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PROSPECTUS
3,000,000 Shares
P-COM, INC.
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COMMON STOCK
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Our stockholder State of Wisconsin Investment Board is offering for
resale and selling under this prospectus up to 3,000,000 shares of our common
stock.
Our common stock is traded on the Nasdaq National Market (Nasdaq
Symbol: PCOM). On October 31, 2000, the closing price of the common stock was
$5.625 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 stockholder.
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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 November 3, 2000.
SUMMARY
The up to 3,000,000 shares of common stock to be resold by the selling
stockholder pursuant to this prospectus were issued by us to the selling
stockholder, State of Wisconsin Investment Board, in a private placement closed
on August 14, 2000.
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
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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.
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RISK FACTORS
You should carefully consider the risks described below before making
an investment decision.
Due to our stage of development and industry, an investment in our stock is very
risky
We do not have the customer base or other resources of more
established companies, which makes it more difficult for us to address
the liquidity and other challenges we face
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 serious
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 October 18, 2000, the market
price of a share of our common stock was as low as $4.125 and as high as
$28.50. 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 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
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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 and 1999, one customer, Orange Personal
Communications Ltd., accounted for 27.9% and 20%, respectively, of our sales.
During the second quarter of 2000, we had four different customers that
individually accounted for over 10% of our sales. During the second quarter of
2000, two customers, Lucent and Winstar, accounted for 20.0% and 19.5%,
respectively, of our sales.
The Company places orders with suppliers based in part on customer
non-binding forecasts
Historically, the Company has built products based on non-binding
forecasts from customers. This practice has resulted in write-offs of excessive
and obsolete inventory for each of the past three years.
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 experienced 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
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only upon onerous terms, could very seriously damage our business, operating
results and financial condition and further erode our stock price.
The common stock sold in this offering will 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 in the
August 14, 2000 private placement 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 issued in the August 14, 2000 private
placement will be eligible for immediate and unrestricted resale into the public
market.
We may try to 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 additional costs to restructure our business to reduce
our expenses, which could materially adversely affect our results of operations
and stock price
During 1999, we generated net losses of approximately $103.0 million.
During the first six months of 2000, we generated net losses of $68.0 million.
We may also incur net losses in future periods. 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 1999
and 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.
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:
. the development of new products and technologies,
. the evaluation of these products,
. expansion into new geographic markets, and
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. 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 of operations and financial condition would be
adversely affected. Reasons for the 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.
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
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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
experienced 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 managing the businesses we have acquired, which
may increase our costs and divert resources from our business. We may continue
to encounter problems related to the management of companies which we have
acquired over the past several years. 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. In this regard, in the first six months of 2000, we sold
three business units, Technosystem, Cemetel S.r.l., and Control Resources
Corporation (CRC), which primarily represented non-core business products, such
as broadcast equipment and network monitoring equipment. The negative impact on
the financial statements of the disposal of Technosystem
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was $30.9 million. The impact on our future financial statements of the
divestitures of Cemetel S.r.l. and CRC is not expected to be material. In
addition, we have written off assets of several of our other acquired companies
including write-offs of $15 million of Cylink Wireless Group goodwill in the
second quarter of 2000.
Accounting charges related to acquisitions may decrease future earnings
Many business acquisitions must be accounted for as purchase business
combinations for financial reporting purposes. All of our past acquisitions,
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.
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 June 30, 2000, our total indebtedness including current
liabilities was approximately $112.7 million and our stockholders' equity was
approximately $77.2 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.
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. 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,
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they might erode customer confidence and cause them to reduce their purchases
from us, which would adversely impact our business and results of operations.
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 much 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 DMC Stratex Networks.
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, DMC Stratex Networks 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. With regard to our point-to-multipoint product line, we also compete
with Netro, who is also a product manufacturer like us. 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
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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 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 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. Until 2000, most of our sales were made to
customers located outside of the United States. 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
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considerable cost and diversion of efforts of management, either of which are
likely to adversely affect our results of operations.
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 acquired Cylink in 1998.
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.
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 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:
. our stockholder rights agreement,
. our certificate of incorporation and bylaws,
. our equity incentive plans, and
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. 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.
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.
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.
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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://www.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.
333-47184) 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 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, until the selling stockholder sells
all of the shares of common stock being registered for resale by the selling
stockholder 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, 1999,
filed on April 5, 2000, as amended by a filing on August 24, 2000;
(2) Our quarterly reports on Form 10-Q filed on May 15, 2000 (as amended
by a filing on August 24, 2000) and August 14, 2000;
(3) our current reports on Form 8-K filed as of January 6, 2000, January
25, 2000 and August 16, 2000;
(4) 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
(5) 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 different information. Neither we nor the selling
stockholder are making an offer of these securities in any state where the offer
is not permitted.
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the common
stock by the selling stockholder.
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.
SELLING STOCKHOLDER
This offering relates to the resale of up to 3,000,000 shares of
Common Stock by the selling stockholder. We sold these shares to the selling
stockholder in a private placement on August 14, 2000, for an aggregate gross
consideration to us of $18,330,000, or $6.11 per share. The closing sale price
of our Common Stock on August 14, 2000 was $5.625 per share. As part of the
private placement purchase agreement, we agreed to register the shares for
resale. Other than stock ownership, the selling stockholder does not hold and
has not held any office or position, nor have now or had, within the past three
years, any material relationship with us. The following table sets forth the
aggregate number of shares of common stock beneficially owned by the selling
stockholder as of October 15, 2000 and the percentage of all shares of common
stock held by the selling stockholder before and after giving effect to the
offering based on 80,373,358 shares of common stock outstanding as of October
15, 2000. 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
. the selling stockholder will sell all of the securities offered by
this prospectus.
Notwithstanding these assumptions, the selling stockholder may sell
less than all of the shares listed on the table. The selling stockholder will
determine the number of shares of common stock that it will sell. In addition,
the shares listed below may be sold pursuant to this prospectus, under Rule 144,
or in privately negotiated transactions.
<TABLE>
<CAPTION> Percent of
Outstanding Number of Number of Percent of
Shares Shares to be Shares Outstanding
Number of Shares Beneficially Sold Beneficially Shares
of Common Stock Owned Pursuant to Owned Beneficially
Beneficially Owned Before the this After the Owned After the
Name of Selling Stockholder Before the Offering Offering Prospectus Offering Offering (1)
-------------------------- ------------------- -------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C>
State of Wisconsin 14,199,300 17.7% 3,000,000 11,199,300 13.9%
Investment Board
</TABLE>
(1) Assumes that all of the shares being offered by the selling stockholder
under this prospectus are sold, and that the selling stockholder acquires no
additional shares of Common Stock before the completion of this offering.
14
<PAGE>
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 stockholder may effect those transactions
. 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
efforts basis.
Sales of the selling stockholder's 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 the selling stockholder's 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.
The 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 the 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 the selling stockholder pledges, hypothecate or grants a security
interest in some or all of the shares, then the pledgees, secured parties or
persons to whom those securities
15
<PAGE>
have been hypothecated shall, upon foreclosure in the event of default, be named
as selling stockholders in a supplement or post-effective amendment to this
prospectus. Similarly, if the selling stockholder transfers, pledges, donates or
assigns 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 stockholder
will decrease if and when the selling stockholder transfers, pledges, donates or
assigns shares. The plan of distribution for the selling stockholder's 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.
The selling stockholder may also use this prospectus in the following
ways:
. to sell short, from time to time, shares of our common stock and,
in those instances, this prospectus may be delivered in connection
with those short sales and the shares offered by this registration
statement may be used to cover those short sales,
. to enter into hedging transactions with broker-dealers, an the
broker-dealers may engage in short sales of the shares in the
course of holding the positions they assume with the selling
stockholder, including, without limitation, in connection with
distribution of the shares by those broker-dealers,
. 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
. 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 rules and regulations in Regulation M under the Securities
Exchange Act of 1934 provide that during the period that any person is engaged
in the distribution, as defined in Regulation M, of our common stock, such
person generally may not purchase shares of our common stock. The selling
stockholder is subject to applicable provisions of the Securities Act of 1933
and Securities Exchange Act of 1934 and the rules and regulations thereunder,
including, without limitation, Regulation M, which provisions may limit the
timing of purchases and sales of shares of the common stock by the selling
stockholder. The foregoing may affect the marketability of the common stock.
The selling stockholder, any underwriter, any broker-dealer or any
agent that participates with the selling stockholder in the distribution of the
shares may be deemed to be an "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
16
<PAGE>
the applicable state or an exemption from the registration or qualification
requirement is available.
We have agreed to keep the registration statement of which this
prospectus is a part continuously effective until all the shares are immediately
freely saleable under Rule 144(k). In this regard, we are required to supplement
and/or amend the registration statement of which this prospectus is a part to
supplement or change the selling stockholders hereunder.
Our agreements with the selling stockholder requires us to indemnify
the selling stockholder, any underwriter and the respective directors, officers,
partners, members, employees, agents and controlling persons of the selling
stockholder against certain liabilities in connection with the offer and sale of
the shares hereunder, including under the Securities Act. Similarly, the 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 the 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 stockholder 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 will be
passed upon for us by Brobeck, Phleger & Harrison LLP, San Diego, California. As
of the date of this prospectus, attorneys of Brobeck, Phleger & Harrison LLP and
their family members beneficially owned an aggregate of approximately 64,000
shares of our common stock.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference to the Annual Report on Form 10-K/A for the year ended December 31,
1999 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
17
<PAGE>
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................... 1
Risk Factors............................................................... 3
Where You Can Find More Information........................................ 13
Use of Proceeds............................................................ 14
Dividend Policy............................................................ 14
Selling Stockholder........................................................ 14
Plan of Distribution....................................................... 15
Legal Matters.............................................................. 17
Experts.................................................................... 17
</TABLE>
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3,000,000 Shares
P-COM, INC.
common stock
------------
PROSPECTUS
------------
November 3, 2000
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