UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES |
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For the Period Ended March 31, 2005 |
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Or |
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TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES |
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Commission File Number: 000-27707 |
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AETHER SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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52-2186634 |
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(State
or other jurisdiction of |
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(IRS Employer Identification Number) |
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621 E. Pratt St., Suite 601, Baltimore, MD |
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21202 |
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(Address of principal executive offices) |
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(Zip Code) |
(Registrant’s telephone number, including area code): (443) 573-9400
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
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 ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act) Yes ý No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
As of May 3, 2005, 44,008,946 shares of the Registrant’s common stock, $.01 par value per share, were outstanding.
AETHER SYSTEMS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2005
INDEX
2
PART I—FINANCIAL INFORMATION
ITEM I: FINANCIAL STATEMENTS
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
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March 31, |
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December 31, |
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(Unaudited) |
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ASSETS |
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Cash and cash equivalents |
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$ |
24,669 |
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$ |
60,723 |
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Mortgage-backed securities, at fair value |
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434,358 |
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62,184 |
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Interest receivable |
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1,510 |
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356 |
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Prepaid expenses and other assets |
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1,965 |
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4,124 |
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Restricted cash |
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8,832 |
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8,832 |
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Property and equipment, net |
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259 |
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367 |
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Total assets |
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$ |
471,593 |
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$ |
136,586 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Accounts payable and accrued expenses |
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$ |
3,694 |
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$ |
3,494 |
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Forward purchase obligations |
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318,068 |
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— |
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Repurchase agreements |
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19,443 |
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— |
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Accrued employee compensation and benefits |
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100 |
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186 |
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Accrued restructuring |
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14 |
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259 |
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Accrued interest payable |
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12 |
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— |
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Other long term liabilities |
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2,057 |
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2,057 |
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Total liabilities |
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343,388 |
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5,996 |
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Stockholders’ equity: |
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Preferred stock, $0.01 par value; 1,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2005 and December 31, 2004 |
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— |
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— |
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Common stock, $0.01 par value; 1,000,000,000 shares authorized; 44,000,821 and 43,963,963 shares issued and outstanding at March 31, 2005 and December 31, 2004, respectively |
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440 |
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440 |
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Additional paid-in capital |
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2,593,069 |
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2,592,977 |
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Accumulated deficit |
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(2,463,276 |
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(2,462,611 |
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Unrealized loss on investments available for sale |
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(2,028 |
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(216 |
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Total stockholders’ equity |
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128,205 |
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130,590 |
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Commitments and Contingencies |
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Total liabilities and stockholders’ equity |
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$ |
471,593 |
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$ |
136,586 |
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See accompanying notes to Condensed Consolidated Financial Statements.
3
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
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Three
Months Ended |
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2005 |
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2004 |
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Interest income from MBS portfolio |
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$ |
808 |
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$ |
— |
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Interest expense from MBS portfolio |
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12 |
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— |
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Net interest income from MBS portfolio |
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796 |
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— |
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Operating expenses: |
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Selling, general and administrative |
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1,783 |
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3,286 |
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Depreciation |
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49 |
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628 |
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Stock compensation expense |
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76 |
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422 |
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Other income |
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(188 |
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(30 |
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Restructuring charge |
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(7 |
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415 |
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Total operating expenses |
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1,713 |
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4,721 |
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Operating loss |
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(917 |
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(4,721 |
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Interest income from other than MBS portfolio |
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269 |
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1,354 |
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Interest expense from subordinated notes |
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— |
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(2,604 |
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Investment gain (loss), including impairments, net |
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(10 |
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557 |
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Loss from continuing operations |
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(658 |
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(5,414 |
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Loss from discontinued operations |
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— |
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(3,836 |
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Gain on sale of discontinued operations |
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— |
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18,396 |
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Net income (loss) |
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$ |
(658 |
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$ |
9,146 |
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Other comprehensive income (loss): |
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Foreign currency translation adjustment |
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$ |
— |
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$ |
(3,883 |
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Unrealized holding gains (losses) on investments available for sale |
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(1,812 |
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669 |
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Comprehensive income (loss) |
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$ |
(2,470 |
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$ |
5,932 |
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