UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1996
OR
( TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
Commission File Number: 0-22888
CAI WIRELESS SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Connecticut 06-1324691
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
18 Corporate Woods Boulevard, Albany, New York 12211
(Address and zip code of principal executive offices)
(518) 462-2632
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No _____
Number of shares outstanding of each of registrant's class of common stock at
October 31, 1996:
CLASS OUTSTANDING SHARES
Common Stock, no par value 40,384,787
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CAI WIRELESS SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30 MARCH 31,
1996 1996
(UNAUDITED) *
ASSETS
Cash and cash equivalents $ 45,483,937 $103,263,094
Subscriber accounts receivable, less allowance
for bad debts of $1,085,000 for September
and $1,296,000 for March 1,276,633 1,432,674
Prepaid expenses 625,795 698,482
Property and equipment, net 71,565,759 52,568,619
Wireless channel rights, net 203,292,785 205,973,840
Investment in CS Wireless Systems, Inc. 105,525,153 113,054,069
Debt service escrow 62,940,778 77,621,088
Goodwill 126,762,356 131,282,996
Loan acquisition costs, net 9,838,309 10,631,263
Other assets 3,679,401 2,268,847
Total Assets $630,990,906 $698,794,972
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable $ 9,688,020 $ 8,244,577
Accrued expenses 12,395,825 10,186,37
Senior debt 275,000,000 275,000,000
Notes payable 37,160,004 43,434,667
Wireless channel rights obligations 21,332,611 41,025,866
Deferred income taxes 26,410,000 35,410,000
381,986,460 413,301,484
Commitments
Mandatorily Redeemable Preferred Stock
14% Senior convertible preferred stock
(liquidation value $70,000,000) 69,090,004 69,020,002
Series A 8% redeemable convertible
preferred stock (liquidation value
$577,500) 577,500 18,050,000
Accrued preferred stock dividends 12,001,374 5,812,562
Shareholders' Equity
Preferred stock - -
Common stock, shares issued and outstanding
March 31, 1996 - 37,829,482
September 30, 1996 - 40,384,787 275,191,915 257,701,130
Accumulated deficit (107,856,347) (65,090,206)
167,335,568 192,610,924
Total Liabilities and Shareholders' Equity $630,990,906 $698,794,972
* Summarized from the Company's audited Consolidated Balance Sheet as of
that date.
See notes to condensed consolidated financial statements.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CAI WIRELESS SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
SIX-MONTH THREE-MONTH
PERIODS ENDED PERIODS ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
REVENUES $ 18,487,778 $ 7,891,508 $ 9,182,955 $ 3,899,641
Costs and expenses
Programming and license 7,859,550 3,463,916 3,966,954 1,799,011
Marketing 1,226,017 1,764,780 651,412 718,777
General and administrative 14,340,890 9,171,468 7,427,376 4,527,393
Depreciation and amortization 16,550,788 5,589,886 8,455,561 2,980,961
39,977,245 19,990,050 20,501,303 10,026,142
Operating loss (21,489,467) (12,098,542) (11,318,348) (6,126,501)
Other income (expense)
Equity in net loss of affiliate (7,800,000) - (4,800,000) -
Interest income 4,039,174 329,453 1,867,110 241,141
Other income 77,397 41,504 37,943 3,558
Interest expense (20,304,553) (3,808,507) (10,143,719) (1,868,229)
(23,987,982) (3,437,550) (13,038,666) (1,623,530)
Loss before provision for
income tax benefit and
minority interest (45,477,449) (15,536,092) (24,357,014) (7,750,031)
Provision for income tax benefit 9,000,000 - 4,500,000 -
Loss before minority interest (36,477,449) (15,536,092) (19,857,014) (7,750,031)
Minority interest in loss - 321,910 - 42,164
Net loss (36,477,449) (15,214,182) (19,857,014) (7,707,867)
Preferred stock dividend (6,270,364) (743,265) (3,194,747) (390,816)
Loss applicable to common stock
shareholders $(42,747,813) $(15,957,447) $(23,051,761) $(8,098,683)
Loss per common share $ (1.08) $ (0.98) $ (0.57) $ (0.48)
Average common and equivalent
shares outstanding 39,638,851 16,321,674 40,384,787 16,725,006
See notes to condensed consolidated financial statements.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CAI WIRELESS SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX-MONTH
PERIODS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (36,477,449) $ (15,214,182)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation and amortization 16,550,788 5,589,886
Equity in net loss of affiliate 7,800,000 -
Deferred income tax benefit (9,000,000) -
Amortization of loan costs and other 990,042 871,769
Minority interest in loss - (321,910)
Debt service escrow interest income 835,968 -
Other - 130,814
Changes in assets and liabilities,
net of effects from acquisitions
Subscriber accounts receivable 107,366 (265,655)
Other assets (670,899) 110,281
Accounts payable and accrued expenses 694,115 835,461
Net cash used in operating activities (19,170,069) (8,263,536)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for companies, net of cash acquired - (77,153,085)
Purchase of wireless channel rights (2,941,307) (18,885,763)
Purchase of property and equipment (22,152,837) (4,391,687)
Proceeds from the sale of property and equipment 463,900 209,851
Investment in CS Wireless (436,202) -
Purchase of investments - (250,000)
Proceeds from the sale of investments 13,844,342 208,858
Loans to related parties (800,000) -
Other (26,264) (498,694)
Net cash used in investing activities (12,048,368) (100,760,520)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of senior notes,
other debt and warrants - 307,931,686
Payment of senior and other debt (26,549,127) (34,044,261)
Cash paid for debt service escrow - (90,638,756)
Proceeds from issuance of senior
preferred stock and warrants - 70,000,000
Debt financing costs paid - (1,750,568)
Proceeds from issuance of common stock - 1,545,979
Registry and other stock issuance costs paid - (1,899,588)
Other (11,593) -
Net cash provided by (used in)
financing activities (26,560,720) 251,144,492
Net increase (decrease) in cash and
cash equivalents (57,779,157) 142,120,436
Cash and cash equivalents, beginning 103,263,094 1,201,932
Cash and cash equivalents, ending $ 45,483,937 $ 143,322,368
See notes to condensed consolidated financial statements
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CAI WIRELESS SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The condensed consolidated financial statements include the accounts
of CAI Wireless Systems, Inc. and its wholly-owned subsidiaries (the
"Company" or "CAI"). The balance sheets presented herein reflect the
acquisitions of ACS Enterprises, Inc. and its subsidiaries ("ACS") and
Eastern Cable Networks of Washington, Inc. ("ECNW") which were effective as
of September 29, 1995. However, consistent with the purchase method of
accounting, the statement of operations for the six and three-month periods
ended September 30, 1995 do not include any operating activity of ACS or
ECNW. A 54% owned subsidiary, CS Wireless Systems, Inc. ("CS") is accounted
for on the equity method. Current summarized financial information
regarding CS is presented in Note 3 below.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not
include all information and notes required by generally accepted accounting
principles for complete financial statements.
In the opinion of the Management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the six-month period ended
September 30, 1996 are not necessarily indicative of the results that may
be expected for the year ending March 31, 1997.
Note 2. Shareholders' Equity
During the three-month period ended June 30, 1996, a total of 174,725
shares of 8% Series A Preferred Stock were converted into 2,481,990 shares
of common stock, resulting in an increase of $17,472,457 in common stock.
Also during that same period, warrants were exercised in a cashless
transaction whereby 75,000 warrants were surrendered for 73,315 shares of
common stock with a charge to accumulated deficit and a credit to common
stock for $18,329, the warrant conversion value.
Note 3. Investment in CS Wireless Systems, Inc.
The Company's equity in net loss of affiliate of approximately
$7,800,000 is based on CAI's pro-rata share of CS Wireless Systems, Inc.'s
net loss of $10,847,000 for the six-month period ended June 30, 1996,
taking into account CAI's complete ownership prior to February 23, 1996,
plus CAI's amortization of the excess of its cost less its pro-rata share
of equity acquired over a fifteen year period as follows:
CAI's share of affiliate's net loss $6,700,000
Amortization of CAI's excess cost 1,100,000
Equity in net loss of affiliate $7,800,000
The summarized financial information disclosed below is extracted from CS
Wireless Systems, Inc. unaudited historical June 30, 1996 financial
statements.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CAI WIRELESS SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3. Investment in CS Wireless Systems, Inc. (continued)
The following is an unaudited condensed consolidated balance sheet of
CS Wireless Systems, Inc. and Subsidiaries as of June 30, 1996:
ASSETS
Cash and cash equivalents $157,637,000
Subscriber receivables, net 683,000
Prepaid expenses and other 275,000
Plant and equipment, net 38,835,000
Wireless channel rights, net 166,918,000
Goodwill, net 52,948,000
Debt issuance costs and other assets, net 9,438,000
$426,734,000
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 6,532,000
FCC Auction payable 14,328,000
Other liabilities 574,000
Debt 253,358,000
Deferred income taxes 13,006,000
287,798,000
STOCKHOLDERS' EQUITY
Common stock 10,000
Additional paid-in-capital 150,980,000
Accumulated deficit (12,054,000)
Total Stockholders' Equity 138,936,000
$426,734,000
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CAI WIRELESS SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3. Investment in CS Wireless Systems, Inc. (continued)
The following is an unaudited condensed consolidated statement of
operations of CS Wireless Systems, Inc. and Subsidiaries for the six months
ended June 30, 1996:
<S
Revenues $ 9,720,000
Operating expenses:
Systems operations 8,275,000
General and administrative 3,136,000
Depreciation and amortization 7,779,000
Total operating expenses 19,190,000
Operating loss (9,470,000)
Other income (expense):
Interest income 2,977,000
Interest expense (10,244,000)
Total other income (expense), net ( 7,267,000)
Loss before income taxes (16,737,000)
Income tax benefit 5,890,000
Net loss $(10,847,000)
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The statements contained in this Quarterly Report on Form 10-Q,
including the exhibits hereto, which are not historical fact are "forward-
looking statements" that involve various important assumptions, risks and
other factors which could cause the Company's actual results for fiscal
1997 and beyond to differ materially from those expressed in such forward
looking statements. These important factors include, without limitation,
the assumptions, risks and uncertainties set forth below in this
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", as well as other assumptions, risks, uncertainties and factors
disclosed elsewhere in this Form 10-Q and the Company's other securities
filings.
OPERATIONS
As of September 30, 1996, CAI Wireless Systems, Inc. and Subsidiaries
(the "Company" or "CAI") had approximately 80,900 wireless systems'
subscribers as compared to 118,500 subscribers as of September 30, 1995,
including subscribers from the acquisitions of ACS Enterprises, Inc.
("ACS") and Eastern Cable Networks of Washington, Inc. ("ECNW") on
September 29, 1995. Approximately 32,900 subscribers for September 30, 1995
are attributable to CS Wireless Systems, Inc. ("CS"), which became an
unconsolidated subsidiary of the Company on February 23, 1996 upon the
closing of the transactions contemplated by the Participation Agreement
dated December 12, 1995, among the Company, CS and Heartland Wireless
Communications, Inc. On a pro forma basis, giving effect to the ACS and
ECNW acquisitions and the CS transaction as if such transactions had
occurred on September 30, 1995, the Company would have had as of September
30, 1995 approximately 85,600 subscribers compared to 80,900 subscribers as
of September 30, 1996.
The net decrease in subscribers is due primarily to the New York
System decrease of approximately 3,800 subscribers for the comparable
periods. The New York system is losing subscribers to hardwire cable
operators primarily due to its inferior channel capacity. This trend in New
York will likely continue until CAI builds digital transmission facilities
which are expected to provide greater channel capacity than the hardwire
cable operators currently have.
CAI has substantially completed construction of digital video
delivery systems in Boston, Massachusetts and Hampton Roads, Virginia in
anticipation of the implementation of the Business Relationship Agreement
(the "BR Agreement") among CAI and affiliates of Bell Atlantic Corporation
and NYNEX Corporation (the "BANX Affiliates") in those markets. The BANX
Affiliates have not yet formally implemented the BR Agreement in any
market, however, Bell Atlantic has recently announced its intention to
begin providing video programming services in Hampton Roads using CAI's
delivery system in early 1997 and NYNEX has announced a launch of the
Boston system some time during the second quarter of 1997. Each of the
BANX Affiliates has until September 1997 to make the election for any
market in its operating territory specified in the BR Agreement. The
option of Bell Atlantic and NYNEX to implement the BR Agreement in each
market is within the sole discretion of Bell Atlantic and NYNEX, as
applicable. The passage of the Telecommunications Act of 1996, enacted
after the parties entered into the BR Agreement, may impact the decision of
the BANX Affiliates to exercise their option to implement the BR Agreement.
As a result of the construction experience in Boston and Virginia
Beach, both CAI and the BANX Affiliates have proposed amendments to the BR
Agreement including, but not limited to, the length of the option exercise
period, the length of time within which CAI must build a digital video
delivery system and the waiver of certain technical defaults under the BR
Agreement, as well as proposed amendments concerning other aspects of the
relationship. The parties have not yet reached a definitive agreement with
respect to the proposed amendments, and there can be no assurance that such
agreement will be reached. The Company's digital transmission facilities
located in Boston and Norfolk/Virginia Beach are currently being tested by
NYNEX and Bell Atlantic, respectively. The testing is not yet complete.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During the six-month period ended September 30, 1996, CAI expended
approximately $22.2 million to purchase equipment, $19.2 million to fund
operating activities of which $16.8 million represents senior note interest
expense paid from the escrow account, $2.9 million to acquire wireless
channel rights and $26.5 million to pay senior and other debt including
$17.2 million against the amount due on the FCC MMDS license auctions.
During this period, CAI funded its cash requirements out of existing cash
balances. At September 30, 1996, CAI had cash and cash equivalents of
approximately $45.5 million.
Pursuant to the Company's capital expenditure plans for fiscal 1997,
CAI is committed as of September 30, 1996 through open purchase orders to
expend approximately $16.4 million primarily for capital expenditures
associated with the development of digital transmission facilities. In
addition, during the six-month period ending March 31, 1997, the Company is
obligated to pay approximately $21.9 million in MMDS license auction fees,
of which CS is obligated to reimburse CAI $4.1 million for licenses
transferred to CS, and approximately $3.2 million of minimum license fees
and lease payments.
Management believes that the Company's growth plan will require
additional funds during the 1997 fiscal year, especially if CAI determines
to effect additional acquisitions or if the BANX Affiliates fails to
exercise their options with respect to markets as contemplated by the BR
Agreement. Such additional funds may take the form of debt or equity
securities issuances, borrowings under loan arrangements or sales of assets
including channel rights or wireless cable systems. CAI's ability to
engage in financings, asset sales or acquisition transactions is limited by
the contractual arrangements entered into with BANX Partnership, and
significant transactions likely will require its prior consent. In
addition, the Company's 12 1/4 % Senior Notes due 2002 (the "Senior Notes")
impose similar restrictions on the incurrence of additional debt and on the
ability to effect asset sales. There is no assurance that any additional
financings will be available to the Company on satisfactory terms and
conditions, if at all.
In the event that such additional financings are not available to the
Company, management can and will defer capital expenditures and other costs
currently contemplated, including the deployment of Digital head-end
equipment which will affect the Company's ability to implement its
obligations under the BR Agreement. The present revenue stream and cash
resources available to the Company are adequate to sustain the Company's
needs into the first quarter of fiscal 1998 if such actions were taken.
However, expansion plans would be adversely impacted. There is no
assurance that any additional financings will be available to the Company
on satisfactory terms and conditions, if at all.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SIX AND THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1996 COMPARED TO SIX AND
THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1995
CAI's total revenue was $18.5 million and $9.2 million for the six
and three-month periods ended September 30, 1996 as compared to $7.9
million and $3.9 million for the six and three-month periods ended
September 30, 1995, respectively. While the ACS and ECNW acquisitions were
reflected in the balance sheet as of September 30, 1995, no operating
activity was reflected until after September 29, 1995, the date of
acquisition, pursuant to purchase accounting principles. Accordingly, the
six and three-month periods of operations for the Philadelphia and
Washington systems reflected in the 1996 period are not included in the
comparable 1995 period.
The Philadelphia and Washington systems (the "Acquired Systems")
accounted for $11.5 million and $5.7 million of revenue for the six and
three-month periods ended September 30, 1996, respectively. The revenue
derived from the systems included in both the six and three-month periods
ended September 30, 1996 and 1995 (the "Same Systems") decreased by $0.9
million and $0.5 million, respectively. The decrease in revenue is
primarily attributable to decreased revenues in the New York system of $1.3
million for the six-month period and $0.6 million for the three-month
period due to decreased subscribers offset by increases totaling $0.4
million and $0.1 million, respectively, due to growth of subscribers in
other systems.
Operating expenses of $40.0 million and $20.5 million for the six and
three-month periods ended September 30, 1996 increased by $20.0 million and
$10.5 million over the $20.0 million and $10.0 million reported for the six
and three-month periods ended September 30, 1995, respectively.
Depreciation and amortization accounted for $11.0 million and $5.5 million
of the six and three-month period increases, respectively, substantially
resulting from the ACS and ECNW acquisitions. Programming and license fees
were up by $4.4 million for the six-month period ended September 30, 1996,
also resulting from the Acquired Systems. The $0.5 million marketing
expense decrease consists of a $0.7 million increase attributable to
Acquired Systems, offset by a $1.2 million decrease attributable to the
Same Systems, reflecting CAI's change from an aggressive growth strategy in
the 1995 period to a limited growth strategy in the 1996 period, as the
Company awaits the commercial availability of digital wireless subscriber
equipment. General and administrative expenses increased by $5.2 million
for the six-month period ended September 30, 1996, primarily attributable
to the Acquired Systems.
CAI's operating loss was $21.5 million and $11.3 million for the six
and three-month periods ended September 30, 1996, or $9.4 million and $5.2
million higher, as compared to the six and three-month periods ended
September 30, 1995 operating loss of $12.1 million and $6.1 million,
respectively. While revenue increased by $10.6 million for the six-month
period ended September 30, 1996, operating expenses also increased (by
$20.0 million). However, after considering the non-cash depreciation and
amortization increase discussed above, operating expenses requiring cash
increased by $9.0 million while revenue increased by $10.6 million. For
the three-month period ended September 30, 1996, operating expenses
increased by $10.5 million of which non-cash depreciation and amortization
accounted for $5.5 million of that increase, leaving operating expenses
requiring cash increasing $5.0 million against a revenue increase of $5.3
million.
CAI's six and three-month periods ended September 30, 1996 include a
$7.8 million and a $4.8 million loss relating to CAI's investment in CS,
representing its pro-rata share of CS's net loss for CS's six-month period
ended June 30, 1996 and three-month period ended June 30, 1996,
respectively. CAI acquired ACS Ohio, Inc., the predecessor of CS on
September 29, 1995.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (continued)
Interest income was $4.0 million and $1.8 million for the six and
three-month periods ended September 30, 1996 as compared to $0.3 million
and $0.2 million for the six and three-month periods ended September 30,
1995. The increase is primarily due to interest earned on the Debt Service
Escrow established in connection with the Company's offering of the Senior
Notes and the investment of the cash remaining from the net proceeds of the
Senior Notes offering and other concurrent September 29, 1995 transactions.
Interest expense increased to $20.3 million and $10.1 million for the
six and three-month periods ended September 30, 1996 up from $3.8 million
and $1.9 million for the six and three-month periods ended September 30,
1995, a change of $16.5 million and $8.3 million, respectively, primarily
due to interest expense incurred on the Senior Notes issued on September
29, 1995.
PART I. FINANCIAL INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Shareholders of CAI Wireless Systems, Inc.
was held on October 16, 1996, for the purposes of electing a Board of
Directors, approving a new 1996 Outside Directors' Stock Option Plan, and
approving certain amendments to the Company's 1993 Stock Option and
Incentive Plan.
(b) All of management's nominees for directors as listed in the proxy
statement were elected with the following vote:
Shares
Voted Shares
"For" "Withheld"
Jared E. Abbruzzese 28,839,707 1,003,588
John J. Prisco 28,839,807 1,003,488
George M. Williams 28,839,807 1,003,488
James P. Ashman 28,839,807 1,003,488
Arthur C. Belanger 28,839,707 1,003,588
Harold A. Bouton 28,839,807 1,003,488
David M. Tallcott 28,791,707 1,051,588
Alan Sonnenberg 28,839,807 1,003,488
Robert D. Happ 28,839,807 1,003,488
(c) The other matters voted upon were as follows:
The 1996 Outside Directors' Stock Option Plan was approved with
the following vote:
Votes For: 27,280,367
Votes Against: 2,404,621
Abstentions: 62,507
Broker non-votes: 95,800
The Amendments to the Company's 1993 Stock Option and Incentive
Plan were approved with the following vote:
Votes For: 22,531,807
Votes Against: 7,115,671
Abstentions: 100,017
Broker non-votes: 95,800
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
The Company issued the following media releases, each of which is
attached hereto as an exhibit:
For details, see the
following exhibits:
CAI RESPONDS TO RECENT SHARE PRICE VOLATILITY Exhibit 99.1
CAI WIRELESS SYSTEMS, INC. ANNOUNCES
APPOINTMENT OF NEW OFFICER Exhibit 99.2
CAI WIRELESS SYSTEMS, INC. TO COMMENCE
LIMITED COMMERCIAL ROLL-OUT OF HIGH-SPEED
INTERNET SERVICE Exhibit 99.3
CAI WIRELESS SYSTEMS, INC. FILES FOR FCC
APPROVAL TO USE WIRELESS MMDS SPECTRUM
FOR TWO-WAY FLEXIBLE USE Exhibit 99.4
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following Exhibits are filed herewith or incorporated by
reference as indicated:
Incorporation
by Reference Page
EXHIBIT NO. DESCRIPTION (SEE LEGEND) REFERENCE
3.1 Amended and Restated Certificat of 1-Exhibit 3.1
Incorporation of CAI
3.2 Amended and Restated Bylaws of CAI 1-Exhibit 3.2
<dagger>11.1 Schedule Regarding Computation of Loss Per 17
Common Share
<dagger>11.2 Schedule Regarding Computation of Fully Diluted 18
Loss Per Common Share
<dagger>27 Financial Data Schedule 19
<dagger>99.1 Media Release - CAI Responds to Recent Share 20
Price Volatility
<dagger>99.2 Media Release - CAI Announces Appointment of 22
New Officer
<dagger>99.3 Media Release - CAI to Commence Limited 23
Commercial Roll-Out of High-Speed Internet
Service
<dagger>99.4 Media Release - CAI files for FCC Approval to 25
Use Wireless MMDS Spectrum for Two-Way
Flexible Use
LEGEND
1 Incorporated by reference to the exhibits to the Quarterly Report on Form
10-Q for September 30, 1995.
<dagger> Filed herewith
(b) Reports on Form 8-K
b1) Form 8-K dated June 27, 1996 (filed July 3, 1996), regarding the
following item:
Item 5. OTHER EVENTS
The Company successfully transmitted digital video, audio
programming and data signals on June 27, 1996 at a demonstration held
in Rochester, New York, for members of the financial community.
b2) Form 8-K dated August 12, 1996 (filed August 13, 1996), regarding
the following item:
Item 5. OTHER EVENTS
The Company announces 1996 first quarter results on August
12, 1996.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)
b3) Form 8-K dated September 16, 1996 (filed September 20, 1996),
regarding the following item:
Item 5. OTHER EVENTS
The Company announced on September 16, 1996 that it will
conduct a market trial of its high-speed wireless Internet access
service in Rochester, NY, beginning by the end of September, and also
announced on September 20, 1996 that all of its operating
subsidiaries would subcontract all of their installation and service
work to outside contractors in an effort designed to cut overhead
costs and promote safety.
b4) Form 8-K dated September 27, 1996 (filed September 27, 1996),
regarding the following item:
Item 5. OTHER EVENTS
The BANX Affiliates have elected to extend the option
exercise period with respect to all option service areas set forth in
the Business Relationship Agreement, dated as of March 28, 1995, as
amended (the "BR Agreement"), among CAI and the BANX Affiliates to
the second anniversary of the Stage II Closing Date, as defined in
the BR Agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SIGNATURE TITLE DATE
/S/ JARED E. ABBRUZZESE Chairman, Chief Executive Officer November 4, 1996
JARED E. ABBRUZZESE and Director (Principal Executive
Officer)
/S/ JAMES P. ASHMAN Executive Vice President, Chief November 4, 1996
JAMES P. ASHMAN Financial Officer and Director
(Principal Financial Officer)
/S/ CRAIG J. KESSLER Vice President and Controller November 4, 1996
CRAIG J. KESSLER (Principal Accounting Officer)