1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A NO. 4
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended April 30, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________________ to ____________________
Commission File Number: 0-17168
FASTCOMM COMMUNICATIONS CORPORATION
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-1289115
- ------------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
45472 Holiday Drive
Sterling, Virginia 20166
- ------------------------------------- ----------------------------
(Address of principal executive (Zip Code)
offices)
Registrant's Telephone Number, including area code: 703/318-7750
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
-----------------------------------------------
(Title of Class)
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
----- -----
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. / /
The aggregate market value of the Common Stock of the registrant
held by non-affiliates of the registrant, computed by reference to the last
sale price of such shares as of the close of trading on July 15, 1994, was
$33,207,271 (5,898,272 shares times $5.63). As of July 15, 1994, there were
8,005,171 shares of the Common Stock of the registrant outstanding.
2
FASTCOMM COMMUNICATIONS CORPORATION
INDEX
PART II.
Item 8. Financial Statements and Supplementary Data. 24
PART III.
Item 10. Directors and Executive Officers of
the Registrant. 55
Item 11. Executive Compensation. 57
Item 12. Security Ownership of Certain
Beneficial Owners and Management. 62
Item 13. Certain Relationships and Related
Transactions. 63
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FASTCOMM COMMUNICATIONS CORPORATION
STATEMENTS OF OPERATIONS
(1994 Form 10-K as amended)
==================================================================================================
1994 1993 1992
As Restated
Year ended April 30, (Note 16)
- --------------------------------------------------------------------------------------------------
REVENUES (Notes 1, 12 and 14)
Products sales $ 3,526,480 $ 6,306,933 $ 4,907,829
Products sales to related
parties 835,044 80,500 -
License fees and other 774,831 10,086 -
- --------------------------------------------------------------------------------------------------
TOTAL REVENUES 5,136,355 6,397,519 4,907,829
- --------------------------------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES
Cost of goods sold 2,127,974 3,162,736 2,842,079
Selling, general and administrative 3,936,748 1,937,583 2,170,958
Research and development 960,042 718,295 1,858,109
Depreciation and amortization 166,098 154,203 118,893
- --------------------------------------------------------------------------------------------------
TOTAL OPERATING COSTS AND EXPENSES 7,190,862 5,972,817 6,990,039
- --------------------------------------------------------------------------------------------------
OPERATING (LOSS) INCOME (2,054,507) 424,702 (2,082,210)
- --------------------------------------------------------------------------------------------------
OTHER INCOME (expense)
Other income 19,150 137,866 30,678
Interest income 52,431 45,426 6,887
Interest expense (25,994) (30,496) (30,077)
- --------------------------------------------------------------------------------------------------
TOTAL OTHER INCOME 45,587 152,796 7,448
- --------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (2,008,920) 577,498 (2,074,722)
PROVISION (BENEFIT) FOR
INCOME TAXES (Note 11) (10,000) 14,000 (176,751)
- --------------------------------------------------------------------------------------------------
NET INCOME (loss) $(1,998,920) $ 563,498 $(1,897,971)
==================================================================================================
Net income (loss) per common share $ (0.27) $ 0.08 $ (0.42)
- --------------------------------------------------------------------------------------------------
Weighted-average number of common
shares outstanding during each
year 7,521,000 6,876,000 4,518,000
==================================================================================================
See accompanying summary of accounting policies and
notes to consolidated financial statements.
4
FASTCOMM COMMUNICATIONS CORPORATION
NOTES TO FINANCIAL STATEMENTS
(1994 Form 10-K as amended)
===============================================================================================================================
13. Success Effective May 1, 1991, the Company established the FastComm Communications
Sharing Plan Corporation Success Sharing Plan, a defined contribution plan that covers
substantially all of its employees. Employer contributions are determined using
an actuarially determined factor based on the employee's age and compensation
level. No employer contributions were made for the years ended April 30, 1994 or
1993.
14. Related Party During 1994 and 1993, the Company had sales of approximately $588,000 and
Transactions $80,500, respectively, to a customer whose Board of Directors includes the
president of the Company. At April 30, 1994, accounts receivable includes
approximately $337,000, from this related party which was paid to the Company
subsequent to year end. During 1994, the Company sold approximately $247,000 of
product to a customer, Texel Systems Corporation, that is controlled by an
individual who is the brother-in-law of the Company's President and Principal
Executive Office. This amount was paid to the Company in 1994.
15. Fourth Quarter During the fourth quarter ended April 30, 1994, the Company recorded certain year
Adjustments end adjustments which, in the aggregate, had the effect of increasing both the
operating loss and the net loss by approximately $726,000 or $0.10 per share.
The fourth quarter adjustments relate to the elimination of product sales, net,
($296,000 or $0.04 per share), the increase in allowance for doubtful accounts
($220,000 or $0.03 per share) and fiscal year end adjustments to inventory and
accounts payable to record book to physical adjustments and to write-off obsolete
inventory ($210,000 or $0.03 per share). The adjustments to product sales and to
the allowance for doubtful accounts, aggregating $516,000 or $0.07 per share,
relate to previously issued quarterly financial statements.
16. Supplemental Supplemental information on interest and income taxes paid is as follows:
Cash Flow
Information
For the Year ended April 30, 1994 1993 1992
---------------------------------------------------------------------------------
Interest $ 25,994 $ 34,053 $ 26,120
Income taxes $ 19,000 - $ 42,000
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PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following lists the directors and executive officers of the Company,
their ages, descriptions of their business experience and positions held with
the Company as of July 15, 1994:
Name Age Position
- ---- --- --------
Peter C. Madsen(1) 43 President, Chief Executive Officer and Director
Gary H. Davison 39 Senior Vice President, Chief Operating Officer and Director
Robert C. Abbott 50 Vice President - Engineering, Secretary
William A. Flanagan 52 Vice President - Marketing and Technology
Charles L. Deslaurier 53 Vice President - Contracts and Administration
Mark H. Rafferty 39 Vice President - Finance, Treasurer
Robert N. Dennis 58 Chairman of the Board of Directors
Edward R. Olson(1)(2) 54 Director
- ----------------
(1) Member Stock Option Committee.
(2) Member Audit Committee.
All directors hold office until the next annual meeting of the
shareholders and the election and qualification of their successors. The
officers are elected by and serve at the discretion of the Board of Directors.
See "Employment and Control Arrangements" beneath Item 11.
Peter C. Madsen has been President, Chief Executive Officer and a
director of the Company since September 1992. Mr. Madsen was President of
Professional Marketing Corporation, a telecommunications equipment distributor,
from February 1992 to September 1992. From November 1986 to January 1992, he
was an officer of the Newbridge Networks Corporation, a Canadian
telecommunications company, most recently as Vice President and General
Manager, United States Region, and President of Newbridge Networks Inc.,
Newbridge Networks Corporation's United States subsidiary. Mr. Madsen
currently serves as a director of Newbridge Network Corporation.
Gary H. Davison was named Senior Vice President, Chief Operating Officer
and a director of the Company on June 6, 1994. From 1988 to 1994, Mr. Davison
held a variety of positions with Newbridge Networks Inc., most recently as Vice
President; U.S. Sales. From 1986 to 1988, Mr. Davison was General Manager,
Transmission Products at Hekemian Laboratories. From 1974 through 1986, Mr.
Davison held a variety of positions at AT&T Corp.
Robert C. Abbott has served as Vice President - Engineering and as
Secretary of the Company since 1984. From December 1980 until joining the
Company, he served as product manager, VF Products, for the Telesystems
Division of Comsat Corporation in Fairfax, Virginia.
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William A. Flanagan has served as Vice President - Marketing and
Technology of the Company since September 1991. Prior to that, from 1987
through September 1991, he was Vice President - Network Marketing and Vice
President - Technology for Newbridge Networks Inc. Mr. Flanagan is the author
of a variety of best selling books on digital communications technology.
Charles L. Deslaurier has been Vice President - Contracts and
Administration of the Company since September 1992. Mr. Deslaurier was Vice
President and a director of Professional Marketing Corporation, a
telecommunications equipment distributor, from February 1992 to September 1992.
From December 1986 to January 1992, he was Vice President of Contracts and
Administration for Newbridge Networks Inc.
Mark H. Rafferty has been Vice President, Chief Financial Officer and
Treasurer of the Company since August 1993. From August 1992 to August 1993,
Mr. Rafferty was Vice President, Finance at Newbridge Networks Inc. From
August 1987 through August 1992, Mr. Rafferty was Controller of Newbridge
Networks Inc.
Robert N. Dennis, a founder of the Company, served as its President from
May 1983 to September 1992, and has served as Chairman of the Board of
Directors since September 1984. In September 1992, Mr. Dennis resigned as
President and Treasurer and was appointed Senior Advisor to the President. Mr.
Dennis resigned as Senior Advisor to the President in fiscal 1994.
Edward R. Olson has served as a director since January 1989. From 1990
to present, Mr. Olson has served as the President, Chief Executive Officer and
Chairman of M-C Industries, Inc., a fluid hydraulics equipment manufacturer.
For the past five years, Mr. Olson has served as President of Ed Olson
Consulting Group, Ltd., a management consulting firm. From 1992 to 1993 Mr.
Olson was Senior Vice President, Operations of Audiovox Corp., a company
concentrating in the marketing and distribution of consumer electronic devices.
From April 1988 to 1989, Mr. Olson was President of Sector Technology, Inc.
(formerly Polaris, Incorporated), a manufacturer of computer-based access
security systems located in Falls Church, Virginia.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and with the National Association of Securities Dealers, Inc. Automated
Quotations (NASDAQ) system. Officers, directors and greater than ten percent
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during its fiscal year
ended April 30, 1994, all filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with,
except that: The Form 5 of Mark Rafferty for fiscal year 1994, reflecting the
grant of 75,000 options, was not filed until August 10, 1994.
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ITEM 11. EXECUTIVE COMPENSATION.
BOARD REPORT ON EXECUTIVE COMPENSATION
The Company does not have a formal compensation committee. Compensation
levels for executive officers are set by the Board of Directors. The Board of
Directors is presently comprised of the following individuals: Peter C.
Madsen, Thomas G. Amon, Edward R. Olson and Gary H. Davison. Messrs. Davison
and Amon joined the Board only after the close of fiscal 1994. Robert N.
Dennis resigned from the Board effective October 31, 1994. Salaries are
reviewed annually and are based on individual performance, the extent of
individual responsibility and comparisons with salaries paid in the industry.
The Company recruits for its executive officer positions from within the
communications industry. In most instances, the source Company is
significantly larger than the Company. It is the policy of the Board of
Directors of FastComm to hire executive officers at levels below that of their
current salaries along with a stock option package intended to make up for the
differentiation and to provide a performance incentive. The Company feels that
stock options are an attractive benefit in that they enhance performance and
loyalty at little cost.
The Board establishes compensation levels based on experience and
responsibility. No executive officer has received a salary increase.
The Board granted three executive officers options during fiscal 1994.
Two of the option grants were based on performance and responsibility. The
third grant was a condition of employment.
The Board adheres to a policy of granting options to executive officers
based upon performance and responsibility. In addition, the Board also
considers the relative importance of the job function being performed and the
number of options currently held by the executive officer.
In September 1992, Robert N. Dennis and Edward R. Olson, then
constituting the entire Board of Directors, established the level of
compensation to be paid to the President. See "Employment and Control
Arrangements." This compensation level was considered by the Board to be
reasonable, fair and equitable. The compensation of the President has not been
revised since that time.
/s/ Edward R. Olson, /s/ Peter C. Madsen
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As of the close of the fiscal year ended April 30, 1994, the Board of
Directors of the Company was comprised of the two above-named persons and
Robert N. Dennis. During the year, Peter C. Madsen and Robert N. Dennis,
President and Chairman, respectively, as directors participated in
deliberations of the Company's Board of Directors concerning executive officer
compensation, including their own. Other than the foregoing, none of such
directors was party to any reportable interlock or participation during fiscal
1994. During the fiscal year ended April 30, 1994, the Company sold
approximately $588,000 of product under normal terms and conditions to
Newbridge Networks, Inc. ("Networks") a United States subsidiary of Newbridge
Networks Corporation, a Canadian Telecommunications Company ("Newbridge").
Peter C. Madsen, President, Chief Executive Officer and a director of the
Company is also a director of Newbridge.
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SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation paid by
the Company to the three named executives (the "Named Executive Officers") for
services furnished in all capacities to the Company during the fiscal year
ended April 30, 1994, as well as such compensation paid by the Company to the
Named Executive Officers during the Company's two previous fiscal years:
Annual Compensation Long-Term Compensation Awards
------------------------------------ -----------------------------
Shares of
Other Annual Common Stock
Salary Bonus Compensation Underlying
Name and Principal Position Year ($) ($) ($)(1) Options ( #)
- --------------------------- ---- ------ ----- ------------ -------------
Peter C. 1994 71,478 -0- 6,219 -0-
Madsen,(2) 1993 -0- -0- 6,000 425,000
President and 1992 -0- -0- -0- -0-
Chairman of the
Board of
Director
Charles L. 1994 125,414 -0- 6,331 20,000
Deslaurier,(3) 1993 27,417 -0- 6,000 150,000
Vice President - 1992 -0- -0- -0- -0-
Contracts and
Administration
William A. 1994 110,923 -0- 6,632 -0-
Flanagan,(4) 1993 106,073 -0- 6,500 -0-
Vice President - 1992 81,825 -0- -0- 150,000
Marketing and
Technology
- ----------------
(1) Automobile benefit.
(2) At April 30, 1994, Mr. Madsen held 478,000 restricted shares of Common
Stock with a market value of $4,660,500 at that date; Mr. Madsen waived
the payment of his entire salary in the 1993 fiscal year and $28,522 of
his salary in the 1994 fiscal year.
(3) At April 30, 1994, Mr. Deslaurier held 114,250 restricted shares of
Common Stock with a market value of $1,113,938 at that date.
(4) At April 30, 1994, Mr. Flanagan held 213,500 restricted shares of Common
Stock with a market value of $2,081,625 at that date.
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FISCAL 1994 OPTION GRANTS
The following table sets forth information concerning
grants of stock options to the Named Executive Officers made pursuant to the
Company's 1992 Stock Option Plan during the fiscal year ended April 30, 1994:
Stock Option Grants in Fiscal Year 1994
Individual Grants Potential
-------------------------------------- Realizable
Percent of Value at
Total Assumed
Options Annual Rates
Securities Granted of Stock
Underlying to Exercise Price
Options Employees or Appreciation
Granted in Fiscal Base Price Expiration For Option
Name (#) Year ($/sh) Date Term 5% ($) 10% ($)
------- ---------- ---------- ----------- ----------- ----------- -------
Peter C. -0- - - - -
Madsen -
Charles L. 20,000(1) 3.9 11.13 3/15/99 61,700
Deslaurier 135,900
William A. -0- - - - -
Flanagan -
- ---------------
(1) Option granted March 15, 1994. Option becomes exercisable in three
equal annual installments commencing March 15, 1995.
FISCAL 1994 AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth information concerning each exercise of
stock options during the fiscal year ended April 30, 1994 by each of the Named
Executive Officers and the fiscal year-end value of unexercised options held by
such persons:
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Shares Value of
Underlying Unexercised
Unexercised in-the-money
Options at Options at
Fiscal Year- Fiscal Year-
Shares Value End (#) End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
- ---- ------------ -------- ------------- -------------
Peter C. 240,000 2,257,500 -0-/125,000 -0-/1,082,031
Madsen
Charles L. -0- -0- 65,000/45,000 562,656/389,531
Deslaurier
William A. 150,000 1,556,250 -0-/-0- -0-/-0-
Flanagan
EMPLOYMENT AND CONTROL ARRANGEMENTS
Effective September 18, 1992 (the "Effective Date"), the Company, Mr.
Robert N. Dennis and Mr. Edward R. Olson, as the "Current Directors" therein,
and Mr. Peter C. Madsen entered into an employment agreement (the "Employment
Agreement") regarding the terms of Mr. Madsen's employment by the Company and
the scope of the relationships among the parties to the Employment Agreement.
In particular, pursuant to or in connection with the Employment
Agreement, as the case may be, subject to confirmation by the Board of
Directors which occurred as of the Effective Date, (i) Mr. Dennis resigned as
President and from all executive offices held by him in the Company, (ii) Mr.
Madsen was elected President and Chief Executive Officer of the Company for an
initial term expiring on January 31, 1995 at an initial base salary of $100,000
per year, (iii) Mr. Madsen was granted an option to purchase a maximum of
425,000 shares of Common Stock of the Company at an exercise price of $1.09375
per share upon certain terms and conditions, (iv) Mr. Deslaurier was elected a
Vice President of the Company, (v) Mr. Deslaurier was granted an option to
purchase a maximum of 150,000 shares of Common Stock of the Company at an
exercise price of $1.09375 per share upon certain terms and conditions, (vi)
Mr. Rick Sampley was granted an option to purchase a maximum of 25,000 shares
of Common Stock of the Company at an exercise price of $1.09375 per share upon
certain terms and conditions, (vii) the Company and Mr. Dennis entered into an
Amended and Restated Employment Agreement providing for, among other things,
the employment of Mr. Dennis as Senior Advisor to the President at an initial
salary of $200,000 per year for an initial term of three years, subject to
earlier termination by Mr. Dennis at any time or by the Company, with or
without cause, on or after September 15, 1993, and (viii) Mr. Madsen and Mr.
Peter Sommerer were elected directors of the Company to fill two vacancies then
existing on the Board of Directors. Mr. Dennis was paid $99,458 pursuant to
this arrangement in the 1994 fiscal year during which year he resigned as
Senior Advisor to the President.
Under the Employment Agreement, Mr. Madsen has been granted full control
of and authority over the operations of the Company, subject to the general
oversight of the Board, and the Current Directors have agreed not to take any
action inconsistent with their respective obligations thereunder. The
Employment Agreement and the related actions resulted in an effective change in
control of the Company away from Mr. Dennis to Mr. Madsen.
DIRECTOR COMPENSATION
Directors receive no salary for their services as such; however, the
Board of Directors has authorized payment of reasonable expenses incurred by
non-employee directors in connection with attendance at meetings of the Board
of Directors. The Chairman of the Board receives no compensation for serving
in such capacity. In fiscal 1994, Mr. Dennis received 99,458 in compensation
as Senior Advisor to the President. As Senior Advisor, Mr. Dennis' duties
included consultation with and advise to the President and other Senior
Management on technical
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and business matters related to past, present and future operations, products
and strategies and the undertaking of special projects related to the above at
the request of the President.
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock with that of
the cumulative total return of the NASDAQ Stock Market - US Index ("NASDAQ
STOCK MRKT - US") and the NASDAQ Telecommunications Index ("NASDAQ TELECOM")
for the five year period ended on April 30, 1994. The information below is
based on an investment of $100, on April 30, 1989, in the Company's Common
Stock, the NASDAQ STOCK MRKT - US and the NASDAQ TELECOM. THE COMPANY'S
MANAGEMENT CONSISTENTLY CAUTIONS THAT THE STOCK PRICE PERFORMANCE SHOWN IN THE
GRAPH BELOW SHOULD NOT BE CONSIDERED INDICATIVE OF POTENTIAL FUTURE STOCK PRICE
PERFORMANCE.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
At July 15, 1994, there were 8,005,171 shares of Common Stock of the
Company issued and outstanding. As of such date, options to purchase 1,189,785
shares of Common Stock were outstanding.
Each holder of shares of Common Stock, but not holders of unexercised
options, is entitled to one vote per share on each matter which may be
presented at a meeting of shareholders. Cumulative voting is not allowed. The
Company's Common Stock is traded on the NASDAQ National Market System under the
symbol "FSCX."
The following table sets forth information regarding ownership of Common
Stock of the Company at July 15, 1994, by each person who is known by
management of the Company to own beneficially more than five percent of the
Common Stock (setting forth the address of each such person), by each director
and nominee for election as a director, by the Named Executive Officers of the
Company identified beneath "Item 11. Executive Compensation," and by all
directors and executive officers of the Company as a group. Shares issuable on
exercise of warrants or options exercisable within 60 days are deemed to be
outstanding for the purpose of computing the percentage ownership of persons
beneficially owning such warrants or options, but have not been deemed to be
outstanding for the purpose of computing the percentage ownership of any other
person. Insofar as is known to the Company, the persons indicated below have
sole voting and investment power with respect to the shares indicated as owned
by them except as otherwise stated in the notes to the table.
Amount and Nature
Name of Beneficial of Beneficial Percent of
Owner Ownership Class
------------------ ------------------ ----------
Robert N. Dennis(1) 1,027,491 12.7
45472 Holiday Drive
Sterling, Virginia 20166
Peter C. Madsen (1) 478,000 5.9
45472 Holiday Drive
Sterling, Virginia 20166
Gary H. Davison (1) 46,250 *
William A. Flanagan 213,500 2.7
Charles L. Deslaurier 179,250(2) 2.2
Edward R. Olson (1) 3,333(3) *
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All Directors and 2,175,232(4) 26.9
Executive Officers
as a group
(eight persons)
- ------------
* Less than one percent.
(1) Director.
(2) Gives effect to exercise of options to purchase 65,000 shares of Common
Stock currently exercisable or exercisable within 60 days.
(3) Gives effect to exercise of options to purchase 3,333 shares of Common
Stock currently exercisable or exercisable within 60 days.
(4) Gives effect to exercise of options to purchase 68,333 shares of Common
Stock currently exercisable or exercisable within 60 days.
The Company is unaware of any arrangement the operation of which could at
a subsequent date result in a change in control of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the fiscal year ended April 30, 1994, the Company sold
approximately $588,000 of product under normal terms and conditions to
Newbridge Networks, Inc. ("Networks") a United States subsidiary of Newbridge
Networks Corporation, a Canadian Telecommunications Company ("Newbridge").
FastComm sells to Newbridge Networks Corporation under net 30 day terms with
prompt payment discounts. Such terms are consistent with that of similar
customers. Title passes on shipment of product. Under the terms of the
contract, Newbridge may return purchased and paid for (during the previous six
month period) but unused products to FastComm for either warranty revalidation
and/or revision level change (hardware or firmware). Peter C. Madsen,
President, Chief Executive Officer and a director of the Company is also a
director of Newbridge. In June 1994, the Company elected Gary H. Davison to
its Board of Directors and employed him as its Senior Vice President and Chief
Operating Officer. Until he joined the Company, Mr. Davison was employed as
Vice President-U.S. Sales and Vice President-U.S. Public Network Systems
Networks. Mr. Davison is currently engaged by Networks as an independent
consultant for a four month term through October 4, 1994, subject to extension
to November 4, 1994. The engagement provides for Mr. Davison to assist
Networks with projects and tasks assigned to him including assistance in
development of master contract renewals for various carrier telephone company
customers.
During the quarter ended July 31, 1993, the Company sold approximately
$247,000 of product to Texel Systems Corporation ("Texel") a private voice and
data communications equipment company located in Fairfax, Virginia. This sale
was made under net 30 day terms with prompt payment discounts. Such terms are
consistent with that of similar customers. Texel is controlled by an
individual who is the brother-in-law of Peter C. Madsen, President, Chief
Executive Officer and a Director of FastComm Communications Corporation. The
accounts receivable due from Texel was $247,000 at July 31, 1993. Payment in
full from Texel was received by FastComm on October 27, 1993. In September
1994 Texel sold this same product for approximately $247,000 to Professional
Marketing Corporation ("PMC"), a reseller of data communications equipment
located in Sterling, Virginia. PMC is owned by Peter C. Madsen and Charles
Deslaurier, formerly Vice President Contracts Administration of the Company.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, on
December , 1995.
FASTCOMM COMMUNICATIONS CORPORATION
By: /s/ PETER C. MADSEN
-----------------------------------
Peter C. Madsen
President (Principal Executive Officer)
By: /s/ MARK H. RAFFERTY
-----------------------------------
Mark H. Rafferty
Vice President-Finance and Treasurer
(Principal Financial Officer)
63