<PAGE>
As filed with the Securities and Exchange Commission on June 27, 1995
Registration File No. 33-85296
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________________
GEOTEK COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
22-2358635
(I.R.S. Employer Identification Number)
20 CRAIG ROAD
MONTVALE, NEW JERSEY 07645
(201) 930-9305
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
ANDREW SIEGEL, ESQ.
GENERAL COUNSEL AND SECRETARY
GEOTEK COMMUNICATIONS, INC.
20 CRAIG ROAD
MONTVALE, NEW JERSEY 07645
(201) 930-9305
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
______________________________
With a copy to:
Wayne D. Bloch, Esq.
Gerald F. Stahlecker III, Esq.
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
(215) 568-6060
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the Registration Statement becomes effective.
______________________________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
<PAGE>
PROSPECTUS
GEOTEK COMMUNICATIONS, INC.
ISSUANCE AND SALE OF UP TO $36,000,000 OF COMMON STOCK AND
RESALE BY SELLING SHAREHOLDERS OF UP TO $36,000,000 OF COMMON STOCK
AND 1,000,000 SHARES OF COMMON STOCK
This Prospectus concerns the issuance and sale to the Selling Shareholders
(as defined herein), from time to time, of up to an aggregate of $36,000,000 of
the common stock, par value $.01 per share (the "Common Stock"), of Geotek
Communications, Inc., a Delaware corporation ("Geotek" or the "Company"), upon
the conversion of senior secured convertible notes, due March 1998, in the
aggregate principal amount of $36,000,000 (the "Notes"). The Notes were issued
by the Company to the Selling Shareholders on March 30, 1995 and are convertible
into Common Stock in accordance with an incremental conversion schedule
beginning on September 30, 1995. See "Selling Shareholders and Related
Information." All shares of Common Stock issuable upon conversion of the Notes
are hereinafter referred to as the "Note Shares."
This Prospectus also concerns the offer and sale by the Selling
Shareholders, from time to time, of the Note Shares and up to an aggregate of
1,000,000 shares of Common Stock issuable upon the exercise of warrants issued
by the Company to the Selling Shareholders in connection with their purchase of
the Notes and certain other notes issued by the Company in June 1994 (the
"Warrant Shares," and collectively with the Note Shares, the "Shares"). See
"Selling Shareholders and Related Information."
The Company's Common Stock is listed on the NASDAQ National Market ("NNM")
under the symbol "GOTK" and on the Pacific Stock Exchange ("PSE") under the
symbol "GEO." On June 20, 1995, the closing sale price for the Company's Common
Stock, as quoted on the NNM, was $7 7/8 per share.
It is presently anticipated that sales of Shares by the Selling
Shareholders hereunder will be effected, from time to time, (i) in ordinary
transactions on the PSE; (ii) through dealers or in ordinary broker transactions
on the NNM or otherwise; (iii) "at the market" to or through market makers or
into an existing market for the Shares; (iv) in other ways not involving market
makers or established trading markets, including direct sales to purchasers or
sales effected through agents; (v) through transactions in options (whether
exchange-listed or otherwise); or (vi) in combinations of any such methods of
sale. The Shares held by the Selling Shareholders will be sold at market prices
prevailing at the time of sale or at negotiated prices. Shares held by the
Selling Shareholders may also be sold hereunder by brokers, dealers, banks or
other persons or entities who receive such Shares as a pledgee of the Selling
Shareholders. The Selling Shareholders and brokers and dealers through whom
sales of Shares may be effected may be deemed to be "underwriters," as defined
under the Securities Act of 1933 (the "Securities Act"), and any profits
realized by them in connection with the sale of the Shares may be considered to
be underwriting compensation.
____________________________________
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5 HEREOF.
____________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
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UNDERWRITING PROCEEDS TO
PRICE DISCOUNTS PROCEEDS TO THE SELLING
TO PUBLIC AND COMMISSIONS THE COMPANY SHAREHOLDERS
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<S> <C> <C> <C> <C>
Per Share........... $(1) $(1)(2) $0(3)(4) $(1)(4)
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Total............... $(1) $(1)(2) $0(3)(4) $(1)(4)
- -----------------------------------------------------------------------------------------------------------------------------
(1) The Note Shares will be issued and sold to the Selling Shareholders upon
conversion of the Notes at conversion prices equal to 87.5% of the weighted
average of the sale prices of the Common Stock on the trading day next
preceding the date of conversion. It is anticipated that the Shares
registered for resale by the Selling Shareholders hereunder will be sold in
market or private transactions at prevailing prices, from time to time.
<PAGE>
(2) No underwriting discounts or commissions are payable in connection with the
issuance of the Note Shares upon conversion of the Notes.
(3) Upon issuance of the Note Shares in connection with the conversion of the
Notes, the principal amounts otherwise payable by the Company under the
Notes, up to $36,000,000 in the aggregate, will be satisfied. The Company
will not receive any proceeds from the sale of Shares by the Selling
Shareholders.
(4) The Company will pay all expenses of the offering of the Shares to which
this Prospectus relates, other than, in connection with sales of Shares by
the Selling Shareholders, any underwriting or broker-dealer discounts or
commissions agreed to be paid by the Selling Shareholders.
</TABLE>
____________________________________
The Date of this Prospectus is June 27, 1995
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<PAGE>
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at 7 World Trade Center, New York, NY 10048, and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained at prescribed
rates from the Public Reference Section of the Commission, Washington, D.C.
20549. The Company's Common Stock is listed on both the NNM and the PSE and
such reports, proxy statements and other information filed with the Commission
should also be available for inspection at the offices of the National
Association of Securities Dealers, Inc., Report Section, 1735 K Street, N.W.,
Washington, D.C. 20006, and at the PSE facilities located at 115 Sansome Street,
San Francisco, California.
The Company has filed with the Commission a registration statement on Form
S-3 under the Securities Act with respect to the securities offered hereby (such
registration statement, together with all exhibits thereto, is hereinafter
referred to as the "Registration Statement"). This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the
securities offered hereby, reference is hereby made to the Registration
Statement. Statements contained in this Prospectus as to the contents of any
document filed with, or incorporated by reference in, the Registration Statement
are not necessarily complete, and in each instance are qualified in all respects
by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company incorporates by reference into this Prospectus the documents
listed below:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1994 (as amended on Form 10-K/A filed on or about May 26, 1995);
(2) The Company's Quarterly Report on Form 10-Q for the three month
period ended March 31, 1995;
(3) The Company's Current Reports on Form 8-K, dated June 18, 1993 (as
amended on Form 8-K/A filed on or about July 12, 1993), June 8, 1994
(as amended on Form 8-K/A filed on or about June 27, 1995),
July 5, 1994 (as amended on Form 8-K/A filed on or about September 14,
1994), August 2, 1994 (as amended on Form 8-K/A filed on or about
October 13, 1994 and Form 8-K/A filed on or about May 25, 1995),
February 27, 1995 and May 26, 1995; and
(4) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, dated December 15, 1992.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the filing of a post-effective amendment to the
Registration Statement which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such reports and documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for all purposes to the extent that a statement contained herein or
in any other subsequently filed document which also is incorporated by reference
herein modifies
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<PAGE>
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide, without charge, to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of such person, a copy of all documents incorporated by reference in
this Prospectus, other than exhibits to such documents unless such exhibits are
specifically incorporated by reference herein. Requests for such copies should
be directed to Corporate Secretary, Geotek Communications, Inc., 20 Craig Road,
Montvale, New Jersey 07645; telephone number (201) 930-9305.
The Company will furnish its shareholders with annual reports containing
audited financial statements and reports by independent accountants. In
addition, the Company will distribute unaudited quarterly reports to its
shareholders for the first three quarters of each fiscal year.
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<PAGE>
RISK FACTORS
The Shares described herein involve a substantial degree of risk.
Prospective purchasers should carefully consider, among other things, the
following factors:
LIMITED OPERATING HISTORY; MANAGEMENT OF GROWTH
The Company entered the wireless communications industry in 1992 and,
therefore, has limited experience in developing, establishing and operating
wireless communications systems. To date, most of the Company's wireless
communications services experience has been in foreign markets and has involved
different technology than that to be employed by the Company in its United
States target markets. In addition, the Company's only experience to date in
the United States with respect to such services has been testing the Company's
digital wireless communications network ("GEONET-TM-") in Philadelphia,
Pennsylvania. Prospective purchasers of the Shares offered hereunder,
therefore, have limited historical financial information about the Company on
which to make a determination as to the prospects for the Company's wireless
communications operations or financial condition and as to an investment in the
Shares offered hereby.
Although the Company has added experienced senior management and hired over
28 people for various field service positions during the last year, the Company
will need to rapidly and significantly increase the number of technical, sales,
management and administrative personnel that it employs as the roll-out of
GEONET-TM- progresses. The Company's success will depend upon its ability to
continue to attract, motivate, train and manage additional employees.
Management's ability to manage the Company's growth effectively also will
require it to significantly expand its operational, financial and management
systems. The failure of the Company to manage its growth effectively would have
a material adverse effect on the Company's future operations.
DEFICIENCY OF EARNINGS TO FIXED CHARGES; CONTINUED LOSSES
On a consolidated basis, the Company experienced net losses from continuing
operations of $2.4 million, $50.4 million and $42.4 million for the years ended
December 31, 1992, December 31, 1993 and December 31, 1994, respectively. In
addition, the Company had a deficiency of earnings before interest, taxes,
depreciation and amortization ("EBITDA") of $0.9 million, $15.2 million and
$34.2 million for the years ended December 31, 1992, December 31, 1993 and
December 31, 1994, respectively. The Company anticipates that its net operating
losses from operations and its EBITDA deficiency will increase significantly
during the roll-out of GEONET-TM-. There can be no assurance that the Company
will ever operate at profitable levels or have positive EBITDA. Until
sufficient cash flow is generated from operations, the Company will have to
utilize its capital resources or external sources of funding to satisfy its
working capital needs.
NEED FOR ADDITIONAL FINANCING
The Company's existing cash on hand and expected cash flow from operations
will not be sufficient to fund its full roll-out of GEONET-TM- in the
United States. Based on the Company's projected roll-out schedule in its
36 United States target markets and its projected loading of subscribers in
these markets, the Company estimates that it will need at least an additional
$350.0 million of finacing to fund GEONET-TM-'s infrastructure costs as well
as operating losses and working capital needs. The Company's need for
additional financing will increase if the Company experiences delays in the
commercial implementation of GEONET-TM-, cost overruns or unanticipated cash
needs. Moreover, additional financing may be necessary to satisfy the terms
of certain financing transactions, including but not limited to, possible
mandatory redemption and repayment obligations of the Company in connection
with the Company's Series H Preferred Stock, Series I Preferred Stock,
Series K Preferred Stock, Series L Preferred Stock and the Notes. Under
certain circumstances, the Company may be required on October 31, 2000
to redeem the Series
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H Preferred Stock for an aggregate price of $40.0 million (plus any accrued but
unpaid dividends). In lieu of paying such redemption price in cash, the Company
may satisfy this obligation by paying all or any portion of the redemption price
in shares of Common Stock. In such event, the number of shares of Common Stock
to be issued will be determined by multiplying the redemption price to be paid
in Common Stock by 150% and dividing the resulting price by the market price of
the Common Stock. In addition, in the event of certain circumstances
constituting a change in control of the Company, the Company is obligated to
offer to redeem the Series I Preferred Stock, Series K Preferred Stock and
Series L Preferred Stock for their aggregate stated value, in each case
(assuming the issuance of 531,463 shares of Series L Preferred Stock which
Vanguard Cellular Systems, Inc. ("Vanguard") has agreed to purchase on
September 1, 1995) approximately $10.0 million (plus accrued but unpaid
dividends), payable in cash or shares of Common Stock at the Company's
option. An event of default under the Notes could result in an acceleration
of the Company's obligations thereunder to repay the unpaid balance of the
$36.0 million original principal amount thereof, plus an amount of interest
equal to the amount the holders thereof would otherwise be entitled to receive
through maturity.
Additional financing also may be required to fund, or as a result of the
consummation of, acquisitions of additional spectrum and businesses. The amount
of additional funding required will depend upon the timing of such expenditures,
the availability of cash flow from operations and, to the extent applicable, the
availability of lease and vendor financing. It is presently anticipated that
additional financing, if obtained, would be obtained from one or more sources,
including, but not limited to, equity or debt financing (whether through public
or private offerings), exercise of currently outstanding options and warrants,
strategic partners, joint ventures or a combination thereof. There can be no
assurance that additional financing will be available to the Company on
desirable terms or at all.
COMMERCIAL IMPLEMENTATION OF GEONET-TM-
The Company's current business plan contemplates the commercial
implementation of GEONET-TM- in 36 target markets in the United States between
the Summer of 1995 and the end of 1997. In each of these markets, the Company
expects to gradually add subscribers and increase its service offerings. The
Company expects to continue to generate negative cash flow in each of its target
markets until it achieves an adequate subscriber base in each such market.
The successful and timely implementation of GEONET-TM- will depend upon a
number of factors, many of which are beyond the control of the Company,
including, but not limited to, the timely and cost-effective manufacture,
construction and integration of the system infrastructure and software, the
acquisition and control of additional radio spectrum, the procurement and
preparation of base station and remote sites, the receipt of all necessary
regulatory approvals, the establishment of effective sales and marketing
organizations and distribution channels and the need for additional financing.
See "-- Dependence on Third Party Providers; Adaptation of Technology for
Commercial Application," "-- Need for Spectrum; Need for Transmission Sites," "-
- - Government Regulation" and "-- Need for Additional Financing." The failure or
delay with respect to any of these items could adversely affect the timing of
the implementation of GEONET-TM- in one or more of the Company's target markets,
which could have a material adverse effect on the Company.
The Company will make continuing hardware and software modifications to
GEONET-TM- prior to, during and after the system's commercial roll-out. For
example, the Company must integrate the initial GEONET-TM- data applications,
which are expected to be completed in the fourth quarter of 1995, with the
initial GEONET-TM- voice applications. Subsequent applications will also need
to be integrated with existing GEONET-TM- applications. There can be no
assurance that the Company will be able to satisfactorily complete such
modifications and/or integration efforts or that they will be able to be
completed in a manner that enables the Company to offer its GEONET-TM- services
on a profitable basis. A failure by the Company to
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<PAGE>
satisfactorily complete any such modifications or integration efforts or to
complete them on a cost-effective basis could have a material adverse effect on
the Company.
To date, no other wireless service provider has been successful at
providing the level of integrated voice and data services contemplated to be
offered by the Company. Accordingly, in implementing GEONET-TM-, the Company
may encounter unforeseen technical issues. In addition, each of the Company's
United States target markets is expected to present unique technical issues due
to differences in geography and the level of local development. Technical
difficulties in the operation and/or performance of GEONET-TM- also may be
experienced as additional subscribers are added to the system in a given market
or as the coverage area in any market is increased. There can be no assurance
that the Company will be able to adequately address any such issues in any given
market or that such issues will be able to be addressed in a cost-effective
manner. Any failure by the Company to adequately address such issues or to
address them in a cost-effective manner could have a material adverse effect on
the Company.
DEPENDENCE ON THIRD PARTY PROVIDERS; ADAPTATION OF TECHNOLOGY FOR COMMERCIAL
APPLICATION
The Company's digital wireless telecommunications system is being developed
and commercialized by PowerSpectrum Technology, Ltd. ("PowerSpectrum"), a joint
venture between the Company and Rafael Armament Development Authority
("Rafael"), an agency of the Government of the State of Israel. Although the
Company owns a 56% interest in PowerSpectrum on a fully diluted basis and holds
the non-Israel worldwide rights to license, market, distribute and sell the
systems utilizing the technology developed by PowerSpectrum, the development of
the technology and systems is dependent in large part upon the efforts of Rafael
to adapt an advanced digital wireless technology known as Frequency Hopping
Multiple Access-TM- ("FHMA-TM-") from a military to a commercial application, to
integrate the FHMA-TM- technology with other digital technologies required for
optimal commercial deployment of GEONET-TM- and, as discussed below, for the
cost-effective manufacture of the base stations. In this regard, approximately
90 employees of Rafael are presently engaged on a full-time subcontract basis in
the development of FHMA-TM-. If Rafael reduces its commitment to PowerSpectrum
or if Rafael's continuing development efforts are not successful, the Company's
prospects could be materially adversely affected.
Neither the Company nor PowerSpectrum possess the expertise necessary to
manufacture the system architecture, hardware and mobile subscriber units
necessary for the commercial implementation of GEONET-TM-. Rafael has been
contracted by PowerSpectrum to manufacture the system hardware for GEONET-TM-.
Third parties, including Mitsubishi Consumer Electronics America, Inc. and
Hughes Network Systems, Inc., will manufacture subscriber units and certain
other components of the system hardware for GEONET-TM-. As a result, the
Company lacks direct control over the manufacturing process and the delivery of
equipment. There can be no assurance that such third parties will deliver such
equipment on a timely basis or that the Company will be able to successfully
integrate such components and hardware in a cost effective system on a timely
basis, if at all. The Company has only a single manufacturing source for
certain of the components of GEONET-TM- system hardware, including the base
stations and subscriber units. Although the Company believes that it can obtain
all components necessary to build GEONET-TM- from other sources, delays may be
encountered in the event of a component shortage because of the time it may take
to identify substitute sources and manufacture substitute components. A failure
by the Company to obtain hardware components on a timely basis or at
satisfactory prices could adversely affect the ability of the Company to roll-
out and market GEONET-TM-, which could have a material adverse effect on the
Company. See "-- Commercial Implementation of GEONET-TM-."
The Company has engaged International Business Machines Corporation ("IBM")
to manage the preparation and construction of each of its base stations and
remote sites. This arrangement is terminable
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at will by either party. A failure by IBM to manage the preparation and
construction of the Company's base stations and remote sites could have a
material adverse effect on the Company. See "-- Commercial Implementation of
GEONET-TM-."
COMPETITION
Although the Company believes that the quality, array and flexibility of
services to be offered by the Company through GEONET-TM- will meaningfully
differentiate such services from those offered by other wireless communications
providers in the Company's target markets, the Company will fact significant
competition from such other providers. The Company expects to experience
competition for each type of service it intends to offer from existing dispatch,
cellular telephony, paging and public data service providers. In addition, the
Company expects to experience competition from manufacturers of Private Mobile
Radio ("PMR") equipment, which target existing private network operators and
specialized mobile radio ("SMR") customers and urge them to build or upgrade
their own private networks rather than utilize SMR service providers. Many of
these providers and manufacturers are more established, have greater name
recognition, have larger sales staffs and/or have greater financial resources
than the Company.
NEXTEL Communications, Inc. ("NEXTEL") has announced plans to construct a
nationwide digital Enhanced Specialized Mobile Radio ("ESMR") network and is
offering services in several cities. NEXTEL has also secured a significant
number of 800 MHz SMR channels in twenty of the largest United States markets.
In addition, OneComm Corp. ("OneComm") has constructed an ESMR network in
several cities. Furthermore, several large SMR providers are positioning
themselves to compete for wireless voice and data traffic and have announced
plans to construct digital ESMR networks utilizing equipment manufactured
primarily by Motorola. These providers include Dial Page, Inc. ("Dial Page")
and Pittencrieff Communications, Inc. ("Pittencrieff"). Motorola has announced
agreements to transfer its 800 MHz SMR licenses to NEXTEL, OneComm and Dial Page
in consideration for equity positions in those companies. Motorola will remain
the largest SMR service provider in the 900 MHz band utilizing analog equipment,
and to the extent that Motorola is the largest provider of PMR equipment, such
company may be deemed to be an indirect competitor of the Company. In 1994,
NEXTEL announced plans to acquire OneComm and Dial Page.
The Company also may face competition from technologies and services
introduced in the future. In March 1995, the Federal Communications Commission
("FCC") completed auctions for Personal Communications Services ("PCS") licenses
in most telecommunications markets within the United States. PCS could compete
with services to be offered by the Company. The FCC also may license additional
spectrum for other wireless services. Although satellite technology currently
is prohibitively expensive for use in urban areas, it is possible that such
technology ultimately could be developed to permit urban use equal to or
superior to that available through SMR systems, which would result in increased
competition for the Company's services. The commercialization of any such
technologies could have a material adverse effect on the Company. See "-- Rapid
Technological Changes."
Many of the target customers for GEONET-TM- currently use other wireless
communications services. In order to be successful, the Company will need to
migrate a portion of its target customers from their existing services to those
provided by the Company over GEONET-TM-. The Company's ability to migrate its
target customers over to its services will be highly dependent on the perceived
utility of the Company's services to its target customers as compared to the
services currently utilized by such customers. Because there currently is no
integrated wireless communications network commercially available that is
comparable to that expected to be offered by the Company over GEONET-TM-, the
extent of the demand for the Company's wireless communications services cannot
be predicted with any degree of certainty. The demand for the Company's
integrated digital wireless communications services also could be affected by
other matters beyond
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<PAGE>
its control, such as the future cost of subscriber equipment, marketing and
pricing strategies of competitors and general economic conditions.
The Company also experiences competition for each of its products and
services other than GEONET-TM- in the markets in which it sells such products
and services. Such competition is expected to remain strong for the foreseeable
future.
The Company also expects to experience competition for radio spectrum from
existing and future providers of wireless communications services. The Company
also expects to experience competition for communications tower space. See "--
Need for Spectrum; Need for Transmission Sites."
GOVERNMENT REGULATION
The licensing, construction, operation and acquisition of SMR systems in
the United States are regulated by the FCC under the Communications Act of 1934,
as amended (the "Communications Act"). During 1994, the FCC initiated several
regulatory proceedings with wide-ranging implications for the wireless
telecommunications industry. A primary intent of these recent amendments was to
encourage competition among mobile communications service providers by removing
regulatory distinctions between common carriers such as cellular telephone
companies and private carriers such as SMR service providers. Although the
Company will not be required to comply with most of these regulatory changes
prior to 1996, the regulations may materially impact the Company's operations in
the future. For example, the Company will be required to provide services on a
"nondiscriminatory basis" and on terms that are not "unjust and unreasonable,"
as such terms are defined by the Communications Act. In addition, the FCC may,
in the future, require that the Company provide equal access to its wireless
services to other wireless and wireline communications providers and
interconnection to wireline and wireless entities. The FCC may, in the future,
specify by rule other common carrier regulations that would apply to commercial
mobile service providers such as the Company. Moreover, the FCC did not delay
the effective date of the applicability of its rules concerning foreign
investment in and management and/or participation in any entity holding an FCC
license. However, the FCC did provide a mechanism for newly re-classified
providers to petition for a waiver of these limitations. The Company filed a
petition to retain its foreign directors and officers, including certain
executive officers of the Company the loss of the services of which could
adversely effect the conduct of the Company's business, which petition remains
pending before the FCC. If the waiver is not granted, this limitation could
restrict the Company's ability to retain foreign directors and officers. See "-
- - Dependence on Key Personnel." These limitations may also affect the Company's
ability to secure foreign financing through the sale of shares of Common Stock
or Common Stock equivalents and to issue Common Stock in the acquisition of
foreign subsidiaries. The FCC may specify by rule other common carrier
regulations that would apply to commercial mobile services providers such as the
Company. The Company cannot predict the effect of any of these regulations or
any future regulation adopted by the FCC on the Company's operations. Moreover,
there has been little experience in the interpretation and implementation of
these regulations. Future interpretations or practices with respect to such
regulations could have a material adverse effect on the Company.
The Company has been granted a waiver to construct and activate certain
systems it has acquired. In the event the Company fails to construct or
activate such systems in accordance with the dates set forth in the waiver, the
Company could lose the waiver and lose all of the frequencies covered by such
waiver which have not been constructed or activated. The Company's waiver is
currently subject to a pending challenge that was filed by a third party with
which the Company failed to negotiate a satisfactory management agreement. The
Company believes that this challenge is without merit and is vigorously opposing
it. A loss of the frequencies
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covered by such waiver that have not been constructed or activated would have a
material adverse effect on the Company.
The Company intends to acquire additional SMR licenses. There can be no
assurance that the Company will be successful in its efforts to negotiate the
acquisition of all licenses it seeks to acquire or in its efforts to obtain
regulatory approval therefor. In addition, there can be no assurances that any
licenses currently owned or acquired in the future by the Company will be
renewed. The failure of the Company to renew existing or future SMR licenses
would have a material adverse effect on the Company.
All of the equipment utilizing the Company's technology, to the extent it
is used to send or receive signals, must meet FCC criteria. Although GEONET-TM-
base stations have received such approval and the mobile subscriber units have
been designed to meet FCC standards, there can be no assurance that the
subscriber units will meet such criteria. A failure of the Company's subscriber
units to meet FCC standards could have a material adverse effect on the Company.
Future changes in regulation or legislation affecting digital wireless
telecommunications services or the allocation by the FCC or Congress of
additional spectrum for services that compete with such service could adversely
affect the Company's business.
NEED FOR SPECTRUM; NEED FOR TRANSMISSION SITES
The Company will require additional spectrum to add capacity and
to service anticipated demand in certain of its target markets, including
in certain of its 1995 and 1996 markets. Moreover, a significant
portion of the Company's existing radio spectrum in Philadelphia, New York City,
Washington, Chicago, Dallas and Houston is subject to management agreements with
Motorola. The Company intends to enter into several of these markets in 1995.
The Company cannot utilize this radio spectrum until such management agreements
are terminated. In November 1994, Motorola and NEXTEL entered into a consent
decree with the federal government pursuant to which NEXTEL and Motorola agreed
that, upon effectiveness of the consent decree, they will take steps to reduce
their ownership and management of radio spectrum in certain U.S. markets
including each of the above-referenced markets, so that they collectively own
and/or manage no more than thirty 900 MHz channels in such markets. The consent
decree further provides that any Motorola management agreements will be
terminable at the sole option of the party owning the license upon 120 days
notice to Motorola. The consent decree allows Motorola to refuse to terminate
such management agreements when Motorola and NEXTEL together control (including
by management agreement) 30 or fewer 900 MHz channels in the licensee's market
(including the managed channel as to which the termination of the agreement is
being sought). The consent decree is subject to, and expected to become
effective upon, approval of the consent decree by the United States District
Court for the District of Columbia. There can be no assurance that the District
Court will approve the consent decree, or will approve it in its current form.
There also can be no assurances that Motorola will not retain its management
rights over some or all of the radio spectrum owned by the Company in these U.S.
markets. In the event the Company is unable to terminate any of the Motorola
management agreements or such ability is delayed, the Company's ability to enter
into such markets may be materially adversely affected.
As to the spectrum that the Company has entered into agreements to
acquire, certain of such agreements are subject to regulatory approval, which
the Company believes will be forthcoming prior to its expected roll-out in
each such market. There can be no assurance that such approvals will be
received on a timely basis or at all. The failure by the Company to obtain
any such approvals could have a material adverse effect on the Company.
-10-
<PAGE>
The Company intends to acquire sufficient spectrum in each of its target
markets in which it does not have sufficient spectrum to initiate service or
service anticipated demand. The Company expects the FCC to auction spectrum
during 1995 in each market in which the Company desires to acquire additional
spectrum. Although the Company intends to bid on such spectrum to the extent
such spectrum is needed, there can be no assurance that the Company will be the
successful bidder for any radio spectrum auctioned by the FCC. In addition, the
Company cannot predict the cost of obtaining licenses for additional spectrum
since such costs are determined by factors beyond the Company's control,
including, but not limited to, the availability of licenses and the number of
competitors seeking to acquire licenses in any particular market. Although the
Company believes that it will be able to acquire licenses in any particular
market. Although the Company believes that it will be able to acquire
sufficient spectrum in each of its U.S. markets, there can be no assurance that
the Company will be able to make such acquisitions on a timely basis, if at all,
or that such acquisitions will be able to be made on commercially acceptable
terms. A failure by the Company to obtain sufficient radio spectrum on
commercially acceptable terms and/or on a timely basis could have a material
adverse effect on the Company. See "-- Commercial Implementation of
GEONET-TM-."
There are only a limited number of existing communications towers capable
of providing the Company with optimal coverage area for its radio transmissions
and that are capable of supporting the Company's transmission equipment. In the
event the Company cannot obtain leases for existing towers, it may be required
to purchase sites, receive necessary permits and build such towers, a process
which the Company estimates could take up to a year to complete for each tower.
If the Company is required to build new towers, the roll-out of GEONET-TM- in
one or more target markets could be delayed, which could have a material adverse
effect on the Company.
RAPID TECHNOLOGICAL CHANGES
The telecommunications industry is subject to rapid and significant changes
in technology which could lead to new products and services that compete with
those offered by the Company or could lower the cost of current competing
products and services to the point where the Company's products and services
become non-competitive and the Company is required to reduce the prices of its
services. While the Company is not aware of any proposed changes that will
materially affect the attractiveness of its product and service offerings, the
effect of technological changes on the businesses of the Company cannot be
predicted. In the future, the Company expects to experience competition from
new technologies such as ESMR networks, PCS and possibly satellite technology,
as well as from advances with respect to existing technologies such as cellular,
paging and mobile data transmission. See "-- Competition."
RISKS OF INTERNATIONAL BUSINESS
The Company operates in and sells its products and services to clients in
various countries and certain of its products and components are manufactured
abroad. The Company's research and development activities are reliant upon
foreign providers. Accordingly, the Company is subject to the risks inherent in
conducting business across national boundaries, including, but not limited to,
currency exchange rate fluctuations, international incidents, military
outbreaks, economic downturns, government instability, nationalization of
foreign assets, government protectionism and changes in governmental policy, any
of which risks could have a material adverse impact on the Company.
-11-
<PAGE>
DEPENDENCE ON KEY PERSONNEL
The success of the Company will depend greatly upon the active
participation and the experience of its management. The loss of the services of
Yaron Eitan, the Company's Chief Executive Officer, could adversely affect the
conduct of the Company's business. In addition, the successful implementation
of the Company's business plan will depend, to a large extent, upon the ability
of the Company's and its subsidiaries' engineers and scientific personnel to
perfect and improve upon existing and proposed products. The loss of some or
all of such personnel, the inability of the Company to attract additional
personnel, or the inability of such persons to design such systems or to
continue product enhancement will directly inhibit the ability of the Company to
sell its products and services and to operate profitably.
INFLUENCE BY SIGNIFICANT STOCKHOLDERS; PREEMPTIVE RIGHTS
As of the date hereof, approximately 14.5 million shares, or 24.6% of the
total voting power of the Company's Common Stock (on a fully diluted basis but
without giving effect to the exercise of the options held by Vanguard), were
beneficially owned by the directors and executive officers of the Company and
their affiliates. Consequently, the Company's directors and executive
officers will be able to exert significant influence with respect to all
matters upon which stockholder approval is required.
Of the amounts discussed above, 5,505,510 shares, or 9.7% of the Company's
Common Stock on a fully diluted basis, are beneficially owned by a group of
investors including George Soros (the "Soros Group"), whose affiliate, Purnendu
Chatterjee, is a director of the Company. In addition, as of the date hereof,
Vanguard owned 2.8 million shares or 5.4% of the Company's outstanding Common
Stock. However, assuming full exercise of the options held by Vanguard as of
such date, 8.1 million shares, or 14.3% of the Company's Common Stock on a
fully diluted basis, would be beneficially owned by Vanguard. With respect
to certain issuances of voting securities by the Company, Vanguard and the
Soros Group have the preemptive right to purchase voting securities of the
Company, at the same price and the same terms as the Company may offer to
third parties, in an amount sufficient to maintain Vanguard's or the Soros
Group's percentage interests, as applicable, in the voting securities of the
Company on a fully diluted basis.
Winston Churchill, the Chairman of the Board of the Company, Yaron Eitan,
the President and Chief Executive Officer of the Company, Evergreen Canada-
Israel Investment & Co., Ltd. ("Evergreen"), S-C Rig Investments-III, L.P., the
Soros Group's vehicle for investment in the Company ("S-C Rig"), and Vanguard
have agreed to vote their shares to elect a representative of each of Evergreen,
S-C Rig and Vanguard, respectively, to the Board of Directors of the Company
(although no representative of Evergreen currently is a member of the Board of
Directors). This obligation shall continue with respect to each of the parties
for so long as Vanguard, S-C Rig and Evergreen beneficially own at least
2,500,000, 2,500,000 and 1,000,000 shares of Common Stock, respectively. In the
event that the beneficial ownership of any such party drops below its designated
ownership level, then the agreement terminates with respect to such party only
and the agreement continues in full force and effect with respect to the
remaining parties thereto. Mr. Purnendu Chatterjee is the designated
representative of S-C Rig; and Mr. Haynes G. Griffin is the designated
representative of Vanguard. In addition, the Company has agreed, pursuant to an
agreement entered into in connection with the Company's acquisition of Metro Net
Systems, Inc. to use its best efforts to cause the election of Mr. Richard
Krants as a director of the Company through the 1996 fiscal year. The Company
has also agreed to use its best efforts to have Mr. Eitan elected as a member of
the Board of Directors during the term of his employment.
-12-
<PAGE>
PATENT ISSUES
The Company protects its proprietary information by way of confidentiality
and non-disclosure agreements with employees and third parties who may have
access to such information. The Company continually reviews its technology
developments in order to file patent applications and has filed patent
applications with respect to certain aspects of the FHMA-TM- technology and
GEONET-TM- in Israel and expects to file additional patent applications in
Israel and the United States. Generally, the Company intends to file all patent
applications in the United States and Israel and in such other countries as it
deems appropriate. There can be no assurance that such applications will be
granted. There can be no assurance that any patents issued will afford
meaningful protection against competitors with similar technology or that any
patents issued will not be challenged by third parties. There also can be no
assurance that others will not independently develop similar technologies,
duplicate the Company's technologies or design around the patented aspects of
any technologies developed by the Company. Many patents and patent applications
have been filed by third parties with respect to wireless communications
technology. The Company does not believe that its technology infringes on the
patent rights of third parties. However, there can be no assurance that certain
aspects of the Company's technology will not be challenged by the holders of
such patents or that the Company will not be required to license or otherwise
acquire from third parties the rights to use certain technology. The failure to
overcome such challenges or obtain such licenses could have a material adverse
effect on the Company's operations.
DIVIDENDS ON COMMON STOCK NOT LIKELY
The Company has not declared or paid any cash dividends on its Common Stock
since commencing operations and does not anticipate paying any dividends on its
Common Stock in the foreseeable future. At present, the Company is obligated to
pay, for a five-year period following the issuance of the Series H Preferred
Stock, cumulative dividends of $2,000,000 per year on the Series H Preferred
Stock, in cash, and, for a five-year period following the issuance of the Series
I Preferred Stock and Series K Preferred Stock, respectively, cumulative
dividends equaling $700,000 per year on the Series I Preferred Stock and
$700,000 per year on the Series K Preferred Stock, in cash or shares of Common
Stock of the Company, before any cash dividends may be paid on its Common Stock.
In addition, the Company is presently obligated to pay cumulative annual
dividends of $750,000 per year on the Series L Preferred Stock (assuming the
issuance of 531,463 shares of Series L Preferred Stock which Vanguard has agreed
to purchase on September 1, 1995), in cash or additional shares of Series L
Preferred Stock, and cumulative annual dividends of $988,125 per year on the
Series M Preferred Stock, in cash or shares of Common Stock, before any cash
dividends may be paid on its Common Stock. At present, the Company is current in
payment of all required dividends on its outstanding preferred stock. In
addition, the terms of certain indebtedness of the Company prohibit, during the
term of such indebtedness, the declaration or payment of any dividend on the
Company's Common Stock (other than in shares of such Common Stock).
SHARES OF COMMON STOCK RESERVED FOR ISSUANCE
As of the date hereof, the Company had an aggregate of approximately
51,400,000 issued and outstanding shares of Common Stock. In addition,
as of such date, the Company had reserved for issuance an aggregate of
approximately 28,500,000 shares of Common Stock issuable pursuant to (i)
outstanding vested and non-vested options, warrants and similar rights,
(ii) conversion of other outstanding equity securities of the Company
(including shares issuable upon conversion of the Company's preferred stock),
(iii) conversion of the Notes issued to the Selling Shareholders, and (iv)
contingent obligations to issue additional shares. Pursuant to the Company's
Restated Certificate of Incorporation, the Company currently has 86,000,000
authorized shares of Common Stock. The Company has included in its Proxy
Statement to be delivered to shareholders in connection with its 1995 annual
meeting of shareholders, a proposal that the shareholders of the Company
approve an amendment to the Restated Certificate of Incorporation which would
increase the authorized number of shares of Common Stock to 99,000,000, and
a proposal that the shareholders of the Company approve an increase in the
number of shares issuable under the Company's employee stock option plan
by 1,750,000 shares. Subject to certain limitations, the persons holding
such options, warrants and convertible securities may obtain the shares of
Common Stock underlying such options, warrants and convertible
-13-
<PAGE>
securities at any time. The issuance of a large number of shares of Common
Stock would dilute the percentage interest of other existing stockholders of the
Company.
SHARES OF COMMON STOCK ELIGIBLE FOR SALE; DILUTION UPON FAILURE TO EFFECT
CERTAIN REGISTRATIONS
The Company has in the past registered for offer and sale under the
Securities Act certain of the issued and outstanding shares of Common Stock and
certain of the shares of Common Stock issuable upon the exercise or conversion,
as applicable, of outstanding options, warrants and convertible securities held
by the Company's stockholders, including certain officers, directors, employees
and "affiliates" of the Company (as such term is defined pursuant to the
Exchange Act). The sale of such shares would have been subject to substantial
limitations in the absence of such registration. A substantial number of such
shares may still be held by the registered holders thereof and available for
resale under currently effective registration statements. In addition, certain
stockholders of the Company hold the right (subject to certain conditions) to
require that the Company register for offer and sale issued and outstanding
shares of Common Stock and/or shares of Common Stock issuable upon the exercise
or conversion, as applicable, of options, warrants and convertible securities.
Sales of substantial amounts of such shares could adversely affect the market
value of the Common Stock and, in the case of convertible securities, may effect
a dilution of the book value per share of Common Stock, depending upon the
timing of any such sales.
In the event the Company fails to maintain the effectiveness of the
Registration Statement to which this Prospectus relates, the Company will be
obligated to issue to the Selling Shareholders a number of shares of Common
Stock equal to 10% of the sum of the Note Shares and Warrant Shares (plus any
shares of Common Stock issued to such Selling Shareholders as a result of this
provision) for each 10 consecutive trading day period that the effectiveness of
such Registration Statement is not maintained at any time prior to the date that
the Company is entitled to deregister the transactions covered thereby. In
addition, the Company is obligated to issue warrants to purchase shares of
Common Stock to holders of the Company's Series M Preferred Stock if a
registration statement covering the resale of the shares of Common Stock
issuable upon conversion of the Series M Preferred Stock is not declared
effective by September 29, 1995 and in certain other circumstances. In the event
the shares of Common Stock or warrants to purchase Common Stock are issued as a
result of the Company's failure to effect or maintain the effectiveness of any
such registration statements, holders of Common Stock may experience
significant dilution. In addition, sales of substantial amounts of any such
shares could adversely affect the market value of the Common Stock.
TRANSACTIONS WITH AFFILIATES
During the period since its inception, the Company has undertaken a wide
variety of financing and merger/acquisition activity which has resulted in its
present corporate and financial structure. Included in such activity have been
transactions which have involved persons who now serve, or who did serve at the
time, as directors and officers of the Company or persons or entities related to
such persons. In every instance where such transactions have involved any such
persons or entities, the specific transaction has been approved unanimously by
directors of the Company, including all disinterested and outside directors,
with the affected parties abstaining. It is the Company's view that each such
transaction has been on terms no less favorable to the Company than other
similar transactions available to the Company with unaffiliated parties, if
available at all. In most of such instances, such transactions have been the
Company's only recourse to meet financing needs and/or business goals. Despite
the foregoing, prospective purchasers may wish to consider the circumstances in
which such transactions were made, the terms of such transactions and the
Company's possible alternative courses of action. For a detailed discussion of
such related party transactions, see Item 13 of the Company's Annual Report(s)
on Form 10-K incorporated by reference into this Prospectus and the consolidated
financial statements (and notes thereto) contained therein.
-14-
<PAGE>
SELLING SHAREHOLDERS
AND RELATED INFORMATION
On March 30, 1995, pursuant to a Note and Warrant Purchase Agreement dated
as of March 20, 1995, the Company consummated a private transaction pursuant to
which it issued and sold to the Selling Shareholders the Notes and five-year
warrants to purchase 700,000 shares of Common Stock at an exercise price of
$8.125 per share (the "New Warrants"). The aggregate gross proceeds to the
Company from the issuance and sale of the Notes and New Warrants was
$36,000,000, less $25,000,000, plus accrued and unpaid interest thereon, used by
the Company to retire certain senior secured notes, having an aggregate
principal amount of $25,000,000, that were issued and sold by the Company to the
Selling Shareholders in June 1994 (the "Old Notes'). In connection with the
issuance and sale of the Old Notes, the Company issued to the Selling
Shareholders five-year warrants to purchase 300,000 shares of Common Stock at an
exercise price of $7.875 per share (the "Old Warrants"). The shares of Common
Stock issuable by the Company upon the exercise of the New Warrants and Old
Warrants have been collectively defined herein as the "Warrant Shares."
The Notes bear interest at the rate of 14.75% per annum, payable quarterly
until maturity. During each four month period beginning September 30, 1995,
February 1, 1996 and June 1, 1996, up to $12,000,000 of the Notes (but no more
than $250,000 on any one day) may be converted, from time to time, by the
Selling Shareholders into shares of Common Stock at a conversion price equal to
87.5% of the weighted average of the sale prices of the Common Stock on the
trading day next preceding the date of conversion. The Company may prepay the
Notes at any time for an aggregate amount equal to the outstanding principal
amount thereof, plus (i) an amount equal to the total amount of interest payable
to maturity less the aggregate amount of interest theretofore paid with respect
to the Notes and (ii) such number of warrants as will allow the holder to
maintain its ability to acquire Note Shares as if the Notes remained
outstanding.
The Selling Shareholders are listed below. Included below concerning each
Selling Shareholder is the total amount and percentage of the Company's Common
Stock beneficially owned by such person, the amount subject to sale hereunder
and the resulting amount and percentage if all Shares offered hereby which are
owned by such person or entity are sold. Except as described herein, neither of
the Selling Shareholders has held any position or office, or had any other
material relationship with the Company during the past three years.
<TABLE>
<CAPTION>
PRE-OFFERING(1)(2) POST-OFFERING(3)
------------------ ----------------
TOTAL TOTAL
NUMBER NUMBER
OF SHARES OF SHARES
BENEFICIALLY PERCENTAGE SHARES BENEFICIALLY PERCENTAGE
SELLING SHAREHOLDERS OWNED OF CLASS (4) OFFERED OWNED OF CLASS(4)
- -------------------- ------------ ------------ ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
The SC Fundamental 4,052,094 7.31% 4,052,094 0 0
Value Fund, L.P. (5)(6)
SC Fundamental Value 2,172,396 4.06% 2,172,396 0 0
BVI, Ltd. (6)(7)
<FN>
- ----------------
-15-
<PAGE>
(1) Beneficial ownership figures include all Common Stock represented by shares
of issued and outstanding Common Stock as well as shares of Common Stock
issuable upon exercise or conversion of outstanding warrants, options and
convertible securities, including shares of Common Stock issuable upon
exercise of the New Warrants and Old Warrants and upon conversion of the
Notes. Neither of the Selling Shareholders beneficially owns any Common
Stock other than the Note Shares and the Warrant Shares.
(2) Assumes the full conversation of the Notes in the aggregate principal
amount of $36,000,000 at a conversion price equal to 87.5% of the weighted
average of the sale prices of the Common Stock as reported on the NNM on
June 20, 1995 ($7 7/8 per share), or 5,224,490 shares of Common Stock.
(3) Assumes the sale of all Shares offered by this Prospectus by each Selling
Shareholder to third parties unaffiliated with the Selling Shareholders.
(4) These percentages are calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder, without giving effect to the 60 day limitation regarding
conversion or exercise of convertible securities and warrants.
(5) Represents 3,390,694 Note Shares and 661,400 Warrant Shares.
(6) Both the general partner of The SC Fundamental Value Fund, L.P., SC
Fundamental, Inc., and the investment manager of SC Fundamental Value BVI,
Ltd., SC Fundamental BVI, Inc., are controlled by Messrs. Gary H. Siegler
and Peter M. Collery. Such individuals may be deemed to beneficially own
the Shares owned by the Selling Shareholders. Messrs. Siegler and Collery
disclaim beneficial ownership of the Shares.
(7) Represents 1,833,796 Note Shares and 338,600 Warrant Shares.
</TABLE>
LEGAL MATTERS
The validity of the Shares of Common Stock offered hereby will be passed upon by
Klehr, Harrison, Harvey, Branzburg & Ellers, Philadelphia, Pennsylvania. Such
firm and certain partners of such firm beneficially own, in the aggregate,
135,363 shares of the Company's Common Stock.
-16-
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No person is authorized to give any information or to make any representation
not contained or incorporated by reference in this Prospectus, and if given or
made, such information or representation must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that there
has been no change in the facts set forth in this Prospectus or in the affairs
of the Company since the date hereof. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any securities other than
those to which it relates or an offer to sell or a solicitation of an offer to
buy any securities in any jurisdiction in which such offer or solicitation is
not authorized, or in which the person making such offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make such an
offer or solicitation in such jurisdiction.
TABLE OF CONTENTS
PAGE
----
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Incorporation of Certain Information
by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Selling Shareholders and Related
Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
GEOTEK COMMUNICATIONS, INC.
ISSUANCE AND SALE OF UP TO
$36,000,000 OF COMMON STOCK
AND
RESALE BY SELLING SHAREHOLDERS
OF UP TO $36,000,000 OF COMMON
STOCK AND 1,000,000 SHARES OF
COMMON STOCK
___________________________________
PROSPECTUS
JUNE 27, 1995
___________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an itemized statement of all expenses incurred or to be
incurred in connection with the issuance and distribution of the securities to
be registered:
<TABLE>
<S> <C>
Registration fee* . . . . . . . . . . . . . . . . . . . $15,086.20
Blue sky filing fees and expenses . . . . . . . . . . . 5,000.00
Transfer agent and registration fee . . . . . . . . . . 1,000.00
Printing and mailing expenses . . . . . . . . . . . . . 5,000.00
Legal fees and expenses . . . . . . . . . . . . . . . . 20,000.00
Accounting fees and expenses. . . . . . . . . . . . . . 7,500.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . . 5,000.00
Total . . . . . . . . . . . . . . . . . . . . . . . $58,586.20
<FN>
____________________
*Exact; all other fees and expenses are estimates.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
A. The Delaware Corporation Law provides that, to the extent that any
director, officer, employee or agent of the Company has been successful on the
merits or otherwise in defense of any action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action by or in the
right of the Company) which he was a party to by reason of the fact that he is
or was a director, officer, employee or agent of the Company or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
the Company shall indemnify any such person against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
B. In addition, the Company has the power to indemnify any of the persons
referred to above in connection with any such actions against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any such actions, suit or
proceeding, if such person acted in good faith and in a manner he reasonably
believed to be or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
Notwithstanding the foregoing, in connection with any action or suit by or
in the right of the Company to procure a judgment in its favor, the Company
shall not make any indemnification as described above in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the Company unless or only to the extent that the Court of Chancery (in the
State of Delaware) or the court in which such action or suit was brought shall
determine, upon application, that, despite adjudication of liability but in view
of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
C. The Company also has the power, under the Delaware Corporation Law, to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation,
II-1
<PAGE>
partnership, joint venture, trust or other enterprise against any other
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Company would have the
power to indemnify him against such liability under the provisions of this
Section.
D. The indemnification provided by or allowable pursuant to the Delaware
Corporation Law shall or may, as applicable, continue as to a person who has
ceased to be a director, officer, employee or agent of the Company and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
ITEM 16. EXHIBITS
The following documents are filed as a part of this Registration Statement.
(Exhibit numbers correspond to the exhibits required by Item 601 of Regulation
S-K for a Registration Statement on Form S-3.)
(a) Exhibits
EXHIBIT NO.
2.1 Stock Purchase Agreement, dated as of November 1, 1993, by and between
the Company and S-C Rig Investments-III, L.P.(1)
2.2 Stock Purchase Agreement, dated as of December 29, 1993, by and
between the Company and Vanguard Cellular Systems, Inc. and its
affiliates ("Vanguard"), regarding the sale of up to an aggregate of
12.5 million shares of the Company's Common Stock.(2)
2.3 Notarial Deed and Share Purchase Agreement, dated May 26, 1994, by and
between Preussag Mobilfunk GmbH and Geotek Communications GmbH, a
wholly-owned subsidiary of the Company. (3)
2.4 Notarial Deed and Share Purchase Agreement, dated July 6, 1994, by and
between Quante A.G., on the one hand, and Geotek Communications GmbH
and Geotek Beteiligungs GmbH, wholly-owned subsidiaries of the
Company, on the other hand.(4)
2.5 Stock Purchase Agreement, dated as of April 6, 1995, by and between
the Company and European Gateway Acquisition Corp., regarding the sale
of the Company's interest in Bogen Corporation and Speech Design GmbH,
as amended.(5)
4.1 Restated Certificate of Incorporation of the Company, as amended.(6)
4.2 Certificate of Amendment of the Restated Certificate of Incorporation
of the Company filed February 26, 1993.(10)
4.3 Certificate of Amendment of the Restated Certificate of Incorporation
of the Company filed February 16, 1994.(6)
4.4 Certificate of Designation of Series H Cumulative Convertible
Preferred Stock.(2)
4.5 Certificate of Designation of Series I Cumulative Convertible
Preferred Stock.(6)
4.6 Certificate of Designation of Series K Cumulative Convertible
Preferred Stock.(5)
4.7 Certificate of Designation of Series L Cumulative Convertible
Preferred Stock.(7)
4.8 Certificate of Designation of Series M Cumulative Convertible
Preferred Stock.(7)
II-2
<PAGE>
4.9 1989 Employee Stock Option Plan, as amended, of the Company.(8)
4.10 1994 Employee Stock Option Plan of the Company.(9)
4.11 Note and Warrant Purchase Agreement, dated as of June 15, 1994, by
and among Geotek Communications, Inc., The SC Fundamental Value Fund,
L.P. and SC Fundamental Value BVI, Ltd.(11)
4.12 Pledge Agreement, dated as of June 15, 1994, by and among Geotek
Communications, Inc., Geotek Acquisition Corp., Geotek Subsidiary
Industries, Inc., Bogen Corporation, U.S.I. Venture Corp. and SC
Fundamental Inc., as agent for The SC Fundamental Value Fund, L.P. and
SC Fundamental Value BVI, Ltd.(11)
4.13 Senior Secured Note, dated June 20, 1994, from the Company in
connection with the Note and Warrant Purchase Agreement referenced in
Exhibit 4.11 hereof.(11)
4.14 Senior Secured Note, dated June 20, 1994, from the Company in
connection with the Note and Warrant Purchase Agreement referenced in
Exhibit 4.11 hereof.(11)
4.15 Warrant Certificate issued in connection with the Note and Warrant
Purchase Agreement referenced in Exhibit 4.11 hereof dated June 20,
1994.(11)
4.16 Warrant Certificate issued in connection with the Note and Warrant
Purchase Agreement referenced in Exhibit 4.11 hereof dated June 20,
1994.(11)
4.17 Note and Warrant Purchase Agreement, dated as of March 20, 1995, by
and among the Company, The SC Fundamental Value Fund, L.P. and SC
Fundamental Value BVI, Ltd.(9)
4.18 Pledge Agreement, dated as of March 30, 1995, by and among the
Company, certain of its subsidiaries and SC Fundamental Inc., as agent
for and on behalf of The SC Fundamental Value Fund, L.P. and SC
Fundamental Value BVI, Ltd.(9)
4.19 Senior Secured Convertible Note, dated March 30, 1995, from the
Company in connection with the Note and Warrant Purchase Agreement
referenced in Exhibit 4.17 hereof.(9)
4.20 Senior Secured Convertible Note, dated March 30, 1995, from the
Company in connection with the Note and Warrant Purchase Agreement
referenced in Exhibit 4.17 hereof.(9)
4.21 Warrant Certificate issued in connection with Note and Warrant
Purchase Agreement referenced in Exhibit 4.17 hereof dated
March 30, 1995.(9)
II-3
<PAGE>
4.22 Warrant Certificate issued in connection with Note and Warrant
Purchase Agreement referenced in Exhibit 4.17 hereof dated
March 30, 1995.(9)
5 Opinion of Klehr, Harrison, Harvey, Branzburg & Ellers.(5)
10.1 Stockholders Voting Agreement, dated as of February 23, 1994, among
the Company, Vanguard Cellular Systems, Inc., S-C Rig Investments III,
L.P., Evergreen Canada-Israel Investment & Co., Ltd., Yaron Eitan and
Winston Churchill.(6)
10.2 Asset Exchange Agreement, dated as of March 24, 1995, by and between
the Company, Metro Net Systems, Inc., NEXTEL Communications, Inc. and
certain NEXTEL subsidiaries.(9)
10.3 FHMA-TM- Commercial Subscriber Unit Agreement, dated as of June 8,
1994, by and between the Company and Mitsubishi Consumer Electronics
America, Inc.(12)
10.4 FHMA-TM- Portable Subscriber Unit Agreement, dated as of May 19, 1995,
by and between the Company and Hughes Network Systems, Inc.(12)
*23.1 Consent of Coopers & Lybrand - Geotek Communications, Inc.
*23.2 Consent of Shachak & Co. -
PowerSpectrum Technology Ltd.
Consent of Shachak & Co. -
Oram Power Supplies (1990) Ltd.
Consent of Shachak & Co. -
Oram Electric Industries Ltd.
*23.3 Consent of Touche Ross & Co. -
National Band Three Limited and predecessor companies
*23.4 Consent of KPMG -
Band Three Radio Limited
*23.5 Consent of Coopers & Lybrand GmbH -
Preussag Bundelfunk GmbH
*23.6 Consent of Dusseldorfer Treuhand-Gesellschaft Altenburg & Tewes
AG -
DBF Bundelfunk GmbH & Co. Betriebs-KG
23.7 Consent of Klehr, Harrison, Harvey, Branzburg & Ellers (included in
Exhibit 5)
24 Power of Attorney regarding amendment of this Registration Statement
appears on the signature page to the originally filed Registration
Statement to which this Amendment No. 2 relates.
____________________________
* Filed herewith.
II-4
<PAGE>
(1) Incorporated by reference to the Exhibits to the Company's Current Report
on Form 8-K with respect to events whose earliest date was November 1,
1993.
(2) Incorporated by reference to the Exhibits to Amendment No. 1 to the
Company's Registration Statement on Form S-3 (Registration No. 33-72820)
filed with the Commission on January 25, 1994.
(3) Incorporated by reference to the Exhibits to the Company's Current Report
on Form 8-K dated July 5, 1994.
(4) Incorporated by reference to the Exhibits to the Company's Current Report
on Form 8-K dated August 2, 1994.
(5) Previously filed as an Exhibit to Amendment No. 1 to the Company's
Registration Statement on Form S-3 (Registration No. 33-85296) filed with
the Commission on May 26, 1995.
(6) Incorporated by reference to the Exhibits to the Company's Annual Report on
Form 10-K for the year ended December 31, 1993.
(7) Incorporated by reference to the Exhibits to the Company's Current Report
on Form 8-K dated May 26, 1995.
(8) Incorporated by reference to the Exhibits to the Company's Registration
Statement on Form S-3 (Registration No. 33-72820) filed with the Commission
on December 10, 1993.
(9) Incorporated by reference to the Exhibits to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994.
(10) Incorporated by reference to the Exhibits to Post-Effective Amendment No.
2 to the Company's Registration Statement on Form S-1 (Registration No.
33-42185) filed with the Commission on August 27, 1993.
(11) Incorporated by reference to the Exhibits to the Company's Current Report
on Form 8-K dated June 1, 1994.
(12) Incorporated by reference to the Exhibits to the Company's Current Report
on Form 8-K dated June 8, 1994 (as amended on Form 8-K/A filed on or
about June 27, 1995).
II-5
<PAGE>
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling-person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person of the registrant in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Montvale, New Jersey, on the 22nd of
June, 1995.
GEOTEK COMMUNICATIONS, INC.
By: /s/ Yaron I. Eitan
---------------------------------------
Yaron I. Eitan
President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement has been duly signed below by the
following persons in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
- --------- ----- ----
* Chairman of the June 22, 1995
- ----------------------------- Board; Director
Winston J. Churchill
/s/ Yaron I. Eitan President and Chief June 22, 1995
- ----------------------------- Executive Officer
Yaron I. Eitan (Principal Executive
Officer); Director
/s/ Yoram Bibring Executive Vice June 22, 1995
- ----------------------------- President, Chief
Yoram Bibring Financial Officer
and Chief Operating
Officer (Principal
Financial and
Accounting Officer)
* Director June 22, 1995
- -----------------------------
Walter E. Auch
* Director June 22, 1995
- -----------------------------
George Calhoun
<PAGE>
SIGNATURES TITLE DATE
- --------- ----- ----
- ----------------------------- Director ________, 1995
Purnendu Chatterjee
* Director June 22, 1995
- -----------------------------
Haynes G. Griffin
* Director June 22, 1995
- -----------------------------
Richard Krants
Director ________, 1995
- -----------------------------
Richard T. Liebhaber
- ----------------------------- Director ________, 1995
Haim Rosen
* Director June 22, 1995
- -----------------------------
Kevin W. Sharer
* Director June 22, 1995
- -----------------------------
William Spier
*An original Power of Attorney authorizing Yaron I. Eitan and Yoram Bibring, and
each of them, to sign any amendment to this Registration Statement on behalf of
certain officers and directors of the Registrant was included with the signature
pages to the originally filed Registration Statement to which this Amendment
No. 2 relates.
By: Yoram Bibring
-------------------------------
Yoram Bibring, Attorney-In-Fact
<PAGE>
EXHIBIT INDEX
PAGE NO. IN
SEQUENTIALLY
EXHIBIT NO. NUMBERED SYSTEM
- ---------- ---------------
23.1 Consent of Coopers & Lybrand - Geotek Communications, Inc.
23.2 Consent of Shachak & Co. -
PowerSpectrum Technology Ltd.
Consent of Shachak & Co. -
Oram Power Supplies (1990) Ltd.
Consent of Shachak & Co. -
Oram Electric Industries Ltd.
23.3 Consent of Touche Ross & Co. -
National Band Three Limited and predecessor companies
23.4 Consent of KPMG -
Band Three Radio Limited
23.5 Consent of Coopers & Lybrand GmbH -
Preussag Bundelfunk GmbH
23.6 Consent of Dusseldorfer Treuhand-Gesellschaft Altenburg & Tewes
AG -
DBF Bundelfunk GmbH & Co. Betriebs-KG
<PAGE>
[LETTERHEAD OF COOPERS & LYBRAND]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement of Geotek Communications, Inc. (formerly Geotek
Industries, Inc.) on Form S-3 (Reg. No. 33-85296) of our report dated
March 30, 1995, on our audits of the consolidated financial statements of
Geotek Communications, Inc. as of December 31, 1994 and 1993,
and for the years ended December 31, 1994, 1993 and 1992, which report is
included in the Company's Annual Report on Form 10-K/A. Our report contains an
emphasis of a matter paragraph related to significant transactions with
related parties in 1992.
COOPERS & LYBRAND
New York, New York
June 22, 1995
<PAGE>
[LETTERHEAD OF SHACHAK & CO.]
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Amendment No. 2 to the Registration Statement of Geotek
Communications, Inc. (the "Company") on Form S-3 (Reg. No. 33-85296) of our
report, dated February 14, 1995, with respect to the financial statements of
PowerSpectrum Technology Ltd. ("PST") as of December 31, 1994 and 1993, and for
the year ended December 31, 1994 and the fifteen month period ended December 31,
1993, and of our report, dated January 17, 1993, with respect to the financial
statements of PST as of September 30, 1992, and for the three month period then
ended, which reports are included in the annual report of the Company on Form
10-K for the fiscal year ended December 31, 1994.
Shachak & Co.
Certified Public Accountants (Isr.)
June 22, 1995
Tel Aviv, Israel
<PAGE>
[LETTERHEAD OF SHACHAK & CO.]
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Amendment No. 2 to the Registration Statement of Geotek
Communications, Inc. (the "Company") on Form S-3 (Reg. No. 33-85296) of our
report, dated February 24, 1993, with respect to the financial statements of
Oram Power Supplies (1990) Ltd. as of December 31, 1992 and for the year then
ended, included in the annual report of the Company on Form 10-K for the fiscal
year ended December 31, 1994.
Shachak & Co.
Certified Public Accountants (Isr.)
June 22, 1995
Tel Aviv, Israel
<PAGE>
[LETTERHEAD OF SHACHAK & CO.]
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Amendment No. 2 to the Registration Statement of Geotek
Communications, Inc. (the "Company") on Form S-3 (Reg. No. 33-85296) of our
report, dated February 24, 1993, with respect to the financial statements of
Oram Electric Industries Ltd. as of December 31, 1992 and for the year then
ended, included in the annual report of the Company on Form 10-K for the fiscal
year ended December 31, 1994.
Shachak & Co.
Certified Public Accountants (Isr.)
June 22, 1995
Tel Aviv, Israel
<PAGE>
[LETTERHEAD OF TOUCHE ROSS & CO.]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-3 (Reg. No. 33-85296) of Geotek Communications,
Inc. (formerly Geotek Industries, Inc.) of (i) our report dated June 10, 1993
with respect to the financial statements of National Band Three Limited, (ii)
our report dated November 24, 1992 with respect to the financial statements of
GEC -Marconi Communications Networks Limited and (iii) our report dated January
27, 1993 with respect to the financial statements of Vodanet Limited, each
appearing in the Current Report on Form 8-K/A of Geotek Communications, Inc.,
dated June 18, 1993.
TOUCHE ROSS & CO.
London, England
June 22, 1995
<PAGE>
[LETTERHEAD OF KPMG]
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Band Three Radio Limited
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-3 (Reg. No. 33-85296) of Geotek Communications,
Inc. of our report dated 15 July 1991, relating to the Band Three Radio Limited
statements of the net loss and cash flows for the year ended 31 March 1991,
which report was included in the Current Report on Form 8-K/A of Geotek
Communications, Inc., dated June 18, 1993.
Reading, England
22 June 1995
<PAGE>
[LETTERHEAD OF COOPERS & LYBRAND GMBH]
CONSENT OF INDEPENDENT AUDITORS RELATING TO
PREUSSAG BUNDELFUNK GMBH, SALZGITTER/GERMANY
--------------------------------------------
As independent auditors, we hereby consent to the incorporation by reference in
this Amendment No. 2 to the Registration Statement of Geotek Communications,
Inc. (the "Company") on Form S-3 (Reg. No. 33-85296) of our report, dated
August 30, 1994, relating to the balance sheet of Preussag Bundelfunk GmbH as of
September 30, 1993 and the related statement of operations, shareholders' equity
and cash flow for the year then ended, which report was included in the Current
Report on Form 8-K of the Company, dated July 5, 1994, as amended.
Hannover,
June 22, 1995
Coopers & Lybrand GmbH
Wirtschaftspr1ufungsgesellschaft
<PAGE>
[LETTERHEAD OF DUSSELDORFER TREUHAND-GESELLSCHAFT
ALTENBURG & TEWES AG]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-3 (Reg. No. 33-85296) of Geotek Communications,
Inc. (formerly Geotek Industries, Inc.) of our report dated September 6, 1994,
on our audit of the financial statements of DBF Bundelfunk GmbH & Co. Betriebs-
KG as of December 31, 1993, and for the year ended December 31, 1993, which
report appears in the Company's Current Report on Form 8-K dated August 2, 1994,
as amended.
Dusseldorf, June 22, 1995
DUSSELDORFER TREUHAND-GESELLSCHAFT
ALTENBURG & TEWES AG
WIRTSCHAFTSPRUFUNGSGESELLSCHAFT
STEUERBERATUNGSGESELLSCHAFT
Berg Spielberg
Wirtschaftsprufer Wirtschaftsprufer
