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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 29, 2000
SONUS COMMUNICATION HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-30124 54-1939577
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1600 Wilson Blvd, Suite 1008
Arlington, VA 22209
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(703) 527-8860
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Item 2. Acquisition of Assets
On March 29, 2000, the registrant acquired Empire One
Telecommunications, Inc., a New York corporation, by merging Empire One with and
into the registrant's wholly-owned subsidiary, EOT Acquisition Corporation, a
Delaware corporation. EOT Acquisition, which was the surviving corporation
following the merger, changed its name to Empire One Telecommunications, Inc.,
effective at the time of merger.
Empire One provides retail Internet and voice telecommunications
services to residential and commercial customers in niche ethnic markets
throughout eleven Northeastern and Middle Atlantic states plus the District of
Columbia and California. It had operated as a switchless long distance reseller
since initiating service in 1996. At the beginning of 1999, however, Empire One
successfully migrated its long distance traffic onto its own leased facilities
network while adding local telephone services and a full suite of Internet
products, including limited e-commerce functionality. Empire One leases two
switches--one for its long distance traffic and the other for its local
traffic--and is in the process of provisioning this equipment in New York City.
Empire One primarily markets its services to niche ethnic groups and has
subscribers in 11 states and the District of Columbia. Marketing is targeted on
the Chinese markets in the New York, Los Angeles and San Francisco metropolitan
areas.
As part of the stock-for-stock merger, all 159,250 shares of Empire
One's outstanding common stock held prior to the merger by 49 individual and
corporate shareholders were converted into the right to receive an aggregate of
1,065,857 shares of the registrant's common stock. Based upon certificates and
representations received from Empire One's former shareholders, at least 15 of
Empire One's former shareholders were accredited investors at the time of the
merger.
Empire One's principal stockholders, consisting of John Friedman, Paul
Butler and Bradley Lewis, collectively owned over 72% of Empire One prior to the
merger. Following the merger, each of these former Empire One shareholders
became executive officers and employees of the registrant.
The amount of consideration paid by the registrant for Empire One was
determined through arms-length negotiations between the registrant's management
and that of Empire One, and
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centered on Empire One's equity value and the value of the registrant's common
stock. The equity value of Empire One was determined for the purposes of the
merger to be $3,197,571, and was based in part upon the strategic value of the
combined companies as operationally integrated after the merger, and not the
current fair market value of Empire One on a standalone basis. The negotiated
price of $3.00 per share of the registrant's common stock issued in the merger
did not necessarily bear any direct relationship to the registrant's revenues or
the value of the registrant's physical or other assets, its book value or any
other generally accepted criteria of valuation.
The primary assets used by Empire One in its business and acquired by
the registrant include capital leases on two network switches, switch interface
equipment, three network servers, thirty-eight personal computers, various
testing equipment, assorted data networking equipment and other office equipment
and furniture. The registrant intends to continue to use these assets in the
manner they have historically been used.
The registrant will file the financial statements and pro forma
financial information required by Item 7(a) and (b) not later than 60 days after
the date that the initial report on Form 8-K relating to the acquisition
described herein must be filed.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements.
The registrant will file the financial statements required by Item 7(a)
not later than 60 days after the date that the initial report on Form 8-K
relating to the acquisition described herein must be filed.
(b) Pro Forma Financial Information.
The registrant will file the pro forma financial information required
by Item 7(b) not later than 60 days after the date that the initial report on
Form 8-K relating to the acquisition described herein must be filed.
(c) Exhibits.
Exhibit No. Decription
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2.1 Merger Agreement dated as of November 15, 1999 by and among Sonus
Communication Holdings, Inc., EOT Acquisition Corporation, Empire One
Telecommunications, Inc. and certain stockholders of EOT Acquisition
Corporation, attached as Exhibit 2.3 to the registration statement on
Form SB-2 filed by the registrant on December 7, 1999 and incorporated
herein by reference.
2.2 Certificate of Merger filed with the Secretary of State of Delaware on
March 29, 2000.
2.3 Certificate of Merger filed with the Secretary of State of New York on
March 29, 2000.
99 Press Release.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
SONUS COMMUNICATION HOLDINGS, INC.
(Registrant)
By: /s/ W. Todd Coffin
------------------------
Name: W. Todd Coffin
Title: Chief Executive Officer
Dated: April 6, 2000
EXHIBIT INDEX
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Exhibit No. Description
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2.1 Merger Agreement dated as of November 15, 1999 by and among Sonus
Communication Holdings, Inc., EOT Acquisition Corporation, Empire One
Telecommunications, Inc. and certain stockholders of EOT Acquisition
Corporation, attached as Exhibit 2.3 to the registration statement on
Form SB-2 filed by the registrant on December 7, 1999 and incorporated
herein by reference.
2.2 Certificate of Merger filed with the Secretary of State of Delaware on
March 29, 2000.
2.3 Certificate of Merger filed with the Secretary of State of New York on
March 29, 2000.
99 Press Release relating to Empire One Acquisition.
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Exhibit 2.2
CERTIFICATE OF MERGER
OF
EMPIRE ONE TELECOMMUNICATIONS, INC.
WITH AND INTO
EOT ACQUISITION CORPORATION
Pursuant to Section 252(c) of the General Corporation Law of the State
of Delaware, EOT Acquisition Corporation, Sonus Communication Holdings, Inc. and
Empire One Telecommunications, Inc. do hereby certify to the following facts
relating to the merger of Empire One Telecommunications, Inc. with and into EOT
Acquisition Corporation (the "Merger"):
FIRST: That the name and state of incorporation of each constituent
corporation which is a party to the Merger is as follows:
Name State of Incorporation
Empire One
Telecommunications, Inc.
("Merging Corporation") New York
EOT Acquisition Corporation
("Surviving Corporation") Delaware
SECOND: That an agreement of merger (the "Merger Agreement") by and
among Merging Corporation, Surviving Corporation, Sonus Communication Holdings,
Inc. (the "Parent Corporation") and certain stockholders of the Merging
Corporation named in the Merger Agreement has been approved, adopted, certified,
executed and acknowledged by Parent Corporation and Surviving Corporation in
accordance with the requirements of subsection 252(c) of the Delaware General
Corporation Law (the "DGCL") and, pursuant to subsection 252(c) of the DGCL, by
Merging Corporation in accordance with Section 904 of the New York Business
Corporation Law (the "NYBCL"). The stockholders of Surviving Corporation have
adopted the Merger Agreement pursuant to 251(c) of the DGCL by unanimous written
consent and, in accordance with Section 251(c) of the DGCL, the stockholders of
Merging Corporation have duly adopted the Merger Agreement by the affirmative
vote of the requisite number of stockholders at a special meeting of
stockholders duly called, noticed and held at which a quorum of stockholders was
at all times present and voting, as required under Section 903 of the
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NYBCL. The approval of stockholders of Parent Corporation was not required under
subsection 252(c) of the DGCL.
THIRD: The name of the surviving corporation in the Merger is EOT
Acquisition Corporation (the "Surviving Corporation").
FOURTH: The certificate of incorporation of EOT Acquisition Corporation
shall be the certificate of incorporation of the Surviving Corporation;
provided, however, that that the certificate of incorporation of EOT Acquisition
Corporation shall be amended hereby to delete Article 1 in its entirety and
replace in lieu thereof the following:
1. NAME
The name of the corporation is Empire One Telecommunications,
Inc. (the "Corporation").
FIFTH: The executed Merger Agreement is on file at the principal place
of business of the Surviving Corporation, located at 1600 Wilson Blvd.,
Arlington, Virginia 22209.
SIXTH: A copy of the Merger Agreement will be furnished by the
Surviving Corporation, on request and without cost, to any stockholder of any
constituent corporation.
SEVENTH: The total number of authorized shares of capital stock of the
Merging Corporation prior to the Merger was 1,000,000 shares of common stock,
par value $.0001 per share.
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IN WITNESS WHEREOF, Empire One Telecommunications, Inc., Sonus
Communication Holdings, Inc. and EOT Acquisition Corporation have caused this
Certificate of Merger to be duly executed in their corporate names as of this
29th day of March, 2000.
[SEAL] EMPIRE ONE TELECOMMUNICATIONS, INC.,
a New York corporation
Attest: /s/ John Friedman By: /s/Bradley Lewis
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Secretary Executive Vice President
[SEAL] EOT ACQUISITION CORPORATION,
a Delaware corporation
Attest: /s/Richard D. Rose By: /s/ W. Todd Coffin
---------------------- --------------------------
Secretary President
[SEAL] SONUS COMMUNICATION HOLDINGS, INC.
a Delaware corporation
Attest: /s/ Nana Maraneli By: /s/ W. Todd Coffin
---------------------- --------------------------
Secretary President
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EXHIBIT 2.3
CERTIFICATE OF MERGER
OF
EMPIRE ONE TELECOMMUNICATIONS, INCORPORATED
INTO
EOT ACQUISITION CORPORATION
UNDER SECTION 907 OF THE BUSINESS CORPORATION LAW
It is hereby certified, upon behalf of each of the constituent
corporations herein named, as follows:
FIRST: The Board of Directors of each of the constituent corporations
has duly adopted a plan of merger setting forth the terms and conditions of the
merger of said corporations.
SECOND: The name of the foreign constituent corporation, which is to be
the surviving corporation, and which is hereinafter sometimes referred to as the
"surviving corporation", is EOT Acquisition Corporation. The jurisdiction of its
incorporation is Delaware; and the date of its incorporation is October 26,
1999. An Application for Authority in the State of New York of the surviving
constituent corporation to transact business as a foreign corporation therein
was filed with the Department of State of the State of New York on December 22,
1999.
THIRD: The name of the domestic constituent corporation, which is being
merged into the surviving constituent corporation, and which is hereinafter
sometimes referred to as the "merging constituent corporation", is Empire One
Telecommunications, Incorporated. The date upon which its certificate of
incorporation was filed by the Department of State is March 22, 1994.
FOURTH: As to each constituent corporation, the plan of merger sets
forth the designation and number of outstanding shares of each class and series,
the specification of the classes and series entitled to vote on the plan of
merger, and the
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specification of each class and series entitled to vote as a class on the plan
of merger, as follows:
EMPIRE ONE TELECOMMUNICATIONS, INCORPORATED
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Number of Classes and series
Designation of each outstanding outstanding shares Designation of class and series entitled to vote as
class and series of shares of each class of shares entitled to vote a class
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common shares 159,250 Not applicable Not applicable
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
EOT ACQUISITION CORPORATION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Number of Classes and series
Designation of each outstanding outstanding shares Designation of class and series entitled to vote as
class and series of shares of each class of shares entitled to vote a class
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common shares 1,000 Not applicable Not applicable
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
FIFTH: The merger herein certified was authorized in respect of the
merging constituent corporation by the vote of holders of outstanding shares of
the corporation entitled to vote on the plan of merger, having not less than the
minimum requisite proportion of votes, all in accordance with section 903 of the
Business Corporation Law of the State of New York.
SIXTH: The merger herein certified is permitted by the laws of the
jurisdiction of incorporation of the surviving constituent corporation and is in
compliance with said laws.
SEVENTH: The surviving constituent corporation agrees that it may be
served with process in the State of New York in any action or special proceeding
for the enforcement of any liability or obligation of the surviving constituent
corporation, for the enforcement of any liability or obligation of the surviving
constituent corporation for which the surviving
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constituent corporation is previously amenable to suit in the State of New York,
and for the enforcement, as provided in the Business Corporation Law of the
State of New York, of the right of shareholders of the merging constituent
corporation to receive payment for their shares against the surviving
constituent corporation.
EIGHTH: The surviving constituent corporation agrees that, subject to
the provisions of section 623 of the Business Corporation Law of the State of
New York, it will promptly pay to the shareholders of the merging constituent
corporation the amount, if any, to which they shall be entitled under the
provisions of the Business Corporation Law of the State of New York, relating to
the rights of shareholders to receive payment for their shares.
NINTH: The surviving constituent corporation hereby designates the
Secretary of State of the State of New York as its agent upon whom process
against it may be served in the manner set forth in paragraph (b) of section 306
of the Business Corporation Law of the State of New York in any action or
special proceeding. The post office address without the State of New York to
which the said Secretary of State shall mail a copy of any process against the
surviving corporation served upon him or her is: EOT Acquisition Corporation,
1600 Wilson Blvd., Suite 10008, Arlington, VA 22209.
TENTH: The merging domestic corporation hereby certifies that all fees
and taxes (including penalties and interest) administered by the Department of
Taxation and Finance of the State of New York which are now due and payable by
the domestic corporation have been paid and a cessation franchise tax report
(estimated or final) through the anticipated date of merger has been filed by
the domestic corporation. The said report, if estimated, is subject to
amendment. The surviving foreign corporation agrees that it will within thirty
days after the filing of the certificate of merger file the cessation tax
report, if an estimated report was previously filed, and promptly pay to the
Department of Taxation and Finance of the State of New York all fees and taxes
(including penalties and interest), if any, due to the said Department of
Taxation and Finance by the domestic corporation.
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Signed on March 29, 2000.
EMPIRE ONE TELECOMMUNICATIONS,
INCORPORATED., a New York corporation
By: /s/ Brad Lewis
Name: Brad Lewis
Title: Executive Vice
President
By: /s/ John K. Friedman
Name: John K. Friedman
Title: Secretary
EOT ACQUISITION CORPORATION,
a Delaware corporation
By: /s/ W. Todd Coffin
Name: W. Todd Coffin
Title: Chief Executive Officer
By: /s/ Richard D. Rose
Name: Richard D. Rose
Title: Secretary
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EXHIBIT 99
NEWS RELEASE
Company Contact: Investors/Media:
W. Todd Coffin Dian Griesel, Ph.D. / Juan Dominguez
Sonus Communication Holdings, Inc. The Investor Relations Group; N.Y., N.Y.
President & CEO 212.736.2650
212.904.1020 [email protected]
For Immediate Release
SONUS COMMUNICATION HOLDINGS, INC. ANNOUNCES COMPLETION OF ACQUISITION OF EMPIRE
ONE TELECOMMUNICATIONS, INC.
Company Continues To Rapidly Expand Customer Base In Ethnic Markets
NEW YORK CITY...April __, 2000 - - Sonus Communication Holdings, Inc., ("Sonus")
(OTC BB: SNHD), provider of low-cost, high-quality telecommunications services
to niche ethnic markets throughout the United States announced today that the
Company has received all approvals necessary to complete its acquisition of
Empire One Telecommunications, Inc., ("EOT") and today completed the closing of
the transaction. Sonus issued approximately 1.1 million shares of Sonus common
stock in exchange for all the outstanding common stock of EOT.
The addition of EOT's 15,000 (primarily ethnic) retail subscribers will increase
Sonus's revenue stream while at the same time providing EOT with immediate cost
savings by utilizing Sonus' established points of presence (POP's) in countries
that correspond to the ethnic communities that are EOT's current and target
markets.
As a result of the acquisition of EOT, Sonus attains a rapidly growing, domestic
Competitive Local Exchange Carrier ("CLEC"), Interexchange Carrier ("IXC"), and
Internet Service Provider ("ISP") that offers a full range of services including
local, long-distance, Internet access and Web Hosting Services to approximately
15,000 customers.
W. Todd Coffin, President and CEO of Sonus Communication commented on the
benefits of this step, "Regulatory approval was our last hurdle in completing
this merger. Today, as a fully integrated provider of telecommunications and
Internet capabilities, we can proudly say that Sonus and Empire One together
stand as a growing force ready to serve the specific needs of ethnic customers
in our target markets. We believe our understanding of cultural differences and
the need to secure
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confidence in these ethnically diverse consumers, ultimately secures our long
term business strategy."
The Company recently announced an aggressive expansion into the ethnic Russian
market for local, long-distance and Internet services. EOT has set a goal of
20,000 subscribers by September 2000. The Company will continue to market,
advertise and sponsor local events in communities with a high Russian
population. The recently installed long distance (class 2) and local (class 5)
switches, which should be fully operational by April and June 2000 respectively,
should provide additional revenue generation at substantially higher profit
margins. The marketing efforts in the Russian communities, will utilize many of
the strategies that EOT proved to be successful in offering telecommunications
alternatives to Chinese ethnic communities in the United States.
Mr. Coffin concluded, "Today, Sonus completed an important step, creating a
perfect fit, for the up and coming integration of a CLEC into Sonus's 'next
generation' telco vision".
ABOUT SONUS
Sonus Communication Holdings, Inc., is a wholesale and retail provider of
low-cost, high-quality, international long distance, local telephone, facsimile
and Internet telephony services. Sonus' strategy is to secure access to
international destinations that offer the opportunity for large call volumes and
high margins and to utilize Voice over Internet Protocol ("VOIP") technology to
establish and provide managed bandwidth services to its major US and foreign
telecommunication clients. In general, these destinations are in developing
countries, characterized by high wholesale rates per minute and are under-served
by US carriers. With the acquisition of Empire One Telecom ("EOT") a leading New
York City based CLEC the Company plans on vertically integrating their business
on the retail side by providing comprehensive service to its approximately
15,000 existing subscribers while extensively marketing its bundle of services
in its targeted ethnic niche markets to create a significant increase in both
the Company's subscriber count as well as its number of access lines served. EOT
has immediate plans to use its innovative marketing techniques to offer services
to ethnic communities that correspond to the destinations served by Sonus'
Points of presence.
All statements in this press release other than statements of historical fact
are forward-looking statements that involve risks and uncertainties. There can
be no assurance that the Company's plans will be realized, that revenues will
increase or that the Company's operations will improve. Reference is made
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to Sonus' Form 10-SB and to the Company's other reports filed with Securities
and Exchange Commission for a discussion of such risks and uncertainties and
other factors that may have a material effect on the Company's business.
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