<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1996
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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AMERICAN TELECASTING, INC.
(Exact name of registrant as specified in its charter)
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<TABLE>
<S> <C> <C>
DELAWARE 4841 54-14869888
(State or other jurisdiction (Primary Standard Industrial Classification (I.R.S. Employer
of incorporation or organization) Code Number) Identification No.)
</TABLE>
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5575 TECH CENTER DRIVE, SUITE 300
COLORADO SPRINGS, COLORADO 80919
(719) 260-5533
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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ROBERT D. HOSTETLER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AMERICAN TELECASTING, INC.
5575 TECH CENTER DRIVE, SUITE 300
COLORADO SPRINGS, COLORADO 80919
(719) 260-5533
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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Copies to:
ROBERT N. JENSEN, ESQ.
MCDERMOTT, WILL & EMERY
1850 K STREET, N.W.
WASHINGTON, D.C. 20006
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or reinvestment plans, please check the following box. [ ]
If any of the securities being 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 conjunction 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> 2
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================
Title of Each Class Proposed Maximum Proposed Maximum
of Securities to be Amount to be Offering Price per Aggregate Offering Amount of
Registered Registered Share Price Registration Fee
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, par
value $.01 per
share 943,956 shares $12.65(2) $11,941,044 $4,118
========================================================================================================
</TABLE>
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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 3
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* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
***************************************************************************
SUBJECT TO COMPLETION
, 1996
[LOGO] AMERICAN TELECASTING, INC.
943,956 SHARES OF COMMON STOCK
This Prospectus relates to an offering of up to 943,956 shares of Class A
Common Stock, par value $.01 per share (the "Common Stock"), of American
Telecasting, Inc., a Delaware corporation ("ATI"), issuable upon exercise of
warrants (the "Warrants") which were offered and sold in ATI's offering of
units (the "Units") consisting of $201,700,000 principal amount at stated
maturity of 14 1/2% Senior Discount Notes due 2005 (the "2005 Notes") and
Warrants to purchase 943,956 shares of Common Stock, in August 1995 (the "1995
Units Offering").
Each Warrant entitles the holder thereof to purchase 4.68 shares of Common
Stock at $12.65 per share, subject to adjustment under certain circumstances.
Warrant holders may exercise the Warrants at any time on or after August 10,
1996 and on or prior to August 10, 2000 (the "Expiration Date"). The Warrants
will terminate and become void at the close of business on the Expiration Date.
The Warrants are not subject to redemption. Upon exercise, the holders of the
Warrants would be entitled, in the aggregate, to 943,956 shares of Common
Stock, representing approximately 4.5% of the Common Stock outstanding on a
fully-diluted basis as of June 30, 1996.
The Warrants contain anti-dilution provisions which, upon the occurrence
of certain events, provide for the adjustment of (i) the number of shares of
Common Stock purchasable upon exercise of each Warrant, and (ii) the exercise
price of the Warrants. Payment of the exercise price must be made by certified
or official bank check, payable in United States currency to the order of the
Company. Upon payment, presentation, and surrender of the Warrants to First
Union National bank of North Carolina (the "Warrant Agent"), a certificate
evidencing the Common Stock underlying such Warrants will be issued and
delivered.
The Common Stock is quoted on The Nasdaq Stock Market (National Market)
under the symbol "ATEL." On June 28, 1996, the last reported sale price of the
Common Stock was $13 1/4 per share.
AN INVESTMENT IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 6 HEREOF FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this Prospectus and, if given or made, such other
information and representations must not be relied upon as having been
authorized by ATI. Except with respect to facts or events arising after the
date hereof which, individually or in the aggregate, represent a material
change in the information set forth herein, 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 affairs of ATI since the
date hereof or that the information contained herein is correct as of any time
subsequent to its date. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities other than the registered
securities to which it relates. This Prospectus does not constitute an offer
to sell or a solicitation of an the offer to buy such securities in any
circumstances in which such offer or solicitation is unlawful.
THE DATE OF THIS PROSPECTUS IS __________, 1996.
<PAGE> 4
AVAILABLE INFORMATION
ATI has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (referred to herein,
together with all amendments, schedules, supplements and exhibits thereto, as
the "Registration Statement") under the Securities Act of 1933, as amended, for
the registration of the securities offered hereby. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement, certain items of which are
contained in exhibits and schedules to the Registration Statement as permitted
by the rules and regulations of the Commission. For further information with
respect to ATI and the securities offered hereby, reference is made to the
Registration Statement, including the exhibits thereto, and the financial
statements and notes incorporated by reference herein. Statements made in this
Prospectus concerning the contents of any document referred to herein are not
necessarily complete. With respect to each such document filed with the
Commission as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.
ATI is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports and other information with the Commission. Such
reports, proxy statements and other information filed by ATI with the
Commission may be inspected at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, or
at its regional offices located at the Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material can be obtained
from the public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents have been filed by ATI with the Commission
pursuant to the requirements of the Exchange Act (file no. 0-23008) and are
hereby incorporated herein by reference and made a part of this Prospectus:
(i) ATI's Annual Report on Form 10-K for the fiscal year ended December
31, 1995;
(ii) ATI's Proxy Statement for its 1996 Annual Meeting of Stockholders;
(iii) ATI's Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1996;
(iv) ATI's Current Report on Form 8-K dated May 10, 1995;
(v) ATI's Current Report on Form 8-K dated December 28, 1995;
(vi) ATI's Current Report on Form 8-K dated January 5, 1996;
(vii) ATI's Current Report on Form 8-K dated January 22, 1996; and
(viii) ATI's Current Report on Form 8-K dated April 1, 1996.
All reports and other documents filed with the Commission by ATI pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the offering made by
this Prospectus shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified, replaced, or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
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ATI will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents incorporated by reference herein (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into this Prospectus). Requests should be directed
to:
American Telecasting, Inc.
5575 Tech Center Drive, Suite 300
Colorado Springs, Colorado 80919
Attention: Securityholder Relations
Telephone number: (719) 260-5533
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<PAGE> 6
THE COMPANY
GENERAL
The Company is a leading operator of wireless cable television systems.
Management believes that the Company is the largest wireless cable company in
the United States as measured by number of subscribers. As of March 31, 1996,
the Company provided subscription television service to approximately 174,900
subscribers through 38 operational systems located in 19 states. In addition
to its operational systems, as of March 31, 1996, the Company held significant
channel interests in 18 other markets where it expects to construct wireless
cable systems in the future, assuming, among other factors, the availability of
financing as discussed herein. As of March 31, 1996, the Company had
approximately 11.1 million Estimated Households in Service Area (as defined
herein) in its operational or target markets, although some of these households
will be "shadowed" and unable to receive the Company's service due to certain
characteristics of the particular market, such as transmitter height and
transmission power, terrain and foliage ("Line-of-Sight Constraints"). The
percentage of Estimated Households in Service Area that may be shadowed due to
Line-of-Sight Constraints generally ranges from 10 to 50% depending upon the
market.
Wireless cable systems use microwave frequencies authorized by the Federal
Communications Commission (the "FCC") to broadcast from a single transmission
site to a receiving antenna at each customer's location. Wireless cable
technology provides a relatively low cost medium to transmit video
entertainment and information services to customers in single family homes,
multiple dwelling unit properties and commercial properties. Unlike
traditional franchise cable systems, wireless cable systems do not require
extensive coaxial cable networks, amplifiers and related equipment. As a
result, capital costs and transmission-related operating costs are
substantially less than those of a typical franchise cable system. Due to this
comparative economic advantage, the Company generally has been able to charge
20 to 30% less than its franchise cable competitors. The Company expects to
maintain its cost and pricing advantage despite the deployment of other
emerging technologies, such as fiber optic systems and direct broadcast
satellite transmission, by existing and new competitors in the subscription
television industry.
The Company differentiates itself from its franchise cable competitors
both by utilizing its lower cost structure to offer customers lower prices and
by emphasizing its strong commitment to customer service. The Company focuses
primarily on developing wireless cable systems in mid-sized markets where
terrain and other conditions are conducive to economical delivery of wireless
cable services. The Company targets value-conscious customers in both cabled
and uncabled areas with its programming, which includes ESPN, CNN, USA Network,
Nickelodeon, Discovery, regional sports channels, MTV, local broadcast channels
and other "basic" channels. The Company also offers Home Box Office, Showtime
and The Disney Channel as "premium" channels, as well as selected pay-per-view
services.
During 1996, the Company has focused on managing its existing systems
through more efficient and cost-effective methods, planning for the
implementation of a digital technology strategy in select markets, and
developing strategic alliances. During the remainder of this year, the Company
intends to continue the growth and launch of certain of its analog wireless
cable systems that management believes can achieve stable customer bases with a
favorable balance of customer growth, subscriber capital investment, and
expenses. Other systems operated by the Company will not be managed for
customer growth, but rather for optimal cash flow from existing customers. In
these systems, the Company intends to focus its marketing efforts on new
commercial and multiple dwelling unit customers.
RECENT DEVELOPMENTS
Operating Results. The number of subscribers to the Company's wireless
cable service increased from 106,500 to 173,700 in 1995. Approximately 37% of
this growth was due to systems acquired during the year and approximately 63%
resulted from internal growth. During 1995, the Company acquired eight
operating wireless cable systems and completed construction and commenced
operation of systems in Ft. Collins and Greeley, Colorado; Yuba City,
California; and Lincoln, Nebraska. As of March 31, 1996, the Company provided
subscription television service to approximately 174,900 subscribers.
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Financing Activities. In August 1995, the Company completed the 1995
Units Offering, resulting in net proceeds to the Company of approximately $94.9
million. In May 1996, the Company completed a public offering (the "1996
Primary Offering") of 1,700,000 shares of its Common Stock at a price of $12
5/8 per share, resulting in net proceeds to the Company of approximately $20.3
million (after deducting underwriting discounts and commissions but before
deducting other expenses of the offering).
Separate Offering By Existing Shareholders. In February 1996, the Company
filed a registration statement (the "Shelf Registration Statement") with the
Commission covering the sale of up to 640,019 shares of its previously issued
Common Stock by certain existing stockholders (the "Selling Shareholders").
The Shelf Registration Statement was declared effective in April 1996. The
Company intends to keep the Shelf Registration Statement effective for 180 days
from the date of effectiveness. The shares of Common Stock registered pursuant
to the Shelf Registration Statement were issued by the Company to the Selling
Shareholders in connection with certain capital raising activities prior to the
Company's IPO (as defined herein), the provision of financial advisory services
prior to the IPO, or acquisitions by the Company of other wireless cable
companies. None of the Selling Shareholders is an officer or director of the
Company or an owner of more than 5% of the Company's Common Stock.
Acquisitions. Since May 1993, the Company has acquired 22 operational
wireless cable systems and wireless cable channel rights in 18 additional
markets. On January 30, 1995, the Company acquired an operating wireless cable
system in Medford, Oregon (the "Medford Acquisition"), which served
approximately 900 subscribers as of the date of acquisition. On March 7, 1995,
the Company acquired an operating wireless cable system in Sheridan, Wyoming
(the "Sheridan Acquisition"), which served approximately 600 subscribers as of
the date of acquisition. On May 10, 1995, the Company completed the
acquisition of a 65% ownership interest in Fresno MMDS Associates (the "Fresno
Partnership"), a partnership that operates wireless cable systems in each of
Fresno, Visalia and Merced, California (the "FWCTI Acquisition"). The systems
acquired in the FWCTI Acquisition collectively served approximately 14,200
subscribers as of the date of acquisition. On July 14, 1995, the Company
acquired an operating wireless cable system in Redding, California, which
served approximately 200 subscribers as of June 30, 1995. On September 15,
1995, the Company acquired (the "Superchannels Acquisition") 58% of the
outstanding common stock of Superchannels of Las Vegas, Inc. ("Superchannels").
Superchannels operates a wireless cable system in Las Vegas, Nevada, which
served approximately 4,300 subscribers as of the date of acquisition. On
November 30, 1995, the Company acquired an operating wireless cable system
serving Rapid City, South Dakota (the "Rapid City Acquisition"), which served
approximately 4,500 subscribers as of the date of acquisition. On June 28,
1996, the Company entered into a definitive agreement to acquire wireless cable
channel rights and certain other assets (including Satellite Master Antenna
Television ("SMATV") assets) in Cincinnati, Ohio (the "Cincinnati Acquisition")
for aggregate consideration of approximately $5.2 million. On that same date,
the Company paid approximately $2.0 million of the purchase price, acquired
certain of the SMATV assets, and entered into a management agreement to operate
the SMATV assets that it has not yet acquired. The SMATV assets acquired or to
be acquired by the Company in connection with the Cincinnati Acquisition served
approximately 3,100 subscribers as of June 28, 1996. Except for the Cincinnati
Acquisition, as of the date of this Prospectus, the Company has no written
agreements, arrangements or understandings to acquire any material wireless
cable businesses or assets, although the Company continuously pursues
opportunities to acquire businesses and channel rights that are consistent with
the Company's business plan.
RBOC Investments. A significant recent development in the wireless cable
industry has been the investment by regional Bell operating companies ("RBOCs")
in wireless cable companies. For example, during 1995, Bell Atlantic and NYNEX
invested $100.0 million in CAI Wireless Systems, Inc. ("CAI") and Pacific
Telesis ("PacTel") acquired both Cross Country Wireless, Inc. ("Cross Country")
and Wireless Holdings, Inc. ("Wireless Holdings") for aggregate purchase prices
of approximately $175.0 million each. The Company is pursuing opportunities to
enter into strategic relationships with RBOCs or other providers of
telecommunications services. Such relationships could involve, among other
things, joint ventures, sales or exchanges of stock or assets, or loans to or
investments in the Company by strategic partners. As of the date of this
Prospectus, the Company has not reached any agreements or understandings with
respect to such relationships, and there can be no assurance that any such
agreements or understandings will be reached.
BTA Auction. The Company participated in the FCC's recent auction of the
rights to apply for and obtain available Multipoint Distribution Service
("MDS") licenses in 493 designated basic trading areas ("BTAs") throughout the
United States. The winning bidder in each BTA obtained the exclusive right to
apply for available MDS licenses in that BTA and will receive the channel
authorizations as long as its station proposals comply with
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the FCC's interference requirements and other rules. However, in order to
provide wireless cable service in these markets, the BTA winner must secure the
right to use a site for a transmission facility and also may need to obtain the
consent of other parties for the acceptance of interference from its proposed
stations. The Company was the winning bidder in 59 BTAs and has filed either
applications for new stations or statements of intention with respect to each
such BTA. The FCC must approve the applications before the MDS authorizations
will be issued. Competing applications cannot be filed but the FCC will
consider petitions to deny the auction winners' applications. There can be no
assurance that the FCC will approve the Company's applications, and the Company
cannot reasonably predict when such approvals will be given, or, even if
granted, whether the Company will ultimately have access to a sufficient number
of channels to have a viable system in each BTA for which it was the winning
bidder. In BTAs with respect to which the Company determines not to file
applications, the Company is required to file statements of intention
indicating its future plans for those BTAs. Regardless of whether the Company
initially applies for additional MDS authorizations in any of its BTAs, as long
as the Company continues to hold the BTA rights, other entities seeking new
licenses or certain modifications to existing licenses within the Company's
BTAs must seek approval from the Company, as the BTA owner. Similarly, to the
extent the Company wishes to obtain new licenses or certain modifications to
its existing licenses in markets in which it was not the BTA winner, it will be
required to negotiate with the BTA owner for approval of such licenses or
modifications. See "Risk Factors--Regulation."
Recent Legislation. On February 8, 1996, the Telecommunications Act of
1996 (the "1996 Act") was enacted. Among other things, the 1996 Act eliminates
the cable/telephone cross-ownership restriction, allowing a telephone company
the option of providing video programming within its telephone service area
over a cable system or other video delivery system. Conversely, cable
companies are now permitted to provide telephone services. As a result of
these developments, the Company may experience increased competition from
telephone companies, which have significantly greater financial and other
resources than the Company.
ATI was incorporated in Delaware in December 1988 and has its principal
executive offices at 5575 Tech Center Drive, Suite 300, Colorado Springs,
Colorado 80919. ATI's telephone number is (719) 260-5533. ATI operates its
wireless cable systems through its subsidiaries. Except as otherwise
indicated, references in this prospectus to ATI refer solely to American
Telecasting, Inc. and references to the "Company" refer to American
Telecasting, Inc. and its subsidiaries collectively.
RISK FACTORS
In addition to the other information contained or incorporated by
reference in this Prospectus, the following factors should be considered
carefully in evaluating an investment in the Common Stock offered by this
Prospectus.
Cash Flow Required to Service Substantial Indebtedness. The Company is
highly leveraged. As of March 31, 1996, the Company had $266.9 million of
outstanding indebtedness and stockholders' equity of $37.7 million. The
indentures (the "Indentures") relating to the Company's 14 1/2% Senior Discount
Notes due 2004 (the "2004 Notes") and the 2005 Notes (collectively, the
"Notes") may permit the Company to incur additional indebtedness in the future,
subject to certain limitations. Subject to the terms of the Indentures,
certain indebtedness of ATI's subsidiaries may be secured by the assets of ATI
and its subsidiaries. The Company has one revolving credit facility (the
"Credit Facility") under which maximum potential borrowings currently aggregate
$8.5 million, although no amounts are currently available for borrowing under
such Credit Facility. As of March 31, 1996, $8.5 million was outstanding under
the Credit Facility. Outstanding borrowings under the Credit Facility bear
interest at the bank's prime rate plus 2.25% (10.50% at March 31, 1996).
Since inception, the Company's cash flow from operations has been
insufficient to cover its fixed charges. There can be no assurance that ATI
will be able to generate sufficient cash flow in the future to cover required
interest and principal payments associated with its outstanding indebtedness.
Commencing December 15, 1999, cash interest on the 2004 Notes will be payable
at the rate of 14.5% per annum (approximately $28.5 million per annum). In
addition, the interest rate on the 2004 Notes will be increased by 1.0% if the
Company does not, by November 10, 1996, issue equity securities or debt
subordinated in right of payment to the 2004 Notes valued at $26.0 million or
more. Commencing February 15, 2001, cash interest on the 2005 Notes will be
payable at the rate of 14.5% per annum (approximately $29.2 million per annum).
The full principal amount of the 2004 Notes,
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which is approximately $196.9 million, will become due on June 15, 2004. The
full principal amount of the 2005 Notes, which is approximately $201.7 million,
will become due on August 15, 2005. Many factors, some of which will be beyond
ATI's control, will affect its cash flow from operations and, thereby, its
ability to service its indebtedness. If ATI were to be unable to meet interest
and principal payments on its outstanding indebtedness in the future, it may,
depending upon the circumstances which then exist, find it necessary to seek
additional equity or debt financing, refinance its existing indebtedness or
sell assets to raise funds to repay its indebtedness. Any such actions may
require the approval of existing and future lenders to ATI or its subsidiaries
or be limited by the terms of the instruments relating to their indebtedness,
including the Indentures. There can be no assurance that sufficient equity or
debt financing would be available or, if such financing were available, that it
would be on terms acceptable to ATI. In addition, there can be no assurance
that ATI would be able to refinance its existing indebtedness or that
sufficient funds could be raised through asset sales.
Potential Acceleration of Credit Facility Indebtedness. As of March 31,
1996, the Company was not in compliance with certain covenants of the Credit
Facility relating to its maintenance of specified minimum subscriber numbers,
annualized operating cash flow to pro forma debt service, funded indebtedness
to annualized operating cash flow, funded indebtedness per subscriber, and
trailing fixed charge coverage ratios. The Company has not been able to obtain
a waiver of such violations. As a result, the lender has the ability, at any
time, to exercise its rights and remedies under the Credit Facility, including
but not limited to, acceleration of all amounts outstanding under the Credit
Facility. Accordingly, all amounts outstanding under the Credit Facility have
been classified as a current liability in the Company's Consolidated Financial
Statements. The Company expects that it will continue to be in violation of
these covenants throughout 1996. Acceleration of amounts outstanding under the
Credit Facility would constitute an event of default under the Indentures,
which could, under certain circumstances, provide holders of the Notes the
ability to exercise their rights and remedies under the Indentures, including
but not limited to, acceleration of all amounts outstanding under the Notes.
The Credit Facility is secured by FWCTI's 65% partnership interest in the
Fresno Partnership, and by the assets of the Fresno Partnership, which consist
primarily of wireless cable systems in Fresno, Visalia and Merced, California.
The Company currently has sufficient cash to be able to repay all amounts
outstanding under the Credit Facility ($8.5 million as of March 31, 1996) if
such repayment were to become necessary. The Company does not currently have
sufficient cash to be able to repay all amounts outstanding under the Notes.
Thus, if the Notes were to be accelerated, the Company would be required to
seek additional financing, refinance the Notes, or sell assets to raise funds
to repay the Notes. There can be no assurance that sufficient additional
financing would be available on terms acceptable to the Company, or at all. In
addition, there can be no assurance that the Company would be able to refinance
the Notes or that sufficient funds could be raised through asset sales.
The Company does not expect that it will be able to expand the Fresno,
Visalia and Merced systems without additional bank borrowings. Due to the
status of the Credit Facility, among other factors, there can be no assurance
that such additional borrowings will become available. However, management
does not expect that its inability to expand the Fresno, Visalia and Merced
systems will have a material adverse effect on the financial position and
results of operations of the Company as a whole.
History of Losses and Negative Operating Cash Flow. The Company has
incurred negative cash flow from operations, as well as operating and net
losses, in each year since its inception in 1988. As of March 31, 1996, the
Company had an accumulated deficit of approximately $110.7 million. Losses
incurred since inception are attributable primarily to start-up costs, interest
expense and depreciation of assets required to develop wireless cable systems
in various markets. The Company expects to incur additional operating and net
losses in the foreseeable future, depending upon its rate of growth and future
acquisitions. There can be no assurance that the Company will ever generate
sufficient operating revenues to achieve or sustain positive cash flow from
operations.
Significant Future Capital Needs. The development of wireless cable
systems requires substantial investment on an ongoing basis to finance capital
expenditures and other expenses necessary to achieve subscriber growth.
Management expects that the Company will require at least $17.0 million of
additional debt or equity financing before the end of 1996 to cover ongoing
operating losses and to achieve its targeted subscriber levels in its operating
systems and target markets for 1996. Without additional equity or debt
financing during 1996, the Company may be required to curtail its operations
and expansion plans. Additional debt or equity financing also may be required
to fund future acquisitions of wireless cable companies, wireless cable systems
or channel interests, to convert existing systems to digital operation, and to
develop systems in additional markets. As a result
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of certain covenants in the Indentures, the Company's additional borrowing
capacity (other than debt which may be issued to a strategic investor that is
subordinated to the Notes) was limited to approximately $1.3 million as of May
31, 1996. Accordingly, the Company's ability to finance ongoing working
capital and system expansion requirements from borrowings under existing or
future credit facilities is currently limited by the terms of the Indentures,
and may also be limited by the current status of the Credit Facility and the
Company's inability to generate sufficient earnings to cover its fixed charges.
As a result, the Company's current financing requirements can be met only
through equity financing or subordinated debt provided by a strategic investor,
and not through other sources of debt financing. See "--Cash Flow Required to
Service Substantial Indebtedness," and "--Potential Acceleration of Credit
Facility Indebtedness," There can be no assurance that the Company will be
able to obtain additional debt or equity capital on satisfactory terms, or at
all, to meet its future financing needs. The Company's future capital
requirements will depend upon a number of factors, including marketing
expenses, staffing levels, and subscriber growth and turnover, as well as other
factors that are not within the Company's control, such as competitive
conditions, programming costs and capital costs. The lack of available
additional capital could have a significant negative effect on the Company's
growth rate and its ability to compete successfully in the subscription
television industry.
Possible Non-Consummation of Strategic Relationships. The Company is
pursuing opportunities to enter into strategic relationships with RBOCs or
other providers of telecommunications services. As of the date of this
Prospectus, the Company has not reached any agreements or understandings with
respect to such relationships, and there can be no assurance that any such
agreements or understandings will ever be reached. If any agreements or
understandings are reached, consummation of such strategic relationships likely
will require the consent of holders of the Notes.
Limited Operating History; Early Stage Company. The Company first began
providing subscription television service in December 1989. Prospective
investors, therefore, have limited historical financial information about the
Company upon which to base an evaluation of the Company's performance and an
investment in the Common Stock. In addition, prospective investors should be
aware of the difficulties encountered by enterprises in early stages of
development, especially in view of the intense competition that is
characteristic of the subscription television industry. Given the Company's
limited operating history, there can be no assurance that it will be able to
develop a sufficiently large subscriber base to achieve or sustain positive
cash flow from operations and to compete successfully in the subscription
television industry.
Prohibition on Subsidiaries Transferring Funds to ATI. The Credit Facility
contains covenants prohibiting certain of ATI's subsidiaries from transferring
funds in the form of cash dividends, loans or advances to ATI. ATI's ability
to use operating cash flow from one system to support development of other
systems and to pay ATI's administrative expenses is limited by such covenants.
In addition, the Indentures prohibit ATI from declaring cash dividends, among
other things.
Competition and New Technologies. The cable television industry is a
highly competitive business. Wireless cable systems typically compete with
both franchise cable companies (locally authorized providers of subscription
television service that use coaxial cable, fiber optic or other continuous
network distribution media to deliver programming) and satellite delivery
systems, although recent regulatory changes and technological developments have
encouraged new competitors, such as telephone companies, to enter the
subscription television business. Many of the Company's existing or potential
competitors have substantially greater name recognition and financial,
technical and human resources than the Company and may be better equipped to
develop and operate systems providing subscription television service. While
the Company believes that its ability to charge lower prices provides a
competitive advantage, aggressive price competition by any existing or new
company in the subscription television industry would have a material adverse
effect on the Company's results of operations and financial condition.
Subscription television providers also compete with conventional television
stations and video rental stores, among others. In addition, within each
market, the Company initially must compete with others to acquire, from the
limited number of channel licenses issued, a minimum number of channels needed
to establish a viable system.
New and advanced technologies for the subscription television industry,
such as digital compression, fiber optic networks, direct broadcast satellite
transmission, and 28 GHz microwave transmission, are in various stages of
development. These technologies are being developed and supported by entities,
such as franchise cable companies and regional telephone companies, that have
significantly greater financial and other resources than the
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Company. When deployed, these new technologies could have a material adverse
effect on the demand for wireless cable service. There can be no assurance that
the Company will be able to compete successfully with existing competitors or
new entrants in the market for subscription television services.
Regulation. The right to broadcast on wireless cable frequencies is
heavily regulated by the FCC. In each metropolitan statistical area, the FCC
has authorized only up to 33 channels for transmission of wireless cable
programming. Up to 13 channels typically can be owned by commercial operators
for full-time usage without programming restrictions. The remaining 20
channels typically are authorized for educational purposes, although excess
capacity can be leased by wireless cable operators, subject to certain
programming restrictions. Licenses for both commercial and educational
channels are granted based upon applications filed with the FCC. FCC approval
also is required for assignment of existing licenses or transfer of control of
license holders. Recently, the FCC conducted an auction of the rights to apply
for and obtain available MDS licenses in 493 designated BTAs. While the
Company was the winning bidder in 59 BTAs, it did not win the BTA rights in all
of its operational or target markets. To the extent that the Company wishes to
obtain new licenses or certain modifications to its existing licenses in these
BTAs, it will be required to negotiate with the BTA owner for approval of such
licenses or modifications. The requirement for approval of new licenses and
certain license modifications by the FCC, as well as the BTA owner in BTAs not
owned by the Company, could delay or impede the Company's ability to launch new
systems and/or expand the capacity of its existing systems. FCC licenses are
limited in duration and subject to renewal procedures. While current FCC rules
are intended to promote development of a competitive cable television industry,
the rules and regulations affecting the cable industry could change, and any
future changes in FCC rules, regulations, policies or procedures could have a
negative impact on the industry as a whole and the Company in particular.
The Communications Act of 1934 (the "Communications Act") provides that
certain types of FCC licenses shall not be held directly by corporations of
which non-U.S. citizens or entities ("Aliens") own of record or vote more than
20% of the capital stock. In situations in which such an FCC licensee is
directly or indirectly controlled by another corporation, Aliens may own of
record or vote no more than 25% of the controlling corporation's capital stock.
ATI's Restated Certificate of Incorporation requires that all of its officers
and directors be U.S. citizens and empowers the Board of Directors to redeem
ATI's outstanding capital stock to the extent necessary to prevent the loss or
secure the reinstatement of any license or franchise from any governmental
agency if a situation arises whereby more than the permitted number of
outstanding shares of capital stock of ATI are owned or voted by Aliens.
Moreover, the Restated Certificate of Incorporation provides that, in such a
situation, no transfers of shares may be made to Aliens and the shares which
caused the Company to exceed the statutory limit may neither be voted, receive
dividends nor be entitled to any other rights, until transferred to U.S.
citizens.
On February 8, 1996, the 1996 Act became law. Among other things, the
1996 Act eliminates the cable/telephone cross-ownership restriction, allowing a
telephone company the option of providing video programming within its
telephone service area over a cable system or other video delivery system.
Conversely, cable companies are now permitted to provide telephone services.
The 1996 Act also limits and, in some cases, eliminates FCC regulation of cable
rates established by the Cable Television Consumer Protection and Competition
Act of 1992 (the "1992 Cable Act"), depending upon the size of the cable system
and whether the system is subject to effective competition and the nature of
the rate. The 1996 Act also provides cable operators with greater flexibility
to offer lower rates to certain of their customers and, consequently, the
ability to provide discounts to subscribers served, or potentially served, by
the Company. The 1996 Act vests the FCC with exclusive jurisdiction over the
provision of DBS service and preempts the authority of local authorities to
impose certain taxes on such service. Because the FCC has not yet promulgated
rules implementing many of the provisions of the 1996 Act, management is unable
to predict at this time the impact of the 1996 Act on the Company in particular
or the wireless cable industry as a whole.
Wireless cable operators are subject to regulation by the Federal Aviation
Administration with respect to construction of transmission towers and to
certain local zoning regulations affecting construction of towers and other
facilities. There also may be restrictions imposed by local authorities,
neighborhood associations and other similar organizations limiting the use of
certain types of reception equipment used by the Company.
Legislation has recently been introduced in several states that would
authorize state and local authorities to impose taxes on providers of video
programming, including wireless cable operators, based upon their gross
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receipts. Because the nature of any such legislation if enacted, is unknown,
the Company cannot predict what impact such legislation would have upon its
results of operations and financial condition.
Future changes in the foregoing regulations, or any other regulations
applicable to the Company, could have a material adverse effect on the
Company's results of operations and financial condition.
Dependence Upon Program Material and Channel Lease Agreements. The Company
has fixed-term contracts with various program suppliers, such as ESPN, HBO and
Showtime. These contracts generally cover a period of two years and are
typically renewable upon expiration. Although the Company has no reason to
believe that these contracts will be terminated or will not be renewed upon
expiration, if the contracts are not renewed for any reason, the Company will
be required to seek program material from other sources. While recent
legislation requires that vertically integrated multiple cable system operators
sell programming to their competitors on fair and reasonable terms, that
legislation is the subject of various legal challenges. If the legislation
were to be found unconstitutional or were superseded by legislation adopting
less restrictive requirements for programmers, programmers might raise their
prices or make their programs unavailable to the Company.
The Company is also dependent on long-term leases with third parties for
the majority of its wireless cable channels. Under FCC rules, the term of
certain of the leases cannot exceed the term of the license granted by the FCC
to the lessor (typically ten years). While many of the Company's leases
provide for automatic renewals, or require the parties to negotiate renewals in
good faith upon expiration, there can be no assurance that these leases will be
renewed or extended beyond their current terms or on terms satisfactory to the
Company. Similarly, the failure by these lessors to comply with the terms of
their FCC authorizations or the FCC's rules could result in the termination or
forfeiture of their authorizations or denial of their renewal by the FCC. Such
terminations, forfeitures or denials of renewal by the FCC or failure to obtain
renewal of channel lease agreements would result in the Company's having to
reduce the amount of programming it offers.
Difficulties and Uncertainties of a New Industry. While wireless cable
television is not a new technology, it is a new industry with a short operating
history. Potential investors should be aware of the difficulties and
uncertainties that are normally associated with new industries, such as lack of
consumer acceptance, difficulty in obtaining financing, increasing competition,
advances in technology and changes in laws and regulations. There can be no
assurance that the wireless cable industry will develop and survive as a viable
industry.
Management of Growth. The Company has experienced rapid growth in its
number of employees, the scope of its operating and financial systems, and the
geographic area of its operations. This growth has increased the operating
complexity of the Company, and has increased the level of responsibility for
both existing and new management personnel. In managing this growth, the
Company will be required to continue to improve its operating and financial
systems and to expand, train and manage its employee base. There can be no
assurance that the Company will be able to improve its operating and financial
systems to keep pace with its expected growth or to attract and retain a
sufficient number of qualified employees to meet the Company's needs during its
growth.
Physical Limitations of Wireless Cable Transmission. In order to be
effective, wireless cable transmission requires a clear "line-of-sight" between
the microwave transmitter located on the operator's transmission antenna and
the antenna located on a subscriber's home or building. A portion of the homes
within a wireless cable operator's broadcast signal area may be unable to
receive wireless cable service due to signal obstructions such as hills, tall
buildings and dense foliage. Certain of these signal blockages can be
ameliorated by increasing transmission power and using engineering techniques
such as pre-amplifiers, beam benders and signal repeaters, which increase the
cost per subscriber. Franchise cable operators do not have line-of-sight
concerns and, therefore, may have a competitive advantage over wireless cable
operators in those areas where the reception of wireless cable signals is
difficult or impractical.
Expiration of Warrants. The Warrants terminate and become void at the
close of business on the Expiration Date (August 10, 2000). The Company shall
give notice not less than 90, or more than 120, days prior to the Expiration
Date to the registered holders of then outstanding Warrants to the effect that
the Warrants will terminate and become void as of the close of business on the
Expiration Date. If the Company fails to give such notice, the Warrants will
nonetheless terminate and become void as of the close of business on the
Expiration Date.
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Minority Interests in Certain Subsidiaries. ATI is a holding company that
conducts most, and may in the future conduct all, of its business through its
subsidiaries. ATI's subsidiaries include non-operating subsidiaries that hold
channel interests, subsidiaries that operate systems, and subsidiaries that do
both. Certain of ATI's subsidiaries are not wholly-owned. Although ATI has a
sufficient interest in each of its subsidiaries to be able to exercise control
over them, ATI may owe a fiduciary duty to the holders of various minority
interests in its subsidiaries, and may be required to deal with such
subsidiaries on terms no less favorable to such subsidiaries than could be
obtained from unaffiliated third parties.
Control by Existing Stockholder. As of May 24 , 1996, Donald R. DePriest,
Chairman of the Board of ATI, controlled directly or indirectly 26.8% of the
total outstanding Common Stock (including the 12.7% which was held of record by
MCT Investors, L.P.). Thus, Mr. DePriest holds a substantial ownership interest
in ATI and may be in a position to significantly influence the election of
ATI's directors and otherwise control the business and affairs of the Company.
Anti-Takeover Provisions. ATI's Restated Certificate of Incorporation, the
Delaware General Corporation Law, the Indentures and the Credit Facility
contain provisions that might diminish the likelihood that a potential acquiror
would make an offer for the Common Stock, impede a transaction favorable to the
interests of stockholders or make it difficult to effect a change in control of
ATI and replace incumbent management. The existence of these provisions may
have a negative effect on the market price of the Common Stock. See
"Description of Capital Stock--Certain Charter Provisions and Delaware Law."
Possible Volatility of Price of the Common Stock. The market price of the
Common Stock has been, and may continue to be, subject to wide fluctuations in
response to quarterly variations in the Company's results of operations,
changes in estimates by analysts, conditions in the wireless cable industry or
general market or economic conditions. In addition, in recent years the stock
market has experienced extreme price and volume fluctuations. These
fluctuations have had a substantial effect on the market prices for many
emerging growth companies and are often unrelated to the operating performance
of the specific companies. Such market fluctuations could adversely affect the
price of the Common Stock.
Dilution. At March 31, 1996, the deficit in net tangible book value per
share of the Common Stock was $8.18. After giving effect to the exercise of
all outstanding Warrants in exchange for the Common Stock offered hereby, the
deficit in net tangible book value per share as of March 31, 1996, as adjusted,
would have been $7.06. Accordingly, holders who exercise their Warrants will
experience immediate dilution in net tangible book value of $19.71 per share.
Shares Eligible for Future Sale. The sale, or availability for sale, of
substantial amounts of Common Stock in the public market in connection with or
subsequent to this offering could adversely affect the prevailing market price
of the Common Stock and could impair the Company's ability to raise additional
capital through the sale of its securities. As of June 30, 1996, 18,365,214
shares of Common Stock were outstanding. Of such 18,365,214 shares, 6,209,996
shares (including 640,019 shares that are subject to the Shelf Registration
Statement) are freely tradeable by persons other than affiliates of the Company
without restriction or further registration under the Securities Act. The
remainder of the outstanding shares of Common Stock (other than certain shares
issued in connection with the Company's employee benefit plans) are currently
considered "restricted" or "control" securities within the meaning of Rule 144
under the Securities Act, and may not be sold in the absence of registration
under the Securities Act unless an exemption from registration is available,
including the exemption contained in Rule 144. In addition, as of June 30,
1996, there were outstanding options and warrants to purchase 2,735,740 shares
(including the Warrants). Of such options and warrants, options and warrants
to purchase 1,287,784 shares of Common Stock currently are exercisable and the
Warrants to purchase 943,956 shares of Common Stock will become exercisable on
August 10, 1996. Assuming exercise of all such options and warrants, 63,284
shares would be restricted or control securities. In connection with the 1996
Primary Offering, the Company, its officers, directors and certain stockholders
agreed to restrict the sale of their shares until August 19, 1996 without the
prior written consent of Alex. Brown & Sons Incorporated. Holders of 61,284
options and warrants and holders of 9,648,873 shares of restricted and control
Common Stock (excluding shares offered by the Selling Shareholders pursuant to
the Shelf Registration Statement) have been granted registration rights with
respect to such Common Stock or the Common Stock issuable upon the exercise of
such options and warrants. See "Description of Capital Stock--Shares Eligible
for Future Sale; Registration Rights."
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Reliance on Existing Management Team. The Company is dependent upon the
efforts and abilities of its existing management team. The loss of one or more
members of the Company's management team at any one time could have a material
adverse effect upon the Company. The Company currently has employment
agreements with Robert D. Hostetler, its President and Chief Executive Officer,
and David K. Sentman, its Senior Vice President and Chief Financial Officer.
The Company does not maintain any key man life insurance with respect to any of
its executive officers or key employees. The Company's success in expanding
its operations will depend upon its ability to attract and retain qualified
employees to develop and operate its wireless cable systems.
Dividend Policy. ATI has never declared or paid any cash dividends on the
Common Stock and does not expect to declare any such dividends in the
foreseeable future. Payment of any future dividends will depend upon earnings
and capital requirements of the Company, the Company's debt facilities and
other factors the Board of Directors considers appropriate. ATI currently
intends to retain earnings, if any, to support continuing growth and expansion.
ATI's ability to declare cash dividends on the Common Stock is affected by
certain covenants in the Indentures. The ability of ATI's subsidiaries to
declare dividends and transfer funds in the form of cash dividends, loans or
advances to ATI is restricted by the Credit Facility.
USE OF PROCEEDS
The Company will not receive any proceeds from the offering unless and
until the Warrants, or any portion thereof, are duly exercised and paid for by
the holders of the Warrants. There can be no assurance that all or any portion
of the Warrants will be exercised. In the event that all Warrants are
exercised, the Company will receive $12.65 for each share of Common Stock
issuable upon exercise of such Warrants, for an aggregate of $11,941,044. The
Company currently plans to use any proceeds received upon exercise of the
Warrants as working capital for general corporate purposes.
PLAN OF DISTRIBUTION
The shares of Common Stock covered by this Prospectus are issuable by ATI
upon exercise of the Warrants.
DESCRIPTION OF WARRANTS
A total of 201,700 Warrants, each entitling the holder thereof to purchase
4.68 shares of Common Stock (subject to adjustment as described below) for
$12.65 per share, were issued under a warrant agreement (the "Warrant
Agreement") dated August 10, 1995, between ATI and the Warrant Agent. The
Warrants are subject to the terms contained in the Warrant Agreement. The
Following summary, which describes certain material provisions of the Warrant
Agreement and Warrants, does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, the Warrant Agreement and
Warrants, including the definitions therein of capitalized terms not defined
herein.
GENERAL
The Warrants are exercisable at any time on or after August 10, 1996, and
on or prior to August 10, 2000 (the "Expiration Date"). Each Warrant entitles
the holder thereof to acquire 4.68 shares of Common Stock upon payment of the
Purchase Price ($12.65 per share), subject to adjustment as described below.
All outstanding Warrants will terminate at the close of business on the
Expiration Date. The Company will give notice not less than 90 nor more than
120 days prior to the Expiration Date to the registered holders of then
outstanding Warrants. If the Company does not give this notice, the Warrants
will still terminate and become void at the close of business on the Expiration
Date. ATI has agreed that, for so long as any unexpired Warrants remain
outstanding, it will maintain the effectiveness of the Registration Statement
with respect to sales of shares of the Common Stock from time to time upon
exercise of the Warrants.
METHOD OF EXERCISE OF WARRANTS
Warrants may be exercised or sold by surrendering to the Warrant Agent a
warrant certificate signed by the registered holder indicating such holder's
election to exercise or sell all or a portion of the Warrants evidenced by such
certificate and, in the case of exercise, payment of the Purchase Price. Upon
surrender of the warrant
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certificate for exercise or sale, and in the case of exercise, payment of the
Purchase Price, the Warrant Agent will deliver or cause to be delivered, to or
upon the written order of any holder, appropriate evidence of ownership of any
shares of Common Stock or other securities or property (including any money) to
which such holder is entitled, together with warrant certificates evidencing
any Warrants not exercised or sold.
Certificates for Warrants will be issued in registered form only and no
service charge shall be made for registration of transfer or exchange upon
surrender of any warrant certificate at the office of the Warrant Agent
maintained for that purpose. The Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of warrant
certificates.
ADJUSTMENT
The number of shares of Common Stock issuable upon the exercise of each
Warrant and the Purchase Price are subject to adjustment in certain
circumstances, including (a) a dividend or distribution on the Common Stock in
shares of ATI's capital stock or a stock split, combination, subdivision or
reclassification of Common Stock, and (b) the issuance of rights, options,
warrants or convertible or exchangeable securities (other than a convertible or
exchangeable security subject to the foregoing clause (a)) to all holders of
Common Stock entitling such holders to purchase shares of Common Stock for a
consideration per share less than the then current market value per share of
Common Stock, and (c) purchases of Common Stock pursuant to a tender or
exchange offer by ATI or any Subsidiary (as defined) at a price in excess of
the then Current Market Price (as defined) of the Common Stock. No adjustment
in the number of shares of Common Stock issuable upon exercise of Warrants will
be required until cumulative adjustments require an adjustment of at least 1%
thereof. In addition, in the event of certain mergers, consolidations or sales
of assets, holders of Warrants will thereafter be entitled to receive such
securities or other consideration as they would have been entitled if they had
exercised their Warrants immediately prior thereto.
If the Purchase Price is adjusted as a result of the distribution of cash,
evidences of indebtedness or other property or assets to the holders of Common
Stock, then such adjustment may constitute a taxable distribution to each
holder of a Warrant so adjusted.
ATI has authorized and reserved for issuance such number of shares of
Common Stock as shall be issuable upon the exercise of all outstanding
Warrants. Such shares of Common Stock, when paid for and issued, will be duly
and validly issued and fully paid and non-assessable.
NO RIGHTS AS STOCKHOLDERS
Holders of Warrants are not entitled, by virtue of being such holders, to
receive dividends or subscription rights, vote, consent, exercise any
preemptive right or receive notice as stockholders of ATI in respect of any
meeting of stockholders for the election of directors of ATI or any other
matter, or exercise any other rights whatsoever as stockholders of ATI.
TAXATION OF WARRANTS
Exercise. A holder of a Warrant will generally not recognize gain or loss
upon exercise of a Warrant. A holder's initial tax basis in a Warrant will be
equal to the portion of the issue price of the Unit allocable to a Warrant.
The tax basis of shares of Common Stock acquired upon exercise of a Warrant
will be equal to the sum of (i) the holder's adjusted tax basis in such Warrant
and (ii) the exercise price. The holding period of the Common Stock acquired
upon exercise of a Warrant will begin on the day after the date of exercise of
the Warrant and will not include the period during which the Warrant was held.
Adjustments. The conversion ratio and exercise price of the Warrants are
subject to adjustments under certain circumstances. Under Section 305 of the
Internal Revenue Code (the "Code") and Treasury Regulations issued thereunder,
holders of the Warrants will be treated as having received a constructive
distribution, resulting in ordinary income (subject to a possible
dividends-received deduction in the case of corporate holders) to the extent of
the Company's current or accumulated earnings and profits, if and to the extent
that certain adjustments in the conversion ratio and exercise price that may
occur in limited circumstances (particularly an adjustment to
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reflect a taxable dividend to holders of Common Stock) increase the
proportionate interest of a holder of a Warrant in the fully-diluted Common
Stock, whether or not the holder ever exercises the Warrant.
Disposition. Upon a sale, exchange or other taxable disposition of a
Warrant or of shares of Common Stock, a holder generally will recognize gain or
loss for United States Federal income tax purposes in an amount equal to the
difference between (i) the sum of the amount of cash and the fair market value
of any property received upon such sale, exchange or other disposition and (ii)
the holder's adjusted tax basis in the Warrant or in the shares of Common Stock
being sold. Any gain or loss recognized upon a sale, exchange or disposition
of a Warrant or of shares of Common Stock would be long-term capital gain or
loss if the Warrant or Common Stock were held by the holder for more than one
year at the time of the sale or exchange.
Lapse. Upon the lapse of a Warrant, a holder will recognize a capital
loss equal to such holder's adjusted tax basis in the Warrant. Any such loss
will be long-term capital loss if the Warrant was held by the holder for more
than one year at the time of lapse.
Foreign Holders. In general, gain recognized by a non-resident alien
individual, a foreign corporation, a foreign estate or trust, or a foreign
partnership or other foreign entity (each a "Foreign Person") upon a sale,
exchange or other taxable disposition of a Warrant or of shares of Common Stock
(to the extent it is not effectively connected with a trade or business engaged
in by such Foreign Person within the United States ("U.S. Trade or Business
Income")) will not be subject to United States Federal income tax unless such
Foreign Person is an individual present in the United States for 183 days or
more during the taxable year in which the disposition occurs, and certain other
requirements are met. Dividends paid on the Common Stock to a Foreign person
(other than dividends that constitute U.S. Trade or Business Income) will be
subject to United States Federal income tax withholding at the rate of 30
percent of the amount of the dividend (unless the rate is reduced by an
applicable tax treaty).
Any Foreign Person that recognizes gain upon the sale, exchange or other
taxable disposition of a Warrant or of shares of Common Stock or receives a
dividend on the Common Stock that is U.S. Trade or Business Income will be
subject to tax in essentially the same manner as a U.S. person, as discussed
above. A Foreign Person that is a foreign corporation engaged in a U.S. trade
or business also may be subject to the branch profits tax with respect to such
gain or dividend.
DESCRIPTION OF COMMON STOCK
The authorized capital stock of ATI consists of 43,000,000 shares, of
which 30,000,000 shares are Common Stock, par value $0.01 per share, 10,000,000
shares are Class B Common Stock, par value $0.01 per share (the "Class B Common
Stock") and 3,000,000 shares are preferred stock, par value $0.01 per share
(the "Preferred Stock"). As of June 30, 1996, there were 18,365,214 shares of
Common Stock outstanding and held of record by approximately 320 stockholders,
no shares of Class B Common Stock outstanding and no shares of Preferred Stock
outstanding. In addition, as of June 30, 1996, warrants to purchase an
aggregate of 1,920,140 shares of Common Stock were outstanding. Of the
outstanding warrants, 976,184 are currently exercisable and 943,956 will become
exercisable on August 10, 1996. A total of 1,525,000 shares of Common Stock
are reserved for issuance to officers and key employees of the Company under
the American Telecasting, Inc. 1990 Stock Option Program, as amended (the
"Stock Option Plan"). As of June 30, 1996, options to acquire 815,600 of
Common Stock were outstanding, 311,600 of which were vested.
The issued and outstanding shares of Common Stock are, and the shares
issuable upon exercise of the Warrants will, upon payment therefor, be, validly
issued, fully paid and nonassessable. Subject to the right of holders of
Preferred Stock, if any, the holders of outstanding shares of Common Stock are
entitled to receive dividends out of assets legally available therefor at such
times and in such amounts as the Board of Directors may from time to time
determine. The shares of Common Stock are neither redeemable nor convertible,
and the holders thereof have no preemptive or subscription rights to purchase
any securities of ATI. Upon liquidation, dissolution or winding up of ATI, the
holders of Common Stock are entitled to receive, pro rata, the assets of ATI
that are legally available for distribution, after payment of all debts and
other liabilities and subject to the prior rights of any holders of Preferred
Stock then outstanding. Each outstanding share of Common Stock is entitled to
one vote on all matters submitted to a vote of stockholders. There is no
cumulative voting in the election of directors.
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The Class B Common Stock is identical in all respects to the Common Stock
except that the holders of Class B Common Stock, if any, are not entitled to
vote on any matters submitted to the stockholders for approval, except as
otherwise provided or required by law.
SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS
As of June 30, 1996, 18,365,214 shares of Common Stock were outstanding
and no shares of Class B Common Stock were outstanding. Of such 18,365,214
shares of Common Stock, 6,209,996 shares (including 640,019 shares that are
subject to the Shelf Registration Statement) are freely tradeable without
restriction or further registration under the Securities Act, unless acquired
by "affiliates" (as defined in Rule 144 of the Securities Act), in which case
such shares are subject to the resale limitations of Rule 144. The remainder
of the outstanding shares of Common Stock (other than certain shares issued in
connection with the Company's employee benefit plans) are currently considered
"restricted" or "control" securities within the meaning of the Securities Act
and may not be resold in the absence of registration under the Securities Act
unless an exemption from registration is available, including the exemption
provided by Rule 144.
In addition to the shares referred to above which are freely tradeable
without restriction or further registration under the Securities Act, the
Company has registered under the Securities Act an aggregate of 1,525,000
shares reserved for issuance under the Stock Option Plan, thus permitting the
resale of such shares upon the exercise of options granted under the plan by
non-affiliates in the public market without restriction under the Securities
Act, subject to vesting requirements of the Company. In addition, as of June
30, 1996, there were outstanding warrants to purchase 1,920,140 shares of
Common Stock (including the Warrants). Of such warrants, warrants to purchase
976,184 shares of Common Stock currently are exercisable and the Warrants to
purchase 943,956 shares of Common Stock will become exercisable on August 10,
1996. Assuming exercise of all such warrants, 63,284 shares would be
restricted or control securities.
In connection with the 1996 Primary Offering, the Company, its officers,
directors and certain stockholders have agreed not to offer, sell or otherwise
dispose of any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for Common Stock, until August 19, 1996 without the
prior consent of Alex. Brown & Sons Incorporated.
Pursuant to a series of registration rights agreements (the "Registration
Rights Agreements"), certain stockholders of the Company are entitled to rights
with respect to the registration under the Securities Act of approximately
9,648,873 shares of outstanding Common Stock (excluding shares offered by the
Selling Shareholders pursuant to the Shelf Registration Statement). While the
precise terms of the Registration Rights Agreements vary, the stockholders who
are party to such agreements generally have a combination of demand and
piggyback registration rights.
ATI can make no prediction as to the effect, if any, that sales of shares
of its Common Stock, or the availability of shares for future sale, will have
on the market price of the Common Stock and Warrants prevailing from time to
time. Sales of substantial amounts of Common Stock in the public market, or
the perception that such sales could occur, could depress the prevailing market
price for the Common Stock and Warrants. Such sales also may make it more
difficult for ATI to sell equity securities or equity-related securities in the
future at a time and price that it deems appropriate.
PREFERRED STOCK
ATI's Restated Certificate of Incorporation authorizes the Board of
Directors to issue the Preferred Stock in classes or series and to establish
the designations, preferences, qualifications, limitations, or restrictions of
any class or series with respect to the rate and nature of dividends, the price
and terms and conditions on which shares may be redeemed, the terms and
conditions for conversion or exchange into any other class or series of the
stock, voting rights and other terms. ATI may issue, without approval of the
holders of Common Stock, Preferred Stock which has voting, dividend or
liquidation rights superior to the Common Stock and which may adversely affect
the rights of holders of Common Stock. The issuance of Preferred Stock, while
providing flexibility in connection with possible acquisitions and other
corporate purposes, could, among other things, adversely affect the voting
15
<PAGE> 18
power of the holders of Common Stock and, under certain circumstances, make it
more difficult for a third party to gain control of ATI.
CERTAIN CHARTER PROVISIONS AND DELAWARE LAW
ATI's Restated Certificate of Incorporation contains a provision requiring
the affirmative vote of the holders of at least 66 2/3% of the voting power of
all the shares of Common Stock of ATI to remove any director or the entire
Board of Directors from office at any time, with or without cause, except as
otherwise provided. Also, ATI's Restated Certificate of Incorporation grants
the Board of Directors the power to adopt, amend, alter, change and repeal the
Bylaws of ATI. The affirmative vote of the holders of at least 66 2/3% of the
voting power of all of the shares of Common Stock of ATI is required for the
stockholders of ATI to adopt, alter, change or repeal the Bylaws of ATI.
Section 203 of the Delaware General Corporation Law ("Section 203")
prohibits certain Delaware corporations from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder unless (i) prior to the date of the business combination, the
transaction is approved by the board of directors of the corporation, (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owns at least 85% of the
outstanding voting stock or (iii) on or after the consummation date the
business combination is approved by the board of directors and by the
affirmative vote of at least 66 2/3% of the outstanding voting stock that is
not owned by the interested stockholder. "Business combinations" include
mergers, assets sales and other transactions resulting in a financial benefit
to the stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15% or more of
the corporation's voting stock. A Delaware corporation may "opt out" of
application of Section 203 through a provision in its certificate of
incorporation or by-laws. ATI has not "opted out" of application of Section
203.
These provisions might diminish the likelihood that a potential acquiror
would make an offer for the Common Stock, impede a transaction favorable to the
interests of stockholders or make it difficult to effect a change in control of
ATI and replace incumbent management. As a result, the existence of these
provisions may have a negative effect on the market price of the Common Stock.
FOREIGN OWNERSHIP PROVISIONS
The Communications Act provides that certain types of FCC licenses shall
not be held directly by corporations of which Aliens own of record or vote more
than 20% of the capital stock. In situations in which such an FCC licensee is
directly or indirectly controlled by another corporation, Aliens may own of
record or vote no more than 25% of the controlling corporation's capital stock.
ATI's Restated Certificate of Incorporation requires that all of its officers
and directors be U.S. citizens and empowers the Board of Directors to redeem
ATI's outstanding capital stock to the extent necessary to prevent the loss or
secure the reinstatement of any license or franchise from any governmental
agency if a situation arises whereby more than the permitted number of
outstanding shares of capital stock of ATI are owned or voted by Aliens.
Moreover, ATI's Restated Certificate of Incorporation provides that, in such a
situation, no transfers of shares may be made to Aliens and the shares which
caused the Company to exceed the statutory limit may neither be voted, receive
dividends nor be entitled to any other rights, until transferred to U.S.
citizens.
TRANSFER AGENT, REGISTRAR AND WARRANT AGENT
The Transfer agent and registrar for the Common Stock and Warrant Agent
for the Warrants is First Union National Bank of North Carolina.
LEGAL MATTERS
The validity of the Common Stock underlying the Warrants has been passed
upon for the Company by McDermott, Will & Emery, Washington, D.C.
16
<PAGE> 19
EXPERTS
The audited consolidated financial statements and schedules of the Company
incorporated by reference in this Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
with respect thereto, and are incorporated by reference herein in reliance upon
the authority of said firm as experts in giving said reports.
The audited financial statements of Fresno Wireless Cable Television, Inc. and
Subsidiary incorporated by reference in this Prospectus have been audited by
McGladrey & Pullen, LLP, independent auditors, as indicated in their reports
with respect thereto, and are incorporated by reference herein in reliance upon
the authority of said firm as experts in giving said reports.
17
<PAGE> 20
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee .................. $ 4,118
Fees and expenses of counsel .......... 7,500
Fees and expenses of accountants ...... 5,000
Miscellaneous ......................... 20,382
-------
Total ................................. $37,000
=======
</TABLE>
Except for the SEC registration fee, all of the foregoing expenses have
been estimated. All expenses will be paid by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Delaware law, a corporation may indemnify any person who was or is a
party or is threatened to be made a party to an action (other than an action by
or in the right of the corporation) by reason of his service as a director or
officer of the corporation, or his service, at the corporation's request, as a
director, officer, employee or agent of another corporation or other
enterprise, against expenses (including attorneys' fees) that are actually and
reasonably incurred by him ("Expenses"), and judgments, fines and amounts paid
in settlement that are actually and reasonably incurred by him, in connection
with the defense or settlement of such action, provided that he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interest, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was unlawful.
Although Delaware law permits a corporation to indemnify any person referred to
above against Expenses in connection with the defense or settlement of an
action by or in the right of the corporation, provided that he acted in good
faith and in a manner he reasonably believed to be in or not opposed to
corporation's best interests, if such person has been judged liable to the
corporation, indemnification is only permitted to the extent that the Court of
Chancery (or the court in which the action was brought) determines that,
despite the adjudication of liability, such person is entitled to indemnity of
such Expenses as the court deems proper. The General Corporation Law of the
State of Delaware also provides for mandatory indemnification of any director,
officer, employee or agent against Expenses to the extent such person has been
successful in any proceeding covered by the statute. In addition, the General
Corporation Law of the State of Delaware provides the general authorization of
advancement of a director's or officer's litigation expenses in lieu of
requiring the authorization of such advancement by the board of directors in
specific cases, and that indemnification and advancement of expenses provided
by the statute shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
bylaw, agreement or otherwise.
Article 7 of ATI's Restated Certificate of Incorporation and Article 8 of
ATI's Amended and Restated ByLaws provide for indemnification of the Company's
directors, officers, employees and other agents to the fullest extent not
prohibited by Delaware law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
II-1
<PAGE> 21
ITEM 16. EXHIBITS
4.1 Specimen Common Stock Certificate (incorporated by reference
to Exhibit 4.1 to Amendment No. 1 to the Company's Registration
Statement on Form S-3 filed with the Commission on April 26, 1996).
4.4 Warrant Agreement dated as of August 10, 1995 between
American Telecasting, Inc. and First Union National Bank of North
Carolina as warrant agent (incorporated by reference to Exhibit 4.5
to the Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1995).
5.1 Opinion of McDermott, Will & Emery.
23.1 Consent of Arthur Andersen, LLP.
23.2 Consent of McGladrey Pullen, LLP.
23.3 Consent of McDermott, Will & Emery (included in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page to the Registration
Statement).
ITEM 17. UNDERTAKINGS.
(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:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) 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;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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-2
<PAGE> 22
(c) Insofar as indemnification for liabilities arising under the Securities Act
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 Commission such indemnification is
against public policy as expressed in the Securities 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 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 Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Colorado Springs, State of Colorado, on June 28,
1996.
AMERICAN TELECASTING, INC.
By: /s/ ROBERT D. HOSTETLER
-------------------------------
Robert D. Hostetler
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Donald R. DePriest, Robert D. Hostetler and
Richard F. Seney and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities (including his capacity as a
director and/or officer of American Telecasting, Inc.) to sign any or all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on June 28, 1996 by the following
persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ DONALD R. DEPREIST Chairman of the Board and Director
-----------------------
Donald R. DePriest
/s/ ROBERT D. HOSTETLER President, Chief Executive Officer and
----------------------- Director (principal executive officer)
Robert D. Hostetler
/s/ RICHARD F. SENEY Vice Chairman of the Board, Secretary and Director
-----------------------
Richard F. Seney
/s/ DAVID K. SENTMAN Senior Vice President, Chief Financial Officer and
----------------------- Treasurer (principal financial officer)
David K. Sentman
/s/ JOHN R. HAGER Controller (principal accounting officer)
-----------------------
John R. Hager
/s/ WILLIAM J. BLAKE Director
-----------------------
William J. Blake
/s/ MITCHELL R. HAUSER Director
-----------------------
Mitchell R. Hauser
</TABLE>
II-4
<PAGE> 24
<TABLE>
<S> <C>
/s/ JAMES S. QUARFORTH Director
-----------------------
James S. Quarforth
/s/ CARL A. ROSBERG Director
-----------------------
Carl A. Rosberg
</TABLE>
II-5
<PAGE> 25
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
4.1 Specimen Common Stock Certificate (incorporated by reference
to Exhibit 4.1 to Amendment No. 1 to the Company's Registration
Statement on Form S-3 filed with the Commission on April 26, 1996).
4.4 Warrant Agreement dated as of August 10, 1995 between
American Telecasting, Inc. and First Union National Bank of North
Carolina as warrant agent (incorporated by reference to Exhibit 4.5
to the Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1995).
5.1 Opinion of McDermott, Will & Emery.
23.1 Consent of Arthur Andersen, LLP.
23.2 Consent of McGladrey Pullen, LLP.
23.3 Consent of McDermott, Will & Emery (included in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page to the Registration
Statement).
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[MCDERMOTT, WILL & EMERY LETTERHEAD]
July 2, 1996
American Telecasting, Inc.
5575 Tech Center Drive, Suite 300
Colorado Springs, Colorado 80919
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
You have requested our opinion in connection with the above-referenced
registration statement (the "Registration Statement"), under which American
Telecasting, Inc. (the "Company") intends to issue 943,956 shares of its Common
Stock, par value $.01 per share (the "Common Stock") upon the exercise of
outstanding warrants issued in the Company's offering of Units in August 1995.
In arriving at the opinion expressed below, we have examined the
Registration Statement, the Warrant Agreement dated as of August 10, 1995
between the Company and First Union National Bank of North Carolina as warrant
agent (the "Warrant Agreement") and such other documents as we have deemed
necessary to enable us to express the opinion hereinafter set forth. In
addition, we have examined and relied, to the extent we deemed proper, on
certificates of officers of the Company as to factual matters, and on the
originals or copies certified or otherwise identified to our satisfaction, of
all such corporate records of the Company and such other instruments and
certificates of public officials and other persons as we have deemed
appropriate. In our examination, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the original
documents of all documents submitted to us as copies, the genuineness of all
signatures on documents reviewed by us and the legal capacity of natural
persons.
Based upon and subject to the foregoing, we are of the opinion
<PAGE> 2
American Telecasting, Inc.
July 2, 1996
Page 2
that the Common Stock has been duly authorized and, when issued in accordance
with the terms and conditions of the Warrant Agreement and the Warrants, will
be duly authorized, validly issued, fully paid and non-assessable.
We hereby consent to the references to our firm under the caption "Legal
Matters" in the Registration Statement and to the use of this opinion as an
exhibit to the Registration Statement. In giving this consent, we do not hereby
admit that we come within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/ MCDERMOTT, WILL & EMERY
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated March 1, 1996
included in American Telecasting, Inc.'s Form 10-K for the year ended December
31, 1995 and to all references to our Firm included in or made a part of this
registration statement filed on Form S-3.
/s/ ARTHUR ANDERSEN LLP
--------------------------------
ARTHUR ANDERSEN LLP
Washington, D.C.
July 1, 1996
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference of our report, dated March
10, 1995, relating to the consolidated financial statements of Fresno Wireless
Cable Television, Inc. and its subsidiary, Fresno MMDS Associates (d/b/a Choice
TV of Fresno), in this Registration Statement on Form S-3 for American
Telecasting, Inc. and to the reference to our Firm under the caption "Experts"
in the Prospectus.
/s/ McGLADREY & PULLEN, LLP
----------------------------------
McGLADREY & PULLEN, LLP
Elkhart, Indiana
July 1, 1996
