U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 12 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM ___________TO_________________
Commission file number 21143
WIRELESS CABLE & COMMUNICATIONS, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0545056
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
102 West 500 South, Suite 320
Salt Lake City, Utah 84101
(Address of Principal Executive Offices) (Zip Code)
(801) 328-5618
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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__
As of May 7, 1998, 8,209,900 shares of registrant's Common Stock, par value $.01
per share, 3,257,490 shares of the registrant's Series A Preferred Stock, par
value $.01 per share, and 354,825 shares of the registrant's Series B Preferred
Stock, par value $.01 per share, were outstanding.
<PAGE>
PART I : FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB
The accompanying unaudited consolidated financial statements have been
prepared by Wireless Cable & Communications, Inc. (the "Company") pursuant to
the rules and regulations of the Securities and Exchange Commission. They do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. These financial
statements should be read in conjunction with Note 1 herein and the consolidated
financial statements and notes thereto included in the Company's annual report
on Form 10-KSB for the year ended December 31, 1997, as amended, which are
incorporated herein by reference. The accompanying financial statements have not
been examined by independent accountants in accordance with generally accepted
auditing standards, but in the opinion of management, all adjustments
(consisting of normal recurring entries) necessary for the fair presentation of
the Company's results of operations, financial position and changes therein for
the periods presented have been included. The results of operations for the
three months ended March 31, 1998 may not be indicative of the results that may
be expected for the year ending December 31, 1998.
[THIS SPACE INTENTIONALLY LEFT BLANK]
2
<PAGE>
<TABLE>
<CAPTION>
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
- -------------------------------------------------------------------------------------------------------------
March 31, December 31,
1998 1997
------------ -------------
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents ............................................... $ 9,914,384 $ 6,171,515
Accounts receivable - net ............................................... 20,011 9,754
Due from affiliaties .................................................... 35,591 36,950
Inventory ............................................................... 35,778 32,074
Prepaid license fees .................................................... 216,253 186,982
Other current assets .................................................... 21,083 18,007
------------ ------------
Total current assets .................................... 10,243,100 6,455,282
INVESTMENT IN CENTURION ..................................................... 845,955 845,955
EQUIPMENT - net ............................................................. 627,990 421,944
LICENSE RIGHTS - net ........................................................ 778,167 807,167
CONTRACT RIGHTS - net ....................................................... 8,581,814 8,916,587
OTHER ASSETS ................................................................ 39,099 42,171
============ ============
TOTAL ASSETS ................................................................ $ 21,116,125 $ 17,489,106
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities ................................ $ 627,927 $ 640,164
Note payable ............................................................ 350,000 350,000
Accrued license lease fees .............................................. 121,621 121,621
Accrued consulting fees (payable to related party) ...................... 100,000 100,000
Due to affiliates ....................................................... 751,163 709,558
Customer deposits ....................................................... 38,874 40,070
------------ ------------
Total current liabilities ............................... 1,989,585 1,961,413
LONG-TERM LIABILITIES:
Long-term debt (owed to related party) .................................. 1,153,111 1,130,660
MINORITY INTEREST IN SUBSIDIARIES ........................................... 13,971 18,067
------------ ------------
Total liabilities ....................................... 3,156,667 3,110,140
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Series "A" Preferred stock; $0.01 par value; 4,250,000 shares authorized:
3,257,490 and 2,938,355 shares issued and outstanding in 1998
and 1997, respectively (10-1 liquidation preference over common) .... 32,575 29,384
Series "B" Preferred stock; $0.01 par value; 750,000 shares authorized:
354,825 shares issued and outstanding in 1998 and 1997 ............. 3,548 3,548
Common stock; $0.01 par value; 15,000,000 shares authorized:
8,209,900 and 6,108,132 shares issued and outstanding in
1998 and 1997, respectively ......................................... 82,099 61,081
Additional paid-in capital .............................................. 24,473,111 19,540,694
Deficit accumulated during the development stage ........................ (6,631,875) (5,255,741)
------------ ------------
Total stockholders' equity .............................. 17,959,458 14,378,966
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................................. $ 21,116,125 $ 17,489,106
============ ============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997,
AND FROM SEPTEMBER 27, 1994 (DATE OF INCEPTION) TO MARCH 31, 1998
- -------------------------------------------------------------------------------------------
Three Three September 27,
Months Months 1994 (Date of
Ended Ended Inception) To
March 31, March 31, March 31,
1998 1997 1998
-------------- -------------- ----------------
<S> <C> <C> <C>
REVENUES ................................ $ 28,336 $ $ 68,522
COST OF SERVICE ......................... 91,800 -- 256,848
------------ ------------ ------------
GROSS MARGIN ............................ (63,464) -- (188,326)
OPERATING EXPENSES:
Professional fees .................. 327,070 66,158 1,424,265
Depreciation and amortization ...... 428,897 19,550 1,048,079
Leased license expense ............. 41,697 7,942 157,858
General and administrative ......... 573,151 78,941 2,195,786
Stock option compensation expense .. -- -- 962,738
------------ ------------ ------------
Total .............. 1,370,815 172,591 5,788,726
------------ ------------ ------------
OPERATING LOSS .......................... (1,434,279) (172,591) (5,977,052)
OTHER INCOME AND EXPENSES:
Interest income .................... 86,321 -- 202,688
Interest expense ................... (32,272) (25,672) (874,618)
------------ ------------ ------------
Total .............. 54,049 (25,672) (671,930)
------------ ------------ ------------
NET LOSS BEFORE MINORITY INTEREST ....... (1,380,230) (198,263) (6,648,982)
MINORITY INTEREST IN LOSS OF SUBSIDIARIES 4,096 2,271 17,107
------------ ------------ ------------
NET LOSS ................................ $ (1,376,134) $ (195,992) $ (6,631,875)
============ ============ ============
Net loss per basic common share* ........ $ (0.04) $ (0.01)
============ ============
Net loss per diluted common share* ...... $ (0.03) $ (0.01)
============ ============
Weighted-average common shares*
Basic .............................. 37,846,129 17,464,149
============ ============
Diluted ............................ 40,409,931 18,340,320
============ ============
</TABLE>
* Retroactively restated for the adoption of Statements of Financial Accounting
Standards (SFAS) No. 128, "Earnings Per Share," effective December 31, 1997.
See notes to consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1998,
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995,
AND FROM SEPTEMBER 27, 1994 (DATE OF INCEPTION) TO MARCH 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Deficit
Accumulated
Series "A" Preferred Series "B" Preferred Stock Common Stock Additional During the
--------- -------- ---------- --------- ---------- -------- Paid-in Development
Shares Amount Shares Amount Shares Amount Capital Stage
--------- -------- ---------- --------- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of TIC
stock to TIC shareholders
on September 27, 1994 ........ 1,500,000 $ 15,000
Net loss for the period
from September 27, 1994
(date of inception)
to December 31, 1994 ............ $ (59,108)
----------- ------- ----------- ------ ----------- ---------- ------------ ----------
BALANCE, DECEMBER 31, 1994 ....... 1,500,000 15,000 (59,108)
Net loss for the
year ended December 31, 1995 .... (179,771)
----------- ------- ----------- ------ ----------- ---------- ------------ ----------
BALANCE, DECEMBER 31, 1995 ....... 1,500,000 15,000 (238,879)
Net loss for the
year ended December 31, 1996 .... (422,568)
----------- ------- ----------- ------ ----------- ---------- ------------ ----------
BALANCE, DECEMBER 31, 1996 ....... 1,500,000 15,000 (661,447)
Reverse acquisition of TIC:
Exchange of TIC common
shares for WCCI Series
"A" Preferred shares ........... 2,397,732 $ 23,977 (1,500,000) (15,000) $ (8,977)
Addition of WCCI common stock . 3,645,833 36,458 50,532
Exchange of CVV common
stock for WCCI common shares
and Series "B" Preferred shares 354,825 3,548 1,577,000 15,770 7,077,182
Issuance of WCCI common
stock and Series "A" Preferred
shares for cash ............... 526,331 5,264 800,305 8,003 9,986,733
Issuance of warrants
below fair value ............... 657,143
Issuance of WCCI common stock
and Series "A" Preferred
shares for cash ............... 14,292 143 84,994 850 299,007
Issuance of options
for common shares and Series
"A" Preferred shares
below fair value .............. 1,479,074
Net loss for the year
ended December 31, 1997 ......... (4,594,294)
----------- ------- ----------- ------ ----------- ---------- ------------ ----------
BALANCE, DECEMBER 31, 1997 ....... 2,938,355 29,384 354,825 3,548 6,108,132 61,081 19,540,694 (5,255,741)
Issuance of WCCI common
stock and Series "A" Preferred
shares for cash ................ 319,135 3,191 2,101,768 21,018 4,932,417
Net loss for the three
months ended March 31, 1998 ..... (1,376,134)
----------- ------- ----------- ------ ----------- ---------- ------------ ----------
BALANCE, MARCH 31, 1998 .......... 3,257,490 $32,575 354,825 $3,548 8,209,900 $ 82,099 $ 24,473,111 $(6,631,875)
=========== ======= =========== ====== =========== ========== ============ ==========
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997,
AND FROM SEPTEMBER 27, 1994 (DATE OF INCEPTION) TO MARCH 31, 1998
- ----------------------------------------------------------------------------------------------------
Three Three September 27,
Months Months 1994 (Date of
Ended Ended Inception) To
March 31, March 31, March 31,
1998 1997 1998
------------- ------------- --------------
CASH FLOWS FROM DEVELOPMENT ACTIVITIES:
<S> <C> <C> <C>
Net loss ......................................... $(1,376,134) $(195,992) $ (6,631,875)
Adjustments to reconcile net loss
to net cash used in development activities:
Depreciation and amortization ............. 428,897 19,550 1,048,079
Minority interest in loss of subsidiaries . (4,096) (2,271) (17,107)
Issuance of stock options below fair value -- -- 1,479,074
Issuance of warrants below fair value ..... -- -- 657,143
Change in assets and liabilities:
Accounts receivable .................... (10,257) -- (9,298)
Prepaid license fees ................... (29,271) 12,203 (41,040)
Inventory .............................. (3,704) -- 29,521
Other current assets ................... (3,076) -- 37,368
Due from affiliates .................... 1,359 -- 229,005
Other assets ........................... 3,072 574,103 (5,772)
Accounts payable and accrued liabilities (12,237) (248,030) (16,282)
Due to affiliates ...................... 41,604 100,000 (156,538)
Accrued license lease fees ............. -- 125,925 12,223
Customer deposits ...................... (1,196) -- (879)
----------- --------- ------------
Net cash (used in) provided by
development activities ................... (965,039) 385,488 (3,386,378)
----------- --------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Centurion .......................... -- (617,076) (805,955)
Reverse acquisition of WCCI ...................... -- 56,582 56,582
Acquisition of CVV (net of cash acquired) ........ -- -- (387,318)
Purchase of minority interest in CVV ............. -- -- (800,000)
Purchases of equipment ........................... (271,169) -- (399,948)
----------- --------- ------------
Net cash used in investing activities .... (271,169) (560,494) (2,336,639)
----------- --------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock ........... 3,161,661 -- 5,144,606
Proceeds from issuance of Series A preferred stock 1,794,965 -- 10,127,020
Proceeds from related party borrowings ........... 22,451 20,566 1,328,068
Payments on related parties borrowings ........... -- (175,319) (962,293)
Proceeds from promissory notes ................... -- 530,838 2,300,000
Payments on promissory notes ..................... -- -- (2,300,000)
----------- --------- ------------
Net cash provided by financing activities .. 4,979,077 376,085 15,637,401
----------- --------- ------------
NET INCREASE IN CASH ................................. 3,742,869 201,079 9,914,384
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ..... 6,171,515 8,902 --
----------- --------- ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ........... $ 9,914,384 $ 209,981 $ 9,914,384
=========== ========= ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest ........... $ $ -- $ 30,996
=========== ========= ============
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
(Unaudited)
1. Presentation
The consolidated financial statements include the accounts of the Company's
subsidiaries, including (i) a 78.14% interest in Caracas Viva Vision TV, S.A.
("CVV"), a local multi-point distribution service wireless communications system
in Venezuela, (ii) a 94.9% interest in Auckland Independent Television Services,
Ltd. ("AITS"), which holds license and lease rights for a multi-point video
distribution service ("MVDS") and four multi-channel, multi-point distribution
service ("MMDS") channels in three new Zealand cities, (iii) a 100% interest in
Wireless Communications Holding - Guatemala, S.A. ("WCH - Guatemala"), a
corporation which has been formed to acquire and operate LMDS rights in
Guatemala, (iv) a 100% interest in Sociedad Television Interactiva, S.A.
("TISA"), a corporation that has the right to manage and operate an LMDS system
in Costa Rica, (v) a 90% interest in Wireless Communications Panama, S.A. ("WC -
Panama"), which will act as the operating company for an LMDS system in Panama,
(vi) an 80% interest in WCI de Argentina ("WCIA"), which holds a value added
license to provide telecommunications services in Argentina, and (vii) a 100%
interest in Transworld Wireless Television, Inc. ("TWTV"), a corporation that
holds four MMDS channels in Park City, Utah. The Company also has a 45% interest
in LatinCom, Inc. which has not engaged in any business activities. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
2. Net loss per common share and common share equivalent
Net loss per common share and common share equivalents is
computed by both the basic method, which uses the weighted average number of
common shares and the common stock equivalents on a voting basis for the Series
"A" and Series "B" preferred stock outstanding, and the diluted method, which
includes the dilutive common shares and Series "A" preferred shares from stock
options and warrants, as calculated using the treasury stock method.
3. Use of Estimates in Preparing Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
7
<PAGE>
4. New Accounting Standard
In June 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its components
(revenues, expenses, gains and losses) in a full set of general-purpose
financial statements. This statement requires that an enterprise (a) classify
items of other comprehensive income by their nature in a financial statement and
(b) display the accumulated balance of other comprehensive income separately
from retained earnings and additional paid-in-capital in the equity section of a
statement of financial position.
Effective January 1, 1998, the Company adopted the provisions of SFAS
No. 130. Accordingly, the Company determined that no Company transactions were
considered to be an additional component of comprehensive income. Therefore,
comprehensive loss equaled net loss for the three months ended March 31, 1998
and 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
A. MATERIAL CHANGES IN FINANCIAL CONDITION
At March 31, 1998, the Company had current assets of $10,243,100,
compared to $6,455,282 at December 31, 1997, for an increase of $3,787,818. Cash
increased by $3,742,869 from $6,171,515 to $9,914,384 during the three month
period, as a result of the Company completing the sale of an aggregate of
1,402,073 shares of the Company's authorized but unissued Common Stock and
235,757 shares of the Company's authorized but unissued Series "A" Preferred
stock for a total purchase price of $4,948,795 to FondElec Essential Services
Fund, L.P. (the "FondElec Transaction"), which is more particularly described in
the Company's report on Form 10-KSB for the fiscal year ended December 31, 1997,
as amended, which description is hereby incorporated by reference. Current
liabilities as of March 31, 1998 were $1,989,585, compared to $1,961,413 as of
December 31, 1997, for an increase of $28,172. The increase was due to by an
increase in amounts due to affiliates and was offset by a payment of accounts
payable.
At March 31, 1998, total assets were $21,116,125, compared to
$17,489,106 as of December 31, 1997, for an increase of $3,627,019. The increase
in total assets was due to the FondElec Transaction and purchases of equipment.
Total liabilities increased $46,527, from $3,110,140 as of December 31, 1997 to
$3,156,667 as of March 31, 1998. The increase in total liabilities is a result
of an increase in related party long-term debt related to additional accrued
interest and an increase in current liabilities. Total stockholders' equity
increased during the period by $3,580,492, from $14,378,966 at December 31,
1997, to $17,959,458 at March 31, 1998.
8
<PAGE>
B. MATERIAL CHANGES IN RESULTS OF OPERATIONS
For the three months ended year ended March 31, 1998, the Company had
revenues of $28,336 from the multi-channel video services provided in Caracas,
Venezuela by CVV, which manages the Venezuelan network. The Company did not have
revenues for the three months ended March 31, 1997. The cost of service for
CVV's revenues was $91,800 for the three months ended March 31, 1998.
Operating expenses for the three months ended March 31, 1998 were
$1,370,815 compared to $172,591 for the same period in 1997, for an increase of
$1,198,224. This increase was due to costs incurred in obtaining equity capital,
start-up expenses associated with the Company's current wireless
telecommunications projects and the depreciation, amortization and lease expense
from the Company's New Zealand assets and the Venezuelan assets. The Company's
operating loss was $1,434,279 for the three months ended March 31, 1998,
compared to $172,591 for the same period in 1997.
Interest income for the three months ended March 31, 1998 was $86,321.
The Company had no interest income during the same period in 1997. Interest
expense increased $6,600 from $25,672 for the three months ended March 31, 1997
to $32,272 for the same period in 1998. The increase was due primarily to
additional interest expense incurred by the Company under the related party
debt.
Minority interest in loss of subsidiaries was $4,096 for the three
months ended March 31, 1998 compared to $2,271 for the same period in 1997, for
an increase of $1,825. The increase relates to the Company's New Zealand
subsidiary and is primarily due to the minority shareholders' portion of the
increase in license lease fees.
As a result of the foregoing, the Company's net loss for the three
months ended March 31, 1998 was $1,376,134, compared to $195,992 for the three
months ended March 31, 1997, for an increase of $1,180,142.
C. LIQUIDITY AND CAPITAL RESOURCES
Since inception, the Company has funded its cash requirements at the
parent company level through debt and equity transactions. The proceeds from
these transactions were primarily used to fund the Company's investments in and
acquisition of start-up network operations, to provide working capital and for
general corporate purposes, including the expenses incurred in seeking and
evaluating new business opportunities. The Company's foreign subsidiary
interests have been financed by the Company through a combination of equity
investments and shareholder loans.
The Company's principal sources of funds are its available resources of
cash and cash equivalents. At March 31, 1998, the Company had cash and cash
equivalents of $9.9 million. The cash flow generated by the Company's operations
and projected data services network launches will not be sufficient to cover the
Company's projected operating expenses, general and administrative expenses and
start-up costs. Accordingly, the Company's cash and cash equivalents are being
depleted under current operating conditions. Nevertheless, the Company believes
that its cash and cash equivalents, together with the anticipated cash flow from
the operations it brings on line, will be sufficient to cover the Company's
operating expenses through 1999.
9
<PAGE>
If the Company elects to provide voice or video services using its
networks, the Company's current sources of funds are insufficient to fund the
buildout and launch of those service capabilities. The ability of the Company to
provide these services will be dependent upon the Company obtaining substantial
additional sources of funds to finance these projects. While the Company
believes that it may be able to obtain financing for new voice and video
launches through additional equity or debt financing or otherwise, no assurances
can be given that any such financing will be available, or that the Company
would be able to obtain any such financing on favorable terms.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See the section entitled "Legal Proceedings" in the Company's report on
Form 10-KSB for the year ended December 31, 1997, as amended.
ITEM 2. CHANGES IN SECURITIES
On February 25, 1998, the Company issued 1,402,073 of its common stock
and 235,757 shares of its Series "A" preferred stock in exchange for $4,948,795
of cash in connection with the FondElec Transaction. In addition, the Company
issued 699,695 of its common stock and 83,378 of its Series "A" preferred stock
in exchange for $7,831 of cash to Petrolera Argentina San Jorge, S.A.
("Petrolera") in connection with an equity investment into the Company by
Petrolera (the Petrolera Transaction"). The FondElec Transaction and Petrolera
Transaction are more particularly described in the Company's report on Form
10-KSB for the fiscal year ended December 31, 1997, as amended, the descriptions
of which are hereby incorporated by reference.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MATTERS SUBMITTED TO A VOTE OF THE COMPANY'S SHAREHOLDERS
None.
ITEM 5. OTHER INFORMATION
In March 1997, the Company entered into an agreement with a Guatemalan
entity to form a joint venture corporation, Wireless Communications Holdings -
Guatemala, S.A. ("WCH - Guatemala"), for the purpose of acquiring and operating
wireless network rights in Guatemala. Under that agreement, the Guatemalan joint
venture partner was to contribute the rights to commercialize two GHz of
spectrum to WCH - Guatemala in exchange for a 30% interest in the capital of WCH
- - Guatemala. The status of those spectrum rights is currently uncertain. See the
Company's report on Form 10-KSB for the year ended December 31, 1997, as
amended. As a result of the Guatemalan entity's failure to provide WCH -
Guatemala with the spectrum rights, the Company has instructed the entity that
held the shares of WCH - Guatemala in escrow to distribute the shares of WCH -
Guatemala which would have been held by the Guatemalan entity to the Company. As
a result of that action, the Company holds 100% of WCH - Guatemala.
In October 1997, Administracion E Inversiones Radiales, S.A. ("AIRSA"),
the holder of certain network rights in Panama and the Company's joint venture
partner in Wireless Communications Panama, S.A., received notice that its
license rights included the right to provide data and multi-channel video
services, with or without spectrum. Those rights were granted on a provisional
basis and for private or non-commercial use. AIRSA has made application with the
Panamanian government to convert its license from a private use license to a
commercial use license, and expects action on that request within the next 60
days.
In January 1998, Auckland Independent Television Service, Ltd.,
("AITS"), which is owned approximately 95% by the Company, was granted a
one-year renewal on the exclusive rights for the 40 GHz frequencies in the
Auckland, Christchurch and Wellington/Petone areas of New Zealand. Unlike AITS'
2.3 GHz licenses (which AITS leases from private entities), the 40 GHz rights
have not been granted by the New Zealand government to private enterprises as
"management rights" under the New Zealand Telecommunications Act. As a result,
the 40 GHz frequencies remain the property of the New Zealand government until
it determines if it will grant them to private companies as management rights.
The 40 GHz licenses are valid for terms of one year, and are subject to renewal
at the discretion of the government.
10
<PAGE>
ITEM 6. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
A. EXHIBITS.
None
B. REPORTS ON FORM 8-K
None
11
<PAGE>
SIGNATURES
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.
WIRELESS CABLE & COMMUNICATIONS, INC.
Date: May 15, 1998 BY /s/ E. ANDREW LOWE
--------------------------
E. Andrew Lowe
Principal Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 9,914,282
<SECURITIES> 0
<RECEIVABLES> 20,011
<ALLOWANCES> 0
<INVENTORY> 35,778
<CURRENT-ASSETS> 10,243,100
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,116,125
<CURRENT-LIABILITIES> 1,989,585
<BONDS> 0
0
36,123
<COMMON> 82,099
<OTHER-SE> 17,841,236
<TOTAL-LIABILITY-AND-EQUITY> 21,116,125
<SALES> 28,336
<TOTAL-REVENUES> 28,336
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<INCOME-PRETAX> (1,376,134)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,376,134)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,376,134)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.03)
</TABLE>
