AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 18, 1996
Registration File No. 33-64533
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
AMENDMENT NO. 1 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.
WILLIAM W. MATTHEWS, 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|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| ____________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_| ____________
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. |_|
<PAGE>
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Form of Prospectus included herein also relates to the securities registered
under the Registrant's Registration Statement on Form S-3 (File No. 33-85296)
declared effective on June 27, 1995 and the Registrant's Registration Statement
on Form S-3 (File No. 33-62075) declared effective on September 8, 1995, is
intended for use in connection therewith, and constitutes a post-effective
amendment thereto.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
JANUARY 18, 1996
PROSPECTUS
GEOTEK COMMUNICATIONS, INC.
ISSUANCE AND SALE TO CERTAIN SELLING SHAREHOLDERS OF UP TO $36,000,000 OF
COMMON STOCK ISSUABLE UPON CONVERSION OF CONVERTIBLE NOTES (THE "NOTE SHARES"),
ISSUANCE AND SALE OF 1,000,000 SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
WARRANTS (THE "WARRANT SHARES"), RESALE BY CERTAIN SELLING SHAREHOLDERS OF THE
NOTE SHARES, THE WARRANT SHARES AND WARRANTS TO ACQUIRE THE WARRANT SHARES,
RESALE BY CERTAIN SELLING SHAREHOLDERS OF 1,223,684 SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF SERIES M CUMULATIVE CONVERTIBLE PREFERRED STOCK AND
RESALE BY A CERTAIN SELLING SHAREHOLDER OF 338,028 SHARES OF COMMON STOCK
This Prospectus concerns the issuance and sale to certain Selling
Shareholders (as described 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, issued by the Company to
certain Selling Shareholders on March 30, 1995 (the "March 1995 Notes"). The
March 1995 Notes 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 March 1995 Notes are hereinafter referred to as the "Note
Shares."
This Prospectus also concerns the issuance and sale to holders of the
Warrants (as hereinafter defined), from time to time, of up to an aggregate of
1,000,000 shares of Common Stock issuable upon exercise of such Warrants. All
shares of Common Stock issuable upon exercise of the Warrants are hereinafter
referred to as the "Warrant Shares."
This Prospectus also concerns the offer and sale by certain Selling
Shareholders, from time to time, of the Note Shares and the Warrant Shares.
This Prospectus also concerns the offer and sale by certain Selling
Shareholders, from time to time, of Warrants issued by the Company to such
Selling Shareholders in connection with their purchase of the March 1995 Notes
and certain other notes issued by the Company on June 15, 1994 (the "June 1994
Notes"). The Warrants consist of 700,000 Common Stock purchase warrants issued
by the Company to such Selling Shareholders with an exercise price of $8.125 per
share of Common Stock (the "$8.125 Warrants") in connection with the sale of the
March 1995 Notes and 300,000 Common Stock purchase warrants issued by the
Company to such Selling Shareholders with an exercise price of $7.875 per share
of Common Stock (the "$7.875 Warrants") in connection with the sale of the June
1994 Notes. Each of the Warrants may be exercised, from time to time, at any
time during the period beginning on the date of issuance by the Company and
ending on the five-year anniversary thereof. The $8.125 Warrants and the $7.875
Warrants are hereinafter collectively referred to as the "Warrants."
This Prospectus also concerns the offer and sale by certain Selling
Shareholders, from time to time, of 1,223,684 shares of Common Stock issuable
upon the conversion of 1,162.5 shares of Series M Cumulative Convertible
Preferred Stock, par value $.01 per share (the "Series M Preferred Stock"). The
Series M Preferred Stock was issued by the Company to such Selling Shareholders
on June 1, 1995. Each share of Series M Preferred Stock is immediately
convertible into the number of shares of Common Stock as is determined by
dividing (i) the sum of the $10,000 stated value per share of Series M Preferred
Stock plus all unpaid dividends accrued and deemed to have accrued, if any, with
respect to such shares of Series M Preferred Stock through the last dividend
payment date by (ii) a conversion price of $9.50 per share, subject to certain
adjustments. See "Selling Shareholders and Related Information." Assuming there
are no accrued and unpaid dividends on the Series M Preferred Stock at the time
of conversion, the Series M Preferred Stock is convertible into an aggregate of
1,223,684 shares of Common Stock. The shares of Common Stock issuable upon
conversion of the Series M Preferred Stock are hereinafter referred to as the
"Series M Shares."
This Prospectus also concerns the resale by a certain Selling
Shareholder, from time to time, of 338,028 shares of Common Stock issued to such
Selling Shareholder on October 31, 1995 (the "RDC Offered Shares"). The Note
Shares, the Warrants Shares, the Series M Shares and the RDC Offered Shares are
hereinafter collectively referred to as the "Shares."
For information regarding the Selling Shareholders, 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 January 15, 1996, the closing sale price for the
Company's Common Stock, as quoted on the NNM, was $7.38 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
<PAGE>
or at negotiated prices. There is currently no established trading market
for the Warrants, and it is uncertain whether there will ever be a trading
market for the Warrants. It is not presently anticipated that the Warrants will
be listed for trading on the PSE, the NNM or otherwise. As a result, it is
presently anticipated that sales of Warrants by the Selling Shareholders will be
effected, from time-to-time, in ways not involving market makers or established
trading markets, including direct sales to purchasers or sales effected through
agents, at negotiated prices. If at any time the Warrants are listed for trading
on the PSE, the NNM or otherwise, sales of the Warrants could be effected in the
same manner in which sales of Shares are effected. The Shares and Warrants held
by the Selling Shareholders may also be sold hereunder by brokers, dealers,
banks or other persons or entities who receive such Shares and Warrants as a
pledgee of the Selling Shareholders. The Selling Shareholders and brokers and
dealers through whom sales of Shares or Warrants 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 or Warrants may be considered to be underwriting compensation.
Notwithstanding the registration of the offer and sale of the Warrants and
Warrant Shares to subsequent purchasers of the Warrants, Selling Shareholders to
whom the Warrants were initially issued by the Company, whether or not
affiliates of the Company, that acquire Warrant Shares upon exercise of the
Warrants shall be required to deliver this Prospectus in accordance with the
Securities Act in connection with any transaction involving the resale of such
Warrant Shares.
------------------------------------
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4 HEREOF.
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
================================================================================================================================
PRICE UNDERWRITING DISCOUNTS PROCEEDS TO PROCEEDS TO THE
TO PUBLIC AND COMMISSIONS THE COMPANY SELLING SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share......... $(1)(2) $(1)(2) $0(3)(4) $(1)(5)
- --------------------------------------------------------------------------------------------------------------------------------
Total.............. $(1)(2) $(1)(2) $0(3)(4) $(1)(5)
================================================================================================================================
</TABLE>
(1) The Note Shares registered for issuance and sale hereunder will be
issued and sold to the Selling Shareholders upon conversion of the
March 1995 Notes at conversion prices equal to 87.5% of the weighted
average of the sales prices of Common Stock on the trading day next
preceding the date of conversion. The Warrant Shares registered for
issuance and sale hereunder will be issued and sold to holders of the
Warrants upon exercise of the Warrants at an exercise price of $8.125,
in the case of the $8.125 Warrants, and $7.875, in the case of the
$7.875 Warrants. It is anticipated that the Shares registered for
resale hereunder will be sold by the Selling Shareholders in market or
private transactions at prevailing prices, from time to time. It is
anticipated that the Warrants registered for resale hereunder will be
sold by the Selling Shareholders in transactions not involving
established trading markets at negotiated prices, from time to time.
(2) No underwriting discounts or commissions are payable in connection with
the issuance of the Note Shares or the Warrant Shares.
(3) Upon issuance of the Note Shares in connection with the conversion of
the March 1995 Notes, the principal amounts otherwise payable by the
Company under the March 1995 Notes, up to $36,000,000 in the aggregate,
will be satisfied. The aggregate gross proceeds to the Company from the
issuance and sale of the Warrant Shares will be $8,050,000.
(4) The Company will not receive any proceeds from the resale of Shares or
Warrants by the Selling Shareholders.
(5) The Company will pay all expenses of the offering of the Shares and
Warrants to which this Prospectus relates, other than, in connection
with the resales of Shares and Warrants by the Selling Shareholders,
any underwriting or broker-dealer discounts or commissions agreed to be
paid by the Selling Shareholders.
------------------------------------
The Date of this Prospectus is JANUARY 18, 1996
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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#1 filed on or about April 28, 1995,
Form 10-K/A#2 filed on or about May 26, 1995 and Form 10-K/A#3 filed on or about
September 26, 1995);
(2) The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1995, June 30, 1995 (as amended by Form 10-Q/A filed on
or about September 26, 1995) and September 30, 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, May 26, 1995, July 6, 1995, July 31, 1995,
August 24, 1995 and December 29, 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 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
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<PAGE>
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.
ADDRESS AND TELEPHONE NUMBER
The mailing address and telephone number of the Company's principal
executive offices are as follows:
Geotek Communications, Inc.
20 Craig Road
Montvale, New Jersey 07645
Telephone Number: (201) 930-9305
RISK FACTORS
The securities described herein involve a substantial degree of risk.
Prospective purchasers should carefully consider, among other things, the
following factors:
COMMERCIAL IMPLEMENTATION OF GEONET(TM)
The Company's current business plan contemplates the commercial
implementation of GEONET in 36 target markets in the United States by 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 such market.
The successful and timely implementation of GEONET 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 substantial additional
financing. See "- Dependence on Third Party Providers," "- 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 in one or more
of the Company's U.S. target markets, which could have a material adverse effect
on the Company.
The Company will make continuing hardware and software modifications to
GEONET prior to, during and after the system's commercial roll-out. For example,
the Company must integrate the initial GEONET data applications, which are
expected to be completed in the first half of 1996, with the initial GEONET
voice applications. Subsequent applications also will need to be integrated with
existing GEONET 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 services on a profitable basis. A failure by the Company to
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 by the
Company. Accordingly, in implementing GEONET, the Company may encounter
unforeseen technical issues. In addition, each of the Company's U.S. target
markets is expected to present unique technical issues to the Company due to
differences in geography and the level of local development. Technical
difficulties in the operation and/or performance of GEONET 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
-4-
<PAGE>
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.
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 U.S. target
markets. In addition, the Company's only experience to date in the United States
with respect to its digital wireless communications services has been testing
GEONET in Philadelphia and, beginning in August 1995, providing wireless
communication services to customers in Philadelphia. Prospective investors,
therefore, have limited historical financial information about the Company on
which to make a determination as to the prospects for the Company's U.S.
wireless communications operations or financial condition and as to an
investment in the Shares and Warrants offered hereby.
Although the Company has added experienced senior management and has
filled a substantial number of sales and field service positions during the last
year, the Company will need to rapidly and significantly increase the number of
technical and sales personnel that it employs in its target markets as the
roll-out of GEONET 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.
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. The Company also requires additional
spectrum to initiate services in certain of its 1997 target markets. Moreover, a
significant portion of the Company's existing radio spectrum in Philadelphia,
New York City, Washington, Chicago, Dallas, Miami and Houston is subject to
management agreements pursuant to which Motorola, Inc. ("Motorola") controls the
radio spectrum. The Company cannot utilize this radio spectrum for GEONET
services until such management agreements are terminated. In November 1994,
Motorola and NEXTEL Communications, Inc. ("NEXTEL") entered into a consent
decree with the federal government pursuant to which NEXTEL and Motorola agreed,
upon effectiveness of the consent decree, to 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) thirty or fewer 900 MHz channels in the licensee's market
(including the managed channels as to which the termination of the agreement is
being sought). The consent decree became effective on July 25, 1995. The Company
has notified Motorola of its intent to terminate management agreements relating
to certain channels owned by the Company or to which the Company has rights and
has entered into an agreement with Motorola pursuant to which Motorola will
vacate these channels on a schedule set by the Company.
Certain agreements pursuant to which the Company has the right to
acquire spectrum are subject to regulatory approval. Although the Company
believes that such approval 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.
The Company intends to acquire sufficient spectrum in each of its
target markets in which it does not have sufficient spectrum to initiate service
and to add additional capacity in certain of its other U.S. target markets. In
December 1995, the Federal Communications Commission (the "FCC") commenced
auctioning spectrum
-5-
<PAGE>
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 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."
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, obtain necessary permits and build such
towers, a process which the Company estimates could take up to one year to
complete for each tower. If the Company is required to build new towers, the
roll-out of GEONET in one or more target markets could be delayed, which could
have a material adverse effect on the Company.
DEFICIENCY OF EARNINGS; NET LOSSES; SUBSTANTIAL INDEBTEDNESS
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, and $47.4 million for the nine month period ended September 30,
1995. 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, and $30.6 million for the nine month period
ended September 30, 1995. The Company anticipates that its net operating losses
from operations and its EBITDA deficiency will increase significantly during the
roll-out of GEONET. 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.
The Company has significant indebtedness, a substantial portion of
which is represented by its 15% Senior Secured Discount Notes due 2005 which
have an aggregate principal amount at maturity of $227.7 million (the "Senior
Discount Notes"). Although no payments of interest or principal are due on the
Senior Discount Notes in the immediate future, the Company will have significant
debt service obligations beginning in July 2000. The Company also anticipates
seeking additional financing, which financing may impose additional and earlier
debt service obligations on the Company. See "-- Need for Additional Financing."
The degree to which the Company is leveraged may impair the ability of the
Company to obtain additional financing in the future for working capital,
capital expenditures, acquisitions or other general corporate purposes. In
addition, the Indenture governing the Senior Discount Notes (the "Indenture")
and certain documents executed in connection therewith impose significant
operating and financial restrictions on the Company, affecting, among other
things, the ability of the Company to incur indebtedness, make prepayments of
certain indebtedness, pay dividends, make investments, engage in transactions
with stockholders and affiliates, issue capital stock of its subsidiaries,
create liens, sell assets and engage in mergers and consolidations. Although the
Indenture and the related documents contain various exemptions that are
generally designed to allow the Company to operate its business without undue
restraint, these restrictions, in combination with the leveraged nature of the
Company, could limit the ability of the Company to effect future financings,
respond to changing market conditions and otherwise may restrict corporate
activities.
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. 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 $250.0 million of financing to fund
GEONET's infrastructure costs as well as operating losses and working capital
needs. Additionally, the macrocellular architecture of Geonet will allow the
Company to adjust its
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<PAGE>
aggregate cash expenditures by focusing its activities in certain markets while
reducing its planned investments in other markets.
The Company's need for additional financing will increase if the
Company experiences delays in the commercial implementation of GEONET, 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 Preferred Stock. Under certain
circumstances, the Company may be required on October 31, 2000 to redeem the
Series 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 approximately $10.0 million (plus accrued but unpaid dividends), payable in
cash or shares of Common Stock at the Company's option.
Pursuant to the terms of a Defeasance Security Agreement, dated July 6,
1995, the Company pledged to SC Fundamental Value Fund, L.P. and SC Fundamental
Value BVI, Ltd., each of which is a Selling Shareholder hereunder, $40.5
million, at maturity, of United States Treasury obligations to secure the
Company's obligations under the March 1995 Notes. The March 1995 Notes are
convertible into Common Stock beginning September 30, 1995 at a 12.5% discount
to the market price of the Common Stock on the date of conversion. To the extent
the March 1995 Notes are not converted into Common Stock, the Company's
financing needs will increase by an amount equal to the face value of the United
States Treasury obligations securing such Notes which would otherwise have been
released to the Company upon conversion.
Additional financing also may be required to fund 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, vendor financing, leasing arrangements or a combination thereof.
There can be no assurance that additional financing will be available to the
Company on desirable terms or at all.
COMPETITION
Although the Company believes that the quality, array and flexibility
of services to be offered by the Company through GEONET will meaningfully
differentiate such services from those offered by other wireless communications
providers in the Company's target markets, the Company will face 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 larger, more established, have more
experience in the telecommunications industry, have greater name recognition,
have larger sales staffs and/or have greater financial resources than the
Company.
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
several of the largest U.S. markets. In addition, to the extent that Motorola
is the largest provider of PMR equipment, Motorola may be deemed to be an
indirect competitor of the Company.
The Company also may face competition from technologies and services
introduced in the future. In March 1995, the FCC completed auctions for wideband
Personal Communications Services ("PCS") licenses on
-7-
<PAGE>
a regional Metropolitan Trading Area basis within the United States. The FCC
commenced its auction of 493 broadband basic trading area PCS licenses in
December 1995. PCS could compete with services to be offered by the Company. The
FCC also may license additional spectrum for other wireless services. It is also
possible that satellite 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 or further development of any such technologies could have a
material adverse effect on the Company. See "- Rapid Technological Changes".
Many of the target customers for GEONET 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. 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, the extent of the demand
for the Company's wireless communication services cannot be predicted with any
degree of certainty. The demand for the Company's digital wireless
communications services also could be affected by other matters beyond its
control, such as the future cost of subscriber equipment, marketing and pricing
strategies of competitors and general economic conditions.
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."
The Company also experiences competition for each of its products and
services other than GEONET in the markets in which it sells such products and
services. Such competition is expected to remain strong for the foreseeable
future.
GOVERNMENT REGULATION
The licensing, construction, operation and acquisition of SMR systems
in the United States is 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 services 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 affect the conduct of the Company's business. The Company's petition
was granted by the FCC, which permits the Company to retain its foreign
directors and officers until August 10, 1996. Thereafter, the Company's ability
to retain foreign directors and officers will be limited by current FCC
regulations. 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 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.
-8-
<PAGE>
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 whom 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 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 thereof. In addition, there can be no assurance 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
could 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
base stations have received such approval and the mobile subscriber units
have been designed to meet FCC standards and have been submitted for such
approval, there can be no assurance that the subscriber units will meet such
criteria. A failure by the Company's subscriber units or any of its other
equipment to meet FCC standards could have a material adverse effect on the
Company.
Future changes in regulation or legislation affecting digital wireless
telecommunications service 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. See "- Competition."
DEPENDENCE ON THIRD PARTY PROVIDERS
The Company's digital wireless telecommunications system is being
developed and commercialized by its subsidiary, PowerSpectrum, Ltd. ("PST").
However, the development by PST of the technology and systems is dependent in
large part upon the efforts of Rafael Armament Development Authority ("Rafael"),
a PST contractor, to adapt frequency hopping from a military to a commercial
application, to integrate the frequency hopping technology with other digital
technologies required for optimal commercial deployment of GEONET and, as
discussed below, for the cost-effective manufacture of the base station
hardware. In this regard, approximately 90 employees of Rafael are presently
engaged on a full-time subcontract basis in the development of FHMA. If Rafael
reduces its commitment to PST or continuing development efforts are not
successful, the Company's prospects could be materially adversely affected.
Neither the Company nor PST manufacture the system architecture,
hardware and mobile subscriber units necessary for the commercial implementation
of GEONET. Rafael has been contracted by PST to manufacture the system hardware
for GEONET. Third parties, including Mitsubishi Consumer Electronics America
("Mitsubishi"), Hughes Network Systems ("Hughes"), a unit of GM Hughes
Electronics, and Kenwood Corporation of Japan ("Kenwood"), will manufacture
subscriber units and certain other components of the system hardware for GEONET.
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 the GEONET system hardware, including the base stations and subscriber units.
Although the Company believes that it can obtain all components necessary to
build GEONET 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, which
could have a material adverse effect on the Company. See "- Commercial
Implementation of GEONET."
The Company has entered into an agreement with IBM Corporation ("IBM")
to manage the construction of the GEONET stations and the installation of FHMA
equipment in the Company's U.S. target markets. 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".
-9-
<PAGE>
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 could become non-competitive and the Company could be 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."
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 President and 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, or 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.
RISKS OF INTERNATIONAL BUSINESS
The Company operates in and sells 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.
INFLUENCE BY SIGNIFICANT STOCKHOLDERS; PREEMPTIVE RIGHTS
As of the date hereof, approximately 25% 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 Cellular Systems, Inc.
("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, 5,916,514 shares, or 9.9% of the
Company's Common Stock 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
beneficially owned approximately 3.3 million shares or 6.1% of the Company's
outstanding Common Stock. However, assuming full exercise of the options held by
Vanguard as of such date, 8.6 million shares, or 14.5% 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
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<PAGE>
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.
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.
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 its FHMA(TM) frequency
hopping technology and GEONET 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 right to use certain technology. The failure to
overcome such challenges or obtain such licenses or rights 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, in cash or
additional shares of Series L Preferred Stock, and cumulative
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<PAGE>
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 ELIGIBLE FOR SALE; DILUTION
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.
NO ESTABLISHED TRADING MARKET FOR WARRANTS
Investors in the Warrants should be aware that there is currently no
established trading market for the Warrants, and it is uncertain whether there
will ever be a trading market for the Warrants. It is not presently anticipated
that the Warrants will be listed on the PSE, the NNM or otherwise.
-12-
<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 SC Fundamental Value Fund, L.P. and
SC Fundamental BVI, Ltd. (collectively, the "SC Investors"), each of which is a
Selling Shareholder hereunder, the March 1995 Notes and the $8.125 Warrants. The
aggregate gross proceeds to the Company from the issuance and sale of the March
1995 Notes and the $8.125 Warrants was $36,000,000, less $25,000,000, plus
accrued and unpaid interest thereon, used by the Company to retire the June 1994
Notes. In connection with the issuance and sale of the June 1994 Notes to the SC
Investors, the Company issued to such Selling Shareholders the $7.875 Warrants.
The $8.125 Warrants and the $7.875 Warrants are collectively referred to as the
"Warrants." The shares of Common Stock issuable by the Company upon the exercise
of the Warrants are collectively referred to herein as the "Warrant Shares."
The March 1995 Notes bear interest at the rate of 14.75% per annum,
payable quarterly until maturity or earlier conversion. During each four month
period beginning September 30, 1995, February 1, 1996 and June 1, 1996, up to
$12,000,000 principal amount 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. Pursuant to the terms of a Defeasance Security
Agreement, dated July 6, 1995, the Company pledged to the SC Investors $40.5
million, at maturity, of United States Treasuries (the "Defeasance Collateral")
to secure the Company's obligations under the March 1995 Notes, including the
repayment of the principal amount thereunder together with all accrued and
unpaid interest thereon through maturity. To the extent all or a portion of the
principal amount of the March 1995 Notes is converted into Common Stock, an
amount of the Defeasance Collateral otherwise payable in respect of such
converted principal, and any interest that would have thereafter accrued
thereon, will be released to the Company.
On June 1, 1995, the Company completed a private transaction pursuant
to which it issued and sold to BEA International Equity Portfolio ("BEA")
and the other investors listed beneath the reference to BEA in the table
regarding beneficial ownership of Common Stock set forth on Page 14 hereof, each
of which is a Selling Shareholder hereunder, 1,162.5 shares of Series M
Preferred Stock. The aggregate gross proceeds to the Company from the issuance
and sale of the Series M Preferred Stock was $11,625,000. The shares of Series M
Preferred Stock issued and sold to such Selling Shareholders are immediately
convertible into the number of shares of Common Stock as is determined by
dividing (i) the sum of the $10,000 stated value per share of Series M Preferred
Stock plus all unpaid dividends accrued and deemed to have accrued, if any, with
respect to such shares of Series M Preferred Stock through the last dividend
payment date by (ii) a conversion price of $9.50 per share, subject to certain
adjustments.
On October 31, 1995, the Company completed a private transaction
pursuant to which it issued to RDC-Rafael Development Corporation Ltd. ("RDC"),
a Selling Shareholder hereunder, 2,138,028 shares of Common Stock, of which
338,028 shares are included in the securities offered by this Prospectus (the
"RDC Offered Shares"). In consideration of the issuance of the RDC Offered
Shares to RDC, the Company received aggregate gross proceeds of $3,000,000. The
remaining 1,800,000 shares issued to RDC (the "RDC Restricted Shares") were
issued by the Company in exchange for RDC's interest in the Company's
subsidiary, PST. RDC's interest in PST consisted of an approximately 38% equity
interest, an approximately 40% voting interest, and a perpetual capital note in
the principal amount of approximately $3,750,000. In connection with the
issuance of shares to RDC described above, PST granted an option to RDC to
acquire up to a 10% equity interest in PST upon the occurrence of certain
triggering events the result of which would be to reduce the Company's ownership
interest in PST to no more than a certain threshold percentage, initially, 90%.
The Company has been and continues to be, in large part, dependent upon the
efforts of Rafael in the development and commercialization of its digital
wireless telecommunications technology. Rafael continues to have a significant
interest in RDC. See "Risk Factors -Dependence on Third Party Providers."
The Selling Shareholders are listed below. Included below concerning
each Selling Shareholder beneficially owning Common Stock or Warrants, as
applicable, is (i) a table showing the total amount and percentage of the 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 are sold, and (ii) a table showing the total amount and
percentage of the Warrants beneficially owned by such person, the amount subject
to sale
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<PAGE>
hereunder, and the resulting amount and percentage if all Warrants offered
hereby which are owned by such person are sold. None 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>
COMMON STOCK PRE-OFFERING(1) POST-OFFERING(2)
------------ --------------- ----------------
TOTAL TOTAL
NUMBER NUMBER
OF SHARES OF SHARES
BENEFICIALLY PERCENTAGE SHARES BENEFICIALLY PERCENTAGE
SELLING SHAREHOLDERS OWNED OF CLASS (3) OFFERED OWNED OF CLASS(3)
- -------------------- ----- ------------ ------- ----- -----------
<S> <C> <C> <C> <C> <C>
The SC Fundamental
Value Fund, L.P.(4) 3,998,414(5)(6) 6.9% 3,998,414 0 0%
SC Fundamental Value BVI,
Ltd.(4) 2,144,443(5)(7) 3.8% 2,144,443 0 0%
RDC-Rafael Development 3,388,028(9) 6.3% 338,028 3,050,000 5.6%
Corporation Ltd. (8)
BEA International 631,579(10) 1.21% 631,579 0 0%
Equity Portfolio
The Emerging 105,263(9) * 105,263 0 0%
Markets Infrastructure Fund
The First
Israel Fund 105,263(9) * 105,263 0 0%
The Emerging Markets 105,263(9) * 105,263 0 0%
Telecommunications Fund
CI Global Fund 105,263(9) * 105,263 0 0%
CI Emerging Markets Fund 105,263(9) * 105,263 0 0%
Alpha Atlas Holdings LLC 52,632(9) * 52,632 0 0%
International Equity Fund 13,158(9) * 13,158 0 0%
</TABLE>
- --------------------------
* Less than 1%
(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 conversion or exercise of the Series M
Preferred Stock, the March 1995 Notes and the Warrants.
Assumes that there are no accrued and unpaid dividends on
the Series M Preferred Stock at the time of conversion so
that each share of Series M Preferred Stock is convertible
into approximately 1,053 Shares. Based on information
available to the Company, to the Company's knowledge,
except for RDC Development Corporation Ltd., none of the
Selling Shareholders beneficially owns any Common Stock
other than the Shares offered hereby. For information
regarding the beneficial ownership of the Warrants, see the
table regarding beneficial ownership of the Warrants set
forth on Page 15 of this Prospectus.
(2) Assumes the sale of all Shares offered by this Prospectus by each
Selling Shareholder to third parties unaffiliated with the Selling
Shareholders.
(3) 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.
(4) 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
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<PAGE>
Messrs. Gary N. Siegler and Peter M. Collery. Such individuals may
be deemed to beneficially own the Shares owned by the SC Investors.
Messrs. Siegler and Collery disclaim beneficial ownership of
such Shares.
(5) Assumes the full conversion 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 August 30, 1995 ($8.00 per share), or
5,142,857 shares of Common Stock. The March 1995 Notes are convertible
into Common Stock in three increments of $12,000,000 each during the
three four-month periods beginning September 30, 1995, February 1, 1996
and June 1, 1996.
(6) Represents 3,337,714 Note Shares and 660,700 Warrant
Shares.
(7) Represents 1,805,143 Note Shares and 339,300 Warrant
Shares.
(8) RDC is controlled by DEP Technology Holdings Ltd. ("DEP"),
a holding company whose sole asset is its 50.1% interest in
the outstanding capital stock of RDC. DEP is one-third
owned by each of PEC Israel Economic Corporation ("PEC"),
Discount Investment Corporation Ltd. ("DIC") and Elron
Electronic Industries Ltd. ("Elron"). PEC owns 13.6% of
the outstanding shares of Elron and DIC owns 26.4% of the
outstanding shares of Elron. PEC and DIC are each
controlled by IDB Development Corporation Ltd., which in
turn is controlled by IDB Holding Corporation Ltd. ("IDB
Holding"). Accordingly, each of such corporations shares
the power to vote and dispose of and may be deemed to
beneficially own the shares of Common Stock of the Company
owned by RDC. By reason of their interests in and
relationships with IDB Holding, Raphael Recanati and Jacob
Recanati, who are brothers, and their nephew and niece,
Leon Recanati and Judith Yovel Recanati, who are brother
and sister, may be deemed to share the power to vote and
dispose of and to beneficially own the shares of Common
Stock of the Company beneficially owned by IDB Holding.
(9) Includes 338,028 RDC Offered Shares, 1,800,000 RDC
Restricted Shares and an additional 1,250,000 shares of
Common Stock of the Company beneficially owned by RDC. In
addition to the shares of Common Stock of the Company owned
by RDC, Albar Finance and Leasing Ltd, a wholly-owned
subsidiary of DIC, owns 50,000 shares of Common Stock of
the Company and IDB Holding owns 23,200 shares of Common
Stock of the Company. The RDC Restricted Shares may not be
sold until October 31, 1997.
(10) Assumes the full conversion of the Series M Preferred
Stock.
<TABLE>
<CAPTION>
WARRANTS PRE-OFFERING(1) POST-OFFERING(2)
-------- --------------- ----------------
TOTAL TOTAL
NUMBER OF NUMBER
WARRANTS OF WARRANTS
BENEFICIALLY PERCENTAGE WARRANTS BENEFICIALLY PERCENTAGE
SELLING SHAREHOLDERS OWNED OF CLASS OFFERED OWNED OF CLASS
- -------------------- ----- -------- ------- ----- --------
<S> <C> <C> <C> <C> <C>
The SC Fundamental Value
Fund, L.P.(3) 660,700(4) 66.07% 660,700 0 0%
SC Fundamental Value BVI,
Ltd.(3) 339,300(5) 33.93% 339,300 0 0%
</TABLE>
- -------------------
(1) Beneficial ownership figures include the Warrants issued in
connection with the issuance of the March 1995 Notes and
the June 1994 Notes, all of which are owned by the Selling
Shareholders. For information regarding beneficial
ownership of Common Stock, including the Warrant Shares
issuable upon exercise of the Warrants, see the table
regarding beneficial ownership of Common Stock beginning on
Page 14 of this Prospectus.
(2) Assumes the sale of all Warrants offered by this Prospectus by each
Selling Shareholder to third parties unaffiliated with the Selling
Shareholders.
-15-
<PAGE>
(3) Both the general partner of The SC Fundamental Value Fund,
L.P., S.C. Fundamental, Inc., and the investment manager of
the SC Fundamental Value BVI, Ltd., SC Fundamental BVI,
Inc., are controlled by Messrs. Gary N. Siegler and Peter
M. Collery. Such individuals may be deemed beneficially
own the Warrants owned by the SC Investors. Messrs.
Siegler and Collery disclaim beneficial ownership of such
Warrants.
(4) Consists of 206,400 $7.875 Warrants and 454,300 $8.125
Warrants.
(5) Consists of 93,600 $7.875 Warrants and 245,700 $8.125
Warrants.
LEGAL MATTERS
The validity of the Shares of Common Stock and Warrants 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.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1994
and 1993 and the consolidated statements of operations, shareholders' equity,
and cash flows for the years ended December 31, 1994, 1993 and 1992,
incorporated by reference in this Prospectus, have been incorporated by
reference herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing. In such report, Coopers & Lybrand L.L.P. states, that
with respect to certain affiliated companies, their opinions are based upon the
reports of other independent accountants.
-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..................................... 4
Selling Shareholders and Related
Information..................................... 13
Legal Matters.................................... 16
GEOTEK COMMUNICATIONS, INC.
ISSUANCE AND SALE TO CERTAIN
SELLING SHAREHOLDERS OF UP TO
$36,000,000 OF COMMON STOCK ISSUABLE
UPON CONVERSION OF CONVERTIBLE
NOTES (THE "NOTE SHARES"), ISSUANCE
AND SALE OF 1,000,000 SHARES OF
COMMON STOCK ISSUABLE UPON
EXERCISE OF WARRANTS (THE
"WARRANT SHARES"), RESALE BY
CERTAIN SELLING SHAREHOLDERS OF
THE NOTE SHARES, THE WARRANT
SHARES AND WARRANTS TO ACQUIRE
THE WARRANT SHARES, RESALE BY
CERTAIN SELLING SHAREHOLDERS OF
1,223,684 SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF
SERIES M CUMULATIVE CONVERTIBLE
PREFERRED STOCK AND RESALE BY A
CERTAIN SELLING SHAREHOLDER OF
338,028 SHARES OF COMMON STOCK
____________________
PROSPECTUS
January 18, 1996
____________________
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
GEOTEK COMMUNICATIONS, INC.
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>
<CAPTION>
<S> <C>
Registration fee*............................................................. $ 815.93
Blue sky filing fees and expenses............................................. 1,000.00
Transfer agent and registration fee........................................... 1,000.00
Printing and mailing expenses................................................. 3,000.00
Legal fees and expenses....................................................... 10,000.00
Accounting fees and expenses.................................................. 5,000.00
Miscellaneous................................................................. 5,000.00
Total..................................................................... $25,813.93
----------
</TABLE>
- -------------------
*Exact; all other fees and expenses are estimates.
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, 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.
II-1
<PAGE>
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)
2.6 Stock Purchase Agreement, dated as of September
28, 1995, by and among the Company, Geotek PST,
Inc. and RDC-Rafael Development Corporation.(6)
4.1 Restated Certificate of Incorporation of the Company,
as amended.(7)
4.2 Certificate of Amendment of the Restated Certificate
of Incorporation of the Company filed February 26,
1993.(8)
4.3 Certificate of Amendment of the Restated Certificate
of Incorporation of the Company filed February 16,
1994.(7)
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.(7)
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.(9)
4.8 Certificate of Designation of Series M Cumulative
Convertible Preferred Stock.(9)
4.9 By-Laws of the Company, as amended.(10)
4.10 1989 Employee Stock Option Plan, as amended, of the
Company.(11)
4.11 1994 Employee Stock Option Plan of the Company.(12)
4.12 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.(13)
II-2
<PAGE>
4.13 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.(13)
4.14 Senior Secured Note, dated June 20, 1994, from the
Company in connection with the Note and Warrant
Purchase Agreement referenced in Exhibit 4.12
hereof.(13)
4.15 Senior Secured Note, dated June 20, 1994, from the
Company in connection with the Note and Warrant
Purchase Agreement referenced in Exhibit 4.12
hereof.(13)
4.16 Warrant Certificate issued in connection with the Note
and Warrant Purchase Agreement referenced in Exhibit
4.12 hereof dated June 20, 1994.(13)
4.17 Warrant Certificate issued in connection with the Note
and Warrant Purchase Agreement referenced in Exhibit
4.12 hereof dated June 20, 1994.(13)
4.18 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.(11)
4.19 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.(11)
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 4.18
hereof.(11)
4.21 Senior Secured Convertible Note, dated March 30, 1995,
from the Company in connection with the Note and
Warrant Purchase Agreement referenced in Exhibit 4.18
hereof.(11)
4.22 Warrant Certificate issued in connection with Note and
Warrant Purchase Agreement referenced in Exhibit 4.18
hereof dated March 30, 1995.(11)
4.23 Warrant Certificate issued in connection with Note and
Warrant Purchase Agreement referenced in Exhibit 4.18
hereof dated March 30, 1995.(11)
4.24 Purchase Agreement, dated as of June 29, 1995, by and
between the Company and Smith Barney Inc.(14)
4.25 Indenture, dated as of June 30, 1995, by and between
the Company and IBJ Schroder Bank & Trust Company, as
Trustee.(14)
4.26 Notes Registration Rights Agreement, dated as of
July 6, 1995, by and between the Company and Smith
Barney Inc.(14)
4.27 Pledge Agreement, dated as of July 6, 1995, by and
between the Company and IBJ Schroder Bank & Trust
Company.(14)
4.28 Share Transfer Agreement, dated as of July 6, 1995, by
and between the Company and IBJ Schroder Bank & Trust
Company.(14)
4.29 Charge Over Shares, dated as of July 6, 1995, by and
between the Company and IBJ Schroder Bank & Trust
Company.(14)
4.30 Warrant Agreement, dated as of June 30, 1995, by and
between the Company and IBJ Schroder Bank & Trust
Company.(14)
II-3
4.31 Warrant Share Registration Rights Agreement, dated as
of July 6, 1995, by and between the Company and Smith
Barney Inc.(14)
4.32 Defeasance Security Agreement, dated as of July 6,
1995, by and among the Company, The SC Fundamental
Value Fund, L.P. and SC Fundamental Value BVI, Ltd.(14)
5 Opinion of Klehr, Harrison, Harvey, Branzburg &
Ellers.(6)
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.(7)
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.(11)
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.(15)
10.4 FHMA(TM)Portable Subscriber Unit Agreement, dated as of
May 19, 1995, by and between the Company and Hughes
Network Systems, Inc.(15)
*23.1 Consent of Coopers & Lybrand L.L.P. - Geotek
Communications, Inc.
*23.2 Consent of Shachak Peer Reznick & Co. -
PowerSpectrum Technology Ltd.
Consent of Shachak Peer Reznick & Co. -
Oram Power Supplies (1990) Ltd.
Consent of Shachak Peer Reznick & 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 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.(6)
- ----------------------------
* 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) Incorporated by reference to the Exhibits 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) Previously filed in connection with the initial filing of
this Registration Statement.
(7) Incorporated by reference to the Exhibits to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993.
(8) 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.
(9) Incorporated by reference to the Exhibits to the Company's Current
Report on Form 8-K dated May 26, 1995.
(10) Incorporated by reference to the Exhibits to the
Company's Registration Statement on Form S-3
(Registration No. 33-64117) filed with the Commission
on November 9, 1995.
(11) 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.
(12) Incorporated by reference to the Exhibits to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
(13) Incorporated by reference to the Exhibits to the Company's Current
Report on Form 8-K dated June 1, 1994.
(14) Incorporated by reference to the Exhibits to the
Company's Current Report on Form 8-K dated July 6,
1995.
(15) 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. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Montvale, New Jersey, on the 18th
of January, 1996.
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
Registration Statement has been duly signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES Title Date
- ---------- ----- ----
<S> <C> <C>
* Chairman of the Board; Director January 18, 1996
- ---------------------------------------
Winston J. Churchill
/s/ Yaron I. Eitan President and Chief Executive Officer January 18, 1996
- --------------------------------------- (Principal Executive Officer);
Yaron I. Eitan Director
* Director January 18, 1996
- ---------------------------------------
Walter E. Auch
* Director January 18, 1996
- --------------------------------------
George Calhoun
* Director January 18, 1996
- -------------------------------------
Purnendu Chatterjee
* Director January 18, 1996
- --------------------------------------
Haynes G. Griffin
* Director January 18, 1996
- --------------------------------------
Richard Krants
* Director January 18, 1996
- --------------------------------------
Richard T. Liebhaber
* Director January 18, 1996
- --------------------------------------
Haim Rosen
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES Title Date
- ---------- ----- ----
<S> <C> <C>
* Director January 18, 1996
- --------------------------------------
Kevin W. Sharer
* Director January 18, 1996
- --------------------------------------
William Spier
/s/ Michael McCoy Chief Financial Officer (Principal January 18, 1996
- --------------------------------------- Financial Officer)
Michael McCoy
/s/ Michael Carus Chief Accounting Officer (Principal January 18, 1996
- --------------------------------------- Accounting Officer)
Michael Carus
</TABLE>
* 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. 1 relates.
By: /s/ Yaron I. Eitan
--------------------------------
Yaron I. Eitan, Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Page No. In
Sequentially
Exhibit No. Numbered SysteM
23.1 Consent of Coopers & Lybrand L.L.P. - Geotek
Communications, Inc.
23.2 Consent of Shachak Peer Reznick & Co. -
PowerSpectrum Technology Ltd.
Consent of Shachak Peer Reznick & Co. -
Oram Power Supplies (1990) Ltd.
Consent of Shachak Peer Reznick & 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 Altenburg & Tewes AG -
DBF Bundelfunk GmbH & Co. Betriebs-KG
<PAGE>
EXHIBIT 23.1
<PAGE>
[LETTERHEAD OF COOPERS & LYBRAND L.L.P.]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1 to the
Registration Statement of Geotek Communications, Inc. (the "Company") on Form
S-3 (Reg. No. 33-64533) of our report dated March 30, 1995 (August 28, 1995 as
to Note 19), on our audits of the consolidated financial statements and
consolidated financial statement schedule of the Company 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#3. Our report contains
an emphasis of a matter paragraph related to significant transactions with
related parties in 1992. We also consent to the reference to our firm under the
caption "Experts" in Amendment No. 1 to this Registration Statement.
COOPERS & LYBRAND L.L.P.
New York, New York
January 10, 1996
EXHIBIT 23.2
<PAGE>
[LETTERHEAD OF SHACHAK PEER REZNICK & CO.]
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Amendment No. 1 to the Registration Statement of Geotek
Communications, Inc. (the "Company") on Form S-3 (Reg. No. 33-64533) 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, as amended, for the fiscal year ended December 31, 1994.
Shachak Peer Reznick & Co.
Certified Public Accountants (Isr.)
January 9, 1996
Israel
<PAGE>
[LETTERHEAD OF SHACHAK PEER REZNICK & CO.]
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Amendment No. 1 to the Registration Statement of Geotek
Communications, Inc. (the "Company") on Form S-3 (Reg. No. 33-64533) 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, as amended,
for the fiscal year ended December 31, 1994.
Shachak Peer Reznick & Co.
Certified Public Accountants (Isr.)
January 9, 1996
Israel
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[LETTERHEAD OF SHACHAK PEER REZNICK & CO.]
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Amendment No. 1 to the Registration Statement of Geotek
Communications, Inc. (the "Company") on Form S-3 (Reg. No. 33-64533) 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, as amended,
for the fiscal year ended December 31, 1994.
Shachak Peer Reznick & Co.
Certified Public Accountants (Isr.)
January 9, 1996
Israel
EXHIBIT 23.3
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[LETTERHEAD OF TOUCHE ROSS & CO.]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to the
Registration Statement on Form S-3 of Geotek Communications, Inc. (Reg. No.
33-64533) 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
January 11, 1996
EXHIBIT 23.4
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[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. 1 to the
Registration Statement on Form S-3 of Geotek Communications, Inc. (the
"Company") (Reg. No. 33-64533) 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 the Company, dated 18 June 1993.
KPMG
Reading, England
9 January 1996
EXHIBIT 23.5
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[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. 1 to the Registration Statement of Geotek Communications,
Inc. (the "Company") on Form S-3 (Reg. No. 33-64533) 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,
January 9, 1996
Coopers & Lybrand GmbH
Wirtschaftsprufungsgesellschaft
EXHIBIT 23.6
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[LETTERHEAD OF ALTENBURG & TEWES AG]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1 to the
Registration Statement on Form S-3 of Geotek Communications, Inc. (Reg. No.
33-64533) (the "Company") 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.
Wuppertal, January 9, 1996
ALTENBURG & TEWES AG
WIRTSCHAFTSPRUFUNGSGESELLSCHAFT
former
DUSSELDORFER TREUHAND-GESELLSCHAFT
ALTENBURG & TEWES AG
WIRTSCHAFTSPRUFUNGSGESELLSCHAFT
STEUERBERATUNGSGESELLSCHAFT
Berg Spielberg
Wirtschaftsprufer Wirtschaftsprufer
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