<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
-----------------------------------
Date of Report (Date of earliest event reported): November 3, 1997
INTERAMERICAS COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 0-25194 87-0464860
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1221 Brickell Avenue
Miami, Florida 33131
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 305/377-6790
(Former name or former address, if changed since last report.)
<PAGE> 2
ITEM 5. OTHER EVENTS.
COMPLETION OF PRIVATE PLACEMENT
On October 27, 1997, the Registrant completed a private placement of
its units, consisting of 14% senior notes due October 27, 2007 and 5,250,000
warrants to purchase 5,250,000 shares, $.001 par value, of Common Stock of the
Registrant, in an aggregate amount of up to $150.0 million (the "Offering")
pursuant to Rule 144A and Regulation S promulgated under the US Securities Act
of 1933 (the "Act"). Interest on the Senior Notes will be payable semi-annually
in cash at a rate of 14% per annum on April 27 and October 27 of each year,
commencing April 27, 1998. 5,250,000 warrants, which when exercised would
entitle the holders thereof to acquire an aggregate of 5,250,000 shares of
Common Stock, representing approximately 15.2% of the Common Stock of the
Registrant on a fully diluted basis as of the date of the consummation of the
Offering (assuming full vesting and exercise of all options and warrants on
October 22, 1997). In addition, the initial purchaser was granted 2,250,000
warrants to acquire 2,250,000 shares of Common Stock, .001 par value, of the
Registrant, at an exercise price of $4.40 per share. The securities offered
pursuant to the Offering are not registered under the Act and may not be offered
or sold in the United States absent registration or an applicable exemption from
the registration requirements of the Act.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined financial statements of the
Registrant contained herein, consisting of the Unaudited Pro Forma Condensed
Combined Balance Sheet as of June 30, 1997 and the Unaudited Pro Forma Condensed
Combined Statements of Operation for the year ended December 31, 1996 and the
six months ended June 30, 1997, gives effect to the Offering, the use of
proceeds therefrom and the consummation of the acquisition of Iusatel Chile S.A.
(the "Iusatel Acquisition"). In addition, the pro forma condensed combined
balance sheet of the Registrant as of June 30, 1997 gives effect to the
transactions listed under Item 5 - Other Events contained in this Report and
in the Report on Form 8-K filed by the Registrant on October 24, 1997.
2
<PAGE> 3
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERAMERICAS COMMUNICATIONS CORPORATION
Date: November 3, 1997 /s/ Douglas G. Geib II
------------------------
Douglas G. Geib II
Chief Financial Officer
3
<PAGE> 4
INDEX TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION................ F-2
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET (JUNE 30, 1997)........ F-3
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS....................... F-4
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS........ F-5
<PAGE> 5
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined financial information consists
of the Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 1997
and the Unaudited Pro Forma Condensed Combined Statements of Operations for the
year ended December 31, 1996 and the six months ended June 30, 1997
(collectively the "Pro Forma Statements"). The Unaudited Pro Forma Condensed
Combined Balance Sheet as of June 30, 1997 gives effect to the Offering, the use
of the proceeds therefrom and the consummation of the Iusatel Acquisition, as if
they each had occurred at that date and the related Unaudited Pro Forma
Condensed Combined Statements of Operations for the year ended December 31, 1996
and the six months ended June 30, 1997 gives effect to the Offering, the
application of proceeds therefrom and the consummation of the Iusatel
Acquisition as if they each had occurred at the beginning of the relevant
period. The Iusatel Acquisition is accounted for under the purchase method of
accounting.
The June 30, 1997 historical balance sheet information for ICCA and Iusatel
has been derived from the unaudited June 30, 1997 balance sheets of ICCA and
Iusatel, respectively, included in this Offering Memorandum. The information for
the six months ended June 30, 1997 have been derived from ICCA's and Iusatel's
unaudited statement of operations for the six months ended June 30, 1997
included elsewhere herein. The pro forma adjustments relating to the purchase by
ICCA of Iusatel represent the Company's preliminary determinations of these
adjustments and are based upon available information and certain assumptions the
Company considers reasonable under the circumstances. Final amounts could differ
from those set forth herein. The unaudited historical financial information of
ICCA referred to above, in the opinion of management of ICCA, include all
adjustments consisting only of normal recurring adjustments, necessary for a
fair presentation of the results of ICCA for the unaudited interim periods.
The Pro Forma Statements and accompanying notes should be read in
conjunction with the Company's consolidated financial statements and Iusatel's
Financial Statements, including the notes thereto, appearing elsewhere in this
Offering Memorandum. The Pro Forma Statements do not purport to represent what
the Company's results of operations or financial position would actually have
been if the aforementioned transactions or events had occurred on the dates
specified or to project the Company's results of operations or financial
position for any future periods or at any future date. The pro forma adjustments
are based upon available information and certain adjustments that the Company
believes are reasonable. In the opinion of the Company, all adjustments have
been made that are necessary to present fairly the Pro Forma Statements.
F-2
<PAGE> 6
INTERAMERICAS COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1997
(IN THOUSANDS OF US DOLLARS)
<TABLE>
<CAPTION>
HISTORICAL
----------------------------------------------------
RECENT ICCA PRO FORMA PRO FORMA
ICCA TRANSACTIONS(1) AS ADJUSTED IUSATEL(2) ADJUSTMENTS(3) ICCA
------- --------------- ----------- ---------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents............ $ 394 $ 940(a) $ 1,334 $ 89 $ 8,332(a) $ 9,755
Restricted bank deposits
and escrows............ 853 -- 853 -- 82,147(b) 83,000
Accounts receivable,
net.................... 45 -- 45 1,742 -- 1,787
Notes and other
receivables............ 30 -- 30 203 -- 233
Due from related
parties................ 44 -- 44 -- -- 44
Prepaid expenses and
other.................. 552 -- 552 607 -- 1,159
------- ------- ------- ------ -------- --------
Total current
assets.......... 1,918 940 2,858 2,641 90,479 95,978
Restricted escrows......... -- -- -- -- 42,000(c) 42,000
Property and equipment,
net...................... 5,662 -- 5,662 3,270 -- 8,932
Intangibles, net........... 4,894 -- 4,894 29 4,500(d) 9,423
Deferred financing costs
and other................ 481 10(b) 491 -- 15,146(e) 15,637
------- ------- ------- ------ -------- --------
Total assets...... $12,955 $ 950 $13,905 $5,940 $152,125 $171,970
======= ======= ======= ====== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank lines of credit and
Bridge Notes........... $ 921 $ 850(c) $ 1,771 $ -- $ (1,771)(f) $ --
8% Convertible
Debentures............. 1,974 (1,450)(d) 524 -- (524)(g) --
Accounts payable and
accrued expenses....... 909 -- 909 1,724 -- 2,633
Notes payable............ -- -- -- 697 -- 697
Due to related parties... 297 (240)(e) 57 1,194 -- 1,251
Lease obligations,
current................ 88 -- 88 242 -- 330
Other current
liabilities............ 340 -- 340 917 (73)(h) 1,184
------- ------- ------- ------ -------- --------
Total current
liabilities.......... 4,529 (840) 3,689 4,774 (2,368) 6,095
7% Convertible
Debentures............... 1,347 (500)(f) 847 -- (847)(i) --
Senior Notes............... -- -- -- -- 131,625(j) 131,625
Lease obligations,
long-term................ 456 -- 456 -- -- 456
Other...................... 152 -- 152 132 -- 284
------- ------- ------- ------ -------- --------
Total liabilities...... 6,484 (1,340) 5,144 4,906 128,410 138,460
------- ------- ------- ------ -------- --------
Stockholders' equity....... 6,471 2,290(g) 8,761 1,034 23,715(k) 33,510
------- ------- ------- ------ -------- --------
Total liabilities
and
stockholders'
equity.......... $12,955 $ 950 $13,905 $5,940 $152,125 $171,970
======= ======= ======= ====== ======== ========
</TABLE>
F-3
<PAGE> 7
INTERAMERICAS COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996 SIX MONTHS ENDED JUNE 30, 1997
------------------------------------------------- -------------------------------------------------
HISTORICAL HISTORICAL
-------------------- PRO FORMA PRO FORMA -------------------- PRO FORMA PRO FORMA
ICCA IUSATEL(2) ADJUSTMENTS(4) ICCA ICCA IUSATEL(2) ADJUSTMENTS(4) ICCA
------- ---------- -------------- --------- ------- ---------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales..................... $ 652 $ 7,822 $ -- $ 8,474 $ 585 $ 4,392 $ -- $ 4,977
Operating expenses:
Cost of sales........... 958 5,598 -- 6,556 668 2,515 -- 3,183
Selling, general and
administrative........ 3,345 5,068 -- 8,413 1,754 2,588 -- 4,342
Depreciation and
amortization.......... 706 519 450(a) 1,675 431 257 225(a) 913
------- ------- -------- -------- ------- ------- -------- --------
Total operating
expenses........ 5,009 11,185 450 16,644 2,853 5,360 225 8,438
------- ------- -------- -------- ------- ------- -------- --------
Loss from operations...... (4,357) (3,363) (450) (8,170) (2,268) (968) (225) (3,461)
Other income (expense).... (23) (444) -- (467) 33 (97) -- (64)
Interest expense.......... (246) (1,361) (21,386)(b) (22,993) (531) (154) (10,749)(b) (11,434)
------- ------- -------- -------- ------- ------- -------- --------
Net loss.................. $(4,626) $(5,168) $(21,836) $(31,630) $(2,766) $(1,219) $(10,974) $(14,959)
======= ======= ======== ======== ======= ======= ======== ========
Net loss per common
share................... $ (0.31) $ (2.14) $ (0.17) $ (.93)
======= ======== ======= ========
Weighted average common
shares outstanding
(000's)................. 14,796 14,796 16,153 16,153
======= ======== ======= ========
</TABLE>
F-4
<PAGE> 8
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(IN THOUSANDS OF U.S. DOLLARS)
(1) Represents recent transactions by the Company occurring after July 1, 1997
and prior to the Offering that impact the capitalization of the Company. See
"Certain Relationships and Related Party Transactions."
(a) Cash and cash equivalents:
<TABLE>
<S> <C>
Proceeds received by the Company from the Bridge
Notes.................................................. $ 950
Cash used to pay expenses related to the Bridge Notes... (10)
-------
$ 940
=======
</TABLE>
(b) Deferred financing costs:
<TABLE>
<S> <C>
Expenses in connection with the Bridge Notes............ $ 10
=======
</TABLE>
(c) Bridge Notes:
<TABLE>
<S> <C>
Issuance of Bridge Notes................................ $ 950
Value attributable to warrants issued in connection with
Bridge Notes........................................... (100)
-------
$ 850
=======
</TABLE>
(d) 8% Convertible Debentures:
<TABLE>
<S> <C>
Conversion of aggregate principal amount................ $ 1,450
=======
</TABLE>
(e) Due to related parties:
<TABLE>
<S> <C>
Issuance of 80,000 common shares to extinguish a
liability to related party.................................. $ 240
=======
</TABLE>
(f) 7% Convertible Debentures:
<TABLE>
<S> <C>
Conversion of aggregate principal amount................ $ 500
=======
</TABLE>
(g) Stockholders equity:
<TABLE>
<S> <C>
Value attributable to 1,101,782 shares of Common Stock
issued in connection with the conversion of Convertible
Debentures............................................. $ 1,950
Value attributable to warrants issued in connection with
Bridge Notes........................................... 100
Value of 80,000 shares of Common Stock issued to
extinguish a liability to related party................ 240
Value of 850,000 vested restricted shares of Common
Stock issued to certain officers....................... 2,338
Value of 500,000 vested restricted shares of Common
Stock issued to certain former directors............... 1,420
Value of 300,000 vested restricted shares of Common
Stock issued to extinguish a liability to related
party.................................................. 852
Value of options granted to acquire 850,000 shares of
Common Stock to certain officers....................... 527
Value of options granted to acquire 500,000 shares of
Common Stock to certain former directors............... 355
Noncash compensation expense recognized in connection
with the issuance of 850,000 vested restricted shares
of Common Stock to certain officers.................... (2,338)
Noncash consulting expense recognized in connection with
the issuance of 500,000 vested restricted shares of
Common Stock to certain former directors............... (1,420)
Noncash interest expense recognized in connection with
the issuance of 300,000 vested restricted shares of
Common Stock to extinguish a liability to a related
party.................................................. (852)
Noncash compensation expense recognized is connection
with the grant of options to acquire 850,000 shares of
Common Stock to certain officers....................... (527)
Noncash consulting expense recognized is connection with
the grant of options to acquire 500,000 shares of
Common Stock to certain former directors............... (355)
-------
$ 2,290
=======
</TABLE>
F-5
<PAGE> 9
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF U.S. DOLLARS)
(2) Represents condensed financial information derived from the Iusatel
Financial Statements included elsewhere in this Offering Memorandum. The Iusatel
Financial Statements have been prepared in accordance with Chilean GAAP. For
comparative purposes, the amounts disclosed for the year ended December 31, 1995
have been restated in terms of Chilean Pesos of December 31, 1996 purchasing
power while the unaudited interim June 30, 1997 amounts are expressed in
constant Chilean Pesos of June 30, 1997. Such financial statements also include,
for the convenience of the reader, translation of amounts from Chilean Pesos
into U.S. dollars at the exchange rate on June 30, 1997 of Ch$416.47 = US$1.
The information below for Iusatel reconciles the Chilean GAAP convenience
translation balances to US GAAP. The adjustment column reflects (a) the
principal differences between Chilean GAAP and US GAAP included in Note 28 to
the Iusatel Financial Statements; and (b) the impact of remeasuring
(translating) amounts in accordance with the criteria set forth in Statement of
Financial Accounting Standards No. 52, "Foreign Currency Translation," using the
current rate method of translation, as the Chilean Peso is considered to be the
functional currency and the books and records are maintained in that currency as
follows:
- Assets and liabilities are translated using the current exchange rate at
the balance sheet date.
- Paid-in capital is translated at historical exchange rates.
- Accumulated losses are translated at the weighted average of the
historical rates in effect when the income was earned.
- All revenues and expenses are translated using the exchange rate of the
transaction date.
- Adjustments from translation of the financial statements are reported in
a separate component of equity.
- Exchange gains and losses from translations and balances that are
receivable or payable in a currency other than the functional currency
are included in income.
<TABLE>
<CAPTION>
IUSATEL'S BALANCE SHEET AT JUNE 30, 1997
------------------------------------------
CHILEAN GAAP US GAAP US GAAP
THUS$ ADJUSTMENTS THUS$
-------------- ------------- ---------
<S> <C> <C> <C>
Current assets................................... $2,641 $ -- $2,641
Fixed assets..................................... 3,817 (547) 3,270
Other assets..................................... 30 (1) 29
------ ----- ------
$6,488 $(548) $5,940
====== ===== ======
Current liabilities.............................. $4,774 $ -- $4,774
Long-term liabilities............................ 132 -- 132
Shareholders' equity............................. 1,582 (548) 1,034
------ ----- ------
$6,488 $(548) $5,940
====== ===== ======
</TABLE>
<TABLE>
<CAPTION>
IUSATEL'S STATEMENT OF OPERATIONS FOR THE
---------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1996 SIX MONTHS ENDED JUNE 30, 1997
------------------------------------ ------------------------------------
CHILEAN GAAP US GAAP US GAAP CHILEAN GAAP US GAAP US GAAP
THUS$ ADJUSTMENTS THUS$ THUS$ ADJUSTMENTS THUS$
------------ ----------- ------- ------------ ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Sales................... $ 8,111 $ (289) $7,822 $ 4,419 $(27) $ 4,392
Operating expenses:
Cost of sales......... 4,824 774 5,598 3,137 (622) 2,515
Selling, general and
administrative...... 5,230 (162) 5,068 2,595 (7) 2,588
Depreciation and
amortization........ 536 (17) 519 258 (1) 257
------- ------- ------- ------- ---- -------
10,590 595 11,185 5,990 (630) 5,360
------- ------- ------- ------- ---- -------
Loss from operations.... (2,479) (884) (3,363) (1,571) 603 (968)
Other income
(expense)............. 274 (718) (444) (403) 306 (97)
Interest expense........ (1,410) 49 (1,361) (156) 2 (154)
------- ------- ------- ------- ---- -------
Net loss.............. $(3,615) $(1,553) $(5,168) $(2,130) $911 $(1,219)
======= ======= ======= ======= ==== =======
</TABLE>
F-6
<PAGE> 10
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF U.S. DOLLARS)
(3) Represents pro forma adjustments to reflect the Offering, the application of
proceeds therefrom and the consummation of the Iusatel Acquisition as
follows:
(a) Cash and cash equivalents:
<TABLE>
<S> <C> <C>
Proceeds from Senior Notes................................ $ 150,000
Cash used to pay estimated transaction fees and expenses
of the Offering......................................... (7,500)
Cash used to pay short-term bank lines of credit and
Bridge Notes, net of
restricted bank deposits................................ (1,018)
Cash used to pay Convertible Debentures*.................. (2,900)
Cash used for Iusatel Acquisition**....................... (5,250)
Cash transferred to short-term restricted escrows:**
Collateral Account...................................... $(62,000)
Pledge Account.......................................... (21,000) (83,000)
--------
Cash transferred to long-term restricted escrows:**
Pledge Account (interest due after one year on Senior
Notes)................................................ (42,000)
---------
$ 8,332
=========
</TABLE>
(b) Restricted bank deposits and escrows:
<TABLE>
<S> <C> <C>
Proceeds from the Offering................................ $ 83,000
Restricted bank deposits used to pay bank lines of
credit.................................................. (853)
---------
82,147
=========
</TABLE>
(c) Restricted escrows (long-term):
<TABLE>
<S> <C> <C>
Pledge Account (for interest payments due beyond one year
on Senior Notes)........................................ $ 42,000
=========
</TABLE>
(d) Intangible assets, net:
<TABLE>
<S> <C> <C>
Intangible assets acquired in the Iusatel Acquisition..... $ 4,500
=========
</TABLE>
(e) Deferred financing costs and other:
<TABLE>
<S> <C> <C>
Estimated transaction fees and expenses related to Senior
Notes................................................... $ 7,500
Value of warrants issued to UBS Securities................ 7,875
Write-off unamortized deferred financing costs related to
Convertible Debentures and Bridge Notes................. (229)
---------
$ 15,146
=========
</TABLE>
(f) Bank lines of credit and Bridge Notes:
<TABLE>
<S> <C> <C>
Payment of short-term bank lines of credit................ $ (921)
Payment of Bridge Notes................................... (950)
Unamortized value of the Bridge Notes warrants............ 100
---------
$ (1,771)
=========
</TABLE>
(g) 8% Convertible Debentures:
<TABLE>
<S> <C> <C>
Payment of original principal amount...................... $ (550)
Unamortized value of warrants............................. 26
---------
$ (524)
=========
</TABLE>
(h) Other current liabilities:
<TABLE>
<S> <C> <C>
Payment of accrued interest on Convertible Debentures..... $ (73)
=========
</TABLE>
F-7
<PAGE> 11
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF U.S. DOLLARS)
(i) 7% Convertible Debentures:
<TABLE>
<S> <C> <C>
Payment of original principal amount.................... $ (1,000)
Unamortized value of warrants........................... 153
---------
$ (847)
=========
</TABLE>
(j) Senior Notes:
<TABLE>
<S> <C> <C>
Issuance of Senior Notes.................................. $ 150,000
Proceeds of the Offering attributable to the Warrants
based on their estimated fair value***.................. (18,375)
---------
$ 131,625
=========
</TABLE>
(k) Stockholders equity:
<TABLE>
<S> <C> <C>
Value attributable to the Warrants........................ $ 18,375
Value attributable to the warrants issued to UBS
Securities.............................................. 7,875
Eliminate historical equity of Iusatel.................... (1,034)
Extraordinary loss on early extinguishment of debt........ (1,420)
Reduction in additional paid in capital to eliminate value
of beneficial conversion feature on Convertible
Debentures.............................................. (365)
Value of 100,000 vested shares of Common Stock expected to
be issued to a director upon consummation of the Iusatel
Acquisition............................................. 284
---------
$ 23,715
=========
</TABLE>
* Cash used to pay Convertible Debentures reflects the Company's current
estimate of the amount required to redeem the 7% Convertible Debentures and
the 8% Convertible Debentures. This amount includes the original principal,
accrued interest, redemption premiums, penalties for not filing a
registration statement to register the shares of Common Stock issuable upon
conversion of the Convertible Debentures and penalties for not converting
the 8% Convertible Debentures pursuant to certain conversion notices. See
"Business -- Legal Proceedings" and the "Convertible Debentures."
** See "Use of Proceeds" and "Description of Units -- Description of Senior
Notes -- Proceeds Pledge and Escrow Agreement."
*** Represents the proceeds of the Offering attributable to the Warrants based
on their estimated fair value. Such amount will be recorded as additional
original issue discount ("OID") with respect to the Senior Notes and will be
amortized over the life of the Senior Notes, using the effective interest
method.
F-8
<PAGE> 12
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF U.S. DOLLARS)
(4) Represents pro forma adjustments to reflect the Offering, the application of
proceeds therefrom and the consummation of the Iusatel Acquisition on the
condensed consolidated statements of operations for the year ended December
31, 1996 and for the six months ended June 30, 1997. The 1996 historical
operating results for Resetel and HSA prior to the acquisition by the
Company in 1996 have not been included in the pro forma tables for the year
ended December 31, 1996 since such amounts are not significant.
<TABLE>
<CAPTION>
FOR THE
FOR THE SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
1996 1997
------------ ------------
<S> <C> <C>
(a) Depreciation and amortization:
Represents the amortization of intangible assets
acquired in the Iusatel Acquisition over a 10
year period...................................... $ 450 $ 225
======== ========
(b) Interest Expense
Interest expense on $150.0 million of Senior Notes
at an interest rate of 14.0% per annum........... $(21,000) $(10,500)
Represents current amortization expense related to
deferred financing costs and the original issue
discount attributable to warrants using the
effective interest method over a 10 year
period........................................... (1,386) (693)
Elimination of historical interest expense of
Iusatel for debt that will not be assumed by the
Company pursuant to the acquisition*............. 1,000 --
Elimination of previously recorded interest costs
associated with the issuance of the Convertible
Debentures during 1997 including actual interest
expense, beneficial conversion option, and
amortization of original issue discount
attributable to warrants and deferred financing
costs, net of capitalized interest............... -- 444
-------- --------
$(21,386) $(10,749)
======== ========
</TABLE>
F-9
