Form 8-K
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
TELESOFT CORP.
(Exact name of small business issuer as specified in its charter)
Arizona 86-0431009
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3443 North Central Avenue #1800, Phoenix, Arizona 85012
(Address of principal executive offices)
(602) 265-6311
(Issuer's telephone number, including area code)
3216 N. Third Street, Phoenix, Arizona 85012
(Former name, former address and former fiscal year, if changed since
last report)
Item 2 Disposition of Assets
On January 12, 1998, the Registrant, together with the minority shareholders
of Telesoft Acquisition Corp II, commercially known as GoodNet(GoodNet),
entered into an agreement with WinStar Communications, Inc. (WinStar) to sell
the Registrant's Internet services subsidiary for approximately $22.0 million,
consisting of $3.5 million cash and shares of common stock of WinStar
(WCII: Nasdaq) having an aggregate market value of approximately $18.5 million.
Under the terms of the agreement, the Registrant will receive $3,500,000 cash
plus 479,387 shares of WCII common stock, which had an aggregate fair market
value of $15,789,809 as of the close of business on January 12, 1998. After
commissions and related legal expenses, the Registrant will realize an
approximate $10,000,000 pretax gain on the sale. Additionally, the
Registrant received $235,000 in cash to offset GoodNet's net cash disbursements
from December 12, 1997 through the date of the sale.
The Company will account for its investment in WinStar as an available-for-sale
equity security, which accordingly is carried at market value. Pursuant to a
hedging strategy implemented by the Company in January, 1998, 400,000 WinStar
shares are hedged, utilizing the purchase of puts and calls in combination to
minimize the downside risk of loss should the price of WinStar stock decline
while allowing for limited upside participation should the stock price rise.
The call option is secured by shares of WinStar stock held by the Company.
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 bye the
undersigned hereunto duly authorized.
Telesoft Corp.
/s/ Michael F. Zerbib
Michael F. Zerbib
Chief Financial Officer
Date: January 27, 1998
