SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 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: 0-27442
OMNIPOINT CORPORATION
(Exact Name of Registrant as specified in its charter)
Delaware 04-2969720
(State or other jurisdictio (IRS employer
incorporation or organization) identification No.)
2000 North 14th Street, Suite 550 22201
Arlington, VA (Zip Code)
(Address of principal executive office)
Registrant's telephone number, including area code: (703) 522-7778
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class: on which Registered:
Common Stock, par value Nasdaq National Market
$0.01 per share
Securities Registered Pursuant to Section 12 (g)
of the Act:
None
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: 45,400,781 shares of
common stock were outstanding as of April 25, 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Note 1)
OMNIPOINT CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 1996 December 31,
(unaudited) 1995
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents........................................... $127,222,563 $ 57,784,381
FCC deposit......................................................... 40,000,000 40,000,000
Prepaid expenses and other assets (Note 3).......................... 5,299,577 5,918,517
Inventory........................................................... 1,611,251 1,309,632
-------------- --------------
Total current assets........................................ 174,133,391 105,012,530
Fixed assets, net (Note 4)............................................ 21,212,764 18,957,189
Licensing costs, net of accumulated amortization of $11,288,394
and $9,116,405 as of March 31, 1996 and December 31, 1995,
respectively............................................... 336,229,915 338,401,904
Deferred financing costs and other intangible assets, net of
accumulated amortization of $1,276,616 and $987,470
as of March 31, 1996 and December 31, 1995, respectively... 12,329,327 12,618,474
------------- --------------
Total assets................................................ $543,905,397 $474,990,097
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.................................................... 15,192,574 15,610,528
Accrued expenses (Note 5)........................................... 2,444,154 4,592,719
Accrued interest payable............................................ 2,444,627 387,654
Capital lease obligations - current portion......................... 146,345 181,741
Credit agreement.................................................... -- 36,500,000
Convertible Subordinated Notes...................................... -- 16,250,000
Deferred revenue.................................................... 4,300,000 4,300,000
-------------- --------------
Total current liabilities................................... 24,527,700 77,822,642
Capital lease obligations - long term portion......................... 92,076 105,736
Loan payable under financing agreement................................ 22,019,058 19,478,778
Senior notes.......................................................... 17,022,109 16,485,199
New York MTA license obligation (Note 6).............................. 347,518,309 347,518,309
Commitments and contingencies (Note 7)
Redeemable convertible preferred stock, $.01 par value, 5,750,000
shares authorized at December 31, 1995:
Series A; 666,667 shares issued and outstanding at December 31, 1995
(at liquidation preference)............................... -- 1,500,000
Series B; cumulative preferred stock; 1,651,714 shares issued
and outstanding at December 31, 1995 (liquidation preference
of $17,243,689 at December 31, 1995), net of issuance costs -- 15,919,529
Series C; cumulative preferred stock; 1,866,338 shares issued
and outstanding at December 31, 1995 (liquidation preference
of $29,105,916 at December 31, 1995), net of issuance costs -- 26,707,933
Continued
- 2 -
<PAGE>
Stockholders' equity (deficit):
Common stock, par value, $.01 per share;
75,000,000 shares authorized; 24,658,618 shares issued and
outstanding at December 31, 1995 and 45,009,039 shares issued
and outstanding at March 31, 1996................................. 450,090 246,586
Additional paid-in capital.......................................... 209,199,909 29,860,440
Accumulated deficit................................................. (75,401,122) (59,498,572)
Unearned compensation............................................... (352,324) (23,220)
Notes receivable.................................................... (1,170,408) (1,133,263)
--------------- -----------------
Total stockholders' equity (deficit)....................... 132,726,145 (30,548,029)
------------- ---------------
Total liabilities and stockholders' equity............. $543,905,397 $474,990,097
============= =============
</TABLE>
See notes to consolidated financial statements
Continued
- 3 -
<PAGE>
OMNIPOINT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
<S> <C> <C>
Revenues $ -- $ --
Operations expenses:
Research and development.......................................... 4,758,931 2,317,574
Sales, general, and administrative................................ 5,171,746 1,784,593
Depreciation and amortization..................................... 3,500,971 2,690,199
------------------- -------------
Total operating expenses........................................ 13,431,648 6,792,366
Loss from operations............................................ (13,431,648) (6,792,366)
------------------ -----------------
Other income (expense):
Interest income................................................... 1,397,794 50,544
Interest expense related to the New York MTA
License obligation reversed during December 1995 (Note 6)......... -- (7,651,383)
Interest expense.................................................. (3,868,696) (330,591)
---------------- ----------------
Net loss.................................................. $ (15,902,550) $ (14,723,796)
============== ==============
Loss per share.................................................. $ (0.39) $ (0.47)
Weighted average common shares outstanding.......................... 40,469,330 31,344,821
</TABLE>
See notes to consolidated financial statements
Continued
- 4 -
<PAGE>
OMNIPOINT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
-------------- --------------
<S> <C> <C>
Cash flows used in operating activities:
Net loss .................................................................. $ (15,902,550) $(14,723,796)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation ........................................... 3,500,971 2,690,199
Compensation expense from stock grants .................................. 20,421 16,767
Increase in employee notes receivable and related accrued interest ...... (37,145) (5,313)
Payment in kind interest on financing agreement ......................... 540,280 --
Accrued interest ........................................................ 2,056,973 7,651,383
Interest expense associated with warrants ............................... -- 299,800
Interest expense associated with amortization of discount and
issuance cost ........................................................ 591,228 --
Changes in assets and liabilities:
(Increase) decrease in operating assets:
Prepaid expenses and other assets .................................. 617,273 23,760
Inventory .......................................................... (301,619) (2,274)
Decrease in operating liabilities:
Accounts payable and accrued expenses .............................. (1,990,627) (855,823)
------------- ------------
Net cash used in operating activities ....................................... (10,904,795) (4,905,297)
------------- ------------
Cash flows used in investing activities:
Purchase of equipment ................................................... (3,348,061) (295,922)
------------- ------------
Net cash used in investing activities ....................................... (3,348,061) (295,922)
------------- ------------
Cash flows from financing activities:
Proceeds from line of credit loan agreement ............................. -- 3,000,000
Proceeds from issuance of common stock .................................. 75,544 66,134
Payments of obligations under capital leases ............................ (49,056) (140,102)
Payments on credit agreement ............................................ (36,500,000) --
Proceeds from financing agreement ....................................... 2,000,000 --
Proceeds from initial public offering ................................... 119,784,000 --
Costs associated with initial public offering ........................... (1,346,640) --
Dividends accrued and paid .............................................. (272,810)
------------- ------------
Net cash provided by financing activities ................................... 83,691,038 2,926,032
------------- ------------
Net increase (decrease) in cash and cash equivalents ........................ 69,438,182 (2,275,187)
Cash and cash equivalents at beginning of period ............................ 57,784,381 5,542,712
------------- ------------
Cash and cash equivalents at end of period .................................. $ 127,222,563 $ 3,267,525
============= ============
Supplemental cash flow information (Note 8)
</TABLE>
See notes to consolidated financial statements.
Continued
- 5 -
<PAGE>
OMNIPOINT CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
for the three months ended March 31, 1996
<TABLE>
<CAPTION>
Common Stock Additional Accumulated Unearned Notes Total Stockholders'
Shares Amount Paid-in Capital Deficit Compensation Receivable Equity (Deficit)
------ ------ --------------- ----------- ------------ ---------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 24,658,618 $246,586 $29,860,440 $(59,498,572) (23,220) $(1,133,263) $ (30,548,029)
31, 1995
Dividends accrued -- -- (272,810) -- -- -- (272,810)
on Series B and
Series C Preferred
Stock
Shares issued in . 8,050,000 80,500 119,703,500 -- -- -- 119,784,000
connection with
initial public
offering
Costs associated . -- -- (1,346,640) -- -- -- (1,346,640)
with initial
public offering
Conversion of .... 1,562,500 15,625 16,234,375 -- -- -- 16,250,000
subordinated debt
Conversion of .... 10,605,591 106,056 44,597,298 -- -- -- 44,703,354
preferred stock
Exercise of stock 132,330 1,323 74,221 -- -- -- 75,544
options
Issuance of ...... -- -- 349,525 -- (349,525) -- --
options in form of
advanced
compensation
Amortization of .. -- -- -- -- 20,421 -- 20,421
unearned
compensation
Interest on ...... -- -- -- -- -- (37,145) (37,145)
employee notes
receivable
-- -- (15,902,550) -- -- (15,902,550)
---------- ------------ ------------- ------------ ------------ ----------- ------------
Balance, March 31, 45,009,039 $ 450,090 $ 209,199,909 $(75,401,122) $(352,324) $(1,170,408) $132,726,145
1996 ---------- ------------ ------------- ------------ ------------ ------------ --------------
</TABLE>
See notes to consolidated financial statements.
Continued
- 6 -
<PAGE>
1. General:
The consolidated financial statements have been prepared by Omnipoint
Corporation ("Omnipoint" or the "Company") pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC") and,
in the opinion of management, include all adjustments necessary for a
fair presentation of the financial information for each period shown.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant
to such SEC rules and regulations. Management believes that the
disclosures made are adequate to make the information presented not
misleading. The results for interim periods are not necessarily
indicative of the results for the full year. These consolidated
financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's 1995 Annual Report on Form 10-K.
On January 31, 1996, the Company completed an initial public offering
in which 8,050,000 shares of common stock were issued which provided
the Company with proceeds of approximately $118,437,000, net of
expenses.
2. Inventory:
Inventory consists of raw materials and other items used in development
of the Company's technology.
3. Prepaid Expenses and Other Assets:
Prepaid expenses and other assets consist of the following at March
31, 1996 (unaudited) and December 31, 1995:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
<S> <C> <C>
Advance payment for pilot system equipment
financed through financing agreement ........................... $4,840,000 $4,840,000
Prepaid offering costs .............................................. --
878,896
Insurance ........................................................... 230,210 --
Deposits ............................................................ 110,287 83,109
Other ............................................................... 119,080 116,512
---------- ----------
$5,299,577 $5,918,517
</TABLE>
4. Fixed Assets:
Fixed assets including equipment under capital leases consist of the
following at March 31, 1996 (unaudited) and December 31, 1995:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
<S> <C> <C>
Building ........................................................................................... $ 1,190,265 $ 1,190,265
Office equipment ................................................................................... 813,468 649,287
Lab equipment ...................................................................................... 4,487,895 3,692,584
Network infrastructure equipment ................................................................... 12,634,467 12,634,467
Cell sites ......................................................................................... 437,713 --
Furniture and fixtures ............................................................................. 286,174 264,530
Purchased software ................................................................................. 1,734,589 1,453,116
Building and leasehold improvements ................................................................ 2,866,947 1,324,900
Vehicles ........................................................................................... 320,016 214,324
------------ ------------
24,771,534 21,423,473
Less: accumulated depreciation .................................................................... (3,558,770) (2,466,284)
------------- -----------
$21,212,764 $18,957,189
============ ============
</TABLE>
Continued
- 7 -
<PAGE>
5. Accrued Expenses:
Accrued expenses consist of the following at March 31, 1996 (unaudited)
and December 31, 1995:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
<S> <C> <C>
Salaries and benefits ............................................................. $581,938 $ 723,475
Bonuses ........................................................................... 350,000 350,000
Relocation ........................................................................ 693,624 538,714
Professional fees ................................................................. 719,498 464,466
Dividends ......................................................................... -- 1,839,032
Initial public offering costs ..................................................... -- 593,406
Other ............................................................................. 99,094 83,626
-------- ----------
$2,444,154 $4,592,719
========== ==========
</TABLE>
6. New York MTA License Obligation:
Prior to December 31, 1995, the FCC had not implemented the exact terms
for principal and interest payments on the New York MTA License. The
initial terms generally allowed for installment payments over the first
five years of the License with interest-only for at least the first two
years. Since payments did not begin until after the New York MTA License
and Pioneer's Preference orders were no longer subject to judicial
review, the FCC had not yet determined the interest rate to be charged,
the timing and nature of the installment payments and related issues.
Therefore, the Company estimated and accrued interest at the prime rate
(9.0% at March 31, 1995) from the date of the New York MTA License
obligation was awarded, and had recorded accrued interest as of March 31,
1995 of $9,108,104.
On March 8, 1996, the FCC adopted an Order which specifies the license
payment terms, such as the interest rate and timetable for payment of the
principal obligations for recipients of the Pioneer's Preference license.
The FCC adopted an interest rate of 7.75%. Payments commenced 30 days
from the Order date or April 8, 1996, and thereafter are due on April 30,
July 31, October 31 and January 31 over the next five years. The five
year payment period runs and interest accrues from the adoption date of
March 8, 1996.
Based on the Order, the Company revised its estimate and accrual of
interest. Pursuant to Accounting Principles Board Opinion No. 20
"Accounting Changes," this change in accounting estimate was recorded in
the Company's financial statements during December 1995, resulting in a
decrease in 1995 interest expense of $33,547,639. Had this adjustment
been retroactively recorded in the three months ended March 31, 1995, the
net loss and loss per common share would have been $(7,072,413) and
$(0.23), respectively.
Continued
- 8 -
<PAGE>
7. Commitments and Contingencies:
During 1994, the Company entered into an agreement to purchase
$100,000,000 of equipment and services over the next five years with
Northern Telecom. Under the terms of the Supply Agreement, if the
conditions of the purchase obligation ofOmnipoint Communications, Inc.
("OCI), a subsidiary of the Company are satisfied and OCI fails to
purchase $100,000,000 of equipment and services, it may have to pay a
penalty of 10% of the satisfied portion of the $100,000,000, which may be
waived under certain conditions. On July 21, 1995, the Company entered
into an amendment to this supply agreement to increase the purchase
commitment from $100,000,000 to $250,000,000. The Company has purchased
approximately $19.3 million under this purchase commitment as of March
31, 1996.
On December 12, 1995, the Company and Hansol Paper Co., Ltd.("Hansol")
and its telecom affiliates entered into a strategic alliance for the
promotion of the Omnipoint System in the Republic of Korea and other
parts of Asia, and the grant of a license to Hansol to manufacture
Omnipoint System handsets. The agreement provides that Omnipoint will
enter into a purchase order, subject to certain preconditions, including
competitive pricing, to acquire from Hansol handsets for sale to
subscribers in areas covered by licenses, if any, purchased by the
Company in the Entrepreneurs' Band auction.
8. Supplemental Cash Flow Information (Unaudited):
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
--------- -------
<S> <C> <C>
Noncash investing and financing activities:
Common stock issued upon conversion of subordinated notes.................................... $16,250,000 --
Issuance of options as a form of advanced compensation ...................................... 349,525 --
Conversion of preferred stock in connection with the offering................................ 44,703,354 --
</TABLE>
9. Subsequent Events (unaudited):
Ericsson Agreements
On April 16, 1996, Ericsson, Inc. ("Ericsson") and the Company entered
into definitive agreements governing (i) the licensing and supply
arrangement related to the Omnipoint System, (ii) the purchase by OCI or
other Omnipoint affiliates of PCS 1900 handsets, (iii) the sale by
Ericsson of IS-661 and GSM infrastructure equipment, subject to
completion of vendor financing agreements, for which the parties have
entered into a non-binding commitment letter regarding the New York MTA
network, and (iv) cooperation of marketing standards and technical
activities.
Under the terms of the licensing and supply agreement, Ericsson will pay
license fees and royalties, including an initial $4.5 million license
fee.
In addition, under the agreement for the sale of Ericsson infrastructure
equipment, the Company and its affiliates will purchase $250.0 million of
a mix of IS-661 and PCS 1900 infrastructure equipment. Under the handset
agreement, the Company will purchase GSM handsets. These commitments are
to be fulfilled within five years of the date upon which the definitive
agreement was executed.
In April 1996, the Company entered into a non-binding memorandum of
understanding with Orbitel Mobile Communications Ltd. ("Orbitel"), a
wholly-owned subsidiary of Ericsson, which contemplates agreements
pursuant to which Orbitel will develop, manufacture and supply to the
Company IS-661 and dual mode IS-661/PCS 1900 handsets in a mutually
agreeable timetable upon OCI agreeing to a minimum purchase commitment to
be determined when the parties have ascertained the resources necessary
for the development and manufacture of such handsets.
The non-binding letter of intent sets forth the terms for vendor
financing to be provided by Ericsson to OCI or Omnipoint affiliates
holding licenses purchased in the Entrepreneurs' Band auction. The $127.5
million vendor financing commitment is for (i) amounts paid to Ericsson
under the infrastructure supply agreement, and (ii)
Continued
- 9 -
<PAGE>
amounts paid to Ericsson under the handset agreement so long as these
latter amounts do not exceed 50% of the amounts paid to Ericsson
for infrastructure equipment.
Entrepreneurs' Band Auction
The Company has successfully bid for 18 Entrepreneurs' Band BTA licenses
for an aggregate price of $509.1 million. The Company will make its first
payment of 5%, or $25.5 million on May 14, 1996. At the time the licenses
are awarded, the Company will pay an additional 5%, or $25.5 million. The
remaining 90%, or $458.1 million, will be due in quarterly installments
beginning in the year 2003 and continuing until 2006 and will bear
interest until paid at the 10-year Treasury Bill rate on the date the
licenses are awarded. The Company anticipates that these licenses will be
issued by the end of August 1996, unless delayed by FCC proceedings or
litigation.
Continued
- 10 -
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
Management's Discussion and Analysis of Financial Condition and Results
of Operations contain forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in forward-looking statements. Factors that might cause such a
difference include, but are not limited to, the "Risk Factors" set forth in the
Company's Registration Statement on Form S-1 (File No. 33-98360).
Overview
Omnipoint reported a 1996 first quarter loss of $15.9 million, or $0.39 per
share, an increase of 8.2%, or approximately $1.2 million, compared to the same
period in 1995. The 1995 first quarter loss was $14.7 million, or $0.47 per
share. On March 8, 1996, the FCC adopted an order setting the interest rate for
the New York MTA License at 7.75% per annum accruing from March 8, 1996. As a
result, the Company reversed accrued interest of $33.5 million related to the
License in December 1995. Had this adjustment been retroactively recorded in the
three months ended March 31, 1995, the net loss and loss per share would have
been $7.1 million and $0.23, respectively.
Results of Operations
Three Months Ended March 31, 1996 Compared to Three Months Ended March
31, 1995
Research and development expenses increased by 108.7%, or approximately
$2.5 million, to $4.8 million for the three months ended March 31, 1996 compared
to $2.3 million for the three months ended March 31, 1995. The increase was
primarily due to an increase of $1.0 million in the purchase of research and
development components and an increase of $1.2 million in payroll and related
taxes, employee benefits and employee recruiting costs, associated with the
Company's continued growth and its development of the IS-661 technology. The
Company expects that research and development expenses will continue to increase
significantly during the remainder of 1996 as compared to 1995.
Sales, general and administrative expenses increased by 188.9%, or
approximately $3.4 million, to $5.2 million for the three months ended March 31,
1996 compared to $1.8 million for the three months ended March 31, 1995. Of this
increase, $947,000 was due to payroll and payroll related expenses associated
with increases in headcount, resulting from the expansion of the Company's
operations. The remaining increase consists primarily of increases of $750,000
in consulting service fees, $283,000 in rent and utility expenses, $261,000 in
legal fees, $216,000 in tradeshow and other business development expenses,
$143,000 in equipment rentals and leases and $100,000 in insurance expense. The
Company expects that such expenses will continue to increase significantly
during 1996, as the Company continues to expand its operations.
Depreciation and amortization increased by 30.0%, or approximately
$811,000, to $3.5 million for the three months ended March 31, 1996 compared to
$2.7 million for the three months ended March 31, 1995. The increase in the 1996
period was due to depreciation on a building and related building improvements
acquired in late 1995, combined with a general increase in depreciation related
to the Company's research and development equipment.
Interest income increased approximately $1.3 million, to $1.4 million for
the three months ended March 31, 1996 compared to $50,000 for the three months
ended March 31, 1995. The increase was due to excess cash invested in short term
interest bearing investments. The increase in cash and cash equivalents resulted
from the issuance of $25.0 million in senior notes in November 1995 and $25.0
million in convertible notes in November and December 1995 and the proceeds of
$119.8 million received from the Company's initial public offering.
Interest expense decreased by 51.3%, or approximately $4.1 million, to $3.9
million for the three months ended March 31, 1996 compared to $8.0 million of
the three months ended March 31, 1995. The interest expense for the three months
ended March 31, 1995 included $7.7 million of accrued interest expense related
to the New York MTA License. On March 8, 1996, the FCC adopted an order setting
the interest rate for the License at 7.75% per annum accruing from March 8,
1996. As a result, the Company reversed $33.5 million of accrued interest
related to the New York MTA
- 11 -
<PAGE>
License during December 1995. Had this adjustment been retroactively recorded in
the three months ended March 31, 1995, the net loss and loss per share would
have been $7.1 million and $0.23, respectively.
Net loss increased by 8.2%, or approximately $1.2 million to $15.9 million
for the three months ended March 31, 1996 compared to $14.7 million for the
three months ended March 31, 1995. This increase was primarily due to a general
increase in operating expenses, partially offset by a decrease of $5.5 million
in net interest expense.
Liquidity and Capital Resources
Operating activities used net cash of $10.9 million for the three months
ended March 31, 1996 compared to $4.9 million for the three months ended March
31, 1995. The increase resulted from the Company's additional activity relating
to supporting product development and commencement of the New York MTA network
buildout. Investing activities used net cash of $3.3 million for the three
months ended March 31, 1996 compared to $296,000 for the three months ended
March 31, 1995. The increase consists of $2.0 million for purchase of New York
MTA infrastructure related items and $800,000 for lab equipment used in
engineering and manufacturing.
As of March 31, 1996, the Company had working capital of approximately
$149.6 million. In January 1996, working capital increased by $135.4 million,
from $27.2 million at December 31, 1995, to $162.6 million upon receiving $118.4
million of proceeds, net of expenses, from the issuance of 8,050,000 shares of
Common Stock in the Company's initial public offering and the reduction of
current liabilities of $36.5 million and $16.3 million related to the repayment
of debt outstanding pursuant to a certain credit agreement, and the conversion
of $25.0 million of convertible subordinated notes upon the initial public
offering, respectively. The increase in working capital was partially offset by
the cash used to repay a short-term credit agreement debt.
Regarding the New York MTA License, on March 8, 1996 the FCC adopted an
order, the terms and conditions of which are as follows: (i) a five-year payment
period with interest accruing at 7.75% from the adoption date of the order with
the first payment due on the 30th day following such date and subsequent
payments due quarterly on April 30, July 31, October 31 and January 31, (ii)
interest only payments for the first two years and (iii) principal and interest
payments for the remaining three years. The Company made the first interest
payment of $2.2 million on April 5, 1996. The Company made a second payment of
$4.5 million, representing interest from April 8 through June 30, 1996, on April
30, 1996.
The Company has a agreement to purchase $250.0 million of equipment and
services over the next five years from Northern Telecom. The Company has
purchased approximately $19.3 million of equipment and services under such
agreement. The Company has a $382.5 million credit facility with Northern
Telecom, the "NT Credit Facility," to finance future purchases and installations
of telecommunications equipment, engineering services, certain related
construction costs, third-party equipment and other expenses. The Company also
has an OEM agreement to sell certain equipment, hardware and software to
Northern Telecom at its normal selling prices, which will result in licensing
fees and revenues.
A portion of the NT Credit Facility, which may be used for working capital
purposes including interest payments on principal of the Facility, matures on
June 30, 1997. Any amounts repaid can be subsequently borrowed for other
purposes allowed under the NT Credit Facility. The principal amount of the other
portions of the NT Credit Facility are payable in installments beginning in
2000, with the final payment due on December 31, 2004. Interest on the NT Credit
Facility is payable quarterly.
The NT Credit Facility is secured by a pledge of all capital stock of OCI
owned by a wholly-owned subsidiary of the Company (which constitutes a 95.58%
ownership interest) and substantially all of OCI's assets.
Under the terms of the NT Credit Facility, OCI is subject to certain
financial and operational covenants including restrictions on the ability to pay
dividends, restrictions on indebtedness and certain financial maintenance
requirements. Additionally, the NT Credit Facility provides that, among other
events, the failure of OCI to pay, when due, amounts
- 12 -
<PAGE>
owing the FCC shall constitute an event of default. As of March 31, 1996, OCI
had a balance (principal and accrued interest) of approximately $22.0 million
outstanding under this Facility.
Subsequent to March 31, 1996, the Company initiated two additional draws on
the NT Credit Facility. On April 1, 1996, the Company drew down $8.9 million of
the NT Credit Facility for the purchase of network infrastructure equipment. An
additional $4.8 million was drawn on April 19, 1996 to fund the purchase of
construction and consulting services related to the buildout of the New York MTA
network.
On November 22, 1995, the Company sold variable interest rate Senior Notes
in the aggregate amount of $25.0 million, together with warrants to purchase
625,000 shares of Common Stock at an exercise price of $.004 per share. The
Senior Notes mature in five years and may be prepaid at any time. The Senior
Notes contain a sinking fund obligation whereby the Company is required to pay
$5.0 million of the outstanding principal balance of the Senior Notes on the
third and fourth anniversary of the date of issuance of the Senior Notes. The
sinking fund provision expires should the Company issue $200 million of
additional equity before the third or fourth anniversary of their date of
issuance. The note purchase agreement contains certain covenants and
restrictions on the Company, including a restriction on the payment of cash
dividends and the requirement that any indebtedness of the Company be pari passu
or subordinate to the Senior Notes.
On November 29, 1995, the Company sold convertible notes in the aggregate
amount of $15.0 million, together with warrants to purchase 375,000 shares of
Common Stock at an exercise price of $.004 per share. On December 18, 1995, the
Company sold to Hansol convertible notes in the aggregate amount of $10.0
million together with warrants to purchase 250,000 shares of Common Stock at an
exercise price of $.004 per share. The convertible notes were converted upon the
closing of the Company's initial public offering on January 31, 1996, into
1,562,500 shares of Common Stock.
On January 31, 1996, the Company completed an initial public offering of
8,050,000 shares of Common Stock resulting in proceeds, net of related expenses
of approximately $118.4 million. In connection with the offering, the Preferred
Stock were converted into 10,605,591 shares of Common Stock. The Company used a
portion of the proceeds to pay down the outstanding balance of the credit
agreement of $36.5 million in connection with its participation in the
Entrepreneurs' Band auction.
On April 8, 1996, Ericsson issued a commitment letter proposing to provide
financing to the Company up to a maximum aggregate principal amount of $127.5
million for the purposes of financing the purchase of equipment and services
(including up to $42.5 million to assist in financing the purchase of handsets)
from Ericsson for the New York MTA market. A portion of the proposed facility,
which may be used for interest payments accruing under such facility, matures on
June 30, 1997. The principal amount under the other portion of the proposed
facility would be payable in installments beginning in 2000, with the final
payment due on December 31, 2004. Amounts borrowed and repaid would not be
available for reborrowing. Interest on the proposed facility would be payable
quarterly.
As proposed, the Ericsson facility would be secured by substantially all
the assets of OCI, including a pledge of all capital stock of OCI owned by a
wholly-owned subsidiary of the Company (which constitutes a 95.58% ownership
interest). All collateral would be held by a collateral agent and would be
shared on a pari passu basis with Northern Telecom.
The proposed facility would also contain negative, affirmative and
financial covenants and events of defaults, which are customarily found in such
financings, including covenants and events of default similar to the NT Credit
Facility.
The Company bid successfully for Entrepreneurs' Band licenses with an
aggregate license fee of approximately of $509.1 million (net of the 25% small
business discount). The Company made its first payment of 5%, or approximately
$25.5 million, and is preparing its long-form application for these licenses. At
the time the licenses are awarded, the Company will pay an additional 5%, or
approximately $25.5 million. The Company will pay interest only until 2003 and
will pay the balance of $458.2 million and remaining interest until paid at the
10-year Treasury Note rate set on the
- 13 -
<PAGE>
date the licenses are awarded. The Company anticipates that these licenses will
be issued by the end of August 1996, unless delayed by FCC proceedings or
litigation.
The Company's future capital requirements will depend upon many factors,
including the successful development of new products, the extent and timing of
acceptance of the Company's equipment in the market, requirements to maintain or
arrange for manufacturing facilities, the progress of the Company's research and
development efforts, expansion of the Company's marketing and sales efforts, the
Company's results of operations and the status of competitive products. The
Company estimates that it will require between $100 million to $150 million to
build out its network at a sufficient level to meet the five year buildout
requirement imposed on the Company as a holder of the New York MTA license. The
Company believes that cash and cash equivalents on hand, anticipated revenues,
vendor financing and additional strategic partnerships will be adequate to fund
its operations for the next 12 months. There can be no assurance, however, that
the Company will not require additional financing prior to such date to fund its
operations. The Company believes that it will require substantial amounts of
additional capital over the next several years and anticipates that this capital
will be derived from a mix of public offerings and private placements of debt or
equity securities or both.
- 14 -
<PAGE>
Part II - Other Information
<TABLE>
<CAPTION>
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<S> <C>
3.1@ Amended and Restated Certificate of Incorporation of the Registrant.
3.6* Amended and Restated Bylaws of the Registrant.
4.2 See Exhibit 3.1.
10.1* Registrant's Amended and Restated 1990 Stock Option Plan.
10.2* Form of Incentive Stock Option Agreement under Registrant's 1990 Stock Option Plan.
10.3* Form of Stock Option Agreement under Registrant's 1990 Stock Option Plan
for non-qualified options.
10.4* Form of Stock Option Agreement outside scope of Registrant's
1990 Stock Option Plan for non-qualified options.
10.5* Warrant Certificate, dated August 2, 1991, by and between
the Registrant and Allen & Company Incorporated.
10.6* Warrant Certificate, dated August 2, 1991, by and between
the Registrant and Allen & Company Incorporated.
10.7* Letter agreement, dated June 29, 1995, by and between the
Registrant and Allen & Company Incorporated (relating to
Exhibit 10.6).
10.8* Common Stock Purchase Warrant issued March 10, 1995, granted to Madison
Dearborn Capital Partners, L.P.
10.9* Common Stock Purchase Warrant issued March 10, 1995, granted to Madison
Dearborn Capital Partners, L.P.
10.10* Proprietary Information, Development and Non-Compete Agreement, dated
December 6, 1990, by and between the Registrant and Douglas G. Smith.
10.11* Employment Agreement, effective October 1, 1995, by and between the
Registrant, Omnipoint Communications Inc. and George F. Schmitt.
10.12* Promissory Note, dated October 1, 1995, by George F. Schmitt.
10.13* Stock Restriction Agreement, dated October 1, 1995, by and between the
Registrant and George F. Schmitt.
10.14* Employment Agreement, dated April 17, 1995, by and between the Registrant
and Bradley E. Sparks.
10.15* Promissory Note, dated April 17, 1995, by Bradley E. Sparks.
10.16* Stock Restriction Agreement, dated April 17, 1995, by and between the
Registrant and Bradley E. Sparks.
10.17* Employment Agreement, dated December 5, 1994, by and between the
Registrant and Randall Meals.
10.18* Promissory Note, dated December 5, 1994, by Randall Meals.
10.19* Promissory Note, dated September 19, 1995, by Randall Meals.
10.20* Stock Restriction Agreement, dated December 5, 1995, by and between the
Registrant and Randall Meals.
10.21* Employment Agreement, dated June 21, 1994, by and between Omnipoint
Communications Inc. and Harry Plonskier.
10.22* Stock Restriction Agreement, dated July 5, 1994, by and between the
Registrant and Harry Plonskier.
10.23* Employment Agreement, dated June 16, 1991, by and between the Registrant
and Evelyn Goldfine.
10.24* Employment Agreement, dated April 15, 1994, by and between the Registrant
and Robert Dixon.
10.25 [Intentionally left blank]
10.26* Form of Employment Agreement by and between the Registrant and its employees.
- 15 -
<PAGE>
10.27* Form of Non-Disclosure Agreement.
10.28* Form of Stock Restriction Agreement by and between the Registrant and
certain stockholders.
10.29* Series A Convertible Preferred Stock Purchase Agreement,
dated August 2, 1991, by and between the Registrant and
Allen & Company Incorporated.
10.30* Series B Convertible Preferred Stock Purchase Agreement,
dated August 9, 1993, by and among the Registrant and
Madison Dearborn Capital Partners, L.P.
10.31* Amendment No. 1 to Series B Convertible Preferred Stock Purchase
Agreement, dated June 29, 1995, by and between the Registrant and Madison
Dearborn Capital Partners, L.P.
10.32* Series C Convertible Preferred Stock Purchase Agreement,
dated June 29, 1995, by and among the Registrant and the
other parties named therein.
10.33* Stock Purchase Agreement, dated January 29, 1994, by and
between the Registrant and Ameritech Development
Corporation.
10.34* Stock Purchase Agreement, dated June 29, 1994, by and
between the Registrant and Associated PCN Company.
10.35* Common Stock Purchase Agreement, dated June 1, 1994, by and
between the Registrant and the parties named therein.
10.36* Amended and Restated Registration Rights Agreement, dated
June 29, 1995, by and among the Registrant and the parties
named therein.
10.37* First Amended and Restated Voting Agreement, dated June 29,
1995, by and among the Registrant and the other parties
named therein.
10.38* OEM Supply Agreement for Omnipoint PCS (Personal
Communication Systems) Products, dated September 22, 1994,
by and between the Registrant and Northern Telecom Inc.
10.39* Letter agreement dated December 9, 1994, by and between the Registrant
and Northern Telecom Inc. (relating to Exhibit 10.38).
10.40* Manufacturing License and Escrow Agreement for Personal Communication
Service Products, dated February 28, 1995, by and between the Registrant and
Northern Telecom Inc.
10.41* Collaborative Development Agreement, dated March 1, 1995, by
and between the Registrant and Northern Telecom Inc.
10.42* Reciprocal OEM Agreement Memorandum of Understanding, dated
March 30, 1995, by and between the Registrant and Northern
Telecom Inc.
10.43* Supply Agreement, dated September 22, 1994, by and between Omnipoint
Communications Inc. and Northern Telecom Inc.
10.44* Amendment No. 1 to Supply Agreement, dated July 21, 1995, by and between
Omnipoint Communications Inc. and Northern Telecom Inc.
10.45* Loan Agreement, dated as of July 21, 1995, by and between Omnipoint
Communications Inc. and Northern Telecom Inc.
10.46 [Intentionally left blank]
10.46.1* Letter Agreement, dated November 14, 1995, by and among the Registrant,
Omnipoint Communications Inc. and JRC International Inc. (relating to
Exhibit 10.46).
10.46.2* Letter Agreement, dated December 21, 1995, by and among the Registrant,
Omnipoint Communications Inc. and JRC International Inc. (relating to
Exhibit 10.46).
10.47* Engineering Services Agreement, dated as of August 31, 1995,
by and between the Registrant and JRC International Inc.
10.48* Memorandum of Understanding, dated April 21, 1995, by and
between the Registrant and Pacific Bell Mobile Services.
- 16 -
<PAGE>
10.49* Office Sublease Agreement by and between the Registrant and
United Technologies Microelectronics Center, Inc.,
commencing August 1, 1994 or upon earlier occupation by the
Registrant.
10.50* Amendment to Office Sublease Agreement, signed August 17, 1994, by and
between the Registrant and United Technologies Microelectronics Center, Inc.
10.51* Office Building Lease for Courthouse Plaza Office Building, dated January 18,
1994, by and between the Registrant and Eastrich No. 130 Corporation.
10.52* First Lease Amendment, dated January 20, 1995, by and between the
Registrant and Eastrich No. 130 Corporation.
10.53* Pioneer's Preference License granted by the FCC to Omnipoint Communications
Inc. on December 14, 1994.
10.54* Note and Warrant Purchase Agreement dated November 22, 1995,
between the Registrant and the purchasers named therein.
10.55* Senior Note Due 2000 issued by the Registrant on November 22, 1995 to the
holder identified therein.
10.56* Senior Note Due 2000 issued by the Registrant on November 22, 1995 to the
holder identified therein.
10.57* Common Stock Warrant issued by the Registrant on November 22, 1995 to the
holder identified therein.
10.58* Common Stock Warrant issued by the Registrant on November 22, 1995 to the
holder identified therein.
10.59* Credit Agreement, dated as of November 21, 1995, by and among OPCS
Corp., Omnipoint PCS Entrepreneurs, Inc. and Bank of America National Trust
and Savings Association.
10.60* Memorandum of Understanding, dated November 22, 1995, by and between the
Registrant and Ericsson Inc.
10.60.1* Letter Agreement, dated January 24, 1996, by and between the
Registrant and between Ericsson Inc.
10.61* Convertible Subordinated Note and Warrant Purchase Agreement, dated
December 12, 1995, by and between the Registrant and Hansol Paper Co., Ltd.
10.62* Convertible Subordinated Note and Warrant Purchase
Agreement, dated as of November 29, 1995, by and among the
Registrant and the entities identified therein.
10.63* Letter of Intent, dated October 26, 1995, by and between the
Registrant and BellSouth Personal Communications, Inc.
10.64* Waiver of Registration Rights and Confirmation of 180-Day
Lockup, dated as of October 31, 1995, by and between the
Registrant and Ameritech Development Corporation.
10.65* Registration Rights Agreement dated as of April 26, 1994, by and among the
Registrant and the parties thereto.
10.66* Contract for Sale of Real Estate, dated August 30, 1995, by and between F&R
Bari Realty, Ltd., Inc. and Omnipoint Communications Inc.
10.67* Lease Agreement, dated October 15, 1995, by and between the Registrant
and Baetis Properties, Inc.
10.68+ Acquisition Agreement for Ericsson CMS 40 Personal Communications Systems (PCS) Infrastructure
Products, dated as of April 16, 1996, by and between Ericsson Inc. and Omnipoint Communications
Inc.
10.69+ Acquisition Supply and License Agreement for Omnipoint Personl Communications Systems (PCS)
Infrastructure Products, dated as of April 16, 1996, by and between Ericsson Inc. and Omnipoint
Communications Inc.
- 17 -
<PAGE>
10.70+ Agreement for Purchase and Sale of Ericsson Inc. Masko Terminal Units, dated as of April 16,
1996, by and between Ericsson Inc. and Omnipoint Communications Inc.
10.71+ Memorandum of Understanding, dated April 2, 1996, by and between Orbitel Mobile Communications
Inc. and the Registrant.
10.72++ Letter of Intent, dated November 20, 1995, by and between
the Registrant and Western Wireless Corporation.
10.73++ Letter of Intent, dated February 26, 1996, by and between Omnipoint Communications Inc. and
American Portable Telecom, Inc.
11.1 Statement of computation of loss per share.
22.1* Subsidiaries of the Registrant.
23.1++ Consent of Coopers & Lybrand L.L.P.
27 Financial Data Schedule
</TABLE>
- ---------------------------
@ Incorporated herein by reference to Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.
* Incorporated herein by reference to the Company's Registration Statement on
Form S-1, No. 33-98360.
+ Incorporated by reference to the Company's Current Report on Form 8-K,
filed May 3, 1996.
++ Incorporated by reference to the Company's Registration Statement on Form
S-1, No. 333-03739, filed May 14, 1996.
- ---------------------------
(b) Reports on Form 8-K
Report on Form 8-K filed May 3, 1996, Item 5, disclosing the
consummation of the Ericsson transactions.
- 18 -
<PAGE>
SIGNATURE
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.
OMNIPOINT CORPORATION
Date: May 14, 1996 /s/ Douglas G. Smith
---------------------- --------------------
Douglas G. Smith
Chairman of the Board, President and
Chief Executive Officer
Date: May 14, 1996 /s/ Bradley E. Sparks
---------------------- ---------------------
Bradley E. Sparks
Chief Financial Officer
- 19 -
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
3.1@ Amended and Restated Certificate of Incorporation of the
Registrant.
3.6* Amended and Restated Bylaws of the Registrant. 4.2 See
Exhibit 3.1.
10.1* Registrant's Amended and Restated 1990 Stock Option Plan.
10.2* Form of Incentive Stock Option Agreement under Registrant's 1990 Stock Option Plan.
10.3* Form of Stock Option Agreement under Registrant's 1990 Stock Option Plan
for non-qualified options.
10.4* Form of Stock Option Agreement outside scope of Registrant's 1990 Stock
Option Plan for non-qualified options.
10.5* Warrant Certificate, dated August 2, 1991, by and between the Registrant
and Allen & Company Incorporated.
10.6* Warrant Certificate, dated August 2, 1991, by and between the Registrant
and Allen & Company Incorporated.
10.7* Letter agreement, dated June 29, 1995, by and between the Registrant and
Allen & Company Incorporated (relating to Exhibit 10.6).
10.8* Common Stock Purchase Warrant issued March 10, 1995, granted to Madison
Dearborn Capital Partners, L.P.
10.9* Common Stock Purchase Warrant issued March 10, 1995, granted to Madison
Dearborn Capital Partners, L.P.
10.10* Proprietary Information, Development and Non-Compete Agreement, dated
December 6, 1990, by and between the Registrant and Douglas G. Smith.
10.11* Employment Agreement, effective October 1, 1995, by and between the
Registrant, Omnipoint Communications Inc. and George F. Schmitt.
10.12* Promissory Note, dated October 1, 1995, by George F. Schmitt.
10.13* Stock Restriction Agreement, dated October 1, 1995, by and between the
Registrant and George F. Schmitt.
10.14* Employment Agreement, dated April 17, 1995, by and between the Registrant
and Bradley E. Sparks.
10.15* Promissory Note, dated April 17, 1995, by Bradley E. Sparks.
10.16* Stock Restriction Agreement, dated April 17, 1995, by and between the
Registrant and Bradley E. Sparks.
10.17* Employment Agreement, dated December 5, 1994, by and between the
Registrant and Randall Meals.
10.18* Promissory Note, dated December 5, 1994, by Randall Meals.
10.19* Promissory Note, dated September 19, 1995, by Randall Meals.
10.20* Stock Restriction Agreement, dated December 5, 1995, by and between the
Registrant and Randall Meals.
10.21* Employment Agreement, dated June 21, 1994, by and between Omnipoint
Communications Inc. and Harry Plonskier.
10.22* Stock Restriction Agreement, dated July 5, 1994, by and between the
Registrant and Harry Plonskier.
10.23* Employment Agreement, dated June 16, 1991, by and between the Registrant
and Evelyn Goldfine.
10.24* Employment Agreement, dated April 15, 1994, by and between the Registrant
and Robert Dixon.
- 20 -
<PAGE>
10.25 [Intentionally left blank]
10.26* Form of Employment Agreement by and between the Registrant and its employees.
10.27* Form of Non-Disclosure Agreement.
10.28* Form of Stock Restriction Agreement by and between the Registrant and
certain stockholders.
10.29* Series A Convertible Preferred Stock Purchase Agreement,
dated August 2, 1991, by and between the Registrant and
Allen & Company Incorporated.
10.30* Series B Convertible Preferred Stock Purchase Agreement,
dated August 9, 1993, by and among the Registrant and
Madison Dearborn Capital Partners, L.P.
10.31* Amendment No. 1 to Series B Convertible Preferred Stock Purchase
Agreement, dated June 29, 1995, by and between the Registrant and Madison
Dearborn Capital Partners, L.P.
10.32* Series C Convertible Preferred Stock Purchase Agreement,
dated June 29, 1995, by and among the Registrant and the
other parties named therein.
10.33* Stock Purchase Agreement, dated January 29, 1994, by and between the
Registrant and Ameritech Development Corporation.
10.34* Stock Purchase Agreement, dated June 29, 1994, by and between the
Registrant and Associated PCN Company.
10.35* Common Stock Purchase Agreement, dated June 1, 1994, by and
between the Registrant and the parties named therein.
10.36* Amended and Restated Registration Rights Agreement, dated
June 29, 1995, by and among the Registrant and the parties
named therein.
10.37* First Amended and Restated Voting Agreement, dated June 29,
1995, by and among the Registrant and the other parties
named therein.
10.38* OEM Supply Agreement for Omnipoint PCS (Personal Communication
Systems) Products, dated September 22, 1994, by and between the Registrant
and Northern Telecom Inc.
10.39* Letter agreement dated December 9, 1994, by and between the Registrant
and Northern Telecom Inc. (relating to Exhibit 10.38).
10.40* Manufacturing License and Escrow Agreement for Personal Communication
Service Products, dated February 28, 1995, by and between the Registrant and
Northern Telecom Inc.
10.41* Collaborative Development Agreement, dated March 1, 1995, by
and between the Registrant and Northern Telecom Inc.
10.42* Reciprocal OEM Agreement Memorandum of Understanding, dated
March 30, 1995, by and between the Registrant and Northern
Telecom Inc.
10.43* Supply Agreement, dated September 22, 1994, by and between Omnipoint
Communications Inc. and Northern Telecom Inc.
10.44* Amendment No. 1 to Supply Agreement, dated July 21, 1995, by and between
Omnipoint Communications Inc. and Northern Telecom Inc.
10.45* Loan Agreement, dated as of July 21, 1995, by and between Omnipoint
Communications Inc. and Northern Telecom Inc.
10.46 [Intentionally left blank]
10.46.1* Letter Agreement, dated November 14, 1995, by and among the Registrant,
Omnipoint Communications Inc. and JRC International Inc. (relating to
Exhibit 10.46).
10.46.2* Letter Agreement, dated December 21, 1995, by and among the Registrant,
Omnipoint Communications Inc. and JRC International Inc. (relating to
Exhibit 10.46).
10.47* Engineering Services Agreement, dated as of August 31, 1995, by and
between the Registrant and JRC International Inc.
- 21 -
<PAGE>
10.48* Memorandum of Understanding, dated April 21, 1995, by and between the
Registrant and Pacific Bell Mobile Services.
10.49* Office Sublease Agreement by and between the Registrant and United
Technologies Microelectronics Center, Inc., commencing August 1, 1994
or upon earlier occupation by the Registrant.
10.50* Amendment to Office Sublease Agreement, signed August 17, 1994, by and
between the Registrant and United Technologies Microelectronics Center, Inc.
10.51* Office Building Lease for Courthouse Plaza Office Building, dated January 18,
1994, by and between the Registrant and Eastrich No. 130 Corporation.
10.52* First Lease Amendment, dated January 20, 1995, by and between the
Registrant and Eastrich No. 130 Corporation.
10.53* Pioneer's Preference License granted by the FCC to Omnipoint Communications
Inc. on December 14, 1994.
10.54* Note and Warrant Purchase Agreement dated November 22, 1995,
between the Registrant and the purchasers named therein.
10.55* Senior Note Due 2000 issued by the Registrant on November 22, 1995 to the
holder identified therein.
10.56* Senior Note Due 2000 issued by the Registrant on November 22, 1995 to the
holder identified therein.
10.57* Common Stock Warrant issued by the Registrant on November 22, 1995 to the
holder identified therein.
10.58* Common Stock Warrant issued by the Registrant on November 22, 1995 to the
holder identified therein.
10.59* Credit Agreement, dated as of November 21, 1995, by and among OPCS
Corp., Omnipoint PCS Entrepreneurs, Inc. and Bank of America National Trust
and Savings Association.
10.60* Memorandum of Understanding, dated November 22, 1995, by and between the
Registrant and Ericsson Inc.
10.60.1* Letter Agreement, dated January 24, 1996, by and between the Registrant and
between Ericsson Inc.
10.61* Convertible Subordinated Note and Warrant Purchase Agreement, dated
December 12, 1995, by and between the Registrant and Hansol Paper Co., Ltd.
10.62* Convertible Subordinated Note and Warrant Purchase Agreement, dated as of
November 29, 1995, by and among the Registrant and the entities identified
therein.
10.63* Letter of Intent, dated October 26, 1995, by and between the Registrant and
BellSouth Personal Communications, Inc.
10.64* Waiver of Registration Rights and Confirmation of 180-Day Lockup, dated as
of October 31, 1995, by and between the Registrant and Ameritech
Development Corporation.
10.65* Registration Rights Agreement dated as of April 26, 1994, by and among the
Registrant and the parties thereto.
10.66* Contract for Sale of Real Estate, dated August 30, 1995, by and between F&R
Bari Realty, Ltd., Inc. and Omnipoint Communications Inc.
10.67* Lease Agreement, dated October 15, 1995, by and between the Registrant
and Baetis Properties, Inc.
10.68+ Acquisition Agreement for Ericsson CMS 40 Personal Communications Systems
(PCS) Infrastructure Products, dated as of April 16, 1996, by and between Ericsson
Inc. and Omnipoint Communications Inc.
10.69+ Acquisition Supply and License Agreement for Omnipoint Personl Communications
Systems (PCS) Infrastructure Products, dated as of April 16, 1996, by and between
- 22 -
<PAGE>
Ericsson Inc. and Omnipoint Communications Inc.
10.70+ Agreement for Purchase and Sale of Ericsson Inc. Masko Terminal Units, dated as
of April 16, 1996, by and between Ericsson Inc. and Omnipoint Communications Inc.
10.71+ Memorandum of Understanding, dated April 2, 1996, by and between Orbitel Mobile Communications
Inc. and the Registrant.
10.72++ Letter of Intent, dated November 20, 1995, by and between the Registrant and
Western Wireless Corporation.
10.73++ Letter of Intent, dated February 26, 1996, by and between Omnipoint Communications Inc.
and American Portable Telecom, Inc.
11.1 Statement of computation of loss per share.
22.1* Subsidiaries of the Registrant.
23.1++ Consent of Coopers & Lybrand L.L.P.
27 Financial Data Schedule
</TABLE>
- ---------------------------
@ Incorporated herein by reference to Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.
* Incorporated herein by reference to the Company's Registration Statement on
Form S-1, No. 33-98360.
+ Incorporated by reference to the Company's Current Report on Form 8-K,
filed May 3, 1996.
++ Incorporated by reference to the Company's Registration Statement on Form
S-1, No. 333-03739, filed May 14, 1996.
- 23 -
<PAGE>
Exhibit 11.1
OMNIPOINT CORPORATION
STATEMENT OF COMPUTATION OF LOSS PER SHARE
Three Months Ended March 31,
(unaudited)
1996 1995
Calculation of primary loss per share:
Net loss $(15,902,550) $(14,723,796)
============= =============
Common shares outstanding 38,179,079 31,344,821
Issuance of cheap stock (1) 2,290,251 --
--------- --------------
Total shares - primary 40,469,330 31,344,821
========== ==========
Primary loss per share:
Net loss per share $ (0.39) $ (0.47)
========== ==========
Note: The computation of fully diluted earnings per share is identical to
that of primary earnings per share for the periods presented above and
therefore is not included separately herein.
(1) Pursuant to Securities and Exchange Commission Staff Accounting
Bulletin No. 83, common equivalent shares issued during the twelve
month period prior to the initial filing date of the Company's Initial
Public Offering Registration Statement at exercise prices below the
initial public offering price of $16.00 have been included in the
calculation of cheap stock shares using the treasury stock method,
until the initial public offering became effective on January 31, 1996.
- 24 -
<PAGE>
EXHIBIT 27
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND INCOME STATEMENT OF OMNIPOINT CORPORATION AS OF AND FOR THE THREE
MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
OMNIPOINT CORPORATION
FINANCIAL STATEMENT SCHEDULE
<TABLE>
<CAPTION>
Item Number Item Description Amount
<S> <C> <C>
5-02(1) Cash and cash items 127,222,563
5-02(2) Marketable securities 0
5-02(3)(a)(1) Notes and accounts receivable - trade 0
5-02(4) Allowance for doubtful accounts 0
5-02(6) Inventory 1,611,251
5-02(9) Total current assets 174,133,391
5-02(13) Property, plant and equipment 24,771,534
5-02(14) Accumulated depreciation (3,558,770)
5-02(18) Total assets 543,905,397
5-02(21) Total current liabilities 24,527,700
5-02(22) Bonds, mortgages and similar debt 17,022,109
5-02(28) Preferred stock - mandatory redemption 0
5-02(29) Preferred stock - no mandatory redemption 0
5-02(30) Common stock 450,090
5-02(31) Other stockholders' equity 132,276,055
5-02(32) Total liabilities and stockholders' equity
543,905,397
5-03(b)1(a) Net sales of tangible products 0
5-03(b)1 Total revenues 0
5-03(b)2(a) Cost of tangible goods sold 0
5-03(b)2 Total costs and expenses applicable to sales and revenues 0
5-03(b)3 Other costs and expenses 13,431,648
5-03(b)5 Provision for doubtful accounts and notes 0
5-03(b)(8) Interest and amortization of debt discount 2,470,902
5-03(b)(10) Income before taxes and other items (15,902,550)
5-03(b)(11) Income tax expense 0
5-03(b)(14) Income/loss continuing operations (15,902,550)
5-03(b)(15) Discontinued operations 0
5-03(b)(17) Extraordinary items 0
5-03(b)(18) Cumulative effect - changes in accounting principles 0
5-03(b)(19) Net income or loss (15,902,550)
5-03(b)(20) Earnings per share - primary (0.39)
5-03(b)(20) Earnings per share - fully diluted (0.39)
</TABLE>
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