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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
---------------
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 2003.
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ___________ to ___________.
COMMISSION FILE NUMBER 000-26153
---------------
HIGH SPEED ACCESS CORP.
(Exact name of Registrant as specified in its charter)
DELAWARE 61-1324009
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
9900 CORPORATE CAMPUS DRIVE, SUITE 3000
LOUISVILLE, KENTUCKY 40223
(Address of principal executive offices, including zip code)
502/657-6340
(Registrant's telephone number, including area code)
FORMER NAME, FORMER ADDRESS, AND FORMER YEAR, IF CHANGED SINCE LAST REPORT:
NOT APPLICABLE
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
YES [ ] NO [X]
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
Number of shares of Common Stock outstanding as of August 1, 2003...40,294,783
1
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Condensed Consolidated Statements of Net Assets in Liquidation as of June 30,
2003 and December 31, 2002 3
Condensed Consolidated Statement of Changes in Net Assets in Liquidation for the
three and six months ended June 30, 2003 4
Condensed Consolidated Statement of Operations (Going Concern Basis) for the
three and six months ended June 30, 2002 5
Condensed Consolidated Statement of Cash Flows (Going Concern Basis) for the
six months ended June 30, 2002 6
Notes to Condensed Consolidated Financial Statements 7
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations 14
Item 3 - Quantitative and Qualitative Disclosures About Market Risk 21
Item 4 - Controls and Procedures 21
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 21
Item 2 - Changes in Securities and Use of Proceeds 22
Item 3 - Defaults upon Senior Securities 22
Item 4 - Submission of Matters to a Vote of Security Holders 22
Item 5 - Other Information 22
Item 6 - Exhibits and Reports on Form 8-K 22
Signatures 23
2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
HIGH SPEED ACCESS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
JUNE 30, DECEMBER 31,
2003 2002
------------ ------------
ASSETS
Cash and cash equivalents $ 8,066 $ 63,640
Short-term investments 859 1,237
Interest receivable 65 392
Charter holdback -- 2,092
Furniture and fixtures 62 113
------------ -----------
Total assets 9,052 67,474
------------ -----------
LIABILITIES
Accounts payable and accrued liabilities 445 2,571
Estimated costs to be incurred during the wind-up period 600 1,089
------------ -----------
Total liabilities 1,045 3,660
------------ -----------
Net assets in liquidation 8,007 63,814
Less: Contingency reserve 1,150 2,000
------------ -----------
Net assets available for distribution to stockholders $ 6,857 $ 61,814
============ ===========
Net assets in liquidation per share $ 0.20 $ 1.58
Net assets available for distribution to stockholders per share $ 0.17 $ 1.53
Outstanding shares used in computing per share amounts 40,294,783 40,294,783
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3
HIGH SPEED ACCESS CORP.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003
(IN THOUSANDS)
(UNAUDITED)
Three months Six months
------------ ----------
Net assets in liquidation, beginning of period $ 63,819 $ 63,814
Adjust assets and liabilities to fair value 600 661
Accrue additional estimated costs during wind-up -- (56)
Initial cash distribution (56,412) (56,412)
---------- ----------
Net assets in liquidation at June 30, 2003 $ 8,007 $ 8,007
========== ==========
The accompanying notes are an integral part of these
condensed consolidated financial statements.
4
HIGH SPEED ACCESS CORP.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (GOING CONCERN BASIS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
Three months Six months
------------ ----------
General and administrative operating expenses:
General and administrative expenses $ 2,783 $ 5,993
Non-cash compensation expense from restricted stock 1,335 1,661
-------------- --------------
Total general and administrative operating expenses 4,118 7,654
-------------- --------------
Loss from continuing operations before other income
(expense) and discontinued operations (4,118) (7,654)
Investment income 335 524
Interest expense (2) (226)
-------------- --------------
Loss from continuing operations before discontinued
operations (3,785) (7,356)
Discontinued operations:
Loss from discontinued operations, net (105) (4,217)
Gain on sale of operations to Charter -- 40,259
-------------- --------------
Net income (loss) $ (3,890) $ 28,686
============== ==============
Basic and diluted net (loss) income per share:
Loss from continuing operations $ (0.10) $ (0.16)
Loss from discontinued operations -- (0.09)
Gain on sale of operations to Charter -- 0.88
-------------- --------------
Net (loss) income $ (0.10) $ 0.63
============== ==============
Weighted average shares used in computation of basic and
diluted net (loss) income per share 40,205,446 45,833,363
The accompanying notes are an integral part of these
condensed consolidated financial statements.
5
HIGH SPEED ACCESS CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (GOING CONCERN BASIS)
FOR THE SIX MONTHS ENDED JUNE 30, 2002
(IN THOUSANDS)
(UNAUDITED)
OPERATING ACTIVITIES
Net income $ 28,686
Adjustments to reconcile net income to cash used in operating activities
of continuing operations:
Loss from discontinued operations, net 4,217
Gain on sale of operations to Charter (40,259)
Loss on early extinguishment of debt and capital lease obligations 2,041
Non-cash compensation expense from restricted stock 1,661
Changes in operating assets and liabilities excluding the effect of dispositions:
Prepaid expenses (249)
Accrued compensation and related expenses (457)
-----------
Net cash used in operating activities of continuing operations (3,446)
Net cash used in operating activities of discontinued operations (8,166)
----------
Net cash used in operating activities (11,612)
----------
INVESTING ACTIVITIES
Purchases of short-term investments (67,324)
Sales and maturities of short-term investments 69,182
----------
Net cash provided by investing activities of continuing operations 1,858
Net cash provided by investing activities of discontinued operations 76,081
----------
Net cash provided by investing activities 77,939
----------
FINANCING ACTIVITIES
Repurchase of common stock (4,449)
Proceeds from exercise of stock options 21
----------
Net cash used in financing activities of continuing operations (4,428)
Net cash used in financing activities of discontinued operations (11,017)
----------
Net cash used in financing activities (15,445)
----------
Net change in cash and cash equivalents from continuing operations (6,016)
Net change in cash and cash equivalents from discontinued operations 56,898
----------
Net change in cash and cash equivalents 50,882
Cash and cash equivalents, beginning of period 11,714
----------
Cash and cash equivalents, end of period $ 62,596
==========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment purchases payable $ 10
The accompanying notes are an integral part of these
condensed consolidated financial statements.
6
ITEM 1 - NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements of High Speed
Access Corp. and its subsidiaries (herein referred to as the Company, we, us, or
our) included herein reflect all adjustments, consisting only of normal
recurring adjustments, which in the opinion of management are necessary to
present fairly the Company's net assets in liquidation and changes in net assets
in liquidation or financial position, results of operations and cash flows for
the periods presented. Certain information and footnote disclosures normally
included in audited financial information prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to the
Securities and Exchange Commission's rules and regulations.
The Board of Directors unanimously adopted a Plan of Liquidation and
Dissolution (the "Plan") on August 13, 2002. The Plan was approved by the
holders of a majority of the Company's shares on November 27, 2002. The key
features of the Plan are (1) filing a Certificate of Dissolution with the
Secretary of State of Delaware and thereafter remaining in existence as a
non-operating entity for three years; (2) winding up our affairs, including the
settlement of any then-outstanding issues with Charter (see Note 2,
"Discontinued Operations") relating to the Asset Sale, selling any remaining
non-cash assets of the Company, and taking such action as may be necessary to
preserve the value of our assets and distributing our assets in accordance with
the Plan; (3) paying our creditors; (4) terminating any of our remaining
commercial agreements, relationships or outstanding obligations; (5) resolving
our outstanding litigation; (6) establishing a Contingency Reserve for payment
of the Company's expenses and liabilities; and (7) preparing to make
distributions to our stockholders.
Under Delaware law, the Company will remain in existence as a non-operating
entity until December 4, 2005 and is required to maintain a certain level of
liquid assets and reserves to cover any remaining liabilities and pay operating
costs during the wind-up period. During the wind-up period, the Company will
attempt to convert its remaining assets to cash and settle its liabilities as
expeditiously as possible.
These financial statements should be read in conjunction with the financial
statements, notes and discussions thereto included in our Annual Report on Form
10-K for the fiscal year ended December 31, 2002 and our October 25, 2002 Proxy
Statement.
LIQUIDATION BASIS OF ACCOUNTING
The condensed consolidated financial statements for the three and six months
ended June 30, 2002 were prepared on the going concern basis of accounting,
which contemplates realization of assets and satisfaction of liabilities in the
normal course of business. As a result of the adoption of the Plan, the Company
adopted the liquidation basis of accounting effective November 27, 2002.
Inherent in the liquidation basis of accounting are significant management
estimates and judgments. Under the liquidation basis of accounting, assets are
stated at their estimated net realizable values and liabilities, including costs
of liquidation, are stated at their anticipated settlement amounts, all of which
approximate their estimated fair values. The estimated net realizable values of
assets and settlement amounts of liabilities represent our best estimate of the
recoverable values of the assets and settlement amounts of liabilities. There
can be no assurance, however, that we will be successful in selling the assets
at their estimated net realizable value or in settling the liabilities at their
estimated amounts. The liquidation basis of accounting requires that we accrue
an estimate for all liabilities related to expenses to be incurred during the
wind-up period. While we believe our estimates are reasonable under the
circumstances, if the length of our wind-up period were to change or other
conditions were to arise, actual results may differ from these estimates and
those differences may be material.
The Company made an Initial Cash Distribution of $1.40 per share or $56.4
million to its stockholders on May 30, 2003. The Board of Directors also
authorized a Subsequent Cash Distribution of $0.17 per share or $6.9 million on
August 29, 2003, payable to shareholders of record as of August 22, 2003. The
"per share" amounts are based on 40,294,783 shares of common stock outstanding
as of August 1, 2003.
Other than this Subsequent Cash Distribution, the Company does not expect to
make any other liquidating distributions prior to the transfer of its remaining
assets and liabilities to a liquidating trust on or before December 31, 2003. At
such time, the Company will most likely deregister under the Securities Act of
1934, and will no longer be subject to its rules, including those relating to
reporting and proxy solicitations. In addition, the Company expects to cancel
its outstanding shares in exchange for illiquid beneficial interests in the
liquidating trust. At such time, we expect to close our stock transfer books,
after which you will no longer be able to transfer shares. After the stock
transfer books have been closed, certificates representing shares of common
stock will not be assignable or
7
transferable on our books except by will, intestate succession or operation of
law. After the final record date for the recording of stock transfers, we will
not issue any new stock certificates, other than replacement certificates.
Due to the duration of the wind-up period to December 4, 2005, and provision
in Delaware law that the Company maintain reserves sufficient to allow for the
payment of all its liabilities and obligations, including all contingent,
conditional and unmatured claims, the Company established a Contingency Reserve
upon the adoption of liquidation basis accounting on November 27, 2002. The
amount of reserve initially established was $2.0 million and was unchanged as of
March 31, 2003. At June 30, 2003, the Company lowered the established
Contingency Reserve to $1,150,000 as a result of the receipt of the remainder of
the Charter Holdback. At June 30, 2003, the Company has no known material claims
against this reserve and will periodically assess whether maintenance of a lower
or higher Contingency Reserve is required. In the event there are no claims
against this reserve, then the amount of any future liquidating distributions
and the Final Liquidation Payment on or before December 4, 2005 would include
the full amount of the Contingency Reserve.
The amount and timing of any future liquidating distributions by the trustee
after January 1, 2004 will depend upon a variety of factors including, but not
limited to, the actual proceeds from the realization of the Company's assets,
the ultimate settlement amounts of the Company's liabilities and obligations and
actual costs incurred in connection with carrying out the Plan, including
salaries, administrative and operating costs during the wind-up period. A
summary of significant estimates and judgments utilized in preparation of the
June 30, 2003 condensed consolidated financial statements on a liquidation basis
follows:
Interest Receivable. At June 30, 2003, interest receivable of $65,000
represents the Company's estimate of future interest earnings on cash, cash
equivalents and short-term investments over the wind-up period through December
4, 2005 and accounts for less than 1.0% of the Company's total assets.
Furniture and Fixtures. At June 30, 2003, furniture and fixtures of $62,000
represents the Company's estimate of cash proceeds to be received on the sale of
office furniture.
Accounts Payable and Accrued Liabilities. At June 30, 2003, accounts payable
and accrued expenses were $0.4 million. Included in this amount are accrued
circuit termination charges of $0.2 million and $0.2 million for the expected
payout on 2,862,174 stock options outstanding under the Company's stock option
plans that were cancelled on March 3, 2003.
Estimated Costs to be Incurred During The Wind-Up Period. At June 30, 2003,
the Company estimates that there are $0.6 million of costs to be incurred
through December 4, 2005, including compensation for liquidation personnel ($0.2
million) and professional fees and other miscellaneous costs ($0.4 million).
Contingency Reserve. In view of the duration of the wind-up period to
December 4, 2005, and provision in Delaware law that the Company maintain
reserves sufficient to allow for the payment of all its liabilities and
obligations, including all contingent, conditional and unmatured claims, the
Company established a Contingency Reserve upon the adoption of liquidation basis
accounting on November 27, 2002. The amount of reserve initially established was
$2.0 million and remained unchanged as of March 31, 2003. At June 30, 2003, the
Company lowered the established Contingency Reserve to $1,150,000 as a result of
the receipt of the remainder of the Charter Holdback. At June 30, 2003, the
Company has no known material claims against this reserve and will periodically
assess whether maintenance of a lower or higher Contingency Reserve is required.
In the event there are no claims against this reserve, the amount of any future
liquidating distributions and the Final Liquidation Payment that may ultimately
be paid to stockholders would include the full amount of the Contingency
Reserve.
Stock-Based Employee Compensation. The Company accounted for stock-based
awards to employees in accordance with Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" and adopted the disclosure-only
requirements of SFAS No. 123 "Accounting for Stock-Based Compensation" ("SFAS
123").
The following illustrates the effect on net income (loss) and net income
(loss) per share for the three and six months ended June 30, 2002 if the fair
value based method of SFAS 123 had been applied to all outstanding and unvested
awards (in thousands).
Three months Six months
------------ ----------
Net (loss) income as reported.................................... $ (3,890) $ 28,686
Add: Stock based employee compensation expense included in
reported net (loss) income.................................... 1,335 1,685
Deduct: Total stock-based employee compensation expense
8
determined under fair value based methods for all awards (4,304) (7,623)
---------- ----------
Pro forma net (loss) income...................................... $ (6,859) $ 22,748
========== ==========
Basic and diluted net (loss) income per share:
As reported.................................................. $ (0.10) $ 0.63
Pro forma.................................................... $ (0.17) $ 0.50
NOTE 2 - DISCONTINUED OPERATIONS
HIGH SPEED INTERNET ACCESS AND RELATED SERVICES
On February 28, 2002, the Company consummated the sale of substantially all
of its assets (the "Asset Sale") to CC Systems, LLC immediately after obtaining
the required approval of the Company's stockholders. The Asset Sale was effected
pursuant to an asset purchase agreement (the "Asset Purchase Agreement"), dated
September 28, 2001, between the Company and Charter Communications Holding
Company, LLC. Subsequent to September 28, 2001, Charter Communications Holding
Company, LLC assigned to CC Systems, LLC the rights to purchase assets and
certain other rights under the Asset Purchase Agreement and certain other
related agreements. Except as otherwise specifically noted or unless the context
otherwise requires, any reference herein to "Charter" should be deemed a
reference individually and/or collectively to any of the following Charter
entities: Charter Communications Holding Company, LLC, Charter Communications,
Inc., CC Systems, LLC, and Charter Communications Ventures, LLC.
The assets acquired by Charter pursuant to the Asset Purchase Agreement were
used by the Company primarily in the provision of high speed Internet access to
residential and commercial customers of Charter via cable modems. Subsequent to
the Asset Sale, we do not own or operate any revenue-generating businesses.
Pursuant to the terms of the Asset Purchase Agreement, Charter acquired
certain assets from us in consideration for (i) the payment to us of a cash
amount equal to $81.1 million, subject to certain adjustments, (ii) the
assumption of certain of our operating liabilities, and (iii) the tender to us
of all our outstanding shares of Series D Preferred Stock and warrants held by
Charter to purchase shares of common stock. On February 28, 2002, Charter held
back an aggregate of $3.4 million of the purchase price to secure certain
purchase price adjustments and indemnity claims against the Company under the
Asset Purchase Agreement. Of this amount, $1.4 million was paid to us on April
30, 2002, $1.0 million plus accrued interest was paid to us on February 28,
2003, and $1.0 million plus accrued interest was paid to us on June 5, 2003.
The Company received from Charter on February 28, 2002, a net cash amount
equal to $69.5 million. The payment consisted of the following (in millions):
Cash purchase price per the Asset Purchase Agreement...... $ 81.1
--------
Adjustments:
Current assets acquired by Charter, as adjusted per
the Asset Purchase Agreement........................ 4.5
Capital leases, debt and other liabilities assumed
or paid by Charter.................................. (12.7)
Indemnity holdbacks.................................... (3.4)
--------
Total adjustments................................ (11.6)
--------
Net cash proceeds from sale to Charter................. $ 69.5
========
Under the Asset Purchase Agreement:
- - We sold substantially all of our revenue-generating fixed assets with a net
book value of $22.8 million at February 28, 2002.
- - We sold all accounts receivable related to Charter systems with a net book
value of $4.1 million at February 28, 2002 for which we received a purchase
price adjustment.
- - The Company paid to Charter $5.1 million for outstanding launch fees.
- - Charter paid to the Company $2.2 million for expenses incurred by the
Company on Charter's behalf prior to September 28, 2001.
- - Charter assumed certain of the Company's operating and capital lease
obligations with future minimum lease payments of $13.5 million.
- - The Company paid $2.2 million to retire all outstanding long-term debt and
$8.1 million to pay-off substantially all of the Company's remaining capital
lease obligations. In connection with these payments, the Company recorded a
loss on the early
9
extinguishment of debt and capital lease obligations of $2.0 million during
the first quarter of 2002.
- - Warrants to purchase 2,650,659 shares of our Company's common stock earned
by Charter under various distribution agreements were cancelled.
- - All of the Company's 75,000 outstanding shares of Series D Preferred Stock
were cancelled.
- - Charter assumed certain commitments relating to circuits with a national
telecommunications company with future minimum payments of $7.4 million
through 2003.
- - On February 28, 2002, the Company paid an additional $3.4 million of
expenses related to the Asset Sale. The total expenses paid were $6.4
million.
The Company recorded a gain on the Asset Sale to Charter of $40.3 million
during the first quarter of 2002. The components of the gain are as follows (in
millions):
Net cash proceeds from sale to Charter...... $ 69.5
Fair value of preferred stock............... 3.7
Liabilities assumed by Charter.............. 14.4
Book value of assets acquired by Charter.... (44.3)
Indemnity holdbacks......................... 3.4
Transaction expenses........................ (6.4)
--------
Gain on Asset Sale.......................... $ 40.3
========
Also on February 28, 2002, the Company purchased 20,222,139 shares of our common
stock from Vulcan Ventures Incorporated ("Vulcan") for an aggregate purchase
price of $4.4 million, or $0.22 per share. The consummation of the Asset Sale
was a condition precedent to the purchase of common stock from Vulcan. The Board
of Directors approved the cancellation of these shares in March, 2002 and they
were officially retired in September, 2002. Following the consummation of the
Asset Sale and the purchase of common stock from Vulcan, none of Vulcan, Charter
or any of their respective affiliates hold any equity interest in the Company.
Accordingly, the Company is no longer affiliated with Vulcan, Charter, or any of
their respective affiliates.
The Asset Sale completed the discontinuance of the Company's high speed
Internet access and related services business.
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS 144)
on January 1, 2002. SFAS 144 supersedes Emerging Issues Task Force Issue No.
95-18 "Accounting and Reporting for a Discontinued Business Segment When the
Measurement Date Occurs after the Balance Sheet Date but before the Issuance of
Financial Statements" and requires a discontinued operation to be accounted for
under SFAS 144 if a measurement date for the discontinued operations is not
reached under Accounting Principles Board Opinion No. 30, "Reporting Results of
Operations - Reporting the Effects of Disposal of a Segment of a Business" prior
to the entity's period-end. The measurement date for the discontinuance of the
Company's high speed Internet access and related services business that included
the Asset Sale occurred on February 28, 2002, the date on which the Company's
stockholders approved the Asset Sale. Consequently, the results of operations of
the high speed Internet access and related services business have been presented
as discontinued.
INTERNATIONAL ISP INFRASTRUCTURE SERVICES
On December 31, 2001, the Company terminated its agreement with Kabel
Nordrhein-Westfalen GmbH & Co. KG ("KNRW") in Germany for the provision of
international ISP infrastructure services. The results of this operation have
also been classified as discontinued.
NOTE 3 - STOCKHOLDERS' EQUITY
Activity in stockholders' equity for the six months ended June 30, 2002 was as
follows (in thousands except share amounts):
PREFERRED STOCK COMMON STOCK
--------------- ------------------------ PAID-IN DEFERRED ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL COMPENSATION DEFICIT
Balance at December 31, 2001 75,000 $ 1 60,394,835 $ 604 $ 742,144 $(1,763) $ (698,791)
Amortization of deferred
compensation 1,685
Exercise of stock options 107,750 1 20
Purchase of treasury stock
Retirement of treasury
stock (20,222,139) (202) (4,247)
Retirement of preferred
Stock (75,000) (1) (3,663)
Net unrealized loss on
Investments
Net income 28,686
------ ----- ---------- -------- --------- ------- ----------
Balance at June 30, 2002 -- $ -- 40,280,446 $ 403 $ 734,254 $ (78) $ (670,105)
====== ===== ========== ======== ========= ======= ==========
TREASURY STOCK
----------------------- COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT LOSS EQUITY
Balance at December 31, 2001 -- $ -- $ 38 $ 42,233
Amortization of deferred
compensation 1,685
Exercise of stock options 21
Purchase of treasury stock 20,222,139 (4,449) (4,449)
Retirement of treasury
stock (20,222,139) 4,449 --
Retirement of preferred
Stock (3,664)
Net unrealized loss on
Investments (1) (1)
Net income 28,686
---------- -------- ----- ---------
Balance at June 30, 2002 -- $ --) $ 37 $ 64,511
========== ======== ===== =========
10
COMPREHENSIVE INCOME (LOSS)
Comprehensive income (loss), comprised of net income (loss) and net
unrealized holding gains and losses on investments, totaled $(3.9) million and
$28.7 million for the three and six months ended June 30, 2002, respectively.
NOTE 4 - INCOME (LOSS) PER SHARE
For the three and six months ended June 30, 2002, the Company computed net
income (loss) per share under the provisions of SFAS No. 128, "Earnings per
Share," ("SFAS 128"). Under the provisions of SFAS 128, basic net income (loss)
per share was computed by dividing the net income for the period by the weighted
average number of shares of common stock outstanding during the period.
Diluted earnings per share was determined in the same manner as basic
earnings per share, except that the number of shares was increased assuming
exercise of dilutive stock options and warrants using the treasury stock method,
assuming conversion of preferred stock, and assuming vesting of restricted stock
awards. In addition, income was adjusted for dividends and other transactions
relating to preferred stock for which conversion was assumed. The calculation of
diluted net income per share excluded potential common shares if the effect was
anti-dilutive.
Basic and diluted net income (loss) per share for the three and six months
ended June 30, 2002 were $(0.10) and $0.63, respectively, based on weighted
average shares outstanding of 40,205,446 and 45,833,363, respectively. Diluted
net income (loss) per share equals basic net income (loss) per share because the
assumed exercise of the Company's stock options and warrants, the assumed
conversion of preferred stock, and the vesting of restricted stock is
anti-dilutive to the loss from continuing operations per share. Stock options
and warrants to purchase 4,429,071 shares of our common stock at June 30, 2002
were excluded from the calculation of diluted net income (loss) per share as
they were anti-dilutive.
NOTE 5 - COMMITMENTS, GUARANTEES AND CONTINGENCIES
The Delaware Class Action Lawsuits. The Company, our then directors, certain
former directors as well as Charter and Paul Allen, were named as defendants in
four putative class action lawsuits filed in the Court of Chancery of the State
of Delaware (Denault v. O'Brien, et. al., Civil Action No. 19045-NC, Tesche v.
O'Brien, et al., Civil Action No. 19046-NC, Johnson v. O'Brien, et. al., Civil
Action No. 19053-NC, and Krim v. Allen, et al., Civil Action 19478-NC). All four
lawsuits, which alleged breach of fiduciary duties by the individual defendants
and Charter, were consolidated and settled with the approval of the Delaware
Chancery Court on April 16, 2003. No objections or appeals to the settlement
were filed. The Company paid its $166,500 portion of the $390,000 settlement
amount required to reimburse plaintiffs' counsel for their fees and expenses
incurred in the litigation.
The IPO Litigation. Also, on November 5, 2001, the Company, our President
and Chief Financial Officer (Mr. George Willett) and one of our former
Presidents (Mr. Ron Pitcock), together with Lehman Brothers, Inc., J.P. Morgan
Securities, Inc., CIBC World Markets Corp., and Banc of America Securities,
Inc., were named as defendants in a purported class action lawsuit filed in the
United States District Court for the Southern District of New York (Ruthy Parnes
v. High Speed Access Corp., et. al., Index No. 01-CV-9743(SAS)). The lawsuit
alleges that our Registration Statement, dated June 3, 1999, and Prospectus,
dated June 4, 1999, for the issuance and initial public offering of 13,000,000
shares of our common stock to investors contained material misrepresentations
and/or omissions. The purported class action alleges violations of Sections 11
and 15 of the Securities Act of 1933 (the "1933 Act") and Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 (the "1934 Act") and Rule 10b-
promulgated thereunder. The essence of the complaints is that defendants issued
and sold our common stock pursuant to the Registration Statement for the IPO
without disclosing to investors that certain underwriters in the offering had
solicited and received excessive and undisclosed commissions from certain
investors. The complaints also allege that our Registration Statement for the
IPO failed to disclose that the underwriters allocated Company shares in the IPO
to customers in exchange for the customers' promises to purchase additional
shares in the aftermarket at pre-determined prices above the IPO price, thereby
maintaining, distorting and/or inflating the market price for the shares in the
aftermarket. The plaintiff asks to represent the interest of all holders of our
common stock and seeks unspecified monetary damages.
11
On July 15, 2002, the Company moved to dismiss all claims against it and
Messrs. Willett and Pitcock. The allegations against Messrs. Willett and Pitcock
were dismissed without prejudice on October 11, 2002 pursuant to a Reservation
of Rights and Tolling Agreement dated as of July 20, 2002. On February 19, 2003,
the Court denied the Company's motion to dismiss the alleged violations of
Section 11 and 15 of the 1933 Act. However, the Court granted the Company's
motion to dismiss the alleged violations of Sections 10(b) and 20(a) of the 1934
Act and Rule 10b- promulgated thereunder.
On February 28, 2003, Charter notified the Company of its assertion of a
potential claim for indemnity in respect of Charter being named as a "successor
in interest" to the Company in the IPO Litigation and deferred release of half
of the $2.0 million indemnity holdback. Charter was dismissed as a defendant in
the IPO Litigation on May 28, 2003 and paid the remaining $1.0 million indemnity
holdback to us on June 5, 2003.
On June 26, 2003, the Plaintiffs' Executive Committee announced that a
proposed settlement between the approximately 300 issuer defendants and their
directors and officers and the plaintiffs has been structured in the IPO
Litigation which would guarantee at least $1.0 billion to investors who are
class members from the insurers of the issuers. The cases will continue against
the 55 investment bank underwriter defendants. The Company had assented to
participate in the settlement, which is subject to final documentation and
review and consent of the Court. If final settlement occurs, the Company will be
removed from the litigation without payment of any funds.
With respect to the allegations against the Company, we believe this lawsuit
is without merit and intend to continue to vigorously defend against the claims
made therein. We express no opinion as to the allegations lodged against Lehman
Brothers, Inc., J.P. Morgan Securities, Inc., CIBC World Markets Corp., and Banc
of America Securities Inc.
We do not believe that the IPO litigation will have a material adverse
effect on our net assets in liquidation.
Indemnification of Charter. In connection with the Asset Sale, we agreed to
indemnify Charter against all claims arising from breaches of our
representations, warranties and covenants, various excluded liabilities and the
pre-closing operation of the assets we sold to Charter. The material
representations and warranties related to, among other things: the necessary
stockholder approval required to consummate the Asset Sale; the absence of
defaults under our material agreements; the assets being sold comprising of all
material assets used in the provision of high speed Internet access to Charter's
customers via cable modems; the absence of certain changes or events; compliance
with applicable laws, including environmental laws; the absence of litigation;
the status of our material contracts, capital leases and operating leases; real
property, including leased premises; title to and condition of the assets being
sold; intellectual property rights; taxes; labor matters; employee benefit
plans; our solvency immediately following the closing; and the correctness of
information we provided to Houlihan Lokey and Lehman Brothers in connection with
the issuance of their fairness opinion.
With the exception of certain representations and warranties and covenants
described below, all of the above-noted representations and warranties are in
effect through August 31, 2003, however any claims arising from any breaches of
these representations and warranties can only be asserted against and are
limited to the $2.0 million indemnification holdback that was released to us on
February 28, 2003 and June 5, 2003.
The following representations and warranties and covenants extend beyond
August 31, 2003 and are not subject to any limitations:
(i) breaches of representations and warranties related to title to the
acquired assets, and certain matters affecting intellectual property,
technology and know-how, will be in effect until the Company is finally
dissolved on December 5, 2005;
(ii) breaches of representations and warranties related to taxes, certain
employee benefit plans and environmental matters will be in effect through
February 28, 2004;
(ii) the excluded liabilities;
(iii) our operation of the assets sold to Charter prior to the closing of
the Asset Sale; and
(iv) common law fraud.
The Company has no liability to Charter for claims arising from breaches of
our representations and warranties unless the damages in the aggregate for such
breaches exceed $250,000, in which case Charter is entitled to reimbursement
from the first dollar of such
12
damages. However, Charter is entitled to reimbursement from the first dollar of
damages related to (i) breaches of post-closing covenants and representations
and warranties related to title, taxes, certain benefit plans and environmental
matters, (ii) the excluded liabilities, (iii) operation of the assets sold to
Charter prior to the closing of the Asset Sale, and (iv) actual common law
fraud, and such damages are unlimited. These indemnification obligations are
limited to actual damages. The Company has no liability to Charter for indirect
or consequential damages.
We are aware of no other claims that Charter has or intends to assert
against us in connection with the Asset Sale.
NOTE 7 - RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
In May 2002, the FASB issued SFAS No. 145 ("SFAS 145"), "Rescission of SFAS
Nos. 4, 44, 64, Amendment of SFAS 13, and Technical Corrections as of April
2002." SFAS 145 rescinds SFAS No. 4, "Reporting Gains and Losses from
Extinguishment of Debt," which required that gains and losses from
extinguishment of debt that were included in the determination of net income be
aggregated and, if material, classified as an extraordinary item, net of the
related income tax effect. Under SFAS 145, gains or losses from extinguishment
of debt should be classified as extraordinary items only if they meet the
criteria in Accounting Principal's Board Opinion No. 30 ("APB 30"), "Reporting
the Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions". Applying the criteria in APB 30 will distinguish transactions
that are part of an entity's recurring operations from those that are unusual or
infrequent or that meet the criteria for classification as an extraordinary
item. The Company adopted SFAS 145 on January 1, 2003. The losses on early
extinguishment of debt and capital lease obligations that were classified as
extraordinary items in prior periods presented that did not meet the criteria of
APB 30 for classification as extraordinary items were reclassified to loss from
continuing operations.
In November 2002, the FASB, issued FASB Interpretation No. 45 ("FIN 45"),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, an interpretation of FASB
Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34. Fin
45 requires that upon issuance of a guarantee, the entity must recognize a
liability for the fair value of the obligation it assumes under that guarantee.
FIN 45 requires disclosure about each guarantee even if the likelihood of the
guarantor's having to make any payments under the guarantee is remote. The
provisions for initial recognition and measurement are effective on a
prospective basis for guarantees that are issued or modified after December 31,
2002 and the disclosure provisions of FIN 45 were effective for our December 31,
2002 financial statements. Adopting the recognition provisions of FIN 45 did not
have an impact on the Company. We have made the disclosures required by FIN 45
in the notes to our condensed consolidated financial statements (see Note 5,
"Commitments, Guarantees and Contingencies").
In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
Consolidation of Variable Interest Entities, an interpretation of ARB 51. The
primary objectives of FIN 46 are to provide guidance on the identification of
entities for which control is achieved through means other than through voting
right (variable interest entities, or VIEs) and how to determine when and which
business enterprise should consolidate the VIE (the primary beneficiary). The
provisions of FIN 46 are effective immediately for VIEs created after January
31, 2003 and no later than July 1, 2003 for VIEs created before February 1,
2003. In addition, FIN 46 requires that both the primary beneficiary and all
other enterprises with a significant variable interest make additional
disclosure in filings issued after January 31, 2003. The adoption of FIN 46 did
not have an impact on the Company because we do not hold any interest in an
entity qualifying as a VIE.
In January 2003, the FASB issued Statement No. 148 ("SFAS 148"), Accounting
for Stock-Based Compensation - Transition and Disclosure. SFAS 148 amends FASB
Statement No. 123 ("SFAS 123"), Accounting for Stock-Based Compensation, to
provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. See Note 1, "Basis of Presentation" for our
stock option accounting policy and required disclosures.
13
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Quarterly Report on Form 10-Q contains certain statements of a
forward-looking nature relating to future events or the future financial
performance of the Company. Such statements are only predictions, involve risks
and uncertainties, and actual events or results may differ materially from the
results discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include those discussed under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Risk Factors" as well as those discussed in other filings with the
Securities and Exchange Commission, including the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2002.
OVERVIEW
High Speed Access Corp. (hereinafter referred to as the Company, we, us or
our) formerly provided high speed Internet access and related services to
residential and commercial customers primarily via cable modems and
international ISP infrastructure services.
On August 13, 2002, our Board concluded that the liquidation of the Company
was the best alternative available for maximizing stockholder value and adopted
a Plan of Liquidation and Dissolution (the "Plan"). The Plan was approved by the
holders of a majority of the Company's shares on November 27, 2002. The key
features of the Plan are (1) filing a Certificate of Dissolution with the
Secretary of State of Delaware and thereafter remaining in existence as a
non-operating entity for three years; (2) winding up our affairs, including the
settlement of any then-outstanding issues with Charter relating to the Asset
Sale, selling any remaining non-cash assets of the Company, and taking such
action as may be necessary to preserve the value of our assets and distributing
our assets in accordance with the Plan; (3) paying our creditors; (4)
terminating any of our remaining commercial agreements, relationships or
outstanding obligations; (5) resolving our outstanding litigation; (6)
establishing a Contingency Reserve for payment of the Company's expenses and
liabilities; and (7) preparing to make distributions to our stockholders.
In connection with the adoption of the Plan and the anticipated liquidation,
the Company adopted the liquidation basis of accounting effective November 27,
2002, and has valued its assets at their estimated net realizable cash values
and has stated its liabilities, including costs to liquidate, at their estimated
settlement amounts, all of which approximate their estimated fair values.
Uncertainties as to the value to be realized from the disposal of the Company's
assets (other than cash), and the ultimate amount paid to settle its liabilities
make it impracticable to predict the aggregate net value that may ultimately be
distributable to stockholders. Claims, liabilities and future expenses of
liquidation (including salaries, payroll and local taxes, professional fees, and
miscellaneous office expenses), although currently declining in the aggregate,
will continue to be incurred with execution of the Plan. Although we do not
believe that a precise estimate of the Company's net assets can currently be
made, we believe that available cash and cash equivalent investments and amounts
received from the sale of office furniture will be adequate to provide for the
Company's obligations, liabilities, operating costs and claims (including
contingent liabilities), and to make future cash distributions to stockholders.
Under Delaware law, the Company will remain in existence as a non-operating
entity until December 4, 2005 and is required to maintain a certain level of
liquid assets and reserves to cover any remaining liabilities and pay operating
costs during the wind-up period. During the wind-up period, the Company will
attempt to covert its remaining assets to cash and settle its liabilities as
expeditiously as possible.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Liquidation Basis of Accounting. As of November 27, 2002, all activities of
the Company are presented under the liquidation basis of accounting. Inherent in
the liquidation basis of accounting are significant management estimates and
judgments. Under the liquidation basis of accounting, assets have been valued at
their estimated net realizable values and liabilities are stated at their
anticipated settlement amounts, all of which approximate their estimated fair
values. The estimated net realizable values of assets and settlement amounts of
liabilities, including costs of liquidation, represent our best estimate of the
recoverable value of the assets and settlement amounts of liabilities. There can
be no assurance, however, that we will be successful in selling the assets at
their estimated net realizable value or in settling the liabilities at their
estimated amounts. The liquidation basis of accounting requires that we accrue
an estimate for all liabilities related to expenses to be incurred during the
wind-up period. While we believe our estimates are reasonable under the
circumstances, if the length of our wind-up period were to change or other
conditions were to arise, actual results may differ from these estimates and
these differences may be material.
The Company made an Initial Cash Distribution of $1.40 per share or $56.4
million to its stockholders on May 30, 2003. The Board of Directors also
authorized a Subsequent Cash Distribution of $0.17 per share or $6.9 million on
August 29, 2003, payable to
14
shareholders of record as of August 22, 2003. The "per share" amounts are based
on 40,294,783 shares of common stock outstanding as of August 1, 2003.
Other than this Subsequent Cash Distribution, the Company does not expect to
make any other liquidating distributions prior to the transfer of its remaining
assets and liabilities to a liquidating trust on or before December 31, 2003. At
such time, the Company will most likely deregister under the Securities Act of
1934, and will no longer be subject to its rules, including those relating to
reporting and proxy solicitations. In addition, the Company expects to cancel
its outstanding shares in exchange for illiquid beneficial interests in the
liquidating trust. At such time, we expect to close our stock transfer books,
after which you will no longer be able to transfer shares. After the stock
transfer books have been closed, certificates representing shares of common
stock will not be assignable or transferable on our books except by will,
intestate succession or operation of law. After the final record date for the
recording of stock transfers, we will not issue any new stock certificates,
other than replacement certificates.
Due to the duration of the wind-up period to December 4, 2005, and provision
in Delaware law that the Company maintain reserves sufficient to allow for the
payment of all its liabilities and obligations, including all contingent,
conditional and unmatured claims, the Company established a Contingency Reserve
upon the adoption of liquidation basis accounting on November 27, 2002. The
amount of reserve initially established was $2.0 million and was unchanged as of
March 31, 2003. At June 30, 2003, the Company lowered the established
Contingency Reserve to $1,150,000 as a result of the receipt of the remainder of
the Charter Holdback. At June 30, 2003, the Company has no known material claims
against this reserve and will periodically assess whether maintenance of a lower
or higher Contingency Reserve is required. In the event there are no claims
against this reserve, then the amount of any future liquidating distributions
and the Final Liquidation Payment on or before December 4, 2005 would include
the full amount of the Contingency Reserve.
The amount and timing of any future liquidating distributions by the trustee
after January 1, 2004 will depend upon a variety of factors including, but not
limited to, the actual proceeds from the realization of the Company's assets,
the ultimate settlement amounts of the Company's liabilities and obligations and
actual costs incurred in connection with carrying out the Plan, including
salaries, administrative and operating costs during the wind-up period. A
summary of significant estimates and judgments utilized in preparation of the
June 30, 2003 condensed consolidated financial statements on a liquidation basis
follows:
Interest Receivable. At June 30, 2003, interest receivable of $65,000
represents the Company's estimate of future interest earnings on cash, cash
equivalents and short-term investments over the wind-up period through December
4, 2005 and accounts for less than 1.0% of the Company's total assets.
Furniture and Fixtures. At June 30, 2003, furniture and fixtures of $62,000
represents the Company's estimate of cash proceeds to be received on the sale of
office furniture.
Accounts Payable and Accrued Liabilities. At June 30, 2003, accounts payable
and accrued expenses were $0.4 million. Included in this amount are accrued
circuit termination charges of $0.2 million and $0.2 million for the expected
payout on 2,862,174 stock options outstanding under the Company's stock option
plans that were cancelled on March 3, 2003.
Estimated Costs to be Incurred During The Wind-up Period. At June 30, 2003,
the Company estimates that there are $0.6 million of costs to be incurred
through December 4, 2005, including compensation for liquidation personnel ($0.2
million) and professional fees and other miscellaneous costs ($0.4 million).
Contingency Reserve. In view of the duration of the wind-up period to
December 4, 2005, and provision in Delaware law that the Company maintain
reserves sufficient to allow for the payment of all its liabilities and
obligations, including all contingent, conditional and unmatured claims, the
Company established a Contingency Reserve upon the adoption of liquidation basis
accounting on November 27, 2002. The amount of reserve initially established was
$2.0 million and was unchanged as of March 31, 2003. At June 30, 2003, the
Company lowered the established Contingency Reserve to $1,150,000 as a result of
the receipt of the remainder of the Charter Holdback. At June 30, 2003, the
Company has no known material claims against this reserve and will periodically
assess whether maintenance of a lower or higher Contingency Reserve is required.
In the event there are no claims against this reserve, then the amount of any
future liquidating distributions and the Final Liquidation Payment that may be
paid to stockholders would include the full amount of the Contingency Reserve.
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
15
The condensed consolidated financial statements for the three and six months
ended June 30, 2002 were prepared on the going concern basis of accounting,
which contemplates realization of assets and satisfaction of liabilities in the
normal course of business. The Company adopted the liquidation basis of
accounting as of November 27, 2002.
The decrease in net assets in liquidation during the six months ended June
30, 2003 is the result of the $56.4 million Initial Cash Distribution plus the
following adjustments made during the six months ended June 30, 2003 (in
thousands):
ADJUST ASSETS AND LIABILITIES TO FAIR VALUE:
Increase in estimated future interest income $ 28
Accounts payable and accrued expenses 633
----------
Total adjustments to fair value 661
----------
ACCRUE ADDITIONAL ESTIMATED COSTS DURING WIND-UP:
Costs to be incurred during the wind-up period (56)
----------
Total estimated costs during the wind-up period (56)
----------
Total liquidation adjustments $ 605
==========
The decrease in accounts payable and accrued expenses is the result of the
settlement of liabilities at less than the recorded amounts. The increase in
estimated costs during the wind-up period is primarily the result of additional
legal fees relating to the remaining $1.0 holdback from Charter.
The Company made an Initial Cash Distribution of $1.40 per share or $56.4
million to its stockholders on May 30, 2003. The Board of Directors also
authorized a Subsequent Cash Distribution of $0.17 per share or $6.9 million on
August 29, 2003, payable to shareholders of record as of August 22, 2003. The
"per share" amounts are based on 40,294,783 shares of common stock outstanding
as of August 1, 2003.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary objectives are to liquidate its assets in the shortest
time period possible while realizing the maximum values for such assets. The
actual nature, amount, and timing of all future distributions will be determined
by the Board in its sole discretion, and will depend in part upon the Company's
ability to convert certain remaining assets into cash and settle certain
obligations. Although the liquidation is currently expected to be concluded on
December 4, 2005, the period of time to liquidate the assets and distribute the
proceeds is subject to uncertainties and contingencies, many of which are beyond
the Company's control (see Item 2, "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Risk Factors"). The Company
made an Initial Cash Distribution of $1.40 per share or $56.4 million to its
stockholders on May 30, 2003. The Company has also announced that its Board of
Directors authorized a Subsequent Cash Distribution of $0.17 per share or $6.9
million on August 29, 2003, payable to shareholders of record as of August 22,
2003. Other than this Subsequent Cash Distribution, the Company does not expect
to make other liquidating distributions prior to the Final Liquidation Payment
on or around December 4, 2005. The "per share" amounts are based on 40,294,783
shares of common stock outstanding as of August 1, 2003. These amounts do not
include any benefit that might be realized if some or all of the Contingency
Reserve is not required to pay claims.
The Company currently intends to transfer its remaining assets and
liabilities to a liquidating trust on or before December 31, 2003. At such time,
the Company will most likely deregister under the Securities Act of 1934, and
will no longer be subject to its rules, including those relating to reporting
and proxy solicitations. In addition, the Company expects to cancel its
outstanding shares in exchange for illiquid beneficial interests in the
liquidating trust. At such time, we expect to close our stock transfer books,
after which you will no longer be able to transfer shares. After the stock
transfer books have been closed, certificates representing shares of common
stock will not be assignable or transferable on our books except by will,
intestate succession or operation of law. After the final record date for the
recording of stock transfers, we will not issue any new stock certificates,
other than replacement certificates.
Due to the duration of the wind-up period to December 4, 2005, and provision
in Delaware law that the Company maintain reserves sufficient to allow for the
payment of all its liabilities and obligations, including all contingent,
conditional and unmatured claims, the Company established a Contingency Reserve
upon the adoption of liquidation basis accounting on November 27, 2002. The
amount of reserve initially established was $2.0 million and was unchanged as of
March 31, 2003. At June 30, 2003, the Company lowered the established
Contingency Reserve to $1,150,000 as a result of the receipt of the remainder of
the Charter Holdback. At June 30, 2003, the Company has no known material claims
against this reserve and will periodically assess whether maintenance of a lower
or higher Contingency Reserve is required. In the event there are no claims
against this reserve, then the
16
amount of any future liquidating distributions and the Final Liquidation Payment
that may ultimately be paid to stockholders would include the full amount the
Contingency Reserve.
At June 30, 2003, the Company estimates that there is $0.6 million of
operating costs to be incurred during the remaining wind-up period through
December 4, 2005. The estimated liabilities of the Company at June 30, 2003
total $1.0 million. In addition, the Company has a Contingency Reserve of
$1,150,000 (see Note 1 of "Notes to Condensed Consolidated Financial
Statements"), equivalent to approximately $0.0285 per share.
At June 30, 2003, net assets in liquidation were $8.0 million. We had cash
and cash equivalents and short-term investments of $8.1 million and $0.9
million, respectively, compared to cash and cash equivalents and short-term
investments of $63.6 million and $1.2 million, respectively, at December 31,
2002. The net decrease in cash, cash equivalents and short-term investments of
$56.0 million is the result of the following: (in thousands):
Receipt of Charter holdback $ 2,103
Interest received 344
Sale of furniture and fixtures 51
Initial cash distribution (56,413)
Compensation and related expenses and severance (1,178)
Property, income and franchise taxes (166)
Legal settlement (167)
Professional fees (218)
Circuit termination charges (89)
Other accrued expenses (219)
----------
Net decrease in cash, cash equivalents and short-term investments $ (55,952)
==========
We invest excess cash in money market accounts with the intent to make such
funds readily available for future distributions to stockholders.
The amount and timing of liquidating distributions will depend upon a
variety of factors including, but not limited to, the actual proceeds from the
realization of the Company's assets, the ultimate settlement amounts of the
Company's liabilities and obligations and actual costs incurred in connection
with carrying out the Plan, including salaries, administrative and operating
costs during the wind-up period.
INVESTMENT PORTFOLIO. Cash equivalents are highly liquid investments with
insignificant interest rate risk and original maturities of 90 days or less and
are stated at amounts that approximate fair value based on quoted market prices.
Cash equivalents consist of investments in interest-bearing money market
accounts with financial institutions. Short-term investments at June 30, 2003
are comprised solely of certificates of deposit.
LEGAL PROCEEDINGS.
The Delaware Class Action Lawsuits. The Company, our then directors, certain
former directors as well as Charter and Paul Allen, were named as defendants in
four putative class action lawsuits filed in the Court of Chancery of the State
of Delaware (Denault v. O'Brien, et. al., Civil Action No. 19045-NC, Tesche v.
O'Brien, et al., Civil Action No. 19046-NC, Johnson v. O'Brien, et. al., Civil
Action No. 19053-NC, and Krim v. Allen, et al., Civil Action 19478-NC). All four
lawsuits, which alleged breach of fiduciary duties by the individual defendants
and Charter, were consolidated and settled with the approval of the Delaware
Chancery Court on April 16, 2003. No objections or appeals to the settlement
were filed. The Company paid its $166,500 portion of the $390,000 settlement
amount required to reimburse plaintiffs' counsel for their fees and expenses
incurred in the litigation.
The IPO Litigation. Also, on November 5, 2001, the Company, our President
and Chief Financial Officer (Mr. George Willett) and one of our former
Presidents (Mr. Ron Pitcock), together with Lehman Brothers, Inc., J.P. Morgan
Securities, Inc., CIBC World Markets Corp., and Banc of America Securities,
Inc., were named as defendants in a purported class action lawsuit filed in the
United States District Court for the Southern District of New York (Ruthy Parnes
v. High Speed Access Corp., et. al., Index No. 01-CV-9743(SAS)). The lawsuit
alleges that our Registration Statement, dated June 3, 1999, and Prospectus,
dated June 4, 1999, for the issuance and initial public offering of 13,000,000
shares of our common stock to investors contained material misrepresentations
and/or omissions. The purported class action alleges violations of Sections 11
and 15 of the Securities Act of 1933 (the "1933 Act") and Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 (the "1934 Act") and Rule 10b-
promulgated thereunder. The
17
essence of the complaints is that defendants issued and sold our common stock
pursuant to the Registration Statement for the IPO without disclosing to
investors that certain underwriters in the offering had solicited and received
excessive and undisclosed commissions from certain investors. The complaints
also allege that our Registration Statement for the IPO failed to disclose that
the underwriters allocated Company shares in the IPO to customers in exchange
for the customers' promises to purchase additional shares in the aftermarket at
pre-determined prices above the IPO price, thereby maintaining, distorting
and/or inflating the market price for the shares in the aftermarket. The
plaintiff asks to represent the interest of all holders of our common stock and
seeks unspecified monetary damages.
On July 15, 2002, the Company moved to dismiss all claims against it and
Messrs. Willett and Pitcock. The allegations against Messrs. Willett and Pitcock
were dismissed without prejudice on October 11, 2002 pursuant to a Reservation
of Rights and Tolling Agreement dated as of July 20, 2002. On February 19, 2003,
the Court denied the Company's motion to dismiss the alleged violations of
Section 11 and 15 of the 1933 Act. However, the Court granted the Company's
motion to dismiss the alleged violations of Sections 10(b) and 20(a) of the 1934
Act and Rule 10b- promulgated thereunder.
On February 28, 2003, Charter notified the Company of its assertion of a
potential claim for indemnity in respect of Charter being named as a "successor
in interest" to the Company in the IPO Litigation and deferred release of half
of the $2.0 million indemnity holdback. Charter was dismissed as a defendant in
the IPO Litigation on May 28, 2003 and paid the remaining $1.0 million indemnity
holdback to us on June 5, 2003.
On June 26, 2003, the Plaintiffs' Executive Committee announced that a
proposed settlement between the approximately 300 issuer defendants and their
directors and officers and the plaintiffs has been structured in the IPO
Litigation which would guarantee at least $1.0 billion to investors who are
class members from the insurers of the issuers. The cases will continue against
the 55 investment bank underwriter defendants. The Company had assented to
participate in the settlement, which is subject to final documentation and
review and consent of the Court. If final settlement occurs, the Company will be
removed from the litigation without payment of any funds.
With respect to the allegations against the Company, we believe this lawsuit
is without merit and intend to continue to vigorously defend against the claims
made therein. We express no opinion as to the allegations lodged against Lehman
Brothers, Inc., J.P. Morgan Securities, Inc., CIBC World Markets Corp., and Banc
of America Securities Inc.
We do not believe that the IPO litigation will have a material adverse effect on
our net assets in liquidation.
RISK FACTORS
You should carefully consider the following factors and other information
in this Form 10-Q and other filings we make with the Securities and Exchange
Commission before trading in our common stock. The Company's plan is to wind-up
the Company's affairs and distribute its net assets to the stockholders. The
timing and completion of these objectives are subject to a number of risks and
uncertainties, including those set forth below:
WE MAKE FORWARD-LOOKING STATEMENTS IN THIS FORM 10-Q THAT ARE SUBJECT TO RISKS
THAT MAY CHANGE THE LIKELIHOOD OF THOSE STATEMENTS BEING REALIZED.
This Form 10-Q, as well as other documents incorporated by reference herein
and to which we refer in this Form 10-Q, describes many of the positive factors
and assumed benefits of the Plan. You should also be aware of factors that could
have a negative impact on the Plan and our ability to make distributions of net
assets. When we use such words as "believes", "expects", "anticipates", or
similar expressions, we are making forward-looking statements. In addition, we
have made in this Form 10-Q certain forward looking statements, including
statements concerning the timing and amount of distributions of cash to
stockholders and other statements concerning the value of our net assets and the
resultant liquidation value per share of common. All such forward-looking
statements are necessarily only estimates of future results, and there can be no
assurance that actual results will not materially differ from expectations.
These statements are subject to many risks, including those set forth in each of
the following paragraphs.
YOU WILL NOT KNOW THE EXACT AMOUNT OR TIMING OF ANY FUTURE LIQUIDATING
DISTRIBUTIONS.
The methods used by the Board and management to estimate the value of our
net assets do not result in an exact determination of value nor are they
intended to indicate definitively the amount of cash you will receive during the
winding up and liquidation of the Company. The Company has established reserves
for known and unknown liabilities (see "Contingency Reserve" discussion below)
18
and the adequacy of those reserves will be reviewed prior to making any future
cash distributions to stockholders. We cannot assure you that the amount you
will receive in liquidation will equal or exceed the price or prices at which
the common stock has recently traded or may trade in the future. Any
distributions to you may be reduced by additional liabilities we may incur, and
the ultimate settlement amounts of our liabilities.
Additionally, even though we are not aware of any other pending or
threatened claims, a creditor of the Company or other party with a claim against
us might file a new lawsuit or obtain an injunction against our making any
further distributions to you under the Plan. In that event, either our Board,
the liquidating trustee or a court may decide that the amounts to be distributed
are needed to provide for the payment of such liabilities and expenses,
including unknown or contingent liabilities that may arise or be put in dispute
at a later date.
WE MIGHT MISCALCULATE OR FAIL TO ADEQUATELY RESERVE AN AMOUNT SUFFICIENT TO
COVER OUR CONTINGENT LIABILITIES.
On December 4, 2002 we filed a Certificate of Dissolution with the State of
Delaware dissolving the Company. According to Delaware General Corporation Law,
we will continue to exist for three years after the dissolution becomes
effective (December 4, 2005) or for a longer period if the Delaware Court of
Chancery requires us to, for the purpose of prosecuting and defending suits
against us and enabling us to dispose of our property, discharge our liabilities
and distribute to our stockholders any remaining assets.
Under Delaware law, the Board established a reserve for known and unknown
liabilities expected to be incurred through completion of our liquidation (the
"Contingency Reserve"), and the adequacy of that reserve has been and will
continue to be reviewed prior to making cash distributions to you. As of June
30, 2003, we set aside a $1,150,000 Contingency Reserve. However, we cannot
assure you that such Contingency Reserve will be adequate to cover all of our
expenses and liabilities expected to be incurred through completion of our
liquidation.
If the Contingency Reserve is insufficient for payment of our expenses and
liabilities, you could be held liable for payment to our creditors of your
proportional share of amounts owed to creditors in excess of the Contingency
Reserve. In that regard, your liability would be limited to the amounts
previously received by you from us or a liquidating trust established by the
Company. Accordingly, you could be required to return some or all distributions
previously made to you. In such an event, you could receive nothing from us
under the Plan. Moreover, you could incur a net tax cost if you paid taxes on
the amounts received from us and then have to repay such amounts back to our
creditors. Unless you are able to get a corresponding reduction in taxes in
connection with your repayment, you may end up having paid taxes on monies that
you have had to return.
YOU MAY NOT BE ABLE TO BUY OR SELL SHARES OF OUR COMMON STOCK IF WE CLOSE OUR
STOCK TRANSFER BOOKS.
- - We expect to close our stock transfer books on or before December 31, 2003,
and in any event on the close of business on the date on which the
remaining assets of the Company are transferred to a liquidating trust,
after which you will no longer be able to transfer shares.
After the stock transfer books have been closed, certificates representing
shares of common stock will not be assignable or transferable on our books
except by will, intestate succession or operation of law. After the final record
date for the recording of stock transfers, we will not issue any new stock
certificates, other than replacement certificates.
OUR STOCK PRICE COULD BE HIGHLY VOLATILE AND OUR STOCK IS LIKELY TO BE THINLY
TRADED.
Our stock price has been trading at a discount to our net cash value per
share. Even though we do not expect to make any additional cash distributions
prior to the transfer of our remaining assets and liabilities to a liquidating
trust on or before December 31, 2003, the announcement of additional cash
distributions could cause our stock to fluctuate suddenly and widely depending
on the amount and timing of such distributions and the amount of funds still
retained by the Company, and these fluctuations may be unrelated to our
performance or actions with respect to the Plan. General market price declines
or market volatility in the future could adversely affect the price of the our
common stock, and thus, the current market price may not be indicative of future
market prices.
In addition, at such time as the Company transfers its remaining assets
and liabilities to a liquidating trust, the Company will most likely deregister
and cancel its outstanding shares in exchange for illiquid beneficial interests
in the liquidating trust. This deregistration and cancellation, or even the
announcement of such a deregistration and cancellation could also adversely
affect the
19
price of our common stock. Moreover, if the number of the Company's shareholders
of record drops below 300, the Company may deregister under the Securities Act
of 1934 prior to December 31, 2003, and will no longer be subject to its rules,
including those relating to reporting and proxy solicitations.
Following our $0.17 per share distribution on August 29, 2003 and continuing
until the closure of our stock transfer books on or about December 31, 2003, it
is possible that our stock will be thinly traded on the over the counter
electronic bulletin board and the Pink Sheets, which could affect a
stockholder's ability to obtain price quotations and/or acquire or dispose of
the Company's shares.
THE TAX CONSEQUENCES OF OUR LIQUIDATION MAY NOT BE FAVORABLE TO YOU
The following discussion is a general summary of what the Company believes
are the material Federal income tax consequences of the Plan to its
stockholders, but does not purport to be a complete analysis of all the
potential tax effects:
As a consequence of our liquidation, our stockholders will recognize
gain or loss equal to the difference between (i) the sum of the amount of
cash distributed to them and the fair market value (at the time of
distribution) of any property distributed to them, and (ii) their tax basis
for their shares of the common stock. A stockholder's tax basis in his or
her shares will depend upon various factors, including the amount paid by
the stockholder for his or her shares and the amount and nature of any
distributions received with respect to those shares. A stockholder's gain or
loss will be computed on a "per share" basis. We have made more than one
liquidating distribution, and the amount of each such liquidating
distribution will be allocated proportionately to each share of stock owned
by a stockholder. Any gain will be recognized by reason of a liquidating
distribution only to the extent that the aggregate value of such
distributions received by a stockholder with respect to a share exceeds his,
her or its tax basis for that share.
STOCKHOLDERS SHOULD NOTE CAREFULLY THAT ANY LOSS WILL GENERALLY BE
RECOGNIZED ONLY UPON EITHER (i) A SALE OF THE STOCKHOLDER'S SHARES PRIOR TO
THE CLOSURE OF OUR STOCK TRANSFER BOOKS, OR (ii) WHEN THE FINAL DISTRIBUTION
FROM HSA (OR THE LIQUIDATING TRUST SUCCEEDING TO OUR REMAINING ASSETS AND
LIABILITIES) HAS BEEN RECEIVED AND THEN ONLY IF THE AGGREGATE VALUE OF THE
LIQUIDATING DISTRIBUTIONS WITH RESPECT TO A SHARE IS LESS THAN THE
STOCKHOLDER'S TAX BASIS FOR THAT SHARE. IF A STOCKHOLDER RETAINS HIS, HER OR
ITS SHARES DURING THE LIQUIDATION PERIOD, SUCH STOCKHOLDER MAY NOT BE ABLE
TO RECOGNIZE ANY LOSS FOR UP TO THREE (3) YEARS (OR POSSIBLY LATER IF THE
LIQUIDATION IS NOT COMPLETE AFTER THREE YEARS.) Any gain or loss recognized
by a stockholder will be capital gain or loss provided the shares are held
as capital assets. Gain resulting from distributions of cash or assets from
a corporation pursuant to a plan of liquidation is, therefore, generally
capital gain rather than ordinary income. If it were to be determined that
distributions made pursuant to the Plan were not liquidating distributions,
the result could be treatment of distributions as dividends, taxable at
ordinary income rates. Upon any distribution of property, the stockholder's
tax basis in such property immediately after the distribution will be the
fair market value of such property at the time of distribution. The gain or
loss realized upon the stockholder's future sale of that property will be
measured by the difference between the stockholder's tax basis in the
property at the time of the sale and the proceeds of the sale. After the
close of each year, HSA will provide stockholders and the IRS with a
statement of the amount of cash distributed to the stockholders and, if
applicable, its best estimate as to the value of any property distributed to
them during that year. There is no assurance that the IRS will not challenge
such property valuation. As a result of such a challenge, the amount of gain
or loss recognized by stockholders might be changed. Distributions to
stockholders could result in tax liability to any given stockholder
exceeding the amount of cash received, requiring the stockholder to meet the
tax obligations from other sources or by selling all or a portion of the
assets received.
We intend to structure the transfer of our remaining assets and
liabilities to the liquidating trust so that stockholders will be treated
for tax purposes as having received their proportionate share of the
property at the time it is transferred to the liquidating trust. In such
event, the amount of the distribution will be reduced by the amount of known
liabilities assumed by the liquidating trust or to which the property
transferred is subject. The liquidating trust itself should not be subject
to tax. After formation of the liquidating trust, the stockholders will take
into account for Federal income tax purposes their allocable portion of any
income, gain or loss recognized by the liquidating trust. AS A RESULT OF THE
TRANSFER OF PROPERTY TO THE LIQUIDATING TRUST AND THE ONGOING OPERATIONS OF
THE LIQUIDATING TRUST, STOCKHOLDERS SHOULD BE AWARE THAT THEY MAY BE SUBJECT
TO TAX, WHETHER OR NOT THEY HAVE RECEIVED ANY ACTUAL DISTRIBUTIONS FROM THE
LIQUIDATING TRUST WITH WHICH TO PAY THE TAX.
20
Stockholders may also be subject to state or local taxes and should
consult their tax advisor with respect to the state and local tax
consequences of the Plan. The foregoing summary of certain Federal income
tax consequences is included for general information only and does not
constitute legal advice to any stockholder. The tax consequences of the Plan
may vary depending upon your particular circumstances. We recommend that you
consult your own tax advisor regarding the specific tax consequences of the
Plan to you.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to market risk is limited to interest rate sensitivity, which
is affected by changes in the general level of U.S. interest rates. Our cash
equivalents are invested with high-quality issuers and limit the amount of
credit exposure to any one issuer. Due to the short-term nature of our cash
equivalents, we believe that we are not subject to any material market risk
exposure. We do not have any foreign currency hedging instruments.
ITEM 4 - CONTROLS AND PROCEDURES
As of June 30, 2003, an evaluation was carried out under the supervision and
with the participation of the Company's management, including the Company's
principal executive officer and chief financial officer, of the effectiveness of
our disclosure controls and procedures. Based on that evaluation, he has
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in reports that
it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms. Subsequent to the date of
their evaluation, there were no significant changes in the Company's internal
controls or in other factors that could significantly affect the disclosure
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The Delaware Class Action Lawsuits. The Company, our then directors, certain
former directors as well as Charter and Paul Allen, were named as defendants in
four putative class action lawsuits filed in the Court of Chancery of the State
of Delaware (Denault v. O'Brien, et. al., Civil Action No. 19045-NC, Tesche v.
O'Brien, et al., Civil Action No. 19046-NC, Johnson v. O'Brien, et. al., Civil
Action No. 19053-NC, and Krim v. Allen, et al., Civil Action 19478-NC). All four
lawsuits, which alleged breach of fiduciary duties by the individual defendants
and Charter, were consolidated and settled with the approval of the Delaware
Chancery Court on April 16, 2003. No objections or appeals to the settlement
were filed The Company paid its $166,500 portion of the $390,000 settlement
amount required to reimburse plaintiffs' counsel for their fees and expenses
incurred in the litigation
The IPO Litigation. Also, on November 5, 2001, the Company, our President
and Chief Financial Officer (Mr. George Willett) and one of our former
Presidents (Mr. Ron Pitcock), together with Lehman Brothers, Inc., J.P. Morgan
Securities, Inc., CIBC World Markets Corp., and Banc of America Securities,
Inc., were named as defendants in a purported class action lawsuit filed in the
United States District Court for the Southern District of New York (Ruthy Parnes
v. High Speed Access Corp., et. al., Index No. 01-CV-9743(SAS)). The lawsuit
alleges that our Registration Statement, dated June 3, 1999, and Prospectus,
dated June 4, 1999, for the issuance and initial public offering of 13,000,000
shares of our common stock to investors contained material misrepresentations
and/or omissions. The purported class action alleges violations of Sections 11
and 15 of the Securities Act of 1933 (the "1933 Act") and Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 (the "1934 Act") and Rule 10b-
promulgated thereunder. The essence of the complaints is that defendants issued
and sold our common stock pursuant to the Registration Statement for the IPO
without disclosing to investors that certain underwriters in the offering had
solicited and received excessive and undisclosed commissions from certain
investors. The complaints also allege that our Registration Statement for the
IPO failed to disclose that the underwriters allocated Company shares in the IPO
to customers in exchange for the customers' promises to purchase additional
shares in the aftermarket at pre-determined prices above the IPO price, thereby
maintaining, distorting and/or inflating the market price for the shares in the
aftermarket. The plaintiff asks to represent the interest of all holders of our
common stock and seeks unspecified monetary damages.
On July 15, 2002, the Company moved to dismiss all claims against it and
Messrs. Willett and Pitcock. The allegations against Messrs. Willett and Pitcock
were dismissed without prejudice on October 11, 2002 pursuant to a Reservation
of Rights and Tolling Agreement dated as of July 20, 2002. On February 19, 2003,
the Court denied the Company's motion to dismiss the alleged violations
21
of Section 11 and 15 of the 1933 Act. However, the Court granted the Company's
motion to dismiss the alleged violations of Sections 10(b) and 20(a) of the 1934
Act and Rule 10b- promulgated thereunder.
On February 28, 2003, Charter notified the Company of its assertion of a
potential claim for indemnity in respect of Charter being named as a "successor
in interest" to the Company in the IPO Litigation and deferred release of half
of the $2.0 million indemnity holdback. Charter was dismissed as a defendant in
the IPO Litigation on May 28, 2003 and paid the remaining $1.0 million indemnity
holdback to us on June 5, 2003.
On June 26, 2003, the Plaintiffs' Executive Committee announced that a
proposed settlement between the approximately 300 issuer defendants and their
directors and officers and the plaintiffs has been structured in the IPO
Litigation which would guarantee at least $1.0 billion to investors who are
class members from the insurers of the issuers. The cases will continue against
the 55 investment bank underwriter defendants. The Company had assented to
participate in the settlement, which is subject to final documentation and
review and consent of the Court. If final settlement occurs, the Company will be
removed from the litigation without payment of any funds.
With respect to the allegations against the Company, we believe this lawsuit
is without merit and intend to continue to vigorously defend against the claims
made therein. We express no opinion as to the allegations lodged against Lehman
Brothers, Inc., J.P. Morgan Securities, Inc., CIBC World Markets Corp., and Banc
of America Securities Inc.
We do not believe that the IPO litigation will have a material adverse effect on
our net assets in liquidation.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31 Certification of CFO Pursuant to Securities Exchange Act Rules 13a-14 and
15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To
Section 906 Of The Sarbanes-Oxley Act Of 2002
(b) On April 21, 2003, the Company filed an 8-K announcing that the Delaware
Chancery Court approved the settlement of the Delaware Class action lawsuits at
a hearing on April 16, 2003.
On May 20, 2003, the Company filed an 8-K announcing that its Board of
Directors authorized a cash distribution of $1.40 per share on May 30, 2003,
payable to shareholders of record as of May 23, 2003.
On June 6, 2003, the Company filed an 8-K announcing that Charter
Communications, Inc. was dismissed as a defendant in the IPO litigation and had
paid to us the remaining $1.0 million balance of the indemnity holdback plus
accrued interest.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 as
amended, the Company has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
High Speed Access Corp.
Date: August 7, 2003 By /s/ George E. Willett
----------------------------------
George E. Willett
President and Chief Financial Officer
23
EXHIBIT INDEX
31 Certification of CFO Pursuant to Securities Exchange Act Rules 13a-14 and
15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To
Section 906 Of The Sarbanes-Oxley Act Of 2002
24