8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

January 4, 2008
Date of Report (Date of earliest event reported)

PCTEL, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-27115	77-0364943
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

471 Brighton Drive
Bloomingdale, IL 60108
(Address of Principal Executive Offices, including Zip Code)

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b))

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets

     On January 4, 2008, PCTEL, Inc. (“PCTEL”) completed the sale of its Mobility Solutions Group to Smith Micro Software, Inc. (“Smith Micro”) in accordance with an Asset Purchase Agreement (the “Asset Purchase Agreement”) entered into between the two companies and publicly announced on December 10, 2007. Under the terms of the Asset Purchase Agreement, Smith Micro purchased substantially all of the assets of the Mobility Solutions Group for total consideration of $59.7 million in cash. In the transaction, PCTEL retained the accounts receivable, non customer-related accrued expenses and accounts payable of the division.

     Substantially all of the employees of the Mobility Solutions Group continued as employees of Smith Micro in connection with the completion of the acquisition. Biju Nair has departed PCTEL as its Vice President and General Manager of the Mobility Solutions Group to join Smith Micro as its Senior Vice President and General Manager in charge of Smith Micro’s Connectivity and Security business unit.

     In connection with the sale of the division, the corporate headquarters of PCTEL have moved to the company’s facilities in Bloomingdale, Illinois. The address at that location is 471 Brighton Drive, Bloomingdale, IL 60108. In addition, the corporate telephone number for PCTEL has changed to (630) 372-6800.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers

     In conjunction with the completion of the sale of PCTEL’s Mobility Solutions Group to Smith Micro on January 4, 2008, Mr. Nair received a $100,000 cash incentive payment from PCTEL. In addition, a total of 36,010 shares of restricted common stock granted to Mr. Nair under PCTEL’s 1997 Stock Plan subject to vesting in 2008 were accelerated for the benefit of Mr. Nair (all other then unvested restricted stock grants terminated), and all stock options held by Mr. Nair for the purchase of common stock under PCTEL’s 1997 Stock Plan were amended to extend the exercise date of such options from 90 days to 120 days following the date of Mr. Nair’s departure from PCTEL.

Item 9.01 Financial Statements and Exhibits

(b) Pro forma financial information

     The following unaudited pro forma financial statements give effect to the Mobility Solutions Group sale in accordance with Article 11 of Regulation S-X and are based upon currently available information and certain assumptions management considered reasonable under the circumstances.

     The unaudited pro forma condensed balance sheet assumes the Mobility Solutions Group sale occurred as of September 30, 2007. Such pro forma financial statement information is based on the consolidated historical unaudited balance sheet data of PCTEL and the Mobility Solutions Group as of September 30, 2007. The unaudited pro forma balance sheet is not necessarily indicative of the results that would have been reported had the Mobility Solutions Group sale actually occurred on that date, nor is it necessarily indicative of PCTEL’s future financial position. The unaudited pro forma statements of operations for the nine months ended September 30, 2007 and for the year ended December 31, 2006 give effect to the Mobility Solutions sale as if the sale had occurred on January 1, 2006.

     The unaudited pro forma financial statements are based on and should be read in conjunction with, and are qualified in their entirety by, the historical consolidated financial statements and notes thereto of PCTEL.

PCTEL, INC.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2007
(Unaudited)
(in thousands, except share data)

	Mobility Solutions
	As Reported			Adjustments			Pro Forma
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	65,898		$	59,700	a	$	125,598
Accounts receivable, net of allowance for doubtful accounts		14,877						14,877
Inventories, net		8,802						8,802
Prepaid expenses and other current assets		2,030			(49	)b		1,981
Total current assets		91,607			59,651			151,258
PROPERTY AND EQUIPMENT, net		12,719			(789	)b		11,930
GOODWILL		17,641			(871	)b		16,770
OTHER INTANGIBLE ASSETS, net		4,774						4,774
OTHER ASSETS		1,091			(75	)b		1,016
DEFERRED TAX ASSETS, net					4,721	d		4,721
TOTAL ASSETS	$	127,832		$	62,637		$	190,469
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	2,442					$	2,442
Deferred revenue		1,074			(1,024	)b		50
Other accrued liabilities		5,920			1,934	b,c		7,854
Income Tax Liability		491			19,082	d		19,573
Short-term debt		1,092						1,092
Total current liabilities		11,019			19,992			30,011
Other long-term accrued liabilities		2,705			(241	)b		2,464
Total liabilities		13,724			19,751			33,475
STOCKHOLDERS’ EQUITY:
Common stock		22						22
Additional paid-in capital		164,020			922	d		164,942
Accumulated deficit		(49,996	)		41,964	e		(8,032	)
Accumulated other comprehensive income		62						62
Total stockholders’ equity		114,108			42,886			156,994
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	127,832		$	62,637		$	190,469

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements

PCTEL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS — PRO FORMA
FOR THE YEAR ENDED SEPTEMBER 30, 2007
(Unaudited)
(in thousands, except per share data)

	Mobility Solutions
	As Reported			Adjustments (f)		Pro Forma
REVENUES	$	58,231		$	7,490	$	50,741
COST OF REVENUES		28,132			35		28,097
GROSS PROFIT		30,099			7,455		22,644
OPERATING EXPENSES:
Research and development		11,604			4,220		7,384
Sales and marketing		10,377			2,114		8,263
General and administrative		10,494			770		9,724
Amortization of intangible assets		1,580					1,580
Restructuring charges , net		1,922					1,922
Gain on sale of assets and related royalties		(750	)				(750	)
Total operating expenses		35,227			7,104		28,123
INCOME (LOSS) FROM OPERATIONS		(5,128	)		351		(5,479	)
OTHER INCOME, NET		2,621					2,621
INCOME (LOSS) BEFORE INCOME TAXES		(2,507	)		351		(2,858	)
PROVISION FOR INCOME TAXES		818			146		672
NET INCOME (LOSS)		($3,325	)		205		($3,530	)
Basic loss per share		($0.16	)	$	0.01		($0.17	)
Shares used in computing basic loss per share		20,981			20,981	$	20,981
Diluted loss per share		($0.16	)	$	0.01		($0.17	)
Shares used in computing diluted loss per share		20,981			21,636	$	20,981

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements

PCTEL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS — PRO FORMA
FOR THE YEAR ENDED DECEMBER 31, 2006
(Unaudited)
(in thousands, except per share data)

	Mobility Solutions
	As Reported			Adjustments (f)		Pro Forma
REVENUES	$	86,562			9,794	$	76,768
COST OF REVENUES		39,990			61		39,929
GROSS PROFIT		46,572			9,733		36,839
OPERATING EXPENSES:
Research and development		13,762			4,596		9,166
Sales and marketing		13,287			2,289		10,998
General and administrative		14,127			1,052		13,075
Impairment of goodwill and intangible assets		20,349					20,349
Amortization of intangible assets		3,593					3,593
Restructuring charges , net		389					389
Gain on sale of assets and related royalties		(1,000	)				(1,000	)
Total operating expenses		64,507			7,937		56,570
INCOME (LOSS) FROM OPERATIONS		(17,935	)		1,796		(19,731	)
OTHER INCOME, NET		3,303					3,303
INCOME (LOSS) BEFORE INCOME TAXES		(14,632	)		1,796		(16,428	)
PROVISION (BENEFIT) FOR INCOME TAXES		(4,613	)		762		(5,375	)
NET INCOME (LOSS) FROM OPERATIONS		($10,019	)		1,034		($11,053	)
Basic loss per share		($0.48	)	$	0.05		($0.53	)
Shares used in computing basic loss per share		20,810			20,810	$	20,810
Diluted loss per share		($0.48	)	$	0.05		($0.53	)
Shares used in computing diluted loss per share		20,810			21,512	$	20,810

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements

Notes to the Unaudited Pro Forma Financial Statements

The unaudited pro forma condensed balance sheet presented herein assumes the Mobility Solutions Group sale occurred as of September 30, 2007. Such pro forma information is based on the consolidated historical unaudited balance sheet of PCTEL, Inc. and Mobility Solutions as of September 30, 2007. The unaudited pro forma statement of operations for the nine months ended September 30, 2007 and for the year ended December 31, 2006 gives the effect to the sale of the Mobility Solutions Group as if the sale had occurred on January 1, 2006.

The unaudited pro forma financial statements are based on and should be read in conjunction with, and are qualified in their entirety by, the historical consolidated financial statements and notes thereto by PCTEL, Inc.

a.	To record cash proceeds received in the sale of the Mobility Solutions Group to Smith Micro.
b.	To record assets and liabilities transferred to Smith Micro or written off by PCTEL.
c.	To record accrued transaction related expenses of $2.0 million incurred by PCTEL.
d.	To record the estimated tax impact of the calculation, including income tax liability of $19.1 million, an increase in deferred tax assets of $4.7 million, and adjustment to additional paid in capital of $1.0 million. The actual income tax impact at January 4, 2008, will differ due to changes in the balance sheet between September 30, 2007 and January 4, 2008.
e.	Reflects the estimated gain on sale of the Mobility Solutions Group of $57.2 million, net of income tax expense of $15.3 million as if the transaction occurred as of September 30, 2007. The actual gain at January 4, 2008, will differ due to working capital adjustments in the balance sheet between September 30, 2007 and January 4, 2008.
f.	To record the discontinued operations of the Mobility Solutions Group.

(e) Exhibits

99.1 Press Release of PCTEL, Inc., dated January 4, 2008

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: January 10, 2008

PCTEL, INC.
By:	/s/ John W. Schoen
	John W. Schoen, Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release of PCTEL, Inc. dated January 4, 2008

EX-99.1

Exhibit 99.1

For Immediate Release For further information contact:          

John Schoen	Jack Seller
CFO	Public Relations
PCTEL, Inc.	PCTEL, Inc.
(773) 243-3000	(773) 243-3016
	jack.seller@pctel.com

PCTEL Completes Sale of Mobility Solutions Group to Smith Micro

Company Will Realize Over $42 Million After Taxes From Sale

Chicago, IL — January 4, 2008 — PCTEL, Inc. (NASDAQ: PCTI), a leading provider of wireless solutions, announced today that it had completed the sale of its Mobility Solutions Group (MSG) to Smith Micro Software, Inc. (NASDAQ: SMSI). A Definitive Agreement covering this transaction was announced on December 10, 2007. Smith Micro has acquired all of the assets of MSG and will take over PCTEL’s office space in Chicago. Smith Micro paid $59.7 million in cash. PCTEL will retain its accounts receivable at the time of close. PCTEL will realize over $42 million after taxes from the transaction. PCTEL’s headquarters will move to its Bloomingdale facility that currently houses its antenna operation.

“PCTEL’s focus on our wireless assets, and in particular our opportunities for growth in the mobile broadband sector, will serve us well,” said Marty Singer, PCTEL’s Chairman and CEO. “We are excited about our prospects in the rapidly growing WiMAX, network timing markets, our legacy private network products, and our network optimization business,” added Singer.

PCTEL acquired the software business for $1.5 million in June, 2002.

About PCTEL

PCTEL, Inc. (Nasdaq:PCTI), is a global leader in propagation and optimization solutions for the wireless industry. The company designs and develops software-based radios for wireless network optimization and develops and distributes innovative antenna solutions. PCTEL’s Maxrad™ antenna solutions address public safety applications, unlicensed and licensed wireless broadband, fleet management, and network timing. Its portfolio includes a broad range of antennas for WiMAX, Land Mobile Radio, GPS, telemetry, RFID, WiFi, indoor cellular, and mesh networks. The company’s SeeGull™ scanning receivers, receiver-based products and CLARIFY™ interference management solutions are used to measure, monitor and optimize cellular networks. PCTEL’s products are sold worldwide through direct and indirect channels. For more information, please visit the company’s web site at: http://www.pctel.com

PCTEL Safe Harbor Statement

Statements in this press release regarding the divestiture of its Mobility Solutions Group (“MSG”), and PCTEL’s prospects in WiMAX, network timing markets, legacy private networks products and network optimization business, are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and actual results may differ materially from those projected as a result of certain risks and uncertainties, including, PCTEL’s ability to successfully grow its antenna and RF solutions businesses, and other risks and uncertainties detailed in PCTEL’s Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and PCTEL disclaims any obligation to update or revise the information contained in any forward-looking statement, whether as a result of new information, future events or otherwise.