UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED JANUARY 24, 2015
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 000-27273
SYCAMORE NETWORKS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 04-3410558 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 300 Brickstone Square, Suite 201 Andover, Massachusetts |
01810 | |
| (Address of principal executive offices) | (Zip code) |
(978) 662-5245
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ¨ | Accelerated filer | ¨ | |||
| Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | x | |||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The number of shares outstanding of the registrant’s Common Stock as of March 3, 2015 was 28,882,093.
2
Sycamore Networks, Inc.
Consolidated Statement of Net Assets in Liquidation
(in thousands, except per share data)
(unaudited)
| January 24, 2015 | July 31, 2014 | |||||||
| Assets |
||||||||
| Cash and cash equivalents |
$ | 11,358 | $ | 12,241 | ||||
| Land |
2,500 | 2,500 | ||||||
| Other assets |
36 | 47 | ||||||
|
|
|
|
|
|||||
| Total assets |
13,894 | 14,788 | ||||||
|
|
|
|
|
|||||
| Liabilities and Net Assets |
||||||||
| Accounts payable |
31 | — | ||||||
| Accrued expenses |
47 | 44 | ||||||
| Reserve for estimated costs during the Dissolution period |
2,457 | 3,462 | ||||||
| Other liabilities |
1,786 | 1,786 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
4,321 | 5,292 | ||||||
|
|
|
|
|
|||||
| Net assets in liquidation |
$ | 9,573 | $ | 9,496 | ||||
|
|
|
|
|
|||||
| Shares outstanding |
28,882 | 28,882 | ||||||
|
|
|
|
|
|||||
| Net assets in liquidation per share |
$ | 0.33 | $ | 0.33 | ||||
|
|
|
|
|
|||||
The accompanying notes are an integral part of the consolidated financial statements.
3
Sycamore Networks, Inc.
Consolidated Statement of Changes in Net Assets (Liquidation Basis)
For the three and six months ended January 24, 2015 and January 25, 2014
(in thousands)
(unaudited)
| Three months ended January 24, 2015 |
Six months ended January 24, 2015 |
|||||||
| Net assets in liquidation at beginning of period |
$ | 9,584 | $ | 9,496 | ||||
| Change in estimated realizable value of assets and liabilities: |
||||||||
| Decrease (increase) in estimated costs during the Dissolution period |
(14 | ) | 6 | |||||
| Increase in estimated realizable value for other assets |
3 | 71 | ||||||
|
|
|
|
|
|||||
| Net assets in liquidation as of January 24, 2015 |
$ | 9,573 | $ | 9,573 | ||||
|
|
|
|
|
|||||
| Three months ended January 25, 2014 |
Six months ended January 25, 2014 |
|||||||
| Net assets in liquidation at beginning of period |
$ | 13,637 | $ | 13,637 | ||||
| Change in estimated net realizable value of assets and liabilities: |
||||||||
| Increase in estimated costs during the Dissolution period |
(184 | ) | (184 | ) | ||||
| Increase in estimated net realizable value for other assets |
47 | 47 | ||||||
| Increase in estimated net realizable value for other receivable |
1,107 | 1,108 | ||||||
| Increase in estimated net realizable value for patents |
2,000 | 2,000 | ||||||
|
|
|
|
|
|||||
| Net assets in liquidation as of January 25, 2014 |
$ | 16,607 | $ | 16,607 | ||||
|
|
|
|
|
|||||
The accompanying notes are an integral part of the consolidated financial statements.
4
Sycamore Networks, Inc.
Notes To Consolidated Financial Statements (Unaudited)
1. Description of Business
Prior to February 1, 2013, Sycamore Networks, Inc. (the “Company”) developed and marketed Intelligent Bandwidth Management solutions for fixed line and mobile network operators worldwide and provided services associated with such products (the “Intelligent Bandwidth Management Business”), and, prior to November 1, 2012, the Company also developed and marketed a mobile broadband optimization solution (the “IQstream Business”). As used in these Notes to the Consolidated Financial Statements, “Sycamore,” “we,” “us,” or “our” refers collectively to the Company and its subsidiaries.
On October 23, 2012, the Company entered into an Asset Purchase and Sale Agreement (the “Asset Sale Agreement”) with Sunrise Acquisition Corp. (now known as Coriant America Inc.), a portfolio company of Marlin Equity Partners (“Buyer”), pursuant to which Buyer agreed to acquire substantially all of the assets (the “Asset Sale”) primarily related to the Intelligent Bandwidth Management Business, including inventory, fixed assets, accounts receivable, intellectual property rights (other than patents and patent applications), contracts, certain real estate leases, the Company’s subsidiaries in Shanghai, the Netherlands and Japan, and certain shared facilities and assets for $18.75 million in cash, subject to a working capital adjustment, and the assumption by Buyer of certain liabilities. The Company’s stockholders authorized the Asset Sale at a Special Meeting of Stockholders held on January 29, 2013 (the “Special Meeting”), and the Asset Sale was completed on January 31, 2013 (the transfer of the Company’s equity interests in its Shanghai subsidiary, which was subject to the receipt of government approval, occurred on March 25, 2013). Upon the closing of the Asset Sale, Buyer acquired substantially all of the Company’s operating assets relating to the Intelligent Bandwidth Management Business, including the Company’s accounts receivable, inventories and prepaid and other assets, and assumed most of the Company’s remaining current liabilities, including substantially all of the Company’s deferred revenue and accrued warranty obligations.
In conjunction with the approval of the Asset Sale Agreement, the Company’s Board of Directors (the “Board”) also approved the liquidation and dissolution of the Company (the “Dissolution”) pursuant to a Plan of Complete Liquidation and Dissolution (the “Plan of Dissolution”) following the completion of the Asset Sale. The Plan of Dissolution was also approved by the stockholders at the Special Meeting and, following a review of the Company’s strategic alternatives for all of the Company’s assets and available options for providing value to the Company’s stockholders, the Company filed a certificate of dissolution with the Secretary of State of the State of Delaware (the “Certificate of Dissolution”) on March 7, 2013. For additional information regarding the Dissolution, please see the Company’s Definitive Proxy Statement on Schedule 14A filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 28, 2012 and its Current Report on Form 8-K filed with the SEC on March 8, 2013.
In connection with the filing of the Certificate of Dissolution, on March 7, 2013, the Company closed its stock transfer books and discontinued recording transfers of its common stock, $0.001 par value per share (the “Common Stock”). The Common Stock, and stock certificates evidencing shares of the Common Stock, are no longer assignable or transferable on the Company’s books, other than transfers by will, intestate succession or operation of law. The Company also submitted a request to The NASDAQ Stock Market (“NASDAQ”) to suspend trading of the Common Stock on The NASDAQ Global Select Market effective as of the close of trading on March 7, 2013 and, on March 15, 2013, the Company filed a Form 25 with the SEC to delist its Common Stock, which became effective prior to the opening of trading on March 25, 2013. Since the suspension of trading of the Common Stock on The NASDAQ Global Select Market, shares of our Common Stock held in street name with brokers have been trading in the over-the-counter market on the Pink Sheets, an electronic bulletin board established for unlisted securities.
As a result of the completion of the Asset Sale and the Company’s previously announced halting of further development and marketing in connection with the IQstream Business, the Company no longer has any operating assets or revenue. Since the filing of the Certificate of Dissolution, the Company has been operating in accordance with the Plan of Dissolution, which contemplates an orderly wind down of the Company’s business, including the sale or monetization of the Company’s remaining non-cash assets and the satisfaction or settlement of its liabilities and obligations, including contingent liabilities and claims.
On December 4, 2014, the Board approved the termination of employment of Anthony J. Petrillo as the Company’s Chief Financial Officer, effective as of the close of business on December 5, 2014. Following the termination of his employment with the Company, Mr. Petrillo has provided certain financial consulting and other services to the Company relating to the wind down pursuant to a Services Consulting Agreement, and he continues to serve as the Company’s Principal Financial Officer and Treasurer on a non-employee basis. As of January 24, 2015, the Company had one remaining employee.
5
During fiscal 2014, the Company completed the sale of its patent portfolios. On February 28, 2014, the Company completed the sale of its portfolio of 40 patents and two patent applications related to the Intelligent Bandwidth Management Business (the “IBM Patents”) for $2.0 million to Dragon Intellectual Property, LLC. On May 22, 2014, the Company completed the sale of its portfolio of three United States patents, six United States patent applications and certain foreign patents and patent applications related to the IQstream Business (the “IQstream Patents”) for $0.3 million to Citrix Systems, Inc.
The Company is continuing to pursue the sale of its remaining non-cash assets, which primarily consist of (1) approximately 102 acres of undeveloped land located in Tyngsborough, Massachusetts (the “Tyngsborough Land”), (2) certain technology and equipment relating to the IQstream Business and (3) the Company’s investment in Tejas Networks India Private Limited (“Tejas”), a private company in India that provides optical transport solutions to telecommunications carriers. Following the sale of the IQstream Patents, the Company has continued to pursue the sale of certain technology and equipment relating to the IQstream Business; however, the Company does not presently expect to receive any additional material consideration for its remaining IQstream assets. In addition, given the illiquid nature of the Company’s investment in Tejas and certain other factors negatively impacting the value of the Company’s investment in Tejas, the Company does not presently expect to receive any material consideration in connection with any disposition of its Tejas investment.
During the fourth quarter of fiscal 2014, the Company received notice of a potential betterment fee that could be assessed against the Tyngsborough Land in connection with a public sewer project proposed by the Town of Tyngsborough (the “Potential Betterment Assessment”). On October 2, 2014, the sewer commission of the Town of Tyngsborough provided the Company with an estimate of the potential betterment fee relating to the Tyngsborough Land in the amount of approximately $3.47 million. At a Special Town Meeting held on October 8, 2014, the Town of Tyngsborough voted against proceeding with the sewer project. Although the Town of Tyngsborough voted against proceeding with the sewer project at that time, the Company cannot provide any assurance that the Town of Tyngsborough will not pursue a similar project in the future, nor can the Company provide any assurance as to the impact of such a project on the value of the Tyngsborough Land.
On October 10, 2014, the Company entered into a Purchase and Sale Agreement relating to the Tyngsborough Land (the “Purchase Agreement”) with Princeton Tyngsborough Commons, LLC (“Tyngsborough Commons”) for a total purchase price of $2.5 million. On February 24, 2015, the Company and Tyngsborough Commons entered into an amendment to the Purchase Agreement providing for, among other things, an extension of the closing date to on or before March 27, 2015, subject to the satisfaction or waiver of the conditions contained in the Purchase Agreement, and for Tyngsborough Commons to deposit an additional $100,000 with the escrow agent to be credited to the purchase price at closing. The terms of the Purchase Agreement, as amended, provide that in the event that Tyngsborough Commons defaults on its obligation to complete the transaction, the Company will retain the entire amount of the deposits. As of February 26, 2015, amounts totaling $300,000 have been deposited with an escrow agent as nonrefundable deposits to be credited to the purchase price at closing. The Purchase Agreement contains customary provisions relating to, among other things, the condition of the title to the Tyngsborough Land, environmental conditions, representations and warranties, obligations of the parties prior to closing and apportionment of taxes. The Company’s representations and warranties and obligations under the Purchase Agreement will survive the closing for a period of six months, and under no circumstances will the Company be liable to Tyngsborough Commons for more than $75,000 in the aggregate for any breaches of such representations and warranties or obligations. If the closing occurs, Tyngsborough Commons will be solely responsible for any and all costs related to the Potential Betterment Assessment. In addition, following the closing, Tyngsborough Commons intends to sell a portion of the Tyngsborough Land to a third party buyer. In no event will the Company be bound by the terms of any agreement with respect to such sale, provided that, in the event Tyngsborough Commons fails to fulfill its obligations under the Purchase Agreement, the Company may in its sole discretion require an assignment to the Company of Tyngsborough Commons’s rights under any such agreement.
The Company currently expects to complete the sale on or about March 27, 2015 (unless an earlier date is agreed upon by the Company and Tyngsborough Commons). The Company is entitled to terminate the Purchase Agreement, as amended, if the closing does not take place on or before March 27, 2015. The closing of the sale is subject to certain conditions and obligations of the parties prior to closing, some of which are outside of the Company’s control and, accordingly, there can be no assurance when or if such closing will occur. If the Purchase Agreement is terminated, there can be no assurance of when, if ever, the Company will be able to sell the Tyngsborough Land. The inability to sell the Tyngsborough Land may delay the completion of the Company’s liquidation and related distributions to its stockholders.
6
On July 29, 2014, the Company paid a liquidating cash distribution to stockholders of $0.24 per share of Common Stock, or $6.93 million in the aggregate. The Board declared this distribution after the Delaware Court of Chancery, on July 2, 2014, granted the Company’s petition for a determination that, among other things, the amount set forth in the petition to be retained by the Company for anticipated wind down costs and expenses and for contingent and unknown liabilities and other possible charges and expenses is sufficient to be retained pursuant to Section 280(c) of the General Corporation Law of the State of Delaware. In accordance with the petition, any portion of the retained amount that is not required to cover wind down costs, charges, expenses or liabilities may be distributed from time to time to the Company’s stockholders in the discretion of the Board in accordance with its fiduciary duties.
Until the completion of the Dissolution, the Company will continue to pursue the liquidation to cash of our remaining non-cash assets for possible distribution to our stockholders. There can be no assurance as to the amount of consideration the Company may be able to obtain for these assets or as to any time frame within which a potential sale or other disposition of these assets might occur. Subject to uncertainties inherent in the winding up of the Company’s business, the Company may make one or more additional liquidating distributions following the liquidation to cash of our non-cash assets and after payment of, or provision for, outstanding claims in accordance with Delaware law. However, the Dissolution process and the payment of any distribution to stockholders involve substantial risks and uncertainties. Accordingly, it is not possible to predict the timing or aggregate amount which will ultimately be distributed to stockholders, and no assurance can be given that the distributions will equal or exceed our estimate of net assets presented in the Company’s Consolidated Statement of Net Assets. The Company will continue to analyze its estimates of liquidation expenses on an ongoing basis, and determine whether further distributions of assets to its stockholders are appropriate at such times.
2. Basis of Presentation
The accompanying financial data has been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2014, as filed with the SEC on October 27, 2014.
In the opinion of management, the accompanying financial data reflect all adjustments (consisting of only normal recurring adjustments) necessary for a fair statement of net assets. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements. Actual results could differ from these estimates.
On March 24, 2013, following the Company’s filing of the Certificate of Dissolution, the Company adopted the liquidation basis of accounting. See Note 3 to the Consolidated Financial Statements, “Liquidation Basis of Accounting,” for further information regarding the Company’s adoption of the liquidation basis of accounting.
3. Liquidation Basis of Accounting
Net assets in liquidation were $9.57 million and $9.50 million as of January 24, 2015 and July 31, 2014, respectively.
As of January 24, 2015, assets consisted of cash and cash equivalents of $11.36 million, the Tyngsborough Land valued at $2.5 million and other assets of $0.04 million. Based on our current best estimate of the realizable value of the Company’s remaining assets relating to the IQstream Business and the Company’s investment in Tejas, we have assigned no value to these assets for purposes of the Statement of Net Assets.
As of January 24, 2015, liabilities consisted of accounts payable of $0.03 million, accrued expenses of $0.05 million, our reserve for estimated costs during the Dissolution period of $2.46 million and other liabilities of $1.79 million. For additional information concerning other liabilities, see Note 5. “Income Taxes.”
7
The Company accrued estimated costs expected to be incurred in carrying out the Plan of Dissolution. Under Delaware law, the Dissolution period will last for a minimum of three years from the filing of the Certificate of Dissolution, or until March 7, 2016. The Company was required to make certain estimates and exercise judgment in determining the accrued costs of liquidation as of January 24, 2015 and July 31, 2014.
The table below summarizes the reserve for estimated costs during the Dissolution period as of January 24, 2015 and July 31, 2014 (in thousands):
| January 24, 2015 | July 31, 2014 | |||||||
| Compensation |
$ | 526 | $ | 1,004 | ||||
| Professional fees |
876 | 1,154 | ||||||
| Other expenses associated with wind down activities |
869 | 1,010 | ||||||
| Insurance |
186 | 294 | ||||||
|
|
|
|
|
|||||
| $ | 2,457 | $ | 3,462 | |||||
|
|
|
|
|
|||||
For the three months ended January 24, 2015, net assets in liquidation decreased $0.01 million primarily as a result of an increase in expected compensation costs. For the six months ended January 24, 2015, net assets in liquidation increased $0.07 million primarily as a result of an increase in other assets related to a miscellaneous receivable and changes in estimates of other expenses associated with wind down activities and compensation costs.
4. Cash Equivalents and Marketable Securities
Cash equivalents are short-term, highly liquid investments with original or remaining maturity dates of three months or less at the date of acquisition. Cash equivalents are carried at cost plus accrued interest, which approximates fair market value. As of January 24, 2015 and July 31, 2014, aggregate cash and cash equivalents consisted of (in thousands):
January 24, 2015:
| Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Market Value |
|||||||||||||
| Cash and cash equivalents |
$ | 11,358 | $ | — | $ | — | $ | 11,358 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
$ | 11,358 | $ | — | $ | — | $ | 11,358 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
July 31, 2014:
| Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Market Value |
|||||||||||||
| Cash and cash equivalents |
$ | 12,241 | $ | — | $ | — | $ | 12,241 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
$ | 12,241 | $ | — | $ | — | $ | 12,241 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
5. Income Taxes
The Company is currently open to audit under statutes of limitation by the Internal Revenue Service, various foreign jurisdictions, and state jurisdictions for the fiscal years ended July 31, 2008 through July 31, 2014. However, limited adjustments can be made to federal and state tax returns in earlier years in order to reduce net operating loss carryforwards.
As of January 24, 2015 and July 31, 2014, the Company had a liability of $1.79 million for taxes, interest and penalties for unrecognized tax benefits related to various foreign income tax matters. As of January 24, 2015 and July 31, 2014, the Company had $0.6 million accrued for interest and penalties related to uncertain tax positions. The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for federal, international and state income taxes. This liability is subject to change, perhaps materially.
As a result of having substantial net operating losses over recent years and no current operations, the Company determined that it is more likely than not that our deferred tax assets will not be realized. Therefore, we maintain a valuation allowance on the full amount of our net deferred tax assets. If the Company generates future taxable income against which these tax attributes may be applied, the net operating loss carryforwards may be utilized and some or all of the valuation allowance reversed. If the valuation allowance is reversed, portions would be recorded as an increase to paid-in capital and the remainder would be recorded as a reduction in income tax expense.
8
The occurrence of ownership changes, as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), is not controlled by the Company, and could significantly limit the amount of net operating loss carryforwards and research and development credits that can be utilized annually to offset future taxable income. The Company completed an updated Section 382 study for the period April 2006 through July 31, 2011 and the results of this study showed that no ownership change within the meaning of the Code had occurred from April 2006 through July 31, 2011. The Company has not, however, conducted a Section 382 study for any periods after July 31, 2011 and, accordingly, the Company cannot provide any assurance that an ownership change within the meaning of the Code has not occurred since that date.
6. Commitments and Contingencies
Litigation
None.
Guarantees
The Company’s guarantees requiring disclosure consist of its indemnification obligations for officers and directors and for other claims.
Prior to the Asset Sale and the Dissolution, in the normal course of business, the Company agreed to indemnify other parties, including customers, lessors and parties to other transactions with the Company with respect to certain matters. Historically, payments made by the Company under these agreements had not had a material impact on the Company’s operating results or financial position. Furthermore, most of these obligations were assumed by Buyer in connection with the Asset Sale. Accordingly, the Company has not recorded a liability for these agreements as of January 24, 2015 or July 31, 2014, as the Company believes the exposure for any related payments is not material.
We entered into our standard form of indemnification agreement with each of our current and former directors and executive officers, which is in addition to the indemnification provided for in our amended and restated certificate of incorporation, as amended. The Plan of Dissolution also provides that we continue to indemnify such directors and executive officers in accordance with such agreements and our amended and restated certificate of incorporation, as amended. The indemnification agreements, among other things, provide for indemnification of such directors and executive officers for a number of expenses, including attorneys’ fees and other related expenses, as well as certain judgments, fines, penalties and settlement amounts incurred by any such person in any action, suit or proceeding, including any action by or in the right of the Company, arising out of such person’s service as a director or executive officer of the Company or any other company or enterprise to which the person provided services at our request. The Company did not incur any expense under these arrangements during the first six months of fiscal 2015 or fiscal 2014. Due to the Company’s inability to estimate liabilities in connection with these agreements, if and when they might be incurred, the Company has not recorded any liability for these agreements as of January 24, 2015 or July 31, 2014. During the Dissolution period, we intend to continue to indemnify each of our current and former directors and executive officers to the extent permitted under Delaware law, our amended and restated certificate of incorporation, as amended, and the indemnification agreements. The Company has also continued to maintain directors’ and officers’ insurance coverage since the filing of the Certificate of Dissolution, and intends to maintain such coverage through the end of the Dissolution period.
7. Fair Value Measurements
The fair value measurement rules establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
| Level 1 | Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. | |
| Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
| Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
9
Assets and liabilities of the Company measured at fair value on a recurring basis as of January 24, 2015, are summarized as follows (in thousands):
| Fair Value Measurements at Reporting Date Using | ||||||||||||||||
| Description |
January 24, 2015 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
| Assets |
||||||||||||||||
| Cash and Cash Equivalents |
$ | 11,358 | $ | 11,358 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | 11,358 | $ | 11,358 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Cash and Cash Equivalents
Cash and cash equivalents of $11.36 million consisting of money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.
Assets and liabilities of the Company measured at fair value on a recurring basis as of July 31, 2014, are summarized as follows (in thousands):
| Fair Value Measurements at Reporting Date Using | ||||||||||||||||
| Description |
July 31, 2014 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
| Assets |
||||||||||||||||
| Cash and Cash Equivalents |
$ | 12,241 | $ | 12,241 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | 12,241 | $ | 12,241 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Cash and Cash Equivalents
Cash and cash equivalents of $12.24 million consisting of money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.
8. Subsequent Events
On February 24, 2015, the Company and Tyngsborough Commons entered into an amendment to the Purchase Agreement providing for, among other things, an extension of the closing date to on or before March 27, 2015, subject to the satisfaction or waiver of the conditions contained in the Purchase Agreement, and for Tyngsborough Commons to deposit an additional $100,000 with the escrow agent to be credited to the purchase price at closing. The terms of the Purchase Agreement, as amended, provide that in the event that Tyngsborough Commons defaults on its obligation to complete the transaction, the Company will retain the entire amount of the deposits. As of February 26, 2015, amounts totaling $300,000 have been deposited with an escrow agent as nonrefundable deposits to be credited to the purchase price at closing.
10
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Except for the historical information contained herein, we wish to caution you that certain matters discussed in this report constitute forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including, without limitation, those risks and uncertainties discussed under the heading “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended July 31, 2014, as filed with the U.S. Securities and Exchange Commission (“SEC”) on October 27, 2014. The information discussed in this report should be read in conjunction with our Annual Report on Form 10-K and other reports we file from time to time with the SEC. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” and “would” or similar words.
Available Information
Sycamore Networks, Inc. (the “Company”) files annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K with the SEC. These reports, any amendments to these reports, proxy and information statements and certain other documents the Company files with the SEC are available through the SEC’s website at www.sec.gov or free of charge on the Company’s website as soon as reasonably practicable after the Company files the documents with the SEC. The public may also read and copy these reports and any other materials the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Executive Summary
Prior to February 1, 2013, the Company developed and marketed Intelligent Bandwidth Management solutions for fixed line and mobile network operators worldwide and provided services associated with such products (the “Intelligent Bandwidth Management Business”), and, prior to November 1, 2012, the Company also developed and marketed a mobile broadband optimization solution (the “IQstream Business”). As used in Management’s Discussion and Analysis, “Sycamore,” “we,” “us,” or “our” refers collectively to the Company and its subsidiaries.
On October 23, 2012, the Company entered into an Asset Purchase and Sale Agreement (the “Asset Sale Agreement”) with Sunrise Acquisition Corp. (now known as Coriant America Inc.), a portfolio company of Marlin Equity Partners (“Buyer”), pursuant to which Buyer agreed to acquire substantially all of the assets (the “Asset Sale”) primarily related to the Intelligent Bandwidth Management Business, including inventory, fixed assets, accounts receivable, intellectual property rights (other than patents and patent applications), contracts, certain real estate leases, the Company’s subsidiaries in Shanghai, the Netherlands and Japan, and certain shared facilities and assets for $18.75 million in cash, subject to a working capital adjustment, and the assumption by Buyer of certain liabilities. The Company’s stockholders authorized the Asset Sale at a Special Meeting of Stockholders held on January 29, 2013 (the “Special Meeting”), and the Asset Sale was completed on January 31, 2013 (the transfer of the Company’s equity interests in its Shanghai subsidiary, which was subject to the receipt of government approval, occurred on March 25, 2013). Upon the closing of the Asset Sale, Buyer acquired substantially all of the Company’s operating assets relating to the Intelligent Bandwidth Management Business, including the Company’s accounts receivable, inventories and prepaid and other assets, and assumed most of the Company’s remaining current liabilities, including substantially all of the Company’s deferred revenue and accrued warranty obligations.
In conjunction with the approval of the Asset Sale Agreement, the Company’s Board of Directors (the “Board”) also approved the liquidation and dissolution of the Company (the “Dissolution”) pursuant to a Plan of Complete Liquidation and Dissolution (the “Plan of Dissolution”) following the completion of the Asset Sale. The Plan of Dissolution was also approved by the stockholders at the Special Meeting and, following a review of the Company’s strategic alternatives for all of the Company’s assets and available options for providing value to the Company’s stockholders, the Company filed a certificate of dissolution with the Secretary of State of the State of Delaware (the “Certificate of Dissolution”) on March 7, 2013. For additional information regarding the Dissolution, please see the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on December 28, 2012 and its Current Report on Form 8-K filed with the SEC on March 8, 2013.
11
In connection with the filing of the Certificate of Dissolution, on March 7, 2013, the Company closed its stock transfer books and discontinued recording transfers of its common stock, $0.001 par value per share (the “Common Stock”). The Common Stock, and stock certificates evidencing shares of the Common Stock, are no longer assignable or transferable on the Company’s books, other than transfers by will, intestate succession or operation of law. The Company also submitted a request to The NASDAQ Stock Market (“NASDAQ”) to suspend trading of the Common Stock on The NASDAQ Global Select Market effective as of the close of trading on March 7, 2013 and, on March 15, 2013, the Company filed a Form 25 with the SEC to delist its Common Stock, which became effective prior to the opening of trading on March 25, 2013. Since the suspension of trading of the Common Stock on The NASDAQ Global Select Market, shares of our Common Stock held in street name with brokers have been trading in the over-the-counter market on the Pink Sheets, an electronic bulletin board established for unlisted securities.
As a result of the completion of the Asset Sale and the Company’s previously announced halting of further development and marketing in connection with the IQstream Business, the Company no longer has any operating assets or revenue. Since the filing of the Certificate of Dissolution, the Company has been operating in accordance with the Plan of Dissolution, which contemplates an orderly wind down of the Company’s business, including the sale or monetization of the Company’s remaining non-cash assets and the satisfaction or settlement of its liabilities and obligations, including contingent liabilities and claims. As of January 24, 2015, the Company had one remaining employee.
During fiscal 2014, the Company completed the sale of its patent portfolios. On February 28, 2014, the Company completed the sale of its portfolio of 40 patents and two patent applications related to the Intelligent Bandwidth Management Business (the “IBM Patents”) for $2.0 million to Dragon Intellectual Property, LLC. On May 22, 2014, the Company completed the sale of its portfolio of three United States patents, six United States patent applications and certain foreign patents and patent applications related to the IQstream Business (the “IQstream Patents”) for $0.3 million to Citrix Systems, Inc.
The Company is continuing to pursue the sale of its remaining non-cash assets, which primarily consist of (1) approximately 102 acres of undeveloped land located in Tyngsborough, Massachusetts (the “Tyngsborough Land”), (2) certain technology and equipment relating to the IQstream Business and (3) the Company’s investment in Tejas Networks India Private Limited (“Tejas”), a private company in India that provides optical transport solutions to telecommunications carriers. Following the sale of the IQstream Patents, the Company has continued to pursue the sale of certain technology and equipment relating to the IQstream Business; however, the Company does not presently expect to receive any additional material consideration for its remaining IQstream assets. In addition, given the illiquid nature of the Company’s investment in Tejas and certain other factors negatively impacting the value of the Company’s investment in Tejas, the Company does not presently expect to receive any material consideration in connection with any disposition of its Tejas investment.
During the fourth quarter of fiscal 2014, the Company received notice of a potential betterment fee that could be assessed against the Tyngsborough Land in connection with a public sewer project proposed by the Town of Tyngsborough (the “Potential Betterment Assessment”). On October 2, 2014, the sewer commission of the Town of Tyngsborough provided the Company with an estimate of the potential betterment fee relating to the Tyngsborough Land in the amount of approximately $3.47 million. At a Special Town Meeting held on October 8, 2014, the Town of Tyngsborough voted against proceeding with the sewer project. Although the Town of Tyngsborough voted against proceeding with the sewer project at that time, the Company cannot provide any assurance that the Town of Tyngsborough will not pursue a similar project in the future, nor can the Company provide any assurance as to the impact of such a project on the value of the Tyngsborough Land.
On October 10, 2014, the Company entered into a Purchase and Sale Agreement relating to the Tyngsborough Land (the “Purchase Agreement”) with Princeton Tyngsborough Commons, LLC (“Tyngsborough Commons”) for a total purchase price of $2.5 million. On February 24, 2015, the Company and Tyngsborough Commons entered into an amendment to the Purchase Agreement providing for, among other things, an extension of the closing date to on or before March 27, 2015, subject to the satisfaction or waiver of the conditions contained in the Purchase Agreement, and for Tyngsborough Commons to deposit an additional $100,000 with the escrow agent to be credited to the purchase price at closing. The terms of the Purchase Agreement, as amended, provide that in the event that Tyngsborough Commons defaults on its obligation to complete the transaction, the Company will retain the entire amount of the deposits. As of February 26, 2015, amounts totaling $300,000 have been deposited with an escrow agent as nonrefundable deposits to be credited to the purchase price at closing. The Purchase Agreement contains customary provisions relating to, among other things, the condition of the title to the Tyngsborough Land, environmental conditions, representations and warranties, obligations of the parties prior to closing and
12
apportionment of taxes. The Company’s representations and warranties and obligations under the Purchase Agreement will survive the closing for a period of six months, and under no circumstances will the Company be liable to Tyngsborough Commons for more than $75,000 in the aggregate for any breaches of such representations and warranties or obligations. If the closing occurs, Tyngsborough Commons will be solely responsible for any and all costs related to the Potential Betterment Assessment. In addition, following the closing, Tyngsborough Commons intends to sell a portion of the Tyngsborough Land to a third party buyer. In no event will the Company be bound by the terms of any agreement with respect to such sale, provided that, in the event Tyngsborough Commons fails to fulfill its obligations under the Purchase Agreement, the Company may in its sole discretion require an assignment to the Company of Tyngsborough Commons’s rights under any such agreement.
The Company currently expects to complete the sale on or about March 27, 2015 (unless an earlier date is agreed upon by the Company and Tyngsborough Commons). The Company is entitled to terminate the Purchase Agreement, as amended, if the closing does not take place on or before March 27, 2015. The closing of the sale is subject to certain conditions and obligations of the parties prior to closing, some of which are outside of the Company’s control and, accordingly, there can be no assurance when or if such closing will occur. If the Purchase Agreement is terminated, there can be no assurance of when, if ever, the Company will be able to sell the Tyngsborough Land. The inability to sell the Tyngsborough Land may delay the completion of the Company’s liquidation and related distributions to its stockholders.
On July 29, 2014, the Company paid a liquidating cash distribution to stockholders of $0.24 per share of Common Stock, or $6.93 million in the aggregate. The Board declared this distribution after the Delaware Court of Chancery, on July 2, 2014, granted the Company’s petition for a determination that, among other things, the amount set forth in the petition to be retained by the Company for anticipated wind down costs and expenses and for contingent and unknown liabilities and other possible charges and expenses is sufficient to be retained pursuant to Section 280(c) of the General Corporation Law of the State of Delaware. In accordance with the petition, any portion of the retained amount that is not required to cover wind down costs, charges, expenses or liabilities may be distributed from time to time to the Company’s stockholders in the discretion of the Board in accordance with its fiduciary duties.
On October 21, 2014, Robert E. Donahue tendered his resignation from the Board, effective as of the close of business on October 27, 2014. The resignation was not due to any disagreement with the Company on any matter. Following the acceptance of Mr. Donahue’s resignation, the Board elected David Guerrera, the Company’s current President, General Counsel and Secretary, to serve as a Class I director to fill the vacancy created by Mr. Donahue’s resignation, effective immediately following the effectiveness of the resignation of Mr. Donahue. Mr. Guerrera will not receive any additional compensation for his service as a director.
On December 4, 2014, the Board approved the termination of employment of Anthony J. Petrillo as the Company’s Chief Financial Officer, effective as of the close of business on December 5, 2014. In connection with the termination of Mr. Petrillo’s employment with the Company, the Company entered into a Services Consulting Agreement with Mr. Petrillo on December 4, 2014, pursuant to which Mr. Petrillo, following the termination of his employment with the Company, will provide certain financial consulting and other services to the Company relating to the wind down (the “Consulting Agreement”). Under the terms of the Consulting Agreement, Mr. Petrillo is entitled to receive $2,500 per month, and he will continue to serve as the Company’s Principal Financial Officer and Treasurer on a non-employee basis.
Pursuant to the Severance Pay Agreement, dated March 29, 2013, by and between the Company and Mr. Petrillo (the “Severance Pay Agreement”), Mr. Petrillo, following the receipt by the Company of a release satisfactory to it, became entitled to receive certain benefits pursuant to his Severance Pay Agreement in connection with the termination of his employment, including an amount equal to 12 months’ worth of his base salary and outplacement services at the Company’s expense for a period of six months. Mr. Petrillo also is eligible to receive continued paid coverage under his individual health plan for 12 months after his termination.
Until the completion of the Dissolution, the Company will continue to pursue the liquidation to cash of its remaining non-cash assets for possible distribution to our stockholders. There can be no assurance as to the amount of consideration the Company may be able to obtain for these assets or as to any time frame within which a potential sale or other disposition of these assets might occur. Subject to uncertainties inherent in the winding up of the Company’s business, the Company may make one or more additional liquidating distributions following the liquidation to cash of our non-cash assets and after payment of, or provision for, outstanding claims in accordance with Delaware law. However, the Dissolution process and the payment of any distribution to stockholders involve substantial risks and uncertainties. Accordingly, it is not possible to predict the timing or aggregate amount which
13
will ultimately be distributed to stockholders, and no assurance can be given that the distributions will equal or exceed our estimate of net assets presented in the Company’s Consolidated Statement of Net Assets. The Company will continue to analyze its estimates of liquidation expenses on an ongoing basis, and determine whether further distributions of assets to its stockholders are appropriate at such times.
Net Assets in Liquidation and Changes in Net Assets
Net assets in liquidation were $9.57 million and $9.50 million as of January 24, 2015 and July 31, 2014, respectively.
For the three months ended January 24, 2015, net assets in liquidation decreased $0.01 million primarily as a result of an increase in expected compensation costs. For the six months ended January 24, 2015, net assets in liquidation increased $0.07 million primarily as a result of an increase in other assets related to a miscellaneous receivable and changes in estimates of other expenses associated with wind down activities and compensation costs.
Based on management’s current best estimate of the realizable value of the Company’s remaining assets relating to the IQstream Business and the Company’s investment in Tejas, the Company has assigned no value to these assets for purposes of the Statement of Net Assets.
During the remainder of the Dissolution period, the Company will continue to pursue the liquidation to cash of our remaining non-cash assets for possible distribution to our stockholders. There can be no assurance as to the amount of consideration the Company may be able to obtain for these assets or as to any time frame within which a potential sale or other disposition of these assets might occur. Subject to uncertainties inherent in the winding up of the Company’s business, we may make one or more additional liquidating distributions following the liquidation to cash of our non-cash assets and after payment of, or provision for, outstanding claims in accordance with Delaware law. However, the Dissolution process and the payment of any distribution to stockholders involve substantial risks and uncertainties. Accordingly, it is not possible to predict the timing or aggregate amount which may ultimately be distributed to Company stockholders, and no assurance can be given that such distributions, if made, will equal or exceed the estimate of net assets presented in the Company’s Consolidated Statement of Net Assets.
Critical Accounting Policies and Estimates
Preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Management believes the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2014 describes the significant accounting estimates and policies used in the preparation of the financial statements. Actual results in these areas could differ from management’s estimates. There have been no significant changes in the Company’s critical accounting policies during the first six months of fiscal 2015.
Liquidity and Capital Resources
Total cash and cash equivalents were $11.36 million as of January 24, 2015, compared to $12.24 million as of July 31, 2014.
Cash and cash equivalents decreased by $0.56 million during the three months ended January 24, 2015. During the three months ended January 24, 2015, the Company paid $0.63 million in costs related to the Plan of Dissolution. During that same period, the Company received $0.07 million related to other assets.
Cash and cash equivalents decreased by $0.88 million during the six months ended January 24, 2015. During the six months ended January 24, 2015, the Company paid $0.96 million in costs related to the Plan of Dissolution. During that same period, the Company received $0.08 million related to other assets.
During the remainder of the Dissolution period, the Company will continue to pursue the liquidation to cash of our remaining non-cash assets, which primarily consist of the Tyngsborough Land, certain technology and equipment relating to the IQstream Business, and our investment in Tejas, for possible distribution to our stockholders. There can be no assurance as to the amount of consideration, if any, the Company may be able to obtain for these assets or as to any time frame within which a potential sale or other disposition of these assets might occur.
14
Our primary source of liquidity comes from our cash and cash equivalents. We believe that our cash and cash equivalents will be sufficient to satisfy our anticipated cash requirements through the end of the Dissolution period. However, the Dissolution process involves substantial risks and uncertainties. Accordingly, the actual amount of cash remaining for distribution to stockholders following completion of the Dissolution could vary significantly from current estimates, and such risks and uncertainties could result in no excess cash available for distribution.
Commitments, Contractual Obligations and Off-Balance Sheet Arrangements
The Company has no material operating leases or inventory or other purchase commitments.
Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
15
Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Our President and our Principal Financial Officer and Treasurer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of January 24, 2015. Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported on a timely basis and that such information is accumulated and communicated to our President and our Principal Financial Officer and Treasurer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our President and our Principal Financial Officer and Treasurer concluded that these disclosure controls and procedures are effective and designed to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods.
Limitations on Effectiveness of Controls. Our President and our Principal Financial Officer and Treasurer have concluded that our disclosure controls and procedures and internal controls provide reasonable assurance that the objectives of our control system are met. However, our President and our Principal Financial Officer and Treasurer do not expect that the disclosure controls and procedures or internal controls will prevent all error and/or fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, errors and instances of fraud, if any, within the company have been or will be detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurances that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
Changes in Internal Control over Financial Reporting. During the quarter ended January 24, 2015, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
16
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended July 31, 2014, as filed with the SEC on October 27, 2014 (our “Annual Report on Form 10-K”). There have been no material changes to our risk factors from those previously disclosed in our Annual Report on Form 10-K. Additional risks and uncertainties, including risks and uncertainties not presently known to us, or that we currently deem immaterial, could also have an adverse effect on our business, financial condition and/or results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The Company has not: (1) publicly announced any programs to repurchase, or repurchased, any shares of Common Stock; or (2) sold, within the last three years, Company securities that were not registered under the Securities Act of 1933, as amended.
17
Exhibits:
| (a) | List of Exhibits |
| Number |
Exhibit Description | |
| 2.1 | Plan of Complete Liquidation and Dissolution adopted by the Board of Directors of Sycamore Networks, Inc. on October 22, 2012 (6) | |
| 3.1 | Amended and Restated Certificate of Incorporation of the Company (1) | |
| 3.2 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company (1) | |
| 3.3 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company (2) | |
| 3.4 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company (4) | |
| 3.5 | Amended and Restated By-Laws of the Company (3) | |
| 4.1 | Specimen common stock certificate (5) | |
| 4.2 | See Exhibits 3.1, 3.2, 3.3, 3.4 and 3.5 for provisions of the Certificate of Incorporation and By-Laws of the Registrant defining the rights of holders of common stock of the Company (1)(2)(3)(4) | |
| 4.3 | Certificate of Dissolution, as filed by Sycamore Networks, Inc. with the Secretary of State of the State of Delaware on March 7, 2013 (7) | |
| 10.1 | Severance Pay Agreement, dated March 29, 2013, by and between Sycamore Networks, Inc. and Anthony Petrillo (8) | |
| 10.2 | Purchase and Sale Agreement, dated October 10, 2014, by and between Sycamore Networks, Inc. and Princeton Tyngsborough Commons LLC (9) | |
| 10.3 | Services Consulting Agreement, dated December 4, 2014, by and between Sycamore Networks, Inc. and Anthony Petrillo (10) | |
| 10.4 | First Amendment to Purchase and Sale Agreement, dated as of February 24, 2015, by and between Sycamore Networks, Inc. and Princeton Tyngsborough Commons LLC (11) | |
| 31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | |
| (1) | Incorporated by reference to Sycamore Networks, Inc.’s Registration Statement on Form S-1 (Registration Statement No. 333-30630) filed with the Securities and Exchange Commission on February 17, 2000. |
| (2) | Incorporated by reference to Sycamore Networks, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended January 27, 2001 filed with the Securities and Exchange Commission on March 13, 2001. |
18
| (3) | Incorporated by reference to Sycamore Networks, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended October 27, 2007 filed with the Securities and Exchange Commission on November 28, 2007. |
| (4) | Incorporated by reference to Sycamore Networks, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 21, 2009. |
| (5) | Incorporated by reference to Sycamore Networks, Inc.’s Annual Report on Form 10-K for the fiscal year ended July 31, 2010 filed with the Securities and Exchange Commission on September 24, 2010. |
| (6) | Incorporated by reference to Sycamore Networks, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended October 27, 2012 filed with the Securities and Exchange Commission on November 29, 2012. |
| (7) | Incorporated by reference to Sycamore Networks, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 8, 2013. |
| (8) | Incorporated by reference to Sycamore Networks, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 1, 2013. |
| (9) | Incorporated by reference to Sycamore Networks, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2014. |
| (10) | Incorporated by reference to Sycamore Networks, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended October 25, 2014 filed with the Securities and Exchange Commission on December 4, 2014. |
| (11) | Incorporated by reference to Sycamore Networks, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 26, 2015. |
19
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Sycamore Networks, Inc.
/s/ Anthony J. Petrillo
Anthony J. Petrillo
Chief Principal Financial Officer and
Treasurer
(Duly Authorized Officer and Principal
Financial and Accounting Officer)
Dated: March 9, 2015
20
EXHIBIT 31.1 – CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, David Guerrera, certify that:
| 1) | I have reviewed this Quarterly Report on Form 10-Q of Sycamore Networks, Inc.; |
| 2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: March 9, 2015
| /s/ David Guerrera |
|
David Guerrera President, General Counsel and Secretary |
EXHIBIT 31.2 – CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, Anthony J. Petrillo, certify that:
| 1) | I have reviewed this Quarterly Report on Form 10-Q of Sycamore Networks, Inc.; |
| 2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: March 9, 2015
| /s/ Anthony J. Petrillo |
|
Anthony J. Petrillo Principal Financial Officer |
EXHIBIT 32.1 – CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Sycamore Networks, Inc. (the “Company”) on Form 10-Q for the period ending January 24, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Guerrera, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company, as of, and for the periods presented in the Report.
/s/ David Guerrera
David Guerrera
President, General Counsel and Secretary
March 9, 2015
EXHIBIT 32.2 – CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Sycamore Networks, Inc. (the “Company”) on Form 10-Q for the period ending January 24, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony J. Petrillo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company, as of, and for the periods presented in the Report.
/s/ Anthony J. Petrillo
Anthony J. Petrillo
Principal Financial Officer
March 9, 2015