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As filed with the Securities and Exchange Commission on September 24, 1999
Registration No. 333-70937
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
AMENDMENT NO. 6 TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933, as amended
______________________
P-COM, INC.
(Exact name of Registrant as specified in its charter)
______________________
Delaware 77-0289371
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
______________________
3175 S. Winchester Boulevard, Campbell, CA 95008
(408) 866-3666
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
______________________
George P. Roberts
Chairman of the Board and Chief Executive Officer
P-Com, Inc.
3175 S. Winchester Boulevard
Campbell, CA 95008
(408) 866-3666
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
______________________
Copy to:
Warren T. Lazarow, Esq.
Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, California 94303
(650) 424-0160
______________________
Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, check the
following box and list the Securities Act of 1933, as amended, 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 of 1933, as amended, check the following box and list
the Securities Act of 1933, as amended, registration statement number of the
earlier effective registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
______________________
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 that specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this registration statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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PRELIMINARY PROSPECTUS
(SUBJECT TO COMPLETION, DATED SEPTEMBER 24, 1999)
8,000,000 Shares
P-COM, INC.
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COMMON STOCK
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The stockholders of P-COM, Inc. listed on page 2 below are offering
for resale and selling under this prospectus up to 8,000,000 shares of our
common stock.
Our common stock is traded on the Nasdaq National Market (Nasdaq
Symbol: PCMS). On September 17, 1999, the closing price of the common stock was
$6.8125 per share.
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You should carefully consider the risk factors commencing on page 3
before purchasing any of the common stock offered by the selling stockholders.
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
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The date of this prospectus is ____________, 1999.
The information in this prospectus is not complete and may be changed.
The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
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SUMMARY
The common stock to be resold by the selling stockholders pursuant to
this prospectus was issued by us to the selling stockholders in exchange for all
outstanding shares of our Series B preferred stock and will be issued upon
exercise of warrants held by the selling stockholders. The name of each selling
stockholder and the number of shares of common stock and warrants held by it are
set forth in the following table:
<TABLE>
<CAPTION>
Number of Shares of Warrants to Purchase the
Common Stock Following Number of shares of
Beneficially Owned Common Stock Beneficially
Name of Selling Stockholder Prior to Offering Owned Before the Offering
- -------------------------------------- ---------------------------- -------------------------------
<S> <C> <C>
Marshall Capital Management, Inc...... 1,540,438 372,677
Castle Creek Technology Partners LLC.. 1,882,758 455,494
Capital Ventures International........ 1,711,598 414,086
</TABLE>
We develop, manufacture and market systems for the transport of voice
and data between the end user and a location where the information is
transferred onto the broader telecommunications network. Our systems are sold to
the worldwide wireless telecommunications market. Our systems are designed to
satisfy the network requirements of cellular telephone service providers and
digital wireless communications service providers, corporate communications,
public utilities and local governments. We also provide comprehensive network
services to assist customers in designing, building and optimizing the
performance of their wireless communications networks. Our radio systems are
sold internationally through strategic partners, providers of bundled consulting
services and telecommunications equipment, manufacturers who resell our products
under their brand names, distributors and directly to end-users. Our executive
offices are located at 3175 S. Winchester Boulevard, Campbell, California 95008,
and our telephone number is (408) 866-3666.
We issued and sold 15,000 shares of a newly designated Series B
preferred stock and warrants to purchase 1,242,257 shares of common stock to the
selling stockholders in December 1998 for gross proceeds of $15 million. On June
4, 1999, in accordance with exchange agreements with the selling stockholders,
we exchanged:
. 5,134,795 shares of our common stock for all outstanding shares of
our Series B Preferred Stock, and
. new warrants having the terms set forth below for our previously
outstanding warrants.
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RISK FACTORS
You should carefully consider the risks described below before making
an investment decision.
We may be required to redeem the common stock issued in the exchange, which
might force us to raise funds through asset sales or additional financings or,
failing that, render us insolvent
If any of the following three events occur, the selling stockholders
have the right under the exchange agreements to cause us to redeem the common
stock issued in the exchange for a cash payment that is larger than the original
issue price:
. we fail to remove any restrictive legend from the stock
certificates representing the common stock owned by a holder,
. the amended registration statement is not effective by October 12,
1999, or
. the amended registration statement cannot be used by a holder to
resell its common stock for 10 consecutive business days or for a
total of more than 20 days in any twelve month period.
The redemption price per share is equal to the higher of $4.00 and the highest
closing bid price for our common stock during the period beginning on the date
of the redemption notice and ending on the redemption date. If all of the common
stock issued in the exchange remains outstanding for redemption and applicable
limits under our credit agreement and Section 160 of the Delaware General
Corporation Law do not limit redemptions, the aggregate amount of redemption
payments would be at least $20,539,180, but could be much higher if the market
price of our stock significantly exceeds $4.00. Making redemption payments may
divert funds away from, and thus adversely affect, our business, financial
condition and results of operations. If we do not have the funds available to
make redemption payments, we may have to sell key operational assets or find
additional financing or, if we are unable or unwilling to do that, we may become
insolvent. Any of those events could have a material adverse effect on our
business, financial condition, prospects and stock price.
If our credit agreement or Section 160 of the Delaware General Corporation Law
prevents redemptions, we may be required to turn fixed or financial assets into
liquid assets or otherwise obtain additional capital, which would materially
adversely affect our business, financial condition and operating results
In the event our credit agreement or DGCL Section 160 prevents
redemption of the common stock issued in the exchange, we are required under the
exchange agreements to use our best efforts to take all reasonably necessary
actions not prohibited by our credit agreement and the exchange agreement to
permit further redemptions. To fulfill these requirements, we may need to alter
our capital structure by turning fixed or financial assets into liquid assets or
otherwise obtaining additional capital. Those liquid assets would augment our
capital for purposes of DGCL Section 160 and may permit us to amend our credit
agreement to permit additional payments to the selling stockholders. Any actions
to accomplish these purposes could materially adversely affect our business,
operating results and financial condition.
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We may be required to make cash payments to the selling stockholders if the
registration statement of which this prospectus is a part is not declared
effective on or before July 19, 1999, which payments would adversely affect our
results of operations
Pursuant to the registration rights agreement we entered into in
connection with the issuance of the Series B preferred stock, as amended by the
exchange agreements, we may be required to make cash payments to the selling
stockholders if the registration statement of which this prospectus is a part is
not declared effective on or before July 19, 1999. As of July 19, 1999, such
payments would total $405,000, and would continue to accrue at a rate of $10,000
for each day after July 19, 1999 until the registration statement is declared
effective. If these payments are made, they will adversely affect our results of
operations.
Due to our stage of development and industry, an investment in our stock is very
risky
Because we have a limited operating history, it is difficult to
evaluate our business
Due to our limited operating history and limited resources, among
other factors, profitability or significant revenue growth on a quarterly or
annual basis may not occur in the future. We were founded in August 1991 and
remained in the development stage until October 1993, when commercial shipments
of our first product began. We have not developed a large installed base of our
equipment or the kind of close relationships with a broad base of customers of a
type enjoyed by older, more developed companies, which would provide a base of
financial performance from which to launch strategic initiatives and withstand
business reversals. In addition, we have not built up the level of capital often
enjoyed by more established companies, so from time to time we may face
challenges in financing our continued operation. We may not be able to
successfully address these risks, which would adversely affect our results of
operations and, ultimately, our stock price.
Our stock price is volatile, so you may not be able to sell our stock
at any particular time at a favorable price
The stock market in general, and the market for shares of small
capitalization and technology stocks in particular, have experienced extreme
price fluctuations in recent years. These fluctuations have often been unrelated
to the operating performance of affected companies. The market price of our
common stock may continue to decline substantially, or otherwise continue to
experience significant fluctuations in the future, sometimes reaching extreme
and unexpected lows, including fluctuations that are unrelated to our
performance. During the 52 week period ending September 17, 1999, the market
price of a share of our common stock was as low as $2 3/8 and as high as $10
3/8. These fluctuations may mean that investors may not be able to sell our
common stock at a favorable price at any given time.
We do not pay dividends, so appreciation of our stock price is the
only way in which you will realize a return on your investment
Our bank line-of-credit agreement prohibits us from paying any
dividends on our common stock except dividends paid in shares of our common
stock. Since our incorporation in 1991, we have not declared or paid cash
dividends on our common stock, and we anticipate that any future earnings will
be retained for investment in our business. Thus, the return on an investment in
our common stock will likely be through resale of shares at a price higher than
the
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price paid for those shares. As indicated above, the market for our shares may
not provide an opportunity to sell our shares at a favorable price at any given
time.
We rely on our existing customers, and it will materially adversely affect our
operating results and financial condition if they do not support us
A substantial amount of our products and services are purchased by a
limited number of customers, so the loss of a large customer would
significantly affect our results of operations
If any of our important customers significantly reduce their purchases
from us, which has been the case during the last twelve months, then this may
materially adversely affect the profitability of our business and our ability to
remain in business. During 1998, one customer, Orange Personal Communications
Ltd., accounted for 23% of our sales and four customers accounted for
approximately 42% of our sales. Six customers accounted for approximately 59% of
the backlog scheduled for shipment in the twelve months subsequent to December
31, 1998.
Our customers may cancel orders leaving us with unsaleable equipment
or idle capacity
Our customers often enter into purchase orders with us far in advance
of manufacture of the equipment ordered. We have recently experienced several
purchase order cancellations and deferrals. Historically, we have chosen not to
harm our relationships with our customers by enforcing their obligations under
purchase orders when the customer wishes to cancel an order. Cancellations of
orders by customers may, depending upon the timing of the cancellation, leave us
with unsaleable equipment or idle capacity, which would adversely affect our
operating results and financial condition.
We may be unable to obtain additional capital needed to operate and grow our
business, which could damage our financial condition and further erode our stock
price
Our future capital requirements will depend upon many factors,
including development of new products and related software tools, potential
acquisitions, maintenance of adequate manufacturing facilities and contract
manufacturing agreements, progress of research and development efforts,
expansion of marketing and sales efforts, and status of competitive products.
Additional financing may not be available in the future on acceptable terms or
at all. The continued existence of a substantial amount of debt could also
severely limit our ability to raise additional financing. In addition, given the
recent price for our common stock, if we raise additional funds by issuing
equity securities, significant dilution to our stockholders could result.
If adequate funds are not available, we may be required to restructure
or refinance our debt or delay, scale back or eliminate our research and
development, acquisition or manufacturing programs. We may also need to obtain
funds through arrangements with partners or others that may require us to
relinquish rights to certain of our technologies or potential products or other
assets. Our inability to obtain capital, or our ability to obtain additional
capital only upon onerous terms, could materially adversely affect our business,
operating results and financial condition and further erode our stock price.
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The common stock sold in this offering will significantly increase the supply of
our common stock on the public market, which may cause our stock price to
decline
The sale into the public market of the common stock issued upon
exercise of the new warrants and in the exchange could materially adversely
affect the market price of our common stock. Most of the shares of our common
stock are eligible for immediate and unrestricted sale in the public market at
any time. Once the registration statement of which this prospectus forms a part
is declared effective, all shares of common stock issuable upon exercise of the
warrants will be eligible for immediate and unrestricted resale into the public
market. Because the exercise price of the new warrants is below the current
market price of our common stock, the sale of the common stock issued upon
exercise of the warrants will be dilutive to our stockholders. Further, the new
warrants contain adjustment features that may significantly decrease the
exercise price of the new warrants and result in additional shares of common
stock being issued upon their exercise, which would create additional dilution.
The presence of these additional shares of common stock in the public market may
further depress our stock price.
We may issue stock at a discount to the current market price, which would dilute
our existing stockholders
In order to raise the funds we need to execute our business plan and
fund operations generally, we may continue to issue stock at a discount to the
current market price. Transactions of that kind would result in dilution to our
existing stockholders.
We may be forced to incur costs to restructure our business to reduce our
expenses, which could materially adversely affect our results of operations and
stock price
During 1998, we generated a net loss of approximately $55.3 million.
During 1997 and 1998, operating expenses increased more rapidly than we had
anticipated and these increases also contributed to net losses. Should current
market conditions continue to deteriorate, we may also incur net losses in
subsequent periods. Recently, in response to market declines and poor
performance in our sector generally and our lower than expected performance over
the last several quarters, we introduced measures to reduce operating expenses.
These measures included reductions in our workforce in July, September and
November of 1998. Additionally, management continues to evaluate market
conditions to assess the need to take further action to more closely align our
cost structure with anticipated revenues. Any subsequent actions could result in
additional restructuring charges, reductions of inventory valuations and
provisions for the impairment of long-lived assets, which could materially
adversely affect our results of operations and stock price.
The exchange will result in adverse accounting charges, which will materially
adversely affect our results of operations and stock price
The exchange will lead to an accounting charge to shareholders' equity
of approximately $9.5 million in the fiscal quarter ending June 30, 1999, which
will materially adversely affect our financial condition and results of
operations. This charge and other potential future charges relating to the
redemption of the common stock will materially adversely affect our earnings per
share which may affect the market price of our common stock both currently and
in future periods.
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When our large fixed costs combine with significant fluctuations in our sales,
large fluctuations in our results of operations may occur which could adversely
affect our stock price
A material portion of our expenses are fixed and difficult to reduce,
which magnifies the effects of any revenue shortfall. In addition, to prepare
for the future, we may continue to heavily invest resources in:
. our acquired and new businesses,
. the development of new products and technologies,
. the evaluation of these products,
. expansion into new geographic markets, and
. our plant and equipment, inventory, personnel and other items, in
order to efficiently produce these products and to provide
necessary marketing and administrative service and support.
As such, in addition to our fixed costs, our expenses will be increased by
start-up costs associated with the initial production and installation of new
products and technologies.
We experience significant fluctuations in sales, gross margins and
operating results. Our results of operations have also been and will continue to
be influenced by competitive factors, including pricing, availability and demand
for competitive products and services. These factors are difficult for us to
forecast, and have materially adversely affected our results of operations and
financial condition and may continue to do so. Because of our inability to
predict customer orders, delays, deferrals and cancellations, we may not be able
to achieve or maintain our current sales levels. We believe that period-to-
period comparisons are thus not necessarily meaningful and should not be relied
upon as indications of future performance. Because of all of the foregoing
factors, in some future quarter or quarters, revenues will be lower than
expected and our operating results and financial condition will be materially
adversely affected. In addition, to the extent our results of operations are
below those projected by public market analysts, the price of our common stock
may continue to be materially adversely affected by this discrepancy.
We may be unable to become profitable if the selling prices of our products and
services decline over time
We believe that average selling prices and possibly gross margins for
our systems and services will decline over time. If we are unable to offset
declining average selling prices by comparable cost savings, our gross margins
will decline, and our results or operations and financial condition would be
adversely affected. Reasons for that decline in average selling prices include
the maturation of our systems, the effect of volume price discounts in existing
and future contracts and the intensification of competition. To offset declining
average selling prices, we believe we must take a number of steps, including:
. successfully introducing and selling new systems on a timely basis;
. developing new products that incorporate advanced software and other
features that can be sold at higher average selling prices; and
. reducing the costs of our systems through contract manufacturing, design
improvements and component cost reduction, among other actions.
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If we cannot develop new products in a timely manner, or if our new
products fail to achieve customer acceptance or do not generate higher average
selling prices, then we would be unable to offset declining average selling
prices.
We depend on contract manufacturers and limited sources of supply and, if they
fail us, production delays could damage our customer relationships
Our internal manufacturing capacity is very limited, and certain
components, subassemblies and services necessary for the manufacture and
production of our systems are obtained from a sole supplier or a small group of
suppliers. As a result, we have reduced control over the price, timely delivery,
reliability and quality of finished products, components and subassemblies. We
have experienced problems in the timely delivery and quantity of products and
certain components and subassemblies from vendors. We expect to rely
increasingly on these contract manufacturers and outside vendors in the future,
and they may prove undependable, stop doing business with us, or go out of
business. Due to the complexity of our products, finding and educating
additional or replacement vendors may be expensive and take considerable time.
Our internal manufacturing capacity and that of our contract manufacturers may
be insufficient to fulfill our orders, and we may be unable to obtain timely
deliveries of components and subassemblies of acceptable quality. Our failure to
manufacture, assemble and ship systems and meet customer demands on a timely and
cost-effective basis could damage relationships with customers and our business.
If we are successful in growing our business, we may be unable to manage and
integrate the expanded operations associated with revenue growth, which may
increase costs and hurt profitability
Our prior expansion has strained and continues to strain our
management, financial resources, manufacturing capacity and other resources and
has disrupted our normal business operations. Our ability to manage any possible
future growth may depend upon significant expansion of our manufacturing,
accounting and other internal management systems and the implementation of a
variety of systems, procedures and controls, all of which would involve
expenditures in advance of increased sales. In particular, if our business
grows, we must successfully manage overhead expenses and inventories, develop,
introduce and market new products, manage and train our employee base, integrate
and coordinate our geographically and ethnically diverse workforce and the
monitor third party manufacturers and suppliers. We have in the past and may
continue to experience significant problems in these areas.
If our business grows, any failure to efficiently coordinate and
improve systems, procedures and controls, including improved inventory control
and coordination with our subsidiaries, could cause continued inefficiencies,
additional operational complexities and expenses, greater risk of billing
delays, inventory write-downs and financial reporting difficulties. Those
problems could impact our profitability and our ability to effectively manage
our business.
We may have difficulty integrating and managing the businesses we have acquired,
which may increase our costs and divert resources from our business
Since April 1996, we have acquired nine complementary companies and
businesses. We have encountered or expect to encounter the following problems
relating to integration and management of these companies:
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. difficulty of combining . impairment of relationships with
operations and assimilating and customers as a result of
retaining personnel of acquired integration of new personnel; and
companies;
. inability of management to maximize . risks of entering markets in which
financial and strategic position we have no or limited direct prior
through integration of acquired experience.
businesses;
Overcoming existing and potential problems may entail increased costs,
additional investment and diversion of management attention and other resources,
or require divestment of one or more business units, which may adversely affect
our business, financial condition and operating results. Several of our
acquisitions have not worked out as originally anticipated and, as a result, we
have written off assets of several acquired companies.
We may be unable to successfully acquire new businesses needed to effectively
compete, or to make those businesses pay off once acquired which could impact
our customer base or workforce and hurt our business
As part of our overall strategy, we plan to continue acquisitions of
or investments in complementary companies, products or technologies and to
continue entering into joint ventures and strategic alliances with other
companies. We compete for acquisition and expansion opportunities against many
entities that have substantially greater resources. Our success in future
acquisition transactions may, therefore, be limited. We also may not be able to
successfully identify suitable candidates, pay for or complete acquisitions, or
expand into new markets. Once integrated, acquired businesses may not achieve
levels of revenues, profitability, or productivity comparable to our existing
business, or the stand alone acquired company, or otherwise perform as expected.
Also, as commonly occurs with mergers of technology companies during
the pre-merger and integration phases, aggressive competitors may try to attract
our customers and to recruit key employees. If we proceed with acquiring
companies through the payment of cash as consideration, a substantial portion of
our available cash could be used to consummate those acquisitions, as was the
case with our acquisition of the Cylink Wireless Group. The occurrence of any of
these events could impact our customer base or workforce and hurt our business.
Accounting charges related to acquisitions may decrease future earnings
Many business acquisitions must be accounted for as purchase business
combinations for financial reporting purposes. Attractive acquisition candidates
are high technology companies which tend to have small amounts of tangible
assets and, as a result, our acquisition of such companies would result in
significant goodwill. If acquired, these businesses would typically result in
substantial future charges related to the amortization of that goodwill. All of
our past acquisitions to date, except the acquisitions of Control Resources
Corporation, RT Masts Limited and Telematics, Inc., have been accounted for as
purchase business combinations, resulting in a significant amount of goodwill
being amortized. Amortization expenses adversely affect our financial results.
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If our results of operations are inadequate, we may have difficulty servicing
our debt, which could cause a default and acceleration of repayment of our debts
As of March 31, 1999, our total indebtedness including current
liabilities was approximately $157.2 million and our stockholders' equity was
approximately $133.3 million. Our ability to make scheduled payments of the
principal and interest on our indebtedness will depend on our future
performance, which is subject in part to economic, financial, competitive and
other factors beyond our control. We may be unable to make payments on or
restructure or refinance our debt in the future, if necessary, which could lead
to a default under our credit agreement and note indenture and acceleration of
repayments of the debts thereunder.
In addition, at various times since June 30, 1998, our banks have
amended our line of credit to prevent violations with respect to several
financial covenants. If we experience similar covenant violations in the future
and are unable to adequately remedy them through amendments or otherwise, our
banks can declare a default which will trigger cross defaults on the outstanding
4 1/4% convertible promissory notes and other debt instruments and accelerate
repayment of our debts.
Our customers may not pay us on time, leaving us short of funds needed to
operate our business
We may be unable to enforce a policy of receiving payment within a
limited number of days of issuing bills. We have had difficulties in the past in
receiving payment in accordance with our policies, particularly from customers
in the early phases of business development which are awaiting financing to fund
their expansion and from customers outside of the United States. The outstanding
level of our accounts receivable relative to our sales has also recently
increased. We may not be able to locate parties to purchase our receivables on
acceptable terms or at all. Any inability to timely collect or sell our
receivables could cause us to be short of cash to fund operations and could have
a material adverse effect on our business, financial condition and results of
operations.
We may experience problems with product quality, performance and reliability,
which may damage our customer relationships
We have limited experience in producing and manufacturing systems and
contracting for this manufacture. Our customers also require very demanding
specifications for quality, performance and reliability. As a consequence,
problems may occur with respect to the specifications for our systems or related
software tools. If those problems occur, we could experience increased costs,
delays, cancellations or reschedulings of orders or shipments, delays in
collections of accounts receivable and product returns and discounts. In
addition, the failure of any of our facilities to maintain or attain quality
certification by the International Standards Organization could adversely affect
our sales and sales growth. If any of these events occur, they might erode
customer confidence and cause them to reduce their purchases from us, which
would adversely impact our business and results of operations.
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The market for our products may not grow fast enough to support our level of
investment, adversely affecting our results of operations
Our future operating results depend upon the continued growth and
increased availability and acceptance of advanced radio-based wireless
telecommunications systems and services in the United States and
internationally. The volume and variety of and the markets for and acceptance of
wireless telecommunications systems and services may not continue to grow as
anticipated. Because these markets are relatively new, predicting which market
segments will develop and at what rate they will grow is difficult. We have
recently invested additional significant time and resources in the development
of new products. If the market for these new products and the market for related
services for our systems fail to grow, or grow more slowly than anticipated,
revenue will also fail to grow, adversely affecting our results of operations.
We may be unable to compete successfully for customers with either competitors
offering technologies similar to ours or with alternative technologies, which
could adversely affect our business and results of operations
Our wireless-based radio systems compete with other wireless
telecommunications products and alternative telecommunications transmission
media, including copper and fiber optic cable. We are experiencing intense
competition worldwide from a number of leading telecommunications companies.
Those companies offer a variety of competitive products and services and broader
telecommunications product lines, which makes us more vulnerable to shifts in
technology and customer preferences. Many of these companies have greater
installed bases, financial resources and production, marketing, manufacturing,
engineering and other capabilities than we do. We face actual and potential
competition not only from these established companies, but also from start-up
companies that are developing and marketing new commercial products and
services.
Two of our primary competitors are Ericsson and Digital Microwave.
Ericsson is a formidable competitor for us because they provide both consulting
services and equipment they manufacture to customers as complete
telecommunications solutions. Ericsson's combined consulting and product
approach insulates them from competition for sales of products because, in order
for customers to obtain the complete solution, Ericsson requires them to
purchase the product from Ericsson, which completely forecloses our opportunity
to sell products to the customer. In contrast, Digital Microwave is a product
manufacturer like us, and competes directly against us for product sales to
customers, which leads to downward pressure on prices we can charge for our
products. If we are unable to successfully compete for customers, future growth,
revenues and profitability would be adversely affected.
Failure to respond to rapid technological change or introduce new products in
a timely manner may limit our revenue growth and adversely impact our results of
operations
Rapid technological change, frequent new product introductions and
enhancements, product obsolescence, changes in end-user requirements and
evolving industry standards characterize the communications market. Our ability
to compete in this market will depend upon our successful development,
introduction and sale of new systems and enhancements and related software
tools, on a timely and cost-effective basis, in response to
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changing customer requirements. We have experienced and continue to experience
delays in customer procurement and in completing development and introduction of
new systems and related software tools, including products acquired in
acquisitions. Moreover, we may not be successful in selecting, developing,
manufacturing and marketing new systems or enhancements or related software
tools. Any inability to rapidly introduce, in a timely manner, new systems,
enhancements or related software tools could have a material adverse effect on
our results of operations and limit future growth.
We have extensive international operations, in more volatile markets than the
United States, and changes in these markets may undermine our business there
In doing business in international markets, we face economic,
political, regulatory, logistical, legal, financial and business environments
and foreign currency fluctuations that are more volatile than those commonly
experienced in the United States. Most of our sales to date have been made to
customers located outside of the United States. We anticipate that international
sales will continue to account for a majority of our sales for the foreseeable
future. Because of the more volatile nature of these markets, the basis for our
business in these markets may be frequently jeopardized, materially and
adversely affecting our operations in these countries and our overall results of
operations and growth.
We are subject to extensive government regulation, which may change and harm
our business
We operate in a constantly changing regulatory environment. Radio
communications are extensively regulated by the United States government, and we
also are subject to foreign laws and international treaties. Our systems must
conform to a variety of domestic and international requirements established to,
among other things, avoid interference among users of radio frequencies and to
permit interconnection of equipment. Regulatory changes, which are affected by
political, economic and technical factors, could significantly impact our
operations by restricting our development efforts and those of our customers.
Many of our competitors have broader telecommunications product lines, which
makes us more vulnerable than they are to regulatory changes that shift business
from one product to another. As a result, those regulatory changes could make
current systems obsolete, favor our competitors or increase competition. Any of
those regulatory changes, including changes in the allocation of available
spectrum or changes that require us to modify our systems and services, could
prove costly and thus materially adversely affect our business and results of
operations.
We are the subject of, and may be the subject of additional, class action
suits, which would divert significant resources away from our business
We are a defendant in a consolidated class action lawsuit in state
court. An unfavorable outcome could have a material adverse effect on our
prospects and financial condition. Even if the litigation is resolved in our
favor, the defense of that litigation will entail considerable cost and
diversion of efforts of management, either of which are likely to adversely
affect our results of operations.
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<PAGE>
We may be unable to protect our proprietary rights, permitting competitors to
duplicate our products and services or preventing us from selling our products
We rely on a combination of patents, trademarks, trade secrets,
copyrights and other measures to protect our intellectual property rights.
However, these measures may not provide adequate protection for our trade
secrets or other proprietary information. Any of our patents could be
invalidated, circumvented or challenged, or may not provide competitive
advantages to us. In addition, foreign intellectual property laws may not
adequately protect our intellectual property rights abroad. Any failure or
inability to protect proprietary rights could have a material adverse effect on
our competitive market position and business.
Litigation may also be necessary to enforce our intellectual property
rights, to protect our trade secrets, to determine the validity and scope of
proprietary rights of others or to defend against claims of infringement. A
variety of third parties have sent correspondence to the former owner of the
Cylink Wireless Group in which they allege that the Cylink Wireless Group's
products may be infringing their intellectual property rights. We recently
acquired Cylink. Therefore, any intellectual property litigation based upon
those allegations could result in substantial costs and diversion of management
attention and resources, and could prevent us from selling certain products or
require us to license technology to continue selling those products. Licenses to
any of that technology may not be available on acceptable terms or at all. If we
are unable to sell those products or can do so only by incurring high licensing
costs, our business, financial condition and results of operations would be
materially adversely affected.
Our results may suffer if we are unable to attract and retain qualified
management and technical personnel
Our highly technical business depends upon the continued contributions
of key technical and senior management personnel, many of whom would be
difficult to replace. Competition for qualified management, manufacturing,
quality assurance, engineering, marketing, sales and support personnel is
intense in our industry and geographic areas, and we may not be successful in
attracting or retaining those personnel. We experience high employee turnover
which is disruptive and could adversely impact our business. The loss, or
failure to perform, of any key employee could materially adversely affect our
customer relations and results of operations.
Our operations and business could be disrupted and our financial condition and
results of operations could be adversely affected if our systems, products or
suppliers are not year 2000 ready
The inability of our products to properly manage and manipulate data
relating to the year 2000 could result in increased warranty costs, customer
dissatisfaction, potential lawsuits and other material costs and liabilities.
The failure of our internal systems to achieve year 2000 readiness could result
in a material disruption of our operations. Any failure of the internal systems
or products of our single source or large volume suppliers related to the year
2000 could have a material adverse effect on our business, financial condition
and results of operations.
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<PAGE>
Our board has the power to reject offers to acquire shares of our common stock
in a change of control transaction, which may prevent our stockholders from
having the opportunity to accept those offers and discourage certain offers for
shares of our common stock
The following factors give our board of directors the power to reject
acquisition proposals without any input or consideration of these proposals by
our stockholders:
. concentration of share ownership in our board of directors and
officers,
. our stockholder rights agreement,
. our certificate of incorporation and bylaws,
. our equity incentive plans, and
. Delaware law.
As a result of these factors, our board of directors could
significantly delay, defer or prevent a change in control transaction involving
P-Com, even if holders of our common stock might want the transaction to occur.
These factors may adversely affect the voting and other rights of other holders
of common stock, and prevent stockholders from receiving and accepting offers to
acquire their shares that the board deems not to be in the best interest of our
stockholders. In addition, the power of the board to reject those offers may
discourage certain third parties from making these offers.
We implemented an option cancellation/regrant program in July 1998, which may
be dilutive of our outstanding common stock
On July 15, 1998, we implemented an option cancellation/regrant
program for all of our employees, excluding our executive officers and
directors. Pursuant to that program, each participant was given the opportunity
to surrender his or her outstanding options with exercise prices in excess of
$5.813 per share for a new option grant for the same number of shares but with
an exercise price of $5.813 per share. Options for a total of 2,745,000 shares
with a weighted average exercise price of $16.45 per share were surrendered for
cancellation and new options for the same number of shares were granted with an
exercise price of $5.813 per share. As a result, if these new options were
exercised using the net exercise provision, they could receive more shares of
common stock than they otherwise would have if these options were not regranted
at an exercise price of $5.813 per share. Therefore, our option
cancellation/regrant program may dilute our outstanding common stock.
Relying on forward-looking statements could cause you to incorrectly assess
the risks and uncertainties in investing in our stock because our actual results
could differ materially from those anticipated in forward-looking statements
contained in this prospectus
This prospectus contains "forward-looking" statements that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including the risks faced by us described above and elsewhere in this
prospectus.
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We may face other risks not described in the foregoing risk factors which may
impair our business operations
The risks and uncertainties described in the foregoing risk factors
may not be the only ones facing us. Additional risks and uncertainties not
presently known to us may also impair our business operations. If any of the
following risks actually occur, our business, financial condition and results of
operations could be materially adversely affected. In this case, the trading
price of our common stock could decline, and you may lose all or part of your
investment.
15
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from our web site at http://p-com.com or at the SEC's web site at
http://www.sec.gov.
This prospectus is part of a registration statement (Registration No.
333-70937) we filed with the SEC. The SEC allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and later information filed with the SEC will update and supersede
this information.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Section 13a, 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, until the selling stockholders sell
all of the shares of common stock being registered for resale by the selling
stockholders or until the shares can be sold without being so registered:
(1) our Annual Report on Form 10-K for the year ended December 31, 1998,
filed as of April 15, 1999, and amended as of April 21, 1999, May 3, 1999 and
June 14, 1999;
(2) our Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, filed as of May 17, 1999 and amended as of June 14, 1999;
(3) our Quarterly Report on Form 10-Q for the quarter ended June 30, 1999,
filed as of August 16, 1999;
(4) our current reports on Form 8-K filed as of July 27, 1999, August 11,
1999 and September 1, 1999 and on Form 8-K/A filed as of August 4, 1999;
(5) the description of our common stock and Series A preferred stock
contained in our registration statements on Form 8-A filed as of January 12,
1995 and on Form 8-A/A filed as of February 16, 1995, October 9, 1997, December
22, 1998, December 24, 1998 and August 25, 1999; and
(6) all future reports and other documents filed by us pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act shall be deemed to be incorporated
by reference herein and to be a part of this prospectus from the date of filing
of each of the reports and documents. Any statement incorporated herein may
modify or supersede information or statements in this prospectus.
Upon request, we will provide without charge a copy of this
prospectus, and a copy of any and all of the information that has been or may be
incorporated by reference in this prospectus. Requests for these copies should
be directed to Corporate Secretary, P-Com, Inc., 3175 S. Winchester Boulevard,
Campbell, California 95008 (telephone (408) 866-3666).
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have authorized no
one to provide you with
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<PAGE>
different information. We are not making an offer of these securities in
any state where the offer is not permitted.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the
common stock by the selling stockholders.
DIVIDEND POLICY
Our credit agreement prohibits us from paying any dividend on our
common stock other than dividends paid in shares of our common stock. We
currently anticipate that we will retain any available funds for use in the
operation of its business, and we do not anticipate paying any cash
dividends in the foreseeable future.
THE EXCHANGE OF COMMON STOCK FOR SERIES B PREFERRED STOCK
On June 4, 1999, we exchanged 5,134,795 shares of our common
stock for all 15,000 shares of our outstanding Series B Preferred Stock,
such that no shares of Series B preferred stock remain outstanding. We also
exchanged outstanding warrants to purchase 1,242,257 shares of common
stock, which were held by the selling stockholders, for new warrants to
purchase 1,242,257 shares of common stock having the terms set forth below.
Registration of resale of common stock. In connection with the
exchange, we and the holders agreed to other matters described below. We
agreed to register the 5,134,795 shares of common stock exchanged for the
Series B preferred stock held by holders and the 1,242,257 shares of common
stock subject to the warrants by amending the registration statement on
Form S-3 that we originally filed on January 21, 1999. We agreed to file
this amendment by June 11, 1999, and to get the registration statement
declared effective by July 19, 1999.
Separately, upon the effectiveness of the amended registration
statement, provided that that effectiveness occurs on or before July 19,
1999, the holders will waive our obligation to make payments to the holders
because the registration statement was not effective on April 22, 1999 in
respect to all dates after June 4, 1999. However, if the amended
registration statement is not effective by July 19, 1999, we will be
obligated to make payments to the holders in respect to all dates after
June 4, 1999. For the period beginning June 4, 1999 and ending on July 19,
1999, such payments would total $405,000, and would continue to accrue at a
rate of $10,000 for each day after July 19, 1999 until the registration
statement is declared effective.
Waiver of certain liabilities and restrictions. In connection
with this exchange, the holders released us from certain liabilities and
restrictions relating to the Series B preferred stock. Specifically, the
holders:
. forgave all of accrued premium through the date of the
exchange;
. waived the payments we owed through the date of the exchange
because the registration statement seeking to register for
resale by the holders the common
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shares issuable in respect of the Series B preferred stock was
not effective on April 22, 1999;
. waived all consequences of our failure to solicit by proxy the
shareholder approval needed to issue more than 8,663,895
shares of common stock upon conversion of the Series B
preferred stock and exercise of the warrants;
. waived violations of the Series B preferred stock financing
documents with respect to our failure to timely file Annual
Report on Form 10-K for the year ended December 31, 1998;
. waived a requirement that we make certain payments to the
holders in shares of Series B preferred stock; and
. waive any cash payments that we might otherwise be required to
make to the holders because of events designated as "Override
Election Events" in the certificate of designations for the
Series B preferred stock which occurred prior to the date of
the exchange.
Issuance of securities; restriction on filing new registration
statements. In addition, the holders waived the restrictions placed on us
with respect to new issuances of securities to others before December 21,
1999 so long as each holder may participate in each new issuance in an
amount up to $3,000,000 and we neither agree to file, nor actually file, a
registration statement for any other securities on any date that is not at
least twenty days after the amended registration statement is declared
effective.
Redemption right. In the event that:
. we fail to remove any restrictive legend from the stock
certificates representing the common stock owned by a holder,
. the amended registration statement is not effective by October
12, 1999, or
. the amended registration statement cannot be used by a holder
to resell its common stock for 10 consecutive business days or
more than 20 days in a twelve month period,
the relevant holders will have the right to the right to have their common
stock redeemed at the higher of $4.00 per share or the highest closing
price during the period beginning on the date of the holder's notice to us
that it is electing to redeem the stock to the date on which we redeem
their stock. On June 29, 1999, we amended our bank credit agreement to
facilitate this redemption right.
The following table sets forth the maximum aggregate amount that
would be paid to redeem the common stock at various levels of redemption
price per share:
<TABLE>
<CAPTION>
-------------------------------------------------------
Highest Closing Price Redemption Amount/(1)/
-------------------------------------------------------
<S> <C>
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
-------------------------------------------------------
$4.00 or less $20,539,180
-------------------------------------------------------
$5.00 $25,673,975
-------------------------------------------------------
$7.00 $35,943,565
-------------------------------------------------------
$10.00 $51,347,950
-------------------------------------------------------
</TABLE>
(1) As discussed below, we may be prevented from paying
these amounts due to limitations imposed by our credit
agreement or DGCL Section 160.
In the event our credit agreement or Section 160 of the Delaware
General Corporation Law prevents redemptions of the common stock issued in
the exchange, we are required to use our best efforts to take all
reasonably necessary actions not prohibited by our credit agreement and the
exchange agreement to permit further redemptions. DGCL Section 160
prohibits a corporation from redeeming its shares for cash if the capital
of the corporation is impaired or if that redemption would result in the
impairment of the capital of the corporation. As amended, our credit
agreement permits redemptions up to a limit of $5 million in redemption
payments, but prohibits redemptions above $5 million. For example, to the
extent that we are presented with redemption requests in the amount of $10
million, we will make redemptions in the amount of $5 million and then will
be required to use our best efforts to take all reasonably necessary
actions not prohibited by our credit agreement and the exchange agreement
to permit redemption of the additional $5 million. The exchange agreements
do not, in any circumstances, require redemptions that would violate our
credit agreement.
If either our credit agreement or DGCL Section 160 prevent
redemptions, to fulfill this best efforts requirement, we may need to alter
our capital structure by turning fixed or financial assets into liquid
assets or otherwise obtaining additional capital. Those liquid assets would
augment our capital for purposes of DGCL Section 160 and may permit us to
amend our credit agreement to permit additional redemptions. Any actions to
accomplish these purposes could materially adversely affect our business,
operating results and financial condition.
Any inability to redeem the shares of common stock issued in the
exchange after a redemption notice is given, including inabilities due to
our credit agreement or DGCL Section 160, shall be considered a breach of
our obligation to redeem the holders' common stock, and each holder shall
have all rights and remedies otherwise available to them. These rights and
remedies may include actual, consequential and punitive damages, as well as
court orders restricting our activities or compelling us to perform
redemptions.
Accounting Charges. The exchange will lead to an accounting
charge to shareholders' equity of approximately $9.5 million in the fiscal
quarter ended June 30, 1999, which will materially adversely affect our
financial condition and results of operations. This charge and other future
charges relating to the redemption of the common stock will materially
adversely affect our earnings per share which may affect the market price
of our common stock both currently and in future periods.
Anti-Dilution Provisions in our Convertible Notes. The exchange
will result in an anti-dilution adjustment to our 4 1/4% convertible
promissory notes, which will result in additional shares of common stock
being issued upon conversion of the notes. Specifically, the conversion
price of the notes is subject to anti-dilution adjustment if we sell common
stock or
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securities initially convertible into or exercisable for common stock,
excluding certain issuances such as common stock issued under employee,
director or consultant benefit plans, at a price per share less than the
conversion price then in effect, such that the adjusted exercise price will
be equal to:
. the conversion price in effect immediately prior to the
issuance, multiplied by
. the sum of
. the number of outstanding shares of our common stock
immediately prior to the issuance, and
. the number of shares of common stock the consideration
received for that stock issuance would purchase at the
current market price (as set forth below); divided by
. the sum of
. number of shares of our common stock outstanding after
the issuance, and
. the number of shares common stock actually issued.
For purposes of the notes, the current market price is defined as
the average of the last sale price of our common stock on the 30
consecutive business days immediately preceding the relevant issuance of
common stock.
On June 4, 1999, which is the date of the exchange, the current
market price per share of common stock was $5.098 per share. Our Board of
Directors valued the price per share received for the common stock at $3.00
per share. This valuation takes into account the forgiveness of accrued
premium on the Series B preferred stock in the amount of $404,384 and the
reacquisition by us of Series B preferred stock having a face amount of
$15,000,000 in the exchange This price per share of common stock was less
than the current market price on the date of the exchange and thus resulted
in an adjustment of the conversion price of the notes. The consideration
per share initially deliverable upon exercise of the new warrants is $3.00
per share. This is less than the current market price on the date of the
exchange and thus also resulted in an adjustment of the conversion price of
the notes.
Even though the exchange of common stock for Series B preferred
stock and the exchange of new warrants for the old warrants occurred
simultaneously, the indenture for the notes provides separate adjustment
formulas for these two events. As a result, the adjustments must be
performed separately and sequentially. As required by the indenture for the
notes, we calculated the adjustments in the manner which results in the
greatest downward adjustment in the conversion price: by performing the
adjustment resulting from the issuance of the new warrants first, so that
the denominator for such adjustment does not include the common stock. Our
calculation of the two adjustments resulting from the exchange is as
follows.
The aggregate consideration for the issuance of new warrants
issued in the exchange was $5,565,988. That amount aggregate consideration
consisted of $3,726,771, which is the aggregate exercise price of the new
warrants and $1,839,217, which is the value our board of directors ascribed
to the old warrants which were exchanged for the new warrants. Such
aggregate consideration would, at the current market price, purchase
1,091,798 shares of
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common stock. These shares, when added to the 48,966,750 shares of common
stock outstanding immediately prior to issuance of the new warrants, yields
a numerator of 50,058,548 for purposes of the conversion price adjustment
fraction in respect of the conversion price adjustment triggered by the new
warrants issuance component of the exchange. The maximum number of shares
of common stock deliverable upon exercise of the new warrants at the
initial exercise price thereof of $3.00 per share is 1,242,257. Thus, the
denominator of the conversion price adjustment fraction is 50,209,007,
which is the sum of 1,242,257 shares of common stock so deliverable upon
such exercise plus 48,966,750 shares of common stock outstanding
immediately prior to issuance of the new warrants. The conversion price
adjustment fraction is 0.997, which, when multiplied by the conversion
price of $27.46 in effect immediately prior to issuance of the common stock
and the new warrants in the exchange, yields an adjusted conversion price
by virtue of issuance of the warrants of $27.38.
The aggregate offering price for the common stock issued in the
exchange was $15,404,384. This aggregate offering price would, at the
current market price, purchase 3,021,652 shares of common stock. These
shares, when added to the 48,966,750 shares of common stock outstanding
immediately prior to issuance of the common stock in the exchange, yields a
numerator of 51,988,402 for purposes of the conversion price adjustment
fraction in respect of the conversion price adjustment triggered by the
common stock issuance component of the exchange. The denominator of the
conversion price adjustment fraction is 54,101,545, which is the sum of the
5,134,795 shares of common stock plus 48,966,750 shares of common stock
outstanding immediately prior to issuance of the common stock in the
exchange. The conversion price adjustment fraction is 0.9609, which, when
multiplied by the conversion price of $27.38 in effect after the adjustment
for the issuance of the new warrants, yields an adjusted conversion price
by virtue of issuance of the common stock of $26.31.
WARRANTS
The new warrants are immediately exercisable at all times prior
to December 22, 2003, when they expire. The warrants may be exercised
either by payment of the exercise price or by net exercise. In a net
exercise of a warrant, shares of our common stock having a market value
equal to the exercise price are deducted from the shares issued to the
warrant holder upon exercise of the warrant and instead are withheld by us
to pay the exercise price. The exercise price for the common stock
underlying the warrant is $3.00 per share, which is below the closing bid
price for our common stock on September 17, 1999 of $6.8125. The exercise
price is subject to:
. adjustment to protect against dilution as described below, and
. re-set on June 4, 2000 to the average of the closing bid
prices for our common stock on the ten consecutive trading
days immediately preceding June 4, 2000, if that re-set will
result in a lower exercise price.
The exercise price of the warrants is subject to anti-dilution
adjustment if we issue common stock or securities convertible into or
exercisable for common stock at a price per share less than the greater of
the exercise price then in effect and the market price per share of our
common stock on the day prior to the issuance. Certain issuances of
securities, such as issuances
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of common stock issued under employee, director or consultant benefit
plans, do not lead to an anti-dilution adjustment. If an anti-dilution
adjustment occurs, the adjusted exercise price will be equal to:
. the exercise price in effect immediately prior to the
issuance, multiplied by
. the sum of
. the number of outstanding shares of our common stock
immediately prior to the issuance, and
. the number obtained when the total consideration received
by us in exchange for the stock issued is divided by the
greater of the exercise price then in effect or the
market price on the day prior to the issuance, divided by
. the number of shares of our common stock outstanding after the
issuance; this number will include the number of shares deemed
outstanding by reason of our issuance of options or
convertible securities exercisable or convertible at less than
the greater of the conversion price in effect at the time of
issuance of those options or convertible securities and the
market price per share of our common stock on the day
preceding the issuance.
For example, assume we had 65,000,000 shares outstanding immediately prior
to issuing 5,000,000 shares of common stock at a price of $4.00 per share
and that the market price of our common shares on the day prior to the
issuance was $5.00 per share. Also assume that the exercise price
immediately prior to such issuance was $3.00 per share. The total
consideration received in the issuance would be $20 million, which, when
divided by the market price of $5.00 per share, yields 4,000,000 shares.
The numerator of the exercise price adjustment fraction in respect of the
issuance would be equal to these 4,000,000 shares plus the 65,000,000
shares outstanding immediately prior to the issuance, or 69,000,000 shares.
The denominator of the exercise price adjustment fraction would be equal to
the 5,000,000 shares actually issued in the issuance plus the 65,000,000
shares outstanding immediately prior to the issuance, or 70,000,000 shares.
The conversion price adjustment fraction would be 0.9857, which, when
multiplied by the exercise price of $3.00 in effect prior to the issuance,
would yield an adjusted exercise price of $2.957.
In addition, with respect to any securities we issue that are
convertible into or exercisable for our common stock in accordance with a
fluctuating or re-setting conversion or exercise price or exchange ratio,
the anti-dilution adjustment described above will be made on the date of
issuance of those securities as though:
. all holding periods and other conditions to the discounts
contained in the securities have been satisfied, and
. the market price of our common stock on the date of exercise,
conversion or exchange of the securities was 80% of the market
price of our common stock on the date the securities were
issued.
For example, assume that on September 1, 1999, we issued $10 million of
convertible preferred stock that converts into common stock at a conversion
price equal to the lower of $4.00 and the market price on the conversion
date. Also assume we had 65,000,000 shares outstanding
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<PAGE>
immediately prior to issuing the preferred stock, that the market price of
our common shares on the day prior to the issuance was $4.00 per share, and
that the exercise price of the warrant immediately prior to such issuance
was $3.00 per share. The total consideration received upon the issuance
would be $10 million, which, when divided by the current market price of
$4.00 per share, yields 2,500,000 shares. The numerator of the exercise
price adjustment fraction in respect of the issuance would equal these
2,500,000 shares plus the 65,000,000 shares outstanding immediately prior
to the issuance, or 67,500,000 shares. The denominator of the exercise
price adjustment fraction is the 65,000,000 shares outstanding immediately
prior to the issuance plus the number of shares that would be issued upon
conversion. On September 1, 1999, the conversion price would be deemed to
be the lower of $4.00 and 80% of the market price on the date of issuance,
or $3.20 per share. When $10 million is divided by $3.20 per share, the
result is 3,125,000. The denominator of the exercise price adjustment
fraction is the 3,125,000 shares deemed issued on September 1, 1999 plus
the 65,000,000 shares outstanding immediately prior to the issuance, or
68,125,000 shares. The conversion price adjustment fraction is 0.9908,
which, when multiplied by the exercise price of $3.00 in effect prior to
the issuance, yields an adjusted exercise price of $2.972 as of September
1, 1999.
If there is a change at any time in:
. the amount of additional consideration payable to us upon
exercise of the securities, or
. the rate at which the securities are convertible into our
common stock, other than changes in such rate by reason of
provisions designed to protect against dilution,
the exercise price of the warrants shall be readjusted to the exercise
price that would have been in effect had such change been in effect at the
time the securities were issued. This adjustments described in this
paragraph will not be made with respect to securities issued under
employee, director or consultant benefit plans so long as the issuance of
the securities is approved by a majority of our non-employee directors.
Under the terms of the warrants, the total number of shares of
common stock issuable upon exercise of the warrants and upon conversion of
the Series B preferred is limited to 8,706,843 shares. As 5,134,795 shares
of common stock were issued to the selling stockholders in exchange for
their Series B preferred stock in the exchange, the total number of shares
of common stock issuable upon exercise of the new warrants is limited to
3,571,688 shares. We are not obligated to obtain a stockholder vote to
remove that limit. In addition, to the extent the holder of a warrant
determines that exercise of its warrant would cause it to own in excess of
4.9% of our outstanding common stock, that warrant will not be
exerciseable.
In the event we merge with any other company, the warrantholders
are entitled to the choices described below as to the consideration they
will receive in the merger or consolidation. If we merge with a public
company meeting the threshold criteria set forth below and our common stock
will be exchanged for common stock of the acquiror or its parent company,
the warrant holders will be entitled to receive in the merger the
consideration they would have received had they exercised their warrants
the day before the public announcement of the merger at the exercise price
in effect on that day. The threshold criteria are:
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<PAGE>
. the securities the holder would receive are publicly traded,
. the average daily trading volume of the exchange securities
over the 90 day period immediately preceding announcement of
the transaction was greater than $2,000,000,
. the historical 100 day volatility of the exchange securities
during the period ending on the date of announcement of the
transaction is no greater than 50%, and
. the last sale price of the exchange securities on the date
immediately preceding the date on which the transaction is
public disclosed is not less than 65% of last sale price of
the exchange securities on any day during the 20 day period
ending on that date.
If we merge with a private company or a public company not
meeting the threshold criteria, the warrant holders will be entitled, at
their option:
. to retain their warrants, which will thereafter convert into
common stock of the surviving company, or
. receive either
. the consideration they would have received had they
exercised their warrants the day before the public
announcement of the merger or
. 125% of the Black-Scholes amount.
The Black-Scholes amount is the value of an option to purchase
one share of common stock as calculated on the Bloomberg online page using
the following values:
. the market price on the day prior to the date of notice of the
transaction,
. volatility equal to the historical 100 day volatility of the
our common stock during the period preceding the date of
notice of the transaction,
. a risk free interest rate equal to the rate on U.S. treasury
bill or treasury notes having a maturity similar to the term
of the warrant on the date of the notice of the transaction,
and
. an exercise price equal to the exercise price on the date of
notice of the transaction.
If we declare or make a distribution of assets to our common
stockholders, then the warrant holders will be entitled to exercise their
warrants and receive the amount of those assets that the holder would have
been entitled to had it been a common stockholder on the record date for
determining shares entitled to the distribution. We have agreed to use our
best efforts to list the common stock issuable upon exercise of the
warrants on a major securities exchange so long as our other common stock
is so listed.
SELLING STOCKHOLDERS
The selling stockholders, Marshall Capital Management, Inc.,
Castle Creek Technology Partners LLC and Capital Ventures International,
acquired shares of Series B preferred stock and warrants on December 22,
1998 pursuant to set of financing agreements. The selling stockholders
acquired shares of our common stock and new warrants on June 4, 1999
24
<PAGE>
pursuant to exchange agreements between us and each of them. None of the selling
stockholders own any other shares of preferred stock of P-Com, and no selling
stockholder has held any office or position, or had any other material
relationship with P-Com within the past three years. The number of shares of
common stock and warrants owned by each selling stockholder is set forth in the
following table:
<TABLE>
<CAPTION>
Number of Shares Number of
of Series B Shares of Number of Percentage of
Preferred Stock Common Stock Shares of Total Number Outstanding
Beneficially Beneficially Common Stock of Shares of Common
Owned owned Issuable upon Common Stock as of
Prior to the After the Exercise of Stock held by September
Name of Holder Exchange Exchange Warrants/1/ Holder/2/ 17, 1999
- ------------------------------- ---------------- ------------ -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Marshall Capital Management,
Inc............................ 4,500 1,540,438 372,677 1,913,115 2.97%
Castle Creek Technology
Partners LLC................... 5,500 1,882,758 455,494 2,338,252 3.63%
Capital Ventures International.. 5,000 1,711,598 414,086 2,125,684 3.30%
</TABLE>
(1) The number of shares issuable upon exercise of the new warrants
set forth above assumes that no anti-dilution adjustment is made.
(2) This number assumes exercise of the new warrants on September 17,
1999.
To help ensure our compliance with the registration rights agreement
and the exchange agreements, we have chosen to register for resale by the
selling stockholders 8 million shares of common stock on behalf of the selling
stockholders. If the warrants were exercised as of September 17, 1999, only
6,377,051 shares of common stock would be issued and available for resale under
this prospectus. However, we cannot determine the exact number of shares of
common stock that we will ultimately issue upon exercise of the warrants
additional shares of common stock may be issued upon exercise of the new
warrants if an anti-dilution adjustment occurs with respect to the new warrants.
See "Warrants." For this reason, we may not issue the entire 8 million shares
of common stock covered by this prospectus. The 8 million shares covered by
this prospectus represent approximately 12.43% of our outstanding shares of
common stock as of September 17, 1999.
The following table sets forth the aggregate number of shares of
common stock beneficially owned by each selling stockholder as of September 17,
1999 and the percentage of all shares of common stock held by that selling
stockholder before and after giving effect to the offering based on 64,356,867
shares of common stock outstanding as of September 17, 1999. We considered the
following factors and made the following assumptions regarding the table:
. beneficial ownership is determined in accordance with the rules of
the SEC and generally includes voting or investment power with
respect to securities and including any securities that grant the
selling securityholders the right to acquire common stock within
60 days of September 17, 1999; and
. the selling stockholders will sell all of the securities offered
by this prospectus.
Notwithstanding these assumptions, the selling stockholders may sell
less than all of the shares listed on the table. Each selling stockholders will
determine the number of shares of common stock that they will sell. In
addition, the shares listed below may be sold pursuant to this prospectus or in
privately negotiated transactions. Lastly, anti-dilution adjustments with
25
<PAGE>
respect to the new warrants may occur that cause the number of shares of our
common stock to be issued upon exercise of the new warrants to increase, which
would cause the number of shares to be resold under this prospectus to increase.
See "Warrants." Accordingly, we cannot determine with certainty the number of
shares of common stock that the selling stockholders will sell under this
prospectus.
<TABLE>
<CAPTION>
Number of Shares Percent of Percent of
of Common Stock Outstanding Shares Number of Shares Outstanding
Beneficially Owned Beneficially Owned Beneficially Owned Shares Beneficially
Name of Selling Stockholder Prior to Offering Before the Offering After the Offering After the Offering
- ----------------------------------------- ----------------- ------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Marshall Capital Management, Inc......... 1,913,115 (1) 2.97% 0 0%
Castle Creek Technology Partners LLC..... 2,338,252 (2) 3.63% 0 0%
Capital Ventures International........... 2,125,684 (3) 3.30% 0 0%
</TABLE>
- -----------------------------
1. Consists of 1,540,438 shares of common stock issued in the exchange and
372,677 shares of common stock issuable upon the exercise of warrants.
Marshall Capital Management, Inc. is an indirect, wholly owned subsidiary
of Credit Suisse First Boston Group, which is a publicly held Swiss
financial services company. The direct and indirect parent companies of
Marshall Capital Management, Inc. may be deemed to be beneficial owners of
the securities. The direct and indirect parent companies of Marshall
Capital Management, Inc. disclaim that beneficial ownership.
2. Consists of 1,882,758 shares of common stock issued in the exchange and
455,494 shares of common stock issuable upon the exercise of warrants.
Pursuant to a management agreement, Castle Creek Partners LLC may be deemed
to beneficially own the securities held by Castle Creek Technology Partners
LLC. Castle Creek Partners LLC disclaims that beneficial ownership. John
Ziegelman and Daniel Asher, as managing members of Castle Creek Partners
LLC, may be deemed to be beneficial owners of the securities. Messrs.
Asher and Ziegelman disclaim that beneficial ownership.
3. Consists of 1,711,598 shares of common stock issued in the exchange and
414,086 shares of common stock issuable upon the exercise of warrants.
Heights Capital Management, Inc., a Delaware corporation, the investment
manager for Capital Ventures International, has voting control and
investment discretion over transactions by Capital Ventures International.
The shares of common stock underlying the warrants presented in the
table is based on the number of shares of common stock issuable upon exercise of
the warrants that is in effect on the date of this prospectus. The actual
number of shares of common stock will we issue is indeterminable as of the date
of this prospectus and is subject to future adjustments.
PLAN OF DISTRIBUTION
We will not receive any proceeds from the sale of the common stock
through this prospectus. We have agreed to pay the expenses of registration of
the common stock offered hereby, including legal and accounting fees, but
excluding underwriter's discounts and commissions, if any.
The offered shares may be sold from time to time at
. negotiated prices,
. fixed prices which may be changed,
. market prices prevailing at the time of sale or
. prices related to prevailing market prices.
The selling stockholders may effect those transactions
26
<PAGE>
. in privately negotiated sales in the over-the-counter market or any
exchange On which the securities are listed,
. by selling the shares through broker-dealers, including
circumstances in which brokers or dealers attempt to sell the
shares to third parties, but, if they are initially unable to do
so, they may purchase the shares themselves and resell the shares
as principal, and
. in one or more underwritten offerings on a firm commitment or best
effort basis.
Sales of selling stockholders' shares may also be made pursuant to
Rule 144 under the Securities Act, where applicable.
To the extent required under the Securities Act, the following
information will be set forth in a post-effective amendment to this prospectus:
. the aggregate amount of selling stockholders' shares being offered
and the terms of the offering,
. the names of any agents, brokers, dealers, transferees or
underwriters, and
. any applicable fee or commission with respect to a particular
offer.
Each selling stockholder will be responsible for paying compensation
owed by it to any underwriters, dealers, brokers or agents participating in the
distribution of its shares, regardless of whether that compensation is in the
form of underwriting discounts, concessions, commission or fees. This
compensation might be in excess of customary commissions. The aggregate
proceeds to a selling stockholder from the sale of its shares offered by this
prospectus will be the purchase price of those shares less any discounts or
commissions.
If selling stockholders pledge, hypothecate or grant a security
interest in some or all of the shares, then the pledgees, secured parties or
persons to whom those securities have been hypothecated shall, upon foreclosure
in the event of default, shall be named as selling stockholders in a supplement
or post-effective amendment to this prospectus. Similarly, if the selling
stockholders transfer, pledge, donate or assign shares to lenders or others,
then each of those persons will be named as a selling stockholder in a
supplement or post-effective amendment to this prospectus. The number of shares
beneficially owned by the selling stockholders will decrease if and when a
selling stockholder transfers, pledges, donates or assigns shares. The plan of
distribution for selling stockholders' shares sold by this prospectus will
otherwise remain unchanged, except that the transferees, pledgees, donees or
other successors will be selling stockholders under this prospectus. There is,
however, no assurance that any selling stockholder will sell any or all of the
shares described in this prospectus.
A selling stockholder may also use this prospectus in the following
ways:
. to enter into option or other transactions with broker-dealers that
involve the delivery of the shares to the broker-dealers, who may
then resell or otherwise transfer those shares, and
27
<PAGE>
. to loan or pledge the shares to a broker-dealer and the broker-
dealer may sell the shares as loaned or upon a default may sell or
otherwise transfer the pledge shares.
The selling stockholders, any underwriter, any broker-dealer or any
agent that participates with the selling stockholders in the distribution of the
shares may be deemed to be "underwriter" within the meaning of the Securities
Act. As a result thereof, any discounts, commissions or concessions received by
them and any profit on the resales of the shares purchased by them may be deemed
to be underwriting commissions under the Securities Act.
To comply with securities laws of certain states, if applicable, the
shares will be sold in those jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the 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.
Pursuant to a registration rights agreement entered into in connection
with the Series B preferred stock financing, as impacted by the exchange
agreement, we have agreed to keep the registration statement of which this
prospectus is a part continuously effective until the earlier of the date that
all of the shares issued in the exchange or upon exercise of the new warrants
have been resold or until all those shares are immediately freely saleable under
Rule 144. In this regard, we are required to supplement and/or amend the
registration statement of which this prospectus is a part if more shares than
are registered for resale hereby are issued or issuable upon exercise of the new
warrants or to supplement or change the selling stockholders hereunder.
The registration rights agreement requires us to indemnify the selling
stockholders, any underwriter and the respective directors, officers, partners,
members, employees, agents and controlling persons of each selling stockholder
against certain liabilities in connection with the offer and sale of the shares
hereunder, including under the Securities Act. Similarly, each selling
stockholder is required to indemnify us and our directors, the officers who sign
the registration statement of which this prospectus is a part, our employees,
agents and controlling persons against certain liabilities in connection with
the offer and sale of the shares hereunder, including the Securities Act, to the
extent that liability occurs as a result of reliance with written information
furnished to us by that selling stockholder expressly for use in connection with
the registration statement of which this prospectus is a part. To the extent
this indemnification is prohibited, the selling stockholders and we are required
to contribute to payments the parties may be required to make in respect of
otherwise indemnifiable claims.
LEGAL MATTERS
The validity of the common stock offered in this prospectus and
certain other legal matters will be passed upon for us by Brobeck, Phleger &
Harrison LLP, Palo Alto, California. As of the date of this prospectus,
attorneys of Brobeck, Phleger & Harrison LLP and family members thereof
beneficially owned an aggregate of approximately 64,000 shares of our common
stock.
28
<PAGE>
EXPERTS
The financial statements incorporated in this prospectus by reference
to our Annual Report on Form 10-K for the year ended December 31, 1998, as
amended, have been so incorporated by reference in the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
29
<PAGE>
================================================================================
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Cover Page.................................................. 1
Summary................................................................ 2
Risk Factors........................................................... 3
Where You Can Find More Information.................................... 16
Use of Proceeds........................................................ 17
Dividend Policy........................................................ 17
The Exchange of Common Stock for Series B Preferred Stock.............. 17
Warrants............................................................... 21
Selling Stockholders................................................... 24
Plan of Distribution................................................... 26
Legal Matters.......................................................... 28
Experts................................................................ 29
</TABLE>
8,000,000 Shares
P-COM, INC.
common stock
________________________
PROSPECTUS
________________________
___________, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14 Other Expenses of Issuance and Distribution.
All expenses incurred in connection with the issuance and
distribution of the securities being registered for resale will be paid by the
Registrant. The following is an itemized statement of these expenses. All
amounts except Securities and Exchange Commission and Nasdaq Stock Market
listing fees and the placement agent fee to PaineWebber Incorporated are
estimates.
<TABLE>
<S> <C>
Registration Statement-SEC................................... $ 25,806.31
Nasdaq listing fee........................................... $ 17,500
Printing and engraving....................................... $ 15,000
Legal fees................................................... $ 325,000
Accounting fees and expenses................................. $ 100,000
Placement agent fee to PaineWebber Incorporated $ 657,754
Miscellaneous................................................ $ 300,000.69
-----------
Total................................................ $ 1,441,061
===========
</TABLE>
Item 15 Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("Section
145") 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
that indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities 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 the underwriting agreements,
the purchase agreements and registration rights agreements entered into in
connection with P-Com's three public offerings, P-Com's nine acquisitions, the
sale of the 4 1/4% convertible promissory notes, the sale of the Series B
preferred stock, the warrants and the exchange agreements, each of which
contains provisions indemnifying officers and directors of P-Com and other
persons against certain liabilities, including, in some cases, those arising
under the Securities Act.
II-1
<PAGE>
Item 16 Exhibits.
Exhibit Description
------- -----------
No.
---
3.2 Restated Certificate of Incorporation, as filed with the
Delaware Secretary of State filed on March 9, 1995*
3.2A Certificate of Amendment of Restated Certificate of
Incorporation, as filed with the Delaware Secretary of State
on June 16, 1997*
3.2C Certificate of Designation for the Series A Junior
Participating preferred stock, as filed with the Delaware
Secretary of State on December 21, 1998*
3.2D Certificate of Designation for the Series B Convertible
Participating preferred stock, as filed with the Delaware
Secretary of State on December 21, 1998*
3.2E Certificate of Correction of Certificate of Designations for
the Series B Convertible Participating preferred stock, as
filed with the Delaware Secretary of State on December 23,
1998*
4.1 Specimen of common stock Certificate*
4.8 Amended and Restated Rights Agreement, dated as of December
21, 1998, between P-Com and BankBoston, N.A.*
5.1 Opinion of Brobeck, Phleger & Harrison LLP*
10.22B Low Capacity Digital Radio Agreement dated February 13, 1995
by and between P-Com and Siemens*
10.38 Securities Purchase Agreement dated as of December 21, 1998 by
and among P-Com and the purchasers listed therein*
10.39 Registration Rights Agreement dated as of December 21, 1998 by
and among P-Com and the purchasers listed therein*
10.48A Agreement between P-Com, Inc. and Marshall Capital Management,
Inc., dated as of June 4, 1999.**
10.48B Agreement between P-Com, Inc. and Castle Creek Technology
Partners LLC, dated as of June 4, 1999.**
10.48C Agreement between P-Com, Inc. and Capital Ventures
International, dated as of June 4, 1999.**
10.49A Warrant to purchase shares of common stock, dated as of June
4, 1999, issued by P-Com to Marshall Capital Management,
Inc.**
II-2
<PAGE>
Exhibit Description
------- -----------
No.
---
10.49B Warrant to purchase shares of common stock, dated as of June
4, 1999, issued by P-Com to Castle Creek Technology Partners
LLC**
10.49C Warrant to purchase shares of common stock, dated as of June
4, 1999, issued by P-Com to Capital Ventures International**
23.1 Consent of Independent Accountants (PricewaterhouseCoopers
LLP)
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1)*
23.3 Consent of Independent Accountants (PricewaterhouseCoopers
LLP)
24.1 Powers of Attorney (including in the signature page of this
registration statement)*
* Previously filed.
** Incorporated by reference to the Form 8-K filed June 8, 1999.
Item 17 Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(b) 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 end 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.
(c) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to that information in the registration statement.
II-3
<PAGE>
(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 those 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission that sort of indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against those 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 that director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
that indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of the
issue.
The undersigned Registrant hereby undertakes 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 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 those securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant, P-Com, Inc., a corporation organized and existing under
the laws of the State of Delaware, 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 amendment no. 6 to this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Campbell, State of California, on the 24th day of September, 1999.
P-COM, INC.
By: /s/ George P. Roberts
----------------------------------------
George P. Roberts, Chairman of the Board
and Chief Executive Officer
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
3.2 Restated Certificate of Incorporation, as filed with the
Delaware Secretary of State filed on March 9, 1995*
3.2A Certificate of Amendment of Restated Certificate of
Incorporation, as filed with the Delaware Secretary of State
on June 16, 1997*
3.2C Certificate of Designation for the Series A Junior
Participating preferred stock, as filed with the Delaware
Secretary of State on December 21, 1998*
3.2D Certificate of Designation for the Series B Convertible
Participating preferred stock, as filed with the Delaware
Secretary of State on December 21, 1998*
3.2E Certificate of Correction of Certificate of Designations for
the Series B Convertible Participating preferred stock, as
filed with the Delaware Secretary of State on December 23,
1998*
4.1 Specimen of common stock Certificate*
4.8 Amended and Restated Rights Agreement, dated as of December
21, 1998, between P-Com and BankBoston, N.A.*
5.1 Opinion of Brobeck, Phleger & Harrison LLP*
10.22B Low Capacity Digital Radio Agreement dated February 13, 1995
by and between P-Com and Siemens*
10.38 Securities Purchase Agreement dated as of December 21, 1998
by and among P-Com and the purchasers listed therein*
10.39 Registration Rights Agreement dated as of December 21, 1998
by and among P-Com and the purchasers listed therein*
10.48A Agreement between P-Com, Inc. and Marshall Capital
Management, Inc., dated as of June 4, 1999.**
10.48B Agreement between P-Com, Inc. and Castle Creek Technology
Partners LLC, dated as of June 4, 1999.**
10.48C Agreement between P-Com, Inc. and Capital Ventures
International, dated as of June 4, 1999.**
10.49A Warrant to purchase shares of common stock, dated as of June
4, 1999, issued by P-Com to Marshall Capital Management,
Inc.**
10.49B Warrant to purchase shares of common stock, dated as of June
4, 1999, issued by P-Com to Castle Creek Technology Partners
LLC**
10.49C Warrant to purchase shares of common stock, dated as of June
4, 1999, issued by P-Com to Capital Ventures International**
23.1 Consent of Independent Accountants (PricewaterhouseCoopers
LLP)
<PAGE>
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1)*
23.3 Consent of Independent Accountants (PricewaterhouseCoopers
LLP)
24.1 Powers of Attorney (including in the signature page of this
registration statement)*
*Previously filed.
** Incorporated by reference to the Form 8-K filed June 8, 1999.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
April 20, 1999 which appears on page 79 of P-Com, Inc's Annual Report on Form
10-K, as amended, for the year ended December 31, 1998. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PricewaterhouseCoopers LLP
San Jose, California
September 24, 1999
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of P-Com, Inc. of our report dated May 15, 1998, except as
to the effect of the restatement described in Note 2, which is as of July 15,
1999 relating to the financial statements of the Wireless Communications Group
(a division of Cylink Corporation), which appears in the Current Report on Form
8-K of P-Com, Inc. dated July 16, 1999.
PricewaterhouseCoopers LLP
San Jose, California
September 24, 1999
