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OMB APPROVAL
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OMB NUMBER: 3235-0145
EXPIRES: AUGUST 31, 1999
ESTIMATED AVERAGE BURDEN
HOURS PER RESPONSE 14.90
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13G
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
APPLIEDTHEORY CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 per share par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
03828R 10 4
- --------------------------------------------------------------------------------
(CUSIP Number)
October 4, 1999
- --------------------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this
Schedule is filed:
[ ] Rule 13d-1(b)
[X] Rule 13d-1(c)
[ ] Rule 13d-1(d)
- ------------
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter the disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 7 pages
<PAGE> 2
CUSIP No. 03828 R 10 4 13G Page 2 of 7 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Grumman Hill Investments III, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
5 SOLE VOTING POWER
NUMBER OF -0-
SHARES -------------------------------------------------
BENEFICIALLY 6 SHARED VOTING POWER
OWNED BY
EACH 2,830,000
REPORTING ------------------------------------------------
PERSON 7 SOLE DISPOSITIVE POWER
WITH
-0-
------------------------------------------------
8 SHARED DISPOSITIVE POWER
2,798,842
- -------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,960,313
- --------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
(See Instructions)
- --------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
14.0%
- --------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON (See Instructions)
CO
- --------------------------------------------------------------------------------
Page 2 of 7 pages
<PAGE> 3
CUSIP No. 03828 R 10 4 13G Page 3 of 7 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Grumman Hill Group LLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
5 SOLE VOTING POWER
NUMBER OF -0-
SHARES -------------------------------------------------
BENEFICIALLY 6 SHARED VOTING POWER
OWNED BY
EACH 2,830,000
REPORTING -------------------------------------------------
PERSON 7 SOLE DISPOSITIVE POWER
WITH
-0-
-------------------------------------------------
8 SHARED DISPOSITIVE POWER
2,798,842
- --------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,960,313
- --------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
(See Instructions)
- --------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
14.0%
- --------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON (See Instructions)
CO
- --------------------------------------------------------------------------------
Page 3 of 7 pages
<PAGE> 4
ITEM 1.
(a) Name of Issuer:
AppliedTheory Corporation
(b) Address of Issuer's Principal Executive Offices:
40 Cutter Mill Road, Suite 405
Great Neck, New York 11021.
ITEM 2.
(a) Name of Person Filing:
The persons filing this Schedule 13G are Grumman Hill Investments
III, L.P. ("GHI") and Grumman Hill Group, LLC ("GHG")
(collectively, the "Filing Persons").
(b) Address of Principal Business Office or, if none, Residence:
Each of the Filing Persons has its principal business office at the
following address:
60 East 42nd Street, Suite 2915
New York, New York 10165
(c) Citizenship:
Each of the Filing Persons is organized under the laws of the State
of Delaware
(d) Title of Class of Securities:
Common Stock, $.01 par value
(e) CUSIP Number:
03828R 10 4
ITEM 3. IF THIS STATEMENT IS FILED PURSUANT TO SECTIONS 240.13d-1(b) OR
240.13d-2(b) OR (c), CHECK WHETHER THE PERSON FILING IS A:
(a) [ ] Broker or dealer registered under section 15 of the Act (15
U.S.C. 78o).
(b) [ ] Bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c).
(c) [ ] Insurance company as defined in section 3(a)(19) of the Act
(15 U.S.C. 78c).
(d) [ ] Investment company registered under section 8 of the
Investment Company Act of 1940 (15 U.S.C. 80a-8).
(e) [ ] An investment adviser in accordance with
section 240.13d-1(b)(1)(ii)(E);
(f) [ ] An employee benefit plan or endowment fund in accordance
with section 240.13d-1(b)(1)(ii)(F);
(g) [ ] A parent holding company or control person in accordance
with section 240.13d-1(b)(1)(ii)(G);
(h) [ ] A savings associations as defined in Section 3(b) of the
Federal Deposit Insurance Act (12 U.S.C. 1813);
(i) [ ] A church plan that is excluded from the definition of an
investment company under section 3(c)(14) of the Investment
Company Act of 1940 (15 U.S.C. 80a-3);
(j) [ ] Group, in accordance with section 240.13d-1(b)(1)(ii)(J).
Not Applicable
Page 4 of 7 Pages
<PAGE> 5
ITEM 4. OWNERSHIP
Provide the following information regarding the aggregate number and
percentage of the class of securities of the issuer identified in Item 1.
(a) Amount beneficially owned: Each of the Filing Persons may be deemed
to own 2,960,313 shares of the Issuer's Common Stock, including the
shares to be purchased pursuant to exercised put options and shares
remaining subject to call options held by GHI. GHI directly owns
the shares of Common Stock which are the subject of this Schedule
13G, and GHG is the general partner of GHI.
(b) Percent of class: 14.0%.
(c) Number of shares as to which the person has:
(i) Sole power to vote or to direct the vote:
-0-
(ii) Shared power to vote or to direct the vote:
2,830,000
(iii) Sole power to dispose or to direct the disposition of:
-0-
(iv) Shared power to dispose or to direct the disposition of:
2,798,842
ITEM 5. OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS
If this statement is being filed to report the fact that as of the date
hereof the reporting person has ceased to be the beneficial owner of
more than five percent of the class of securities, check the
following [ ].
Not Applicable
ITEM 6. OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER PERSON.
Not Applicable
ITEM 7. IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH ACQUIRED THE
SECURITY BEING REPORTED ON BY THE PARENT HOLDING COMPANY
Not Applicable
ITEM 8. IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP
Not Applicable
ITEM 9. NOTICE OF DISSOLUTION OF GROUP
Not Applicable
ITEM 10. CERTIFICATION
By signing below I certify that, to the best of my knowledge and
belief, the securities referred to above were not acquired and are not
held for the purpose of or with the effect of changing or influencing
the control of the issuer of the securities and were not acquired and
are not held in connection with or as a participant in any transaction
having that purpose or effect.
Page 5 of 7 pages
<PAGE> 6
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
November 4, 1999
----------------------------------
Date
GRUMMAN HILL INVESTMENTS III, L.P.
By: Grumman Hill Group LLC
Its: General Partner
By: /s/ JAMES T. KELSEY
------------------------------
Signature
Name: James T. Kelsey
Its: General Partner
GRUMMAN HILL GROUP, LLC
By: /s/ JAMES T. KELSEY
------------------------------
Signature
Name: James T. Kelsey
Its: General Partner
Page 6 of 7 pages
<PAGE> 7
EXHIBIT INDEX
Exhibit 1: Stock Purchase Agreement by and among IXC Internet Services, Inc.,
Grumman Hill Investments III, L.P., Issuer, NYSERNet.net, Inc.,
Richard Mandelbaum, David Buckel, James Luckett, Denis Martin and
Mark Oros dated August 4, 1998 (incorporated by reference to
Exhibit 10.01 to Issuer's Form S-1 filed with the Commission on
February 10, 1999).
Exhibit 2: Form of Option Agreements among Issuer, IXC Internet Services,
Inc., Grumman Hill Investments III, L.P. and John Pendray, David
Buckel, Charles Baruch, Marc Bortnicker, Shelley Harrison, James
Luckett, Richard Mandelbaum, Denis Martin, Mark Oros, George
Sadowsky and Yechiam Yemini, each dated August 4, 1998 and among
Issuer, Internet, Grumman Hill Investments III, L.P. and Robert
Riley, Bill Owens, Jacqueline A. Owens, Patrick McManus, Stephen
Kankus, Barbara J. DeMong, each dated August 28, 1998 (incorporated
by reference to Exhibit 10.03 to Issuer's Form S-1 (File No.
333-72133) filed with the Commission on February 10, 1999).
Exhibit 3: Joint Reporting Agreement dated November 4, 1999 among the Filing
Persons.
Page 7 of 7 pages
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JOINT REPORTING AGREEMENT
In consideration of the mutual covenants herein contained, each of the
parties hereto represents to and agrees with the other party as follows:
1. Such party is eligible to file a statement or statements on Schedule
13G pertaining to the Common Stock, $.01 par value, of AppliedTheory Corporation
to which this agreement is an exhibit, for filing of the information contained
herein.
2. Such party is responsible for timely filing of such statement and
any amendments thereto and for the completeness and accuracy of the information
concerning such party contained therein, provided that no such party is
responsible for the completeness or accuracy of the information concerning any
other party making the filing, unless such party knows or has reason to believe
that such information is inaccurate.
3. Such party agrees that such statement is filed by and on behalf of
each such party and that any amendment thereto will be filed on behalf of each
such party.
This Joint Reporting Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original instrument, but
all of such counterparts together shall constitute but one agreement.
Dated: November 4, 1999
GRUMMAN HILL INVESTMENTS III, L.P.
By: Grumman Hill Group LLC
Its: General Partner
By: /s/ JAMES T. KELSEY
------------------------------
Signature
Name: James T. Kelsey
Its: General Partner
GRUMMAN HILL GROUP, LLC
By: /s/ JAMES T. KELSEY
-----------------------------
Signature
Name: James T. Kelsey
Its: General Partner
