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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
July 16, 1997
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Date of Report (Date of earliest event reported)
Phoenix Network, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-17909 84-0881154
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
1687 Cole Boulevard, Golden, Colorado 80401
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(Address of principal executive offices)
(303) 205-3500
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On July 16, 1997, Phoenix Network, Inc. (the "Company") announced that
it had terminated its previously announced letter of intent, dated June 19, 1997
(the "Letter of Intent"), to merge with US ONE Communications Corp.
(collectively with its subsidiaries "US ONE") and Resurgens Capital Group, Inc.
("Resurgens"). The Company also announced that it will not pursue its earlier
announced merger with US One. The announcement was made in a news release, a
copy of which is filed herewith as Exhibit 99.1.
The Letter of Intent was terminated because Resurgens was notified by
its investment bankers that the merged company would have difficulty raising
sufficient long-term financing, given current market conditions. The Company
continues to pursue a strategy of raising additional capital, combining with a
company operating its own long distance network and completing complementary
acquisitions.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 News Release, released on July 16, 1997.
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Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: July 17, 1997 Phoenix Network, Inc.
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By: /s/ Wallace M. Hammond
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Wallace M. Hammond, President
and Chief Executive Officer
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PHOENIXNETWORK.
News Release
For Immediate Release
July 16, 1997
Contact: Monica Williamson
Phoenix Network Investor Relations
(800) 448-0804
MERGER DISCUSSIONS TERMINATED
JULY 16, 1997--GOLDEN, CO--Phoenix Network, Inc. (AMEX:PHX) announced today
that the parties to the previously announced merger, Phoenix Network, Inc., US
ONE Communications Corp. and Resurgens Capital Group, Inc. have mutually agreed
to discontinue merger negotiations and cancel the letter of intent date June
19, 1997. The reason for this decision is that Resurgens Capital has been
notified by its investment bankers that, given present market conditions, the
merged companies would be unlikely to raise sufficient long-term financing in
either the public equity or debt market to finance the contemplated
transaction. In a related development, it was also announced that Phoenix
Network will not pursue its previously announced merger with US ONE.
Commenting on these developments, Wallace M. Hammond, President and CEO of
Phoenix Network, Inc., said, "We felt that this merger presented Phoenix with
an excellent opportunity to accelerate our network and acquisition strategy.
We are obviously disappointed that the necessary financing could not be
arranged and that the merger discussions had to be discontinued, but we are not
disheartened. The fact that someone as knowledgeable and experienced as Mr.
Jack Phillips embraced our strategy gives us confidence that we are on the
right track. These discussions with Mr. Phillips and US ONE have not precluded
us from considering alternative opportunities within our industry and we will
now vigorously pursue those opportunities with we feel will allow us to achieve
our corporate goals and enhance our shareholders' value."
Mr. Jack Phillips, President and CEO of Resurgens, added, "We are extremely
disappointed that the financial community does not, as yet, share our
enthusiasm for another round of long distance industry consolidation. I still
firmly believe that this is the right time and the right place for another
round of consolidation and I wish the management team of Phoenix Network the
best of luck in its pursuit of this objective. I intend to follow their
progress closely and will continue to look for an opportunity to participate."
--more--
PHOENIX NETWORK, INC. 1687 COLE BOULEVARD
GOLDEN, COLORADO 80401 TEL: 303.205.3500 800.864.0288
FAX: 303.205.3501 WORLDWIDE WEB:HTTP://WWW.PHOENIXNET.COM
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News Release
Merger Discussions Terminated, July 16, 1997
Page 2
Commenting on the immediate future of Phoenix, Mr. Hammond said, "In order for
us to be successful we must do three things immediately: raise additional
capital, consolidate with a company operating its own long distance network and
continue our discussions with the acquisition targets which we brought to this
contemplated merger.
"We are not starting from ground zero on any of these fronts. We have recently
been contacted by and are currently in negotiations with several potential
equity investors. We will continue those discussions with an eye towards
raising the capital we need to continue our growth-through-acquisition
strategy.
"As a result of the publicity surrounding our recent merger discussions, we
have been contacted by several companies currently operating their own long
distance networks. We intend to immediately pursue those opportunities which
we feel to be an appropriate strategic fit and have the potential to enhance
our network strategy.
"Over the past two years we have completed ten acquisitions and we have
recently been engaged in negotiating several other acquisition transactions
which we believe would have been completed and rolled into the proposed merger.
Those discussions are continuing and we believe that those transactions can
still be completed."
In conclusion, Mr. Hammond said, "We have not remained idle as these merger
negotiations have progressed and we have not been caught off guard by their
unexpected termination. I believe that, with our recent preparation, we are
well-positioned to meet our immediate challenges and have an excellent
opportunity to continue our growth and improve our financial performance."
Phoenix Network is an inter-exchange carrier (IXC) which, in addition to its
core long distance products and services, offers Internet access, enhanced fax
services, international call-back, conference callings, travel cards, debit
cards, custom invoices, management reports, and a variety of other products and
services. Phoenix Network's World Wide Web address is
<http://www.phoenixnet.com>.
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PHOENIX NETWORK, INC. 1687 COLE BOULEVARD
GOLDEN, COLORADO 80401 TEL: 303.205.3500 800.864.0288
FAX: 303.205.3501 WORLDWIDE WEB:HTTP://WWW.PHOENIXNET.COM
