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SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest reported): August 1, 1997
IFX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-15187 36-3399452
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
200 West Adams Street, Chicago, Illinois 60606
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(Address of principal executive offices)
Registrant's telephone number, including area code: (312) 419-9530
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
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On August 1, 1997, IFX Corporation (the "Company") consummated
documentation of a transaction, effective as of April 1, 1997, whereby The Park
Trust, an affiliate of IFX Limited's two principal salesmen, Graham Wellesley
and Lorenzo Naldini, subscribed for slightly less than 50% of the stock of IFX
Limited, a London-based subsidiary of the Company. The subscription price of
$2,448,464 was funded with $100,000 in cash and a subscription payable to The
Park Trust for the remaining $2,348,464 of the purchase price. The subscription
payable will be funded out of dividends from the Company which would otherwise
be paid to The Park Trust, as provided in a stockholders agreement among the
Company, IFX Limited and The Park Trust (the "Agreement"). Following the
restructuring of IFX Limited, the Company owns slightly greater than 50% of IFX
Limited, and is deemed to have a controlling interest.
The subscription by The Park Trust was effected through a restructuring of
IFX Limited's capital. The 2,448,465 ordinary $1.00 par shares, already issued
and held by the Company, were redesignated as "A" ordinary $1.00 par shares. In
addition, the authorized share capital of IFX Limited was increased by the
creation of 322,829 new "B" ordinary $1.00 par shares and the 2,125,635 unissued
ordinary $1.00 par shares were converted into a like number of "B" ordinary
$1.00 par shares. The 2,448,464 "B" ordinary $1.00 par shares were then
subscribed for by The Park Trust as described above.
Following the subscription by The Park Trust, the Company and The Park
Trust are entitled to profit distributions according to their respective
ownership percentages, based upon stipulations set forth in the Agreement.
Prior to the subscription, under their original employment contracts, the
three principal salesmen of IFX Limited (Messrs. Wellesley and Naldini, and a
third individual whose employment with IFX Limited was terminated, who together
were primarily responsible for establishing the business of IFX Limited), were
entitled to 50% of the pre-tax profits of IFX Limited, one-half of which was
payable quarterly, with the remaining one-half payable at the end of the fiscal
year, adjusted for subsequent losses, if any. These salesmen were also entitled
to share in up to 50% of any premium, as defined, which might be generated if a
change in ownership of IFX Limited occurred, depending upon when such a change
happened. Since these contracts were entered into, business at IFX Limited has
grown substantially, requiring that the Company provide additional capital for
regulatory purposes to IFX Limited.
In March, 1997, the Company and IFX Limited renegotiated the employment
contracts of Messrs. Wellesley and Naldini. As a result of this renegotiation,
their existing employment contracts were terminated, new ones were executed, and
the Company agreed, in principle, to issue shares of IFX Limited to the salesmen
at book value. Under the new arrangement, the remaining two principal salesmen
receive a modest salary rather than a profit share.
In settlement of their original employment contracts, Messrs. Wellesley and
Naldini have agreed to accept the one-half of profit share which was payable to
them quarterly for the first nine months of the fiscal year ending June 30, 1997
($641,000 less any draws that had been previously taken) and to waive any rights
to the one-half profit share ($641,000) which would have otherwise been due to
them on June 30, 1997. As IFX Limited had been accruing the fiscal year-end
one-half profit share which would have been due to Messrs. Wellesley and Naldini
on June 30, 1997, it was able to reduce its compensation and related benefits
expenses by $641,000 for the quarter ended March 31, 1997 as a result of this
settlement. The third salesman who was terminated received full payment in
February 1997 for his deferred profit share under the terms of his employment
contract.
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Item 7. Financial Statements and Exhibits
(b) Pro forma financial information
The June 30, 1997 financial statements, which will be included in the
Registrants' Form 10-K due September 30, 1997, will reflect adjustments
necessary to properly reflect the transaction described above. Accordingly,
separate pro forma financial information with respect to the transaction will
not be filed as an amendment to this report on the Form 8-K.
(c) Exhibits
10.1 Agreement
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SIGNATURES
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.
IFX Corporation
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(Registrant)
Date: August 15, 1997 By: /s/ Christina S. Donka
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Christina S. Donka
Secretary and Chief Financial
Officer
