UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 15, 2001
TELOCITY DELAWARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 333-94271 77-046792
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
10355 North DeAnza Blvd.
Cupertino, California 95014
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 863-6600
Not Applicable
(Former name or former address, if changed since last report)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
In accordance with the terms of the convertible subordinated note
(the "Note") issued by Telocity Delaware, Inc. ("Telocity" or the "Company") to
Hughes Electronics Corporation ("Hughes") in connection with the December 21,
2000 Agreement and Plan of Merger by and among Telocity, Hughes and DIRECTV
Broadband Inc. ("DIRECTV"), Hughes has agreed to provide Telocity with up to $20
million in unsecured interim financing. On February 13, 2001, Telocity delivered
written notice to Hughes of its intent to draw down $10 million under the Note.
On February 16, 2001, pursuant to the terms of the Note, Telocity received from
Hughes $10 million of the $20 million line of credit authorized under the Note.
In the future, Telocity will access this interim financing on an "as needed"
basis. A copy of the Note is included as an exhibit to the Schedule TO
previously filed by Hughes on February 1, 2001.
On January 25, 2001, Telocity released financial results for the fourth
quarter and year-ended December 31, 2000. Telocity has revised its financial
results for the fourth quarter and year ended December 31, 2000 to record
additional non-cash compensation charges of $6.1 million related to the
rescission of the exercise of certain employee stock options through the
issuance of full recourse notes. The revised financial results are included
herein. The financial results announced on January 25, 2001 were prepared prior
to the availability of the guidance contained in EITF Topic No. D-93,
"Accounting for the Rescission of the Exercise of Employee Stock Options" which
was published on February 1, 2001 and clarified the accounting for rescinded
stock compensation awards. This guidance is applicable to calendar year 2000
rescissions, and, accordingly, the Company has revised its financial results
to reflect this latest guidance.
TELOCITY (DELAWARE), INC.
Financial Highlights
(Dollars in thousands, except share and per share data)
(unaudited)
Three Months Ended Twelve Months Ended
12/31/00 9/30/00 12/31/00 9/30/00
Revenues $ 4,659 $ 2,851 $ 9,352 $ 4,822
Operating Expenses:
Network and products costs 10,064 8,228 29,090 22,705
Sales, general and administrative 23,615 18,357 89,739 80,819
Research and Development 4,246 4,873 18,336 16,516
Amortization of stock based compensation 20,685 6,607 32,778 14,172
Depreciation and amortization 5,477 4,811 15,592 11,115
Total operating expenses (64,087) 42,876 185,535 145,327
Loss from operations (59,428) (40,025) (176,183) (140,505)
Net interest income (expense) 636 1,379 2,794 1,470
Net loss $ (58,792) $ (38,646) $ (173,389) $ (139,035)
Basic and diluted net loss per common share (1) $(0.76) $(0.51) $(2.89) $(3.62)
Weighted average shares used in computing net loss
per share 76,983,273 75,529,306 60,079,659 43,127,459
Pro Forma Information:
Pro forma net loss (2) $ (38,107) $ (32,039) $ (140,611) $ (124,863)
Diluted pro forma net loss per share (3) $(0.50) $(0.42) $(1.94) $(1.98)
Shares used in computing diluted pro forma net loss
per share (3) 76,983,273 75,529,306 72,405,384 63,160,175
Other Data:
EBITDA (4) $ (33,266) $ (28,607) $ (127,813) $ (115,218)
(1) Basic and diluted net loss per share is after taking effect of deemed
dividend and accretion on mandatorily redeemable convertible preferred
stock of $341,000 and $16,750,000 for the quarters ended March 31, 2000,
and December 31, 1999, respectively.
(2) Pro forma net loss excludes the effect of the amortization of deferred
stock compensation, deemed dividend and accretion on mandatorily redeemable
convertible preferred stock.
(3) Diluted pro forma net loss per share, assumes the conversion of Telocity's
preferred stock, which converted to common stock upon the closing of its
initial public offering, as if the conversion occurred as of the beginning
of the period or the date of issuance, if later.
(4) EBITDA is defined as earnings (losses) before interest, taxes,
depreciation, amortization, non-cash stock based compensation and other
non-operating income or expenses.
December 31 December 31
2000 1999
Selected Balance Sheet Data:
Cash and cash equivalents (A) $ 44,398 $ 66,978
Working capital (2,159) 53,729
Net property and equipment 46,028 22,272
Total assets 133,060 140,071
Current liabilities 52,923 20,275
Long-term obligations 7,124 12,058
Total stockholders' equity $ 73,013 $107,738
(A) Cash and cash equivalents at December 31, 2000 includes restricted cash of
$5,976,000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Telocity Delaware, Inc.
Date: February 16, 2001 By:/s/ Scott Martin
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Scott Martin
Executive Vice President, Chief
Administrative
Officer and Corporate Secretary