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PROSPECTUS
8,180,216 Shares
P-COM, INC.
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COMMON STOCK
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The stockholders of P-Com, Inc. listed on pages 1 and 2 below are
offering for resale and selling under this prospectus up to 8,180,216 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 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 November 3, 2000.
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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 a private
placement closed on June 22, 1999. The name of each selling stockholder and the
number of shares of common stock to be registered for resale under this
registration statement are set forth in the following table:
Number of Shares of
Name of Selling Stockholder Common Stock
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State of Wisconsin Investment Board 5,033,979
Kaufmann Fund 2,516,990
Lagunitas Partners L.P. 415,303
Gruber McBaine International 119,557
Lockheed Martin Corp. Master Retirement Trust 62,925
Trustees of Hamilton College 31,462
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.
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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 $28.500.
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.
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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 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
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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 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 June
22, 1999 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 June 22, 1999 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
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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:
o
o the development of new products and technologies,
o the evaluation of these products,
o expansion into new geographic markets, and
o 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
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future contracts and the intensification of competition. To offset declining
average selling prices, we believe we must take a number of steps, including:
o successfully introducing and selling new systems on a timely
basis;
o developing new products that incorporate advanced software and
other features that can be sold at higher average selling
prices; and
o 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
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.
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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 businessWe 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 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
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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, 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.
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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
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 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. 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
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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.
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
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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:
o our stockholder rights agreement,
o our certificate of incorporation and bylaws,
o our equity incentive plans, and
o 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.
333-47034) 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 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,
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
stockholders 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 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.
SELLING STOCKHOLDERS
This offering relates to the resale of up to 8,180,216 shares of Common
Stock by the selling stockholders. We sold these shares to the selling
stockholders and others in a private placement on June 22, 1999, for an
aggregate gross consideration to us of $40,000,000, or $5.71 per share. The
closing sale price of our Common Stock on June 22, 1999 was $5.31 per share. As
part of the private placement purchase agreements, we agreed to register the
shares for resale. Other than stock ownership, no selling stockholder has held
any office or position, or has 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 each selling stockholder
as of October 15, 2000 and the percentage of all shares of common stock held
by that 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:
o beneficial ownership is determined in accordance with the
rules of the SEC
o 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 stockholder 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.
<TABLE>
<CAPTION>
Percent of Percent of
Outstanding Outstanding
Shares Shares
Number of Shares of Beneficially Number of Beneficially
Common Stock Owned Shares to be Number of Shares Owned
Name of Selling Beneficially Owned Before the Sold Pursuant to Beneficially Owned After the
--------------- ---------
Stockholder Prior to Offering Offering this Prospectus After the Offering Offering (1)
----------- ----------------- -------- --------------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
State of Wisconsin 14,199,300 17.7% 5,033,979 9,165,321 11.4%
Investment Board
Kaufmann Fund 2,516,990 3.1% 2,516,990 0 *
Lagunitas Partners L.P.(2) 1,057,738 1.3% 415,303 642,435 *
Gruber McBaine 379,947 * 119,557 260,390 *
International(2)
Lockheed Martin Corp. 234,880 * 62,925 171,955 *
Master Retirement
Trust(2)
Trustees of Hamilton 101,639 * 31,462 70,177 *
College(2)
</TABLE>
(1) Assumes that all of the shares being offered by the selling
stockholders under this prospectus are sold, and that the selling
stockholders acquire no additional shares of common stock before the
completion of this offering.
(2) Gruber McBaine Capital Management is general partner of Lagunitas
Partners L.P. and is attorney in fact for Gruber McBaine
International, Lockheed Martin Corp. Master Retirement Trust and
Trustees of Hamilton College. In each of these capacities, Gruber
McBaine Capital Management has full voting and investment power over
all the indicated shares. Combined the shares so "beneficially owned"
by Gruber McBaine Capital Management constitute 1,774,204 shares
beneficially owned before this offering, or 2.2%, 629,247 shares to be
sold pursuant to this prospectus; and 1,144,957 shares beneficially
owned after the offering, or 1.4%.
* Less than 1%.
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
o negotiated prices,
o fixed prices which may be changed,
o market prices prevailing at the time of sale or
o prices related to prevailing market prices.
The selling stockholders may effect those transactions
o in privately negotiated sales in the over-the-counter market
or any exchange on which the securities are listed,
o 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
o in one or more underwritten offerings on a firm commitment or
best efforts 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:
o the aggregate amount of selling stockholders' shares being
offered and the terms of the offering,
o the names of any agents, brokers, dealers, transferees or
underwriters, and
o 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.
15
<PAGE>
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, 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:
o 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,
o to enter into hedging transactions with broker-dealers, and
the broker-dealers may engage in short sales of the shares in
the course of holding the positions they assume with that
selling stockholder, including, without limitation, in
connection with distribution of the shares by those
broker-dealers,
o 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
o 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 stockholders
are 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
stockholders. The foregoing may affect the marketability of the common stock.
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 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
16
<PAGE>
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.
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 stockholders require 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 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
Page
----
Prospectus Cover Page...................................................... 1
Summary.................................................................... 2
Risk Factors............................................................... 3
Where You Can Find More Information........................................ 13
Use of Proceeds............................................................ 14
Dividend Policy............................................................ 14
Selling Stockholders....................................................... 14
Plan of Distribution....................................................... 15
Legal Matters.............................................................. 17
Experts.................................................................... 17
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8,180,216 Shares
P-COM, INC.
common stock
------------------
PROSPECTUS
------------------
November 3, 2000
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