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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
(CHECK ONE): /X/Form 10-K / /Form 20-F / /Form 11-K / /Form 10-Q / /Form N-SAR
For Period Ended: December 31, 1999
/ / Transition Report on Form 10-K
/ / Transition Report on Form 20-F
/ / Transition Report on Form 11-K
/ / Transition Report on Form 10-Q
/ / Transition Report on Form N-SAR
For the Transition Period Ended:
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READ INSTRUCTION (ON BACK PAGE) BEFORE PREPARING FORM. PLEASE PRINT OR TYPE.
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
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If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
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PART I -- REGISTRANT INFORMATION
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Full Name of Registrant
CELLNET DATA SYSTEMS, INC.
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Former Name if Applicable
NOT APPLICABLE
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Address of Principal Executive Office (Street and Number)
125 SHOREWAY ROAD
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City, State and Zip Code
SAN CARLOS, CALIFORNIA 94070
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PART II -- RULES 12b-25(b) AND (c)
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If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate)
(a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or
expense;
(b) The subject annual report, semi-annual report, transition report
on Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion thereof,
/ / will be filed on or before the fifteenth calendar day following
the prescribed due date; or the subject quarterly report of
transition report on Form 10-Q, or portion thereof will be filed
on or before the fifth calendar day following the prescribed due
date; and
(c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
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PART III -- NARRATIVE
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State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q,
N-SAR, or the transition report or portion thereof, could not be filed within
the prescribed time period.
Registrant is unable to file Form 10-K for its fiscal year ended December 31,
1999 for the following reasons:
BANKRUPTCY FILING
As previously reported, on February 4, 2000, CellNet Data Systems, Inc.
("CellNet"), together with its subsidiaries (collectively, the "Debtors"), filed
voluntary petitions for relief under Chapter 11 of Title 11 of the United States
Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code") in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") -- IN RE
CELLNET DATA SYSTEMS, INC., ET AL., DEBTORS, Chapter 11, Case No. 00-00844
(PJW). The directors and officers of the Debtors are expected to remain in
possession
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during the proceedings, subject to the supervision and orders of the Court.
(See CellNet's Report on Form 8-K dated and filed on February 7, 2000.)
Debtors filed their petitions pursuant to a proposal letter (the
"Proposal Letter") and an attached summary of terms of an agreement (the
"Summary of Terms") with Schlumberger Limited ("Schlumberger") pursuant to which
Schlumberger, or an entity designated by it, would acquire all or substantially
all of the assets and business operations of the Debtors and certain specified
liabilities related thereto. On March 3, 2000, Schlumberger Resource Management
Services, Inc. (as "Purchaser") and Schlumberger Technology Corporation (its
parent company), each affiliates of Schlumberger, entered into an Asset Purchase
Agreement (the "Asset Purchase Agreement") dated as of March 1, 2000 with
certain of the Debtors including CellNet (as "Sellers"). The Asset Purchase
Agreement contains the definitive terms under which the Purchaser would acquire
from the Sellers all or substantially all of the assets and business operations
of the Debtors and certain specified liabilities related thereto.
Copies of the Proposal Letter and Summary of Terms are attached to
CellNet's Report on Form 8-K dated and filed on February 7, 2000, under Item 7
(c). Copies of the Asset Purchase Agreement and a First Amendment to Asset
Purchase Agreement, without schedules and exhibits, are attached to CellNet's
Report on Form 8-K dated on March 10, 2000 and filed on March 13, 2000, under
Item 7 (c). Complete copies of each of the above documents have been filed with
the Bankruptcy Court.
BANKRUPTCY PROCEEDINGS
The purchase under the Asset Purchase Agreement is subject to the
receipt of higher or better offers for the assets to be acquired by the
Purchaser or to the receipt of greater value in connection with a proposal for a
plan of reorganization or a recapitalization of the Debtors. On March 7, 2000,
the Bankruptcy Court entered an "ORDER (A) APPROVING (I) BIDDING PROCEDURES,
INCLUDING WITHOUT LIMITATION BREAK-UP FEE PROVISIONS, PURSUANT TO 11 U.S.C.
SECTIONS 105, 363, 503 AND 507 AND (II) FORM AND MANNER OF NOTICE OF AUCTION AND
SALE HEARING, AND (B) SCHEDULING A HEARING TO CONSIDER APPROVAL OF SALE OF ALL
OR SUBSTANTIALLY ALL THE DEBTORS' ASSETS" (the "Sale Order").
Persons who desire to submit a bid on the Debtors' assets or to submit
a proposal for a plan of reorganization or a recapitalization of the Debtors
have until 2:00 PM (EST) on April 12, 2000 to do so. Any such bids must be
submitted by "Qualified Bidders" (as defined in the Sales Order) in order to be
considered. If the Debtors receive any "Qualified Bids" (as defined in the Sales
Order) from Qualified Bidders prior to the Bid Deadline, an auction will be held
in New York, New York on April 14, 2000, beginning at 10:00 AM (EST) or such
later time or different place as the Debtors shall notify all Qualified Bidders.
The first competing bid must exceed the transaction value under the Asset
Purchase Agreement by not less than $7.5 million in order to be a Qualified Bid.
Subsequent competing Qualified Bids must be in higher increments of $2.5
million.
If the Debtors do not receive any Qualified Bids, the Debtors will so
advise the Bankruptcy Court and proceed with the sale to the Purchaser under the
Asset Purchase
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Agreement. A Bankruptcy Court hearing is scheduled for April 19, 2000 to
consider approval of the sale of all or substantially all of the Debtors'
assets either to the Purchaser or to a Qualified Bidder submitting a higher
or better offer or a plan of greater value.
CONTINUATION AS A GOING CONCERN
In the absence of adequate long-term financing, CellNet will be unable
to continue as a going concern. At September 30, 1999, CellNet had cash, cash
equivalents and short-term equivalents on hand of approximately $18.3 million.
On October 27, 1999, CellNet announced that it had been unsuccessful so
far in its efforts to raise additional capital necessary to fund the continued
growth and operation of its business and that it was becoming evident that
restructuring of its balance sheet was likely to be necessary to attract
long-term capital. (See CellNet's Report on Form 8-K dated and filed on October
27, 1999.)
On November 9, 1999, CellNet sold $10 million of its 15% Senior Secured
Notes due November 30, 1999 (the "Secured Notes") to certain holders of its 14%
Senior Discount Notes due October 1, 2007 (the "Discount Notes") in order to
enable the Company to meet its short-term cash requirements for the month of
November as it continued its search for permanent financing. (See CellNet's
Report on Form 10-Q dated and filed on November 15, 1999.)
On December 3, 1999, CellNet announced that it had sold an additional
$10 million of its Secured Notes due January 7, 2000 to certain holders of its
Discount Notes and had extended the maturity of the original series of Secured
Notes until January 7, 2000 to serve its immediate short-term cash needs while
it continued the ongoing process of restructuring its balance sheet and seeking
additional short-term and long-term financing needed to continue to fund its
growth and operations. (See CellNet's Report on Form 8-K dated and filed on
December 3, 1999.)
On January 4, 2000, CellNet sold an additional $2.2 million of its
Secured Notes due January 7, 2000 to certain holders of its Discount Notes for
the same purpose. The holders of the Discount Notes subsequently extended the
maturity dates for each of the three series of Secured Notes purchased by them,
first until January 30, 2000, and subsequently to facilitate the sale to the
Purchaser under the Asset Purchase Agreement.
By the end of January 2000, CellNet had exhausted its available cash
reserves and had been unable to secure any additional short-term or long-term
financing required to continue operations, other than the debtor-in-possession
financing contemplated under the Schlumberger Proposal Letter. CellNet then
determined that the best course of action in the circumstances was to accept the
Schlumberger Proposal Letter. (See CellNet's Report on Form 8-K dated and filed
on February 7, 2000.) Since the beginning of February 2000, CellNet and the
other Debtors have been dependent upon the debtor-in-possession financing
provided by the Purchaser for the continuation of business operations.
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PLAN OF LIQUIDATION, REORGANIZATION OR RECAPITALIZATION
If the purchase under the Asset Purchase Agreement is concluded as
expected on or about May 1, 2000, and each of the other Debtors not acquired
by the Purchaser (the "Remaining Debtors") intend to file one or more plan(s)
of liquidation. CellNet presently estimates that the Remaining Debtors will
receive approximately $55 million in proceeds with which to pay
administrative expenses and make distributions to unsecured creditors.
Although the total amount of unsecured creditor claims have yet to be
determined, CellNet estimates that the total amount of such claims as of May
1, 2000 will exceed $400 million. If the Debtors receive and accept as the
winning bid a Qualified Bid proposing an asset purchase transaction
comparable to the proposed transaction under the Asset Purchase Agreement,
the Remaining Debtors also intend to file one or more plan(s) of liquidation.
Although the amount of proceeds that might be received under such a bid
cannot be estimated at this time, CellNet does not expect that any increase
in the total amount of sale proceeds to be received will be sufficient to pay
administrative expenses and to discharge all unsecured claims. If the Debtors
receive and accept as the winning bid a Qualified Bid proposing a different
transaction, the Debtors will proceed with the proposed plan of
reorganization or a recapitalization, as the case may be. Notwithstanding any
change in the nature of the transaction proposed, CellNet does not expect
that there will be available under any such arrangement sufficient funds set
aside to pay administrative expenses and to discharge all unsecured claims.
INABILITY TO PREPARE MEANINGFUL FINANCIAL STATEMENTS AND TO PROVIDE RELATED
FINANCIAL DATA AND SCHEDULES
In view of the pending bankruptcy proceedings, uncertainties with
respect to any sale of all or substantially all of the assets of the Debtors
(including whether or not a purchase will take place as provided under the Asset
Purchase Agreement or under another agreement in a different transaction and as
to the proceeds to be realized in such a case), and uncertainties with respect
to the nature and terms of a possible plan of reorganization or a
recapitalization (should either be presented by a Qualified Bidder, accepted by
the Debtors, and implemented or concluded), CellNet is, at this point, unable to
determine the relevant basis of accounting (historical cost / going concern or
liquidation basis) to be applied in presenting its financial statements, whether
consolidated or unconsolidated.
In addition, it is likely that any sale transaction, plan of
reorganization, plan of liquidation or recapitalization that is consummated,
implemented or concluded will result in the impairment or writedown of the
Debtors' non-current assets in amounts that cannot yet be determined. Until the
closing of any sale transaction, implementation of a plan of reorganization or
liquidation or the conclusion of a recapitalization of the Debtors, CellNet will
be unable both to determine the degree of impairment or writedown of such assets
or to prepare appropriate footnotes to the financial statements, whether
consolidated or unconsolidated, relating to such impairment or writedown.
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MARKET FOR REGISTRANT'S SECURITIES AND MARKET RISK
CellNet has Common Stock, $0.001 par value per share (the "Common
Stock") presently issued and outstanding. The Common Stock was listed for
trading on the Nasdaq National Market ("Nasdaq") under the symbol "CNDS"
(recently "CNDSQ"). The Nasdaq suspended trading of the Common Stock on February
1, 2000 and delisted the Common Stock effective with the close of business on
March 29, 2000. Accordingly, no public market exists for the Common Stock. The
Common Stock is not expected to trade again in any public market and is not
expected to have any value upon conclusion of the bankruptcy proceedings.
INABILITY TO PRESENT A MEANINGFUL DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
CellNet has kept investors regularly apprised of the nature of its
business, the associated risk factors, its financial condition and results of
operations, and various current events and circumstances affecting it through
the filing of regular Reports on Form 10-K and Form 10-Q, current Reports on
Form 8-K, when appropriate, and in connection with other filings made with the
Securities and Exchange Commission. Given its present circumstances, CellNet is
unable to present a meaningful discussion and analysis (beyond what has already
been reported) of its financial condition and results of operations both in
general terms and in particular insofar as any forward looking information and
expressions of opinion or belief concerning the business are concerned. CellNet
expects that there will be a change in control of the business as a result of
the bankruptcy proceedings and that its present stockholders will have no
continuing ownership interests in the business as a result of their investment
in CellNet. CellNet is unlikely to be able to control or influence the future
conduct of the business as a result of the bankruptcy proceedings.
DIRECTORS, EXECUTIVE OFFICERS, EXECUTIVE COMPENSATION, SECURITY OWNERSHIP AND
CERTAIN RELATIONSHIPS
CellNet regularly provides the information required by Part III of Form
10-K in its Proxy Statement for its Annual Meeting of Stockholders. CellNet
would expect to provide such information for 1999 in its Proxy Statement for its
next Annual Meeting of Stockholders in the event such a meeting is called and
held and to the extent that such information is then required to be provided to
stockholders.
(ATTACH EXTRA SHEETS IF NEEDED)
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PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification:
David L. Perry,
Vice President &
Secretary (650) 508-6075
(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period
that the registrant was required to file such report(s) been filed? If
answer is no, identify report(s). /X/ Yes / / No
(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected
by the earnings statements to be included in the subject report or
portion thereof? /X/ Yes / / No
If so, attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
See the information provided in PART III above.
CELLNET DATA SYSTEMS, INC.
(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date March 31, 2000 By /s/ David L. Perry
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David L. Perry,
Vice President &
Secretary
INSTRUCTION: The form may be signed by an executive officer of the registrant
or by any other duly authorized representative. The name and title of the
person signing the form shall be typed or printed beneath the signature. If
the statement is signed on behalf of the registrant by an authorized
representative (other than an executive officer), evidence of the
representative's authority to sign on behalf of the registrant shall be filed
with the form.
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ATTENTION
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL
VIOLATIONS (SEE 18 U.S.C. 1001).
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GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 (17 CFR 240.12b-25) of the General
Rules and Regulations under the Securities Exchange Act of 1934.
2. One signed original and four conformed copies of this form and amendments
thereto must be completed and filed with the Securities and Exchange
Commission, Washington, D.C. 20549, in accordance with Rule O-3 of the
General Rules and Regulations under the Act. The information contained in
or filed with the form will be made a matter of public record in the
Commission files.
3. A manually signed copy of the form and amendments thereto shall be filed
with each national securities exchange on which any class of securities of
the registrant is registered.
4. Amendments to the notifications must also be filed on form 12b-25 but need
not restate information that has been correctly furnished. The form shall
be clearly identified as an amended notification.
5. ELECTRONIC FILERS. This form shall not be used by electronic filers unable
to timely file a report solely due to electronic difficulties. Filers unable
to submit a report within the time period prescribed due to difficulties in
electronic filing should comply with either Rule 201 or Rule 202 of
Regulation S-T (Section 232.201 or Section 232.202 of this chapter) or apply
for an adjustment in filing date pursuant to Rule 13(b) of Regulation S-T
(Section 232.13(b) of this chapter).
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