<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report : May 14, 1996
(Date of earliest event reported)
PRICELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of Incorporation)
1-13526 13-3784318
(Commission File Number) (IRS Employer Identification No.)
45 Rockefeller Center, New York, New York 10020
(Address of principal executive offices)
Registrant's Telephone Number, including area code:
(212) 459-0800
<PAGE> 2
ITEM 5. OTHER EVENTS.
The purpose of this report is to file the financial statements of
Dominion Cellular, Inc. for the year ended September 30, 1995, the financial
statements of Dutchess County Cellular Telephone Company for the three months
ended March 31, 1996 and the financial statements of Hudson Cellular Limited
Partnership for the three months ended March 31, 1996.
The aforementioned financial statements are attached as exhibits to
this report and are hereby incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
27.1 Financial Data Schedule of Dominion Cellular, Inc. for the year ended
September 30, 1995
27.2 Financial Data Schedule of Dutchess County Cellular Telephone Company,
Inc. for the 3 months ended March 31, 1996
27.3 Financial Data Schedule of Hudson Cellular Limited Partnership for the
3 months ended March 31, 1996
99.1 Financial statements of Dominion Cellular, Inc. for the year ended
September 30, 1995
99.2 Financial statements of Dutchess County Cellular Telephone Company
for the three months ended March 31, 1996
99.3 Financial statements of Hudson Cellular Limited Partnership for the
three months ended March 31, 1996
<PAGE> 3
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRICELLULAR CORPORATION
By: /s/ Robert Price
------------------------------
Robert Price
President
Dated: May 14, 1996
<PAGE> 4
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
27.1 Financial Data Schedule of Dominion Cellular, Inc. for the year ended
September 30, 1995
27.2 Financial Data Schedule of Dutchess County Cellular Telephone Company,
Inc. for the 3 months ended March 31, 1996
27.3 Financial Data Schedule of Hudson Cellular Limited Partnership for the
3 months ended March 31, 1996
99.1 Financial statements of Dominion Cellular, Inc. for the year ended
September 30, 1995
99.2 Financial statements of Dutchess County Cellular Telephone Company
for the three months ended March 31, 1996
99.3 Financial statements of Hudson Cellular Limited Partnership for the
three months ended March 31, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEPT-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEPT-30-1995
<CASH> 322,057
<SECURITIES> 0
<RECEIVABLES> 808,780
<ALLOWANCES> 133,070
<INVENTORY> 43,535
<CURRENT-ASSETS> 3,307,964
<PP&E> 4,007,474
<DEPRECIATION> 1,120,243
<TOTAL-ASSETS> 7,343,722
<CURRENT-LIABILITIES> 6,120,109
<BONDS> 0
0
0
<COMMON> 50,100
<OTHER-SE> 1,173,513
<TOTAL-LIABILITY-AND-EQUITY> 7,343,727
<SALES> 0
<TOTAL-REVENUES> 4,893,580
<CGS> 0
<TOTAL-COSTS> 3,539,066
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,173,513
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,173,513
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,173,513
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 210
<SECURITIES> 0
<RECEIVABLES> 742
<ALLOWANCES> 0
<INVENTORY> 32
<CURRENT-ASSETS> 1010
<PP&E> 2217
<DEPRECIATION> 0
<TOTAL-ASSETS> 3311
<CURRENT-LIABILITIES> 14348
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (11170)
<TOTAL-LIABILITY-AND-EQUITY> 3311
<SALES> 0
<TOTAL-REVENUES> 1523
<CGS> 0
<TOTAL-COSTS> 1610
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 335
<INCOME-PRETAX> (422)
<INCOME-TAX> 0
<INCOME-CONTINUING> (422)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (422)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 341
<SECURITIES> 0
<RECEIVABLES> 645
<ALLOWANCES> 0
<INVENTORY> 24
<CURRENT-ASSETS> 1063
<PP&E> 1698
<DEPRECIATION> 0
<TOTAL-ASSETS> 4426
<CURRENT-LIABILITIES> 451
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3955
<TOTAL-LIABILITY-AND-EQUITY> 4426
<SALES> 0
<TOTAL-REVENUES> 942
<CGS> 0
<TOTAL-COSTS> 880
<OTHER-EXPENSES> 3
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5
<INCOME-PRETAX> 60
<INCOME-TAX> 0
<INCOME-CONTINUING> 60
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE> 1
Exhibit 99.1
[LETTERHEAD OF ELLIOT H. GOLDBERG, CPA, P.C.]
INDEPENDENT AUDITORS' REPORT
Dominion Cellular, Inc.
Clanton, Alabama
We have audited the accompanying balance sheet of Dominion Cellular, Inc. as of
September 30, 1995, and the related statements of operations, equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dominion Cellular, Inc. as of
September 30, 1995, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/ELLIOT H. GOLDBERG, CPA, P.C.
--------------------------------
ELLIOT H. GOLDBERG, CPA, P.C.
December 16, 1995
1
<PAGE> 2
DOMINION CELLULAR, INC.
BALANCE SHEET
SEPTEMBER 30, 1995
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash $ 322,057
Accounts receivable - trade (less allowance
for doubtful accounts of $133,070) 808,780
Inventory (Note 1) 43,535
Prepaid expenses and other 33,592
Due from parent (Note 5) 2,100,000
----------
Total current assets 3,307,964
----------
Property, equipment, furniture and
fixtures, net of accumulated depreciation of
of $ 1,120,243 Notes 1 and 6) 4,007,474
----------
Cellular telephone license costs,
net of accumulated amortization of
$ 103,839 (Note 3) 28,284
----------
Total assets $7,343,722
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion - long-term debt (Note 4) $2,986,057
Note payable - Pricellular (Notes 5 and 6) 2,000,000
Accounts payable 288,877
Accrued expenses and taxes 251,998
Sales and excise taxes payable 11,360
Due to parent company (Note 2) 581,817
----------
Total current liabilities 6,120,109
Commitments (Note 5)
Stockholders' equity :
Common stock 50,100
Retained earnings 1,173,513
----------
1,223,613
----------
Total liabilities and stockholders'
equity $7,343,722
==========
</TABLE>
See accompanying notes to financial statements
<PAGE> 3
DOMINION CELLULAR, INC.
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C>
REVENUES:
Subscriber revenues $ 1,268,938
Roamer revenues 3,357,745
Equipment sales 150,985
Other 115,912
-----------
Total revenues 4,893,580
-----------
OPERATING EXPENSES:
Technical salaries 104,647
System maintenance 73,250
Telephone switch expenses 295,800
Rent and occupancy costs 121,620
Cost of equipment sales 351,395
Roamer costs 825,540
-----------
Total operating expenses 1,772,252
-----------
GENERAL AND ADMINISTRATIVE EXPENSES:
Administrative and management salaries 184,451
Office expenses 91,137
Insurance 24,820
Professional fees 9,319
Interest expense 460,476
Advertising and marketing 78,880
Depreciation and amortization 454,953
Commissions 106,520
Billing expenses 122,412
Provision for bad debts 41,572
Employee benefits and payroll taxes 37,180
Franchise taxes 18,070
Auto Expense 22,424
Management Fee 114,600
-----------
Total general and administrative expenses: 1,766,814
-----------
Net Income 1,354,514
-----------
Retained earnings - October 1, 1994 (181,001)
-----------
Retained earnings - September 30, 1995 $ 1,173,513
===========
</TABLE>
See accompanying notes to financial statements
<PAGE> 4
DOMINION CELLULAR, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,354,514
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 454,953
Allowance for doubtful accounts (82,140)
Changes in assets and liabilities:
Inventories 24,897
Accounts receivable (232,525)
Prepaid expenses and other (4,607)
Accounts payable and accrued expenses (101,967)
Due to parent company, Dominion
Resources, Inc. 315,314
Due from parent (2,100,000)
-----------
Net cash used by operating activities (371,561)
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,154,793)
-----------
Net cash (used in) investing activities (1,154,793)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt (299,272)
Proceeds from borrowings 2 000,000
-----------
Net cash provided by financing activities 1,700,728
-----------
Net increase in cash 174,374
Cash - beginning, October 1, 1994 147,683
-----------
Cash - ending, September 30, 1995 $ 322,057
===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR:
Interest $ 460,476
===========
</TABLE>
See accompanying notes to financial statements
<PAGE> 5
DOMINION CELLULAR, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
REVENUE RECOGNITION (CELLULAR TELEPHONE OPERATIONS):
Revenues are recognized as services are rendered. Unbilled revenues,
resulting from cellular telephone usage occurring from the billing
cycle date to the end of each month, are estimated and recorded.
Equipment sales are recognized upon delivery to the customer. Revenues
from operations consist of charges to customers for monthly access
charges, cellular airtime usage, toll charges, and roamer charges.
Equipment sales revenues reflect charges to customers for cellular
telephone equipment purchased.
INVENTORIES:
Inventories are stated at the lower of cost (first-in, first-out) or
market and consisted of equipment held for sales and installations of
$43,535 at September 30, 1995.
In connection with the sale of the Company's Cellular Telephone System
described in Note 6, ownership of the Company's inventory was
transferred to the purchaser on the date of closing which took place in
the first quarter of fiscal 1996.
PROPERTY, EQUIPMENT, FURNITURE AND FIXTURES:
Property, equipment, furniture and fixtures are stated at cost.
Depreciation is computed using the straight-line method over estimated
useful lives of ten years for equipment, seven years for furniture and
fixtures, and thirty years for building and cell-site improvements.
Property, equipment, furniture, and fixtures consisted of the following
at September 30, 1995:
<TABLE>
<S> <C>
Operating equipment $3,245,769
New cell site preparation and equipment 1,764,489
Furniture and fixtures 117,459
----------
5,127,717
Less: Accumulated depreciation and
amortization 1,120,243
----------
$4,007,474
==========
</TABLE>
<PAGE> 6
DOMINION CELLULAR, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED SEPTEMBER 30, 1995
2. ORGANIZATION AND BACKGROUND:
Dominion Cellular, Inc. ("the Company") was incorporated January 1991
for purposes of construction and operation of a cellular telephone
system located in Bibb County, Alabama. The Company is wholly owned by
Dominion Resources, Inc. ("The Parent").
3. CELLULAR TELEPHONE LICENSE COSTS:
Cellular telephone license costs represent expenses incurred by the
Company for the acquisition of site locations, zoning approvals, and
technical and other expenses related to construction and obtaining the
necessary approvals and licenses to operate and preparing to operate a
cellular telephone system. These costs are capitalized and are
amortized through charges to operations over their estimated useful
lives, currently estimated to be five years.
4. LONG-TERM DEBT, MOTOROLA, INC.:
Long-term debt consists of notes payable to Motorola, Inc. ("Motorola")
for $2,986,057 at September 30, 1995. The Company entered into a
Cellular System Purchase Agreement with Motorola (the "Purchase
Agreement") pursuant to which the Company purchased and Motorola
designed, manufactured, and produced specified cellular fixed network
equipment together with expansion products, hardware, and software
products and related services. Pursuant to the Purchase Agreement,
Motorola assisted in the construction and implementation of the system.
Motorola agreed to lend DCI up to $1,650,000 to purchase equipment and
services to be provided primarily by Motorola for construction and
installation of the cellular telephone system and up to $950,000 for
working capital. All such loans were repayable interest only until the
third year after DCI placed the cellular telephone system into
commercial service and then paid over a four year period on a seven
year amortization schedule. Interest is calculated at the rate of 3%
per annum in excess of the Chase Manhattan Bank's Corporate Base Rate,
which was 9% at September 30, 1995. DCI has the right to prepay such
loans in whole or in part and the Financing Agreement also provides for
certain mandatory prepayments including prepayments equal to 75% of
DCI's "Free Cash Flow" (operating cash flow less non-financed capital
purchases and debt service).
<PAGE> 7
DOMINION CELLULAR, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED SEPTEMBER 30, 1995
4. LONG-TERM DEBT, MOTOROLA, INC.: (CONTINUED)
The Financing Agreement required the parent Company (Resources) to
execute a Stock Pledge Agreement pledging all of the issued and
outstanding capital stock of Dominion Cellular with Motorola as
collateral. As additional collateral, Cellular has assigned all of its
cell site, tower, and building leases to Motorola together with a
security interest in all of its tangible and intangible assets. The
Financing Agreement contains certain financial covenants and
restrictions on the payment of dividends, which Cellular has complied
with.
In October, 1992, the Company entered into an additional line of credit
of $686,193 with Motorola for additional equipment purchases. The terms
of the additional line of credit call for interest only payments
through September 1994 and a balloon payment of principal on December
31, 1994.
On December 22, 1994, the Company and Motorola agreed to a
restructuring of the $686,193 Motorola line of credit originally
scheduled to be repaid December 31, 1994. Pursuant to the
restructuring, a $50,000 payment to reduce principal and a $10,000
restructuring fee prior to January 1, 1995 was paid. An additional fee
of $5,000 was paid prior to March 31, 1995. The $636,193 balance was
scheduled to be paid in ten consecutive monthly installments of $63,619
commencing August 14, 1995 with interest on the unpaid balance payable
quarterly.
In connection with the sale of the Company's cellular telephone system
described in Note 6, the Company's outstanding indebtedness to Motorola
was paid out of the closing which took place in the first quarter of
fiscal 1996.
<PAGE> 8
DOMINION CELLULAR, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED SEPTEMBER 30, 1995
5. NOTES PAYABLE - PRICELLULAR
In anticipation of the execution of the Asset Purchase Agreement,
described in Note 6, PriCellular extended a $2,000,000 loan to DCI on
April 7, 1995. From the $2,000,000 of loan proceeds, 1) the Company
made a $1,417,598 loan to an entity of which the Company's principal
stockholder is a creditor; 2) paid $250,000 to a corporation owned by
the Company's president and her husband in payment of bills rendered
for previously completed cell site and tower construction for the
System; and 3) prepaid $125,000 of indebtedness owed to an entity owned
by members of the principal stockholder's immediate family. The balance
was applied to legal and professional fees related to the sale of the
System. The $2,000,000 loan was repaid out of the closing proceeds with
interest payable at 8% from the sale of the cellular telephone system
which took place in the first quarter of fiscal 1996.
6. SALE OF CELLULAR ASSETS
On November 16, 1994, the Company announced that it had retained an
independent broker on an exclusive basis to attempt to find a potential
purchaser for DCI's cellular system or a possible merger partner with
DCI. Management of the Company determined to seek a purchaser because
it believed that DCI's cellular system had been developed to a point
where it represented an attractive acquisition for potential acquirors
in the cellular industry at a price, based on current market
conditions, substantially in excess of DCI's costs in developing the
system.
On May 8, 1995, the Company and its Parent executed an Asset Purchase
Agreement (Subsequently amended on August 14, 1995 and December 14,
1995) with two unaffiliated entities, PriCellular and Pricellular's
wholly owned Northland subsidiary, providing for the sale to Northland
of the System operated by DCI in the Bibb, Alabama RSA (the "AL-4
RSA"). The system was substantially the Company's only source of
revenues. Immediately after completion of the sale of the System, the
Company had no significant operations.
<PAGE> 9
DOMINION CELLULAR, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED SEPTEMBER 30, 1995
6. SALE OF CELLULAR ASSETS (CONTINUED)
In anticipation of the execution of the Asset Purchase Agreement,
PriCellular extended a $2,000,000 loan to DCI on April 7, 1995.
The sale of the System was contingent upon obtaining the consent of the
FCC to the assignment by DCI of the licenses to operate the System to
Northland (which consent was obtained on June 9, 1995) and upon
obtaining the approval of the sale from holders of a majority of the
outstanding shares of the Company's Common Stock (which approval was
obtained on November 6, 1995).
The Assets sold (subject to certain current liabilities related to the
System and being assumed by the Purchaser) included the FCC nonwireline
license for the AL-4 RSA, the cellular sites, towers and related
equipment used by the System, the real property on which the cellular
sites are located, and the bulk of DCI's current assets.
The parties also agreed that effective August 1, 1995, PriCellular
would become the manager of the System pursuant to a management
agreement providing for a management fee to be paid to PriCellular
equal to 7% of the gross revenues of the System during the term of the
management agreement. Through November 7, 1995, the Company accrued
$114,600 in connection with the management agreement.
The original purchase price of the system was $19,900,000 (after a
$100,000 reduction for the amount by which certain liabilities assumed
by the purchaser at the closing exceeded DCI's current assets) payable
as follows: (a) $6,000,000 in cash, payable at the Closing which
occurred on November 7, 1995, (b) $3,900,000 in cash payable 30 days
following the Closing (the "Second Payment Date") and (c) $10,000,000
(also referred herein as the "PriCellular Note"). The PriCellular Note
was convertible into shares of PriCellular Class A Common Stock at
$8.51 per share (i) at the option of the holder and
<PAGE> 10
DOMINION CELLULAR, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED SEPTEMBER 30, 1995
6. SALE OF CELLULAR ASSETS (CONTINUED)
(ii) at the option of PriCellular if the closing price for PriCellular
Class A Common Stock when trading on the American Stock Exchange (or
such other exchange which at such time may be the principal exchange
where such stock is traded) is $10.60 or higher for ten consecutive
trading days.
At the closing, the initial $6,000,000 cash portion of the purchase
price was reduced to the extent required to repay DCI's outstanding
debt to Motorola (approximately $2,864,000) incurred to finance
construction of the System, and to repay the 8%, $2,000,000 loan
extended to DCI by PriCellular on April 7, 1995 in anticipation of the
execution of the Asset Purchase Agreement. At the second closing, the
$4,000,000 cash portion of the purchase price was decreased by $100,000
the amount by which assumed current liabilities exceeded DCI's current
assets. An aggregate $400,000 of the $3,900,000 balance of the purchase
price was required to be held in escrow for a one year period following
the closing, to ensure the accuracy of the Company's representations
and warranties.
Also at the closing, Pricellular elected to force conversion of its
five-year, 4%, $10,000,000 Convertible Subordinated Note to DCI into
1,175,088 shares of its Class A Common Stock. The high and low sales
prices for PriCellular Class A Common Stock, as traded on the American
Stock Exchange on November 7, 1995 were $13.125 and $12.75,
respectively. As a result, the Company recorded the 1,175,088 converted
shares at a value of $7,497,061 an amount which reflects a 50% discount
of the closing sales price of PriCellular Class A Common Stock on
November 7, 1995 of $12.75. The Company recorded a 50% discount because
of the trading restrictions placed on the stock.
In connection with the second closing, the Company entered into a
second amendment to the Asset Purchase Agreement dated December 14,
1995 whereby the Company and PriCellular resolved certain disputes with
respect to the adjusted purchase price of the cellular telephone
system. As amended, the Company received $3,500,000 at the second
closing, with the $400,000 balance being held in escrow. As part of the
second amendment, the Company retained ownership of certain accounts
receivable deemed to be uncollectible as of August 1, 1995 in the
aggregate principal amount of approximately $124,000. In addition, the
Company reserved the right to the proceeds of any insurance claim
arising from a loss that took place in the month of August 1995.
<PAGE> 11
DOMINION CELLULAR, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED SEPTEMBER 30, 1995
6. SALE OF CELLULAR ASSETS (CONTINUED)
Pursuant to a separate registration rights agreement, PriCellular
granted the holders of at least 50% of the Class A Common Stock
issuable or issued upon conversion of the PriCellular Note, one
"demand" right of registration requiring PriCellular to register such
shares of Class A Common Stock for public offer and sale under the
Securities Act of 1933. The ":demand" registration right was
exercisable after the earlier of June 30, 1996 or the effective date of
the first registration statement for an underwritten public offering of
PriCellular securities. The registration rights agreement also granted
the holders of the PriCellular Note or the underlying Class A Common
Stock certain "piggy-back" registration rights permitting it to have
such Class A Common Stock included in other registration statements
filed by PriCellular with respect to a public offering of its
securities at PriCellular's expense, so as to permit public offer and
sale of such shares, subject to the right of any underwriter of such
public offering to limit the number of shares so included.
7. USE OF PROCEEDS FROM THE SYSTEM SALE
In addition to receipt of the PriCellular Class A Common Stock, the
Company received an aggregate of approximately $9,900,000 (less closing
costs and associated expenses) in cash payments from PriCellular at the
initial closing and at the Second Payment Date (of which $400,000 is
being held in escrow for a one year period as previously described).
The cash payments were applied substantially as follows:
<TABLE>
<S> <C>
a) Repayment of Motorola debt and accrued
interest incurred to finance construction of
the System $2,864,226
b) Repayment of PriCellular loan and accrued
interest $2,040,000
c) Closing costs $ 747,955
d) Escrow account deposit $ 400,000
e) Portion of amounts paid to repurchase all of
the shares of the Company's president, her
son and her husband $1,568,626
----------
Total: $7,620,807
==========
</TABLE>
<PAGE> 1
Exhibit 99.2
DUTCHESS COUNTY CELLULAR TELEPHONE COMPANY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 210
Accounts Receivable, net 742
Inventory 32
Prepaid expenses and other current assets 26
--------
Total current assets 1,010
Net fixed assets 2,217
Cellular licenses, net
Other assets 84
--------
Total current assets $ 3,311
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 435
Income taxes payable 76
Other current liabilities 13,817
Long-term debt 37
--------
Total current liabilities 14,348
Other long-term liabilities 96
--------
Total liabilities 14,481
Stockholders' equity (11,170)
--------
Total liabilities and stockholders' equity $ 3,311
========
</TABLE>
The accompanying notes to financial statements are an integral part
of these financial statements.
<PAGE> 2
DUTCHESS COUNTY CELLULAR TELEPHONE COMPANY, INC.
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED
MARCH 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
REVENUES $1,523
COSTS AND EXPENSES:
Cost of cellular service 566
Cost of equipment sold 153
Selling, general & administrative 792
Depreciation and amortization 99
------
1,610
------
Operating income (loss) 87
Other income (expense)
Interest expense, net (335)
------
Total other income (expense) (335)
------
Net income (loss) $ (422)
======
</TABLE>
The accompanying notes to financial statements are
an integral part of these financial statements.
<PAGE> 3
DUTCHESS COUNTY CELLULAR TELEPHONE COMPANY, INC.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from operations $(422)
Add (deduct) adjustments to reconcile net loss from
operations to net cash required by operating activities:
Depreciation and amortization 98
Change in accounts receivable 114
Change in inventory 12
Change in accounts payable/accrued expenses and accrued interest (149)
Change in deferred revenues and customer deposits 5
Change in other assets and liabilities 33
-----
Net cash provided by operating activities (309)
-----
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in notes payable-affiliates 383
Change in long-term debt-affiliates (3)
Change in current maturities of long-term debt --
-----
Net cash provided by financing activities 380
-----
NET INCREASE IN CASH AND CASH EQUIVALENTS 71
-----
CASH AND CASH EQUIVALENTS
Beginning of period 139
-----
End of period $ 210
=====
</TABLE>
The accompanying notes to financial statements are an integral part
of these financial statements.
<PAGE> 4
1. Financial Statement Presentation
The financial statements have been prepared by the Company without audit. In
the opinion of Management, the statements reflect all adjustments necessary
for a fair presentation of the results for the interim period. The results
of operations for the interim period are not necessarily indicative of the
results for a full year.
2. Subsequent Event
Pursuant to an agreement dated April 23,1996, the Company sold substantially
all of its assets to PriCellular Corporation for $39,200,000 with one-half
paid in cash and the balance in a three year prime note with a bullet
maturity.
<PAGE> 1
Exhibit 99.3
HUDSON CELLULAR LIMITED PARTNERSHIP
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 341
Accounts Receivable, net 645
Inventory 24
Prepaid expenses and other current assets 53
------
Total current assets 1,063
Net fixed assets 1,698
Cellular licenses, net 1,623
Other assets 42
------
Total current assets $4,426
======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 234
Income taxes payable 45
Other current liabilities 172
Long term debt 37
------
Total current liabilities 451
Other long-term liabilities 20
------
Total liabilities 471
Stockholders' equity 3,955
------
Total liabilities and stockholders' equity $4,426
======
</TABLE>
The accompanying notes to financial statements are
an integral part of these financial statements.
<PAGE> 2
HUDSON CELLULAR LIMITED PARTNERSHIP
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED
MARCH 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
REVENUES $ 942
COSTS AND EXPENSES:
Cost of cellular service 347
Cost of equipment sold 84
Selling, general and administrative 363
Depreciation and amortization 86
------
880
------
62
Operating income (loss)
Other income (expense)
Interest expense, net (5)
Other income (expense) 3
------
Total other income (expense) (2)
------
Net income (loss) $ 60
======
</TABLE>
The accompanying notes to financial statements are an integral part
of these financial statements.
<PAGE> 3
HUDSON CELLULAR LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from operations $ 60
Add (deduct) adjustments to reconcile net loss from
operations to net cash required by operating activities:
Depreciation and amortization 86
Change in accounts receivable (18)
Change in inventory (15)
Change in accounts payable/accrued expenses and accrued interest 73
Change in deferred revenues and customer deposits (12)
Change in other assets and liabilities 98
-----
Net cash acquired by operating activities 272
-----
CASH FLOWS FROM INVESTING ACTIVITIES:
Net additions to property, plant and equipment (157)
-----
Net cash required by investing activities (157)
-----
NET INCREASE IN CASH AND CASH EQUIVALENTS 115
CASH AND CASH EQUIVALENTS
Beginning of period 226
-----
End of period $ 341
=====
</TABLE>
The accompanying notes to financial statements are an integral part of
these financial statements.
<PAGE> 4
1. Financial Statement Presentation
The financial statements have been prepared by the Company without
audit. In the opinion of Management, the statements reflect all
adjustments necessary for a fair presentation of the results for the
interim period. The results of operations for the interim period are not
necessarily indicative of the results for a full year.
2. Subsequent Event
Pursuant to an agreement dated April 23, 1996 the Company sold
substantially all of its assets to PriCellular Corporation approximately
$19,800,000 in cash.
