As filed with the Securities and Exchange Commission on June 27, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
__________________
P-COM, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0289371
(State of Incorporation) (I.R.S. Employer
Identification No.)
3175 S. Winchester Boulevard
Campbell, California 95008
(408) 866-3666
(Address and telephone number of principal executive offices)
George P. Roberts
Chairman of the Board and Chief Executive Officer
P-Com, Inc.
3175 S. Winchester Boulevard
Campbell, California 95008
(408) 866-3666
(Name, address and telephone number of agent for service)
__________________
Copies to:
Warren T. Lazarow, Esq.
H. Richard Hukari, Esq.
Michael C. Doran, Esq.
Brobeck, Phleger & Harrison LLP
Two Embarcadero Place, 2200 Geng Road
Palo Alto, California 94303
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are
being offered pursuant to dividend or interest reinvestment
plans, 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 connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
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, check the following box. |_|
<TABLE>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
======================================================================================================
Title of Each Class of | Amount to | Proposed Maximum | Proposed Maximum | Amount of
Securities to be | Registered | Offering Price | Aggregate Offering | Registration
Registered | | Per Share (1) | Price (1) | Fee (1)
- ------------------------------------------------------------------------------------------------------
Common Stock, $0.0001 | | | |
par value | 1,131,455 | 32.69 | 36,987,263 | 11,208.26
======================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) based on a per share price
of $32.69, the average of the high and low sale prices per share of
the Company's Common Stock on June 20, 1997.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
Cross-Reference Sheet Showing Location in Prospectus
of Information Required by Items of Form S-3
Form S-3 Registration Statement Location in Prospectus
Item and Heading
------------------------------- ----------------------
1. Forepart of the Registration Statement
and Outside Front Cover Page Prospectus Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus Inside Front Cover Page
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges Not Applicable; Risk
Factors; Not Applicable
4. Use of Proceeds Outside Front Cover; Use
of Proceeds
5. Determination of Offering Price Outside Front Cover Page
6. Dilution Not Applicable
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Outside Front Cover Page;
Plan of Distribution
9. Description of Securities to be Registered Information Incorporated
by Reference
10. Interests of Named Experts and Counsel Legal Matters
11. Material Changes Not Applicable
12. Incorporation of Certain Information
by Reference Information Incorporated
by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities Not Applicable
P-Com, Inc.
1,131,455 Shares Common Stock
($0.0001 par value per share)
_______________________________
This Prospectus relates to the public offering, which is not being
underwritten, of up to 1,131,455 shares (the "Resale Shares") of Common
Stock, $0.0001 par value per share, of P-Com, Inc. (referred to herein,
together with its majority-owned and wholly-owned subsidiaries, as "P-Com,"
the "Company" or the "Registrant"). The Resale Shares may be offered by
certain stockholders of the Company or by pledgees, donees, transferees or
other successors in interest that receive such shares as a gift, partnership
distribution or other non-sale related transfer (the "Selling Stockholders").
The Resale Shares were received by the Selling Stockholders in connection
with the acquisition of the assets of Columbia Spectrum Management, LP ("CSM")
pursuant to an Asset Purchase Agreement dated February 12, 1997 and the
acquisition of all of the outstanding securities of Control Resources
Corporation ("CRC") pursuant to an Agreement and Plan of Reorganization dated
April 14, 1997 (the "Acquisitions"). See "Recent Developments -- The
Acquisitions." All of the Resale Shares were issued pursuant to an exemption
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"), provided by Section 4(2) thereof. The Resale Shares
are being registered by the Company pursuant to registration rights
agreements with the Selling Stockholders. See the "Plan of Distribution"
section herein.
The Resale Shares may be offered by the Selling Stockholders from time to
time in transactions on the Nasdaq National Market,in privately negotiated
transactions, or by a combination of such methods of sale, at fixed prices
that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Selling Stockholders may effect such transactions by selling the Resale
Shares to or through broker-dealers and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders or the purchasers of the Resale Shares for whom such
broker-dealers may act as agent or to whom they sell as principal or both
(which compensation to a particular broker-dealer might be in excess of
customary commissions). See "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the Resale
Shares by the Selling Stockholders. The Company has agreed to bear certain
expenses in connection with the registration and sale of the Resale Shares
being offered by the Selling Stockholders.
The Company intends that this registration statement will remain effective
until no later than May 29, 1998. On June 26, 1997 the last reported sale
price for the Common Stock, as reported on The Nasdaq National Market, was
$32.625 per share. The Company's Common Stock is currently quoted on Nasdaq
under the symbol "PCMS."
_______________________________
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
_______________________________
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.
_______________________________
The date of this Prospectus is July , 1997
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection
with the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company or by any other person. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any
implication that information herein is correct as of any time subsequent to
the date hereof. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the securities
covered by this Prospectus, nor does it constitute an offer to or
solicitation of any person in any jurisdiction in which such offer or
solicitation may not lawfully be made.
AVAILABLE INFORMATION
P-Com is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance
therewith, files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy and information statements and other information filed
by the Company with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and the following
regional offices of the Commission: Seven World Trade Center, Suite 1300,
New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material may also be obtained
from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, upon payment of prescribed rates. In addition,
the Commission maintains a Web site at http://www.sec.gov that contains
P-Com's reports, proxy and information statements and other information that
have been filed since P-Com began to file electronically with the Commission
in August 1996. The Common Stock of the Company is quoted on the Nasdaq
National Market, and such material may also be inspected at the offices of
Nasdaq Operations, 1735 K Street, N.W., Washington, D.C. 20006.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 (the "Registration Statement") of which
this Prospectus is a part, including exhibits set forth therein or
incorporated by reference thereto, which has been filed electronically with
the Commission under the Securities Act of 1933, as amended (the "Act")
Statements made in this Prospectus as to the contents of any referenced
contract, agreement or other document are not necessarily complete, and
each such statement shall be deemed qualified in its entirety by reference
thereto. Copies of the Registration Statement and the exhibits and schedules
thereto may be obtained, upon payment of the fee prescribed by the
Commission, or may be examined without charge at the office of the
Commission or at the Commission's Web site.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission (File
No. 0-25356) pursuant to the 1934 Act are incorporated by reference in this
Prospectus:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997;
3. The Company's Current Report on Form 8-K filed on March 10, 1997,
the Company's Current Report on Form 8-K filed on March 21, 1997,
the Company's Current Report on Form 8-K/A filed on May 21, 1997,
the Company's Current Report on Form 8-K filed on June 13, 1997,
the Company's Current Report on Form 8-K/A filed on June 26, 1997
and the Company's Current Report on Form 8-K/A filed on
June 27, 1997;
4. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the
Commission on January 12, 1995, as amended on February 16, 1995;
and
5. All other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date
of this Prospectus but prior to the termination of the offering
of the Shares.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus
and the Registration Statement of which it is a part to the extent that a
statement contained herein or in any other subsequently filed document that
also is incorporated herein modifies or replaces such statement. Any
statement so modified or superseded shall not be deemed, in its unmodified
form, to constitute a part of this Prospectus or such Registration Statement.
Upon written or oral request, the Company will provide without charge to
each person to whom a copy of the Prospectus is delivered a copy of the
documents incorporated by reference herein (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference
therein). Requests should be submitted in writing or by telephone at (408)
866-3666 to George P. Roberts, Chairman of the Board and Chief Executive
Officer, P-Com, Inc., at the principal executive offices of the Company,
3175 S. Winchester Boulevard, Campbell, California 95008.
THE COMPANY
The following section contains forward-looking statements which involve
risks and uncertainties. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth under "Risk Factors" and
elsewhere in this Prospectus.
P-Com, Inc. designs, manufactures and markets short-haul millimeter wave
radio systems and spread spectrum microwave radio systems for use in the
worldwide wireless telecommunications and broadcasting markets. The Company's
Tel-Link (registered trademark) systems are used as digital links in
applications that include interconnecting base stations and mobile
switching centers in microcellular and personal communications
services ("PCN/PCS") networks and providing local telephone company
("telco") connectivity in the local loop. The integrated architecture and
high software content of the Company's systems are designed to offer
cost-effective, high-performance products with a high degree of flexibility
and functionality. Additionally, the Company offers turnkey microwave
relocation services to new licensees of radio spectrum who must first
remove existing users from the frequencies before implementing new
systems and provides equipment for network access and wireline
applications. Furthermore, the Company is currently developing a point-to-
multipoint product for use in both the telecommunications and broadcast
industries.
P-Com's Tel-Link (registered trademark) wireless radios utilize a common
architecture for systems in multiple millimeter wave and spread spectrum
microwave frequencies including 2.4 GHz, 5.7 GHz, 7 Ghz, 13 GHz, 14 GHz,
15 GHz, 18 Ghz, 23 GHz, 24 GHz, 26 GHz, 38 GHz and 50 GHz. The Company's
systems are designed to be highly reliable, cost effective and simple to
install and maintain. Software embedded in the Company's systems allows
the user to easily configure and adjust system settings such as frequency,
power and capacity with minimal manual tuning and mechanical adjustments.
The Company also markets a full line of Windows-based software products
that are complementary to its systems as sophisticated diagnostic,
maintenance and system configuration tools.
The Company's radio systems are sold internationally through strategic
partners, system providers, original equipment manufacturers ("OEMs") and
distributors as well as directly to end-users, and domestically primarily
through its direct sales force. The Company's radio system customers include
Advanced Radio Telecom Corp. ("ART"), Bosch Telecom GmbH, Grupo Iusacell
S.A. de C.V., Lucent Technologies, Inc. (including the entities formerly
known as AT&T Network Systems Deutschland GmbH and AT&T Network Systems
Nederland BV), Mercury Communications Ltd., Mercury Personal
Communications, Norweb plc, Orange Personal Communications Ltd., Pacific
Bell Mobile Services, Itatel S.p.A. (formerly known as Siemens
Telecommunicazioni, S.p.A.), Ericsson, Ltd., Fujitsu Limited, Northern
Telecom, Ltd. and WinStar Wireless, Inc. ("Winstar"). The Company's
customers for microwave relocation services include Sprint Spectrum,
AT&T Wireless, PrimeCo Personal Communications, BellSouth, Omnipoint and
Intercel.
P-Com received in December 1993 its initial ISO 9001 registration,
a standard established by the International Organization for
Standardization that provides a methodology by which manufacturers can
obtain quality certification. In accordance with ISO 9001 requirements,
the Company's ISO 9001 registration was subsequently recertified. The
Company also completed ISO 9001 registration for its United Kingdom sales
and customer support facility and Geritel facility in Italy in 1996. The
Company is in the process of obtaining ISO 9001 registration for its other
facilities outside of the United States.
RISK FACTORS
Limited Operating History
The Company was founded in August 1991 and was in the development
stage until October 1993 when it began commercial shipments of its first
product. From inception to the end of the first quarter of fiscal 1997,
the Company generated a cumulative net profit of approximately $4.1
million. From October 1993 through March 31, 1997, the Company
generated sales of approximately $188.3 million, of which $135.6 million,
or 72% of such amount, was generated in the year ended December 31, 1996
and the first quarter of 1997. The Company does not believe recent
growth rates are indicative of future operating results. Due to the
Company's limited operating history and limited resources, among other
factors, there can be no assurance that profitability or significant
revenues on a quarterly or annual basis will occur in the future. During
1996 and the first quarter of 1997, both the Company's sales and
operating expenses increased more rapidly than the Company had anticipated.
There can be no assurance that the Company's revenues will continue to
remain at or increase from the levels experienced in 1996 or in the first
quarter of 1997 or that sales will not decline. The Company intends to
continue to invest significant amounts in its operations, particularly to
support product development and the marketing and sales of recently
introduced products, and operating expenses will continue to increase
significantly in absolute dollars. If the Company's sales do not
correspondingly increase, the Company's results of operations would be
materially adversely affected. Accordingly, there can be no assurance that
the Company will achieve profitability in future periods. The Company is
subject to all of the risks inherent in the operation of a new business
enterprise, and there can be no assurance thatthe Company will be able to
successfully address these risks.
Significant Customer Concentration
To date, approximately forty-five customers have accounted for all of
the Company's sales. For 1996, six customers accounted for 79% of the
Company's sales, and as of December 31, 1996, six customers accounted for
most of the Company's backlog scheduled for shipment in the twelve months
subsequent to December 31, 1996. During the first quarter of 1997, five
customers accounted for 64% of the Company's sales, and as of March 31, 1997,
six customers accounted for 90% of the Company's backlog scheduled for
shipment in the twelve months subsequent to March 31, 1997. The Company
anticipates that it will continue to sell its products and services
to a changing but still relatively small group of customers. Some companies
implementing new networks are at early stages of development and may require
additional capital to fully implement their planned networks. The Company's
ability to achieve sales in the future will depend in significant part upon
its ability to obtain and fulfill orders from, maintain relationships
with and provide support to existing and new customers, to manufacture
systems on a timely and cost-effective basis and to meet stringent
customer performance and other requirements and shipment delivery
dates, as well as the condition, working capital availability and
success of its customers. As a result, any cancellation, reduction or
delay in orders by or shipments to any customer, as a result of
manufacturing or supply difficulties or otherwise, or the inability
of any customer to finance its purchases of the Company's products or
services may materially adversely affect the Company's business,
financial condition and results of operations. In addition, financial
difficulties of any existing or potential customers may limit the overall
demand for the Company's products and services (for example, certain
potential customers in the telecommunications industry have been reported
to have undergone recent financial difficulties and may therefore limit
their future orders). There can be no assurance that the Company's sales
will increase in the future or that the Company will be able to support or
attract customers.
Significant Fluctuations in Results of Operations
The Company has experienced and may in the future continue to
experience significant fluctuations in sales, gross margins and operating
results. The procurement process for most of the Company's current and
potential customers is complex and lengthy, and the timing and amount of
sales is difficult to predict reliably. In addition, a single customer's
order scheduled for shipment in a quarter can represent a significant portion of
the Company's potential sales for such quarter. There can be no
assurance that the Company will be able to obtain such large orders from
single customers in the future. The Company has at times failed to receive
expected orders, and delivery schedules have been deferred as a result
of changes in customer requirements, among other factors. As a result,
the Company's operating results for a particular period have in the past
been and may in the future be materially adversely affected by a delay,
rescheduling or cancellation of even one purchase order. Much of the
anticipated growth in telecommunications infrastructure results from
the entrance of new service providers, many of whom do not have the
financial resources of existing service providers. To the extent these
new service providers are unable to adequately finance their operations, they
may cancel orders. Moreover, purchase orders are often received and
accepted substantially in advance of shipment, and the failure to
reduce actual costs to the extent anticipated or an increase in
anticipated costs before shipment could materially adversely affect the
gross margins for such order, and as a result, the Company's results of
operations. Moreover, most of the Company's backlog scheduled for shipment
in the twelve months subsequent to March 31, 1997 can be canceled since
orders are often made substantially in advance of shipment, and the
Company's contracts typically provide that orders may be canceled with
limited or no penalties. As a result, backlog is not necessarily
indicative of future sales for any particular period. Furthermore, most of
the Company's sales in recent quarters have been realized near the end of
each quarter. Accordingly, a delay in a shipment near the end of a
particular quarter, as the Company has been experiencing recently, due to,
for example, an unanticipated shipment rescheduling, a cancellation or
deferral by a customer, competitive or economic factors, unexpected
manufacturing or other difficulties, delays in deliveries of components,
subassemblies or services by suppliers, or the failure to receive an
anticipated order, may cause sales in a particular quarter to fall
significantly below the Company's expectations and may materially
adversely affect the Company's operating results for such quarter.
In connection with its efforts to ramp-up production of recently
introduced products, the Company expects to continue to make substantial
capital investments in equipment, recruit and train additional personnel
and possibly invest in additional manufacturing facilities. The Company
anticipates that these expenditures may be made in advance of, and in
anticipation of, increased sales and, therefore, that its gross margins will
be adversely affected from time-to-time due to short-term
inefficiencies associated with addition of equipment, personnel or
facilities, and that each cost category may increase as a percentage of
revenues from time-to-time on a periodic basis. As a result, the Company's
operating results will vary.
A large portion of the Company's expenses are fixed and difficult
to reduce should revenues not meet the Company's expectations, thus
magnifying the material adverse effect of any revenue shortfall.
Furthermore, announcements by the Company or its competitors of new
products and technologies could cause customers to defer or cancel
purchases of the Company's systems, which would materially adversely affect
the Company's business, financial condition and results of operations.
Additional factors that have caused and may continue to cause the Company's
sales, gross margins and results of operations to vary significantly from
period to period include: new product introductions and enhancements,
including related costs; the Company's ability to manufacture and produce
sufficient volumes of systems and meet customer requirements; manufacturing
capacity, efficiencies and costs; mix of systems and related software tools
sold; operating and new product development expenses; product discounts;
accounts receivable collection, in particular those acquired in recent
acquisitions; changes in pricing by the Company, its customers or suppliers;
inventory obsolescence; natural disasters; seasonality; market acceptance
and the timing of availability of new products by the Company or its
customers; acquisitions, including costs and expenses; usage of different
distribution and sales channels; fluctuations in foreign currency exchange
rates; delays or changes in regulatory approval of its systems; warranty
and customer support expenses; customization of systems; and general
economic and political conditions. In addition, the Company's results of
operations have been and will continue to be influenced significantly by
competitive factors, including the pricing and availability of, and
demand for, competitive products. The Company expects to continue to
expend significant resources with respect to the development, ramp-up of
production and anticipated commercial shipments of its newest products and
expects its gross margins to be adversely affected due to the start-up
inefficiencies associated with these products, among many other factors.
All of the above factors are difficult for the Company to forecast, and
these or other factors could materially adversely affect the Company's
business, financial condition and results of operations. As a result,
the Company believes that period-to-period comparisons are not necessarily
meaningful and should not be relied upon as indications of future
performance. Due to all of the foregoing factors, it is likely that in
some future quarter the Company's operating results will be below the
expectations of public market analysts and investors. In such event, the
price of the Company's Common Stock may be materially adversely affected.
Dependence on Contract Manufacturers; Reliance on Sole or Limited
Sources of Supply
The Company's internal manufacturing capacity is very limited. The
Company utilizes contract manufacturers such as Remec, Inc., Sanmina
Corporation, SPC Electronics Corp., GSS Array Technology, Celeritek, Inc.
and Senior Systems Technology Inc. to produce its systems, components and
subassemblies and expects to rely increasingly on these and other
manufacturers in the future. The Company also relies on outside vendors
to manufacture certain other components and subassemblies. Certain necessary
components, subassemblies and services necessary for the manufacture of the
Company's systems are obtained from a sole supplier or a limited group of
suppliers. In particular, ELTEL, MilliWave, Scientific Atlanta and Xilinx,
Inc. each are sole source suppliers for critical components used in the
Company's radio systems. There can be no assurance that the Company's
internal manufacturing capacity and that of its contract manufacturers
will be sufficient to fulfill the Company's orders. Failure to
manufacture, assemble and ship systems and meet customer demands on a
timely and cost-effective basis could damage relationships with customers
and have a material adverse effect on the Company's business, financial
condition and operating results. The Company's reliance on contract
manufacturers and on sole suppliers or a limited group of suppliers and
the Company's increasing reliance on contract manufacturers and
suppliers involves several risks, including a potential inability to obtain
an adequate supply of finished radio systems and required components
and subassemblies, and reduced control over the price, timely delivery,
reliability and quality of finished radio systems, components and
subassemblies. The Company does not have long-term supply agreements with
most of its manufacturers or suppliers. Manufacture of the Company's radio
systems and certain of these components and subassemblies is an extremely
complex process, and the Company has from time to time experienced and may
in the future continue to experience delays in the delivery of and quality
problems with radio systems and certain components and subassemblies from
vendors. Certain of the Company's suppliers have relatively limited
financial and other resources. Any inability to obtain timely deliveries
of components and subassemblies of acceptable quality or any other
circumstance that would require the Company to seek alternative sources
of supply, or to manufacture its finished radio systems or such components
and subassemblies internally, could delay the Company's ability to
ship its systems, which could damage relationships with current or
prospective customers and have a material adverse effect on the
Company's business, financial condition and operating results.
No Assurance of Successful Expansion of Operations; Management of Growth
Recently, the Company has significantly increased the scale of its
operations to support the increases in its sales levels that have occurred
and to address critical infrastructure and other requirements. This
increase has included the leasing of new space, the opening of branch
offices in the United Kingdom, Germany and Singapore, the acquisition of a
majority interest in Geritel S.p.A. ("Geritel"), and the acquisitions of
Atlantic Communication Sciences, Inc. ("ACS"), Technosystem S.p.A.
("Technosystem"), CSM and CRC, significant investments in research and
development to support product development, including the new products
recently introduced, and the hiring of additional personnel, including in
sales and marketing, manufacturing and operations and finance and has
resulted in significantly higher operating expenses. The Company anticipates
that its operating expenses will continue to increase significantly.
If the Company's sales do not correspondingly increase, the Company's
results of operations would be materially adversely affected. See "--Limited
Operating History." Expansion of the Company's operations has caused and
is continuing to impose a significant strain on the Company's
management, financial, manufacturing and other resources. The Company's
ability to manage the recent and any possible future growth, should it
occur, will depend upon a significant expans on of its manufacturing,
accounting and other internal management systems and the implementation and
subsequent improvement of a variety of systems, procedures and controls. In
addition, the Company must establish and improve a variety of systems,
procedures and controls to more efficiently coordinate its activities in
its acquired companies in Rome and Milan, Italy, France, Poland, New Jersey,
Florida and Virginia and the various locations where the acquired businesses
perform their operations. In addition, the Company must establish and
improve a variety of systems, procedures and controls to more
effectively coordinate its activity in acquired or to be acquired companies
(including their facilities) in Italy, France, Poland, New Jersey, Florida
and Virginia and their respective offices and customer bases. There can be
no assurance that significant problems in these areas will not occur. Any
failure to expand these areas and implement and improve such systems,
procedures and controls in an efficient manner at a pace consistent with
the Company's business could have a material adverse effect on the
Company's business, financial condition and results of operations. In
particular, the Company must successfully manage the transition to
higher internal and external volume manufacturing, including the
establishment of adequate facilities, the control of overhead expenses and
inventories, the development, introduction, marketing and sales of new
products, the management and training of its employee base and the
monitoring of its third party manufacturers and suppliers. Although
the Company has substantially increased the number of its manufacturing
personnel and significantly expanded its internal and external
manufacturing capacity, there can be no assurance that the Company
will not experience manufacturing or other delays or problems that could
materially adversely affect the Company's business, financial condition or
results of operations.
In this regard, any significant sales growth will be
dependent in significant part upon the Company's expansion of its
marketing, sales, manufacturing and customer support capabilities. This
expansion will continue to require significant expenditures to build the
necessary infrastructure. There can be no assurance that the Company's
attempts to expand its marketing, sales, manufacturing and customer
support efforts will be successful or will result in additional sales or
profitability in any future period. As a result of the expansion of its
operations and the significant increase in its operating expenses, as well
as the difficulty in forecasting revenue levels, the Company may continue to
experience significant fluctuations in its revenues, costs, and gross
margins, and therefore its results of operations.
The Company has pursued, and will continue to pursue, growth
opportunities through internal development and acquisitions of
complementary businesses and technologies. The Company is unable to predict
whether and when any prospective acquisition candidate will become available
or the likelihood that any acquisition will be completed. The Company
competes for acquisition and expansion opportunities with many entities that
have substantially greater resources than the Company. In addition,
acquisitions may involve difficulties in the retention of personnel,
diversion of management's attention, unexpected legal liabilities, and tax and
accounting issues. There can be no assurance that the Company will be
able to successfully identify suitable acquisition candidates, complete
acquisitions, integrate acquired businesses into its operations, or expand
into new markets. Once integrated, acquired businesses may not achieve
comparable levels of revenues, profitability, or productivity as the existing
business of the Company or otherwise perform as expected. The occurrence
of any of these events could have a material adverse effect on the
Company's business, financial condition and results of operations.
Declining Average Selling Prices
The Company believes that average selling prices and gross margins
for its systems will decline in the long term as such systems mature, as
volume price discounts in existing and future contracts take effect and as
competition intensifies, among other factors. To offset declining average
selling prices, the Company believes that it must successfully introduce and
sell new systems on a timely basis, develop new products that incorporate
advanced software and other features that can be sold at higher average
selling prices and reduce the costs of its systems through contract
manufacturing, design improvements and component cost reduction, among
other actions. To the extent that new products are not developed in a
timely manner, do not achieve customer acceptance or do not generate higher
average selling prices, and the Company is unable to offset declining average
selling prices, the Company's gross margins will decline, and such decline
will have a material adverse effect on the Company's business,
financial condition and results of operations.
Trade Account Receivables
The Company is subject to credit risk in the form of trade account
receivables. The Company may in certain circumstances be unable to enforce
a policy of receiving payment within a limited number of days of issuing
bills, especially in the case of customers who are in the early phases
of business development. In addition, many of the Company's foreign
customers are accustomed to paying their suppliers on longer terms than
those typically existing in the United States. See "-- International
Operations; Risks of Doing Business in Developing Countries." Generally,
the Company does not require collateral or other security to support
customer receivables.
No Assurance of Product Quality, Performance and Reliability
The Company has limited experience in producing and manufacturing
its systems and contracting for such manufacture. The Company's customers
require very demanding specifications for quality, performance and
reliability. There can be no assurance that problems will not occur in the
future with respect to the quality, performance and reliability of the
Company's systems or related software tools. If such problems occur, the
Company could experience increased costs, delays in or cancellations
or reschedulings of orders or shipments, delays in collecting accounts
receivable and product returns and discounts, any of which would have a
material adverse effect on the Company's business, financial condition
or results of operations. In addition, in order to maintain its ISO 9001
registration, the Company periodically must undergo a recertification
assessment. Failure to maintain such registration could materially adversely
affect the Company's business, financial condition and results of operations.
The Company completed ISO 9001 registration for its United Kingdom sales
and customer support facility and its Geritel facility in Italy in 1996,
and other facilities will also be attempting ISO 9001 registration. There
can be no assurance that such registration will be achieved.
Acquisitions
In the future, the Company will pursue acquisitions of
complementary product lines, technologies or businesses. Future
acquisitions by the Company could result in potentially dilutive issuances
of equity securities, the incurrence of debt and contingent liabilities
and amortization expenses related to goodwill and other intangible
assets, which could materially adversely affect any Company profitability.
All of the Company's acquisitions to date, except CRC, are being accounted
for under the purchase method of accounting and as a result a significant
amount of goodwill is being amortized as set forth in the Company's
Financial Statements. In addition, acquisitions, such as Geritel, ACS,
Technosystem, CSM and CRC, involve numerous risks, including difficulties
in the assimilation of the operations, technologies and products of the
acquired companies, the diversion of management's attention from other
business concerns, risks of entering markets in which the Company has no
or limited direct prior experience, operating companies in different
geographical locations with different cultures, and the potential loss of key
employees of the acquired company. In the event that such an acquisition
does occur, however, there can be no assurance as to the effect thereof on
the Company's business, financial condition or operating results.
Uncertainty of Market Acceptance
The future operating results of the Company depend to a
significant extent upon the continued growth and increased availability
and acceptance of microcellular, PCN/PCS and wireless local loop
access telecommunications services in the United States and internationally.
There can be no assurance that the volume and variety of wireless
telecommunications services or the markets for and acceptance of such
services will continue to grow, or that such services will create a
demand for the Company's systems. Because these markets are relatively new,
it is difficult to predict which segments of these markets will develop
and at what rate these markets will grow, if at all. If the short-haul
millimeter wave or spread spectrum microwave wireless radio market and
related services for the Company's systems fails to grow, or grows more
slowly than anticipated, the Company's business, financial condition and
results of operations would be materially adversely affected. Certain
sectors of the communications market will require the development and
deployment of an extensive and expensive communications infrastructure. In
particular, the establishment of PCN/PCS networks will require very large
capital expenditures. There can be no assurance that communications providers
have the ability to, or will, make the necessary investment in such
infrastructure or that the creation of this infrastructure will occur in a
timely manner. Moreover, a potential application of the Company's
technology, use of the Company's systems in conjunction with the provision
by wireless telecommunications service providers of alternative wireless
access in competition with the existing wireline local exchange providers,
is dependent on the pricing of wireless telecommunications
services at rates competitive with those charged by wireline telephone
companies. Rates for wireless access are currently substantially higher
than those charged by wireline companies, and there can be no assurance that
rates for wireless access will generally be competitive with rates charged
by wireline companies. If wireless access rates are not competitive,
consumer demand for wireless access will be materially adversely
affected. If the Company allocates its resources to any market segment that
does not grow, it may be unable to reallocate its resources to other market
segments in a timely manner, which may curtail or eliminate its ability
to enter such market segments.
To date, most of the Company's sales have been to customers located
outside the United States. In addition, in 1996, the Company acquired a
51% interest in Geritel and in February 1997, a 100% interest in
Technosystem. Both companies are located in Europe and sell products
primarily to customers in Europe. The Company's future results of
operations will be dependent in significant part on its ability
to penetrate the telecommunications market in the United States and
foreign countries in which the Company has not yet established a
meaningful presence. There can be no assurance that the Company will be
successful in penetrating these additional markets.
Certain of the Company's current and prospective customers are currently
utilizing competing technologies such as fiber optic and copper cable,
particularly in the local loop access market. To successfully displace
existing technologies, the Company must, among many actions, offer systems
with superior price/performance characteristics and extensive customer
service and support, supply such systems on a timely and cost-effective
basis in sufficient volume to satisfy such prospective customers'
requirements and otherwise overcome any reluctance on the part of such
customers to transition to new technologies. Any delay in the adoption of
the Company's systems may result in prospective customers utilizing
alternative technologies in their next generation of systems and
networks, which would have a material adverse effect on the Company's
business, financial condition and results of operations. There can be no
assurance that prospective customers will design their systems or networks
to include the Company's systems, that existing customers will continue
to include the Company's systems in their products, systems or networks
in the future, or that the Company's technology will to any significant
extent replace existing technologies and achieve widespread acceptance in the
wireless telecommunications market. Failure to achieve or sustain
commercial acceptance of the Company's currently available radio systems
or to develop other commercially acceptable radio systems would materially
adversely affect the Company's business, financial condition and results of
operations. In addition, there can be no assurance that industry technical
standards will remain the same or, if emerging standards become
established, that the Company will be able to conform to these new
standards in a timely and cost-effective manner.
Intensely Competitive Industry
The wireless communications market is intensely competitive. The
Company's wireless-based radio systems compete with other wireless
telecommunications products and alternative telecommunications
transmission media. The Company experiences intense competition worldwide
from a number of leading telecommunications companies that offer a
variety of competitive products and broader telecommunications product lines,
including Digital Microwave Corporation, California Microwave, Inc.,
Alcatel Network Systems, Philips T.R.T., Adtran, Inc., Western Multiplex
Corporation, Cylink Corporation, Larus Corporation, Ericsson Limited,
Harris Corporation -- Farinon Division and Nokia Telecommunications,
most of which have substantially greater installed bases, financial
resources and production, marketing, manufacturing, engineering and other
capabilities than the Company. The Company also faces competition from
startup companies. The Company may also face competition in the future from
new market entrants offering competing technologies. In addition, the
Company's current and prospective customers and partners have developed,
are currently developing or could develop the capability to manufacture
products competitive with those that have been or may be developed or
manufactured by the Company. Certain of such customers and partners have
access to the Company's technology or are granted the right to use
the technology for purposes of manufacturing under defined
circumstances. The Company's future results of operations may depend in
part upon the extent to which these customers elect to purchase from outside
sources rather than develop and manufacture their own radio systems.
Recently, certain of the Company's competitors have announced the
introduction of competitive products, including related software tools, and
the acquisition of other competitors and competitive technologies. Within
the near future, the Company expects its competitors to continue to improve
the performance and lower the price of their current products and to
introduce new products or new technologies that provide added functionality
and other features, that may or may not be comparable to the Company's
products, which could cause a significant decline in sales or loss of market
acceptance of the Company's systems, or make the Company's systems or
technologies obsolete or noncompetitive. The Company expects to continue
to experience significant price competition that may materially adversely
affect its gross margins and its business, financial condition and results
of operations. The Company believes that to be competitive, it will
continue to be required to expend significant resources on, among
other items, new product development and enhancements. There can be no
assurance that the Company will be able to compete successfully in the future.
Requirement for Response to Rapid Technological Change and Requirement
for Frequent New Product Introductions
The wireless communications market is subject to rapid
technological change, frequent new product introductions and
enhancements, product obsolescence, changes in end-user
requirements and evolving industry standards. The Company's ability to
be competitive in this market will depend in significant part upon
its ability to successfully develop, introduce and sell new systems
and enhancements and related software tools on a timely and cost-effective
basis that respond to changing customer requirements. Recently, the Company
has been developing spread spectrum and point-to-multipoint radio systems.
Any success of the Company in developing new and enhanced systems and related
software tools will depend upon a variety of factors, including new product
selection, integration of the various elements of its complex
technology, timely and efficient completion of system design, timely and
efficient implementation of manufacturing and assembly processes and its
cost reduction program, development and completion of related software
tools, system performance, quality and reliability of its systems and
development and introduction of competitive systems by competitors.
The Company has experienced and may continue to experience delays from
time to time in completing development and introduction of new systems and
related software tools, including products acquired in the Acquisitions.
Moreover, there can be no assurance that the Company will be successful
in selecting, developing, manufacturing and marketing new systems or
enhancements or related software tools. There can be no assurance that
errors will not be found in the Company's systems after commencement of
commercial shipments, which could result in the loss of or delay in
market acceptance. The inability of the Company to introduce in a
timely manner new systems or enhancements or related software tools that
contribute to sales could have a material adverse effect on the Company's
business, financial condition and results of operations.
International Operations; Risks of Doing Business in Developing Countries
Most of the Company's sales to date have been made to customers located
outside of the United States. In addition, in 1996, the Company acquired a
51% interest in Geritel and in February 1997, a 100% interest in
Technosystem which are located in Europe and will sell their products
primarily to customers in Europe, the Middle East and Africa. The
Company anticipates that international sales will continue to account
for at least a majority of its sales for the foreseeable future. The
Company's international sales may be denominated in foreign or United
States currencies. A decrease in the value of foreign currencies relative
to the United States dollar could result in losses from transactions
denominated in foreign currencies. With respect to the Company's
international sales that are United States dollar-denominated, such a
decrease could make the Company's systems less price-competitive and could
have a material adverse effect upon the Company's business, financial
condition and results of operations. Although the Company seeks to mitigate
its currency exposure through hedging measures, these measures have been
and in the future may be limited in their effectiveness. Additional risks
inherent in the Company's international business activities include changes
in regulatory requirements, costs and risks of localizing systems in
foreign countries, delays in receiving components and materials,
availability of suitable export financing, timing and availability of
export licenses, tariffs and other trade barriers, political and economic
instability, difficulties in staffing and managing foreign operations,
branches and subsidiaries, including Geritel and Technosystem, difficulties
in managing distributors, potentially adverse tax consequences, foreign
currency exchange fluctuations, the burden of complying with a wide variety
of complex foreign laws and treaties and the possibility of difficulty in
accounts receivable collections. Many of the Company's customer purchase
and other agreements are governed by foreign laws, which may differ
significantly from U.S. laws. Therefore, the Company may be limited in
its ability to enforce its rights under such agreements and to collect
damages, if awarded. There can be no assurance that any of these factors
will not have a material adverse effect on the Company's business, financial
condition and results of operations.
International telephone companies are in many cases owned or strictly
regulated by local regulatory authorities. Access to such markets is often
difficult due to the established relationships between a government owned
or controlled telephone company and its traditional indigenous
suppliers of telecommunications equipment. The successful expansion of the
Company's international operations in certain markets will depend on its
ability to locate, form and maintain strong relationships with established
companies providing communication services and equipment in targeted regions.
The failure to establish regional or local relationships or to successfully
market or sell its products in international markets could significantly
limit the Company's ability to expand its operations and would materially
adversely affect the Company's business, financial condition and results of
operations. The Company's inability to identify suitable parties for such
relationships, or even if such parties are identified, to form and
maintain strong relationships with such parties could prevent the Company
from generating sales of its products and services in targeted markets
or industries. Moreover, even if such relationships are established, there
can be no assurance that the Company will be able to increase sales of its
products and services through such relationships.
Some of the Company's potential markets consist of developing countries
that may deploy wireless communications networks as an alternative to the
construction of a limited wired infrastructure. These countries may decline
to construct wireless telecommunications systems or construction of such
systems may be delayed for a variety of reasons, in which event any demand
for the Company's systems in those countries will be similarly limited
or delayed. In doing business in developing markets, the Company may also
face economic, political and foreign currency fluctuations that are more
volatile than those commonly experienced in the United States and other
areas.
Extensive Government Regulation
Radio communications are subject to extensive regulation by the United
States and foreign laws and international treaties. The Company's
equipment must conform to a variety of domestic and international
requirements. Historically, in many developed countries, the
unavailability of frequency spectrum has inhibited the growth of wireless
telecommunications networks. In order for the Company to operate in a
jurisdiction, it must obtain regulatory approval for its systems and
comply with differentregulations in each jurisdiction. The delays inherent
in this governmental approval process may cause the cancellation,
postponement or rescheduling of the installation of
communications systems by the Company's customers, which in turn may have a
material adverse effect on the sale of systems by the Company to such
customers. The failure to comply with current or future regulations or
changes in the interpretation of existing regulations could result in the
suspension or cessation of operations. Such regulations or such changes in
interpretation could require the Company to modify its radio systems and
incur substantial costs to comply with such time-consuming regulations and
changes. In addition, the Company is also affected to the extent that
domestic and international authorities regulate the allocation and auction of
the radio frequency spectrum. Equipment to support new services can be
marketed only if permitted by suitable frequency allocations, auctions and
regulations, and the process of establishing new regulations is complex and
lengthy. To the extent PCS operators and others are delayed in deploying
these systems, the Company could experience delays in orders. Failure
by the regulatory authorities to allocate suitable frequency spectrum
could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, delays in
the radio frequency spectrum auction process in the United States could
delay the Company's ability to develop and market equipment to support new
services. These delays could have a material adverse effect on the
Company's business, financial condition and results of operations.
The regulatory environment in which the Company operates is subject
to significant change. Regulatory changes, which are affected by
political, economic and technical factors, could significantly impact
the Company's operations by restricting development efforts by the
Company and its customers, making current systems obsolete or
increasing the opportunity for additional competition. Any such regulatory
changes could have a material adverse effect on the Company's business,
financial condition and results of operations. The Company might deem it
necessary or advisable to modify its systems to operate in compliance
with such regulations. Such modifications could be extremely expensive and
time-consuming.
Future Capital Requirements
The Company's future capital requirements will depend upon many factors,
including the development of new radio systems and related software
tools, potential acquisitions, requirements to maintain adequate
manufacturing facilities and contract manufacturing agreements, the
progress of the Company's research and development efforts, expansion of the
Company's marketing and sales efforts, and the status of competitive
products. There can be no assurance that additional financing will be
available to the Company on acceptable terms, or at all. If additional
funds are raised by issuing equity securities, further dilution to the
existing stockholders will result. If adequate funds are not available,
the Company may be required to delay, scale back or eliminate its research
and development, acquisition or manufacturing programs or obtain funds
through arrangements with partners or others that may require the Company
to relinquish rights to certain of its technologies or potential products
or other assets. Accordingly, the inability to obtain such financing could
have a material adverse effect on the Company's business, financial condition
and results of operations.
Uncertainty Regarding Protection of Proprietary Rights
The Company attempts to protect its intellectual property rights
through patents, trademarks, trade secrets and a variety of other measures.
However, there can be no assurance that such measures will provide adequate
protection for the Company's trade secrets or other proprietary
information, that disputes with respect to the ownership of its intellectual
property rights will not arise, that the Company's trade secrets or
proprietary technology will not otherwise become known or be independently
developed by competitors or that the Company can otherwise meaningfully
protect its intellectual property rights. There can be no assurance that any
patent owned by the Company will not be invalidated, circumvented or
challenged, that the rights granted thereunder will provide competitive
advantages to the Company or that any of the Company's pending or future
patent applications will be issued with the scope of the claims sought by
the Company, if at all. Furthermore, there can be no assurance that others
will not develop similar products or software, duplicate the Company's
products or software or design around the patents owned by the Company
or that third parties will not assert intellectual property infringement
claims against the Company. In addition, there can be no assurance that
foreign intellectual property laws will adequately protect the Company's
intellectual property rights abroad. The failure of the Company to protect its
proprietary rights could have a material adverse effect on its business,
financial condition and results of operations.
Litigation may be necessary to protect the Company's intellectual
property rights and trade secrets, to determine the validity of and scope of
the proprietary rights of others or to defend against claims of
infringement or invalidity. Such litigation could result in substantial
costs and diversion of resources and could have a material adverse
effect on the Company's business, financial condition and results
of operations. There can be no assurance that infringement,
invalidity, right to use or ownership claims by third parties or claims for
indemnification resulting from infringement claims will not be asserted in the
future. If any claims or actions are asserted against the Company, the
Company may seek to obtain a license under a third party's intellectual
property rights. There can be no assurance, however, that a license will be
available under reasonable terms or at all. In addition, should the Company
decide to litigate such claims, such litigation could be extremely
expensive and time consuming and could materially adversely affect the
Company's business, financial condition and results of operations,
regardless of the outcome of the litigation.
Dependence on Key Personnel
The Company's future operating results depend in significant part upon
the continued contributions of its key technical and senior management
personnel, many of whom would be difficult to replace. The Company's
future operating results also depend in significant part upon its ability
to attract and retain qualified management, manufacturing, quality
assurance, engineering, marketing, sales and support personnel.
Competition for such personnel is intense, and there can be no assurance
that the Company will be successful in attracting or retaining such
personnel. There may be only a limited number of persons with the requisite
skills to serve in these positions and it may be increasingly difficult
for the Company to hire such personnel over time. The loss of any key
employee, the failure of any key employee to perform in his or her current
position, the Company's inability to attract and retain skilled employees
as needed or the inability of the officers and key employees of the Company
to expand, train and manage the Company's employee base could
materially adversely affect the Company's business, financial condition
and results of operations.
The Company may experience employee turnover due to several factors,
including an expanding economy within the geographic area in which the
Company maintains its principal business offices, making it more difficult
for the Company to retain its employees. Due to this and other factors,
the Company may experience high levels of employee turnover, which
could adversely impact the Company's business, financial condition and
results of operations. The Company is presently addressing these issues and
will pursue solutions designed to retain its employees and to provide
performance incentives.
Volatility of Stock Price
The Company's initial public offering ("IPO") was completed in March
1995, and its follow-on offerings were completed in August 1995 and
May 1996. The market price of the Company's Common Stock has fluctuated
significantly since the Company's IPO. The Company believes that factors
such as announcements of developments related to the Company's business,
announcements of technological innovations or new products or enhancements by
the Company or its competitors, sales by competitors, including sales to the
Company's customers, sales of the Company's Common Stock into the public
market, including by members of management, developments in the Company's
relationships with its customers, partners, lenders, distributors and
suppliers, shortfalls or changes in revenues, gross margins, earnings or
losses or other financial results from analysts' expectations,
regulatory developments, fluctuations in results of operations and general
conditions in the Company's market or the markets served by the Company's
customers or the economy could cause the price of the Company's Common
Stock to fluctuate, perhaps substantially. In addition, in recent years
the stock market in general, and the market for shares of small
capitalization and technology stocks in particular, have experienced extreme
price fluctuations, which have often been unrelated to the operating
performance of affected companies. Many companies in the
telecommunications industry, including the Company, have recently
experienced historic highs in the market price of their Common Stock.
There can be no assurance that the market price of the Company's Common Stock
will not decline substantially from its historic highs, or otherwise
continue to experience significant fluctuations in the future, including
fluctuations that are unrelated to the Company's performance. Such
fluctuations could materially adversely affect the market price of the
Company's Common Stock.
Control by Existing Stockholders; Effects of Certain Anti-Takeover
Provisions
Members of the Board of Directors and the executive officers of the
Company, together with members of their families and entities that may be
deemed affiliates of or related to such persons or entities, beneficially
own approximately 10% of the outstanding shares of Common Stock of the
Company. Accordingly, these stockholders are able to influence the election
of the members of the Company's Board of Directors and influence the
outcome of corporate actions requiring stockholder approval, such as mergers
and acquisitions. This level of ownership, together with certain provisions
of the Company's certificate of incorporation, equity incentive plans,
bylaws and Delaware law, may have a significant effect in delaying,
deferring or preventing a change in control of the Company and may
adversely affect the voting and other rights of other holders of Common Stock.
Possible Adverse Effect on Market Price for Common Stock of Shares Eligible
for Future Sale After the Offering
Sales of the Company's Common Stock into the market could materially
adversely affect the market price of the Company's Common Stock. Shares of
Common Stock sold in the initial public offering in March 1995 and follow-on
offerings in August 1995 and May 1996, shares to be registered pursuant
hereto in connection with the acquisitions of CSM and CRC, and shares of
unregistered stock, including those shares issued in connection with the
acquisition of ACS, and option shares registered on the Company's
registration statements covering employee compensation plans are also, or
will be in the near future, eligible for immediate sale in the public market
at any time. Most of the other shares of the Company's Common Stock are
not restricted and are freely tradeable in the public market.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Resale Shares by the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth the number of shares of Common Stock
owned by each of the Selling Stockholders. None of the Selling
Stockholders has had a material relationship with the Company or with CSM
or CRC, as applicable, within the past three years other than as a result
of the ownership of the Resale Shares or other securities of the Company
or CSM or CRC, as applicable. Because the Selling Stockholders may offer
all or some of the Resale Shares which they hold pursuant to the
offering contemplated by this Prospectus and because there are currently
no agreements, arrangements or understandings with respect to the sale of
any of the Resale Shares, no estimate can be given as to the amount of
Resale Shares that will be held by the Selling Stockholders after
completion of this offering. The Resale Shares offered by this Prospectus
may be offered from time to time by the Selling Stockholders named below:
Ownership
After Offering
--------------
Number
Number of Shares of Shares
Name and Address of Owned Prior to Being Number of
Selling Stockholders Offering Offered Shares Percent
- ------------------------------------------------------------------------------
Columbia Spectrum 4,580 4,580 0 0
Management, Inc.
Columbia Spectrum 278,358 278,358 0 0
Management Investors, L.P.
Allen Telecom, Inc. 38,338 38,338 0 0
Tom Stroup 107,001 107,001 0 0
William Welch 18,321 18,321 0 0
Katherine Grammes 6,870 6,870 0 0
Thomas Lusk 4,580 4,580 0 0
Bruce B. Bee 1,192 1,192 0 0
Elizabeth Booth 1,805 1,805 0 0
Michael J. Brown 50,295 50,295 0 0
Eileen M. Byrnes 836 836 0 0
Judith Channell 270 270 0 0
James Clements 2,860 2,860 0 0
CMNY Capital 113,841 113,841 0 0
Stacey Cohane 7,867 7,867 0 0
Timothy Collins, Jr. 578 578 0 0
Steven Jay Davis 2,145 2,145 0 0
C.J. Denholm 21,456 21,456 0 0
John B. DiGiglio 1,430 1,430 0 0
Bruce Ducker 953 953 0 0
Kenneth R. Etheredge 516 516 0 0
Sam Fasnacht 1,072 1,072 0 0
Deborah L. Ferguson 1,192 1,192 0 0
Mickey Fouts 2,257 2,257 0 0
J. Gallagher 8,582 8,582 0 0
Mary (Blackburn) Greco
Dockstader 469 469 0 0
Allen J. Green 953 953 0 0
Deborah Dana Heuga 1,907 1,907 0 0
Kenneth D. Higgins 35,760 35,760 0 0
Kenneth Higgins, 1,311 1,311 0 0
Cust. for Joleen D. Higgins
Joleen D. Higgins 6,556 6,556 0 0
Kurtis P. Higgins 10,251 10,251 0 0
Maria L. Higgins 7,867 7,867 0 0
Peter B. Holmes 34,806 34,806 0 0
Alan L. Jacobs 516 516 0 0
David Jackson 6,436 6,436 0 0
Steven Klein 11,920 11,920 0 0
Korr Inc. 17,284 17,284 0 0
Alan L. Madian 1,811 1,811 0 0
Merrill Lynch 23,840 23,840 0 0
Donald Newman 4,769 4,769 0 0
Barbara L. O'Pray, MD 5,905 5,905 0 0
Donald E. Stasko
Bruce L. O'Pray 214,560 214,560 0 0
Suzanne R. O'Pray 6,556 6,556 0 0
Gavin C. Ridge 11,443 11,443 0 0
Michael Schaenen 516 516 0 0
James A. Schneider 5,960 5,960 0 0
Schneider Securities Corp. 924 924 0 0
Trowbridge Limited 2,384 2,384 0 0
Jonathan M. Wainwright, Esq. 596 596 0 0
William M. White 37,768 37,768 0 0
William M. White, for Wm. 1,192 1,192 0 0
Whitney Burke White
- -----------------------------------------------------------------------------
Total: 1,131,455 1,131,455 0 0
* less than 1%.
1/ Based upon 19,889,627 shares of Common Stock outstanding on March 31,
1997. This Registration Statement shall also cover any additional shares of
Common Stock which become issuable in connection with the shares
registered for sale hereby by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt of
consideration which results in an increase in the number of the
Registrant's outstanding shares of Common Stock.
RECENT DEVELOPMENTS
The Acquisitions.
On March 7, 1997, the Company acquired substantially all of the assets
of Columbia Spectrum Management, L.P., a Delaware limited partnership based
in Vienna, Virginia ("CSM"), for $8.0 million in cash and Common Stock
valued at $14.5 million. The former partners of CSM may receive up to
$1,500,000 in cash (as part of such $8.0 million amount) over the next two
years, subject to the satisfaction of certain indemnification obligations.
CSM provides turnkey relocation services for microwave paths over spectrum
allocated by the Federal Communications Commission for Personal
Communications Services and other emerging technologies.
On May 29, 1997, the Company acquired Control Resources Corporation,
a Delaware corporation located in Fair Lawn, New Jersey ("CRC"), in a
statutory merger. A total of 673,407 shares of the Company's Common Stock
valued at $22 million were issued, or will be issuable, to former CRC
stockholders and optionholders in exchange for the acquisition by the
Company of all outstanding shares of CRC capital stock and all unexpired
and unexercised options to acquire CRC capital stock, which options the
Company assumed in the merger. CRC is a provider of integrated network
access devices to network service providers and manufactures products
used by the communications industry to connect end user sites to a range
of communications services. CRC's NetPath product line enables network
service providers to offer their customers a migration path from entry-level
data services to cost-effective integrated delivery of voice, video and
Internet access. The NetPath product line will support the network service
provider's introduction of new technologies including asynchronous
transfer mode and frame relay.
PLAN OF DISTRIBUTION
The Company will not receive proceeds from the sale of Resale Shares in
this offering. The Resale Shares offered hereby may be sold by the
Selling Stockholders from time to time in transactions in the Nasdaq
market, in negotiated transactions, or a combination of such methods of
sale, at fixed prices which may be changed, at market prices prevailing at
the time of sale, at prices related to prevailing market prices or at
negotiated prices. The Selling Stockholders may effect such transactions by
selling the Resale Shares to or through broker-dealers, and such broker-
dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of the
Resale Shares for whom such broker-dealers may act as agents or to whom
they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
In order to comply with the securities laws of certain states, if
applicable, the Resale Shares will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in
certain states the Resale Shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is
complied with.
The Selling Stockholders and any broker-dealers or agents that
participate with the Selling Stockholders in the distribution of the
Resale Shares may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions received by them and any profit on the
resale of the Resale Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
The Company has advised the Selling Stockholders that, during such time
as they may be engaged in a distribution of the shares of Common Stock
included herein, they must comply with the applicable provisions under
Regulation M under the Securities Exchange Act of 1934, as amended
("Regulation M") and, in connection therewith, the Selling Stockholders may
not engage in any stabilization activity in connection with any securities
of the Company, that they must furnish copies of this Prospectus to each
broker-dealer through which the shares of Common Stock included herein
may be offered, and that they may not bid for or purchase any securities of
the Company or attempt to induce any person to purchase any securities of
the Company except as permitted under Regulation M. The Selling
Stockholders have also agreed to inform the Company and broker-dealers
through whom sales may be made hereunder when the distribution of the
shares is completed.
Rules 102 and 103 under the Exchange Act prohibits participants
in a distribution from bidding for or purchasing for an account in which
the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Rule 104 under the Regulation M governs
bids and purchases made to stabilize the price of a security in
connection with a distribution of the security.
The Resale Shares were originally issued in the Acquisitions pursuant
to exemptions from the registration requirements of the Securities Act
provided by Section 4(2) thereof. The Company agreed to register the
Resale Shares under the Securities Act. The Company has agreed to pay all
fees and expenses incident to the filing of this Registration Statement
other than underwriting discounts, commissions and fees and disbursements of
counsel for the Selling Stockholders.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
the Company by Brobeck, Phleger & Harrison LLP, Palo Alto, California. As of
the date of this Prospectus, a member of Brobeck, Phleger & Harrison LLP
and family members thereof beneficially owned an aggregate of approximately
25,000 shares of the Company's Common Stock.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1996
and 1995 and the related consolidated statements of operations,
stockholder's equity and cash flows for each of the three years in the
period ended December 31, 1996, incorporated by reference from the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996
into this Prospectus, have been incorporated herein in reliance on the
report of Price Waterhouse, LLP, independent accountants, given on the
integrity of that firm as experts in accounting and auditing.
The financial statements of CSM as of and for the years ended December
31, 1996 and 1995, appearing in the Company's Current Report on Form 8-K
filed on March 21, 1997, as amended, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report appearing therein and
incorporated herein by reference. Such financial statements are incorporated
herein by reference in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.
The financial statements of CRC as of December 31, 1996 and 1995, and
for each of the years in the two-year period ended December 31, 1996, have
been incorporated by reference from the Company's Current Report on Form 8-K
filed on June 13, 1997, as amended, into this Prospectus and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP covering the December 31, 1996 and
1995 financial statements contains an explanatory paragraph that states
that CRC's 1996 losses from operations and net stockholders' deficit raise
substantial doubt about CRC's ability to continue as a going concern.
The financial statements do not include any adjustments that might result
from the outcome of that uncertainty.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth an itemized statement of all estimated
expenses in connection with the issuance and distribution of the
securities being registered:
SEC Registration fee .................................... $ 11,208.26
Legal expenses .......................................... 50,000.00
Accounting fees and expenses ............................ 12,500.00
Total ........................................... $ 73,708.26
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a
court to award or a corporation's Board of Directors to grant
indemnification to directors and officers in terms sufficiently broad to
permit such indemnification under certain circumstances for liabilities
(including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Act"). Article VII of the
Registrant's Bylaws provides for mandatory indemnification of its
directors and permissible indemnification of its officers, employees and other
agents to the maximum extent permitted by the Delaware General Corporation
Law. The Registrant has entered into Indemnification Agreements with its
officers and directors which are intended to provide the Registrant's
officers and directors with further indemnification to the maximum extent
permitted by the Delaware General Corporation Law. Reference is also made
to Section 1.10 of the Restated Investor Rights Agreement contained in
Exhibit 4.3 incorporated by reference herein, which contains provisions
indemnifying officers and directors of the Registrant against certain
liabilities. Reference is also made to the Underwriting Agreements entered
into in connection with the Company's three public offerings indemnifying
officers and directors of the Company and other persons against certain
liabilities, including those arising under the Act.
Item 16. Exhibits and Financial Statement Schedules
Number Description
------- -------------
2.1(4) Asset Purchase Agreement dated February 12, 1997, by and
among the Company, P-Com Field Services, Columbia Spectrum
Management, L.P., and thePartners of Columbia Spectrum
Management, L.P.
2.2(5) Agreement and Plan of Reorganization, dated as of April
14, 1997, by and among the Company, P-Com Merger Subsidiary,
Inc., Control Resources Corporation and certain
shareholders of Control Resources Corporation.
4.1(1) Form of Common Stock Certificate.
4.3(1) Amended and Restated Investor Rights Agreement dated
January 11, 1995, by and among the Company and the parties
thereto.
4.4(1) Form of Warrant to Purchase Common Stock of the Company,
forms of Letter Agreements amending Warrant to
Purchase Common Stock and list of holders thereof.
4.5(1) Warrant Purchase Agreement dated November 9, 1992, by and
between the Company and Dominion Ventures, Inc.
("Dominion"); Series A Preferred Stock Warrant dated
January 8, 1992 issued to Dominion.
4.6(1) Warrant Purchase Agreement dated June 23, 1993 by and
between the Company and Dominion; Series B Preferred Stock
Warrant dated June 23, 1993 issued to Dominion.
4.7(1) Letter Agreement dated June 23, 1993, by and between the
Company and Dominion.
4.8(1) Series C Preferred Stock Warrant dated January 10,
1995, issued to Applied Telecommunication Technologies, Inc.
4.9(2) Amendment and Consent to Amended and Restated Investors
Rights Agreement, dated July 28, 1995, by and among the
Company and the parties thereto.
4.10(3) Second Amendment and Consent to Amended and Restated
Investors Rights Agreement, dated April 15, 1996, by and
among the Company and the parties thereto.
4.11(4) Registration Rights Agreement dated as of February 12,
1997 by and among the Company and the parties thereto.
4.12(5) Registration Rights Agreement dated as of April 12, 1997
by and among the Company and the parties thereto.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Price Waterhouse LLP, Independent Accountants.
23.2 Consent of Ernst & Young LLP, Independent Accountants.
23.3 Consent of KPMG Peat Marwick LLP, Independent Accountants.
23.4 Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (see page II-3).
- ---------------------
(1) Incorporated by reference to identically numbered exhibits included in
the Company's Registration Statement on Form S-1 (File No. 33-88492)
declared effective with the Securities and Exchange Commission on
March 2, 1995.
(2) Incorporated by reference to an identically numbered exhibit included
in the Company's Registration Statement on Form S-1 (File No. 33-95392)
declared effective with the Securities and Exchange Commission on
August 17, 1995.
(3) Incorporated by reference to an identically numbered exhibit included in
the Company's Registration Statement on Form S-3 (File No. 333-3558)
declared effective with the Securities and Exchange Commission on May
16, 1996.
(4) Incorporated by reference to the Company's Current Report on Form 8-K
filed on March 21, 1997 (File No. 0-25356).
(5) Incorporated by reference to the Company's Current Report on Form 8-K
filed on June 13, 1997 (File No. 0-25356).
Item 17. Undertaking
Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the
Certificate of Incorporation or the Bylaws of the Registrant,
Indemnification Agreements entered into between the Registrant and its
officers and directors, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer, or controlling person
of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The 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 of 1933;
(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.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
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 Campbell, State of California on this 27th day of
June, 1997.
P-Com, Inc.
By: /s/ George P. Roberts
----------------------------
(George P. Roberts)
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints George P.
Roberts and Michael J. Sophie, and each of them singly, as 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 to sign the Registration
Statement filed herewith and any or all amendments to said
Registration Statement (including post-effective amendments and
registration statements filed pursuant to Rule 462 and
otherwise), 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 the full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the foregoing, as full to all intents and purposes as he or
she might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or his
substitute, may lawfully do or cause to be done by virtue hereof.
Witness our hands on the date set forth below.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ George P. Roberts Chairman of the Board and June 27, 1997
- -------------------------- Chief Executive Officer and Director
(George P. Roberts) (Principal Executive Officer)
/s/ Michael J. Sophie Chief Financial Officer and June 27, 1997
- -------------------------- Vice President, Finance and
(Michael J. Sophie) Adminstration
(Principal Accounting and
Financial Officer)
/s/ Gill Cogan Director June 27, 1997
- --------------------------
(Gill Cogan)
/s/ John A. Hawkins Director June 27, 1997
- --------------------------
(John A. Hawkins)
/s/ M. Bernard Puckett Director June 27, 1997
- --------------------------
(M. Bernard Puckett)
/s/ James J. Sobczak Director June 27, 1997
- --------------------------
(James J. Sobczak)
P-COM, INC.
Index to Exhibits
Exhibit Description
------- -----------
2.1(4) Asset Purchase Agreement dated February 12, 1997, by and
among the Company, P-Com Field Services, Columbia Spectrum
Management, L.P., and the Partners of Columbia Spectrum
Management, L.P.
2.2(5) Agreement and Plan of Reorganization, dated as of April 14,
1997, by and among the Company, P-Com Merger Subsidiary, Inc.
and Control Resources Corporation.
4.1(1) Form of Common Stock Certificate.
4.3(1) Amended and Restated Investor Rights Agreement dated
January 11, 1995, by and among the Company and the parties
thereto.
4.4(1) Form of Warrant to Purchase Common Stock of the Company,
forms of Letter Agreements amending Warrant to Purchase
Common Stock and list of holders thereof.
4.5(1) Warrant Purchase Agreement dated November 9, 1992, by and
between the Company and Dominion Ventures, Inc. ("Dominion");
Series A Preferred Stock Warrant dated January 8, 1992 issued
to Dominion.
4.6(1) Warrant Purchase Agreement dated June 23, 1993 by and
between the Company and Dominion; Series B Preferred Stock
Warrant dated June 23, 1993 issued to Dominion.
4.7(1) Letter Agreement dated June 23, 1993, by and between the
Company and Dominion.
4.8(1) Series C Preferred Stock Warrant dated January 10, 1995,
issued to Applied Telecommunication Technologies, Inc.
4.9(2) Amendment and Consent to Amended and Restated Investors Rights
Agreement, dated as of July 28, 1995, by and among the Company
and the parties thereto.
4.10(3) Second Amendment and Consent to Amended and Restated and
Investors Rights Agreement, dated as of April 15, 1996 by and
among the Company and the parties thereto.
4.11(4) Registration Rights Agreement dated as of February 12, 1997 by
and among the Company and the parties thereto.
4.12(5) Registration Rights Agreement dated as of April 12, 1997 by
and among the Company and the parties thereto.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Price Waterhouse LLP, Independent Accountants.
23.2 Consent of Ernst & Young LLP, Independent Accountants.
23.3 Consent of KPMG Peat Marwic LLP, Independent Accountants.
23.4 Consent of Brobeck, Phleger & Harrison LLP
(included in Exhibit 5.1).
24.1 Power of Attorney (see page II-3).
- -----------------------------
(1) Incorporated by reference to identically numbered exhibits included
in the Company's Registration Statement on Form S-1 (File No. 33-88492)
declared effective with the Securities and Exchange Commission on
March 2, 1995.
(2) Incorporated by reference to an identically numbered exhibit included
in the Company's Registration Statement on Form S-1 (File No. 33-95392)
declared effective with the Securities and Exchange Commission on
August 17, 1995.
(3) Incorporated by reference to an identically numbered exhibit included
in the Company's Registration Statement on Form S-3 (File No. 333-3558)
declared effective with the Securities and Exchange Commission on May
16, 1996.
(4) Incorporated by reference to the Company's Current Report on Form 8-K
filed on March 21, 1997 (File No. 0-25356).
(5) Incorporated by reference to the Company's Current Report on Form 8-K
filed on June 13, 1997 (File No. 0-25356).
June 27, 1997
P-Com, Inc.
3175 S. Winchester Boulevard
Campbell, CA 95008
Ladies and Gentlemen:
We have acted as counsel to P-Com, Inc. (the
"Company"), a Delaware corporation, in connection with its
registration of 1,131,455 shares of Common Stock (the "Common
Stock") as described in the Company's Registration Statement on
Form S-3, filed with the Securities and Exchange Commission under
the Securities Act of 1933. The Common Stock consists of shares
that may be offered by certain stockholders of the Company or by
pledgees, donees, transferees or other successors in interest
that receive such shares as a gift, partnership distribution or
other non-sale related transfer (the "Resale Shares").
We are familiar with the corporate proceedings taken by
the Company in connection with the issuance and sale of the
Resale Shares. It is our opinion that the Resale Shares have been
duly authorized and are validly issued, fully paid and
nonassessable.
We consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement and to the reference to this firm
under the caption "Legal Matters" in the Prospectus which is part
of the registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting
part of this Registration Statement on Form S-3 of our report dated
January 22, 1997 (except for Note 9 which is as of March 7, 1997),
relating to the consolidated financial statements of P-Com, Inc., which
are incorporated by reference in such Prospectus. We also consent to
the reference to our firm under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
San Jose, California
June 26, 1997
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption
"Experts" in this Registration Statement on Form S-3 (No. 33-
) and related prospectus of P-Com, Inc. for the registration
of 1,131,455 shares of its common stock, and to the
incorporation by reference therein of our report dated April
14, 1997, with respect to the financial statements of
Columbia Spectrum Management, L.P. as of and for the years
ended December 31, 1996 and 1995, included in P-Com, Inc.'s
March 21, 1997 Current Report on Form 8-K, as amended, filed
with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Vienna, Virginia
June 24, 1997
Exhibit 23.3
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT ACCOUNTANTS
The Board of Directors
Control Resources Corporation:
We consent to the incorporation by reference in the Prospectus
constituting part of this registration statement on Form S-3 of P-
Com, Inc. of our report dated February 7, 1997, relating to the
balance sheets of Control Resources Corporation ("CRC") as of
December 31, 1996 and 1995, and the related statements of
operations and (accumulated deficit) retained earnings, and cash
flows for each of the years in the two-year period ended December
31, 1996, which report appears in the Form 8-K of P-Com, Inc.
dated June 13, 1997, as amended. The report of KPMG Peat Marwick
LLP covering the December 31, 1996 and 1995 financial statements
contains an explanatory paragraph that states that CRC's 1996
losses from operations and net stockholders' deficit raise
substantial doubt about CRC's ability to continue as a going
concern. The financial statements do not include any adjustments
that might result from the outcome of that uncertainty. We also
consent to the reference to our firm under the heading "Experts"
in such Prospectus.
KPMG Peat Marwick LLP
Short Hills, New Jersey
June 26, 1997
