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): October 4, 2000
Breakaway Solutions, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
000-27269 04-3285165
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(Commission File Number) (I.R.S. Employer Identification No.)
50 Rowes Wharf
Boston, Massachusetts 02110
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(Address of Principal Executive Offices) (Zip Code)
(617) 960-3400
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(Registrant's Telephone Number, Including Area Code)
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
Breakaway Solutions, Inc. (the "Registrant") is filing this Current
Report on Form 8-K for the purpose of filing with the Securities and Exchange
Commission as exhibits hereto:
o the Registrant's press release, dated October 4, 2000, announcing,
among other things, preliminary third quarter 2000 financial results
and a 9% reduction in staff.
o the Registrant's press release, dated October 26, 2000, announcing the
Registrant's third quarter 2000 financial results.
A copy of the Press Release announcing, among other things, the
Registrant's preliminary third quarter 2000 financial results and a 9% reduction
in staff is attached to this Current Report on Form 8-K as Exhibit 99.1.
A copy of the Press Release announcing the Registrant's third quarter
2000 financial results is attached to this Current Report on Form 8-K as Exhibit
99.2.
In addition, on October 24, 2000, the Registrant acquired a 19.9%
interest in Breakaway Solutions Asia Pacific Limited, a Bermuda company
("Breakaway Asia Pacific") and granted a license to that company. ICG
AsiaWorks Limited, a subsidiary of Internet Capital Group, Inc. owns the
balance of the shares of Breakaway Asia Pacific. Internet Capital Group is
the Registrant's largest stockholder and has two representatives on the
Registrant's Board of Directors.
The license granted by the Registrant to Breakaway Asia Pacific gives
Breakaway Asia Pacific, on a royalty-free basis, the exclusive right to use the
"Breakaway Solutions" name and the Registrant's other intellectual property, in
all of Asia, except Japan. Either party to the license may terminate the license
if the other party breaches its obligations or becomes bankrupt.
The Registrant and ICG AsiaWorks have also entered into a Shareholders
Agreement with respect to Breakaway Asia Pacific. Under the terms of the
Shareholders Agreement, ICG AsiaWorks has invested $10 million in Breakaway Asia
Pacific and has agreed to invest up to an additional $15 million if requested to
do so by the board of directors of Breakaway Asia Pacific. The Registrant's
19.9% ownership interest would not be diluted in the event of any additional
investment, up to $15 million. The board of directors of Breakaway Asia Pacific,
under the terms of the Shareholders Agreement, consists of three directors
appointed by IGC Asia Pacific, the chief executive officer of Breakaway Asia
Pacific and one representative of Breakaway.
Either party may terminate the Shareholders Agreement in the event of a
material breach by the other party, or if the other party dissolves, is
liquidated or goes bankrupt. In addition, ICG AsiaWorks may terminate the
Shareholders Agreement if Breakaway Asia Pacific has terminated the related
license agreement described above. In the event of a termination by ICG
AsiaWorks, that company has the right to require the Registrant to sell its
interest in Breakaway Asia Pacific to ICG AsiaWorks for the current fair market
value of that interest. If the Registrant terminates the Shareholders Agreement,
Breakaway has the right to require ICG AsiaWorks to buy its interest at current
fair market value.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
Not Applicable.
(b) PRO FORMA FINANCIAL INFORMATION
Not Applicable.
(c) EXHIBITS
99.1 Press Release, dated October 4, 2000, announcing,
among other things, preliminary third quarter 2000
financing results and a 9% reduction in staff.
99.2 Press Release, dated October 26, 2000, announcing the
Registrant's third quarter 2000 financial results.
SIGNATURE
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.
BREAKAWAY SOLUTIONS, INC.
Date: November 13, 2000 By: /s/ KEVIN COMERFORD
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KEVIN COMERFORD
VICE PRESIDENT, ADMINISTRATION
CHIEF FINANCIAL OFFICER, TREASURER
AND SECRETARY
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
99.1 Press Release, dated October 4, 2000, announcing,
among other things, preliminary third quarter 2000
financial results and a 9% reduction in the
Registrant's staff.
99.2 Press Release, dated October 26, 2000, announcing
the Registrant's third quarter 2000 financial
results.