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As Filed with the Securities and Exchange Commission on August 30, 2001
Registration No. 333- 60388
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
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
incorporation or organization) Identification Number)
10901 WEST TOLLER DRIVE
LITTLETON, COLORADO 80127
(720) 922-2828
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
CHARLES E. RICHARDSON, III
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
10901 WEST TOLLER DRIVE
LITTLETON, COLORADO 80127
(720) 922-2828
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
CARYN F. PRICE, ESQ.
WYATT, TARRANT & COMBS, LLP
2800 CITIZENS PLAZA
LOUISVILLE, KENTUCKY 40202
(502) 589-5235
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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PROSPECTUS
HIGH SPEED ACCESS CORP.
125,000 SHARES OF COMMON STOCK
The stockholder identified in this prospectus is offering
125,000 shares of common stock. The selling stockholder will receive
all of the net proceeds from its sale of the shares and we will not
receive any of the proceeds from the sale of the shares.
Our common stock trades on the Nasdaq National Market under
the symbol "HSAC". On August 29, 2001, the last reported sale price of
the common stock on the Nasdaq National Market was $0.32 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS FOR
A DISCUSSION OF MATERIAL RISKS THAT AN INVESTOR SHOULD CONSIDER BEFORE
BUYING OUR COMMON STOCK.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is August 30, 2001.
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TABLE OF CONTENTS
<Table>
HIGH SPEED ACCESS CORP........................................................4
RISK FACTORS..................................................................6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS............................29
WHERE YOU CAN FIND MORE INFORMATION..........................................30
USE OF PROCEEDS..............................................................31
SELLING STOCKHOLDER..........................................................31
PLAN OF DISTRIBUTION.........................................................32
LEGAL MATTERS................................................................33
EXPERTS .....................................................................33
</Table>
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HIGH SPEED ACCESS CORP.
Because this is a summary, it does not contain all the information
about HSA that may be important to you. You should read the more detailed
information and the financial statements and related notes which are
incorporated by reference in this Prospectus.
High Speed Access Corp. and its subsidiaries (hereinafter referred to
as the Company, we, us, or our) provides high speed Internet access to
residential and commercial end users primarily using cable modem technology. The
Company focuses primarily on residential end users in exurban areas, although
the Company has recently begun to provide broadband services in some urban
markets. The Company defines exurban markets as cable systems with fewer than
100,000 homes passed. The term "homes passed" refers to the number of homes that
potentially can be served by a cable system. The Company enters into long-term
exclusive contracts with cable system operators to provide a suite of services
on a comprehensive "turnkey" basis as well as on an unbundled or "Network
Services" basis. These services enable a cable system's customers to receive
high speed Internet access.
In exchange for providing the Company with access to its customers in
the turnkey solution, we pay the cable operator a portion of the monthly fees
received from an end user who subscribes to the services. In an unbundled or
Network Services solution, we deliver fewer services and incur lower costs than
in a turnkey solution but also earn a smaller percentage of the subscription
revenue or a fixed fee on a per subscriber basis. Under the Network Services
solution, our cable partners will typically bill the end user and remit to us
our percentage of the revenue or the fixed fee. Network Services solutions have
become a significant part of our business mix, and we anticipate this trend will
continue.
The Company currently offers certain related services including web
site hosting, all primarily for small and medium enterprises ("SMEs"). The
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Company also currently provides, on a limited basis, standard Internet access
through traditional dial-up service to residential and SME customers.
Our principal executive offices are located at:
10901 West Toller Drive
Littleton, Colorado 80127
Tel: (720) 922-2828
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RISK FACTORS
You should carefully consider the following risk factors as well as the
other information contained and incorporated by reference in this prospectus
before making an investment in our common stock. Any one or a combination of
these risk factors may have a material adverse effect on us.
RISKS RELATED TO OUR NEED FOR CAPITAL
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WE WILL NEED SUBSTANTIAL ADDITIONAL CAPITAL TO CONTINUE OUR OPERATIONS AND THERE
IS SUBSTANTIAL DOUBT THAT IT WILL BE AVAILABLE IN THE CURRENT ENVIRONMENT.
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The Company has incurred losses from operations and negative cash flows
from operating activities since Inception, which have been funded primarily
through the issuance of equity securities and borrowings. Management expects to
experience substantial negative cash flows for at least the next several years.
As of June 30, 2001, the Company had $56.5 million of unrestricted cash, cash
equivalents and short-term investments, which management believes are sufficient
to meet the Company's cash needs in 2001.
To preserve cash and enhance the prospects for entering into a
strategic transaction, the Company recently announced a series of significant
cost reduction measures. Among the actions being taken by the Company are:
o the completion of its previously announced exit from certain
one-way cable TV markets;
o the commencement of negotiations to exit all of its turnkey
contracts with cable operators other than Charter (covering 22,500,
or approximately 12% of the Company's current subscribers);
o scaling back the operations of Digital Chainsaw, including reducing
its workforce and eliminating all service offerings other than web
site hosting;
o ceasing pursuit of its previously planned entry into the DSL market
and ceasing development of any other new service and product
offerings other than those that are expected to be cash flow
positive in the short term; and
o material reductions in workforce.
The Company also has begun pursuing the sale of Digital Chainsaw as
well as its DSL assets. After these changes are completed, the Company's
operations will consist of its cable internet access cable business with Charter
and our international ISP infrastructure services business. The Company expects
these reductions in its operations to result in future operating cost reductions
the amounts of which cannot yet be determined. However, even with these changes,
the Company will continue to experience substantial negative cash flow from its
remaining operations. Although the Company will continue to monitor the size of
its workforce and the levels of its other operating costs and cash commitments
with a view to conserving cash, the Company will not be able to reduce costs
significantly enough to continue as a going concern without additional
financing.
The Company will need substantial additional financing by no later than
early 2002 to fund continued operations. Management has attempted to secure
additional financing over the last several
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months but has thus far been unsuccessful in its efforts. The Company believes
that it is very unlikely that it will be able to secure additional financing in
the current economic environment being faced by the telecommunications industry
before its cash reserves are depleted in early 2002. In light of the difficult
current financing environment, the Company has been pursuing additional
strategic alternatives, including consideration of Charter's proposal to acquire
the Company's cable modem business with Charter. If the Charter proposal is not
consummated and if additional financing is not available on acceptable terms,
the Company will be forced to further curtail operations, which could have a
material adverse effect on the Company. Such curtailment of operations would
involve significant additional amendments to the Company's current business plan
including, but not limited to some or all of the following: further
administrative and operating expense reductions, a further reduction of our
sales, marketing and customer service efforts, sales of certain assets of the
Company, or the bankruptcy and dissolution of the Company.
Such financing could involve the issuance, or deemed issuance, of
additional shares of capital stock at a price below the conversion price of our
convertible preferred stock held by Vulcan and Charter, which would result in a
downward adjustment of the conversion price. In the event of such an adjustment,
the number of shares of common stock issuable upon conversion of the convertible
preferred stock would be increased pursuant to a weighted average formula
described below under the caption "Risk Factors - Our Convertible Preferred
Stock Contains Anti-dilution Adjustments and Restrictions On Our Future
Activities". Furthermore, additional equity or debt financing could give rise to
any or all of the following:
o Additional dilution to our current stockholders;
o The issuance of securities with rights, preferences or privileges
senior to those of the existing holders of our common stock; and
o The issuance of securities with covenants imposing restrictions on our
operations.
Charter can require any lender with liens on our equipment placed in Charter
headends to deliver to Charter a non-disturbance agreement as a condition to
such financing. We can offer no assurance that we will be able to obtain
additional secured equipment financing for Charter systems subject to such a
condition or that a potential lender will be able to negotiate acceptable terms
of non-disturbance with Charter.
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There is substantial doubt as to the Company's ability to continue as a
going concern unless it is able to secure additional financing by early 2002.
The remaining Risk Factors below are risks applicable to our business operations
and are less currently imperative to the Company than our need for additional
financing.
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OTHER RISKS RELATED TO OUR OPERATIONS
OUR AGREEMENT WITH AMERICA ON LINE/TIME WARNER WILL LIKELY NOT BENEFIT US.
We recently entered into an agreement with Time Warner Cable, a unit of
AOL Time Warner, covering the provision of our high-speed Internet access
services over AOL Time Warner's cable systems covering approximately 20 million
homes passed. The agreement is the third national internet service provider
("ISP") agreement reached by Time Warner Cable, following similar arrangements
with Earthlink and Juno. We have been working with Time Warner Cable to
coordinate logistics and the modifications to Time Warner Cable systems need to
accommodate multiple ISPs. Under the agreement, both companies will be free to
market their service independently.
Our agreement with Time Warner Cable is subject to approval by the
Federal Trade Commission. We can give no assurance that the FTC will approve the
agreement. Our strategy in this multiple ISP environment is also dependent upon
our ability to secure a national content provider to provide customer
acquisitions and marketing support and a compelling array of consumer services.
If we are unable to reach an agreement with a major content provider addressing
these issues, we will be unable to deploy our services and gain subscribers from
the Time Warner system in a cost effective manner. We have thus far been
unsuccessful in our efforts to reach agreement with a major content provider and
we believe that we are very unlikely to secure such a party within the period
provided for in the agreement with Time Warner Cable. Finally, the market for
high speed internet access services is very competitive, particularly in a
multiple ISP environment. See "--Risks Related to the Market for High Speed
Internet Access - The Market for Internet Services is Highly Competitive". There
can be no assurance that we will be successful in achieving acceptance of our
services on the Time Warner Cable system. Consequently, our agreement with Time
Warner Cable will likely be of no material benefit to us.
WE MAY BECOME SUBJECT TO RISKS OF INTERNATIONAL OPERATIONS.
We are providing services on an international basis to Kabel
Nordrhein-Westfalen GMBH & Co., KG and are currently evaluating other
international expansion opportunities. As a result of expanding internationally
or entering into joint venture arrangements to pursue international business
opportunities, we will become subject to the risks of conducting business
internationally, including:
o Foreign currency fluctuations, which could result in increased
operating expenses;
o Inability to locate qualified local partners and suppliers;
o The burdens of complying with a variety of foreign laws and trade
standards;
o Tariffs and trade barriers;
o Difficulty in accounts receivable collection;
o Potentially longer payment cycles;
o Foreign taxes;
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o Unexpected changes in regulatory requirements, including the
regulation of Internet access; and
o Uncertainty regarding liability for information retrieved and
replicated in foreign countries.
If we expand internationally, we will also be subject to general
geopolitical risks, such as political and economic instability and changes in
diplomatic and trade relationships. Our proposed international operations could
harm our revenues and ability to achieve profitability.
WE CANNOT PREDICT OUR SUCCESS BECAUSE OUR BUSINESS MODEL IS UNPROVEN, HAS
CHANGED IN THE PAST AND MAY CONTINUE TO CHANGE.
Our success depends on continued growth in the use of the Internet and
high speed access services. Although Internet usage and popularity have grown
rapidly, we cannot be certain that this growth will continue at its present
rate, or at all. Critical issues concerning the increased use of the
Internet--including security, reliability, cost, ease of access, ease of
installation and customer acquisition and quality of service--remain unresolved
and are likely to affect the development of the market for our services.
The success of our business ultimately will depend upon the acceptance
of our services by end users. Our current liquidity problems will limit our
ability to deploy and market our services in new and existing markets, to
introduce new services, to make changes to our product offerings to meet
customer demands and to respond to changes in our evolving industry, which may
have a material adverse effect on our business.
Although our primary service offering is high bandwidth Internet
access, we currently derive a portion of our revenue from standard dial-up
Internet access. We cannot predict whether demand for our high speed Internet
access services will develop, particularly at the volume or prices we need to
become profitable. Even if sufficient demand for our high speed services is
generated, we may be unable to deploy our services at the rate required to
satisfy demand. Additionally, we believe that Network Services will become an
increasingly important part of our business. Under the Network Services
arrangements, such as the one we signed with Charter on May 12, 2000, covering a
minimum of 5 million homes passed, we will earn less revenue, and absorb less
operating expense, per end user, than under a turnkey arrangement. In our
Network Services solution, we deliver fewer services and incur lower costs than
in a turnkey solution but will also earn a smaller percentage of the
subscription revenue or a fixed fee on a per subscriber basis.
As part of our recently announced cost reduction measures, our Board of
Directors has made the strategic determination to no longer pursue DSL as a
potential new product offering. Therefore, our business will continue to rely on
our cable modem service, which may not be well suited for many SMEs and for
which market acceptance has been slow.
OUR BUSINESS IS DIFFICULT TO EVALUATE BECAUSE WE HAVE A LIMITED OPERATING
HISTORY.
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Our predecessor companies began offering services to cable operators in
October 1997. Most of our cable modem deployments occurred within the last two
years. Our senior management team and other employees have worked together at
our Company for only a short period of time. We have recognized only limited
revenues since our Inception. We do not consider any of the markets in which we
operate to be mature. As a result of our limited operating history and our
recent cost reduction measures, our business is difficult to evaluate.
WE HAVE NOT BEEN PROFITABLE AND EXPECT FUTURE LOSSES.
Since our founding, we have not been profitable. We have incurred
substantial costs to create and introduce our broadband Internet access
services, to operate these services, and to grow our business. We incurred net
losses of approximately $288.7 million from April 3, 1998 (Inception) through
June 30, 2001. Our limited operating history, the dynamic nature of our
industry, and changes in our business model make predicting our operating
results, including operating expenses, difficult.
We expect to incur substantial losses and experience substantial
negative cash flow from operations for at least the next several years. The
principal costs of any future expansion of our business will include:
o Direct and indirect selling, marketing and promotional costs;
o System operational expenses, including the lease of our Internet
backbone, which has a traffic capacity in excess of our current needs;
o Costs incurred in connection with higher staffing levels to meet our
growth;
o The acquisition and installation of the equipment, software and
telecommunications circuits necessary to enable our cable partners to
offer our services or to add additional products and services; and
o Costs in connection with acquisitions, divestitures, business
alliances or changing technologies.
OUR QUARTERLY OPERATING RESULTS ARE LIKELY TO FLUCTUATE SIGNIFICANTLY AND MAY BE
BELOW OUR EXPECTATIONS AND THE EXPECTATIONS OF ANALYSTS AND INVESTORS.
Our revenues and expenses, and in particular our quarterly revenues,
expenses and operating results have varied in the past and may fluctuate
significantly in the future due to a variety of factors, many of which are
outside of our control. These factors include:
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o Our ability to raise additional capital;
o The outcome of our current discussions with Charter regarding a
possible business combination transaction;
o Changes in our operating expenses including, in particular, personnel
expenses;
o The success of our cost control measures;
o Our ability to enter into strategic alliances with content providers;
and
o Economic conditions specific to the Internet and cable industries, as
well as general economic and market conditions.
In addition, our operating expenses are based on our expectations of
the future demand for our services and are relatively fixed in the short term.
We may be unable to adjust spending quickly enough to offset any unexpected
demand surge or shortfall in demand. A shortfall in revenues in relation to our
expenses could have a material and adverse effect on our business and financial
results.
The quarter-to-quarter comparisons of our results of operations should
not be relied upon as an indication of future performance. It is possible that
in some future periods our results of operations may be below our expectations
and the expectations of public market analysts and investors. In that event, the
price of our common stock is likely to fall.
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OUR LARGEST CABLE PARTNER CAN TERMINATE ITS CONTRACT WITH US.
Our largest cable partner is Charter. Charter is an affiliate of
Vulcan, an affiliate of Microsoft co-founder Paul Allen, who may be deemed to
beneficially own 49.5% of our outstanding common stock as of June 30, 2001,
assuming 100% conversion of the Company's convertible preferred stock and the
exercise of 2,650,659 warrants owned by Charter. We have entered into several
agreements with Charter, including several distribution agreements. The first
distribution agreement was entered into in November 1998 and the second in May
2000. Under both agreements, Charter has committed to provide us the exclusive
right to provide network services related to the delivery of Internet access to
homes passed in some cable systems.
Under the May 2000 agreement, we will provide Network Services,
including call center support for cable modem customers as well as network
monitoring, troubleshooting and security services. The agreement has an initial
term of five years and may be renewed at Charter's option for additional
successive five-year terms. In a Network Services solution, we deliver fewer
services and incur lower costs than in turnkey solutions, but will also earn a
smaller percentage of the subscription revenue based on a fixed fee per
subscriber. Under the November 1998 agreement, we have primarily provided
comprehensive turnkey services.
Subject to the provisions of the distribution agreements, Charter can
terminate our exclusivity rights, on a system-by-system basis, if we fail to
meet performance specifications or otherwise breach our agreement. Moreover,
Charter can terminate the November 1998 agreement, for any reason, as long as it
purchases the associated cable headend equipment and modems at book value and
pays us a termination fee based on the net present value of the revenues we
otherwise would earn for the remaining term of the agreement from those end
users subscribing to our services as of the date of termination. We may be
unable to meet the benchmarks related to its customer penetration rates.
Further, Charter may decide to terminate either agreement for any other reason.
If Charter were to terminate either agreement, in whole or for any material
system, regardless of any termination fee we may receive, we would lose end
users and market share, and likely be forced to incur significant unanticipated
costs to establish alternative arrangements, which may not be available on
competitive terms, or at all. The Company recently received a non-binding
proposal from Charter to acquire the Company's cable modem business with
Charter. See Note 7, "Business Developments" of the unaudited financial
statements contained in our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2001 for a description of such proposal.
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IN THE VERY UNLIKELY EVENT THAT WE ARE ABLE TO ATTRACT ADDITIONAL FINANCING OUR
CONVERTIBLE PREFERRED STOCK CONTAINS ANTI-DILUTION ADJUSTMENTS AND RESTRICTIONS
ON OUR FUTURE ACTIVITIES.
Vulcan and Charter own 38,000 and 37,000 convertible preferred shares,
respectively. Paul Allen controls Vulcan and Charter. The shares of convertible
preferred stock initially were initially convertible at a conversion price of
$5.01875 per share into 14,943,960 shares of common stock. The conversion price
is subject to an anti-dilution adjustment which would increase the number of
shares issuable to Vulcan and Charter upon conversion of the convertible
preferred stock if we issue common stock (or are deemed to issue common stock)
at below the conversion price. The conversion price at June 30, 2001 was
$5.01575.
The terms of the convertible preferred stock also place significant
restrictions on our activities in the future. Among other things, these
constraints will require us to:
o Obtain the approval of Vulcan and Charter before declaring a dividend,
entering into a merger, acquisition, consolidation, business
combination, or other similar transaction, or issuing any debt or
equity securities;
o Provide Vulcan and Charter with a right of first refusal to purchase
shares of stock, common or otherwise, that we may offer in the future;
and
o Offer and make available to Vulcan, Charter and their affiliates,
licensing and business arrangements relating to our technologies,
products and services, of any combination
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thereof, on terms and conditions at least as favorable as those agreed
to with any third party at substantially the same level of purchase or
other financial commitment.
Because the convertible preferred stock has voting rights, its issuance
has a dilutive effect on the relative voting power of our common stockholders.
You should also be aware that conversion of the convertible preferred stock into
shares of common stock will have a dilutive effect on earnings per share of our
common stockholders. In addition, you should note that we may issue additional
shares of common stock in connection with the payment of dividends or conversion
price adjustments on the convertible preferred stock, which may increase the
number of shares of common stock issued in connection with the transaction.
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The Company recently received a non-binding proposal from Charter to
acquire the Company's cable modem business with Charter. See Note 7, "Business
Developments" of the unaudited financial statements contained in our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2001 for a description of
such proposal. If the transaction with Charter is consummated on the terms as
proposed by Charter, all shares of preferred stock held by Charter and Vulcan
would be cancelled.
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OUR ABILITY TO INCREASE THE CAPACITY AND MAINTAIN THE SPEED OF OUR NETWORK IS
UNPROVEN.
We may not be able to increase the transmission capacity of our network
to meet expected end user levels while maintaining superior performance. While
peak downstream data transmission speeds across the cable infrastructure
approach 10 Mbps in each 6 megahertz (Mhz) channel, actual downstream data
transmission speeds are almost always significantly slower depending on a
variety of factors. These factors include our intentional throttling of data
traffic flowing through the local network out in order to optimize the use of
our network capacity and to sell tiered price-service packages, bandwidth
capacity constraints between the cable headend and the Internet backbone, the
type and location of content, Internet traffic, the number of active end users
on a given cable network node, the number of 6 Mhz channels allocated to us by
our cable partner, the capabilities of the cable modems used and the service
quality of the cable operators' fiber-coax facilities. The actual data delivery
speed that an end user realizes also will depend on the end user's hardware,
operating system and software configurations. There can be no assurance that we
will be able to achieve or maintain a speed of data transmission sufficiently
high to enable us to attract and retain our planned number of end users,
especially as the number of end users grows. Because end users will share the
available capacity on a cable network node, we may underestimate the capacity we
need to provide in order to maintain peak transmission speeds. A perceived or
actual failure to achieve or maintain sufficiently high speed data transmission
could significantly reduce end user demand for our services or increase costs
associated with customer complaints and have a material adverse effect on our
business and financial results.
OUR NETWORK MAY BE VULNERABLE TO SECURITY RISKS.
Despite our implementation of industry-standard security measures the
networks we operate may be vulnerable to unauthorized access, computer viruses
and other disruptive problems. Internet and online service providers in the past
have experienced, and in the future may experience, interruptions in service as
a result of the accidental or intentional actions of Internet users. Because the
cable infrastructure is a shared medium, it is inherently more vulnerable to
security risks than dedicated telephony technologies such as digital subscriber
lines. Moreover, we have no control over the security measures that our cable
partners and end users adopt. Unauthorized access could also potentially
jeopardize the security of confidential information stored in the computer
systems maintained by us and our end users. These events may result in liability
to us or harm to our end users. Eliminating computer viruses and alleviating
other security problems may require interruptions, delays or cessation of
service to our end users, which could have a material adverse effect on our
business and financial results. In addition, the threat of these and other
security risks may deter potential end users from purchasing our services, which
could have a material adverse effect on our business and financial results.
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WE HAVE RECENTLY MADE ACQUISITIONS AND ACQUISITIONS INVOLVE NUMEROUS RISKS.
Our growth is dependent upon market growth, our ability to enhance our
existing products and our ability to introduce new products on a timely basis.
One of the ways we have addressed, and will continue to address, the need to
develop new products is through acquisitions of other companies. In particular,
we recently acquired certain DSL facilities-based assets in order to begin
offering DSL service, although our Board of Directors has since determined not
to pursue this DSL strategy. In addition, we also recently acquired Digital
Chainsaw, Inc. in order to allow us to offer other additional services to our
customers, including web hosting and web design. Acquisitions involve numerous
risks, including the following:
o Difficulties in integration of the operations, technologies, and
products of the acquired companies;
o The risk of diverting management's attention from normal daily
operations of the business;
o Potential difficulties in completing projects associated with
purchased in-process research and development;
o Risks of entering markets in which we have no or limited direct prior
experience and where competitors in such markets have stronger market
positions; and
o The potential loss of key employees of the acquired company.
The occurrence of any of the foregoing could harm our business and
operating results. Furthermore, mergers and acquisitions of high-technology
companies are inherently risky, and we can give no assurance that our previous
or future acquisitions will be
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successful and will not materially adversely affect our business, operating
results or financial condition.
RISKS RELATED TO THE MARKET FOR HIGH SPEED INTERNET ACCESS
THE MARKET FOR INTERNET SERVICES IS HIGHLY COMPETITIVE.
We face competition for partnerships with cable operators from other
cable modem-based providers of Internet access services and for end users from
providers of other types of data and Internet services.
We believe the major competitive factors in the market for partnerships
with cable operators include breadth of service, speed and ease of deployment,
revenue sharing arrangements, cash and equity incentives and operating
experience. We believe the major competitive factors in the market to provide
high speed Internet access to end users include financial, marketing and sales
resources, established customer relationships, price, ease of access and use,
transmission speed, reliability of service, quantity and quality of content,
network security and customer support. We face competition from many competitors
with significantly greater financial, sales and marketing resources, larger
customer bases, longer operating histories, greater name recognition and more
established relationships with advertisers, content and application providers
and/or other strategic partners than we have. We expect the level of this
competition in cable and DSL Internet access markets to increase in intensity in
the future. We face competition from both cable modem service providers and from
providers of other types of data and Internet services for end users, including
DSL companies. Due to this intense competition, there may be a time-limited
market opportunity for our cable-based high speed
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access and our entry into DSL services. There can be no assurance that we will
be successful in achieving widespread acceptance of our services before
competitors offer services similar to our current offerings, which might
preclude or delay purchasing decisions by potential customers.
For the reasons discussed below, we may not be able to compete
successfully against current or future competitors, and competitive pressures we
face could materially and adversely affect our business and financial results.
CABLE-BASED INTERNET ACCESS MARKET. Our competitors in the cable-based
Internet access market are those companies that have developed their own
cable-based services and market those services to cable system operators. In
particular, Excite@Home, Road Runner, and Earthlink and their respective cable
partners, are deploying high speed Internet access services over cable networks.
Excite@Home, through its Excite@Home Solutions product, markets to systems in
markets with at least 20,000 homes passed. Other competitors in the cable-based
Internet access market are those companies seeking to establish distribution
arrangements with cable system operators in exurban markets and/or provide
one-way system capability. In addition, other cable system operators have
launched their own cable-based Internet services that could limit the market for
our services. Many of our competitors and potential competitors in the market
for partnerships with cable operators, in particular Excite@Home, have
substantially greater financial, sales and marketing resources, larger customer
bases, longer operating histories, greater name recognition and more established
relationships with cable operators, advertisers and content and application
providers than we do. Widespread commercial acceptance of any of these
competitors' products could significantly reduce the potential customer base for
our services, which could have a material adverse effect on our business and
financial results.
DSL AND OTHER TECHNOLOGIES. Our cable-based services compete directly
against DSL companies and telecommunications companies offering DSL services to
end users. In addition, long distance inter-exchange carriers, such as AT&T,
Sprint and MCI WorldCom, have deployed large-scale Internet access networks and
sell Internet access to business and residential customers. The regional Bell
operating companies and other local exchange carriers have also entered this
field and are providing price competitive services. Many of these carriers are
offering diversified packages of telecommunications services, including Internet
access, to residential customers, and could bundle these services together,
which could put us at a competitive disadvantage. Many of these competitors are
offering, or may soon offer, technologies that will compete with our cable-based
high speed data service offerings. Such competing technologies include
integrated services digital networks, digital subscriber lines and wireless and
satellite services. Many of our competitors and potential competitors,
particularly regional Bell operating companies, have substantially greater
financial, sales and marketing resources than we have, and also may compete
favorably in terms of price, ease of access and use, transmission speed and
reliability of service. Widespread commercial acceptance of DSL or
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other competing technologies could significantly reduce the potential customer
base for our cable-based services, which could have a material adverse effect on
our business and financial results.
INTERNET AND ONLINE SERVICE PROVIDERS. We also compete with traditional
Internet service providers, which provide basic Internet access to residential
and commercial end users and businesses, generally using the existing telephone
network. While not presently offering the advantages of broadband access, these
services are widely available and inexpensive. Many online service providers,
such as America Online, have the advantage of large customer bases, industry
experience, longer operating histories, greater name recognition, established
relationships with advertisers and content and application providers, and
significant financial, marketing and sales resources. Moreover, America Online
recently merged with Time Warner, a major content provider and cable system
owner/operator, to create AOL Time Warner. One condition placed on this merger
involves AOL Time Warner permitting unaffiliated Internet access providers to
use AOL Time Warner's cable systems to provide high speed Internet access to
their customers. These "open access" arrangements may affect our business in
various respects. Previously, AOL announced alliances with SBC Communications
and Bell Atlantic to offer AOL's services via digital subscriber line
connections to be installed by these regional Bell operating companies. The pace
at which AOL and its telephone company partners roll out DSL service could limit
our ability to attract and retain end users in areas where our service offerings
overlap.
PEAKING CONSUMER INTEREST IN INTERNET ACCESS. Although the growth in
consumer interest in accessing the Internet has been growing for several years,
growth in consumer time spent on the Internet will eventually level off and may
decline. This leveling off of demand may be offset over time by the development
of additional Internet-based services and functions by existing and new
Internet-oriented firms, but there is no assurance that these new services will
actually be developed or will achieve customer acceptance. A leveling of demand
will tend to intensify competition among existing providers of Internet access,
including us and traditional dial-up providers of access.
OUR CABLE PARTNERS COULD SELL THEIR SYSTEMS OR BE ACQUIRED.
In recent years, the cable television industry has undergone
substantial consolidation. If one of our cable partners is acquired by a cable
operator that already has a relationship with one of our competitors or that
does not enter into a contract with us, we could lose the ability to offer our
cable modem access services in the systems formerly served by our cable partner,
which could have a material and adverse effect on our business and financial
results. Many of the cable operators operate multiple systems, thus increasing
the risk to us if they are acquired. Moreover, it is common in the cable
industry for operators to swap systems, which could cause us to lose our
contract for a swapped system. Even though many of our contracts obligate our
cable partners to pay us a termination fee if they sell their system to another
operator who does not assume our contract, the potential termination fee may not
be adequate to ensure that the successor operator assumes our contract, or to
compensate us fully for the loss of future business in that system.
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OUR CABLE PARTNERS COULD LOSE THEIR FRANCHISES AND ARE VULNERABLE TO
COMPETITION.
Cable television companies operate under franchises granted by local or
state authorities that are subject to renewal and renegotiations from time to
time. A franchise is generally granted for a fixed term ranging from five to 15
years, although in many cases the franchise is terminable if the franchisee
fails to comply with the material provisions of its franchise agreement. No
assurance can be given that the cable operators that have contracts with us will
be able to retain or renew their franchises. The non-renewal or termination of
any of these franchises would result in the termination of our contract with the
applicable cable operator. Moreover, cable television operators are sometimes
subject to overbuilding by competing operators who offer competing video and
Internet access services. Moreover, many direct broadcast satellite ("DBS")
operators can compete with cable operators and provide Internet access services
to their subscribers. Any such dilution of our cable operator market base can
adversely affect our potential market base.
OUR MARKET IS CHARACTERIZED BY RAPID TECHNOLOGICAL CHANGE AND OUR SERVICES COULD
BECOME OBSOLETE OR FAIL TO GAIN MARKET ACCEPTANCE.
The market for our services is characterized by rapid technological
advances, evolving industry standards, changes in end user requirements and
frequent new service introductions and enhancements. For example, the North
American cable industry has adopted a set of interface specifications, known as
"DOCSIS," for hardware and software to support cable-based data delivery using
cable modems. Our ability to adapt to rapidly changing technology and industry
standards, such as DOCSIS, and to develop and introduce new and enhanced
products and service offerings will be significant factors in maintaining or
improving our competitive position reducing our costs, and our prospects for
growth. If our technologies become obsolete or fail to gain widespread consumer
acceptance, or if we are unable to meet newly adopted industry standards, then
our business and financial results will be materially and adversely affected.
We currently anticipate that we will use a portion of our working
capital to acquire cable modem equipment. The technology underlying that
equipment is continuing to evolve. It is possible that the equipment we acquire
could become obsolete prior to the time we would otherwise intend to replace it,
which could require us to make unanticipated capital expenditures. Our inability
to replace obsolete equipment on a timely basis could have a material adverse
effect on our business and financial results.
WE DEPEND ON THIRD PARTIES AND OUR BUSINESS IS SUBJECT TO DISRUPTION BY EVENTS
OUTSIDE OUR CONTROL.
Our success will depend upon the capacity, reliability and security of
the infrastructure used to carry data between our end users and the Internet. A
significant portion of that infrastructure is owned by third parties.
Accordingly, we have no control over its quality and maintenance. For example,
we rely on our cable partners to maintain their cable infrastructures. We also
rely on other third parties to provide a connection from the cable
infrastructure to the Internet and to provide fulfillment services to us.
Currently, we have transit agreements with MCI WorldCom and its affiliate,
UUNet, and others to support the exchange of traffic between
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our data servers, the cable infrastructure and the Internet. We also have
agreements with various vendors to manage and oversee our customer installation
process, including installation, customer education, dispatch service, quality
control, recruitment and training. The failure of these third parties to
maintain this infrastructure and otherwise fulfill their obligations under these
agreements could have a material adverse effect on our business and financial
results.
Our operations also depend on our ability to avoid damages from fires,
earthquakes, floods, power losses, telecommunications failures, network software
flaws, transmission cable cuts, and similar events. The occurrence of any of
these events could interrupt our services. The failure of the Internet backbone,
our servers, or any other link in the delivery chain, whether from operational
disruption, natural disaster or otherwise, resulting in an interruption in our
operations could have a material adverse effect on our business and financial
results.
WE MAY BE HELD LIABLE FOR DEFAMATORY OR INDECENT CONTENT, AS WELL AS INFORMATION
RETRIEVED OR REPLICATED.
In part, our business involves supplying information and entertainment
to customers over the cable systems of our cable system partners. Accordingly,
we face the same types of risks that apply to all businesses that publish or
distribute information, such as potential liability for defamation, libel,
invasion of privacy and similar claims, as well as copyright or trademark
infringement and similar claims. A number of third parties have claimed that
they hold patents covering various forms of online transactions or online
technologies. In addition, our errors and omissions and liability insurance may
not cover potential patent or copyright infringement claims and may not
adequately indemnify us for any liability that may be imposed.
The law relating to the liability of Internet and online service
providers for information carried or disseminated through their networks is
unsettled. There are some federal laws regarding the distribution of obscene or
indecent material over the Internet under which we are subject to potential
liability. These risks are mitigated by two federal laws. One, passed in 1996,
immunizes Internet service providers from liability for defamation and similar
claims for materials the Internet service provider did not create, but merely
distributed. The other, passed in 1998, creates a "safe harbor" from copyright
infringement liability for Internet service providers who comply with its
requirements, which we intend to do. These laws apply only in the United States;
if we expand our operations to other countries, our potential liability under
the laws of those countries could be greater.
WE MAY BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION, "OPEN ACCESS"
COMPETITION AND OTHER DSL- AND DBS-BASED COMPETITION.
The regulatory climate affecting our business is uncertain at this
time, and we may become subject to burdensome governmental regulation in the
future. Historically, the Company and its cable partners believed that for
regulatory purposes our services would be considered a form of cable service, or
an unregulated information service. Some federal courts have reached decisions
consistent with these views. However, in June 2000, the federal appeals court
for the 9th Circuit concluded that a cable operator's provision of transmission
facilities in some instances is a telecommunications service under the
Communications Act. This classification
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could subject our cable partners, and possibly us, to federal and state
regulation as "telecommunications carriers." If we or our cable partners were
classified as telecommunications common carriers, or otherwise subject to common
carrier-like access and non-discrimination requirements in the provision of our
Internet over cable service, the Company or its cable partners could be subject
to burdensome governmental regulations. In particular, the government might seek
to regulate us and our cable partners with respect to the terms, conditions and
prices for Internet connection services and interconnections with the public
switched telephone network, and require that we make contributions to the
universal service support fund. The law in this area thus remains unsettled.
Moreover, some local franchising authorities might claim that our cable partners
need a separate franchise to offer our service. This franchise may not be
obtainable on reasonable terms, or at all.
In addition, some local cable franchising authorities seek to impose
"non-discrimination" or "open access" obligations on our cable partners, under
which competing ISPs would have access to the high-speed transmission
capabilities of our cable partners' networks. AOL and Time Warner agreed to such
an "open access" condition, applicable to Time Warner's cable networks, in order
to obtain federal antitrust approval for their recent merger. A consortium of
dial-up Internet service providers and large telephone companies are encouraging
local franchising authorities and the Federal Communications Commission ("FCC")
to ban the type of exclusive ISP-cable operator arrangements that we have with
our cable partners that make us the exclusive supplier of high speed data on the
cable systems where our service is offered. If such arrangements are banned, the
Company could face additional competition from other Internet access providers
using the cable system to connect to their customers, which could have a
material adverse effect on our business and financial results. Both AOL-Time
Warner and AT&T have announced plans to open their networks to competing
Internet service providers in the coming years, and AT&T and Time Warner Cable
have initiated "open-access" trials with selected ISPs in several markets. Other
ISPs are petitioning the FCC and various large cable operators for access to
cable plants. The Company cannot predict the degree to which such voluntary or
involuntary "open access" will affect our business.
In addition, regulatory decisions that make services based on DSL
technology easier for competing telephone companies to deploy over normal
telephone lines and less expensive for customers to buy, could negatively affect
the Company's cable-based high speed access business. The FCC issued a
line-sharing ruling in December 1999 that allows DSL providers to simply lease
the data spectrum of the customer's local loop from the incumbent carrier. This
obviates the need for the customers to lease a secondary DSL-provisioned loop
from the incumbent carrier in order to obtain high speed DSL data service, which
in turn could make DSL service a more cost-competitive alternative to our
services. In addition, in several decisions issued in 2000, the FCC took steps
designed to make it more efficient for DSL providers to locate their
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equipment in telephone company switching centers. Furthermore, firms controlling
digital broadcast spectrum have announced plans to utilize a portion of that
spectrum to offer consumers high-bandwidth data delivery via broadcast. Some DBS
video companies are also deploying higher-bandwidth data delivery products. The
Company cannot predict when or whether these services will be offered, but if
offered, they could present material competition to our cable-based high speed
access services and could materially and adversely affect our success in the
marketplace.
In addition to regulatory activity, large Incumbent Local Exchange
Carriers ("ILECs") have been pressing Congress to amend the Communications Act
to make it easier for those firms to offer high-speed Internet access services
to consumers and to participate directly in transmitting information between
their customers and the Internet backbone. If such legislation were to pass,
ILECs could become even more formidable competitors in the high speed Internet
access business.
RISK RELATED TO TRADING IN OUR STOCK
BECAUSE OF OUR RELATIONSHIP WITH VULCAN VENTURES, NEW INVESTORS WILL HAVE LITTLE
INFLUENCE OVER MANAGEMENT DECISIONS.
Vulcan and Charter currently own 36.4% and 13.1%, respectively, of our
outstanding stock assuming 100% conversion of the Company's convertible
preferred stock and the exercise of 2,650,659 warrants owned by Charter. Charter
also has warrants to purchase up to 12,000,000 shares of our common stock at an
exercise price of $3.23 per share. Paul Allen is the controlling stockholder of
Charter and Vulcan and as a result Mr. Allen's beneficial ownership of our
outstanding stock is 49.5%. Accordingly, Mr. Allen will be able to significantly
influence and possibly exercise control over most matters requiring approval by
our stockholders, including the election of directors and approval of
significant corporate transactions. This concentration of ownership may also
have the effect of delaying or preventing a change in control. In addition,
conflicts of interest may arise as a consequence of Mr. Allen's control
relationship with us, including:
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o Conflicts between Vulcan, Charter and other affiliates of Mr. Allen
and our other stockholders, whose interests may differ with respect
to, among other things, our strategic direction or significant
corporate transactions;
o Conflicts related to corporate opportunities that could be pursued by
us, on the one hand, or by Vulcan, Charter or other affiliates of Mr.
Allen, on the other hand; or
o Conflicts related to existing or new contractual relationships between
us, on the one hand, and Mr. Allen and his affiliates, such as Vulcan
and Charter, on the other hand.
In particular Mr. Allen controls Charter, our largest cable partner.
Additionally, Vulcan has the exclusive right to provide or designate the first
page our end users see when they log on to our service and, if it provides that
first page, will be entitled to all of the related revenues. Moreover, Vulcan
can prohibit us from providing content that competes with content it chooses to
provide, and can prohibit us from providing telephony service if it chooses to
provide those services. The Company recently received a non-binding proposal
from Charter to acquire the Company's cable modem business with Charter. See
Note 7, "Business Developments" of the unaudited financial statements contained
in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 for a
description of such proposal. If the transaction with Charter is consummated on
the terms as proposed by Charter, all shares of preferred stock held by Charter
and Vulcan would be cancelled.
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THE FUTURE SALE OF SHARES MAY HURT OUR MARKET PRICE.
A substantial number of shares of our common stock are available for
resale. If our stockholders sell substantial amounts of our common stock in the
public market, the market price of our common stock could fall. These sales also
might make it more difficult for us to sell equity securities in the future at
times and prices that we deem appropriate.
OUR STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE.
The stock market has experienced extreme price and volume fluctuations.
In particular, the market prices of the securities of Internet-related companies
have been especially volatile. In the past, companies that have experienced
volatility in the market price of their stock have been the object of securities
class action litigation. If we were the object of securities class action
litigation, it could result in substantial costs and a diversion of our
management's attention and resources.
WE HAVE ANTI-TAKEOVER PROVISIONS.
Certain provisions of our certificate of incorporation, our bylaws and
Delaware law, in addition to the concentration of ownership by Mr. Paul Allen,
could make it difficult for a third party to acquire us, even if doing so might
be beneficial to our other stockholders.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A
of the Securities Act of 1933, as amended, and is subject to the safe harbors
created by those sections. These forward-looking statements are subject to
significant risks and uncertainties, including those identified in the section
of this prospectus entitled "Risk Factors", which may cause actual results to
differ materially from those discussed in such forward-looking statements. The
forward-looking statements within this prospectus are identified by words such
as "believes", "anticipates", "expects", "intends", "may", "will" and other
similar expressions. However, these words are not the exclusive means of
identifying such statements. In addition, any statements which refer to
expectations, projections or other characterizations of future events or
circumstances are forward-looking statements. We undertake no obligation to
publicly release the results of any revisions to these forward-looking
statements which may be made to reflect events or circumstances occurring
subsequent to the date of this prospectus. Readers are urged to carefully review
and consider the various disclosures made by us in this prospectus and in our
reports filed with the Securities and Exchange Commission, that attempt to
advise interested parties of the risks and factors that may affect our business.
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WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and file reports and other information with
the Securities and Exchange Commission in accordance therewith. Such reports,
proxy statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at the Commission's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information regarding the public reference facilities may be obtained from the
Commission by calling 1-800-SEC-0330. Our filings are also available to the
public on the Commission's Internet site at http://www.sec.gov. Copies of such
materials may also be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. We maintain a website at http://www.hsacorp.net.
We have filed with the Commission a registration statement on Form S-3
under the Securities Act of 1933, as amended, with respect to the common stock
that the selling stockholder may offer under this prospectus. This prospectus,
which is a part of that registration statement, does not include all the
information contained in the registration statement and its exhibits. For
further information with respect to us and our common stock, you should consult
the registration statement and its exhibits. Statements contained in this
prospectus concerning the provisions of any documents are summaries of those
documents, and we refer you to the document filed with the SEC for more
information. The registration statement and any of its amendments, including
exhibits filed as a part of the registration statement or an amendment to the
registration statement, are available for inspection and copying as described
above.
The Commission allows us to "incorporate by reference" the information
we file with them. This means that we can disclose important information to you
by referring you to the other information we have filed with the Commission. The
information that we incorporate by reference is considered to be part of this
prospectus. Information that we file later with the Commission will
automatically update and supersede this information.
The following documents filed by us with the Commission and any future
filings we make with the Commission under Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act prior to the termination of this offering are incorporated by
reference:
o our Annual Report on Form 10-K for the fiscal year ended December 31,
2000, as amended by Form 10-K/A filed on April 30, 2001;
o our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2001 and June 30, 2001;
o our Current Report on Form 8-K dated June 13, 2001;
o the description of our common stock contained in the registration
statement on Form 8-A, filed with the Commission on May 21, 1999.
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You can request a free copy of the above filings or any filings
subsequently incorporated by reference into this prospectus by writing or
calling us at:
High Speed Access Corp.
10901 West Toller Drive
Littleton, Colorado 80127
Attention: Investor Relations
Telephone: (720) 922-2828
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE
ELSE TO PROVIDE YOU WITH ADDITIONAL OR DIFFERENT INFORMATION. THE COMMON STOCK
IS NOT BEING OFFERED IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD
NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE
AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF SUCH DOCUMENT.
USE OF PROCEEDS
The shares of our common stock being offered hereby are offered solely
for the account of the selling stockholder pursuant to an agreement that we have
entered into with it. We will not receive any proceeds from the sale of such
common stock. See "The Selling Stockholder."
THE SELLING STOCKHOLDER
In connection with the issuance of these securities to the selling
stockholder, we entered into an agreement that requires us to file a
registration statement covering the common stock offered hereby. This prospectus
is a part of the registration statement we filed with the Commission covering
all of those shares of common stock.
The selling stockholder is ISP Channel, Inc. and its address is 650
Townsend Street, Suite 225, San Francisco, CA 94103. As of April 30, 2001, the
selling stockholder owned 125,000 shares of our common stock, all of which are
covered by this prospectus. We received this information from the selling
stockholder. Except as disclosed in this prospectus, the selling stockholder has
not, or within the past three years has not had, any position, office or other
material relationship with us or any of our predecessors or affiliates. Because
the selling stockholder may offer all or some portion of our common stock
pursuant to this prospectus, no estimate can be given as to the number of shares
of our common stock that will be held by the selling stockholder upon
termination of any sales of such common stock. In addition, the selling
stockholder may have sold, transferred or otherwise disposed of all or a portion
of its securities since the date on which it provided the information regarding
its securities in transactions exempt from the registration requirements of the
Securities Act.
The shares of common stock are being registered to permit public
secondary trading of the shares and the selling stockholder may offer the shares
for sale from time to time. See "Plan of Distribution."
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PLAN OF DISTRIBUTION
We are registering common stock on behalf of the selling stockholder.
As used herein, "selling stockholder" includes donees and pledgees selling our
common stock received from the selling stockholder after the date of this
prospectus. All costs, expenses and fees in connection with the registration of
our common stock offered hereby will be borne by us. Brokerage commissions and
similar selling expenses, if any, attributable to the sale of our common stock
will be borne by the selling stockholder. Sales of our common stock may be
effected by the selling stockholder from time to time in one or more types of
transactions (which may include block transactions) on the Nasdaq National
Market, in the over-the-counter market, in negotiated transactions, through put
or call options transactions relating to our common stock, through short sales
of our common stock, or a combination of such methods of sale, at market prices
prevailing at the time of sale, or at negotiated prices. Such transactions may
or may not involve brokers or dealers. The selling stockholder has advised us
that it has not entered into any agreements, understandings or arrangements with
any underwriters or broker-dealers regarding the sale of the common stock, nor
is there an underwriter or coordinating broker acting in connection with the
proposed sale of our common stock by the selling stockholder.
The selling stockholder may effect such transactions by selling our
common stock directly to purchasers or to or through broker-dealers, which may
act as agents or principals. Such broker-dealers may receive compensation in the
form of discounts, concessions, or commissions from the selling stockholder
and/or the purchasers of our common stock for whom such broker-dealers may act
as agents or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
The selling stockholder and any broker-dealers that act in connection
with the sale of our common stock might be deemed to be "underwriters" with the
meaning of Section 2(11) of the Securities Act, and any commissions received by
such broker-dealers and any profit on the resale of our common stock sold by
them while acting as principals might be deemed to be underwriting discounts or
commissions under the Securities Act. We have agreed to indemnify the selling
stockholder against certain liabilities, including liabilities arising under the
Securities Act. The selling stockholder may agree to indemnify any agent, dealer
or broker-dealer that participates in transactions involving sales of our common
stock against certain liabilities, including liabilities arising under the
Securities Act.
Because the selling stockholder may be deemed to be an "underwriter"
within the meaning of Section 2(11) of the Securities Act, the selling
stockholder will be subject to the prospectus delivery requirements of the
Securities Act. We have informed the selling stockholder that the
anti-manipulative provisions of Regulation M promulgated under the Exchange Act
may apply to their sales in the market.
The selling stockholder also may resell all or a portion of its HSA
common stock in open market transactions in reliance upon Rule 144 under the
Securities Act, provided it meets the criteria and conforms to the requirements
of such Rule.
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Upon our notification by the selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of our
common stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of the selling stockholder and the
participating broker-dealer(s), (ii) the number of shares of our common stock
involved, (iii) the price at which such shares were sold, (iv) the commissions
paid or discounts or concessions allowed to such broker-dealer(s), where
applicable, (v) that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this prospectus
and (vi) other facts material to the transaction. In addition, upon our
notification by the selling stockholder that a donee or pledgee intends to sell
more than 500 shares of our common stock, a supplement to this prospectus will
be filed.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby will be
passed upon for us by Wyatt, Tarrant & Combs, LLP, Louisville, Kentucky.
EXPERTS
The financial statements incorporated in this prospectus by reference
to the Annual Report on Form 10-K of High Speed Access Corp. for the year ended
December 31, 2000, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
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HIGH SPEED ACCESS CORP.
125,000 Shares
Common Stock
----------
PROSPECTUS
----------
August 30, 2001
35
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated amounts of the expenses of and related to offering are as
follows:
<Table>
SEC registration fee.................................... $ 31.57
Accounting fees and expenses............................ $ 3,000.00
Legal fees and expenses................................. $ 7,500.00
Miscellaneous........................................... $ 5,000.00
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Total................................................... $15,531.57
==========
</Table>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Amended and Restated Certificate of Incorporation (the
"Certificate") provides that, except to the extent prohibited by the Delaware
General Corporation Law, as amended (the "DGCL"), the Registrant's directors
shall not be personally liable to the Registrant or its stockholders for
monetary damages for any breach of fiduciary duty as directors of the
Registrant. Under the DGCL, the directors have a fiduciary duty to the
Registrant which is not eliminated by this provision of the Certificate and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available. In addition, each director will
continue to be subject to liability under the DGCL for breach of the director's
duty of loyalty to the Registrant and its stockholders, for acts or omissions
which are found by a court of competent jurisdiction to be not in good faith or
involving intentional misconduct, for knowing violations of law, for actions
leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are prohibited by
the DGCL. This provision also does not affect the directors' responsibilities
under any other laws, such as the Federal securities laws or state or Federal
environmental laws. The Registrant has obtained liability insurance for its
officers and directors.
Section 145 of the DGCL empowers a corporation to indemnify its
directors and officers and to purchase insurance with respect to liability
arising out of their capacity or status as directors and officers. The
Certificate provides that the Registrant shall indemnify any person who was or
is a party or is threatened to be made a party to or becomes involved in any
action, suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that such person is or was a director or
officer of the Registrant, or is or was serving at the request of the Registrant
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement reasonably incurred by such person in connection with such action,
suit or proceeding. The DGCL provides further that the indemnification permitted
thereunder shall not be deemed exclusive of any other rights to which the
directors and officers may be entitled under the corporation's bylaws, any
agreement, a vote of stockholders or otherwise. The Registrant has entered into
indemnification agreements with each member of the Board of Directors and
certain executive officers of the Registrant providing for the indemnification
of the directors and such officers to the fullest extent authorized, permitted
or allowed by Delaware law.
II-1
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibit No. Description
4.1** Specimen Common Stock Certificate.
4.2** Amended and Restated Certificate of Incorporation.
4.3** Amended and Restated Bylaws.
4.4 Certificate of Designation of Series D Convertible Preferred
Stock (incorporated by reference to Exhibit 2 of Exhibit 99.1
to Registrant's Current Report on Form 8-K dated October 23,
2000).
5* Opinion of Wyatt, Tarrant & Combs, LLP.
23.1* Consent of Wyatt, Tarrant & Combs, LLP (included in
Exhibit 5).
23.2 Consent of PricewaterhouseCoopers LLP.
24* Power of Attorney (included on signature page to this
Registration Statement).
- --------------
* Previously filed.
** Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 333-74667).
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
II-2
37
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act of 1933, as amended, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person
of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and will
be governed by the final adjudication of such issue.
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38
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Louisville, State of Kentucky, on this 29th day
of August, 2001.
HIGH SPEED ACCESS CORP.
By: /s/ George E. Willett
------------------------------------
Name: George E. Willett
Title: Chief Financial Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
Signature Title
- --------- -----
* Chairman of the Board of Directors
- --------------------------------------------
David A. Jones, Jr.
* Vice Chairman of the Board of
Robert Saunders Directors
* Director
- --------------------------------------------
Irving W. Bailey, II
* Director
- ---------------------------------------------
Michael Gellert
II-4
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<Table>
* President, Chief Executive Officer and
- -------------------------------------------- Director (Principal Executive Officer)
Daniel J. O'Brien
/s/ George E. Willett Chief Financial Officer
- -------------------------------------------- (Principal Financial and Accounting
George E. Willett Officer)
</Table>
*By: /s/ George E. Willett
--------------------------------------
George E. Willett, Attorney-in Fact
Date: August 29, 2001
II-5
40
EXHIBIT INDEX
<Table>
<Caption>
Exhibit No. Description
- ----------- -----------
4.1** Specimen Common Stock Certificate.
4.2** Amended and Restated Certificate of Incorporation.
4.3** Amended and Restated Bylaws.
4.4 Certificate of Designation of Series D Convertible Preferred
Stock (incorporated by reference to Exhibit 2 of Exhibit 99.1
to Registrant's Current Report on Form 8-K dated October 23,
2000).
5* Opinion of Wyatt, Tarrant & Combs, LLP.
23.1* Consent of Wyatt, Tarrant & Combs, LLP (included in Exhibit
5).
23.2 Consent of PricewaterhouseCoopers LLP.
24* Power of Attorney (included on signature page to this
Registration Statement).
</Table>
- --------------
* Previously filed.
** Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 333-74667).