SECURITIES
AND EXCHANGE COMMISSION
|
Washington,
D.C. 20549
|
Post-Effective
Amendment #2
to
FORM
S-1
|
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
|
NextWave
Wireless Inc.
|
(Exact
name of registrant as specified in its charter)
|
Delaware
|
3663
|
20-5361360
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
Identification
No.)
|
12670
High Bluff Drive
San
Diego, California 92130
(858)
480-3100
(Address,
including zip code, and telephone number, including area code, of
registrant’s principal executive offices)
|
Frank
A. Cassou
Executive
Vice President - Corporate Development and Chief Legal
Counsel
NextWave
Wireless Inc.
12670
High Bluff Drive
San
Diego, California 92130
(858)
480-3100
(Name,
address, including zip code, and telephone number, including area
code, of
agent for service)
|
Copies
to:
Marita
Makinen, Esq.
Weil,
Gotshal & Manges LLP
767
Fifth Avenue
New
York, New York 10153
(212)
310-8000
|
Page
|
||
|
||
PROSPECTUS
SUMMARY
|
1
|
|
THE
OFFERING
|
6
|
|
RISK
FACTORS
|
8
|
|
SPECIAL
NOTE REGARDING FORWARD LOOKING STATEMENTS
|
23
|
|
USE
OF PROCEEDS
|
24
|
|
DIVIDEND
POLICY
|
24
|
|
CAPITALIZATION
|
25
|
|
SELECTED
FINANCIAL DATA
|
26
|
|
EXPLANATORY
NOTE
|
27
|
|
INDUSTRY
AND MARKET DATA
|
28
|
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
29
|
|
OVERVIEW
|
29
|
|
QUALITATIVE
AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS
|
47 | |
BUSINESS
|
48 | |
MANAGEMENT
|
79
|
|
EXECUTIVE
COMPENSATION DISCUSSION AND ANALYSIS
|
86
|
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
97
|
|
PRINCIPAL
STOCKHOLDERS
|
98
|
|
SELLING
STOCKHOLDERS
|
101
|
|
DESCRIPTION
OF CAPITAL STOCK
|
102
|
|
PLAN
OF DISTRIBUTION
|
105
|
|
LEGAL
MATTERS
|
107
|
|
EXPERTS
|
107
|
|
WHERE
YOU CAN FIND MORE INFORMATION
|
107
|
|
INCORPORATION BY REFERENCE | 107 | |
GLOSSARY
OF SELECTED WIRELESS TERMINOLOGY
|
108
|
|
FINANCIAL
STATEMENTS AND EXHIBITS
|
F-1 |
·
|
Improve
the performance and economics of WiMAX and Wi-Fi networks and enhance
their ability to cost-effectively handle the large volume of network
traffic associated with bandwidth-intensive multimedia applications
such
as mobile television, video-on-demand, streaming hi-fidelity audio,
two-way video telephony and real-time
gaming;
|
·
|
Improve
the performance, power consumption and cost characteristics of mobile
broadband enabled subscriber
terminals;
|
·
|
Improve
the degree of interoperability and integration between Wi-Fi and
WiMAX
systems for both Local Area Networks (LANs) and Wide Area Networks
(WANs);
|
·
|
Improve
the efficiency, cost and performance of video and audio broadcast
applications over WiMAX networks;
and
|
·
|
Improve
service provider economics and roaming capabilities by enabling WiMAX
networks and WiMAX enabled devices to seamlessly operate across multiple
frequency bands including the use of certain unlicensed
bands.
|
a)
|
the
acquisition of PacketVideo Corporation, a global provider of
device-embedded multimedia software for mobile phones, for $46.7
million in July 2005;
|
b)
|
the
acquisition of CYGNUS Communications, a developer of WiMAX semiconductor
solutions, for $9.8 million in February 2006;
and
|
c)
|
the
acquisition of GO Networks, a global provider of cost-effective
carrier-class, mobile Wi-Fi network systems to commercial and municipal
service providers, for $13.2 million, plus up to $25.7 million of
contingent consideration, in January 2007.
|
Common
stock outstanding prior to this offering, excluding the shares underlying
the unexercised warrants(1)
|
|
84,470,013
shares
|
|
|
|
Common
stock being offered for resale to the public by the selling
stockholders
|
|
4,109,470
shares
|
|
|
|
Common
stock to be outstanding after this offering
|
|
86,406,003
shares
|
|
|
|
Total
proceeds raised by offering
|
|
We
will not receive any proceeds from the resale of our common stock
pursuant
to this offering. We may receive proceeds upon the exercise of the
warrants to the extent such warrants are exercised for
cash.
|
|
|
|
Use
of proceeds
|
|
Any
proceeds we may receive will be used to meet our working capital
needs and
general corporate purposes.
|
|
|
|
Nasdaq
Global Market symbol
|
WAVE
|
|
Risk
factors
|
|
See
“Risk Factors” and the other information included in this prospectus for a
discussion of risk factors you should carefully consider before deciding
to invest in our common stock.
|
(1) |
The
number of shares of our common stock outstanding prior to this
offering is based on the number of shares of our common stock outstanding
as of March 28, 2007, and includes 2,173,480 shares previously issued
upon
the exercise of the warrants. This number does not include, as of
March
28, 2007:
|
·
|
14,266,486 shares
of our common stock issuable upon exercise of options and warrants
outstanding, at a weighted average exercise price of $6.17 per
share;
|
·
|
2,663,481 shares
of our common stock are reserved for issuance under our NextWave
Wireless
Inc. 2005 Stock Incentive Plan, NextWave Wireless
Inc. 2007 Stock Incentive Plan, the CYGNUS Communications, Inc. 2004
Stock Option Plan and the PacketVideo Corporation 2005 Equity Incentive
Plan plus
up to $5.0 million of stock may be issued under the GO Networks Employee
Stock Bonus Plan upon the achievement of specified
milestones;
|
·
|
500,000 shares of our common stock issuable upon exercise of warrants at an exercise price of $6.00 per share, plus an additional 1,935,990 shares of our common stock issuable upon the exercise of warrants at an exercise price of $0.01 per share; and |
·
|
32,126,696
shares of our common stock issuable upon the conversion of our
Series A
Preferred Stock.
|
(in
thousands, except per share data)
|
Year
Ended
December
30, 2006 (1)
(2)
|
Inception
(April
13, 2005) to December 31, 2005 (3)
|
|||||
Consolidated
Statement of Operations Data:
|
|
|
|||||
Revenues
|
$
|
24,284
|
$
|
4,144
|
|||
Loss
from operations
|
(98,526
|
)
|
(55,687
|
)
|
|||
Net
loss
|
(105,020
|
)
|
(45,952
|
)
|
|||
Basic
and diluted net loss per common share
|
$
|
(1.28
|
)
|
$
|
—
|
(4)
|
|
Consolidated
Balance Sheet Data:
|
|||||||
Cash,
cash equivalents and short-term investments
|
$
|
200,685
|
$
|
459,231
|
|||
Restricted
cash (5)
|
75,000
|
—
|
|||||
Wireless
spectrum licenses, net
|
527,998
|
(6)
|
45,467
|
||||
Goodwill
|
32,184
|
24,782
|
|||||
Other
intangible assets, net
|
18,570
|
18,100
|
|||||
Total
assets
|
897,079
|
579,774
|
|||||
Long-term
obligations, net of current portion (5)
|
298,030
|
14,934
|
|||||
Convertible
preferred stock (7)
|
—
|
—
|
|||||
Total
shareholders’ equity (1)
|
469,178
|
—
|
|||||
Total
members’ equity (1)
|
—
|
539,364
|
(1)
|
On
November 13, 2006, NextWave completed a corporate conversion merger,
whereby a wholly-owned subsidiary of NextWave Wireless Inc. was merged
with and into NextWave Wireless LLC (“Corporate Conversion Merger”). As a
result of the merger, NextWave Wireless LLC became a wholly-owned
subsidiary of NextWave Wireless Inc. Under the terms of the merger
agreement, NextWave Wireless Inc. issued shares of its common stock
to
holders of NextWave Wireless LLC’s membership units in exchange for all of
the outstanding membership units of NextWave Wireless LLC, with NextWave
Wireless LLC unit holders receiving one share of NextWave Wireless
Inc.
common stock for each six membership units of NextWave Wireless LLC
that
they held.
|
(2)
|
Effective
January 1, 2006, we changed our fiscal year end and quarterly reporting
periods from quarterly calendar periods ending on December 31 to
a 52-53
week fiscal year ending on the Saturday nearest to December 31 of
the
current calendar year or the following calendar year.
|
(3)
|
On
April 13, 2005, pursuant to the plan of reorganization of the NextWave
Telecom group, our equity securities were distributed to the NTI
equity
holders and we were reconstituted as a company with a new capitalization
and a new wireless technology business plan. A summary of the assets
and
liabilities contributed to us on April 13, 2005 is provided in the
Notes
to Consolidated Financial Statements included elsewhere in this
registration statement. For more information on our emergence as
a new
wireless technology company, see “Business-Our History.”
|
(4)
|
Loss
per share information is not presented for the period from inception
(April 13, 2005) to December 31, 2005 as it would not be meaningful
due to
the Corporate Conversion Merger.
|
(5)
|
On
July 17, 2006, NextWave issued 7% Senior Secured Notes due 2010 (the
“Notes”) in the aggregate principal amount of $350.0 million. The Notes
were issued at a fifteen percent (15%) original issue discount, resulting
in gross proceeds of $297.5 million. NextWave is required to maintain
a
minimum balance of $75.0 million in cash or cash equivalents from
funds
other than the proceeds of the Notes in a restricted collateral account
at
all times while the Notes remain outstanding.
|
(6)
|
The
increase in wireless spectrum licenses, net, during 2006, includes
our
July 2006 acquisition of WCS Wireless, Inc. which resulted in the
addition
of $236.4 million of wireless spectrum licenses. The value assigned
to the
wireless spectrum includes the cash purchase price of $160.5 million,
legal costs of $0.1 million, and $75.8 million in associated deferred
tax.
We also acquired other licensed spectrum rights for $245.0 million
in cash
and $4.0 million through the assumption of lease liabilities. These
additions were reduced by amortization during 2006 of $2.9
million.
|
(7)
|
On
March 28, 2007, we issued and sold 355,000 shares of our Series A
Senior
Convertible Preferred Stock (the “Series A Preferred Stock”) at a price of
$1,000 per share. We received $351.0 million in net proceeds from
the sale
of the Series A Preferred Stock. The Series A Preferred Stock has a
mandatory redemption on March 28,
2017.
|
|
·
|
the
inability to control the amount and timing of resources that our
potential
service providers devote to their network deployment
activities;
|
|
·
|
the
possibility that potential service provider customers could move
forward
and deploy networks without the assistance of NSG; and
|
|
·
|
the
possibility that service provider customers may experience financial
or
technical difficulties.
|
|
·
|
a
preference for embedded software licensed by one of PacketVideo’s
competitors;
|
|
·
|
competing
applications;
|
|
·
|
a
decision to discontinue embedding our PacketVideo software, or mobile
broadband embedded software altogether;
|
|
·
|
a
carrier’s decision not to provide mobile broadband applications or content
thereby reducing the need for PacketVideo’s applications;
|
|
·
|
a
carrier’s network encountering technical problems that disrupt the
delivery of content for our applications;
|
|
·
|
a
manufacturer’s decision to increase the cost of mobile phones and devices
embedded with PacketVideo’s software;
|
|
·
|
a
manufacturer’s decision to reduce the price it is willing to pay for
embedded software such as PacketVideo’s; and
|
|
·
|
consolidation
among manufacturers or wireless carriers or the emergence of new
manufacturers or wireless carriers that do not license PacketVideo
software.
|
|
·
|
a
potential lack of capacity to meet demand;
|
|
·
|
reduced
control over quality and delivery schedules;
|
|
·
|
risks
of inadequate manufacturing yield or excessive costs;
|
|
·
|
difficulties
in selecting and integrating subcontractors;
|
|
·
|
limited
warranties in products supplied to us;
|
|
·
|
price
increases; and
|
|
·
|
potential
misappropriation of our intellectual property.
|
·
|
significant
research and development costs;
|
|
·
|
research
and development issues and delays;
|
|
·
|
the
financial results of our PacketVideo subsidiary;
|
|
·
|
spectrum
acquisition costs;
|
|
·
|
manufacturing
issues and delays;
|
|
·
|
fluctuating
market demand for WiMAX services;
|
|
·
|
impact
of competitive products, services and technologies;
|
|
·
|
changes
in the regulatory environment;
|
|
·
|
the
cost and availability of network infrastructure; and
|
|
·
|
general
economic conditions.
|
|
·
|
announcements
concerning us or our competitors, including the selection of mobile
WiMAX
wireless communications technology by telecommunications providers
and the
timing of the roll-out of those systems;
|
|
·
|
receipt
of substantial orders or order cancellations for integrated circuits
and
system software products for mobile WiMAX networks by us or our
competitors;
|
|
·
|
quality
deficiencies in technologies, products or services;
|
|
·
|
announcements
regarding financial developments or technological
innovations;
|
|
·
|
our
ability to remediate the material weakness in internal controls over
financial reporting identified in connection with our restatement
of
revenues of our PacketVideo subsidiary;
|
|
·
|
international
developments, such as technology mandates, political developments
or
changes in economic policies;
|
|
·
|
lack
of capital to invest in WiMAX
networks;
|
|
·
|
new
commercial products;
|
|
·
|
changes
in recommendations of securities analysts;
|
|
·
|
government
regulations, including FCC regulations governing spectrum
licenses;
|
|
·
|
earnings
announcements;
|
|
·
|
proprietary
rights or product or patent litigation;
|
|
·
|
strategic
transactions, such as acquisitions and divestitures; or
|
|
·
|
rumors
or allegations regarding our financial disclosures or
practices.
|
·
|
our
directors serve staggered, three-year terms and accordingly, pursuant
to
Delaware law, can only be removed with cause;
|
|
·
|
no
action can be taken by stockholders except at an annual or special
meeting
of the stockholders called in accordance with our bylaws, and stockholders
may not act by written consent;
|
|
·
|
our
board of directors will be expressly authorized to make, alter or
repeal
our bylaws, and our stockholders will be able to make, alter or repeal
our
bylaws by a vote of 66-2/3% of the issued and outstanding voting
shares;
|
|
·
|
any
vacancies on the board of directors would be filled by a majority
vote of
the board;
|
|
·
|
our
board of directors will be authorized to issue preferred stock without
stockholder approval; and
|
|
·
|
we
will indemnify officers and directors against losses that they may
incur
in investigations and legal proceedings resulting from their services
to
us, which may include services in connection with takeover defense
measures.
|
·
|
our
limited relevant operating history;
|
|
·
|
our
ability to remediate the material weakness in internal controls over
financial reporting identified in connection with our restatement
of
revenues of our PacketVideo subsidiary;
|
|
·
|
our
ability to manage growth or integrate recent or future
acquisitions;
|
|
·
|
competition
from alternative wireless technologies and other technology
companies;
|
|
·
|
our
ability to develop and commercialize mobile broadband products and
technologies;
|
|
·
|
the
ability of vendors to manufacture commercial WiMAX equipment and
devices;
|
|
·
|
consumer
acceptance of WiMAX technology;
|
|
·
|
PacketVideo’s
ability to grow its resources to support larger numbers of device
manufacturers and wireless carriers;
|
|
·
|
changes
in government regulations;
|
|
·
|
changes
in capital requirements;
|
|
·
|
any
loss of our key executive officers; and
|
|
·
|
the
other risks described under “Risk Factors.”
|
(in
thousands, except par value data)
|
At
December 30, 2006
|
|||
Cash
and cash equivalents
|
$
|
32,980
|
||
Long-term
obligations, net of current portion
|
$
|
298,030
|
||
Convertible
preferred stock (1)
|
—
|
|||
Stockholders’
Equity:
|
||||
Preferred
stock, $0.001 par value, 25,000 shares authorized; no shares issued
and
outstanding, actual (1)
|
—
|
|||
Common
stock, $0.001 par value, 400,000 shares authorized; 83,716 and
85,715 issued and outstanding, respectively
|
84
|
|||
Additional
paid-in capital
|
620,430
|
|||
Common
stock in treasury, at cost, 1 share
|
(7
|
)
|
||
Accumulated
other comprehensive loss
|
(357
|
)
|
||
Accumulated
deficit
|
(150,972
|
)
|
||
Total
stockholders’ equity
|
469,178
|
|||
Total
capitalization
|
$
|
767,208
|
On
March 28, 2007, we issued and sold 355,000 shares of our Series A
Senior
Convertible Preferred Stock (the “Series A Preferred Stock”) at a price of
$1,000 per share. We received $351.0 million in net proceeds from
the sale
of the Series A Preferred Stock. The Series A Preferred Stock has
a
mandatory redemption on March 28, 2017.
|
(in
thousands, except per share data)
|
Year
Ended
December
30, 2006 (1)
(2)
|
Inception
(April
13, 2005) to December 31, 2005 (3)
|
|||||
Consolidated
Statement of Operations Data:
|
|
|
|||||
Revenues
|
$
|
24,284
|
$
|
4,144
|
|||
Loss
from operations
|
(98,526
|
)
|
(55,687
|
)
|
|||
Net
loss
|
(105,020
|
)
|
(45,952
|
)
|
|||
Basic
and diluted net loss per common share
|
$
|
(1.28
|
)
|
$
|
—
|
(4)
|
|
Consolidated
Balance Sheet Data:
|
|||||||
Cash,
cash equivalents and short-term investments
|
$
|
200,685
|
$
|
459,231
|
|||
Restricted
cash (5)
|
75,000
|
—
|
|||||
Wireless
spectrum licenses, net
|
527,998
|
(6)
|
45,467
|
||||
Goodwill
|
32,184
|
24,782
|
|||||
Other
intangible assets, net
|
18,570
|
18,100
|
|||||
Total
assets
|
897,079
|
579,774
|
|||||
Long-term
obligations, net of current portion (5)
|
298,030
|
14,934
|
|||||
Convertible
preferred stock (7)
|
—
|
—
|
|||||
Total
shareholders’ equity (1)
|
469,178
|
—
|
|||||
Total
members’ equity (1)
|
—
|
539,364
|
(1)
|
On
November 13, 2006, NextWave completed a corporate conversion merger,
whereby a wholly-owned subsidiary of NextWave Wireless Inc. was merged
with and into NextWave Wireless LLC (“Corporate Conversion Merger”). As a
result of the merger, NextWave Wireless LLC became a wholly-owned
subsidiary of NextWave Wireless Inc. Under the terms of the merger
agreement, NextWave Wireless Inc. issued shares of its common stock
to
holders of NextWave Wireless LLC’s membership units in exchange for all of
the outstanding membership units of NextWave Wireless LLC, with NextWave
Wireless LLC unitholders receiving one share of NextWave Wireless
Inc.
common stock for each six membership units of NextWave Wireless LLC
that
they held.
|
(2)
|
Effective
January 1, 2006, we changed our fiscal year end and quarterly reporting
periods from quarterly calendar periods ending on December 31 to
a 52-53
week fiscal year ending on the Saturday nearest to December 31 of
the
current calendar year or the following calendar year.
|
(3)
|
On
April 13, 2005, pursuant to the plan of reorganization of the NextWave
Telecom group, our equity securities were distributed to the NTI
equity
holders and we were reconstituted as a company with a new capitalization
and a new wireless technology business plan. A summary of the assets
and
liabilities contributed to us on April 13, 2005 is provided in the
Notes
to Consolidated Financial Statements included elsewhere in this
registration statement. For more information on our emergence as
a new
wireless technology company, see “Business-Our History.”
|
(4)
|
Loss
per share information is not presented for the period from inception
(April 13, 2005) to December 31, 2005 as it would not be meaningful
due to
the Corporate Conversion Merger.
|
(5)
|
On
July 17, 2006, NextWave issued 7% Senior Secured Notes due 2010 (the
“Notes”) in the aggregate principal amount of $350.0 million. The Notes
were issued at a fifteen percent (15%) original issue discount, resulting
in gross proceeds of $297.5 million. NextWave is required to maintain
a
minimum balance of $75.0 million in cash or cash equivalents from
funds
other than the proceeds of the Notes in a restricted collateral account
at
all times while the Notes remain outstanding.
|
(6)
|
The
increase in wireless spectrum licenses, net, during 2006, includes
our
July 2006 acquisition of WCS Wireless, Inc. which resulted in the
addition
of $236.4 million of wireless spectrum licenses. The value assigned
to the
wireless spectrum includes the cash purchase price of $160.5 million,
legal costs of $0.1 million, and $75.8 million in associated deferred
tax.
We also acquired other licensed spectrum rights for $245.0 million
in cash
and $4.0 million through the assumption of lease liabilities. These
additions were reduced by amortization during 2006 of $2.9
million.
|
On
March 28, 2007, we issued and sold 355,000 shares of our Series A
Senior
Convertible Preferred Stock (the “Series A Preferred Stock”) at a price of
$1,000 per share. We received $351.0 million in net proceeds from
the sale
of the Series A Preferred Stock. The
Series A Preferred Stock has a mandatory redemption on March 28,
2017.
|
(in
millions)
|
Year
Ended December 30,
2006
|
Inception
(April
13, 2005)
to
December 31,
2005
|
Increase
(Decrease)
|
|||||||
Cost
of revenues
|
$
|
12.1
|
$
|
4.6
|
$
|
7.5
|
||||
Engineering,
research and development
|
52.8
|
17.3
|
35.5
|
|||||||
General
and administrative
|
51.5
|
15.3
|
36.2
|
|||||||
Sales
and marketing
|
10.0
|
3.0
|
7.0
|
|||||||
Business
realignment costs
|
(7.1
|
)
|
13.0
|
(20.1
|
)
|
|||||
Purchased
in-process research and development
|
3.5
|
6.6
|
(3.1
|
)
|
||||||
Total
operating expenses
|
$
|
122.8
|
$
|
59.8
|
$
|
63.0
|
(in
millions)
|
December
30,
2006
|
Decrease
for the Year Ended December 30, 2006
|
December
31, 2005
|
Increase
(Decrease) for the Period from Inception (April 13, 2005) to December
31,
2005
|
Inception
(April
13, 2005)
|
|||||||||||
Working
capital
|
$
|
166.3
|
$
|
(290.1
|
)
|
$
|
456.4
|
$
|
(96.3
|
)
|
$
|
552.7
|
||||
Cash
and cash equivalents
|
33.0
|
(60.6
|
)
|
93.6
|
(461.5
|
)
|
555.1
|
|||||||||
Short-term
investments
|
167.7
|
(197.9
|
)
|
365.6
|
365.6
|
—
|
||||||||||
Total
cash, cash equivalents and investments
|
$
|
200.7
|
$
|
(258.5
|
)
|
$
|
459.2
|
$
|
(95.9
|
)
|
$
|
555.1
|
(in
millions)
|
Year
Ended
December
30, 2006
|
Inception
(April
13, 2005)
to
December
31, 2005
|
|||||
Beginning
cash, cash equivalents and investments
|
$
|
459.2
|
$
|
555.1
|
|||
Cash
paid for acquisition of wireless spectrum licenses
and
subsequent lease obligations
|
(402.7
|
)
|
(18.8
|
)
|
|||
Cash
paid for business combinations, net of cash
acquired
|
(8.4
|
)
|
(51.1
|
)
|
|||
Proceeds
from long-term obligations, net of costs to
issue
|
295.0
|
—
|
|||||
Net
payments to and changes in restricted investment account securing
long-term obligations
|
(75.0
|
)
|
—
|
||||
Cash
used by operating activities
|
(56.3
|
)
|
(18.7
|
)
|
|||
Cash
paid for property and equipment
|
(13.0
|
)
|
(7.3
|
)
|
|||
Other,
net
|
1.9
|
—
|
|||||
Ending
cash, cash equivalents and investments
|
$
|
200.7
|
$
|
459.2
|
·
|
We
plan to fund our wireless broadband technology development activities
with
our unrestricted cash and investments and net proceeds from the sale
of
preferred stock until such point that we begin sales of our chipsets
and
network component products and enter into licensing arrangements
for our
wireless broadband technologies. Our wireless broadband products
and
technologies are in the early stages of development and will require
a
substantial investment before they may become commercially viable.
Our
research and development expenses for our wireless broadband products
and
technologies, including our chipsets were $41.4 million during 2006.
Largely due to our planned increase in engineering personnel, we
expect
our wireless broadband technology development expenses to increase
by
approximately 69% during 2007. Because we are adopting a strategy
of
licensing our technology and selling chipsets to third party equipment
manufacturers, we do not anticipate that the license and sale of
our
products and technologies will require significant additional
capital.
|
·
|
Our
network services business is not expected to require significant
additional capital expenditures beyond what is necessary to complete
our
Henderson, Nevada office building and test site. With the exception
of our
test site in Henderson, Nevada, we do not intend to build-out wireless
networks, but will provide our technologies, services and spectrum
to
service providers who are engaged in these activities. In 2007, we
expect
to expend $4.4 million on the deployment of our test site in Henderson,
Nevada. If that test site is successful, we anticipate that we will
seek
service providers to expand the trial network to cover most of the
Las
Vegas metropolitan region.
|
·
|
GO
Networks, Inc., acquired in February 2007, develops high-performance
mobile Wi-Fi systems for commercial and municipal service providers.
GO
Networks’ Mobile Broadband Wireless system combines xRF TM smart-antenna
technology with a cellular-mesh Wi-FI architecture to provide commercial
and municipal service providers with a cost-effective solution to
support
bandwidth-intensive mobile broadband services such as video streaming,
web
browsing, real-time gaming, video telephony and other types of multimedia
applications.
|
Three
Months Ended
|
||||||||||||||||||||||||||||
April
1, 2006
|
July
1, 2006
|
September
30, 2006
|
||||||||||||||||||||||||||
(in
thousands)
|
As
Reported
|
Adjustments
|
As
Restated
|
As
Reported
|
Adjustments
|
As
Restated
|
As
Reported
|
Adjustments
|
As
Restated
|
|||||||||||||||||||
Consolidated
Statements of Operations
|
||||||||||||||||||||||||||||
Revenues
|
$
|
5,673
|
$
|
(1,768
|
)
|
$
|
3,905
|
$
|
8,331
|
$
|
(2,038
|
)
|
$
|
6,293
|
$
|
8,051
|
$
|
(1,381
|
)
|
$
|
6,670
|
|||||||
Operating
expenses:
|
||||||||||||||||||||||||||||
Cost
of revenues
|
2,686
|
(879
|
)
|
1,807
|
3,198
|
(560
|
)
|
2,638
|
4,568
|
(1,062
|
)
|
3,506
|
||||||||||||||||
Engineering,
research and development
|
10,233
|
856
|
11,089
|
12,601
|
693
|
13,294
|
11,455
|
179
|
11,634
|
|||||||||||||||||||
General
and administrative
|
8,492
|
—
|
8,492
|
12,140
|
—
|
12,140
|
14,896
|
—
|
14,896
|
|||||||||||||||||||
Sales
and marketing
|
1,613
|
—
|
1,613
|
2,539
|
—
|
2,539
|
2,992
|
—
|
2,992
|
|||||||||||||||||||
Purchased
in-process research and
development
|
—
|
—
|
—
|
1,648
|
—
|
1,648
|
—
|
—
|
—
|
|||||||||||||||||||
Total
operating expenses
|
23,024
|
(23
|
)
|
23,001
|
32,126
|
133
|
32,259
|
33,911
|
(883
|
)
|
33,028
|
|||||||||||||||||
Loss
from operations
|
(17,351
|
)
|
(1,745
|
)
|
(19,096
|
)
|
(23,795
|
)
|
(2,171
|
)
|
(25,966
|
)
|
(25,860
|
)
|
(498
|
)
|
(26,358
|
)
|
||||||||||
Other
income (expense)
|
||||||||||||||||||||||||||||
Interest
income
|
3,187
|
—
|
3,187
|
3,197
|
—
|
3,197
|
3,419
|
—
|
3,419
|
|||||||||||||||||||
Interest
expense
|
(308
|
)
|
—
|
(308
|
)
|
(366
|
)
|
—
|
(366
|
)
|
(9,010
|
)
|
—
|
(9,010
|
)
|
|||||||||||||
Other
income and expense, net
|
(92
|
)
|
—
|
(92
|
)
|
216
|
—
|
216
|
(26
|
)
|
—
|
(26
|
)
|
|||||||||||||||
Total
other income (expense), net
|
2,787
|
—
|
2,787
|
3,047
|
—
|
3,047
|
(5,617
|
)
|
—
|
(5,617
|
)
|
|||||||||||||||||
Loss
before provision for income taxes and minority interest
|
(14,564
|
)
|
(1,745
|
)
|
(16,309
|
)
|
(20,748
|
)
|
(2,171
|
)
|
(22,919
|
)
|
(31,477
|
)
|
(498
|
)
|
(31,975
|
)
|
||||||||||
Income
tax benefit (provision)
|
209
|
—
|
209
|
—
|
—
|
—
|
(93
|
)
|
—
|
(93
|
)
|
|||||||||||||||||
Minority
interest
|
657
|
—
|
657
|
214
|
—
|
214
|
265
|
—
|
265
|
|||||||||||||||||||
Net
loss
|
$
|
(13,698
|
)
|
$
|
(1,745
|
)
|
$
|
(15,443
|
)
|
$
|
(20,534
|
)
|
$
|
(2,171
|
)
|
$
|
(22,705
|
)
|
$
|
(31,305
|
)
|
$
|
(498
|
)
|
$
|
(31,803
|
)
|
April
1, 2006
|
July
1, 2006
|
September
30, 2006
|
||||||||||||||||||||||||||
(in
thousands)
|
As
Reported
|
Adjustments
|
As
Restated
|
As
Reported
|
Adjustments
|
As
Restated
|
As
Reported
|
Adjustments
|
As
Restated
|
|||||||||||||||||||
Consolidated
Balance Sheets
|
||||||||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||||||||||
Cash
and cash equivalents
|
$
|
99,871
|
$
|
—
|
$
|
99,871
|
$
|
30,643
|
$
|
—
|
$
|
30,643
|
$
|
25,371
|
$
|
—
|
$
|
25,371
|
||||||||||
Short-term
investments
|
266,716
|
—
|
266,716
|
309,794
|
—
|
309,794
|
196,801
|
—
|
196,801
|
|||||||||||||||||||
Accounts
receivable, net
|
2,235
|
—
|
2,235
|
5,206
|
—
|
5,206
|
5,728
|
—
|
5,728
|
|||||||||||||||||||
Deposits
for wireless spectrum bids
|
—
|
—
|
—
|
—
|
—
|
—
|
142,866
|
—
|
142,866
|
|||||||||||||||||||
Deferred
contract costs
|
1,456
|
21
|
1,477
|
2,105
|
(110
|
)
|
1,995
|
2,242
|
772
|
3,014
|
||||||||||||||||||
Prepaid
expenses and other current assets
|
5,745
|
—
|
5,745
|
8,518
|
—
|
8,518
|
7,252
|
—
|
7,252
|
|||||||||||||||||||
Total
current assets
|
376,023
|
21
|
376,044
|
356,266
|
(110
|
)
|
356,156
|
380,260
|
772
|
381,032
|
||||||||||||||||||
Restricted
cash
|
—
|
—
|
—
|
—
|
—
|
—
|
76,792
|
—
|
76,792
|
|||||||||||||||||||
Wireless
spectrum licenses, net
|
130,889
|
—
|
130,889
|
130,374
|
—
|
130,374
|
374,137
|
—
|
374,137
|
|||||||||||||||||||
Goodwill
|
27,001
|
—
|
27,001
|
32,936
|
—
|
32,936
|
32,829
|
—
|
32,829
|
|||||||||||||||||||
Other
intangible assets, net
|
17,449
|
—
|
17,449
|
16,846
|
—
|
16,846
|
16,306
|
—
|
16,306
|
|||||||||||||||||||
Property
and equipment, net
|
15,040
|
—
|
15,040
|
14,632
|
—
|
14,632
|
16,796
|
—
|
16,796
|
|||||||||||||||||||
Prepaid
expenses and other noncurrent assets
|
7,708
|
—
|
7,708
|
6,761
|
—
|
6,761
|
8,279
|
—
|
8,279
|
|||||||||||||||||||
Total
assets
|
$
|
574,110
|
$
|
21
|
$
|
574,131
|
$
|
557,815
|
$
|
(110
|
)
|
$
|
557,705
|
$
|
905,399
|
$
|
772
|
$
|
906,171
|
|||||||||
LIABILITIES
AND MEMBERS’ EQUITY
|
||||||||||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||||||
Accounts
payable
|
$
|
4,488
|
$
|
—
|
$
|
4,488
|
$
|
2,274
|
$
|
—
|
$
|
2,274
|
$
|
2,369
|
$
|
—
|
$
|
2,369
|
||||||||||
Accrued
expenses
|
7,058
|
—
|
7,058
|
12,104
|
—
|
12,104
|
19,465
|
—
|
19,465
|
|||||||||||||||||||
Current
portion of long-term obligations
|
2,575
|
—
|
2,575
|
2,822
|
—
|
2,822
|
2,681
|
—
|
2,681
|
|||||||||||||||||||
Deferred
revenue
|
4,021
|
1,766
|
5,787
|
3,100
|
3,806
|
6,906
|
2,867
|
5,186
|
8,053
|
|||||||||||||||||||
Current
tax liability
|
—
|
—
|
—
|
—
|
—
|
—
|
40
|
—
|
40
|
|||||||||||||||||||
Other
current liabilities and deferred credits
|
755
|
—
|
755
|
1,009
|
—
|
1,009
|
961
|
—
|
961
|
|||||||||||||||||||
Total
current liabilities
|
18,897
|
1,766
|
20,663
|
21,309
|
3,806
|
25,115
|
28,383
|
5,186
|
33,569
|
|||||||||||||||||||
Deferred
income tax liabilities
|
—
|
—
|
—
|
—
|
—
|
—
|
67,673
|
—
|
67,673
|
|||||||||||||||||||
Long-term
deferred credits and reserves
|
8,203
|
—
|
8,203
|
8.575
|
—
|
8,575
|
8,243
|
—
|
8,243
|
|||||||||||||||||||
Long-term
obligations
|
15,311
|
—
|
15,311
|
15,661
|
—
|
15,661
|
292,310
|
—
|
292,310
|
|||||||||||||||||||
Minority
interest in subsidiary
|
889
|
—
|
889
|
1,143
|
—
|
1,143
|
884
|
—
|
884
|
|||||||||||||||||||
Commitments
and contingencies
|
||||||||||||||||||||||||||||
Members’
equity:
|
||||||||||||||||||||||||||||
Membership
interests
|
591,452
|
—
|
591,452
|
592,389
|
—
|
592,389
|
619,966
|
—
|
619,966
|
|||||||||||||||||||
Accumulated
other comprehensive loss
|
(992
|
)
|
—
|
(992
|
)
|
(1,078
|
)
|
—
|
(1,078
|
)
|
(571
|
)
|
—
|
(571
|
)
|
|||||||||||||
Accumulated
deficit
|
(59,650
|
)
|
(1,745
|
)
|
(61,395
|
)
|
(80,184
|
)
|
(3,916
|
)
|
(84,100
|
)
|
(111,489
|
)
|
(4,414
|
)
|
(115,903
|
)
|
||||||||||
Total
members’ equity
|
530,810
|
(1,745
|
)
|
529,065
|
511,127
|
(3,916
|
)
|
507,211
|
507,906
|
(4,414
|
)
|
503,492
|
||||||||||||||||
Total
liabilities and members’ equity
|
$
|
574,110
|
$
|
21
|
$
|
574,131
|
$
|
557,815
|
$
|
(110
|
)
|
$
|
557,705
|
$
|
905,399
|
$
|
772
|
$
|
906,171
|
Payments
Due by Period
|
||||||||||||||||
(in
thousands)
|
Total
|
2007
|
Years
2008-2009
|
Years
2010-2011
|
Years
2012
and
Thereafter
|
|||||||||||
Long-term
obligations
|
$
|
380,178
|
$
|
3,066
|
$
|
5,744
|
$
|
354,929
|
$
|
16,439
|
||||||
Services
and other purchase agreements
|
12,929
|
7,535
|
5,394
|
—
|
—
|
|||||||||||
Pending
business acquisition
|
19,000
|
19,000
|
—
|
—
|
—
|
|||||||||||
Capital
expenditures(1)
|
8,200
|
8,200
|
—
|
—
|
—
|
|||||||||||
Operating
leases
|
21,362
|
7,037
|
10,879
|
3,084
|
362
|
|||||||||||
Total
|
$
|
441,669
|
$
|
44,838
|
$
|
22,017
|
$
|
358,013
|
$
|
16,801
|
||||||
Significant
contractual obligations entered into subsequent to December 30,
2006:
|
||||||||||||||||
Series
A Senior Convertible Preferred Stock(2)
|
$
|
355,000
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
355,000
|
||||||
Business
acquisition(3)
|
19,863
|
16,283
|
3,580
|
—
|
—
|
|||||||||||
Pending
wireless spectrum acquisition(4)
|
26,015
|
26,015
|
—
|
—
|
—
|
|||||||||||
Pending
wireless spectrum leases(5)
|
23,399
|
7,523
|
1,597
|
1,633
|
12,646
|
|||||||||||
Operating
facility lease(6)
|
17,286
|
1,238
|
6,706
|
7,967
|
1,375
|
|||||||||||
Pending
business acquisition(7)
|
25,000
|
25,000
|
—
|
—
|
—
|
(1) |
Our
purchase agreement for an office building in Henderson, Nevada was
amended
in March 2007, reducing the cost of the building to $6.9 million.
A
separate agreement was entered into in March 2007 related to the
interior
construction costs of the building for $2.6 million. An additional
estimated $1.9 million for non-contracted fixtures and furniture
will also
be required to ready the building for occupancy. Construction is
expected
to be completed during the second quarter of 2007, at which time
we expect
to occupy the facility and pay the remaining costs associated with
occupancy.
|
(2) |
On
March 28, 2007, we issued and sold 355,000 shares of our Series A
Senior
Convertible Preferred Stock (the “Series A Preferred Stock”) at a price of
$1,000 per share. We received $351.0 million in net proceeds from
the sale
of the Series A Preferred Stock. The
Series A Preferred Stock has a mandatory redemption on March 28,
2017.
|
(3) |
In
February 2007, we acquired all of the outstanding common stock and
warrants of GO Networks, Inc., for $13.2 million plus the assumption
of
$6.7 million in debt, of which $1.3 million was paid at closing.
Additional purchase consideration of up to $25.7 million may be paid
in
shares of NextWave common stock, subject to the achievement of certain
operational milestones in the 18-month period subsequent to the closing
of
the acquisition. We also adopted the GO Networks Employee Stock Bonus
Plan, whereby a select group of employees may receive up to an aggregate
of $5.0 million in shares of NextWave common stock upon the achievement
of
certain operational milestones in the 18-month period subsequent
to the
closing of the acquisition.
|
(4) |
In
March 2007, we acquired all of the outstanding shares of common stock
of
4253311 Canada Inc., a Canadian company. The total cost of the acquisition
is expected to be approximately $26.0 million in cash. The assets
of the
company are comprised almost entirely of wireless
spectrum.
|
(5) |
During
the first three months of 2007, we entered into three separate wireless
spectrum leases. Approval of one of the license transfer applications
has
been received from the FCC and one is pending. The third application
is
pending with the Swiss Confederated Communications
Commission.
|
(6) |
In
March 2007, we signed a lease agreement for office facilities that
expires
in 2012. The lease requires a $2.5 million letter of credit, which
is
gradually reduced until termination of the lease in
2012.
|
(7) |
In
May 2007, we acquired IPWireless, Inc. for $25.0 million in cash
plus 7.7
million in shares of our common stock, valued at $75.0 million. Additional
consideration of up to $135.0 million will be paid based upon the
achievement of certain revenue milestones between 2007 and 2009,
as
specified in the agreement, with potential payments of up to $50.0
million
in late 2007 or 2008, up to $7.5 million in 2008, up to $24.2 million
in
2009 and up to $53.3 million in 2010. If earned, up to $114.0 million
of
such additional consideration will be payable in cash or shares of
common
stock at our election and up to $21.0 million of such amounts will
be
payable in cash or shares of common stock at the election of
representatives of IPWireless shareholders. We also adopted the
IPWireless, Inc. Employee Stock Bonus Plan which provides IPWireless
employees with shares of our common stock having an aggregate value
of up
to $7.0 million, valued at the time of issuance, contingent upon
the
achievement of certain revenue milestones relating to IPWireless’ public
safety business and TDtv business.
|
·
|
Improve
the performance and economics of WiMAX and Wi-Fi networks and enhance
their ability to cost-effectively handle the large volume of network
traffic associated with bandwidth intensive, multimedia applications
such
as mobile television, video-on-demand, streaming hi-fidelity audio,
two-way video telephony and real-time
gaming;
|
·
|
Improve
the performance, power consumption and cost characteristics of mobile
broadband enabled subscriber
terminals;
|
·
|
Improve
the degree of interoperability and integration between Wi-Fi and
WiMAX
systems for both Local Area Networks (LANs) and Wide Area Networks
(WANs);
|
·
|
Improve
the efficiency, costs and performance of video and audio broadcast
applications over WiMAX networks;
and
|
·
|
Improve
service provider economics and roaming capabilities by enabling WiMAX
networks and WiMAX enabled devices to seamlessly operate across multiple
frequency bands including the use of certain unlicensed
bands.
|
·
|
Remain
connected to their favorite music, movies and
television;
|
·
|
Participate
in interactive, real-time gaming;
|
·
|
Easily
establish high-speed connections to their desired web
content;
|
·
|
Remotely
access their personal Digital Video Recorders and watch recorded
television;
|
·
|
Remotely
view real-time images from home or office security
cameras;
|
·
|
Conduct
two-way video conferences;
|
·
|
Capture,
transmit or receive high resolution digital photos or video to friends,
family members, and business associates;
|
·
|
Engage
in a wide-range of multimedia shopping services customized via location
based services;
|
|
|
·
|
Conduct
a broad range of financial transactions;
|
·
|
Make
“landline quality”, VoIP telephone calls; and
|
·
|
Participate
in social network activities with portable devices away from home
or
office.
|
·
|
Increasing
global demand by mobile phone users for easy and affordable mobile
access
to the Internet and on-line multimedia content sources on a fully
mobile
basis;
|
·
|
A
growing awareness of the limitations of existing third generation
(3G)
wireless networks;
|
·
|
Broader
availability of high-quality, multimedia content available for
distribution over wireless networks;
|
·
|
Mandates
by public safety agencies for reliable mobile broadband
services;
|
·
|
The
ability of wireless technologies such as WiMAX to serve as a
cost-effective way to deliver broadband to millions of homes in the
U.S.
and abroad with no or limited (e.g., dial-up) Internet connectivity;
and
|
·
|
Increasing
market demand for fully integrated wireless local area network (“LAN”) and
wide area network (“WAN”) solutions that utilize both Wi-Fi and WiMAX
technologies for converged devices, appliances and consumer
electronics.
|
·
|
Mobile
WiMAX enjoys broad support from wireless industry leaders. Members
of the
WiMAX Forum, an industry organization dedicated to promoting and
certifying WiMAX products, include Alcatel, AT&T, Bell Canada, British
Telecom, Broadcom, Cisco, Deutsche Telekom, Ericsson, Intel, Korea
Telecom, LG Electronics, Lucent, Motorola, NEC, Nokia, Nortel, Samsung,
Siemens, Sprint Nextel and Texas Instruments.
|
|
·
|
Companies
such as Intel, who are interested in seeing mobile WiMAX integrated
into
laptops and other mobile computing platforms, are actively working
to
drive the market adoption of WiMAX and the deployment of WiMAX
networks.
|
|
·
|
International
support by network operators for WiMAX is growing. At present, numerous
WiMAX networks based on the 802.16-2004 standard are currently being
deployed by numerous operators in Europe, Asia, South America, and
the
Middle East.
|
·
|
Deployments
of 802.16e compliant mobile broadband networks by companies such
as Korea
Telecom who expect to launch commercial service in 2006 using the
WiBro
derivative of mobile WiMAX.
|
|
·
|
Mobile
WiMAX economics, including network construction and operating costs,
are
expected to be competitive with those of alternative mobile broadband
technologies.
|
|
·
|
Mobile
WiMAX incorporates quality of service capabilities that are required
to
efficiently handle quality of service dependent applications such
as VoIP
telephony, video conferencing and real-time, interactive
gaming.
|
|
·
|
Mobile
WiMAX network performance, including the ability to handle the high
volumes of traffic associated with VoIP, high speed web-surfing and
next-generation wireless multimedia applications, is expected to
be
competitive with alternative mobile broadband
technologies.
|
·
|
Digital
Baseband ASICs:
An ASIC is an integrated circuit or chip customized for a specific
purpose. Our family of WiMAX/Wi-Fi based digital baseband ASICs under
development represent the core of our system architecture. Our first
baseband WiMAX ASIC, the NW1100, is currently in the final stages
of
development and the final description of the circuit is expected
to be
sent to manufacture in the third quarter of 2007. This ASIC includes
many
of the enhancements that have been developed by ATG engineers and
is
designed to showcase and validate these innovations.. The family
of
baseband ASIC that ATG is developing include a wide array of interfaces
to
accommodate a wide range of device types including mobile handsets,
PDAs,
mobile PC cards, USB devices, and CPE modems. For this reason, ATG
is also
creating a family of device reference designs, including those for
handsets and media players, that will highlight the features of its
WiMAX
ASIC products.
|
·
|
Radio
Frequency Integrated Circuits (RFICs):
An RFIC is part of the front-end of a radio system that receives
a radio
frequency signal, converts it to a lower frequency and modifies it
for
further processing. Designed to utilize multiple spectral bands to
improve
performance and flexibility, our RFICs are part of an advanced radio
frequency subsystem that is matched to our family of baseband ASICs
and is
expected to enable a mobile device to operate over a wide range of
operational frequencies without sacrificing overall performance.
We
believe that enabling WiMAX to operate over multiple frequency bands
will
significantly improve the economics of WiMAX network deployments
for the
following reasons:
|
||
|
-
|
WiMAX
network operators will have the ability to assemble a licensed spectrum
footprint using multiple frequency bands as opposed to having to
acquire
scarce spectrum in a single frequency band;
|
|
|
-
|
carriers
will have the ability to address network coverage and capacity issues
via
the acquisition of low-cost spectrum as opposed to costly cell
splitting;
|
|
|
-
|
the
ability of frequency-agile WiMAX devices to roam between multiple
WiMAX
networks will be facilitated; and
|
|
|
-
|
A
single chipset family capable of addressing markets worldwide will
permit
economies of scale and result in lower device
costs.
|
·
|
Pico
Base Transceiver Station (BTS): A BTS, also known as a wireless base
station, includes equipment needed to transmit and receive radio
signals
(transceiver) to and from subscriber devices, antennas, and the
electronics required to communicate with other network elements.
Unlike a
conventional BTS which can provide radio coverage over a radius of
several
miles, a pico BTS is much smaller in size and is intended to provide
low-cost capacity and coverage relief in very small geographic areas.
NextWave is currently in the design phase of silicon products to
support a
PicoBTS/Access point product family. This design is currently being
implemented in field-programmable gate array (“FPGA”) form and will be
field tested later this year.
|
|
·
|
PacketVideo
is already a global provider of device embedded, mobile multimedia
software and has broad experience in developing software for memory
and
processor limited mobile devices.
|
|
·
|
As
part of NextWave, PacketVideo will have full access to the company’s
extensive mobile broadband technology development activities and
will be
able to develop new multimedia software applications that take full
advantage of the unique capabilities we are designing into our products
and technologies.
|
|
·
|
Unlike
the aforementioned PC software environment, there are no dominant
mobile
device operating systems and, in fact, over two dozen such operating
systems are currently in use by mobile handset manufacturers worldwide.
PacketVideo’s software has been engineered to work with virtually all of
the most popular mobile device operating systems in use today. By
maintaining this flexible approach, we believe that PacketVideo’s next
generation of mobile broadband software will be well-positioned to
enjoy
continued wide scale industry
adoption.
|
·
|
WLS
2100 Micro Cellular-Mesh Wi-Fi Sector Base Station:
The WLS 2100 is a 120 degree multi-radio sector panel designed for
easy
installation on building sides, rooftops, towers and utility poles.
The
WLS 2100 is equipped with two xRF-enabled 802.11 b/g access radios
and a
separate 802.11a channel for beamformed user access and high-performance
mesh backhaul.
|
·
|
WLP
1100 Pico Cellular-Mesh Wi-Fi- Base Station:
The WLP 1100 is an omni-directional multi-radio weather-proof unit
intended for street-level pole/utility pole Wi-Fi applications. The
WLP
1100 is equipped with one xRF-powered 802.11 b/g access radio and
a
separate 802.11a channel for beamformed user access and high-performance
mesh networking and backhaul.
|
·
|
MBW
EMS/NMS Platform:
The MBW EMS/NMS platform offers a sophisticated set of management
tools
for element management as well as network-wide performance monitoring
and
management. From the MBW EMS/NMS console, operators can proactively
monitor network and RF performance and dynamically reconfigure their
Wi-Fi
infrastructure, at the access point level or network-wide, to meet
varying
RF environments, network conditions, traffic and user
loads.
|
|
·
|
RF
design;
|
|
·
|
Network
construction;
|
|
·
|
Network
optimization;
|
|
·
|
Network
operations center implementation;
|
|
·
|
IP
core network including security integration;
|
|
·
|
Core
network integration;
|
|
·
|
Billing
and operational support systems;
|
|
·
|
Customer
support systems; and
|
|
·
|
Network
operations and maintenance, including Network Management Systems
(NMS).
|
|
·
|
Las
Vegas is one of the fastest growing metropolitan areas in the country,
with demographics that are conducive gauging customer
acceptability;
|
|
·
|
Existing
tower inventory and flexible zoning procedures will reduce the time
required to deploy a network;
|
|
·
|
As
the current operational headquarters for our Network Service Group,
most
of our network engineering and resources needed to design, build,
and
operate a mobile WiMAX/Wi-Fi network are already located in the market;
and
|
|
·
|
Las
Vegas represents a highly attractive market
for potential service provider
customers.
|
Type
of Spectrum
|
|||||||||||||||||||
MEA
|
MEA
Name
|
POPs
(mm)
|
BRS/EBS
|
WCS
|
AWS
|
Top
Covered CMAs within MEA
(POP
Rank)
|
|||||||||||||
1
|
Boston
|
9.5
|
|
x
|
x
|
Boston
(9), Providence (50)
|
|||||||||||||
2
|
New
York City
|
31.9
|
x
|
x
|
x
|
New
York (2), Hartford (40)
|
|||||||||||||
3
|
Buffalo
|
1.5
|
|
x
|
|
Buffalo
(42), Chautauqua (113)
|
|||||||||||||
4
|
Philadelphia
|
8.8
|
x
|
x
|
x
|
Philadelphia
(5), Wilmington (75)
|
|||||||||||||
5
|
Washington
|
0.8
|
|
|
x
|
Virginia
10 - Frederick (218)
|
|||||||||||||
6
|
Richmond
|
1.4
|
|
|
x
|
Highland
(261), Roanoke (267)
|
|||||||||||||
7
|
Charlotte-Greensboro-Greenville-Raleigh
|
7.0
|
|
|
x
|
Greenville
(68), Columbia SC (89)
|
|||||||||||||
8
|
Atlanta
|
4.6
|
|
|
x
|
Chattanooga
(107), Augusta (115)
|
|||||||||||||
9
|
Jacksonville
|
2.8
|
|
x
|
x
|
Jacksonville
(39), Tallahassee (184)
|
|||||||||||||
10
|
Tampa-St.
Petersburg-Orlando
|
2.1
|
|
|
x
|
Florida
4 - Citrus (85), Sarasota (159)
|
|||||||||||||
11
|
Miami
|
1.2
|
|
|
x
|
Fort
Myers (99), Florida 1 - Collier (168)
|
|||||||||||||
12
|
Pittsburgh
|
2.8
|
|
|
x
|
Pittsburgh
(22), Johnstown (283)
|
|||||||||||||
13
|
Cincinnati-Dayton
|
1.2
|
|
|
x
|
Huntington
(188), Charleston (255)
|
|||||||||||||
14
|
Columbus
|
0.7
|
|
|
x
|
Ohio
6 - Morrow (106),
Ohio
9 -Ross (259)
|
|||||||||||||
15
|
Cleveland
|
5.2
|
|
x
|
x
|
Cleveland
(25), Akron (73)
|
|||||||||||||
16
|
Detroit
|
11.0
|
|
x
|
|
Detroit
(7), Grand Rapids (60)
|
|||||||||||||
17
|
Milwaukee
|
5.2
|
|
x
|
|
Milwaukee
(33), Madison (117)
|
|||||||||||||
18
|
Chicago
|
14.2
|
|
x
|
x
|
Chicago
(3), Gary (80)
|
|||||||||||||
19
|
Indianapolis
|
2.7
|
|
|
x
|
Indianapolis
(31),
Indiana
6 - Randolph (302)
|
|||||||||||||
20
|
Minneapolis-St.
Paul
|
7.0
|
|
x
|
|
Minneapolis
- St. Paul (14),
Hubbard
(202)
|
|||||||||||||
21
|
Des
Moines-Quad Cities
|
2.9
|
|
x
|
|
Des
Moines (108), Davenport (161)
|
|||||||||||||
22
|
Knoxville
|
1.4
|
|
|
x
|
Knoxville
(86), Jonson City (110)
|
|||||||||||||
23
|
Louisville-Lexington-Evansville
|
2.0
|
|
|
x
|
Louisville
(51), Kentucky 3 - Meade (167)
|
|||||||||||||
24
|
Birmingham
|
0.9
|
|
|
x
|
Montgomery
(166), Butler (288)
|
|||||||||||||
25
|
Nashville
|
1.0
|
|
|
x
|
Tennessee
3 - Macon (144),
Clarksville
(311)
|
|||||||||||||
26
|
Memphis-Jackson
|
1.6
|
|
|
x
|
Tennessee
5 - Fayette (143),
Tennessee
1 - Lake (181)
|
|||||||||||||
27
|
New
Orleans-Baton Rouge
|
2.0
|
|
|
x
|
New
Orleans (41), Mobile (91)
|
|||||||||||||
28
|
Little
Rock
|
2.8
|
|
|
x
|
Little
Rock (84), Fayetteville (158)
|
|||||||||||||
29
|
Kansas
City
|
3.3
|
|
x
|
|
Kansas
City (26), Topeka (317)
|
|||||||||||||
30
|
St.
Louis
|
5.0
|
|
x
|
x
|
St.
Louis (18),
Illinois
8 - Washington (173)
|
|||||||||||||
31
|
Houston
|
7.3
|
|
x
|
x
|
Houston
(6),
Louisiana
5 - Beauregard (137)
|
|||||||||||||
32
|
Dallas-Fort
Worth
|
12.8
|
x
|
x
|
x
|
Dallas-Fort
Worth (4), Austin (36)
|
|||||||||||||
33
|
Denver
|
5.4
|
|
x
|
|
Denver
- Boulder (17),
Colorado
Springs (87)
|
|||||||||||||
34
|
Omaha
|
1.8
|
|
x
|
|
Omaha
(72), Lincoln (228)
|
|||||||||||||
35
|
Wichita
|
1.2
|
|
x
|
x
|
Wichita
(94), Kansas 14 - Reno (387)
|
|||||||||||||
36
|
Tulsa
|
1.4
|
|
x
|
x
|
Tulsa
(58), Oklahoma 4 - Nowata (309)
|
|||||||||||||
37
|
Oklahoma
City
|
1.9
|
|
x
|
x
|
Oklahoma
City (46),
Oklahoma
6 - Seminole (289)
|
|||||||||||||
38
|
San
Antonio
|
4.1
|
|
x
|
|
San
Antonio (27), McAllen (77)
|
|||||||||||||
39
|
El
Paso-Albuquerque
|
2.7
|
x
|
x
|
x
|
EL
Paso (71), Albuquerque (74)
|
|||||||||||||
40
|
Phoenix
|
5.6
|
|
x
|
|
Phoenix
(13), Tucson (53)
|
|||||||||||||
41
|
Spokane-Billings
|
2.1
|
|
x
|
x
|
Spokane
(120), Idaho 1 - Boundary (212)
|
|||||||||||||
42
|
Salt
Lake City
|
3.5
|
|
x
|
x
|
Salt
Lake City (34), Provo (128)
|
|||||||||||||
43
|
San
Francisco-Oakland-San Jose
|
15.0
|
|
x
|
x
|
San
Francisco (12), Sacramento (24)
|
|||||||||||||
44
|
Los
Angeles-San Diego
|
24.9
|
x
|
x
|
x
|
Los
Angeles (1), San Diego (15)
|
|||||||||||||
45
|
Portland
|
4.0
|
|
x
|
x
|
Portland
(23), Salem (147)
|
|||||||||||||
46
|
Seattle
|
5.1
|
|
x
|
|
Seattle
(20), Tacoma (69)
|
|||||||||||||
47
|
Alaska
|
0.6
|
|
|
x
|
Anchorage
(215), Alaska 2 - Bethel (377)
|
|||||||||||||
48
|
Hawaii
|
1.3
|
|
x
|
|
Honolulu
(55), Hawaii 3 - Hawaii (415)
|
|||||||||||||
49
|
Puerto
Rico and U.S. Virgin Islands
|
3.8
|
|
|
x
|
San
Juan (21),
Puerto
Rico 2 - Adjuntas (209)
|
|||||||||||||
|
Total
(excluding overlaps)
|
248.9
(approx)
|
|
|
|
|
(1)
|
WCS
licenses are assigned by the FCC according to MEAs or REAGs (see
further
explanation below in “WCS Spectrum”). MEAs are named for the largest
metropolitan area contained within the licensed geographic service
area.
An MEA is significantly larger than the metropolitan area for which
it is
named. REAGs are named for the geographic region the license
covers.
|
|
|
(2)
|
Our
AWS, WCS and BRS spectrum is held directly through FCC licenses.
Our EBS
spectrum has been leased on a long-term basis from current license
holders.
|
|
(3)
|
AWS
licenses are assigned by the FCC according to REAGs, EAs, or CMAs
(see
further explanation below in “AWS Spectrum”).
|
|
(4)
|
We
lease EBS spectrum from multiple parties in the greater New York,
NY
metropolitan area, including geographic areas in New York, New Jersey
and
Connecticut. These leases give us access to different amounts of
spectrum
in specific parts of the market area. The term of these leases range
from
20 to up to 60 years when their renewal options are
included.
|
|
(5)
|
We
lease EBS spectrum from The Orange Catholic Foundation in the Los
Angeles,
CA (Orange County) area. This lease has an initial 10 year term and
contains five renewal options for 10 years each to extend the term
of the
lease.
|
(6)
|
The
source for our POP figure is derived from 2006 composite data contained
in
databases managed by Applied Geographic Solutions Inc. of Newbury
Park CA.
Except for Puerto Rico which is derived from 2000 census
figures.
|
·
|
grant
licenses in the WCS, AWS, BRS and EBS bands;
|
·
|
regulate
the technical parameters and standards governing wireless services,
the
certification, operation and marketing of radio frequency devices
and the
placement of certain transmitting
facilities;
|
·
|
impose
build-out or performance requirements as a condition to license
renewals;
|
·
|
approve
applications for license renewals;
|
·
|
approve
assignments and transfers of control of FCC licenses;
|
·
|
approve
leases covering use of FCC licenses held by other persons and
organizations;
|
·
|
resolve
harmful radiofrequency interference between users of various spectrum
bands;
|
·
|
impose
fines, forfeitures and license revocations for violations of FCC
rules;
and
|
·
|
impose
other obligations that it determines to be in the public
interest.
|
·
|
The
NextWave Telecom group abandoned substantially all of its PCS networks,
technology and fixed assets, except the PCS spectrum licenses to
be
acquired by Verizon Wireless.
|
|
·
|
NTI
and its subsidiaries transferred all of their remaining non-PCS assets
to
NextWave Broadband, except cash and the PCS spectrum licenses to
be
acquired by Verizon Wireless. The assets contributed primarily consisted
of property and equipment not desired by Verizon Wireless, having
a fair
market value of less than $10 million.
|
|
·
|
NextWave
Broadband was transferred to Old NextWave Wireless.
|
|
·
|
Old
NextWave Wireless retained its investment in CYGNUS preferred stock
and
convertible notes, as well as wireless licenses useful for its new
technology broadband business with a value of approximately $33.6
million.
|
|
·
|
NTI
and its subsidiaries, including Old NextWave Wireless, obtained an
order
providing a release of claims pursuant to Section 1141 of the Bankruptcy
Code. To the extent that such release did not eliminate all liabilities
of
the NextWave Telecom group, NextWave Wireless assumed and agreed
to
indemnify Verizon Wireless against such liabilities.
|
|
·
|
NTI
and its subsidiaries (other than Old NextWave Wireless) were sold
to
Verizon Wireless for $3.0 billion.
|
|
·
|
Membership
units of NextWave were distributed to the former stockholders of
NTI,
which distribution was exempt from registration under the Securities
Act
pursuant to Section 1145 of the Bankruptcy Code. Upon this distribution,
on April 13, 2005, Old NextWave Wireless emerged as NextWave
Wireless.
|
|
·
|
Simultaneously
with the distribution, NextWave was capitalized with $550 million
of cash
proceeds from the sale to Verizon Wireless and prior PCS spectrum
license
sales.
|
|
·
|
Pursuant
to the plan, the NTI stockholders received the undivided interests
in the
underlying assets of Old NextWave Wireless as part of their consideration
for the redemption of their NTI shares, which was followed by the
deemed
contribution of these undivided interests to NextWave in return for
membership interests in NextWave.
|
|
·
|
In
May 2007, we acquired IPWireless, Inc. for $25.0 million in cash
plus 7.7
million in shares of our common stock, valued at $75.0 million.
Additional
consideration of up to $135.0 million will be paid based upon the
achievement of certain revenue milestones between 2007 and 2009,
as
specified in the agreement, with potential payments of up to $50.0
million
in late 2007 or 2008, up to $7.5 million in 2008, up to $24.2 million
in
2009 and up to $53.3 million in 2010. If earned, up to $114.0 million
of
such additional consideration will be payable in cash or shares
of common
stock at our election and up to $21.0 million of such amounts will
be
payable in cash or shares of common stock at the election of
representatives of IPWireless shareholders. We also adopted the
IPWireless, Inc. Employee Stock Bonus Plan which provides IPWireless
employees with shares of our common stock having an aggregate value
of up
to $7.0 million, valued at the time of issuance, contingent upon
the
achievement of certain revenue milestones relating to IPWireless’ public
safety business and TDtv
business.
|
|
·
|
In
March 2007, we acquired all of the outstanding shares of common stock
of
4253311 Canada Inc., a Canadian company. The total cost of the acquisition
was approximately $26.0 million in cash. The assets of the company
are
comprised almost entirely of wireless spectrum covering Canadian
markets.
|
|
·
|
In
February 2007, NextWave acquired all of the outstanding common stock
and
warrants of GO Networks, Inc., for $13.2, million at closing plus
the
assumption of $6.7 million in debt, of which $1.3 million was paid
at
closing. Additional purchase consideration of up to $25.7 million
may be
paid in shares of NextWave common stock, subject to the achievement
of
certain operational milestones in the 18-month period subsequent
to the
closing of the acquisition. NextWave also adopted the GO Networks
Employee
Stock Bonus Plan, whereby certain employees may receive up to an
aggregate
of $5.0 million in shares of NextWave common stock upon the achievement
of
the operational milestones referred to above.
|
|
·
|
In
January 2007, PacketVideo acquired all of the shares of SDC Secure
Digital Container AG for cash of $19.0 million. The acquisition will
be
accounted for in the first quarter of 2007 using the purchase method
of
accounting whereby the total purchase price, including any transaction
related expenses, will be allocated to tangible and intangible assets
acquired based upon their respective fair values.
|
|
·
|
In
December 2006, we were awarded 154 spectrum licenses for an aggregate
bid
of $115.6 million in the AWS auction. These licenses significantly
increased our spectrum portfolio to cover approximately 249 million
persons.
|
|
·
|
Since
our emergence as a wireless technology company, we have consummated
transactions to acquire licensed spectrum rights, including subsequent
lease obligations, for amounts totaling approximately $451.9 million,
including our recent acquisition of WCS Wireless Inc., which holds
spectrum covering 188.8 million persons, or POPs, in the Central,
Western,
and Northeastern United States, for $160.5 million.
|
|
·
|
In
July 2005 we acquired all of the outstanding shares of PacketVideo
Corporation for $46.7 million in
cash.
|
|
Age
|
|
Position
|
|
Allen
Salmasi
|
|
52
|
|
Chairman
of the Board of Director, Class III Director, Chief Executive Officer
and
President
|
George
C. Alex
|
|
47
|
|
Executive
Vice President - Chief Financial Officer
|
Roy
D. Berger
|
|
49
|
|
Executive
Vice President - Corporate Marketing &
Communications
|
Frank
A. Cassou
|
|
50
|
|
Executive
Vice President - Corporate Development and Chief Legal Counsel, Secretary,
Class I Director
|
Kevin
M. Finn
|
|
65
|
|
Executive
Vice President - Chief Compliance Officer, Class II
Director
|
Mark
Kelley
|
|
46
|
|
Executive
Vice President - Chief Division Officer (ATG)
|
Richard
Kornfeld
|
|
46
|
|
Executive
Vice President - Chief Strategy Officer
|
Jim
Madsen
|
|
47
|
|
Executive
Vice President - Chief Business Development Officer
|
David
B. Needham
|
|
49
|
|
Executive
Vice President - Chief Division Officer (NSG)
|
R.
Andrew Salony
|
|
54
|
|
Executive
Vice President - Chief Administration Officer
|
Kenneth
Stanwood
|
|
45
|
|
Executive
Vice President - Technical and Standards Development
|
Douglas
F. Manchester (1)(2)(3)
|
|
64
|
|
Class
III Director
|
Jack
Rosen (3)
|
|
60
|
|
Class
II Director
|
Robert
T. Symington (1)(2)
|
|
43
|
|
Class
III Director
|
William
H. Webster (1)(2)(3)
|
|
83
|
|
Class
I Director
|
·
|
assist
the board’s oversight of:
|
|
·
|
the
integrity of our financial statements;
|
|
·
|
our
compliance with legal and regulatory requirements;
|
|
·
|
the
application of our codes of conduct and ethics as established by
the board
of directors;
|
|
·
|
our
independent auditors’ qualifications, engagement, compensation and
performance, their conduct of the annual audit of our financial
statements, and their engagement to provide any other services;
and
|
|
·
|
the
performance of our system of internal controls;
|
|
·
|
prepare
the report required to be prepared by the committee pursuant to SEC
rules;
and
|
|
·
|
maintain
and oversee procedures for addressing complaints about accounting
matters.
|
·
|
identify
and to recommend to the board individuals qualified to serve as directors
of our company and on committees of the board;
|
|
·
|
review
corporate governance on a regular basis;
|
|
·
|
review
and recommend changes to the size of the
Board;
|
·
|
review
the manner in which conflicts of interest are addressed;
and
|
|
|
·
|
recommend
to the Board any changes in director
compensation.
|
·
|
review
CEO and other executive officer compensation at least
annually;
|
|
·
|
review
and approve any annual performance objectives;
|
|
·
|
review
and recommend to the Board equity based plans and review all grants
under
such plans;
|
|
·
|
review
any employee retirement or other benefit plans and recommend any
desired
changes to the Board; and
|
|
·
|
prepare
the annual report on compensation to be included in the proxy
statement.
|
·
|
base
salary;
|
·
|
annual
incentive awards for fiscal 2005 performance, paid in the form of
fully-vested options; and
|
·
|
other
benefits.
|
Name
and
Principal Position
|
Year
|
Salary
($)
|
Option
Awards
($)(1)
|
All
Other Compensation
($)(2)
|
Total
($)
|
|||||||||||
Allen
Salmasi
Chairman
of the Board of Directors
|
2006
|
$
|
721,692
|
$
|
179,945
|
$
|
17,238
|
$
|
918,875
|
|||||||
Frank
A. Cassou
Executive
Vice President, Corporate Development, Chief Legal Counsel, and Secretary
|
2006
|
435,839
|
87,941
|
17,238
|
541,018
|
|||||||||||
George
C. Alex
Chief
Financial Officer
|
2006
|
330,304
|
77,155
|
32,238
|
439,697
|
|||||||||||
R.
Andrew Salony
Chief
Administration Officer
|
2006
|
283,558
|
9,327
|
63,376
|
356,262
|
|||||||||||
David
B. Needham
Chief
Division Officer
|
2006
|
283,558
|
9,327
|
60,734
|
353,619
|
(1)
|
The
amounts reported in the Option Awards column represent the portion
of the
grant date fair value of the stock options granted to the Named Executive
Officers during 2006 and in prior years that was recognized for financial
reporting purposes with respect to 2006 in accordance with Statement
of
Financial Accounting Standards No. 123 (revised 2004) “Share
Based Payment”
(FAS 123(R)). Pursuant to SEC rules, the amounts reported exclude
the
impact of estimated forfeitures related to service-based vesting
conditions. The assumptions made in calculating the grant date fair
value
amounts for the options granted in 2006 and in prior years are
incorporated herein by reference to the discussion of those assumptions
in
footnote 10 to the Company’s financial statements as contained in the
Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2007.
See the Grants of Plan-Based Awards Table on page 20 for information
on
the options granted in 2006. Note that the amounts reported in this
column
reflect the Company’s accounting cost for these options, and do not
correspond to the actual economic value that will be received by
the Named
Executive Officers from the
options.
|
(2)
|
The
amounts reported in the All Other Compensation column comprise the
following compensation items: Mr. Salmasi, $17,238 for health, disability,
and life insurance premiums; Mr. Cassou, $17,238 for health, disability,
and life insurance premiums; Mr. Alex, $15,000 for a vehicle allowance
and
$17,238 for health, disability, and life insurance premiums; Mr.
Salony,
$12,000 for vehicle allowance, $40,480 for a housing allowance and
$10,986
for health, disability, and life insurance premiums; and Mr. Needham,
$37,663 for a vehicle allowance, $12,000 for a housing allowance
and
$11,071 for health, disability, and life insurance premiums. The
housing allowances disclosed represent the rental cost for an apartment
(and associated utilities) and hotel rooms used by our executives
when
working at the Company's California offices. The vehicles allowance
disclosed represents the cost of renting an automobile when working
at the
Company’s offices in California. The vehicle allowance for Mr. Alex is
based on the requirement for Mr. Alex to extensively use his privately
owned vehicle for business purpose.
|
Name
|
Grant
Date
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
|
Exercise
or Base Price of Option Awards ($/Sh)(1)
|
Grant
Date Fair Value of Stock and Option Awards ($)(2)
|
|||||||||
Allen
Salmasi
|
4/27/06
|
111,416
|
$
|
6.00
|
$
|
179,945
|
|||||||
Frank
A. Cassou
|
4/27/06
|
54,450
|
6.00
|
87,941
|
|||||||||
George
C. Alex
|
4/27/06
|
47,772
|
6.00
|
77,155
|
|||||||||
R.
Andrew Salony
|
4/27/06
|
5,775
|
6.00
|
9,327
|
|||||||||
David
B. Needham
|
4/27/06
|
5,775
|
6.00
|
9,327
|
(1) |
This
column shows the per share exercise price for the stock options granted
in
2006, which, as part of the corporate conversion merger, was adjusted
at
the time of the merger by multiplying the per share exercise price
(being
rounded up to the next 100th of a cent) applicable to the option
to
purchase LLC interests immediately prior to the merger by the merger
exchange ratio (which provided one share of the Company’s common stock for
every six membership units of NextWave Wireless
LLC).
|
(2) |
For
information on the
assumptions that were used in calculating these amounts, see Note
1 to
the Summary Compensation Table on page 92 of this proxy
statement.
|
Name
|
Number
of Securities Underlying Unexercised Options (#) Exercisable
(1)
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Option
Exercise Price ($)
|
Option
Expiration Date
|
|||||||||
Allen
Salmasi
|
|||||||||||||
April
13, 2005
|
416,666
|
0
|
$
|
6.00
|
4/12/15
|
||||||||
April
27, 2006
|
111,416
|
0
|
6.00
|
4/26/16
|
|||||||||
Frank
A. Cassou
|
|||||||||||||
April
13, 2005
|
333,333
|
0
|
6.00
|
4/12/15
|
|||||||||
April
27, 2006
|
54,450
|
0
|
6.00
|
4/26/16
|
|||||||||
George
C. Alex
|
|||||||||||||
April
13, 2005
|
250,000
|
0
|
6.00
|
4/12/15
|
|||||||||
April
27, 2006
|
47,772
|
0
|
6.00
|
4/26/16
|
|||||||||
R.
Andrew Salony
|
|||||||||||||
April
13, 2005
|
250,000
|
0
|
6.00
|
4/12/15
|
|||||||||
April
27, 2006
|
5,775
|
0
|
6.00
|
4/26/16
|
|||||||||
David
B. Needham
|
|||||||||||||
April
13, 2005
|
250,000
|
0
|
6.00
|
4/12/15
|
|||||||||
April
27, 2006
|
5,775
|
0
|
6.00
|
4/26/16
|
(1)
|
The
options granted on April 13, 2005 are immediately exercisable in
full as
of the option grant date, subject to a repurchase right (at the option
exercise price) in favor of the Company in the event that the Named
Executive Officer terminates employment with the Company for any
reason
prior to the fourth anniversary of the date of grant. This repurchase
right expires in 48 equal monthly installments over a four year period
commencing on the date of grant, beginning on May 13, 2005. The options
granted on April 27, 2006 in lieu of a cash incentive award for
performance in fiscal 2005 were vested in full as of the option grant
date.
|
Name
|
Number
of Unvested Option Shares
(#)
|
Intrinsic
Value of Options Shares Based on Accelerated Vesting as of December
30,
2006
($)
(1)
|
|||||
Allen
Salmasi
|
243,056
|
$
|
1,149,655
|
||||
Frank
A. Cassou
|
194,445
|
919,725
|
|||||
George
C. Alex
|
145,834
|
689,795
|
|||||
R.
Andrew Salony
|
145,834
|
689,795
|
|||||
David
B. Needham
|
145,834
|
689,795
|
(1)
|
For
purposes of this calculation, the following assumptions were
used:
|
·
|
the
date of the change in control of the Company was December 30, 2006;
|
·
|
the
market price per share of the Company’s common stock on the date of the
change in control was equal to the last reported sale price for the
shares
of the Company’s common stock on December 29, 2006 as reported on the
Nasdaq OTC Bulletin Board Service, or $10.73 per
share;
|
·
|
the
number of unvested shares of the Company’s common stock as of December 30,
2006 was the number of shares that were subject to the Company’s unvested
share repurchase right as of that date;
and
|
·
|
the
value of the accelerated vesting of outstanding stock options is
the
intrinsic value of the options as of December 30, 2006 (that is,
the value
based upon the last reported sale price for the shares of the Company’s
common stock on December 29, 2006 less the option exercise
price).
|
Name
|
Fees
Earned or Paid in Cash
($)
(2)
|
Option
Awards
($)
(3)
|
Total
($)
|
|||||||
Douglas
F. Manchester
|
$
|
26,000
|
$
|
4,586
|
$
|
30,586
|
||||
Jack
Rosen
|
14,000
|
4,586
|
18,586
|
|||||||
Robert
T. Symington
|
21,500
|
9,173
|
32,923
|
|||||||
William
H. Webster
|
26,000
|
4,586
|
30,586
|
(1) |
As
employees of the Company, Messrs. Salmasi, Cassou, and Finn receive
no
compensation for serving as members of the Company’s Board of
Directors.
|
(2) |
The
Company’s standard fee arrangements for non-employee directors are as
follows: a $2,000 cash fee for each Board meeting attended in person,
a
$1,000 cash fee for each telephonic Board meeting attended, and a
$750
cash fee for each Board committee meeting attended. In addition,
non-employee directors also receive an annual stock option grant
of 35,000
shares of the Company’s common stock for service on the Board of Directors
and an annual stock option grant of 8,500 shares of the Company’s common
stock for service on each Board committee. This equity award policy
was
adopted beginning in July 2005.
|
(3) |
The
amounts reported in the Option Awards column represent the portion
of the
grant date fair value of the stock options granted to the non-employee
directors during 2006 and in prior years that was recognized for
financial
reporting purposes with respect to 2006 in accordance with Statement
of
Financial Accounting Standards No. 123 (revised 2004) “Share
Based Payment”
(SFAS 123(R)). Pursuant to SEC rules, the amounts reported exclude
the
impact of estimated forfeitures related to service-based vesting
conditions. Note that the amounts reported in this column reflect
the
Company’s accounting cost for these options, and do not correspond to the
actual economic value that will be received by the non-employee directors
from the options.
|
(4) |
The
grant date fair value of the stock options granted to the non-employee
directors during 2006 are as follows: Messrs. Manchester, Rosen,
and
Webster, $21,582; and Symington,
$43,165.
|
Name
|
Number
of Shares Underlying Outstanding Options
|
|||
Douglas
F. Manchester (a)
|
71,076
|
|||
Jack
Rosen (b)
|
41,666
|
|||
Robert
T. Symington (c)
|
49,999
|
|||
William
H. Webster (d)
|
58,333
|
(a)
|
Includes
an option to purchase 12,743 shares of the Company’s common stock with an
exercise price of $1.96 per share, granted on September 15, 2004;
an
option to purchase 50,000 shares of the Company’s common stock with an
exercise price of $6.00 per share, granted on April 13, 2005; and
an
option to purchase 8,333 shares of the Company’s common stock with an
exercise price of $6.00 per share, granted on April 27, 2006.
|
(b)
|
Includes
an option to purchase 33,333 shares of the Company’s common stock with an
exercise price of $6.00 per share, granted on April 13, 2005; and
an
option to purchase 8,333 shares of the Company’s common stock with an
exercise price of $6.00 per share, granted on April 27, 2006.
|
(c)
|
Includes
an option to purchase 33,333 shares of the Company’s common stock with an
exercise price of $6.00 per share, granted on April 13, 2005; and
an
option to purchase 16,666 shares of the Company’s common stock with an
exercise price of $6.00 per share, granted on April 27, 2006.
|
(d)
|
Includes
an option to purchase 50,000 shares of the Company’s common stock with an
exercise price of $6.00 per share, granted on April 13, 2005; and
an
option to purchase 8,333 shares of the Company’s common stock with an
exercise price of $6.00 per share, granted on April 27, 2005.
|
|
·
|
each
person or entity known to beneficially own more than 5% of our outstanding
common stock;
|
|
·
|
each
of our directors and executive officers; and
|
|
·
|
all
of our directors and executive officers as a
group.
|
Securities
Beneficially Owned
|
||||||||||
Name
and Address of Beneficial Owner
|
Shares
Beneficially Owned
|
Percentage
of
Shares
Outstanding
|
||||||||
Principal
Securityholders:
|
|
|||||||||
Navation
(1)
|
19,618,761
|
22.0
|
%
|
|||||||
Manchester
Financial Group, LP (2)
|
14,095,341
|
15.8
|
%
|
|||||||
Avenue
Capital Group (3)
|
11,042,260
|
11.6
|
%
|
|||||||
Midtown
Acquisitions LLC (4)
|
5,412,449
|
6.4
|
%
|
|||||||
Directors
and Executive Officers:
|
||||||||||
Allen
Salmasi (5)
|
28,488,854
|
31.8
|
%
|
|||||||
Frank
A. Cassou (6)
|
3,785,328
|
4.5
|
%
|
|||||||
George
C. Alex (7)
|
780,932
|
*
|
||||||||
Roy
D. Berger (8)
|
853,994
|
1.0
|
%
|
|||||||
Kevin
M. Finn (9)
|
1,400,046
|
1.7
|
%
|
|||||||
Mark
Kelley (10)
|
309,331
|
*
|
||||||||
Richard
Kornfeld (11)
|
268,127
|
*
|
||||||||
Jim
Madsen (12)
|
870,592
|
1.0
|
%
|
|||||||
David
B. Needham (13)
|
714,073
|
*
|
||||||||
R.
Andrew Salony (14)
|
850,268
|
1.0
|
%
|
|||||||
Kenneth
Stanwood (15)
|
288,271
|
*
|
||||||||
Douglas
F. Manchester (16)
|
14,169,732
|
15.9
|
%
|
|||||||
Jack
Rosen (17)
|
222,270
|
*
|
||||||||
Robert
T. Symington (18)
|
77,181
|
*
|
||||||||
William
H. Webster (19)
|
174,229
|
*
|
||||||||
All
directors and officers as a group (15 persons)
|
53,253,228
|
54.6
|
%
|
(1)
|
The
address for Navation, Inc. is c/o Mr. Alain Tripod, 15, rue
Général-Dufour, Case Postale 5556, CH - 1211 Genéve 11, Switzerland.
Includes 4,524,887 shares underlying Series A Preferred Stock that
are
convertible within a period of 60 days from the record
date.
|
(2)
|
The
address for Manchester Financial Group LP is One Market Place, 33rd
Floor,
San Diego, California 92101. Includes 4,524,887 shares underlying
Series A
Preferred Stock that are convertible within a period of 60 days from
the
record date.
|
(3)
|
The
address for Avenue Capital Group is 535 Madison Avenue, 14th Floor,
New
York, New York 10022. Includes 1,992,489 shares underlying options
that
are exercisable to purchase restricted stock, which are subject to
forfeiture prior to their vesting. Includes 9,049,771 shares underlying
Series A Preferred Stock that are convertible within a period of
60 days
from the record date.
|
(4)
|
Mr.
Thomas L. Kempner, Jr., Marvin H. Davidson, Stephen M. Dowicz, Scott
E.
Davidson, Michael J. Leffell, Timothy I. Levart, Robert J. Brivio,
Eric P.
Epstein, Anthony A. Yoseloff and Avram Z. Friedman have voting and/or
investment control over the shares held by Midtown Acquisition LLC.
The
address for Midtown Acquisition LLC is c/o MH Davidson & Co., 885
Third Avenue, Suite 3300, New York, New York 10022.
|
(5)
|
Allen
Salmasi is Chief Executive Officer of Navation, Inc. Mr. Salmasi
may be
deemed to beneficially own the shares of common stock held or record
by
Navation, Inc. Represents shares held by Allen Salmasi directly and
indirectly through Navation, Inc. Includes 225,706 shares underlying
options that are exercisable to purchase restricted stock, which
are
subject to forfeiture prior to their vesting. Includes 4,524,887
shares
underlying Series A Preferred Stock that are convertible within a
period
of 60 days from the record date.
|
(6)
|
Includes
180,565 shares underlying options that are exercisable to purchase
restricted stock, which are subject to forfeiture prior to their
vesting.
|
(7)
|
Represents
shares held by George C. Alex directly and indirectly through each
of
George C. Alex Grantor Retained Annuity Trust and The Alex Family
Foundation. Includes 135,424 shares underlying options that are
exercisable to purchase restricted stock, which are subject to forfeiture
prior to their vesting.
|
(8)
|
Includes
135,424 shares underlying options that are exercisable to purchase
restricted stock, which are subject to forfeiture prior to their
vesting.
|
(9)
|
Represents
shares held by Kevin M. Finn directly and indirectly through KFMF
Co.
Includes 135,424 shares underlying options that are exercisable to
purchase restricted stock, which are subject to forfeiture prior
to their
vesting. Includes 18,995 shares underlying Series A Preferred Stock
that
are convertible within a period of 60 days from the record
date.
|
(10)
|
Includes
90,282 shares underlying options that are exercisable to purchase
restricted stock, which are subject to forfeiture prior to their
vesting.
|
(11)
|
Includes
135,424 shares underlying options that are exercisable to purchase
restricted stock, which are subject to forfeiture prior to their
vesting.
|
(12)
|
Represents
shares held by Jim Madsen directly and indirectly through Jarrah
Inc.
Includes 135,424 shares underlying options that are exercisable to
purchase restricted stock, which are subject to forfeiture prior
to their
vesting.
|
(13)
|
Includes
135,424 shares underlying options that are exercisable to purchase
restricted stock, which are subject to forfeiture prior to their
vesting.
|
(14)
|
Includes
135,424 shares underlying options that are exercisable to purchase
restricted stock, which are subject to forfeiture prior to their
vesting.
|
(15)
|
Represents
shares held by Kenneth Stanwood directly and indirectly through The
K&G Stanwood Family Trust. Includes 67,948 shares underlying options
that are exercisable to purchase restricted stock, which are subject
to
forfeiture prior to their vesting.
|
(16)
|
Represents
shares held by Douglas F. Manchester directly and indirectly through
each
of Manchester Financial Group, LP and Manchester Grand Resorts, LP.
Includes 9,384 shares underlying options that are exercisable to
purchase
restricted stock, which are subject to forfeiture prior to their
vesting.
Includes 4,524,887 shares underlying Series A Preferred Stock that
are
convertible within a period of 60 days from the record
date.
|
(17)
|
Includes
8,007 shares underlying options that are exercisable to purchase
restricted stock, which are subject to forfeiture prior to their
vesting.
|
(18)
|
Includes
13,214 shares underlying options that are exercisable to purchase
restricted stock, which are subject to forfeiture prior to their
vesting.
|
(19)
|
Includes
9,384 shares underlying options that are exercisable to purchase
restricted stock, which are subject to forfeiture prior to their
vesting.
|
Name
of Selling Stockholder
|
Number
of
Shares
of
Common
Stock
Owned
Prior
to the
Offering
|
Number
of
Shares
of
Common
Stock
Issued or Issuable Upon the
Exercise
of Warrants
(1 )
|
Total
Number of Securities Owned Prior to the Offering
|
Total
Number of Securities Owned Being
Registered
|
Number
of Shares of Common
Stock
Owned After the Offering
|
Percentage
of
Common
Stock
Owned
After
the
Offering
(2 )
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
Davidson
Kempner Institutional Partners, LP
Davidson
Kempner Partners
DK
Acquisition Partners, LP
M.H.
Davidson & Co.
Serena
Limited
c/o
M.H. Davidson & Co.
65
East 55th Street
New
York, NY 10022
|
4,590,373
|
822,076
|
5,412,449
|
822,076
|
4,590,373
|
5.4
|
%
|
||||||||||||
Investcorp
Interlachen Multi-Strategy Master Fund Limited (3)
800
Nicollet Mall, Ste. 2500
Minneapolis,
MN 55402
|
0
|
69,818
|
69,818
|
69,818
|
0
|
*
|
|||||||||||||
Silver
Oak Capital, LLC (4)
245
Park Avenue, 26th Floor
New
York, NY 10167
|
0
|
681,685
|
681,685
|
681,685
|
0
|
*
|
|||||||||||||
Avenue
Investments, L.P. (5)
Avenue
Special Situations Fund IV, L.P.
c/o
Avenue Capital Group
535
Madison Avenue, 14th Floor
New
York, NY 10022
|
9,106,270
|
1,935,990
|
11,042,260
|
1,935,990
|
9,106,270
|
9.7
|
%
|
||||||||||||
Highbridge
International LLC
c/o
Highbridge Capital Management, LLC
9
West 57th Street, 27th Floor
New
York, NY 10019
|
10,000
|
353,493
|
363,493
|
353,493
|
10,000
|
*
|
|||||||||||||
Kings
Road Investments Ltd. (6)
c/o
Polygon Investment Partners LP
598
Madison Avenue, 14th Floor
New
York, NY 10022
|
0
|
246,408
|
246,408
|
246,408
|
0
|
*
|
(1) |
Unless
otherwise indicated, the warrants represented are exerciseable at
$0.01
per share of our common stock.
|
(2) |
Unless
otherwise indicated, assumes that each selling stockholder will resell
all
of the shares of our common stock offered hereunder. Applicable percentage
of ownership is based on 84,470,013 shares of our common stock
outstanding as of March 28, 2007, together with securities exerciseable
for, or convertible into, shares of common stock within 60 days of
March
28, 2007.
|
(3) |
Investcorp
Interlachen Multi-Strategy Master Fund Limited exercised its 69,877
warrants by means of cashless
exercise.
|
(4) |
Silver
Oak Capital, LLC exercised its 682,323 warrants by means of cashless
exercise.
|
(5) |
Includes
9,049,771 shares of common stock issuable upon conversion of
Series A
Convertible Preferred Stock, and 56,499 shares issuable pursuant
to
options that are exercisable within 60
days.
|
(6) |
King
Road Investments Ltd. exercised its 246,623 warrants by means
of cashless
exercise.
|
|
·
|
our
directors serve staggered, three-year terms and accordingly, pursuant
to
Delaware law, can only be removed with cause;
|
|
·
|
no
action can be taken by stockholders except at an annual or special
meeting
of the stockholders called in accordance with our bylaws, and stockholders
may not act by written consent;
|
|
·
|
our
board of directors will be expressly authorized to make, alter or
repeal
our bylaws, and our stockholders will be able to make, alter or repeal
our
bylaws by a vote of 66-2/3% of the issued and outstanding voting
shares;
|
|
·
|
any
vacancies on the board of directors would be filled by a majority
vote of
the board;
|
|
·
|
our
board of directors will be authorized to issue preferred stock without
stockholder approval; and
|
|
·
|
we
will indemnify officers and directors against losses that they may
incur
in investigations and legal proceedings resulting from their services
to
us, which may include services in connection with takeover defense
measures.
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchases;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a part;
|
|
·
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number
of such
shares at a stipulated price per share;
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
|
|
·
|
a
combination of any such methods of sale; or
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
•
|
Annual Report on Form 10-K for the fiscal year ended December 30, 2006; |
•
|
Quarterly
Report on Form 10-Q filed May 15, 2007;
|
•
|
Amended Quarterly Report on Form 10-Q/A filed April 20, 2007; |
•
|
Current Reports on Form 8-K filed on January 3, 2007, April 12, 2007 and May 8, 2007; and |
•
|
Definitive Proxy Statement on Schedule 14A dated April 19, 2007, relating to our annual meeting of stockholders to be held May 17, 2007. |
Page
|
||
Consolidated
Financial Statements
|
||
Report
of Ernst & Young LLP, Independent Registered Public Accounting
Firm
|
F-2
|
|
Consolidated
Balance Sheets as of December 30, 2006 and December 31,
2005
|
F-3
|
|
Consolidated
Statements of Operations for the Year Ended December 30, 2006 and
for the
Period from Inception (April 13, 2005) to December 31,
2005
|
F-4
|
|
Consolidated
Statement of Stockholders’/Members’ Equity for the Year Ended December 30,
2006 and for the Period from Inception (April 13, 2005) to December
31,
2005
|
F-5
|
|
Consolidated
Statements of Cash Flows for the Year Ended December 30, 2006 and
for the
Period from Inception (April 13, 2005) to December 31,
2005
|
F-6
|
|
Notes
to Consolidated Financial Statements
|
F-7
|
|
Schedule
II - Valuation and Qualifying Accounts
|
F-41
|
/s/
ERNST & YOUNG LLP
|
|||
San
Diego, California
March
26, 2007,
except
for Note 14, as to which the date is
March
29, 2007
|
|
December
30,
2006
|
December
31,
2005
|
|||||
ASSETS
|
|
|
|||||
Current
assets:
|
|
|
|||||
Cash
and cash equivalents
|
$
|
32,980
|
$
|
93,649
|
|||
Short-term
investments
|
167,705
|
365,582
|
|||||
Accounts
receivable, net of allowance for doubtful accounts of $321 and $391,
respectively
|
5,056
|
3,712
|
|||||
Deferred
contract costs
|
2,397
|
898
|
|||||
Prepaid
expenses and other current assets
|
7,837
|
8,677
|
|||||
Total
current assets
|
215,975
|
472,518
|
|||||
Restricted
cash
|
75,000
|
—
|
|||||
Wireless
spectrum licenses, net
|
527,998
|
45,467
|
|||||
Goodwill
|
32,184
|
24,782
|
|||||
Other
intangible assets, net
|
18,570
|
18,100
|
|||||
Property
and equipment, net
|
17,529
|
11,092
|
|||||
Other
noncurrent assets
|
9,823
|
7,815
|
|||||
Total
assets
|
$
|
897,079
|
$
|
579,774
|
|||
|
|||||||
LIABILITIES
AND STOCKHOLDERS’/MEMBERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
1,630
|
$
|
3,406
|
|||
Accrued
expenses
|
33,537
|
5,152
|
|||||
Current
portion of long-term obligations
|
3,065
|
2,200
|
|||||
Deferred
revenue
|
10,253
|
4,103
|
|||||
Current
tax liability
|
80
|
417
|
|||||
Other
current liabilities and deferred credits
|
1,160
|
822
|
|||||
Total
current liabilities
|
49,725
|
16,100
|
|||||
Deferred
income tax liabilities
|
75,774
|
—
|
|||||
Long-term
deferred credits and reserves
|
3,324
|
8,306
|
|||||
Long-term
obligations, net of current portion
|
298,030
|
14,934
|
|||||
Total
liabilities
|
426,853
|
39,340
|
|||||
Minority
interest in subsidiary
|
1,048
|
1,070
|
|||||
Commitments
and contingencies
|
|||||||
Stockholders’/Members’
equity:
|
|||||||
Preferred
stock, $0.001 par value; 25,000 shares authorized; no shares issued
or
outstanding
|
—
|
—
|
|||||
Common
stock, $0.001 par value; 400,000 shares authorized; 83,716 and 83,715
issued and outstanding, respectively, at December 30, 2006
|
84
|
—
|
|||||
Membership
interests; 488,672 interests issued and outstanding as of December
31,
2005
|
—
|
589,354
|
|||||
Additional
paid-in-capital
|
620,430
|
—
|
|||||
Common
stock in treasury, at cost, 1 share at December 30, 2006
|
(7
|
)
|
—
|
||||
Accumulated
other comprehensive loss
|
(357
|
)
|
(832
|
)
|
|||
Accumulated
deficit
|
(150,972
|
)
|
(49,158
|
)
|
|||
Total
stockholders’/members’ equity
|
469,178
|
539,364
|
|||||
Total
liabilities and stockholders’/members’ equity
|
$
|
897,079
|
$
|
579,774
|
|
Year
Ended December 30, 2006
|
Inception
(April
13, 2005) to December 31, 2005
|
|||||
Revenues
|
$
|
24,284
|
$
|
4,144
|
|||
Operating
expenses:
|
|||||||
Cost
of revenues
|
12,054
|
4,573
|
|||||
Engineering,
research and development
|
52,810
|
17,349
|
|||||
General
and administrative
|
51,537
|
15,318
|
|||||
Sales
and marketing
|
9,992
|
2,960
|
|||||
Business
realignment costs (credits)
|
(7,121
|
)
|
13,031
|
||||
Purchased
in-process research and development
|
3,538
|
6,600
|
|||||
Total
operating expenses
|
122,810
|
59,831
|
|||||
Loss
from operations
|
(98,526
|
)
|
(55,687
|
)
|
|||
Other
income (expense)
|
|||||||
Interest
income
|
12,533
|
11,051
|
|||||
Interest
expense
|
(20,647
|
)
|
(1,006
|
)
|
|||
Other
income and expense, net
|
(23
|
)
|
(20
|
)
|
|||
Total
other income (expense), net
|
(8,137
|
)
|
10,025
|
||||
Loss
before provision for income taxes and minority interest
|
(106,663
|
)
|
(45,662
|
)
|
|||
Income
tax benefit (provision)
|
35
|
(417
|
)
|
||||
Minority
interest
|
1,608
|
127
|
|||||
Net
loss
|
$
|
(105,020
|
)
|
$
|
(45,952
|
)
|
|
Net
loss per common share - basic and diluted
|
$
|
(1.28
|
)
|
N/A
|
|||
Weighted
average shares used in per share calculation
|
81,841
|
N/A
|
See
Note 1 for pro forma net loss per common share
information.
|
Common
Stock
|
Membership
Interests
|
Additional
Paid-In
|
Treasury
Stock
|
Accumulated
Other
Compre-hensive
|
Accumulated
|
Total
Stockholders’/
Members’
|
Compre-
hensive
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Units
|
Amount
|
Capital
|
Shares
|
Amount
|
Loss
|
Deficit
|
Equity
|
Loss
|
||||||||||||||||||||||||
Capital
contributions upon inception (April 13, 2005)
|
—
|
$
|
—
|
488,672
|
$
|
588,279
|
$
|
—
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
588,279
|
|
||||||||||||||||
Accumulated
deficit of variable interest entity contributed upon inception (April
13,
2005)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(3,206
|
)
|
(3,206
|
)
|
|
|||||||||||||||||||||
Share-based
compensation for non-employee advisory services
|
—
|
—
|
—
|
1,075
|
—
|
—
|
—
|
—
|
—
|
1,075
|
|
|||||||||||||||||||||||
Unrealized
net losses on investments
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(832
|
)
|
—
|
(832
|
)
|
$
|
(832
|
)
|
|||||||||||||||||||
Net
loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(45,952
|
)
|
(45,952
|
)
|
(45,952
|
)
|
||||||||||||||||||||
Balance
at December 31, 2005
|
—
|
—
|
488,672
|
589,354
|
—
|
—
|
—
|
(832
|
)
|
(49,158
|
539,364
|
$
|
(46,784
|
)
|
||||||||||||||||||||
Units
issued and stock options exchanged in a business
acquisition
|
—
|
—
|
1,558
|
1,558
|
904
|
—
|
—
|
—
|
—
|
2,462
|
|
|||||||||||||||||||||||
Shares/units
issued for stock/unit options and warrants exercised, net of
repurchases
|
1,504
|
2
|
1,382
|
1,382
|
13
|
(1
|
)
|
(7
|
)
|
—
|
—
|
1,390
|
|
|||||||||||||||||||||
Sale
of restricted units
|
—
|
—
|
1,000
|
1,000
|
—
|
—
|
—
|
—
|
—
|
1,000
|
|
|||||||||||||||||||||||
Share-based
compensation expense
|
—
|
—
|
—
|
3,969
|
1,187
|
—
|
—
|
—
|
—
|
5,156
|
|
|||||||||||||||||||||||
Distributions
to members
|
—
|
—
|
—
|
(3,481
|
)
|
—
|
—
|
—
|
—
|
—
|
(3,481
|
)
|
|
|||||||||||||||||||||
Accumulated
deficit of variable interest entity eliminated upon acquisition by
NextWave
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
3,206
|
3,206
|
|
|||||||||||||||||||||||
Fair
value of warrants issued in connection with the issuance of 7% Senior
Secured Notes
|
—
|
—
|
—
|
24,626
|
—
|
—
|
—
|
—
|
—
|
24,626
|
|
|||||||||||||||||||||||
Exchange
membership interests for common shares in conjunction with the Corporate
Conversion
|
82,212
|
82
|
(492,612
|
)
|
(618,408
|
)
|
618,326
|
—
|
—
|
—
|
—
|
—
|
|
|||||||||||||||||||||
Unrealized
net gains on investments
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
475
|
—
|
475
|
$
|
475
|
||||||||||||||||||||||
Net
loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(105,020
|
)
|
(105,020
|
)
|
(105,020
|
)
|
||||||||||||||||||||
Balance
at December 30, 2006
|
83,716
|
$
|
84
|
—
|
$
|
—
|
$
|
620,430
|
(1
|
)
|
$
|
(7
|
)
|
$
|
(357
|
)
|
$
|
(150,972
|
)
|
$
|
469,178
|
$
|
(104,545
|
)
|
|
Year
Ended December 30,
2006
|
Inception
(April
13, 2005) to December 31,
2005
|
|||||
OPERATING
ACTIVITIES
|
|||||||
Net
loss
|
$
|
(105,020
|
)
|
$
|
(45,952
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Depreciation
|
6,081
|
661
|
|||||
Amortization
of intangible assets
|
5,831
|
2,926
|
|||||
Non-cash
share-based compensation
|
5,156
|
1,075
|
|||||
Non-cash
business realignment costs (credits)
|
(7,121
|
)
|
13,031
|
||||
In-process
research and development
|
3,538
|
6,600
|
|||||
Accretion
of interest expense
|
9,503
|
939
|
|||||
Losses
incurred on strategic investment
|
1,494
|
159
|
|||||
Minority
interest
|
(1,537
|
)
|
—
|
||||
Other
non-cash adjustments
|
848
|
(614
|
)
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(1,513
|
)
|
(406
|
)
|
|||
Deferred
contract costs
|
(1,499
|
)
|
(424
|
)
|
|||
Prepaid
expenses and other current assets
|
(2,463
|
)
|
(3,742
|
)
|
|||
Other
assets
|
(724
|
)
|
205
|
||||
Accounts
payable and accrued liabilities
|
22,819
|
4,758
|
|||||
Deferred
revenue
|
8,599
|
1,760
|
|||||
Other
current liabilities and deferred credits
|
(329
|
)
|
350
|
||||
Net
cash used in operating activities
|
(56,337
|
)
|
(18,674
|
)
|
|||
INVESTING
ACTIVITIES
|
|||||||
Proceeds
from maturities of available-for-sale securities
|
457,985
|
1,137,962
|
|||||
Proceeds
from the sale of available-for-sale securities
|
1,091,844
|
—
|
|||||
Purchases
of available-for-sale securities
|
(1,351,477
|
)
|
(1,503,544
|
)
|
|||
Payments
for wireless spectrum licenses
|
(400,337
|
)
|
(18,780
|
)
|
|||
Cash
paid for business combination, net of cash acquired
|
(8,446
|
)
|
(46,621
|
)
|
|||
Payment
for investment in software development company
|
—
|
(4,500
|
)
|
||||
Purchase
of property and equipment
|
(13,036
|
)
|
(7,278
|
)
|
|||
Other,
net
|
(1,909
|
)
|
—
|
||||
Net
cash used in investing activities
|
(225,376
|
)
|
(442,761
|
)
|
|||
FINANCING
ACTIVITIES
|
|||||||
Proceeds
from long-term obligations, net of costs to issue
|
295,018
|
—
|
|||||
Payments
on long-term obligations
|
(2,502
|
)
|
(15
|
)
|
|||
Payment
to restricted cash account securing long-term obligations
|
(75,000
|
)
|
—
|
||||
Proceeds
from the sale of equity interests, net of repurchases
|
2,390
|
—
|
|||||
Proceeds
from investment by joint venture partner
|
2,585
|
—
|
|||||
Cash
distributions paid to members
|
(1,447
|
)
|
—
|
||||
Net
cash provided by (used in) financing activities
|
221,044
|
(15
|
)
|
||||
Net
decrease in cash and cash equivalents
|
(60,669
|
)
|
(461,450
|
)
|
|||
Cash
and cash equivalents, beginning of period
|
93,649
|
555,099
|
|||||
Cash
and cash equivalents, end of period
|
$
|
32,980
|
$
|
93,649
|
(in
thousands)
|
|
|||
Cash
|
$
|
555,099
|
||
Prepaid
expenses and other current assets
|
1,240
|
|||
Property
and equipment, net
|
9,706
|
|||
Wireless
spectrum licenses
|
33,597
|
|||
Goodwill
|
4,619
|
|||
Deposits
and other noncurrent assets
|
369
|
|||
Lease
obligations for wireless spectrum licenses
|
(16,107
|
)
|
||
Accrued
lease liability
|
(1,260
|
)
|
||
Accrued
expenses and other current liabilities
|
(1,120
|
)
|
||
Minority
interest in variable interest entity
|
(1,070
|
)
|
||
Accumulated
deficit of variable interest entity
|
3,206
|
|||
Total
membership interests
|
$
|
588,279
|
(in
thousands, except per share data)
|
Year
Ended December 30,
2006
|
(Pro
Forma) Inception
(April
13, 2005) to December 31,
2005
|
|||||
Net
loss
|
$
|
(105,020
|
)
|
$
|
(45,952
|
)
|
|
Basic
and diluted loss per common share
|
$
|
(1.28
|
)
|
||||
Pro
forma basic and diluted loss per common share
|
$
|
(0.56
|
)
|
||||
Weighted
average shares used in per share calculation
|
81,841
|
—
|
|||||
Pro
forma weighted average shares used in per share
calculation
|
—
|
81,445
|
|||||
Weighted
average securities that could potentially dilute earnings per share
in the
future that are not included above as they are
antidilutive:
|
|||||||
Outstanding
stock options
|
9,209
|
—
|
|||||
Common
stock warrants
|
2,313
|
—
|
|||||
Restricted
stock
|
149
|
—
|
|||||
Pro
forma outstanding stock options
|
—
|
5,934
|
|||||
Pro
forma common stock warrants
|
—
|
220
|
(in
thousands)
|
Amortized
Cost
|
Gains
|
Losses
|
Fair
Value
|
|||||||||
December
30, 2006
|
|||||||||||||
Municipal
securities
|
$
|
177,442
|
$
|
—
|
$
|
(6
|
)
|
$
|
177,436
|
||||
U.S.
Treasury and Agency obligations
|
39,251
|
—
|
(200
|
)
|
39,051
|
||||||||
Corporate
notes
|
25,845
|
—
|
(151
|
)
|
25,694
|
||||||||
Money
market funds
|
500
|
—
|
—
|
500
|
|||||||||
Cash
|
24
|
—
|
—
|
24
|
|||||||||
Total
portfolio
|
243,062
|
—
|
(357
|
)
|
242,705
|
||||||||
Less
restricted portion
|
(75,000
|
)
|
—
|
—
|
(75,000
|
)
|
|||||||
Total
unrestricted short-term investments
|
$
|
168,062
|
$
|
—
|
$
|
(357
|
)
|
$
|
167,705
|
||||
December
31, 2005
|
|||||||||||||
Municipal
securities
|
$
|
280,767
|
$
|
1
|
$
|
(34
|
)
|
$
|
280,734
|
||||
U.S.
Treasury and Agency obligations
|
55,117
|
—
|
(451
|
)
|
54,666
|
||||||||
Corporate
notes
|
30,524
|
—
|
(342
|
)
|
30,182
|
||||||||
Total
short-term investments
|
$
|
366,408
|
$
|
1
|
$
|
(827
|
)
|
$
|
365,582
|
(in
thousands)
|
Amortized
Cost
|
Fair
Value
|
|||||
Due
in less than one year
|
$
|
79,476
|
$
|
79,119
|
|||
Due
in 1 to 5 years
|
3,521
|
3,521
|
|||||
Due
in greater than 5 to 10 years
|
7
|
7
|
|||||
Due
in greater than 10 years
|
160,058
|
160,058
|
|||||
|
$
|
243,062
|
$
|
242,705
|
|
|
|
Less
than 12 months of Temporary Impairment
|
|
12
months or More of
Temporary
Impairment
|
|
Total
|
|
||||||||||||||
(dollars
in thousands)
|
|
Number
of investments
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||
Municipal
securities
|
5
|
$
|
11,411
|
$
|
(6
|
)
|
$
|
—
|
$
|
—
|
$
|
11,411
|
$
|
(6
|
)
|
|||||||
U.S.
Treasury and Agency obligations
|
3
|
4,031
|
(1
|
)
|
34,797
|
(199
|
)
|
38,828
|
(200
|
)
|
||||||||||||
Corporate
notes
|
3
|
—
|
—
|
25,141
|
(151
|
)
|
25,141
|
(151
|
)
|
|||||||||||||
Total
portfolio
|
$
|
15,442
|
$
|
(7
|
)
|
$
|
59,938
|
$
|
(350
|
)
|
$
|
75,380
|
$
|
(357
|
)
|
December
30, 2006
|
December
31, 2005
|
||||||||||||||||||
(dollars
in thousands)
|
Weighted
Average Life
(in
Years)
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
Weighted
Average Life
(in
Years)
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
|||||||||||||
Amortized
intangible assets:
|
|||||||||||||||||||
Leased
wireless spectrum licenses
|
14.1
|
$
|
82,385
|
$
|
4,438
|
15.0
|
$
|
31,347
|
$
|
1,510
|
|||||||||
Purchased
technology
|
7.0
|
9,614
|
1,821
|
7.0
|
8,600
|
555
|
|||||||||||||
Purchased
customer base
|
8.0
|
5,960
|
1,044
|
8.0
|
5,700
|
321
|
|||||||||||||
Non-compete
agreements
|
4.0
|
2,800
|
1,193
|
4.0
|
2,800
|
537
|
|||||||||||||
Other
|
7.4
|
2,002
|
252
|
3.0
|
16
|
3
|
|||||||||||||
|
$
|
102,761
|
$
|
8,748
|
$
|
48,463
|
$
|
2,926
|
|||||||||||
Intangible
assets not subject to amortization:
|
|||||||||||||||||||
Wireless
spectrum licenses
|
$
|
450,051
|
$
|
15,630
|
|||||||||||||||
Goodwill
|
32,184
|
24,782
|
|||||||||||||||||
Purchased
tradenames and trademarks
|
2,504
|
2,400
|
|||||||||||||||||
|
$
|
484,739
|
$
|
42,812
|
(dollars
in thousands)
|
Estimated
Useful
Life
(in
years)
|
December
30,
2006
|
December
31,
2005
|
|||||||
Furniture
and equipment
|
2-7
|
$
|
13,626
|
$
|
7,071
|
|||||
Purchased
software
|
2-3
|
7,296
|
3,459
|
|||||||
Leasehold
improvements
|
1-5
|
2,358
|
879
|
|||||||
Construction
in progress
|
N/A
|
846
|
380
|
|||||||
|
24,126
|
11,789
|
||||||||
Less:
Accumulated depreciation
|
(6,597
|
)
|
(697
|
)
|
||||||
Total
property and equipment, net
|
$
|
17,529
|
$
|
11,092
|
(in
thousands)
|
December
30,
2006
|
December
31,
2005
|
|||||
Accrued
interest
|
$
|
11,178
|
$
|
—
|
|||
Accrued
payroll and related expenses
|
9,417
|
3,426
|
|||||
Accrued
professional fees
|
3,746
|
720
|
|||||
Accrued
expenses
|
4,870
|
715
|
|||||
Accrued
equity distributions payable
|
2,034
|
—
|
|||||
Other
|
2,292
|
291
|
|||||
Total
accrued liabilities
|
$
|
33,537
|
$
|
5,152
|
Options
for NextWave Wireless Inc
Common
Stock
|
Options
for NextWave Wireless Inc. Common Stock Issued Upon Conversion
of
CYGNUS
Plan (1)
|
Options
for CYGNUS Communications, Inc. Common
Stock (2)
|
Options
for PacketVideo
Common
Stock
|
||||||||||
Risk-free
interest rate
|
4.36%-5.11
|
%
|
4.62%-5.03
|
%
|
4.35%-4.39
|
%
|
4.36%-5.11
|
%
|
|||||
Expected
term (in years)
|
1.5-5.5
|
0-4.7
|
2.5-5.9
|
2.5-5.5
|
|||||||||
Expected
and weighted average stock price volatility
|
50
|
%
|
50
|
%
|
50
|
%
|
50
|
%
|
|||||
Expected
dividend yield
|
0
|
%
|
0
|
%
|
0
|
%
|
0
|
%
|
|||||
Weighted
average grant-date fair value of options granted
|
$
|
2.59
|
$
|
7.51
|
$
|
2.61
|
$
|
0.42
|
(1) |
Represents
assumptions used as of the conversion date to value options to purchase
common stock of NextWave Wireless Inc. that were issued to holders
of
options to purchase common stock of CYGNUS Communications,
Inc.
|
(2) |
Represents
assumptions used to value options to purchase common stock of CYGNUS
Communications, Inc. prior to the Corporate Conversion Merger, at
converted values.
|
(in
thousands)
|
|
|||
Advances
to CYGNUS, including interest
|
$
|
18,145
|
||
Accumulated
CYGNUS losses while consolidated in
accordance
with FIN 46R
|
(8,550
|
)
|
||
Conversion
of convertible preferred stock into common stock
|
1,884
|
|||
Membership
interests issued
|
1,558
|
|||
Fair
value of stock options exchanged
|
904
|
|||
Cash
paid
|
53
|
|||
Less
cash acquired
|
(4,190
|
)
|
||
Total
acquisition cost
|
$
|
9,804
|
(in
thousands)
|
|
|||
Accounts
receivable
|
$
|
196
|
||
Prepaid
expenses and other current assets
|
511
|
|||
Property
and equipment
|
704
|
|||
Goodwill
|
5,447
|
|||
Intangible
assets
|
3,680
|
|||
Deposits
and other noncurrent assets
|
658
|
|||
Accounts
payable, accrued expenses and other current liabilities
|
(613
|
)
|
||
Unfavorable
lease liability
|
(692
|
)
|
||
Long-term
obligations
|
(87
|
)
|
||
Total
acquisition cost
|
$
|
9,804
|
(dollars
in thousands)
|
Life
|
Amount
|
|||||
In-process
research and development
|
none
|
$
|
1,890
|
||||
Purchased
technology
|
7
years
|
1,680
|
|||||
Purchased
tradenames and trademarks
|
5
years
|
110
|
|||||
|
$
|
3,680
|
(in
thousands)
|
Opening
Balance
Sheet
Accrual
|
Adjustment
to Goodwill
|
Interest
Accretion
|
Amounts
Paid in Cash
|
Balance
at December 30,
2006
|
|||||||||||
Unfavorable
lease liability
|
$
|
692
|
$
|
(374
|
)
|
$
|
4
|
$
|
(31
|
)
|
$
|
291
|
(in
thousands)
|
|
|||
Accounts
receivable
|
$
|
3,498
|
||
Deferred
contract costs
|
474
|
|||
Prepaid
expenses and other current assets
|
792
|
|||
Property
and equipment
|
679
|
|||
Goodwill
|
20,238
|
|||
Intangible
assets
|
26,100
|
|||
Deposits
and other noncurrent assets
|
825
|
|||
Accounts
payable, accrued expenses and other current liabilities
|
(3,047
|
)
|
||
Deferred
revenue
|
(2,343
|
)
|
||
Noncurrent
deferred rent
|
(520
|
)
|
||
Total
acquisition cost
|
$
|
46,696
|
(dollars
in thousands)
|
Life
|
Amount
|
|||||
Purchased
technology
|
7
years
|
$
|
8,600
|
||||
Customer
relationships
|
8
years
|
5,700
|
|||||
In-process
research and development
|
none
|
6,600
|
|||||
Non-compete
agreements
|
4
years
|
2,800
|
|||||
Purchased
tradenames and trademarks
|
indefinite
|
2,400
|
|||||
|
$
|
26,100
|
(in
thousands)
(unaudited)
|
Revenues
|
$
|
8,449
|
||
Net
loss(1)
|
$
|
(48,659
|
)
|
(in
thousands)
|
Year
Ended
December
30,
2006
|
Inception
(April
13, 2005) to December 31,
2005
|
|||||
Revenues
from customers located in:
|
|
|
|||||
United
States
|
$
|
16,511
|
$
|
1,858
|
|||
Japan
|
4,657
|
1,324
|
|||||
Europe
|
2,459
|
552
|
|||||
Rest
of the world
|
657
|
410
|
|||||
Total
revenues
|
$
|
24,284
|
$
|
4,144
|
(dollars
in thousands)
|
December
30,
2006
|
December
31,
2005
|
|||||
7%
Senior Secured Notes, $350,000 due 2010, net of unamortized discount
and
fair value of warrants of $69,325, interest payable semiannually
in
January and July each year, secured by $525,643 in FCC licenses and
spectrum leases and $75,000 in restricted cash
|
$
|
280,675
|
$
|
—
|
|||
Wireless
spectrum leases, weighted average imputed interest of 8.43% at December
30, 2006, scheduled maturities ranging from 2011 through 2019, net
of
unamortized discounts of $9,758 and $9,353, respectively, with three
to
five renewal options ranging from 10 to 15 years each, secured by
$39,194
in wireless spectrum licenses
|
20,091
|
17,047
|
|||||
Other
|
329
|
87
|
|||||
Total
long-term obligations
|
301,095
|
17,134
|
|||||
Less
current portion
|
(3,065
|
)
|
(2,200
|
)
|
|||
Long-term
portion
|
$
|
298,030
|
$
|
14,934
|
(in
thousands)
Fiscal
Years:
|
||||
2007
|
$
|
3,065
|
||
2008
|
3,070
|
|||
2009
|
2,674
|
|||
2010
|
352,518
|
|||
2011
|
2,411
|
|||
Thereafter
|
16,440
|
|||
380,178
|
||||
Less
unamortized discount
|
(79,083
|
)
|
||
Less
current portion
|
(3,065
|
)
|
||
Total
long-term obligations
|
$
|
298,030
|
|
December
30, 2006
|
December
31, 2005
|
|||||||||||
(in
thousands)
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
|||||||||
Financial
assets:
|
|
|
|
|
|||||||||
Cash
and cash equivalents
|
$
|
32,980
|
$
|
32,980
|
$
|
93,649
|
$
|
93,649
|
|||||
Investment
securities
|
167,705
|
167,705
|
365,582
|
365,582
|
|||||||||
Restricted
cash
|
75,000
|
75,000
|
—
|
—
|
|||||||||
Financial
liabilities:
|
|||||||||||||
7%
Senior Secured Notes
|
280,675
|
280,675
|
—
|
—
|
|||||||||
Wireless
spectrum leases
|
20,091
|
15,785
|
17,047
|
17,047
|
(in
thousands)
Fiscal
Years:
|
||||
2007
|
$
|
7,535
|
||
2008
|
4,044
|
|||
2009
|
1,350
|
|||
Total
|
$
|
12,929
|
(in
thousands)
|
Lease
Commitments
|
Sublease
Rentals
|
Net
|
|||||||
Fiscal
Years:
|
||||||||||
2007
|
$
|
7,037
|
$
|
(1,099
|
)
|
$
|
5,938
|
|||
2008
|
6,429
|
(198
|
)
|
6,231
|
||||||
2009
|
4,450
|
-
|
4,450
|
|||||||
2010
|
2,808
|
-
|
2,808
|
|||||||
2011
|
276
|
-
|
276
|
|||||||
Thereafter
|
362
|
-
|
362
|
|||||||
$
|
21,362
|
$
|
(1,297
|
)
|
$
|
20,065
|
(in
thousands)
|
Year
Ended December 30,
2006
|
Inception
(April 13, 2005)
to
December 31,
2005
|
|||||
United
States
|
$
|
(103,272
|
)
|
$
|
(43,737
|
)
|
|
Foreign
|
(3,391
|
)
|
(1,925
|
)
|
|||
$
|
(106,663
|
)
|
$
|
(45,662
|
)
|
(in
thousands)
|
Year
Ended December 30,
2006
|
Inception
(April 13, 2005)
to
December 31,
2005
|
|||||
Current
income tax expense (benefit):
|
|||||||
Federal
|
$
|
(265
|
)
|
$
|
258
|
||
State
|
10
|
7
|
|||||
Foreign
|
220
|
152
|
|||||
Total
provision (benefit) for taxes
|
$
|
(35
|
)
|
$
|
417
|
December
30,
2006
|
December
31,
2005
|
||||||
Current
deferred income tax assets:
|
|||||||
Deferred
revenue
|
$
|
4,777
|
$
|
1,709
|
|||
Other
current reserves and accruals
|
1,802
|
811
|
|||||
Total
current deferred income tax assets
|
6,579
|
2,520
|
|||||
Noncurrent
deferred income tax assets:
|
|||||||
Net
operating losses
|
48,453
|
26,390
|
|||||
Research
and development and other credit carryforwards
|
298
|
2,234
|
|||||
Capitalized
start-up expenses
|
24,613
|
13,635
|
|||||
Capitalized
research and experimentation expenditures
|
761
|
2,544
|
|||||
Other
noncurrent reserves and accruals
|
2,532
|
246
|
|||||
Total
noncurrent deferred income tax assets
|
76,657
|
45,049
|
|||||
Noncurrent
deferred income tax liabilities:
|
|||||||
Fixed
assets and other intangible assets
|
(580
|
)
|
(6,155
|
)
|
|||
Intangible
assets not subject to amortization
|
(75,774
|
)
|
—
|
||||
Total
noncurrent deferred income tax liabilities
|
(76,354
|
)
|
(6,155
|
)
|
|||
Valuation
allowance
|
(82,656
|
)
|
(41,414
|
)
|
|||
Net
deferred income tax liability
|
$
|
(75,774
|
)
|
$
|
—
|
Year
Ended December 30,
2006
|
Inception
(April 13, 2005) to
December
31,
2005
|
||||||
Federal
statutory rate
|
(35.0
|
)%
|
(35.0
|
)%
|
|||
State
taxes, net of federal effect
|
0.0
|
0.0
|
|||||
Effect
of non-consolidated affiliates
|
3.2
|
(1.3
|
)
|
||||
In-process
research and development
|
1.2
|
4.1
|
|||||
Increase
in valuation allowance
|
30.1
|
37.6
|
|||||
Other
|
0.5
|
(4.5
|
)
|
||||
Total
provision for taxes
|
0.0
|
%
|
0.9
|
%
|
(in
thousands)
|
||||
Stock
options:
|
||||
Granted
and outstanding
|
10,934
|
|||
Available
for future grants
|
1,747
|
|||
Warrants
|
3,106
|
|||
15,787
|
Options
(in
thousands)
|
Weighted
Average Exercise Price
per
Share
|
Weighted
Average Remaining
Contractual
Term (in Years)
|
Aggregate
Intrinsic
Value
(in
thousands)
|
||||||||||
Outstandiung
at December 31, 2005
|
6,611
|
$
|
5.78
|
||||||||||
Granted
|
5,283
|
$
|
6.43
|
||||||||||
Exercised
|
(267
|
)
|
$
|
5.45
|
|||||||||
Cancellation
of awards modified
|
(314
|
)
|
$
|
2.23
|
|||||||||
Cancelled
|
(379
|
)
|
$
|
5.71
|
|||||||||
Outstanding
at December 30, 2006
|
10,934
|
$
|
6.20
|
8.8
|
$
|
49,477
|
|||||||
Exercisable
at December 30, 2006
|
10,132
|
$
|
5.91
|
8.7
|
$
|
48,800
|
Options
(in
thousands)
|
Weighted
Average
Grant
Date
Fair Value
per
Share
|
||||||
Unvested
at December 31, 2005
|
5,522
|
$
|
—
|
(1)
|
|||
Granted
|
5,283
|
$
|
3.13
|
||||
Vested
|
(2,907
|
)
|
$
|
1.03
|
(1)
|
||
Effective
cancellation of unvested awards modified
|
(174
|
)
|
$
|
0.02
|
(1)
|
||
Canceled
|
(368
|
)
|
$
|
0.35
|
(1)
|
||
Early
exercise of unvested options
|
(5
|
)
|
$
|
1.14
|
(1)
|
||
Unvested
at December 30, 2006
|
7,351
|
$
|
1.82
|
(1)
|
Options
(in
thousands)
|
Weighted
Average Exercise Price
per
Share
|
Weighted
Average Remaining
Contractual
Term (in Years)
|
Aggregate
Intrinsic
Value
(in
thousands)
|
||||||||||
Outstanding
at December 31, 2005
|
8,225
|
$
|
1.00
|
||||||||||
Granted
|
1,459
|
$
|
1.00
|
||||||||||
Forfeited
|
(285
|
)
|
$
|
1.00
|
|||||||||
Outstanding
at December 30, 2006
|
9,399
|
$
|
1.00
|
5.7
|
$
|
7,426
|
|||||||
Exercisable
at December 30, 2006
|
2,812
|
$
|
1.00
|
5.6
|
$
|
2,222
|
Options
(in
thousands)
|
Weighted
Average
Grant
Date
Fair
Value
per Share
|
||||||
Unvested
at December 31, 2005
|
8,225
|
$
|
—
|
(1)
|
|||
Granted
|
1,459
|
$
|
0.42
|
||||
Vested
|
(2,815
|
)
|
$
|
—
|
(1)
|
||
Forfeited
|
(282
|
)
|
$
|
0.04
|
(1)
|
||
Unvested
at December 30, 2006
|
6,587
|
$
|
0.09
|
(1)
|
Options
and
Warrants
(in
thousands)
|
Weighted
Average Exercise Price
per
Share
|
Weighted
Average Remaining
Contractual
Term (in Years)
|
Aggregate
Intrinsic
Value
(in
thousands)
|
||||||||||
Outstanding
at December 31, 2005
|
500
|
$
|
6.00
|
||||||||||
Granted
|
287
|
$
|
7.97
|
||||||||||
Outstanding
at December 30, 2006
|
787
|
$
|
6.72
|
5.9
|
$
|
3,155
|
|||||||
Exercisable
at December 30, 2006
|
500
|
$
|
6.00
|
5.6
|
$
|
2,365
|
Options
and
Warrants
(in
thousands)
|
Weighted
Average
Fair Value per Share
|
||||||
Unvested
at December 31, 2005
|
333
|
$
|
2.48
|
||||
Granted
|
287
|
$
|
7.24
|
||||
Vested
|
(184
|
)
|
$
|
2.91
|
|||
Unvested
at December 30, 2006
|
436
|
$
|
6.84
|
Options
|
Warrants
|
Restricted
Common Shares
|
||||||||
Risk-free
interest rate
|
4.54%-4.79
|
%
|
4.58%-4.68
|
%
|
4.57%-4.78
|
%
|
||||
Expected
life (in years)
|
6.0-9.9
|
3.0-4.0
|
0.1-3.9
|
|||||||
Expected
stock price volatility
|
50
|
%
|
50
|
%
|
50
|
%
|
||||
Expected
dividend yield
|
0
|
%
|
0
|
%
|
0
|
%
|
||||
Weighted
average fair value of awards
|
$
|
7.24
|
$
|
4.42
|
$
|
5.42
|
Year
Ended
December
30, 2006
|
Inception
(April
13, 2005) to
December
31, 2005
|
||||||
(in
thousands)
|
|||||||
Cash
paid for income taxes
|
$
|
124
|
$
|
152
|
|||
Cash
paid for interest
|
—
|
—
|
|||||
Noncash
investing and financing activities:
|
|||||||
Fair
value of warrants issued in connection with the
issuance
of 7% Senior Secure Notes
|
24,626
|
—
|
|||||
Wireless
spectrum licenses acquired with lease obligations
|
4,039
|
—
|
|||||
Membership
interests issued for business acquisition
|
1,558
|
—
|
Three
Months Ended
|
||||||||||||||||||||||||||||
April
1, 2006
|
July
1, 2006
|
September
30, 2006
|
||||||||||||||||||||||||||
(in
thousands)
|
As
Reported
|
Adjustments
|
As
Restated
|
As
Reported
|
Adjustments
|
As
Restated
|
As
Reported
|
Adjustments
|
As
Restated
|
|||||||||||||||||||
Consolidated
Statements of Operations
|
||||||||||||||||||||||||||||
Revenues
|
$
|
5,673
|
$
|
(1,768
|
)
|
$
|
3,905
|
$
|
8,331
|
$
|
(2,038
|
)
|
$
|
6,293
|
$
|
8,051
|
$
|
(1,381
|
)
|
$
|
6,670
|
|||||||
Operating
expenses:
|
||||||||||||||||||||||||||||
Cost
of revenues
|
2,686
|
(879
|
)
|
1,807
|
3,198
|
(560
|
)
|
2,638
|
4,568
|
(1,062
|
)
|
3,506
|
||||||||||||||||
Engineering,
research and development
|
10,233
|
856
|
11,089
|
12,601
|
693
|
13,294
|
11,455
|
179
|
11,634
|
|||||||||||||||||||
General
and administrative
|
8,492
|
—
|
8,492
|
12,140
|
—
|
12,140
|
14,896
|
—
|
14,896
|
|||||||||||||||||||
Sales
and marketing
|
1,613
|
—
|
1,613
|
2,539
|
—
|
2,539
|
2,992
|
—
|
2,992
|
|||||||||||||||||||
Purchased
in-process research and development
|
—
|
—
|
—
|
1,648
|
—
|
1,648
|
—
|
—
|
—
|
|||||||||||||||||||
Total
operating expenses
|
23,024
|
(23
|
)
|
23,001
|
32,126
|
133
|
32,259
|
33,911
|
(883
|
)
|
33,028
|
|||||||||||||||||
Loss
from operations
|
(17,351
|
)
|
(1,745
|
)
|
(19,096
|
)
|
(23,795
|
)
|
(2,171
|
)
|
(25,966
|
)
|
(25,860
|
)
|
(498
|
)
|
(26,358
|
)
|
||||||||||
Other
income (expense)
|
||||||||||||||||||||||||||||
Interest
income
|
3,187
|
—
|
3,187
|
3,197
|
—
|
3,197
|
3,419
|
—
|
3,419
|
|||||||||||||||||||
Interest
expense
|
(308
|
)
|
—
|
(308
|
)
|
(366
|
)
|
—
|
(366
|
)
|
(9,010
|
)
|
—
|
(9,010
|
)
|
|||||||||||||
Other
income and expense, net
|
(92
|
)
|
—
|
(92
|
)
|
216
|
—
|
216
|
(26
|
)
|
—
|
(26
|
)
|
|||||||||||||||
Total
other income (expense), net
|
2,787
|
—
|
2,787
|
3,047
|
—
|
3,047
|
(5,617
|
)
|
—
|
(5,617
|
)
|
|||||||||||||||||
Loss
before provision for income
taxes
and minority interest
|
(14,564
|
)
|
(1,745
|
)
|
(16,309
|
)
|
(20,748
|
)
|
(2,171
|
)
|
(22,919
|
)
|
(31,477
|
)
|
(498
|
)
|
(31,975
|
)
|
||||||||||
Income
tax benefit (provision)
|
209
|
—
|
209
|
—
|
—
|
—
|
(93
|
)
|
—
|
(93
|
)
|
|||||||||||||||||
Minority
interest
|
657
|
—
|
657
|
214
|
—
|
214
|
265
|
—
|
265
|
|||||||||||||||||||
Net
loss
|
$
|
(13,698
|
)
|
$
|
(1,745
|
)
|
$
|
(15,443
|
)
|
$
|
(20,534
|
)
|
$
|
(2,171
|
)
|
$
|
(22,705
|
)
|
$
|
(31,305
|
)
|
$
|
(498
|
)
|
$
|
(31,803
|
)
|
April
1, 2006
|
July
1, 2006
|
September
30, 2006
|
||||||||||||||||||||||||||
(in
thousands)
|
As
Reported
|
Adjustments
|
As
Restated
|
As
Reported
|
Adjustments
|
As
Restated
|
As
Reported
|
Adjustments
|
As
Restated
|
|||||||||||||||||||
Consolidated
Balance Sheets
|
||||||||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||||||||||
Cash
and cash equivalents
|
$
|
99,871
|
$
|
—
|
$
|
99,871
|
$
|
30,643
|
$
|
—
|
$
|
30,643
|
$
|
25,371
|
$
|
—
|
$
|
25,371
|
||||||||||
Short-term
investments
|
266,716
|
—
|
266,716
|
309,794
|
—
|
309,794
|
196,801
|
—
|
196,801
|
|||||||||||||||||||
Accounts
receivable, net
|
2,235
|
—
|
2,235
|
5,206
|
—
|
5,206
|
5,728
|
—
|
5,728
|
|||||||||||||||||||
Deposits
for wireless spectrum bids
|
—
|
—
|
—
|
—
|
—
|
—
|
142,866
|
—
|
142,866
|
|||||||||||||||||||
Deferred
contract costs
|
1,456
|
21
|
1,477
|
2,105
|
(110
|
)
|
1,995
|
2,242
|
772
|
3,014
|
||||||||||||||||||
Prepaid
expenses and other current assets
|
5,745
|
—
|
5,745
|
8,518
|
—
|
8,518
|
7,252
|
—
|
7,252
|
|||||||||||||||||||
Total
current assets
|
376,023
|
21
|
376,044
|
356,266
|
(110
|
)
|
356,156
|
380,260
|
772
|
381,032
|
||||||||||||||||||
Restricted
cash
|
—
|
—
|
—
|
—
|
—
|
—
|
76,792
|
—
|
76,792
|
|||||||||||||||||||
Wireless
spectrum licenses, net
|
130,889
|
—
|
130,889
|
130,374
|
—
|
130,374
|
374,137
|
—
|
374,137
|
|||||||||||||||||||
Goodwill
|
27,001
|
—
|
27,001
|
32,936
|
—
|
32,936
|
32,829
|
—
|
32,829
|
|||||||||||||||||||
Other
intangible assets, net
|
17,449
|
—
|
17,449
|
16,846
|
—
|
16,846
|
16,306
|
—
|
16,306
|
|||||||||||||||||||
Property
and equipment, net
|
15,040
|
—
|
15,040
|
14,632
|
—
|
14,632
|
16,796
|
—
|
16,796
|
|||||||||||||||||||
Prepaid
expenses and other non-current
assets
|
7,708
|
—
|
7,708
|
6,761
|
—
|
6,761
|
8,279
|
—
|
8,279
|
|||||||||||||||||||
Total
assets
|
$
|
574,110
|
$
|
21
|
$
|
574,131
|
$
|
557,815
|
$
|
(110
|
)
|
$
|
557,705
|
$
|
905,399
|
$
|
772
|
$
|
906,171
|
|||||||||
LIABILITIRES
AND
MEMBERS’
EQUITY
|
||||||||||||||||||||||||||||
Current
liabilities
|
||||||||||||||||||||||||||||
Accounts
payable
|
$
|
4,488
|
$
|
—
|
$
|
4,488
|
$
|
2,274
|
$
|
—
|
$
|
2,274
|
$
|
2,369
|
$
|
—
|
$
|
2,369
|
||||||||||
Accrued
expenses
|
7,058
|
—
|
7,058
|
12,104
|
—
|
12,104
|
19,465
|
—
|
19,465
|
|||||||||||||||||||
Current
portion of long-term obligations
|
2,575
|
—
|
2,575
|
2,822
|
—
|
2,822
|
2,681
|
—
|
2,681
|
|||||||||||||||||||
Deferred
revenue
|
4,021
|
1,766
|
5,787
|
3,100
|
3,806
|
6,906
|
2,867
|
5,186
|
8,053
|
|||||||||||||||||||
Current
tax liability
|
—
|
—
|
—
|
—
|
—
|
—
|
40
|
—
|
40
|
|||||||||||||||||||
Other
current liabilities and deferred credits
|
755
|
—
|
755
|
1,009
|
—
|
1,009
|
961
|
—
|
961
|
|||||||||||||||||||
Total
current liabilities
|
18,897
|
1,766
|
20,663
|
21,309
|
3,806
|
25,115
|
28,383
|
5,186
|
33,569
|
|||||||||||||||||||
Deferred
income tax liabilities
|
—
|
—
|
—
|
—
|
—
|
—
|
67,673
|
—
|
67,673
|
|||||||||||||||||||
Long-term
deferred credits and reserves
|
8,203
|
—
|
8,203
|
8,575
|
—
|
8,575
|
8,243
|
—
|
8,243
|
|||||||||||||||||||
Long-term
obligations
|
15,311
|
—
|
15,311
|
15,661
|
—
|
15,661
|
292,310
|
—
|
292,310
|
|||||||||||||||||||
Minority
interest in subsidiary
|
889
|
—
|
889
|
1,143
|
—
|
1,143
|
884
|
—
|
884
|
|||||||||||||||||||
Commitments
and contingencies
|
||||||||||||||||||||||||||||
Members’
equity:
|
||||||||||||||||||||||||||||
Membership
interests
|
591,452
|
—
|
591,452
|
592,389
|
—
|
592,389
|
619,966
|
—
|
619,966
|
|||||||||||||||||||
Accumulated
other comprehensive loss
|
(992
|
)
|
—
|
(992
|
)
|
(1,078
|
)
|
—
|
(1,078
|
)
|
(571
|
)
|
—
|
(571
|
)
|
|||||||||||||
Accumulated
deficit
|
(59,650
|
)
|
(1,745
|
)
|
(61,395
|
)
|
(80,184
|
)
|
(3,916
|
)
|
(84,100
|
)
|
(111,489
|
)
|
(4,414
|
)
|
(115,903
|
)
|
||||||||||
Total
members’ equity
|
530,810
|
(1,745
|
)
|
529,065
|
511,127
|
(3,916
|
)
|
507,211
|
507,906
|
(4,414
|
)
|
503,492
|
||||||||||||||||
Total
liabilities and members’ equity
|
$
|
574,110
|
$
|
21
|
$
|
574,131
|
$
|
557,815
|
$
|
(110
|
)
|
$
|
557,705
|
$
|
905,399
|
$
|
772
|
$
|
906,171
|
(in
thousands, except per share data)
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
|||||||||||
Year
Ended December 30, 2006(1)(2):
|
(Restated)
|
(Restated)
|
(Restated)
|
|||||||||||||
Revenues
|
$
|
3,905
|
$
|
6,293
|
$
|
6,670
|
$
|
7,416
|
$
|
24,284
|
||||||
Net
loss
|
$
|
(15,443
|
)
|
$
|
(22,705
|
)
|
$
|
(31,803
|
)
|
$
|
(35,069
|
)
|
$
|
(105,020
|
)
|
|
Basic
and diluted net loss per common share(3)
|
$
|
(0.19
|
)
|
$
|
(0.28
|
)
|
$
|
(0.39
|
)
|
$
|
(0.43
|
)
|
$
|
(1.28
|
)
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
||||||||||||
Period
from Inception (April 13, 205) to
December
31, 2005(2):
|
||||||||||||||||
Revenues
|
N/A
|
$
|
148
|
$
|
1,202
|
$
|
2,794
|
$
|
4,144
|
|||||||
Net
loss(3)
|
N/A
|
$
|
(2,948
|
)
|
$
|
(16,653
|
)
|
$
|
(26,351
|
)
|
$
|
(45,952
|
)
|
(in
thousands)
|
Balance
at
Beginning
of
Period
|
Net
Additions
Charged
(Credited)
to
Expense
|
Additions
Acquired
from
Business Combination
|
Deductions(1)
|
Balance
at End of Period
|
|||||||||||
Year
Ended December 30, 2006:
|
||||||||||||||||
Allowance
for doubtful accounts
|
$
|
391
|
$
|
236
|
$
|
—
|
$
|
(306
|
)
|
$
|
321
|
|||||
Reserve
for contract termination fee
|
$
|
7,121
|
$
|
(7,121
|
)
|
$
|
—
|
$
|
—
|
$
|
—
|
|||||
Unfavorable
lease liability
|
$
|
1,037
|
$
|
75
|
$
|
318
|
$
|
(442
|
)
|
$
|
988
|
|||||
Period
from Inception (April 13, 2005) to December 31,
2005:
|
||||||||||||||||
Allowance
for doubtful accounts
|
$
|
—
|
$
|
218
|
$
|
195
|
$
|
(22
|
)
|
$
|
391
|
|||||
Reserve
for contract termination fee
|
$
|
—
|
$
|
7,121
|
$
|
—
|
$
|
—
|
$
|
7,121
|
||||||
Unfavorable
lease liability
|
$
|
1,260
|
$
|
67
|
$
|
—
|
$
|
(209
|
)
|
$
|
1,037
|
(1) |
Deduction
for allowance for doubtful accounts is for accounts receivable balances
written-off. Deduction for the unfavorable lease liability represents
amounts paid in cash.
|
$
|
4,838
|
|||
Printer
expenses
|
$
|
4,217
|
||
Legal
fees and expenses
|
$
|
250,000
|
||
Accounting
fees and expenses
|
$
|
75,000
|
||
Total
|
$
|
334,055
|
Number
|
|
Description
|
|
|
|
2.1
|
|
Third
Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code
of
NextWave Personal Communications Inc., NextWave Power Partners Inc.,
NextWave Partners Inc., NextWave Wireless Inc. and NextWave Telecom
Inc.,
dated January 21, 2005 (incorporated by reference to Exhibit 2.1
to the
Registration Statement on Form 10 of NextWave Wireless LLC filed
May 1,
2006 (the “Form 10”))**
|
|
|
|
2.2
|
|
Agreement
and Plan of Merger, dated as of May 25, 2005, by and among NextWave
Wireless LLC, PVC Acquisition Corp., PacketVideo Corporation and
William
D. Cvengros, as the Stockholder Representative (incorporated by reference
to Exhibit 2.2 to Amendment #1 to the Registration Statement on Form
10 of
NextWave Wireless LLC filed June 29, 2006 (“Amendment #1 to the Form
10”))**
|
|
|
|
3.1
|
|
Amended
and Restated Certificate of Incorporation of NextWave Wireless Inc.
(incorporated by reference to Exhibit 3.1 to Amendment #2 to the
Company’s
Registration Statement on Form S-4 filed November 17, 2006 (“Amendment #2
to the Form S-4”))**
|
|
|
|
3.2
|
|
Amended
and Restated Bylaws of NextWave Wireless Inc. (incorporated by reference
to Exhibit 3.2 to Amendment #2 to the Company ‘ s Registration Statement
on Form S-4 filed November 17, 2006 (“Amendment #2 to the Form
S-4”))**
|
|
|
|
4.1
|
|
Specimen
common stock certificate (incorporated by reference to Exhibit 4.1
to
Amendment #2 to the Form S-4)**
|
|
|
|
4.2
|
|
Form
of Station 4, LLC Warrant (incorporated by reference to Exhibit 4.2
to the
Form 10)**
|
|
|
|
4.3
|
|
Indenture,
dated April 13, 2005, by and between NextWave Wireless LLC and JPMorgan
Chase Bank, N.A., as trustee (with respect to $149,000,000 Non-Recourse
Secured Notes) (incorporated by reference to Exhibit 4.2 to the Form
10)**
|
|
|
|
4.4
|
|
Purchase
Agreement, dated as of July 17, 2006, among NextWave Wireless LLC,
as
issuer, NextWave Broadband Inc., NW Spectrum Co., AWS Wireless Inc.,
and
PacketVideo Corporation, as subsidiary guarantors, the note purchasers
party thereto and The Bank of New York, as collateral agent (incorporated
by reference to Exhibit 4.1 to the Current Report on Form 8-K/A of
NextWave Wireless LLC filed September 8, 2006)**
|
|
|
|
4.5
|
|
Warrant
Agreement, dated as of July 17, 2006, among NextWave Wireless Inc.
and the
Holders listed on Schedule I thereto (incorporated by reference to
Exhibit
4.2 to the Current Report on Form 8-K of NextWave Wireless LLC filed
July
21, 2006 (the “July 21, 2006 Form 8-K”))**
|
|
|
|
4.6
|
|
Registration
Rights Agreement, dated as of July 17, 2006, among NextWave Wireless
Inc.
and the Purchasers listed on Schedule I thereto (incorporated by
reference
to Exhibit 4.3 to the July 21, 2006 Form 8-K)**
|
4.7
|
Certificate
of Designations for NextWave Wireless Inc.'s Series A Senior Convertible
Preferred Stock (incorporated by reference to Exhibit 4.4 to the
Company’s
Annual Report on Form 10-K filed March 30, 2007 (the “2006
10-K”))**
|
|
4.8
|
Securities
Purchase Agreement, dated March 28, 2007, by and among NextWave Wireless
Inc. and the Purchasers listed on Schedule I (the “Purchasers”) thereto
(incorporated by reference to Exhibit 10.19 to the 2006
10-K)**
|
|
4.9
|
Registration
Rights Agreement, dated March 28, 2007, among NextWave Wireless Inc.
and
the Purchasers (incorporated by reference to Exhibit 10.20 to the
2006
10-K)**
|
|
|
|
|
5.1
|
|
Opinion
of Weil, Gotshal & Manges LLP
|
10.1
|
|
NextWave
Wireless Inc. 2005 Stock Incentive Plan
|
|
|
|
10.2
|
|
PacketVideo
Corporation 2005 Equity Incentive Plan (incorporated by reference
to
Exhibit 10.2 to the Form 10)**
|
|
|
|
10.3
|
|
CYGNUS
Communications, Inc. 2004 Stock Option Plan (incorporated by reference
to
Exhibit 10.3 to the Form 10)**
|
|
|
|
10.4
|
|
Acquisition
Agreement by and among NextWave Telecom Inc., Cellco Partnership
D/B/A
Verizon Wireless and VZW Corp., dated as of November 4, 2004 (incorporated
by reference to Exhibit 10.4 to the Form 10)**
|
|
|
|
10.5
|
|
Option
Agreement between NextWave Wireless LLC and Manchester Financial
Group LP
(incorporated by reference to Exhibit 10.5 to the Form
10)**
|
|
|
|
10.6
|
|
NextWave
Wireless Inc. 2005 Stock Incentive Plan Option Award Agreement
(incorporated by reference to Exhibit 99.3 to the Company's
Registration Statement on Form S-8 filed December 7,
2006)**
|
|
|
|
10.7
|
|
Acquisition
Agreement, dated as of May 9, 2006, by and among (i) NextWave Wireless
LLC, (ii) NW Spectrum Co., (iii) WCS Wireless, Inc., (iv) Columbia
WCS
III, Inc., (v) TKH Corp., (vi) Columbia Capital Equity Partners III
(Cayman), L.P., the sole stockholder of Columbia WCS III, Inc., (vii)
each
of the stockholders of TKH Corp., namely, Aspen Partners Series A,
Series
of Aspen Capital Partners, L.P., Oak Foundation USA, Inc., Enteraspen
Limited, and The Reed Institute dba Reed College and (viii) Columbia
Capital, LLC, as the Stockholder Representative (incorporated by
reference
to Exhibit 10.7 to Amendment #1 of the Form 10)**
|
|
|
|
10.8
|
|
Spectrum
Acquisition Agreement, dated as of October 13, 2005, between NextWave
Broadband Inc. and Bal-Rivgam, LLC (incorporated by reference to
Exhibit
10.8 to Amendment #1 of the Form 10)**
|
|
|
|
10.9
|
|
Guaranty,
dated as of July 17, 2006, by and among NextWave Broadband, Inc.,
NW
Spectrum Co., AWS Wireless Inc., PacketVideo Corporation and The
Bank of
New York, as Collateral Agent (incorporated by reference to Exhibit
10.1
to the July 21, 2006 Form 8-K)**
|
|
|
|
10.10
|
|
Parent
Guaranty, dated as of July 17, 2006, between NextWave Wireless Inc.
and
The Bank of New York, as Collateral Agent (incorporated by reference
to
Exhibit 10.2 to the July 21, 2006 Form 8-K)**
|
|
|
|
10.11
|
|
Pledge
and Security Agreement, dated as of July 17, 2006, by and among NextWave
Wireless LLC, the undersigned direct and indirect subsidiaries of
NextWave
Wireless LLC, each additional Grantor that may become a party thereto
and
The Bank of New York, as Collateral Agent (incorporated by reference
to
Exhibit 10.3 to the July 21, 2006 Form 8-K)**
|
10.12
|
NextWave
Wireless Inc. 2007 New Employee Stock Incentive Plan (incorporated
by
reference to Exhibit 10.17 to the 2006 10-K)**
|
|
10.13
|
GO
Networks, Inc. Stock Bonus Plan (incorporated by reference to Exhibit
10.18 to the 2006 10-K)**
|
|
10.14
|
Agreement and Plan of Merger, dated December 31, 2006, by and among NextWave Inc., GO Acquisition Corp., GO Networks, Inc. and Nechemia J.Peres as Stockholder Representative (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed January 3, 2007)** | |
11.1
|
|
Statement
of Computation of Earnings Per Share (required information contained
in
this Registration Statement)
|
|
|
|
21.1
|
|
Subsidiaries
of the registrant (incorporated by reference to Exhibit 21.1 to Amendment
#1 of the Form 10)**
|
|
|
|
23.1
|
|
Consent
of Ernst & Young LLP, Independent Registered Public Accounting
Firm
|
|
|
|
23.2
|
|
Consent
of Weil, Gotshal & Manges LLP (to be included in Exhibit
5.1)
|
(1)
|
To
file, during any period in which offers or sales are being made,
a
post-effective amendment to this registration statement
|
||
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
|
||
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent
a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease
in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in
the effective registration
statement;
|
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration statement.
|
||
(2)
|
That,
for the purpose of determining any liability under the Securities
Act of
1933, each such post-effective amendment shall be deemed to be a
new
registration statement relating to the securities offered therein,
and the
offering of such securities at that time shall be deemed to be the
initial
bona fide offering thereof.
|
||
(3)
|
To
remove from registration by means of a post-effective amendment any
of the
securities being registered which remain unsold at the termination
of the
offering.
|
||
(4)
|
That
prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c), such reoffering prospectus will
contain the information called for by the applicable registration
form
with respect to reofferings by persons who may be deemed underwriters,
in
addition to the information called for by the other items of the
applicable form.
|
||
(5)
|
That
every prospectus (i) that is filed pursuant to paragraph (4)
immediately preceding, or (ii) that purports to meet the requirements
of Section 10(a)(3) of the Securities Act of 1933 and is used in
connection with an offering of securities subject to Rule 415, will
be filed as a part of an amendment to the registration statement
and will
not be used until such amendment is effective, and that, for purposes
of
determining any liability under the Securities Act of 1933, each
such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of
such securities at that time shall be deemed to be the initial bona
fide
offering thereof.
|
||
(6)
|
That,
for purposes of determining any liability under the Securities Act
of
1933, each filing of the registrant’s annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan’s annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall
be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be
deemed to be the initial bona fide offering thereof.
|
||
(7)
|
To
respond to requests for information that is incorporated by reference
into
the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form,
within
one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This
includes
information contained in documents filed subsequent to the effective
date
of the registration statement through the date of responding to the
request.
|
||
(8)
|
To
supply by means of a post-effective amendment all information concerning
a
transaction, and the company being acquired involved therein, that
was not
the subject of and included in the registration statement when it
became
effective.
|
Insofar
as indemnification for liabilities arising under the Securities Act
of
1933 may be permitted to directors, officers and controlling persons
of
the registrant pursuant to the foregoing provisions, or otherwise,
the
registrant has been advised that in the opinion of the Securities
and
Exchange Commission such indemnification is against public policy
as
expressed in the Act and is, therefore, unenforceable. In the event
that a
claim for indemnification against such liabilities (other than the
payment
by the registrant of expenses incurred or paid by a director, officer
or
controlling person of the registrant in the successful defense of
any
action, suit or proceeding) is asserted by such director, officer
or
controlling person in connection with the securities being registered,
the
registrant will, unless in the opinion of its counsel the matter
has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the
final
adjudication of such issue.
|
|
NextWave
Wireless Inc.
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By:
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/s/
Frank A. Cassou
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Frank
A. Cassou
Executive
Vice President - Corporate Development
and
Chief
Legal Counsel, Secretary
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Name
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Title
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*
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Chairman
of the Board of Directors, Chief Executive Officer and
President
(Principal Executive Officer)
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Allen
Salmasi
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*
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Executive
Vice President - Chief Financial Officer
(Principal
Financial Officer)
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George C. Alex |
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*
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Senior
Vice President - Corporate Controller
(Principal
Accounting Officer)
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Fran J. Harding |
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/s/
Frank A. Cassou
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Director
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Frank A. Cassou |
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Director
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Kevin M. Finn |
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Director
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Douglas F. Manchester |
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Director
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Jack Rosen |
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Director
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Robert T. Symington |
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Director
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William H. Webster |
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Number
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Description
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2.1
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Third
Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code
of
NextWave Personal Communications Inc., NextWave Power Partners Inc.,
NextWave Partners Inc., NextWave Wireless Inc. and NextWave Telecom
Inc.,
dated January 21, 2005 (incorporated by reference to Exhibit 2.1
to the
Registration Statement on Form 10 of NextWave Wireless LLC filed
May 1,
2006 (the “Form 10”))**
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2.2
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Agreement
and Plan of Merger, dated as of May 25, 2005, by and among NextWave
Wireless LLC, PVC Acquisition Corp., PacketVideo Corporation and
William
D. Cvengros, as the Stockholder Representative (incorporated by reference
to Exhibit 2.2 to Amendment #1 to the Registration Statement on Form
10 of
NextWave Wireless LLC filed June 29, 2006 (“Amendment #1 to the Form
10”))**
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3.1
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Amended
and Restated Certificate of Incorporation of NextWave Wireless Inc.
(incorporated by reference to Exhibit 3.1 to Amendment #2 to the
Company’s
Registration Statement on Form S-4 filed November 17, 2006 (“Amendment #2
to the Form S-4”))**
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3.2
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Amended
and Restated Bylaws of NextWave Wireless Inc. (incorporated by reference
to Exhibit 3.2 to Amendment #2 to the Company ‘ s Registration Statement
on Form S-4 filed November 17, 2006 (“Amendment #2 to the Form
S-4”))**
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4.1
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Specimen
common stock certificate (incorporated by reference to Exhibit 4.1
to
Amendment #2 to the Form S-4)**
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4.2
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Form
of Station 4, LLC Warrant (incorporated by reference to Exhibit 4.2
to the
Form 10)**
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4.3
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Indenture,
dated April 13, 2005, by and between NextWave Wireless LLC and JPMorgan
Chase Bank, N.A., as trustee (with respect to $149,000,000 Non-Recourse
Secured Notes) (incorporated by reference to Exhibit 4.2 to the Form
10)**
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4.4
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Purchase
Agreement, dated as of July 17, 2006, among NextWave Wireless LLC,
as
issuer, NextWave Broadband Inc., NW Spectrum Co., AWS Wireless Inc.,
and
PacketVideo Corporation, as subsidiary guarantors, the note purchasers
party thereto and The Bank of New York, as collateral agent (incorporated
by reference to Exhibit 4.1 to the Current Report on Form 8-K/A of
NextWave Wireless LLC filed September 8, 2006)**
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4.5
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Warrant
Agreement, dated as of July 17, 2006, among NextWave Wireless Inc.
and the
Holders listed on Schedule I thereto (incorporated by reference to
Exhibit
4.2 to the Current Report on Form 8-K of NextWave Wireless LLC filed
July
21, 2006 (the “July 21, 2006 Form 8-K”))**
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4.6
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Registration
Rights Agreement, dated as of July 17, 2006, among NextWave Wireless
Inc.
and the Purchasers listed on Schedule I thereto (incorporated by
reference
to Exhibit 4.3 to the July 21, 2006 Form 8-K)**
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4.7
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Certificate
of Designations for NextWave Wireless Inc.'s Series A Senior Convertible
Preferred Stock (incorporated by reference to Exhibit 4.4 to the
Company’s
Annual Report on Form 10-K filed March 30, 2007 (the “2006
10-K”))**
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4.8
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Securities
Purchase Agreement, dated March 28, 2007, by and among NextWave Wireless
Inc. and the Purchasers listed on Schedule I (the “Purchasers”) thereto
(incorporated by reference to Exhibit 10.19 to the 2006
10-K)**
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4.9
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Registration
Rights Agreement, dated March 28, 2007, among NextWave Wireless Inc.
and
the Purchasers (incorporated by reference to Exhibit 10.20 to the
2006
10-K)**
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5.1
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Opinion
of Weil, Gotshal & Manges LLP
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10.1
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NextWave
Wireless Inc. 2005 Stock Incentive Plan
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10.2
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PacketVideo
Corporation 2005 Equity Incentive Plan (incorporated by reference
to
Exhibit 10.2 to the Form 10)**
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10.3
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CYGNUS
Communications, Inc. 2004 Stock Option Plan (incorporated by reference
to
Exhibit 10.3 to the Form 10)**
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10.4
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Acquisition
Agreement by and among NextWave Telecom Inc., Cellco Partnership
D/B/A
Verizon Wireless and VZW Corp., dated as of November 4, 2004 (incorporated
by reference to Exhibit 10.4 to the Form 10)**
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10.5
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Option
Agreement between NextWave Wireless LLC and Manchester Financial
Group LP
(incorporated by reference to Exhibit 10.5 to the Form
10)**
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10.6
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NextWave
Wireless Inc. 2005 Stock Incentive Plan Option Award Agreement
(incorporated by reference to Exhibit 99.3 to the Company's
Registration Statement on Form S-8 filed December 7,
2006)**
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10.7
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Acquisition
Agreement, dated as of May 9, 2006, by and among (i) NextWave Wireless
LLC, (ii) NW Spectrum Co., (iii) WCS Wireless, Inc., (iv) Columbia
WCS
III, Inc., (v) TKH Corp., (vi) Columbia Capital Equity Partners III
(Cayman), L.P., the sole stockholder of Columbia WCS III, Inc., (vii)
each
of the stockholders of TKH Corp., namely, Aspen Partners Series A,
Series
of Aspen Capital Partners, L.P., Oak Foundation USA, Inc., Enteraspen
Limited, and The Reed Institute dba Reed College and (viii) Columbia
Capital, LLC, as the Stockholder Representative (incorporated by
reference
to Exhibit 10.7 to Amendment #1 of the Form 10)**
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10.8
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Spectrum
Acquisition Agreement, dated as of October 13, 2005, between NextWave
Broadband Inc. and Bal-Rivgam, LLC (incorporated by reference to
Exhibit
10.8 to Amendment #1 of the Form 10)**
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10.9
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Guaranty,
dated as of July 17, 2006, by and among NextWave Broadband, Inc.,
NW
Spectrum Co., AWS Wireless Inc., PacketVideo Corporation and The
Bank of
New York, as Collateral Agent (incorporated by reference to Exhibit
10.1
to the July 21, 2006 Form 8-K)**
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10.10
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Parent
Guaranty, dated as of July 17, 2006, between NextWave Wireless Inc.
and
The Bank of New York, as Collateral Agent (incorporated by reference
to
Exhibit 10.2 to the July 21, 2006 Form 8-K)**
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10.11
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Pledge
and Security Agreement, dated as of July 17, 2006, by and among NextWave
Wireless LLC, the undersigned direct and indirect subsidiaries of
NextWave
Wireless LLC, each additional Grantor that may become a party thereto
and
The Bank of New York, as Collateral Agent (incorporated by reference
to
Exhibit 10.3 to the July 21, 2006 Form 8-K)**
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10.12
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NextWave
Wireless Inc. 2007 New Employee Stock Incentive Plan (incorporated
by
reference to Exhibit 10.17 to the 2006 10-K)**
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10.13
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GO
Networks, Inc. Stock Bonus Plan (incorporated by reference to Exhibit
10.18 to the 2006 10-K)**
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10.14
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Agreement and Plan of Merger, dated December 31, 2006, by and among NextWave Inc., GO Acquisition Corp., GO Networks, Inc. and Nechemia J.Peres as Stockholder Representative (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed January 3, 2007)** | |
11.1
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Statement
of Computation of Earnings Per Share (required information contained
in
this Registration Statement)
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21.1
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Subsidiaries
of the registrant (incorporated by reference to Exhibit 21.1 to Amendment
#1 of the Form 10)**
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23.1
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Consent
of Ernst & Young LLP, Independent Registered Public Accounting
Firm
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23.2
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Consent
of Weil, Gotshal & Manges LLP (to be included in Exhibit
5.1)
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