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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 11, 1998
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First Pacific Networks, Inc.
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(Exact name of registrant as specified in charter)
Delaware 0-20238 77-0174188
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
871 Fox Lane, San Jose, California 95131
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 943-7600
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(Former name or former address, if changed since last report)
This Current Report, including exhibits, contains 5 pages.
The Exhibit Index is located on page 5.
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ITEM 5.
On February 10, 1997, the Company voluntarily filed for relief under
Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code"). The
petition was filed in the United States Bankruptcy Court for the Northern
District of California, San Jose Division (the "Court") and was assigned
case number 97-51077ASW. The Company has been operating as
debtor-in-possession under the Bankruptcy Code. The Company has had limited
capital available for reorganization and has been seeking a strategic
relationship or capital infusion for such purpose. Any trading of the
Company's stock at this time should be considered highly speculative.
As previously disclosed the Company entered into a letter agreement on
July 31, 1998 to sell substantially all of the assets of the Company to
American Sterling Corporation (ASC), a privately held company. The letter
agreement was subject to a definitive purchase agreement and Court approval
of bidding procedures. On August 6, 1998 the Court issued an order approving
bidding procedures to be used in the event that any third party wished to
submit a competitive bid or offer.
On August 10, 1998, the Company filed a motion with the Court seeking
approval of the sale of substantially all of the assets of the Company
pursuant to an Asset Purchase Agreement (the "Agreement") with ASC. The
Agreement provides, among other things, for the sale of substantially all of
the Company's assets in exchange for $292,300 in current cash consideration
and assumption of certain contractual obligations and other liabilities. In
addition, ASC will pay contingent future consideration equal to 3% of net
sales, as defined in the Agreement, for a five year period from the date of
the Agreement or $5,000,000, whichever occurs first. The Agreement was
subject to ASC negotiating agreements to its satisfaction with Entergy
Enterprises, Inc. (claim filed for $7,000,000) and Asset Recovery Group, LLC
($278,000 plus accrued interest pursuant a Loan and Security Agreement dated
January 15, 1998). The management of the Company has been informed by ASC
that it currently intends to tender employment offers to four members of the
Company's management in the event that their transaction was approved by the
Court. The Court hearing to review competitive bids, if any, and to approve
the sale of assets was scheduled for Wednesday August 26, 1998 and was
further extended to September 11, 1998. At the September 11, 1998 hearing
the Court approved the sale to ASC and on September 12, 1998 the Agreement
was consummated.
The Company currently believes that it is unlikely that any material
amounts, if any, will be available for shareholders after payments for
allowed creditor claims under the Agreement and that if any funds ever become
available to shareholders it most likely will be several years before such an
event would occur. Current creditor claims exclusive of the aforementioned
Entergy Enterprises and Asset Recovery Group amounts (which are being
separately assumed by ASC) as well as certain claims are currently estimated
to be approximately $5.0 to $5.5 million.
Following the sale the Company has no business operations. The Company
intends to file a Plan of Reorganization for Liquidation of the Assets of the
Company that will provide for distributing cash that may become available to
the creditors under the Agreement.
In addition, on September 16, 1998 the Company's Board of Directors
appointed Christopher J. Arenal to the Company's Board of Directors and
following such appointments Messrs. James R. Hirschy, Paul O'Brien, Bill B.
May, William A. Wilson and Robert P. McNamara resigned from the
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Company. In addition, all members of management resigned or provided notice
of their intent to resign from the Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statement of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable.
(c) Exhibits
None
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.
FIRST PACIFIC NETWORKS, INC.
Date: September 24, 1998 By: /s/ Kenneth W. Schneider
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Kenneth W. Schneider
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
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Not Applicable
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