Filed Pursuant to Rule 424(b)(4)
Registration No. 333-30473
Prospectus
P-Com, Inc.
1,067,295 Shares Common Stock
($0.0001 par value per share)
_______________________________
This Prospectus relates to the public offering, which is not being
underwritten, of up to 1,067,295 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 July 28, 1997 the last
reported sale price for the Common Stock, as reported on The Nasdaq
National Market, was $37.50 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 5.
_______________________________
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 31, 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, as amended (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-Linkr 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-Linkr 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
that the 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 expansion 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 different regulations 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 Offering1
---------------
Number
Number of Shares of Shares
Name of Selling Owned Prior to Being Number of
Stockholders Offering Offered Shares Percent
------------ -------- ------- ------ -------
Columbia Spectrum 3,939 3,939 0 0
Management, Inc.
Columbia Spectrum 239,366 239,366 0 0
Management Investors, L.P.
Allen Telecom, Inc. 32,968 32,968 0 0
Tom Stroup 92,012 92,012 0 0
William Welch 15,756 15,756 0 0
Katherine Grammes 5,908 5,908 0 0
Thomas Lusk 3,939 3,939 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 1,192 1,192 0 0
Wm. Whitney Burke White
_____________________________________________________________________
Total: 1,067,295 1,067,295 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.
