U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 12 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997.
[X] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____ TO ____.
Commission file number 21143
WIRELESS CABLE & COMMUNICATIONS, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0545056
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
102 West 500 South, Suite 320
Salt Lake City, Utah 84101
(Address of Principal Executive Offices) (Zip Code)
(801) 328-5618
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if
changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 ____
As of October 31, 1997, 6,023,138 shares of registrant's Common Stock, par value
$.01 per share, 2,924,063 shares of the registrant's Series A Preferred Shares,
par value $.01 per share, and 354,825 shares of the registrant's Series B
Preferred Shares, par value $10.00 per share, were outstanding.
PART I : FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB
The accompanying unaudited consolidated financial statements have been
prepared by Wireless Cable & Communications, Inc. ("WCCI") pursuant to the rules
and regulations of the Securities and Exchange Commission. They do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. The consolidated financial
statements have been prepared using a reverse acquisition accounting treatment
due to a transaction where Telecom Investment Corporation ("TIC") merged with a
wholly owned subsidiary of WCCI and the financial statements presented for the
period from September 27, 1994 (date of TIC inception) through September 30,
1997 are the financial statements of TIC and differ from the consolidated
financial statements of WCCI and its subsidiaries as previously reported (see
Note 1). The financial statements presented include the operations of TIC for
the period from September 27, 1994 (date of TIC inception) through September 30,
1997 and for the full nine months, and of WCCI and its subsidiaries for the
period February 4, 1997 (effective date of the acquisition) to September 30,
1997. These financial statements should be read in conjunction with Note 1
herein and the consolidated financial statements and notes thereto included in
the WCCI annual report on form 10-KSB, as amended, for the year ended December
31, 1996, which are incorporated herein by reference. The accompanying financial
statements have not been examined by independent accountants in accordance with
generally accepted auditing standards, but in the opinion of management, all
adjustments (consisting of normal recurring entries) necessary for the fair
presentation of the Company's results of operations, financial position and
changes therein for the periods presented have been included. The results of
operations for the three and nine months ended September 30, 1997 may not be
indicative of the results that may be expected for the year ending December 31,
1997.
[THIS SPACE INTENTIONALLY LEFT BLANK]
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS (Unaudited)
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
September 30, December 31,
1997 1996
ASSETS
CURRENT ASSETS:
Cash .......................................................... $ 8,247,003 $ 8,902
Accounts Receivable, net ...................................... 14,411 --
Prepaid license lease fees, other ............................. 205,002 14,778
------------- -------------
Total current assets .................................. 8,466,416 23,680
INVESTMENT IN AFFILIATES ....................................... 1,808,455 --
EQUIPMENT - Net ................................................ 406,506 --
LICENSE RIGHTS - Net ........................................... 836,167 --
DUE FROM AFFILIATES ............................................ 64,855 --
INTANGIBLE ASSETS & GOODWILL - Net ............................. 7,422,110 --
OTHER ASSETS ................................................... 35,063 --
------------- -------------
TOTAL ASSETS ................................................... $ 19,039,572 $ 23,680
============= =============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable & other accrued liabilities ................. $ 473,034 $ 438,557
Accrued license lease fees ................................... 121,621 --
Accrued consulting fees - related party ...................... 100,000 --
Due to affiliates ............................................ 746,579 --
Customer Deposits ............................................ 40,671 --
------------- -------------
Total current liabilities ............................. 1,481,905 438,557
LONG-TERM LIABILITIES:
Long-term debt - related parties ............................ 1,341,631 231,570
Note payable ................................................ 732,383 --
MINORITY INTEREST IN SUBSIDIARY ................................ 22,413 --
------------- -------------
Total liabilities ..................................... 3,578,332 670,127
------------- -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Series A Preferred stock; $0.01 par value; 4,250,000 shares
authorized and 2,924,063 and 0 shares issued and outstanding
in 1997 and 1996, respectively ............................. 29,241 --
Series B Preferred stock; $10.00 par value; 750,000 shares
authorized: 354,825 and 0 issued and outstanding in 1997
and 1996, respectively ..................................... 3,548 --
Common stock; $0.01 par value; 15,000,000 shares authorized:
6,023,138 and 1,500,000 shares issued and outstanding
in 1997 and 1996 respectively .............................. 60,231 15,000
Additional paid-in capital .................................... 17,105,471 --
Deficit accumulated during the development stage .............. (1,737,251) (661,447)
------------- -------------
Total stockholders' deficit ........................... 15,461,240 (646,447)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..................... $ 19,039,572 $ 23,680
============= =============
See notes to consolidated financial statements.
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
AND FROM SEPTEMBER 27, 1994 (DATE OF INCEPTION) TO SEPTEMBER 30, 1997
Three Three September 27,
Months Months 1994 (Date of
Ended Ended Inception) To
September 30, September 30, September 30,
1997 1996 1997
--------------- --------------- -------------
REVENUES ................................................... $ 38,648 NONE $ 38,648
COST OF SERVICES ........................................... 24,106 24,106
------------ ------------ ------------
GROSS PROFIT ............................................... 14,542 NONE 14,542
EXPENSES:
Professional fees ........................................ 138,919 $ 43,124 453,714
Depreciation and amortization ............................ 187,353 -- 235,903
Lease expense ............................................ 28,884 -- 61,370
Consulting ............................................... 56,862 35,000 396,140
Payroll expenses ......................................... 139,721 -- 139,721
General and administrative ............................... 110,243 82,633 356,445
------------ ------------ ------------
Total ................................................. 661,982 160,757 1,643,293
------------ ------------ ------------
OPERATING LOSS ............................................. (647,440) (160,757) (1,628,751)
------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest income ......................................... 34,839 -- 34,839
Interest expense ........................................ (47,348) (10,892) (152,004)
------------ ------------ ------------
NET LOSS BEFORE MINORITY INTEREST .......................... (659,949) (171,649) (1,745,916)
MINORITY INTEREST IN LOSS OF
SUBSIDIARIES ............................................... 3,237 -- 8,665
------------ ------------ ------------
NET LOSS ................................................... $ (656,712) $ (171,649) $(1,737,251)
============ ============ ============
Net loss per Common Shares and
Common Share equivalent .................................. $ (.024) $ (0.07)
============ ============
Weighted average Common Shares and
Common Share equivalent .................................. 2,769,174 2,511,196
============ ============
See notes to consolidated financial statements.
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
AND FROM SEPTEMBER 27, 1994 (DATE OF INCEPTION) TO SEPTEMBER 30, 1997
Nine Nine September 27,
Months Months 1994 (Date of
Ended Ended Inception) To
September 30, September 30, September 30,
1997 1996 1997
--------------- --------------- -------------
REVENUES ................................................... $ 38,648 NONE $ 38,648
COST OF SERVICES ........................................... 24,106 -- 24,106
------------ ----------- -------------
GROSS PROFIT ............................................... 14,542 NONE 14,542
EXPENSES:
Professional fees ........................................ 229,571 $ 72,788 453,714
Depreciation and amortization ............................ 235,903 -- 235,903
Lease expense ............................................ 61,370 -- 61,370
Consulting ............................................... 103,260 101,000 396,140
Payroll expenses ......................................... 139,721 -- 139,721
General and administrative ............................... 247,164 117,522 356,445
------------ ------------ ------------
Total ................................................. 1,016,989 291,310 1,643,293
OPERATING LOSS ............................................. (1,002,447) (291,310) (1,628,751)
------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest income ......................................... 34,839 -- 34,839
Interest expense ........................................ (116,861) (16,320) (152,004)
------------ ------------ ------------
NET LOSS BEFORE MINORITY INTEREST .......................... (1,084,469) (307,630) (1,745,916)
MINORITY INTEREST IN LOSS OF
SUBSIDIARIES ............................................... 8,665 -- 8,665
------------ ------------ ------------
NET LOSS ................................................... $(1,075,804) $ (307,630) $(1,737,251)
============ ============ ============
Net loss per Common Shares and
Common Share equivalent .................................. $ (0.40) $ (0.12)
============ ============
Weighted average Common Shares and
Common Share equivalent .................................. 2,720,120 2,502,438
============ ============
See notes to consolidated financial statements.
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997,
THE YEAR ENDED DECEMBER 31, 1996,
AND FROM SEPTEMBER 27, 1994 (DATE OF INCEPTION) TO SEPTEMBER 30, 1997
Deficit
Series A Series B Accumulated
Preferred Stock Preferred Stock Common Stock Additional During the
----------------- ----------------- ----------------- Paid-in Development
Shares Amount Shares Amount Shares Amount Capital Stage
Issuance of TIC stock to TIC
shareholders in October 1994...... 1,500,000 $15,000
Net loss for the period from
September 27, 1995 (date of
inception) to December 31, 1994..... $ (59,108)
-------- -------- -------- -------- --------- -------- ---------- -------------
BALANCE, DECEMBER 31, 1994 1,500,000 15,000 (59,108)
Net loss for the year ended
December 31, 1995................ (179,771)
-------- -------- -------- -------- --------- -------- ---------- -------------
BALANCE, DECEMBER 31, 1995.......... 1,500,000 15,000 (238,879)
Net loss for the year ended
December 31, 1996................ (422,568)
-------- -------- -------- -------- --------- -------- ---------- -------------
BALANCE, DECEMBER 31, 1996.......... 1,500,000 15,000 (661,447)
Reverse acquisition of TIC:
Exchange of TIC common stock for WCCI
Series A Preferred Shares........... 2,397,732 $ 23,977 (1,500,000) (15,000) $ (8,977)
Addition of WCCI common stock....... 3,645,833 36,458 50,532
Exchange of CVV common stock for
WCCI common stock and Series B
Preferred Stock.................... 354,825 3,548 1,577,000 15,770 7,077,182
Issuance of WCCI common stock and
Series A Preferred shares
for cash......................... 526,331 5,264 800,305 8,003 9,986,734
Net loss for the nine month
Period edn September 30, 1997..... (1,075,804)
-------- --------- -------- -------- --------- -------- ---------- -------------
BALANCE, SEPTEMBER 30, 1997......... 2,924,063 $ 29,241 354,825 $ 3,548 6,023,138 $ 60,231 $17,105,471 $ (1,737,251)
======== ========= ======== ======== ========= ======== ========== =============
See notes to consolidated financial statements.
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
AND FROM SEPTEMBER 27, 1994 (DATE OF INCEPTION) TO SEPTEMBER 30, 1997
Nine Nine September 27,
Months Months 1994 (Date of
Ended Ended Inception) To
September 30, September 30, September 30,
1997 1996 1997
CASH FLOWS FROM DEVELOPMENT ACTIVITIES:
Net loss ............................................................. $ (1,075,804) $ (307,630) $ (1,737,251)
Adjustments to reconcile net loss to net cash used in
development activities:
Depreciation and amortization ...................................... 235,903 -- 235,903
Minority interest in loss of subsidiary ............................ (8,665) -- (8,665)
Change in assets and liabilities:
Prepaid license lease fees ....................................... (44,567) -- (44,567)
Due from affiliates .............................................. (40,127) -- (44,804)
Other assets ..................................................... 585,396 233,108 575,294
Accounts payable and other liabilities ........................... (459,807) -- (175,963)
Accrued license lease fees ....................................... 121,621 -- 121,621
Accrued consulting fees .......................................... 100,000 100,000
------------- ------------- -------------
Net cash generated (used) in development activities...... (586,050) (74,522) (978,432)
------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in affiliates .............................................. (1,648,455) -- (1,648,455)
Reverse acquisition of WCCI ........................................... 56,582 -- 56,582
Acquisition of CVV, net of cash acquired .............................. (200,000) (200,000)
------------- ------------- -------------
Net cash used in investing activities ................... (1,791,873) -- (1,791,873)
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock ............................... 1,800,686 -- 1,815,686
Proceeds from issuance of preferred stock ............................ 8,199,314 -- 8,199,314
Proceeds from related party borrowings ............................... 58,960 68,526 445,244
Payments on related parties borrowings ............................... (175,319) -- (175,319)
Payments on a promissory note ........................................ (2,253,217) (2,253,217)
Borrowings through a promissory note ................................. 2,985,600 2,985,600
------------- ------------- -------------
Net cash generated by financing activities .............. 10,616,024 68,526 11,017,308
------------- ------------- -------------
NET INCREASE IN CASH ................................................... 8,238,101 (5,996) 8,247,003
CASH AT BEGINNING OF PERIOD ............................................ 8,902 15,009 --
CASH AT END OF PERIOD .................................................. $ 8,247,003 $ 9,013 $ 8,247,003
============= ============= =============
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Acquisition of CVV:
Fair value of assets acquired, including intangible
contract rights and equipment........................................ $ 8,375,492
Fair value of liabilities assumed ................................... (878,992)
Common stock issued ................................................. (3,548,250)
Preferred stock issued .............................................. (3,548,250)
Future payments on acquisition ...................................... (200,000)
-------------
Net cash paid ........................................... $ (200,000)
=============
See notes to consolidated financial statements.
WIRELESS CABLE & COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(Unaudited)
1. Presentation
On January 31, 1997, Wireless Cable & Communications, Inc.
("WCCI") entered into a transaction with Telecom Investment
Corporation ("TIC"), pursuant to which TIC merged with a newly
formed wholly-owned subsidiary of WCCI, NewWCCI, Inc. (the
"Merged Companies" or the "Company"). The merger was effective
February 4, 1997. Under the terms of the merger, the former
shareholders of TIC received 2,397,732 shares of WCCI's newly
designated Series "A" Preferred Shares and legally TIC became a
wholly-owned subsidiary of WCCI. Also, the former option holders
of TIC received options to purchase 199,811 shares of WCCI's
Series "A" Preferred Shares. As a result of the merger, the
former shareholders and option holders of TIC held approximately
87.7% of the voting power of the Merged Companies on a common
share equivalent basis at the time of the merger. Generally
accepted accounting principles typically require that the company
whose shareholders retain the majority voting interest in the
combined business be treated as the acquiror for accounting
purposes. Accordingly, the merger was accounted for as a "reverse
acquisition" whereby TIC was deemed to have acquired an 87.7%
interest on a common share equivalent basis in WCCI using the
purchase method. However, WCCI remained the legal entity and the
Registrant for Securities and Exchange Commission reporting
purposes.
Consistent with the reverse acquisition accounting treatment, the
financial statements presented for the period from September 27,
1994 (date of TIC inception) through September 30, 1997 are the
financial statements of TIC and differ from the consolidated
financial statements of WCCI and its subsidiaries as previously
reported. The financial statements presented include the
operations of TIC for the period from September 27, 1994 (date of
TIC inception) through September 30, 1997 and for the full nine
months and of WCCI and its subsidiaries for the period February
4, 1997 (effective date of the acquisition) to September 30,
1997.
The consolidated financial statements also include the accounts
of WCCI and its subsidiaries, including Auckland Independent
Television Services, Ltd. ("AITS"), Transworld Wireless
Television, Inc. ("TWTI"), and Caracas Viva Vision T.V., S.A.
("CVV"). All significant intercompany accounts and transactions
have been eliminated in consolidation.
2. Net loss per common share and common share equivalent
Net loss per common share and common share equivalent is
calculated by dividing net loss by the weighted average number of
common shares and the common stock equivalent for the Series A
preferred stock outstanding during the period. Series A Preferred
shares are included in the calculation because of the ten-to-one
voting rights, dividend and liquidation attributes of the
preferred shares as compared to the common shareholders.
3. Use of Estimates in Preparing Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
4. Description of Purchase
On August 15, 1997, the Company completed the acquisition of
68.14% of CVV, a Venezuelan company which operates a
multi-channel television service (see Item 5(A) for a more
detailed description of the transaction). Based on the terms of
the acquisition, the transaction has been accounted for as a
purchase of CVV by the Company for financial reporting and
accounting purposes. Accordingly, the consolidated statements of
operation include CVV's results since the date of the
acquisition. The Company revalued the basis of CVV's acquired
assets and assumed liabilities to fair value at the date of
purchase. The intangible contract rights will be amortized over a
seven year period.
The allocation of the $7,496,500 purchase price for the purchase
of 68.14% of CVV was as follows:
Fair value of assets acquired............ $ 8,375,492
Fair value of liabilities assumed........ (878,992)
-------------
$ 7,496,500
=============
The following unaudited proforma information reflects the results
of the Company's operations as if the acquisition had occurred at
the beginning of the period presented adjusted for the effect of
recurring changes related to the acquisition, primarily the
amortization of intangible contract rights and a reduction of
depreciation expense due to the write-down to fair value of fixed
assets.
Nine Months Ended September
Pro forma results 1997 1996
------------- -------------
Revenue............. $ 218,595 $ --
Net loss............ $ (1,377,931) $ (307,630)
Net loss per common
share and common
share equivalent.... $ (0.46) $ (0.12)
These pro forma results have been prepared for comparative
purposes only and do not purport to be indicative of what
operating results would have been had the acquisition actually
taken place at the beginning of the periods presented nor do they
purport to represent results of future operations of the merged
companies.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
A. MATERIAL CHANGES IN FINANCIAL CONDITION
At September 30, 1997, the Company had current assets of
$8,466,416, compared to $23,680 at December 31, 1996, for an increase of
$8,442,736. Cash increased by $8,238,101 from $8,902 to $8,247,003 during the
nine month period, primarily as a result of the Company selling common stock and
Series A Preferred stock to a third party investor (see Item 5(B) for a more
detailed description of this transaction) (the "Petrolera Transaction") and the
receipt of $775,000 of proceeds from the sale of secured promissory notes (the
"Notes"), which are more particularly described in the Company's report on Form
10-KSB for the fiscal year ended December 31, 1996, which description is hereby
incorporated by reference. The increase in cash was offset by a decrease due to
the payment of outstanding accounts payable. Current liabilities as of September
30, 1997, were $1,481,905, compared to $438,557 as of December 31, 1996, for an
increase of $1,043,348, primarily as a result of assuming liabilities in a
transaction where the Company purchased 68.14% of a Venezuelan company which
operates a multi-channel video system (see Item 5(A) for a more detailed
description of the purchase) (the "CVV Transaction").
At September 30, 1997, total assets were $19,039,572, compared to
$23,680 as of December 31, 1996, for an increase of $19,015,892. The increase in
total assets was due primarily to the assets acquired in the CVV Transaction,
the proceeds from the sale of equity in the Petrolera Transaction and the sale
of additional Notes. Total liabilities increased $2,908,205 from $670,127 as of
December 31, 1996 to $3,578,332 as of September 30, 1997. The increase in total
liabilities is a result of the additional current liabilities, long-term debt
and minority interest in subsidiary associated with the liabilities assumed in
the CVV Transaction and from the additional sale of the Notes. Total
stockholders' equity increased by $16,107,687 from $(646,447) at December 31,
1996, to $15,461,240 at September 30, 1997.
B. MATERIAL CHANGES IN RESULTS OF OPERATIONS
The Company had revenues of $38,648 for the nine months ended
September 30, 1997 and generated $14,542 of gross profit on these revenues.
Prior to 1997, the Company did not have revenues. During the nine months ending
September 30, 1997, total operating expenses were $1,016,989, compared to
$291,310 for the same nine-month period a year earlier, for an increase of
$725,679. The increase was due primarily to administrative expenses incurred for
the CVV Transaction and the Petrolera Transaction, additional depreciation,
amortization and lease expense associated with the Company's license and
intangible rights and the expenses of the CVV operations.
During the nine months ending September 30, 1997, the Company had
a net loss of $1,075,804, compared to a net loss of $307,630 for the same period
a year earlier, for an increase of $768,174. The increase in net loss is
primarily a result of the addition of depreciation and amortization, lease and
interest expenses, increase in administrative costs from the CVV Transaction and
the Petrolera Transaction and the losses from the CVV operation. For the nine
months ended September 30, 1997, there was a net loss per common share and
common share equivalent of $(0.40), compared to a net loss per common share and
common share equivalent of $(0.12) for the same period a year earlier.
C. LIQUIDITY AND CAPITAL RESOURCES
Prior to September 30, 1997, the Company funded its operating
losses primarily through private equity and debt financings. As of September 30,
1997, the Company had cash totaling approximately $8.2 million. Cash in excess
of immediate requirements is invested in a manner which is intended to maximize
liquidity and return while minimizing investment risk.
During the nine month period ended September 30, 1997, the
Company generated $8,238,101 compared to a use of approximately $5,996 during
the same period a year earlier. This increase is cash is primarily due to the
proceeds from the Petrolera Transaction and the Notes.
Historically, the Company's operations have not been capital
intensive and, therefore, its investment in property, plant and equipment during
the periods presented has not been significant. The Company anticipates however,
that its investment in facilities and equipment will increase in the future, due
to the Company's desire to build-out wireless telecommunications systems in its
market area.
The Company expects to continue to incur substantial costs
associated with the build-out of the wireless telecommunications systems. The
Company anticipates that its existing cash balances will be sufficient to fund
the operations of the Company for approximately the next two years. However, the
Company may be required or elect to raise additional capital before that time.
The Company's actual capital requirements will depend on many factors, some of
which are outside the Company's control.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MATTERS SUBMITTED TO A VOTE OF THE COMPANY'S SHAREHOLDERS
None.
ITEM 5. OTHER INFORMATION
A. CVV Purchase.
On August 15, 1997, the Company purchased 68.14% of a
Venezuelan company which operates a multichannel video system in
Caracas, Venezuela. For a more detailed description of this
transaction, see the Company's report on Form 10-KSB which is
hereby incorporated by reference.
B. Equity Investment.
Effective August 1, 1997, the Company entered into a
Stock Purchase Agreement with Petrolera Argentina San Jorge, S.A.
("Petrolera"), an Argentinean sociedad anonima (the "Petrolera
Agreement"). A copy of the Petrolera Agreement is attached to this
report as an exhibit. Under the terms of the Petrolera Agreement,
Petrolera acquired 800,305 common shares and 526,331 Series A
preferred shares from the Company in exchange for an investment of
US $10 million. Of the purchase price, US $7.9 million was paid in
cash, and the balance ($2.1 million) was paid through the
contribution by Petrolera of the $2.1 million promissory note
delivered to it by the Company on August 4, 1997. The terms of
that promissory note are more particularly described in the
Company's report on Form 10-QSB for the period ended June 30,
1997.
Under the terms of the Petrolera Agreement, the
Company made certain affirmative covenants, including an agreement
that it will not take certain actions unless those actions are
approved by two-thirds of the Company's board of directors. These
actions include certain future issuances of securities, increases
in benefits and other remunerations payable to the Company's board
of directors and executive officers, the incurrence of certain
indebtedness, or the consummation of certain other transactions,
including mergers, consolidations or liquidations of the Company,
or its sale of all or substantially all of its assets or
properties. In addition, the Company granted Petrolera certain
preemptive rights to acquire additional shares of the Company in
the future and agreed to issue future equity securities to
Petrolera in the event the Company acquires equity investments
from parties specified in the Stock Purchase Agreement.
ITEM 6. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
A. EXHIBITS.
1. Stock Purchase Agreement among the Company and Petrolera
Argentina San Jorge, S.A. dated August 1, 1997.
B. REPORTS ON FORM 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WIRELESS CABLE & COMMUNICATIONS, INC.
Date: August 19, 1997 BY /s/ ANTHONY SANSONE
Anthony Sansone
Chief Accounting Officer
EXHIBIT INDEX
Sequential
Exhibit Page
Number Exhibit Description Number
1 Stock Purchase Agreement --