SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM 8-K
ON FORM 8-K/A
AMENDMENT TO CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
APRIL 1, 1999
_______________________________________
Date of Report (Date of earliest event reported)
USN COMMUNICATIONS, INC.
______________________________________________________
(Exact name of Registrant as specified in its charter)
DELAWARE 333-16265 36-3947804
______________ _____________________ ________________
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
10 SOUTH RIVERSIDE PLAZA, SUITE 2000, CHICAGO, ILLINOIS 60606
____________________________________________________________
(Address of principal executive offices, including zip code)
(312) 906-3600
____________________________________________________
(Registrant's telephone number, including area code)
N/A
_____________________________________________________________
(Former name or former address, if changed since last report)
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
As a condition to the consummation of the transactions contemplated
by the CoreComm Agreement (as hereinafter defined), approved by the Board
of Directors of USN Communications, Inc. (the "Company"), the Company
agreed to provide CoreComm Limited ("CoreComm") with audited consolidated
financial statements of the Company for the fiscal year ended December 31,
1998. Upon the mutual agreement of CoreComm and the Company, Ernst & Young
LLP ("E&Y") was engaged to perform the audit. The accounting firm of
Deloitte & Touche LLP ("Deloitte") audited the financial statements of the
Company for the fiscal years ended December 31, 1996 and 1997 and issued
reports thereon which did not contain any adverse opinion or disclaimer of
opinion, nor were such reports qualified or modified as to uncertainty,
audit scope or accounting principles, except that with respect to
Deloitte's report dated March 14, 1997, the report noted that the Company's
recurring losses from operations raised substantial doubt about the
Company's ability to continue as a going concern. Deloitte has not audited
any financial statements of the Company for any dates or periods subsequent
to December 31, 1997. As of April 7, 1999, the Company dismissed Deloitte
as its certifying accountant. The Company and Deloitte have had no
disagreements and there have been no reportable events for the periods
audited by Deloitte or the interim period through the date the client-
auditor relationship between the Company and Deloitte ended, April 7, 1999.
ITEM 5. OTHER EVENTS
On April 2, 1999, the United States District Court for the District
of Delaware (the "Court") entered a final order authorizing the Company and
twelve of its subsidiaries (collectively, the "Debtors") to, among other
things, sell substantially all of their assets, excluding the Company's
Connecticut wireless subsidiaries ("USN Wireless"), to CoreComm for up to
$85 million in cash plus warrants to purchase common stock of CoreComm. As
previously announced, the agreement provides for approximately $25 million
in cash, plus the warrants, to be paid at closing in addition to up to $60
million payable to the Company depending on future operating results.
The Court also approved the sale of USN Wireless under an agreement
entered into pursuant to the Court's auction procedures established for
such sale. Under the terms of the Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated as of April 1, 1999, among the Company, Unified
Signal Corporation, a Georgia corporation, and Unified Signal Corporation,
a Delaware corporation (together, "Unified Signal"), Unified Signal will
acquire all of the capital stock of USN Wireless for an aggregate purchase
price of $20 million to be paid to the Company at closing, less (a) $1
million required to be paid to the Company as a deposit on April 16, 1999
in the event the transaction has not been consummated prior to such time
and (b) $1 million to be deposited in escrow for the satisfaction of
certain indemnifiable claims and other matters.
Under the terms of the Stock Purchase Agreement, USN Wireless is
obligated, among other things, to conduct its business in the ordinary
course prior to closing. The consummation of the transactions contemplated
by the Stock Purchase Agreement is subject to a number of customary
conditions including receipt of necessary state and federal regulatory
approvals. The Stock Purchase Agreement is terminable, among other events,
by either party if required regulatory approval of the transactions is not
obtained or if the closing shall not have occurred by May 15, 1999. The
Company is obligated to pay Unified Signal a termination fee of $750,000 in
the event the Company enters into an alternative transaction for the sale
of USN Wireless, as specified in the Stock Purchase Agreement.
In addition, the Court gave final authorization to the Debtors to
borrow up to $20 million of a previously announced debtor-in-possession
financing facility to continue operations, pay employees, purchase goods
and services going forward and repurchase the Company's $15 million
aggregate principal amount prepetition senior secured notes. The financing
facility was amended as of March 15, 1999 and again as of March 24, 1999
to, among other things, extend the maturity date of the notes issued
thereunder to May 14, 1999.
The descriptions set forth above of the Stock Purchase Agreement and
the Note Purchase Agreement and all amendments thereto do not summarize all
of the material provisions of such documents. Copies of such documents
have been previously filed or are filed herewith as exhibits as noted
below. The terms of such documents are hereby incorporated herein by
reference. Investors are urged to obtain and fully review copies of such
documents.
This Report contains statements which constitute "forward-looking
statements" within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended by the Private Securities
Litigation Reform Act of 1995. "Forward-looking statements" in this Report
include the intent, belief or current expectations of the Company and
members of its management team with respect to the timing of, completion of
and scope of the sales to CoreComm Limited and Unified Signal Corporation
financing, and the Company's future liquidity, as well as the assumptions
upon which such statements are based. While the Company believes that its
expectations are based upon reasonable assumptions within the bounds of its
knowledge of its business and operations, investors are cautioned that any
such forward-looking statements are not guarantees of future performance,
involve risks and uncertainties, and that actual results may differ
materially from those contemplated by such forward-looking statements.
Important facts currently known to management that could cause actual
results to differ materially from those contemplated by the forward-looking
statements in this Report include, but are not limited to, further adverse
developments with respect to the Company's liquidity position or operations
of the Company's various businesses, adverse development in the Company's
efforts to complete the financing and/or sales agreements; and the ability
of the Company to realize the anticipated general and administrative
expense savings and overhead reductions presently contemplated. Additional
factors that would cause actual results to differ materially from those
contemplated within this Report can also be found in the Company's Reports
on Form 8-K during 1998 and 1999, Form 10-Q for the quarter ended September
30, 1998, and Form 10-K for the year ended December 31, 1997.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The following exhibits are included with this Report:
Exhibit 10.1 Stock Purchase Agreement, dated as of April
1, 1999, by and among the Company, Unified
Signal Corporation, a Georgia corporation,
and Unified Signal Corporation, a Delaware
corporation (incorporated herein by
reference).*
Exhibit 10.2 First Amendment to Note Purchase Agreement,
dated as of March 15, 1999, by and between
the Company and Merrill Lynch Global
Allocation Fund, Inc. and CoreComm
(incorporated herein by reference).*
Exhibit 10.3 Second Amendment to Note Purchase Agreement,
dated as of March 24, 1999, by and between
the Company and Merrill Lynch Global
Allocation Fund, Inc. and CoreComm
(incorporated herein by reference).*
Exhibit 16 Letter from Deloitte & Touche LLP, dated
April 29, 1999
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* Filed previously on April 16, 1999.
SIGNATURES
Pursuant to the requirement 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.
USN COMMUNICATIONS, INC.
By: /s/ Thomas A. Monson
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Thomas A. Monson
Senior Vice President, General Counsel
and Secretary
Exhibit 16
[Deloitte & Touche LLP Letterhead]
April 29, 1999
Securities and Exchange Commission
Mail Stop 9-5
450 5th Street, N.W.
Washington, D.C. 20549
Dear Sirs/Madams:
We have read and agree with the comments in Item 4 of Form 8-K of USN
Communications, Inc. dated April 29, 1999.
Yours truly,
/s/ Deloitte & Touche LLP
