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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 0-17909
Phoenix Network, Inc.
(Exact Name of registrant as specified in its charter)
DELAWARE 84-0881154
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1687 COLE BLVD., GOLDEN, COLORADO 80401
(Address of principal executive offices)
Registrant's telephone number, including area code: (303) 205-3500
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
Common Stock $0.001 Par Value American Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of March 24, 1997, the aggregate market value of the voting stock
held by nonaffiliates of the Registrant was $44,187,299 (based on the closing
sales price as reported on the American Stock Exchange).
The number of shares outstanding of the Registrant's Common Stock,
$0.001 par value, was 25,900,036 at March 24, 1997.
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DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates certain information by reference from the
Registrant's definitive proxy statement for the annual meeting of stockholders
held on September 26, 1996 (the "1996 Proxy"), which is incorporated by
reference herein.
Part II incorporates certain information by reference from the
Registrant's Registration Statement on Form S-3 (file no. 333-20923), as amended
(the "Registration Statement on Form S-3"), which was filed with the Securities
and Exchange Commission (the "Commission") on January 31, 1997, and is
incorporated by reference herein.
Except for the historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. The Registrant's actual results could differ materially from
those discussed here. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in the sections entitled
"Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and in the section entitled "Risk Factors" included
within the Registrant's Registration Statement on Form S-3 incorporated by
reference herein.
PART III
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the voting securities of the Company as of December 31,
1996 by: (i) each director; (ii) each executive officer named above; (iii) all
executive officers and directors of the Company as a group; and (iv) all those
known by the Company to be beneficial owners of more than five percent (5%) of
any class of its voting securities. Each of the Series A, Series B and Series D
Preferred Stock is convertible into shares of Common Stock and vote with the
Common Stock on an as-if-converted basis. Unless otherwise indicated, the
Company believes that each of the persons indicated below has sole voting and
investment power with respect to the shares owned by such person.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
-------------------------------------------------------------------------------
Series A Series B Series D
Common Stock Preferred Stock Preferred Stock Preferred Stock
------------------ ----------------- ----------------- -----------------
Percent
Number Percent Number Percent Number Percent Number Percent of Total
of of of of of of of of Voting
Shares Class Shares Class Shares Class Shares Class Power
------ ----- ------ ----- ------ ----- ------ ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5% STOCKHOLDERS:
Proactive Partners, L.P.(1)(2) .... 741,734 2.86% -- -- 50,000 43.67% 333,333 100.00% 5.13%
50 Osgood Place
San Francisco, CA 94133
Fremont Proactive ................. 24,234 * -- -- 7,500 6.55% -- -- *
Partners, L.P. (1)(3)
50 Osgood Place
San Francisco, CA 94133
Lagunitas Partners, L.P. (1)(4) ... 210,084 * 20,000 20.28% 35,000 30.57% -- -- 1.92%
50 Osgood Place
San Francisco, CA 94133
McGettigan Wick Investments ....... 164,616 * 15,000 15.21% -- -- -- -- *
50 Osgood Place
San Francisco, CA 94133
Myron A. Wick III(5) .............. 77,247 * 5,000 5.07% -- -- -- -- *
50 Osgood Place
San Francisco, CA 94133
</TABLE>
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<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Series A Series B Series D
Common Stock Preferred Stock Preferred Stock Preferred Stock
-------------------- ------------------ ----------------- ----------------
Percent
Number Percent Number Percent Number Percent Number Percent of Total
of of of of of of of of Voting
Shares Class Shares Class Shares Class Shares Class Power
------ ----- ------ ----- ------ ----- ------ ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Jon D. Gruber(6) ................. 8,000 * 4,000 4.06% -- -- -- -- *
50 Osgood Place
San Francisco, CA 94133
J. Patterson McBaine(7) .......... 8,000 * 1,000 1.01% -- -- -- -- *
50 Osgood Place
San Francisco, CA 94133
Judy Van Essen ................... 2,800,000 10.81% -- -- -- -- -- -- 10.22%
15100 North 78th Way, Ste. 200
Scottsdale, AZ 85260
Penelope DeYoung Trust ........... -- -- 5,000 5.07% -- -- -- -- *
c/o Winston Partners
225 W. Washington St., #1600
Chicago, IL 60606
Jupiter Partners ................. 48,728 * 10,000 10.14% -- -- -- -- *
c/o John M. Bryan
600 Montgomery St., 35th Floor
San Francisco, CA 94111
Elizabeth D. Wick ................ 2,667 * 10,000 10.14% -- -- -- -- *
444 South Beach Road
Hobe Sound, FL 33455
Walter D. Wick Trust ............. -- -- 5,000 5.07% -- -- -- -- *
c/o Winston Partners
225 W. Washington St., #1600
Chicago, IL 60606
James W. DeYoung ................. -- -- 5,000 5.07% -- -- -- -- *
c/o Winston Partners
225 W. Washington St., #1600
Chicago, IL 60606
Benjamin F. Dillingham II ........ -- -- 5,000 5.07% -- -- -- -- *
1508 Smith Road
Yuba City, CA 95993
BMA, Inc. ........................ -- -- -- -- 10,000 8.73% -- -- *
2001 Kirby Ave
Houston, TX 77019
Michael McCord ................... -- -- -- -- 10,000 8.73% -- -- *
3415 Meadow Lake Lane
Houston, TX 77027
DIRECTORS AND EXECUTIVE
OFFICERS:
Wallace M. Hammond(1) ............ 341,000 1.30% -- -- -- -- -- -- 1.23%
Jeffrey L. Bailey(1)(8) .......... 131,874 * -- -- -- -- -- -- *
J. Rex Bell(1) ................... 96,874 * -- -- -- -- -- -- *
Jon F. Beizer(1) ................. 29,125 * -- -- -- -- -- -- *
Thomas H. Bell(1)(9) ............. 2,968,900 11.23% -- -- -- -- -- -- 10.62%
</TABLE>
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<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Series A Series B Series D
Common Stock Preferred Stock Preferred Stock Preferred Stock
-------------------- ----------------- ----------------- -----------------
Percent
Number Percent Number Percent Number Percent Number Percent of Total
of of of of of of of of Voting
Shares Class Shares Class Shares Class Shares Class Power
------ ----- ------ ----- ------ ----- ------ ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
James W. Gallaway(1) ........... 475,486 1.83% -- -- -- -- -- -- 1.73%
Merrill L. Magowan(1) .......... 96,499 * 10,000 10.14% -- -- -- -- *
Charles C. McGettigan(1)(10) ... 24,000 * -- -- -- -- -- -- *
David Singleton(1) ............. 151,961 * -- -- -- -- -- -- *
Max E. Thornhill(1)(11) ........ 1,376,271 5.29% -- -- -- -- -- -- 5.00%
All directors and executive
officers as a group
(10 persons)(1) ............... 5,691,990 20.78% 10,000 10.14% -- -- -- -- 19.84%
</TABLE>
* Less than one percent.
(1) Includes shares of common stock which certain principal stockholders,
directors and officers of the Company have the right to acquire within 60
days after the date of this table pursuant to outstanding options and
warrants as follows: Proactive Partners, L.P., 50,225 shares; Fremont
Proactive Partners, L.P., 2,000 shares; Lagunitas Partners, L.P., 12,000
shares; Wallace M. Hammond, 325,000 shares; Jeffrey L. Bailey, 131,874
shares; J. Rex Bell, 96,874 shares; Jon F. Beizer, 29,125 shares; Thomas
H. Bell, 548,000 shares; James W. Gallaway, 104,936 shares; Merrill L.
Magowan, 96,499 shares; Charles C. McGettigan, 24,000 shares; David
Singleton, 16,281 shares; and Max E. Thornhill, 118,281 shares.
(2) The general partner of Proactive Partners, L.P., a California limited
partnership ("PP"), is Proactive Investment Managers, L.P., a California
limited partnership ("PIM"), of which Messrs. Gruber, McBaine, McGettigan
and Myron A. Wick III are general partners.
(3) The general partner of Fremont Proactive Partners, L.P., a California
limited partnership ("FPP"), is PIM, of which Messrs. Gruber, McBaine,
McGettigan and Wick are general partners.
(4) The general partners of Lagunitas Partners, L.P., a California limited
partnership, are Gruber & McBaine Capital Management, a California
corporation ("GMCM"), and Messrs. Gruber and McBaine.
(5) Includes 5,000 shares of Series A Preferred Stock held of record by the
Myron A. Wick III Trust, a trust for which Mr. Wick is the trustee. The
address of the Myron A. Wick III Trust is c/o Winston Partners, 225 W.
Washington St., #1600, Chicago, IL 60606.
(6) Includes only shares held of record by Mr. Gruber. Mr. Gruber is also a
director of GMCM, which owns of record 30,500 shares of common stock and
which is a general partner of Lagunitas Partners, L.P., GMJ Investments,
L.P., a California limited partnership which owns of record 5,000 shares
of common stock, and Lagunitas International, a Cayman Islands limited
partnership which owns 5,000 shares of common stock. Mr. Gruber is also a
general partner directly in Lagunitas Partners, L.P. and GMJ Investments,
L.P. Moreover, Mr. Gruber is a general partner of PIM, which is the
general partner of PP and FPP. Accordingly, Mr. Gruber may be deemed to
beneficially own some or all of the shares of the capital stock of
Phoenix held by such companies. Mr. Gruber's address is 50 Osgood Place,
San Francisco, CA 94133.
(7) Includes only shares held of record by Mr. McBaine. Mr. McBaine is also a
director of GMCM, which is a general partner of the entities described in
note (6) above. Mr. McBaine is also a general partner directly in
Lagunitas Partners, L.P. and GMJ Investments, L.P. Moreover, Mr. McBaine
is a general partner of PIM, which is the general partner of PP and FPP.
Accordingly, Mr. McBaine may be deemed to beneficially own some or
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all of the shares of capital stock of Phoenix held by such companies. Mr.
McBaine's address is 50 Osgood Place, San Francisco, CA 94133.
(8) Mr. Bailey resigned as an executive officer of the Company effective
March 31, 1997.
(9) Mr. Bell's address is 1687 Cole Blvd., Golden, CO 80401.
(10) Includes only shares held of record by Mr. McGettigan. Mr. McGettigan is
a general partner of McGettigan, Wick Investments, a partnership which
holds 10,666 shares of Common Stock, immediately exercisable warrants to
purchase 153,950 shares of Common Stock, and 15,000 shares of Series A
Preferred Stock. Mr. McGettigan is also a general partner of PIM, which
is the general partner of PP and of FPP. Accordingly, Mr. McGettigan may
be deemed to beneficially own some or all of the shares of the capital
stock of Phoenix held by such companies. Mr. McGettigan's address is 50
Osgood Place, San Francisco, CA 94133.
(11) Mr. Thornhill's address is 1687 Cole Blvd, Golden, CO 80401.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PHOENIX NETWORK, INC.
By: /s/ Wallace M. Hammond
----------------------------------------------
Wallace M. Hammond
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Jonathan F. Beizer
----------------------------------------------
Jonathan F. Beizer
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Dated: April 30, 1997
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