-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CX03QbDI+F50PJb7yywPa1BMDe5KW99VOTVPfMgKIisehqjQYrfTPU7yXvWThdso H8UVC20bQHhb5jqtT1Mx7Q== 0000897069-01-000226.txt : 20010316 0000897069-01-000226.hdr.sgml : 20010316 ACCESSION NUMBER: 0000897069-01-000226 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20010315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORLD WIDE WIRELESS COMMUNICATIONS INC CENTRAL INDEX KEY: 0001098207 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 860887822 FILING VALUES: FORM TYPE: SB-2 SEC ACT: SEC FILE NUMBER: 333-57076 FILM NUMBER: 1569288 BUSINESS ADDRESS: STREET 1: 520 THIRD STREET SUITE 101 STREET 2: 510-839-6100 CITY: OAKLAND STATE: CA ZIP: 94607 BUSINESS PHONE: 5108396100 SB-2 1 0001.txt FORM SB-2 REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on March __, 2001 Registration No. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 WORLD WIDE WIRELESS COMMUNICATIONS, INC. (Name of small business issuer in its charter) ----------------- Nevada 4812 860887822 (State or jurisdiction of (Primary Standard Industrial (IRS Employer incorporation or organization) Identification No.) Classification Code No.) DOUGLAS P. HAFFER 520 Third Street, Suite 101 Oakland, CA 94607 (510) 839-6100 (Name, Address and Telephone Number of Agent for Service) ----------------------- Copies to: WILLIAM D. EVERS, ESQ. Foley & Lardner One Maritime Plaza, Suite 600 San Francisco, CA 94111 Phone No.: 415-434-4484 Fax No.: 415-434-4507 ------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If this Form is filed to register additional securities for an offering pursuant to Rule 462 (b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If this Form is a post-effective amendment filed pursuant to Rule 462 (c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If this Form is a post-effective amendment filed pursuant to Rule 462 (d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. /X/ If delivery of the prospectus is expected to be made pursuant to Rule 434 check the following box. / / CALCULATION OF REGISTRATION FEE
- ------------------------- ---------------------- ---------------------- ---------------------- ---------------------- Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of Securities to be Registered (1) Offering Price per Aggregate Offering Registration Fee Registered Share Price - ------------------------- ---------------------- ---------------------- ---------------------- ---------------------- Common Stock, $0.001 50,000,000 (2) $0.1797 (3) $ 8,985,000 $ 2,246.25 par value - ------------------------- ---------------------- ---------------------- ---------------------- ---------------------- Common Stock, $0.001 15,000,000 (5) $0.265 $3,975,000 $993.75 par value - ------------------------- ---------------------- ---------------------- ---------------------- ---------------------- Common Stock, $0.001 200,000 (6) $0.1797 $35,940 $8.99 par value - ------------------------- ---------------------- ---------------------- ---------------------- ---------------------- Total Registration Fee (4) 65,200,000 $3,248.99 - ------------------------- ---------------------- ---------------------- ---------------------- ----------------------
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, there are included in this registration such additional number of shares of common stock that may be issuable to prevent dilution resulting from stock splits, stock dividends and conversion price or exercise price adjustments. (2) Represents common stock which may be issued pursuant to the equity line of credit contained in the common stock purchase agreement with Grenville Finance Ltd. (3) The proposed maximum offering price is estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) of the Securities Act of 1933, as amended. The price per common share is based on the average bid and asked price of the common stock on the Over the Counter Bulletin Board maintained by the National Association of Securities Dealers on March 9, 2001. The price per common share under the common stock purchase agreement will vary according to changes in the volume-weighted average daily price of our common stock during the draw down periods provided for in the agreement. The purchase price will be equal to 85% of the volume-weighted average daily price for each trading day within such draw down pricing periods. The agreement allows for up to 24 draws over a period of 24 months for amounts up to $1,500,000 per draw. (4) The maximum net proceeds we can receive is $50,000,000 less an 8% finders fee payable to Union Atlantic, LC, $20,000 for fees and expenses of Grenville Finance Ltd's counsel, and $750 in escrow fees and expenses per draw down. (5) These shares to be registered may be offered for sale and sold from time to time during the period the registration statement remains effective, by or for the account of Grenville Finance Ltd. These shares consist of 15,000,000 shares issuable upon exercise of a warrant issued to Grenville Finance Ltd. under the common stock purchase agreement. The exercise price of these warrants is $0.265 per share. These warrants may be exercised until February 12, 2004. (6) These shares to be registered may be offered for sale and sold from time to time during the period the registration statement remains effective, by or for the account of Andrew Corporation. These shares consist of 200,000 shares issuable upon exercise of a warrant issued to Andrew Corporation in connection with a loan agreement. The exercise price of these warrants is $0.23 per share. These warrants may be exercised until January 24, 2005. The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay it effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a) may determine. World Wide Wireless Communications, Inc. 65,200,000 shares of Common Stock This prospectus is part of a registration statement that covers the issuance of up to: (i) 50,000,000 shares of our common stock issuable by us from time to time upon the exercise of an equity line of credit in the common stock purchase agreement with Grenville Finance Ltd.; (ii) 15,000,000 shares issuable by us upon the exercise of a warrant held by Grenville Finance Ltd.; and (iii) 200,000 shares underlying certain warrants issued to Andrew Corporation. We will refer to these entities as the selling shareholders. We will not receive any proceeds from the resale of our common stock by the selling shareholders. However, we will receive the sale price of any common stock that we sell to Grenville Finance Ltd. under the equity line of credit in the common stock purchase agreement described in this prospectus and upon the exercise for cash of the warrants held by the selling shareholders, including the warrant we issued to Grenville Finance Ltd. We will pay the costs of registering our common stock under this prospectus, including legal fees. The selling shareholders may offer and sell some, all or none of their common stock under this prospectus. The selling shareholders may determine the prices at which they will sell their shares, which may be at market prices prevailing at the time of the sale or some other price. The selling shareholders may use brokers or dealers to assist them in selling their shares, who may receive compensation or commissions for such sales. Grenville Finance Ltd. is an "underwriter" within the meaning of the Securities Act of 1933 in connection with its sales. Our shares are currently traded on the OTC Bulletin Board under the trading symbol WLGS. --------------------- Investing in our common stock involves a great amount of risk. See "Risk Factors" beginning on page 4. ---------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. The date of this prospectus is March ___, 2001 TABLE OF CONTENTS Page No. SUMMARY OF FINANCIAL DATA.....................................................3 RISK FACTORS..................................................................4 FORWARD-LOOKING STATEMENTS....................................................9 DIVIDEND POLICY...............................................................9 USE OF PROCEEDS...............................................................9 MANAGEMENT DISCUSSION AND ANALYSIS...........................................10 BUSINESS.....................................................................14 MANAGEMENT...................................................................26 PRINCIPAL AND SELLING SHAREHOLDERS...........................................32 CERTAIN RELATED PARTY TRANSACTIONS...........................................36 DESCRIPTION OF SECURITIES....................................................36 THE COMMON STOCK PURCHASE AGREEMENT..........................................39 PRICE RANGE OF COMMON STOCK..................................................47 PLAN OF DISTRIBUTION.........................................................49 LEGAL MATTERS................................................................50 EXPERTS......................................................................50 ADDITIONAL INFORMATION.......................................................50 FINANCIAL STATEMENTS.........................................................51 INFORMATION NOT REQUIRED IN PROSPECTUS.......................................52 EXHIBITS.....................................................................55 UNDERTAKINGS.................................................................60 SIGNATURES...................................................................62 Until 90 days after the effective date of this prospectus all dealers effecting transactions in the registered securities, whether or not participating in this distribution, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. You should rely only on the information contained in this prospectus. We have not authorized any person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The information in this document may only be accurate on the date of this document. -i- PROSPECTUS SUMMARY World Wide Wireless Communications, Inc. We provide high-speed broadband wireless Internet service in the United States and internationally. We are also developing a new technology, named the distributed wireless call processing system, which we believe will significantly enhance wireless communications. We intend to license this technology to third parties in the future. We are incorporated under the laws of the State of Nevada. Our offices are located at 520 Third Street, Suite 101, Oakland, CA 94607. Our telephone number is (510) 839-6100. Summary of the offering Type of security......................Common stock Common stock registered by company....We are registering 65,200,000 shares of common stock which includes 15,200,000 shares of common stock underlying certain warrants for the selling shareholders identified in this prospectus. Common stock outstanding .............93,417,795 shares Use of proceeds.......................For expansion of our sales force, marketing and distribution activities, expansion of both our domestic and international business operations, for acquiring spectrum, and for general corporate purposes. -2- SUMMARY OF FINANCIAL DATA The summary financial data for the years ended September 30, 2000 and 1999 have been derived from the Financial Statements and Notes to Financial Statements, audited by Reuben E. Price & Co., San Francisco independent auditors. The summary financial data for the quarter ended December 31, 2000 is derived from our unaudited financial statements which, in the opinion of management, includes all adjustments, none of which were other than normal recurring adjustments necessary for a fair presentation of the financial position and results of operations for such periods. The financial information for the quarter ended December 31, 2000 is not necessarily indicative of the results of operations for subsequent periods or a full fiscal year. The selected financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Financial Statements and Notes thereto included elsewhere in this prospectus. Statements of Income Data: Quarter ended Year ended Year ended December 31, 2000 Sept. 30, 2000 Sept. 30, 1999 ----------------- -------------- -------------- (unaudited) (audited) (audited) Revenue $ 316,591 $ 524,246 $ --------- Cost of Goods Sold 256,196 336,717 --------- ------- ------- ---------- Gross Profit 60,395 187,529 ---------- ------ ------- ---------- Operating Expenses 1,860,011 7,065,788 2,383,330 Impairment Loss --------- 1,500,000 -- ------------ --------- --------- Total Operating Expenses 1,860,011 8,565,788 2,383,330 --------- --------- --------- Operating loss (1,799,616) (8,378,259) (2,383,330) Interest Income 52,857 Interest Expense (31,650) (70,706) ---------- -------- --------- ---------- Net loss (1,831,266) (8,396,108) (2,383,330) Foreign Currency --------- 1,600 ----------- Translation --------- --------- ----------- Total Comprehensive $ (1,831,266) $ (8,397,268) $(2,343,330) Loss Balance Sheet Data: December 31, 2000 September 30, 2000 September 30, 1999 ----------------- ------------------ ------------------ (unaudited) (audited) (audited) Working capital $ 217,128 $ 2,403,009 $ (153,646) Total assets 8,138,554 9,703,562 1,180,777 Long-term debt, --------- ----------- 328,000 Less current portion Minority Interest 115,150 115,150 -------- Shareowners' equity 165,033 1,999,185 361,309 -3- RISK FACTORS An investment in our common stock is very risky. You should be aware that you could lose the entire amount of your investment. You should carefully consider the following risks before you decide to buy our common stock. Risks Related to Our Business We will require substantial additional capital in the short term to remain a going concern. We will require substantial short term outside investment on a continuing basis to finance our current operations and capital expenditures as well as the acquisition of additional spectrum and licenses. Our revenues for the foreseeable future may not be sufficient to attain profitability. In the two years since we began operations, we have generated little revenue and have incurred substantial expenditures. We expect to continue to experience losses from operations while we develop and expand our wireless Internet service system and other technologies. In view of this fact, our auditors have stated in their report for the period ended September 30, 2000 that our ability to meet our future financing requirements, and the success of our future operations, cannot be determined at this time. In order to finance our working capital requirements we are currently negotiating equity investments with several sophisticated investors, but there can be no assurance that we will obtain this capital or that it will be obtained on terms favorable to us. If we do not obtain short term financing we may not be able to continue as a viable concern. We do not have a bank line of credit and there can be no assurance that any required or desired financing will be available through bank borrowings, debt, or equity offerings, or otherwise, on acceptable terms. If future financing requirements are satisfied through the issuance of equity securities, investors may experience significant dilution in the net book value per share of common stock. We may not be able to obtain permission to use two-way transmission for our wireless service, thereby making our services significantly less attractive to potential customers. We believe that it is important for us to obtain the right to conduct two-way transmissions through the radio transmission frequencies for which we acquire licenses. None of our present channel leases in the United States allow for two-way transmissions. Permission to conduct two-way transmissions must be obtained from the Federal Communications Commission (FCC), and the rules of the FCC require that we file applications with the FCC to receive permission to conduct two-way transmissions through these frequencies. In August, we filed six applications for permission to conduct two way transmissions with the FCC for the areas of Vail and Aspen, Colorado, Grand Rapids, Michigan, Key West, Florida, Pierre, South Dakota and Ukiah, California, that are currently pending. We cannot be certain that the licenses will be granted. The application process required us to engineer a network configuration and channel-use plan for these frequencies in each market where we intend to launch a two-way system. The applications must meet FCC interference protection rules or contain the consent of other licensees in these markets and adjacent markets. We cannot be certain that: o We will be able to complete the necessary processes to enable us to complete two-way applications for each of our markets. o We will be able to obtain the necessary cooperation and consents from licensees in our markets or adjacent markets to enable us to use our spectrum for two-way communication services. -4- o The FCC will approve our applications. If we do not receive the required consents from the FCC and other licensees within a market, or we are not able to design a two-way system that will meet the FCC's interference protection rules, we will be unable to obtain authorization to implement a two-way system in that market. If we are unable to obtain this authorization, we might be forced to operate our service as a one-way transmission service, which we believe would make our Internet access services significantly less attractive to prospective customers than two-way transmission services. We are subject to other substantial governmental regulations that could adversely affect our business. Our services are subject to current regulations of the FCC with respect to the use of our wireless access. We are required to use and maintain our licenses for certain frequencies and file reports with the FCC. If we fail to comply with these requirements, we may lose our licenses to operate such frequencies. The loss of licenses to operate our frequencies could lead to interruption of our wireless access services and materially adversely affect our business. For example, we currently have applications pending in Aspen and Vail, Colorado, Grand Rapids, Michigan, Key West, Florida, Pierre, South Dakota and Ukiah, California. Our ability to provide two way broadcasting authority in any of those markets depends on obtaining the necessary license from the FCC. In addition, changes in the regulatory environment relating to Internet access could affect the prices at which we may sell our services. These include regulatory changes that, directly or indirectly, affect telecommunications costs, limit usage of subscriber-related information or increase the likelihood or scope of competition from the regional Bell operating companies or other telecommunications companies. For example, regulations recently adopted by the FCC are intended to subsidize Internet connectivity rates for schools and libraries, which could affect demand for our services. The FCC has also stated its intention to consider whether to regulate certain transmission services over the Internet as "telecommunications," even though Internet access itself would not be regulated. Additionally, a number of state and local government officials have also asserted the right or indicated a willingness to impose taxes on Internet-related services, including sales, use and access taxes. We cannot predict the impact that future laws and regulations may have on our business. Our new distributed wireless call processing system technology is unproven and may not function as anticipated. Our distributed wireless call processing system technology remains in the development phase and we have not yet developed a fully functional prototype of that technology. We cannot be certain when we will be able to complete development of that system and whether that system will work in the manner anticipated when development is completed. Furthermore, we cannot be certain whether the system will receive substantial market acceptance assuming that it is developed. For these reasons, although we believe that our distributed wireless call process system is promising, an investor should not assume that the system will be available or will contribute positively to our business prospects or financial condition. We may be unable to protect our intellectual property rights. Our success depends in part on our ability to protect our proprietary technologies. We rely on a combination of patent, copyright and trademark laws, trade secrets and confidentiality and -5- other contractual provisions to establish and protect our proprietary rights. We have received one patent from the United States Patent and Trademark Office pertaining to the distributed wireless call processing system and may file for additional patents in the future. However, our patents may not be of sufficient scope or strength, others may independently develop similar technologies or products, duplicate any of our products or design around our patents, and the patents may not provide us competitive advantages. Litigation, which could result in substantial costs and diversion of effort by us, may also be necessary to enforce any patents issued or licensed to us or to determine the scope and validity of third-party proprietary rights. Any such litigation, regardless of outcome, could be expensive and time consuming, and adverse determinations in any such litigation could seriously harm our business. We have not yet sought patent protection for the distributed wireless call processing system in any country other than the United States, nor have we sought to register our trademarks in those countries in which we currently do or intend to do business. The laws of other countries vary with respect to intellectual property protection, and some jurisdictions may provide substantially less protection than those of the United States. As a consequence, our ability to protect our intellectual property and prevent competitors from using our intellectual property may be much more limited. We are subject to the requirements that we receive regulatory approvals from those countries in which we do business, the delay or denial of which can reduce our revenues and adversely affect our foreign operations. We anticipate that a substantial percentage of our revenues will be derived from operations outside of the United States. Our reliance on international operations to obtain consents of local regulatory authorities, some of which may significantly delay or deny permitting us to operate in those jurisdiction, might inhibit our efforts in certain markets. For example, we will not be able to generate revenues from our operations in Argentina if and until such time as the governmental regulatory authority, the CNC, reinstates some or all our subsidiary's licenses. In early 2000, the government of Argentina announced that it was placing a freeze on all license transfer applications, which has effectively delayed consideration of our application. In September 2000, the government of Argentina revoked licenses for certain lower transmission frequencies, for all communication carriers, including those of the Company's subsidiary, Infotel Argentina, S.A. Although we have resubmitted the necessary paperwork to reinstate licenses in Argentina, it is unclear at this point when and if the licenses will be reissued. A denial of our most recent application or a significant delay in consideration of our application could either prevent us from conducting our planned operations in Argentina or materially adversely affect our ability to do so. Our prospective operations in other jurisdictions are also subject to receipt of government approval, which we cannot ensure that we will receive. Because we operate internationally, our operations are subject to unexpected political changes, changes in legal requirements and fluctuations in exchange rates, all of which may substantially increase our operating costs or make it difficult to do business there. In addition to these international risks, we are also subject to the following risks in connection with our international operations that may substantially reduce our revenues, increase our operating and capital expenses, and otherwise materially affect our ability to conduct business: o unexpected changes in regulatory requirements, taxes, trade laws and tariffs, which can substantially increase the costs of doing business in other jurisdictions; -6- o changes in a specific country's or region's political or economic conditions which may make it difficult or impossible to conduct business there; o lack of clear rules and regulations governing the issuance of licenses and standards for their operation; and o fluctuating exchange rates. We are inexperienced in operating a business internationally, which could cause us to fail to develop our international operations successfully. We intend to expand our international sales efforts in the future. We have very limited experience in marketing, selling and supporting our products and services abroad. There is a risk that we will not be able to expand due to this inexperience. If we are unable to grow our international operations successfully and in a timely manner, our business and operating results could be seriously harmed. This could be reflected in a loss in your investment. If we do not develop system features in response to customer requirements, customers may not wish to use our services, which would seriously harm our business. The broadband wireless access industry is rapidly evolving and is subject to technological change and innovation. These changes require providers of broadband services to adopt new technologies quickly or modify existing technologies to maintain service and market products. Compliance with these changes may cause us to incur unexpected expenses or lose revenues. If we are unable to comply with diverse new or varying governmental regulations or industry standards in each of the many worldwide markets in which we compete, we may not be able to respond to customers in a timely manner or market our products, which could seriously harm our business. We are dependent on the services of key individuals and the loss of any of these individuals could significantly effect our ability to operate our business. Our development and success is significantly dependent upon Douglas P. Haffer, Chairman, President. We do not currently have key man insurance for him. Any loss of the services of Mr. Haffer could seriously harm our business. Risks Related to this Offering The sale of our common stock under to the equity line of credit, the exercise of the outstanding warrants and the conversion of the convertible debentures may substantially dilute the interests of other security holder. The shares issuable to Grenville Finance Ltd. under the equity line of credit will be issued at a 15% discount to the average daily price of our common stock. Accordingly, the shares of common stock then outstanding will be diluted. Depending on the price per share of our common stock during the 24 month period of the equity line of credit, we may need to register additional shares for resale to access the full amount of financing available, which could have a further dilutive effect on the value of our common stock. We also currently have 36,336,113 shares of common stock which are issuable under outstanding convertible debentures and warrants. The current conversion price on the debentures is equal to the lesser of $0.64 and an amount equal to 85% of the average of the closing price on the five trading days immediately prior to the conversion. The floor price on the convertible debentures is $0.50 until May 30, 2001. However, if the aggregate revenue for the last three quarters of the year 2000 and the first quarter of 2001 is less than $13.5 million then as of May 14, 2001 the floor price will be zero. The potential or actual issuance of shares under the convertible debentures and upon exercise of warrants will have a dilutive impact on other stockholders and could have a negative impact on the market price. Moreover, if the floor price on the shares drops to zero it will have a further dilutive effect. The Conversion by the holders of convertible securities and our draw downs on the equity line may result in substantial dilution to the third party holders of our common stock since we expect immediate resale of such shares and holders may ultimately convert and sell the full amount issuable on conversion. Future purchases of our common stock and existing stockholders could experience substantial dilution as the debenture holders convert and as we draw down on the equity line and they resell the common stock. Because the conversion price of the debentures is below market value of the common stock, we expect the debenture holder to ultimately convert the entire principal amount and sell the common stock. Because the shares issuable upon our drawdown on the equity line of credit will be substantially below the market value of the common stock, we expect Grenville Finance to resell the common stock immediately after issuance. The issuance of shares of common stock upon the conversion of debentures and upon our draw downs will have a dilutive impact on our common stock holders. As a result, our income per share could be materially and adversely affected. The sale of material amounts of our common stock under the equity line of credit or pursuant to our convertible debentures could reduce the price of our common stock and encourage short sales. -7- As we sell shares of our common stock to Grenville Finance Ltd. under the equity line of credit and the selling shareholders are issued additional common stock upon exercise of the warrants, and then the selling shareholders sell the common stock, our common stock price may decrease due to the additional shares in the market. The common stock price may also decrease if the holders of the convertible securities elect to convert and resell their shares of common stock. As the price of our common stock decreases, and if we decide to draw down on the equity line of credit, or if the holders of convertible debentures elect to convert, we will be required to issue more shares of our common stock for any given dollar amount invested by Grenville Finance Ltd., subject to a designated minimum threshold price specified by us. This may encourage short sales, which could place further downward pressure on the price of our common stock. We cannot determine the precise amount by which the interests of other security holders will be diluted by draw downs under the equity line of credit because our decisions on the number, size and timing of draw downs and the minimum threshold price for each draw down depends upon a number of factors. We have substantial discretion over the number, size and timing of the draw downs that we will make under the equity line of credit. In addition, at the time we make each draw down request, we have the right to limit the amount of dilution that will occur by setting a minimum threshold price below which shares may not be sold in that draw down. However, if we set the minimum threshold price at a level high enough to limit the sale of our shares, the amount of funds we can raise in the draw down will also be reduced. Some of the factors that we will consider in determining the size and amount of each draw down and the minimum threshold price are: o Our short-term and long-term operating capital requirements; o Our actual and projected revenues and expenses; o Our assessment of general market and economic conditions; o Our assessment of risks and opportunities in our targeted markets; o The availability and cost of alternative sources of financing; and o The trading price of our common stock and our expectations with respect to its future trading price. Our discretion with respect to the number, size and timing of each draw down request is also subject to a number of contractual limitations that are described in "The Common Stock Purchase Agreement" below. We cannot determine the precise amount by which the interests of other security holders will be diluted by draw downs under the equity line of credit because the number of shares we will sell depends upon the trading price of the shares during each draw down period. The number of shares that we will sell is directly related to the trading price of our common stock during each draw down period. As the price of our common stock decreases, and if we decide to draw down on the equity line of credit, we will be required to issue more shares of our common stock for any given dollar amount invested by Grenville Finance Ltd. We do not know the precise number of shares of common stock that we may have to issue upon the conversion of outstanding convertible securities once the floor price is removed because the conversion price is linked to the future market price of the common stock. The shares issuable upon conversion of the 4% convertible debentures are linked to a percentage discount to the market price of the our common stock at the time of the conversion once the floor price is removed. Until then, we do not know the precise maximum number of common stock shares that may be issued. The lower the price of our common stock at the time of conversion, the more the shares of common stock that we will be required to issue upon conversion, which will further dilute holders of common stock and cause the common stock price to decline further. The sale of shares of the common stock covered in this prospectus could enable third party investors to influence our Board of Directors and increase the possibility of a change in control. -8- We have registered 65,2000,000 shares of our common stock for sale by the selling stockholders under the registration statement of which this prospectus forms a part. Under the terms of our common stock purchase agreement with Grenville Finance Ltd., we may not issue shares of our common stock to Grenville Finance Ltd. which would result in ownership by Grenville Finance Ltd. of more than 9.9% of our issued and outstanding common stock. However, if all of the shares being registered are issued under the terms of the common stock purchase agreement and the warrants are resold by Grenville Finance Ltd. and the other selling stockholders, third party investors could acquire a significant percentage of our common stock. The acquisition by third party investors of a significant percentage of our common stock could enable such investors to influence or direct the policies, decisions and composition of our Board of Directors and management. A potential change of control could involve a number of risks, including the diversion of management attention and resources, the loss of key employees, and changes in our business plan and operations. Any such events could have a material adverse effect on our business and results of operations. We may be unable to access all or part of our equity line facility. If our stock price and trading volume are at certain levels, then we will not be able to drawdown all $50 million pursuant to the proposed equity line facility with Grenville Finance Ltd. In addition, business and economic conditions may not make it feasible to drawdown pursuant to this facility. Furthermore, if we are unable to keep a registration statement effective for those shares of common stock subject to the equity line, or if our common stock is delisted from the OTC Bulletin Board, or if we experience a material adverse change to our business that is not cured within 60 days, the common stock purchase agreement may terminate, or we may not be able to drawdown any funds. FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements. We intend to identify forward-looking statements in this prospectus using words such as "believes," "intends," "expects," "may," "will," "should," "plan," "projected," "contemplates," "anticipates," or similar statements. These statements are based on our beliefs as well as assumptions we made using information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties and assumptions. Actual future results may differ significantly from the results discussed in the forward-looking statements. Some, but not all, of the factors that may cause these differences include those discussed in the Risk Factors section of this prospectus. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this prospectus. DIVIDEND POLICY We have never declared or paid any cash dividends on our capital stock and do not intend to pay dividends in the foreseeable future. We intend to invest our future earnings, if any, to fund our growth. USE OF PROCEEDS We will not realize any proceeds from the sale of the common stock by the selling shareholders; rather, the selling shareholders will receive those proceeds directly. However, we will receive cash infusions of capital if and when Grenville Finance Ltd. purchases our common stock in accordance with the common stock purchase agreement. We may receive additional cash upon the exercise of warrants held by the selling shareholders if the selling shareholders chooses to pay cash upon exercise rather than utilize the cashless exercise provision contained in the warrant. We intend to use the proceeds from the sale of common stock to the selling shareholders to expand our sales force, expand our domestic and international business operations, for acquiring spectrum and for general corporate purposes. -9- MANAGEMENT DISCUSSION AND ANALYSIS The following should be read in conjunction with the "Risk Factors" and the "Financial Statements" and the Notes thereto. Results of Operations Fiscal Year 2000 We did not generate any revenues by providing wireless internet services during fiscal 1999 and we generated only approximately $524,000 in 2000, none of which was from Internet-related sources. We did not have enough subscribers in either period to generate revenues sufficient to cover our total operating expenses which totaled $2,383,330 and $8,565,788 respectively, in fiscal 1999 and 2000. Our operating expenses included service costs, programming and license fees, general and administrative expenses, and certain acquisition expenses resulting from acquiring spectrum. Our expenses increased substantially in 2000 over those in 1999 as we substantially increased the scope of our business operations during that period. Quarter Ended December 31, 2000 Compared to Quarter Ended December 31, 1999 For the three months ended December 31, 2000 we generated $361,591 in revenue, as compared with no revenue for the quarter ended December 31, 1999. The increase in revenue for the three months ended December 31, 2000 over the same period in 1999 derived from the sale of telephone system integration and engineering in our Argentine subsidiary and through the initiation of internet service in our Peruvian subsidiary. The costs of goods sold for the three months ended December 31, 2000 was $256,196, as compared with none for the three and nine months ended December 31, 1999. The increase in cost of goods sold is primarily attributable to labor and material costs associated with the sale of telephone system integration and engineering by the Argentina subsidiary and the initiation of internet service in the Peruvian subsidiary. Operating losses, including income attributable to a minority interest, for the three months ended December 31, 2000 were $1,799,616 as compared to $829,189 for the three months ended December 31, 1999. This increase in losses is due primarily to expenses generated by our foreign subsidiary Infotel Argentina and increased demand for the parent company in expanding the business and managing the foreign subsidiaries. Interest income (expense) for the three months ended December 31, 2000 was $31,650 as compared to no interest expense in the three months ended December 31, 1999. This increase is due primarily to accrued interest expense for the issuance of debentures. Net losses for the three months ended December 31, 2000 was $1,831,266 as compared with $829,189 for the three months ended December 31, 1999. Liquidity and Capital Resources -10- As of September 30, 2000 our total working capital was $2,403,009. During 1999 and 2000, we experienced continuing cash shortages due to an insufficient subscriber base. The resulting cash shortages rendered us unable to advertise and aggressively promote our services. On December 31, 2000, the company had cash and cash equivalents of $984,274 compared with $3,111,150 as of September 30, 2000. The decrease during the three months in cash and cash equivalents of $2,126,876 is due to equipment installation costs of $526,955, and cash used in operating activities of $1,599,921. Similarly, no sales of capital stock or other financing activities took place during the quarter. Because we have not received sufficient revenues from operations and do not anticipate receiving sufficient revenues for the next 12 months from operations, we will need to obtain substantial funding from external sources over the next twelve months to finance our current operations. In order to finance our working capital requirements, we are currently negotiating equity investments with several sophisticated investors, but there can be no assurance that we will obtain this capital or that it will be obtained on terms favorable to us. If we do not obtain short term financing we may not be able to continue as a viable concern. In view of this fact, our auditors have stated in their report from the period ended September 30, 2000, that there is substantial doubt about our ability to continue as a going concern, dependent upon our ability to meet our future financing requirements, and the success of our future operations, the outcome of which cannot be determined at this time. We do not have a bank line of credit and there can be no assurance that any required or desired financing will be available through bank borrowings, debt, or equity offerings, or otherwise, on acceptable terms. If future financing requirements are satisfied through the issuance of equity securities, investors may experience significant dilution in the net book value per share of common stock. On April 14, 2000, we entered into a Securities Purchase Agreement with six investors, for the purchase of investment units, consisting of common stock, common stock purchase warrants, 4% subordinated debentures and preferred stock. Pursuant to the Securities Purchase Agreement, these investors purchased 760,000 shares of common stock, warrants to purchase 3,600,000 shares of common stock and subordinated debentures with a principal amount of $3,280,000 for a total price of $4,800,000. On August 10, 2000, we agreed with the investors to modify certain terms of the earlier funding agreement. Under the new terms of this agreement, we agreed to issue an additional 608,000 shares of common stock to the investors, in exchange for $1,920,000 and the investors' forbearance of certain rights under the original agreement. The conversion price of the subordinated debentures was amended to the lesser of 110% of the average per share market value for the five consecutive trading days immediately preceding the original issue date and 85% of the average per share market value for the five consecutive trading days immediately prior to the conversion date. We also agreed to change the floor price to $1.00 for the period between August 10, 2000 and October 14, 2000, $0.64 from the period between October 14, 2000 and April 14, 2001 and zero thereafter. Notwithstanding these changes, under this amendment if our revenues for fiscal year 2000 fall below $13.5 million than the floor price will be zero as of April 1, 2001. Furthermore, the exercise price of the warrants to purchase our shares was changed to $2.00. On November 15, 2000, the investors agreed to modify the transaction documents in accordance with our request and agreed to waive any breach of the original Securities Purchase Agreement and the first amendment by us which occurred prior to the closing date of the Second Amendment. In consideration for these concessions, we agreed to increase the principal amount of the -11- debentures held by the investors to $6,720,000 and to issue 3,996,113 additional restricted shares of common stock to the investors. The investors have returned to the company 760,000 previously issued shares of common stock in exchange for the issuance of new debenture certificates reflecting the increase in the principal amount. Under this agreement, the selling shareholders may convert the debentures at a conversion price equal to the lesser of $0.64 and an amount equal to 85% of the average of the closing trading prices of the common stock for the five consecutive trading days immediately prior to the conversion. At no time shall the conversion price be below the floor price. The floor price is $0.64 for the period between October 1, 2000 and October 14, 2000, $0.50 for the period between October 14, 2000 and September 1, 2001 and zero thereafter. However, if our aggregate revenue for the last three quarters of the year 2000 and the first quarter of the year 2001 is less than $13.5 million then as of May 14, 2001 the floor price shall be zero. In addition, the 608,000 shares to be issued under the first amendment were never issued and were accordingly cancelled. We signed a common stock purchase agreement with Grenville Finance Ltd. dated January 26, 2001 for the future issuance and purchase of our common stock. The common stock purchase agreement establishes what is sometimes termed an equity line of credit or an equity draw down facility. In general, the equity line of credit operates like this: Grenville Finance Ltd. committed up to $50 million to purchase our common stock over a twenty-four month period. Once every 22 trading days, we may request a draw down of up to $1,500,000 of the committed money, subject to a formula based on the average common stock price and average trading volume, setting the maximum amount of any request for any given draw down. Each draw down must be at least $50,000. The amount of money that Grenville Finance Ltd. will provide to us and the number of shares we will issue to Grenville Finance Ltd. in return for that money is settled twice during a 22 day trading period following the draw down request based on the formula in the common stock purchase agreement. Grenville Finance Ltd. will receive a fifteen percent discount to the volume weighted average stock price for that 22 day period We will receive the amount of the draw down less an escrow agent fee of $750 for each draw down amount and an 8% placement fee payable to the placement agent, Union Atlantic, LC, which introduced us to Grenville Finance Ltd. In addition, Grenville Finance Ltd. will receive a three year warrant to purchase up to 15,000,000 shares of our common stock at an exercise price of $0.20 per share. See "The Common Stock Purchase Agreement" below. On February 11, 2001, we entered into a Stock Purchase Agreement with two investors for the purchase of four million shares of common stock we offered at $0.125 per share through our Post Effective Amendment Form SB-2 Registration Statement. The total purchase price was $500,000. Plan of Operations We are considering alternatives to our present business strategy, which include, but are not limited to modifications of our business plan and the possible sale or licensing of certain assets. Specific components of the modified new business plan could include a significant reduction in our selling, general and administrative expenses, additional equity investment, recapitalization and additions to the current management of the company. We cannot provide assurance that implementing the modified business plan, even with the successful execution of all the components of the new plan, will lead the company to profitability. Due to the substantial operating losses we incurred during the fiscal year ended September 30, 2000 and this past quarter, as well as the current projected future operating losses, we will require new sources of funding in the form of equity or debt financing in order to execute our -12- current business plan. However, there is no certainty that additional financing of any kind will be forthcoming in amounts sufficient to allow the company to continue to operate its business. On January 14, 2001, we entered into a Loan Agreement with our systems integrator, Andrew Corporation, to repay costs incurred in purchasing their services and equipment. Under the Loan Agreement, we agreed to pay the company an initial payment of $100,000 and then an additional $100,000 each month until the loan is repaid. The amount payable each month is subject to an increase if we receive additional financing. In addition, we issued the company a warrant to purchase no less than 200,000 shares and no greater than 500,000 shares of common stock. The warrants are exercisable until January 24, 2005 at an exercise price of $0.23 per share. The warrants were issued in lieu of interest. We are required to register the shares underlying the warrants. During the next 12 months we intend to initiate and expand licensed operations in Ukiah, California, South Bend, Indiana, Grand Rapids, Michigan, Vail and Aspen, Colorado, Key West, Florida and Pierre, South Dakota. Internationally, we intend to focus primarily in Peru, India, and Thailand, and Argentina assuming that our licenses are restored. We are considering selling certain limited assets. We anticipate that our expansion will involve the purchase of significant equipment in these markets and estimate that the expenditure will be approximately $15,000,000 to $25,000,000. We currently have 10 full-time employees at our headquarters office and approximately 30 additional full time employees in the offices of our subsidiaries. We anticipate hiring more employees as we enter new markets. -13- BUSINESS Introduction In February of 1997, Worldwide Wireless, Inc., a Nevada corporation, was formed to coordinate the operations of TSI Technologies, Inc., a Nevada corporation, and National Micro Vision Systems, Inc., a Nevada corporation. Its purpose was to complete the development of its patented advanced distributed wireless telephone and network designs and to finance, manufacture, and market these units and systems. TSI Technologies, Inc. was the research and development company formed for the purpose of creating and developing the distributed wireless call processing system. National Micro Vision Systems, Inc. was formed to operate a network of wireless Internet sites. In April of 1998, Worldwide Wireless, Inc., TSI Technologies, Inc. and National Micro Vision Systems, Inc. acquired Upland Properties, Inc., a Nevada corporation, for stock and transferred their assets to Upland Properties, Inc. Upland Properties, Inc. then changed its name to World Wide Wireless Communications, Inc. and began trading on the OTC Bulletin Board under the symbol WLGS. Worldwide Wireless, Inc. remains a significant shareholder in our company, but it does not play a role in our current operations. National Micro Vision Systems, Inc. is now completely separate from and unrelated to us. We have purchased, leased or otherwise have acquired an interest in a substantial number of high-speed wireless Internet frequencies in the United States, Peru, India and Thailand either by ourselves, or through our subsidiaries or joint ventures. We have also applied for reinstatement of our subsidiary's license in Argentina. We plan to purchase or lease additional wireless Internet frequencies in the United States and abroad, should we receive additional funding. In addition to acquiring and developing wireless Internet frequencies, we have received a patent on a new generation of wireless cellular telephone technology that we have named the distributed wireless call processing system. We believe that this technology may enhance wireless communications in the future by increasing cellular telephone network capacity. The Industry Use of the Internet and private communications networks has expanded and continues to expand rapidly. International Data Corporation estimates that there were 142 million Internet subscribers at the end of 1998, and projects that this number will grow to over 500 million subscribers by 2003. Businesses increasingly depend upon data networks, not only for communication within the office, but also to exchange information among corporate sites, remote locations, telecommuting employees, business partners, suppliers and customers. Consumers are also accessing the Internet to communicate, collect and publish information and conduct retail purchases. The growth in data traffic is resulting in an increase in the demand for high-speed access. To accelerate the speed at which data can be transmitted, service carriers are increasingly relying on broadband, which allows the transmission of multiple data channels through a single medium. One broadband medium consists of wireless frequencies which have large bandwidth, or an ability to transmit large amounts of data in a short period of time. The FCC has taken steps to increase the availability of frequencies and bandwidth that may be used by wireless carriers in the United States for such data transmission. In addition, an FCC ruling in September 1998 allowed license holders of various frequencies within the band of 2.15 to 2.68 Gigahertz or GHz, to offer two-way broadband wireless data services upon the opening of a filing -14- window. On March 23, 2000, the FCC announced the initial filing window for two way authorization which eventually took place between August 14, and August 18, 2000. Previously, these frequencies had been restricted to one-way video transmissions, which limited their effectiveness for data transmission. The FCC has also increased the availability of various higher frequencies within the bands of 24 to 40 GHz. Internationally, these frequencies vary slightly, with the lower frequency services being between 2.5 to 5.0 GHz and the higher frequency-type services being offered on frequencies similar to the higher frequencies used in the United States. Opportunities in broadband wireless access are increasing globally as Europe, Latin America, Asia Pacific and Canada join the United States in promoting competition in the local communications services market by allocating frequencies and bandwidth and issuing transmission licenses. In this regard, at least 26 countries have allocated broadband wireless frequency bands for use or trials in the last mile, according to Global Telephony. Deregulation has been a significant catalyst for increased competition in the long-haul segment of the market and massive spending on network infrastructure, as incumbent and emerging carriers have sought to address the growing demand for bandwidth. In the local access segment of the market, deregulation has also been a significant catalyst for the growing interest in providing broadband access directly to subscribers. Data services that historically were offered only by a single provider for a region now may be offered by a number of competing service providers. This increased competition has given local service providers compelling incentives to improve data transmission rates in order to offer additional value-added services to subscribers. However, bandwidth limitations of the existing infrastructure for the connection to the subscriber have constrained service providers from exploiting these opportunities. Links to subscribers typically consist of copper wires that operate at substantially lower transmission speeds than those offered in the long-haul segment of a network, or by some available broadband alternatives. These copper wires were originally intended to carry only analog circuit-switched, voice signals. As a result, the connection to the subscriber has become a bottleneck that limits high-speed data transmission. Alternative technologies for broadband access include: o Digital subscriber line, or DSL, technology which improves the data transmission rates of a telephone company's existing copper wire network; o Cable modems, which are designed to provide broadband Internet access and are targeted primarily at the residential market; o Fiber Optic-Based Solutions and high-capacity leased lines, which offer the highest data transmission rate of any of the alternative technologies for broadband access; o Point-to-point wireless technology enables data transmission using a dedicated radio link between two locations; and o Broadband point-to-multipoint wireless networks, which consist of a wireless hub that communicates over radio frequencies to transmit and receive network traffic to and from wireless modems installed at multiple subscriber locations. Both incumbent and emerging service providers are emphasizing broadband wireless technologies for Internet access. Established carriers are expected to use broadband wireless technology to reach new customers to whom they previously could not provide access, fill coverage -15- gaps in their existing networks and deploy value-added services in a cost-effective manner. For example, International Data Corporation reports that in 1999, Sprint and MCI WorldCom spent over $1.5 billion to purchase companies holding licenses in these lower frequencies within the 2.15 to 2.68 GHz range. Emerging carriers may use this technology to bypass existing wire-based infrastructure and to compete with incumbent carriers. In addition, this technology may be used to deploy broadband services in regions where there is no wire-based communications infrastructure. Estimates of the revenue which lower frequency licenses will generate vary substantially, but International Data Corporation estimates that revenue generated by basic services delivered via fixed, non-satellite based wireless technologies will grow from $767 million last year to $7.4 billion in 2003. Lower and Higher Frequency Wireless Transmission Systems We have chosen to focus on acquiring licenses to transmit within the lower frequency ranges approved by the FCC and used internationally, which are generally between 2.15 and 5.0 GHz. Although the higher frequencies are large enough to transmit large amounts of data at once, the higher frequencies have severe limitations including high costs of build out, very short range of less than 5 kilometers and severe problems with interference from weather and atmospheric conditions. Even though they have these limitations, higher frequency transmissions would appear to have major potential in wireless local loops, internal wireless networks and intranets. The lower frequencies approved by the FCC have less bandwidth than those in the higher frequencies. Nonetheless, we believe that the lower frequencies have more than enough bandwidth for the great majority of potential business and residential users. In the United States, which allows 10 watts of power in transmitting data, the range of the lower frequencies is at least 50 kilometers and transmissions within these frequencies are much less affected by atmospheric and meteorological phenomena. It is also much less expensive to install and operate lower frequency transmission services than at higher frequencies, in part because the greater range of the lower frequencies require the installation of fewer transmitters. Both high and low frequency transmissions are transmitted over a limited number of licensed frequencies that protect data from interference by other forms of radio or microwave transmitters. It is critical, therefore, that any company operating or attempting to develop a system of wireless Internet over these frequencies acquire them as quickly and as inexpensively as possible and for as many locations and as many channels/bands as possible in each location. Because of the limitations of higher frequencies as a means of transmissions for Internet access, and because we believe that the more viable market for wireless high-speed services is in the small to medium-size business and residential market, we have decided to concentrate exclusively on the lower frequencies for our Internet access service. In that context, we have been actively engaged in the acquisition of wireless Internet frequencies in the United States and especially abroad. One major technical problem with wireless transmissions within the lower FCC-approved frequencies has traditionally been that a clear line of sight was necessary between the transmission and the receiver. This limitation allowed these frequencies to be used only in areas with even terrain and no obstructions, insofar as buildings and hills would often disrupt transmissions. Although these problems persist with the lower frequencies, there have been recent developments which have shown a potential for reducing these problems. Cisco Systems, Inc. announced the development of Vector Orthogonal Frequency Division Multiplexing, which purportedly has the ability to reassemble multi-path signals at the receiving point so that they appear to arrive in a single stream -16- from one location, even if obstacles are in the path of the original signal. (Communications Daily, MMDS Industry Gears Up on Standards Issues, Spectrum Planning, April 3, 2000). This would have the effect of significantly reducing the line of sight problem and, we believe, will enhance lower frequency transmissions as a medium for Internet access. A part of the spectrum which the lower frequencies occupy consist of frequencies referred to as Instructional Television Fixed Service. These frequencies are reserved by federal law to television broadcasting by religious, educational or other nonprofit groups. An increasing number of providers of data transmission are leasing transmission rights of the holders of Instructional Television Fixed Service licenses. As we discuss below, we have leased a number of these frequencies from a nonprofit organization. International Broadband Use We believe that international markets offer enormous potential for growth. Although use of the Internet has grown substantially internationally, we believe that the combination of obsolete equipment and newly privatized systems in many countries provide us with great opportunity. The technology we employ allows countries such as Thailand and Peru to establish an up-to-date, high-speed, broadband wireless Internet system equal to any of the most developed nations with very little infrastructural costs. We believe the same will be true in the many other countries throughout Asia, Latin America, the Middle East and Europe in which we are actively seeking wireless frequencies. We believe that our approach to providing high-speed, broadband, fixed wireless Internet service will make our service available to a broader customer base than is possible with certain other fixed wireless services. By concentrating on the acquisition of relatively low-frequency spectrum, we can provide service over a substantially larger market of customers, with enhanced propagation properties, and for substantially lower cost than can be offered by higher-frequency wireless services. It is our belief that the bandwidth and speed of our service will meet the requirements of at least 90% of the potential high-speed wireless Internet customer base, and we hope to be able to provide this service more economically and with greater reliability than our competition. In the international market, we should be able to provide a quantum leap in the quality of Internet service beyond that which currently exists and at a price point similar to that being charged by providers of the current service. Our strategy Our activities are currently divided into three categories: o Acquisition of Wireless Internet Frequencies - Spectrum; o Development of Wireless Frequencies - Build Out; and o Development and Licensing of Distributed Wireless Call Processing Systems. Acquisition of Wireless Internet Frequencies - Spectrum We have determined that our primary target for acquisition of wireless frequencies will be in the frequency range within the United States of 2.5 GHz to 3.0 GHz and in similar frequency ranges up to around 5.0 GHz internationally. With these frequency ranges we believe that we will be able to provide the highest quality, broadest band, and fastest service and the most reasonable costs to the largest number of potential customers. By positioning ourselves to provide enhanced connectivity -17- to the largest number of people, we believe that we will play a significant role in the expansion of this technological development in both the short and long term. Prior to 1999, we controlled licenses in only three locations - the East Bay region of San Francisco, California, northern San Diego County, California, and South Bend, Indiana. Since the beginning of 1999, we have acquired rights - either through long-term leases with options to purchase or outright purchases - to additional spectrum both in the United States and elsewhere. As of March 1, 2001, we lease, own or possess reversionary rights to licensed frequencies in the following additional locations: Location State/Country Hot Springs Arkansas Aspen Colorado Vail Colorado Hilo Hawaii Grand Rapids Michigan Key West Florida Ukiah California La Grande Oregon Pierre South Dakota Buenos Aires* Argentina, South America Bangkok Thailand. Asia Hat Yai Thailand, Asia Khon Kaen Thailand, Asia Nakhon Ratchasima Thailand, Asia Phuket Thailand, Asia Chiang Mai Thailand, Asia Lima/Callao Peru, South America - ------------------- * At this point the license in Buenos Aires, Argentina has been revoked. Although the government in Argentina has informed us it will reissue the licenses we cannot provide assurance that this will occur. The licenses in the United States listed in the above table are currently leased from Shekinah Networks. Pursuant to an Option Agreement with Shekinah Networks, we paid $500,000 to lease nine Instructional Television Fixed Service channels for our high-speed wireless Internet connections, as authorized by the FCC. This agreement also provides us an exclusive option to lease excess capacity on Shekinah's remaining thirty-two channels, as they become available. The monthly minimum transmission fee to be paid to Shekinah for each license or application leased will be 5% of the gross system receipts or $500, whichever is greater. Each lease has a term of five years, which may be renewed at our election for an additional five-year term if the FCC renews the license. All of the United States licenses described above allow us to broadcast over frequencies using one-way transmissions only. With the exception of certain limited provisional licenses granted in various parts of the country, the FCC has not yet granted long-term two-way transmission licenses for the lower frequencies. We have submitted six applications for two way transmissions on our existing licenses to the FCC in the following markets: Aspen, Grand Rapids, Key West, Pierre, Ukiah and Vail. Each of those applications is currently pending. -18- Development of Wireless Frequencies - Build Out As spectrum is acquired, we plan to provide high-speed Internet services, including telephony and videoconferencing services. We plan to join with local partners and other entities in the industry to form strategic alliances in connection with the use and implementation of high-speed wireless services. We may also provide services directly to users of Internet services. As of the date of this prospectus, and except as described below, we have not yet entered into any strategic alliances. We selected Andrew Corporation as our exclusive systems integrator worldwide. We anticipate that this association with Andrew Corporation will assist us in our effort to deploy our high speed wireless data systems throughout the world. Most recently, Andrew Corporation has provided significant assistance with our system build out in Lima/Callao, Peru. We are currently operating a single system off of Mt. Diablo in Concord, California, an area some thirty miles east of San Francisco. The license at Mt. Diablo is one of only two one-channel licenses that we control, with all the remaining ones being at least four channels. Commercial service commenced in this location in December 1999. Because the high-speed wireless component of the Mt. Diablo operations is only available in downlink mode, we have been aware from the outset that the operations in the Concord area would not be typical for the more conventional two-way systems. However, because the FCC has not yet approved permit applications for two-way transmissions within these frequencies and because of the specific demographics within the potential Mt. Diablo transmission area, we decided to commence the limited-type of service close to our headquarters in Oakland. In December 1999, we entered into an amended lease agreement regarding a lease for the license covering Concord, California and the surrounding area. We have recently received a Notice of Default from the lessor. The Notice of Default is based on a requirement in the amended agreement that the balance of the purchase price for the assignment of the license be paid by December 1, 2000. Our management has been advised by counsel, that payment of the balance of the purchase price prior to the FCC's consent to the assignment of the license may constitute a premature assignment in violation of the FCC's rules. The assignment application has not been filed with the FCC for the FCC to make a definitive ruling on this issue. At this point, no formal legal action has been taken by the Lessor. We intend to build-out domestic systems in various areas including the small town of Ukiah, California, some ninety miles north of San Francisco. In addition to Ukiah, we plan to commence domestic build-out programs in northern San Diego County, South Bend, Indiana, Grand Rapids, Michigan, Vail and Aspen, Colorado, Key West, Florida, and Pierre, South Dakota. We recently entered into an agreement with Shekinah Network to lease their excess airtime capacity in Hot Springs, Arkansas and Hilo, Hawaii. We signed an agreement to acquire 51% of Infotel Argentina, S.A. in November, 1999. We intend to commence operations in Buenos Aires, Argentina as soon as we obtain the necessary licenses. We have secured the necessary backbone connections and transmitter locations in the Greater Buenos Aires metropolitan area, which contains more than 16 million people. Our ability to begin transmission over the frequencies is subject to approval of the Comision Nacional de Communicaciones, or CNC, the governmental agency primarily responsible for regulating telecommunications in Argentina. The Argentine government recently announced that it was revoking all licenses for certain specific lower frequencies previously granted to Infotel and others. As a result the licenses for which we had submitted transfer requests were revoked. The Argentine government -19- has set forth criteria for the return of the licenses and we have submitted the necessary documentation. We expect that the CNC will ultimately approve our applications and allow for us to commence offering our wireless services. However, we have been informed that the government might not reissue the same lower frequency licenses for those cities outside Buenos Aires, but may instead issue a new series of licenses on a different frequency. We cannot provide assurance that a license from the Argentine government will be forthcoming. We acquired all of the shares of Digital Way, S.A., a Peruvian telecommunications company earlier this year. Digital Way presently owns a wireless transmission license in Lima/Callao and is in the process of attempting to secure additional licenses in that area as well as licenses for five different cities in Peru. We have received necessary governmental consent in Peru for the transfer of the control of Digital Way's licenses. Digital Way, S.A. recently launched its two way, high speed, broadband wireless internet operations in metropolitan Lima/Callao Peru. This effort has generated interest from business customers in the region. This service is to be marketed under the name "Speedway" and is intended to provide high quality service to currently underserved sectors of the Peruvian market. Recently, Digital Way entered into an agreement for a pilot project with McDonalds's, Compaq Computer, and a local Internet Service Provider to provide Internet access to McDonald's customers at one of the restaurants locations in San Isidro, Lima Peru. Digital Way is providing the connectivity and internet backbone to provide the service. We expect that the pilot project will be expanded in the future to cover additional McDonald's locations in the Lima/Callao area. We intend to inaugurate services in Thailand subject to funding. Earlier this year, we entered into a joint venture with World Thai Star Company, a Thai corporation, to provide high speed, wireless, broadband internet and related services in Bangkok and other major areas in Thailand. World Thai Star Company, currently owns frequencies in Bangkok and throughout "up-country" Thailand. World Thai Star will transfer its rights to certain frequency licenses to the joint venture and we will contribute funding. Upon receipt of additional funding, we intend to commence a build out of our high speed broadband fixed wireless data service system in India. We have entered into an agreement with a group of Indian businessmen to establish such a system. Under the agreement, World Wide Wireless Communications (India) Ltd. was formed. World Wide Wireless Communications (India) has received internet service provider licenses in five cities in India. The success of this venture depends on obtaining a nationwide internet service provider license and an appropriate frequency license from the Indian government. We recently received a frequency license from the Indian government to provide service in nine Indian cities subject to certain conditions imposed by the government. Our India operation still needs to apply for a nationwide ISP license to provide service in all the frequencies granted. We are required to contribute capital to World Wide Wireless Communications (India) Ltd for build out and related expenses in increments based on obtaining the internet service provider and frequency licenses. We expect that, in the case of any future acquisition of licensed frequencies, we will operate the systems alone, do so in joint ventures with local entities, or transfer the licenses to third parties for significant consideration. Although we initiated negotiations with businesses in Puerto Rico and Portugal in 1999, no further negotiations or affiliations are currently pending in those countries. -20- Development and Licensing of Distributed Wireless Call Processing System We are completing the development of our distributed wireless call processing system. The major feature of this system is that it allows individual cell phones and other communication units to amplify signals, thereby reducing the need for repeater stations. The system allows every handset itself to serve as a mobile, low-power repeater site, and each unit facilitates the operation of the entire local network within a radius of 10-20 miles. A whole continent populated with these units would theoretically have no need for infrastructure support of any kind. In practice, we or parties to whom we license the system will build widely scattered gateway sites that will serve to introduce local signals into long lines, international and satellite service providers and introduce data signals into destination networks while providing a medium for our generation of an ongoing revenue stream. We are looking to license this technology to a third party developer in order to potentially create a royalty stream of income. However, we cannot guarantee that we will enter into such an agreement. Competition Our competitive business position is largely dependent on the various markets in which we operate. United States The telecommunications market in the United States is highly competitive and largely deregulated, although the FCC still plays a prominent role. We are focusing our strategy on underserved rural areas that are less economically viable for high speed wireline or cable-modem services. Although other fixed wireless providers, such as Sprint and Worldcom/MCI, may eventually become competitors, in the next few years these operators will likely focus on the more lucrative opportunities offered by larger markets. We believe that markets in which we have licenses, such as Key West and Aspen, will not be the focus of these service providers in the near future which we hope will enable us to establish our services in these markets before other larger companies enter these markets. Other potential competitors such as satellite broadband and dial-up Internet service providers currently provide less bandwidth than do service providers using our frequencies which can result in some instances in transmission delays and downstream service interruptions, particularly in bad weather. Peru The Peruvian Internet market is still dominated by the former monopoly, Telefonica del Peru, which provides basic dedicated, hosting and high-speed wired services. Access connections are limited by the limited personal computer and cable penetration rates, as well as low availability of local content. Although Bell South and AT&T Latin America plan to enter the Internet service provider marketplace, we believe it is a lower priority than providing their basic telephony services. Diginet Americas has entered Peru with a fixed wireless broadband service. Diginet Americas intends to provide "point to multipoint" services such as ours. Most of the less prominent Internet service provider companies are focusing on the Lima/Callao market where there are numerous high-income and corporate customers. Argentina -21- Argentina's Internet service provider market is relatively competitive, with four significant Internet access providers, none of which possesses a market share greater than 25%, however, taken together, these four companies represent about 80% of the total Internet service provider market. We believe that some of the cable providers have entered or plan to enter, the dial-up and cable-modem markets. In addition, Velocom and Millicom, two Argentine companies, have recently entered the market using wireless spectrum (3.5 GHz) in a similar range as ours. Winstar, an American company, recently rolled out Internet service provider services in Buenos Aires using higher bandwidth than ours. Winstar primarily plans to concentrate on large businesses. We plan to focus our efforts on small to medium size businesses if our license is restored. We believe that services on our frequencies, if the government reinstates our licenses, provide for a geographically longer-range of coverage. Thailand Pyramid Research, a research firm, indicates that there are currently at least four competitors for us in the Internet service provider market in Thailand. However, it reports that none of them have more than 30% of the market. Fixed wireless technology is not yet prevalent in Thailand providing a good potential environment for our technology. India Slow deregulation has stifled competition in the Indian Internet service provider market. The former monopoly, VSNL, still retains a significant majority of all Internet access connections. Currently, in order to provide internet access in India a company must first apply for an Internet service provider license. The Indian government has indicated that it considers Internet access a top priority and intends to increase availability of such licenses. We anticipate that our current relationship with certain Indian contacts will ultimately allow us to gain access to additional licenses and an Internet service provider license. At this point, our four major competitors are the former telephone monopoly (VSNL), Satyam Infoway, Regional Monopoly (MTNL) and Cable Satellite Network "Zee". Acquisitions On November 30, 1999, we signed an agreement to acquire 51% of Infotel Argentina, S.A., the owner of wireless transmission licenses in eight of the largest cities in Argentina, including Buenos Aires. Under the agreement, we will appoint the majority of Infotel's directors and will be in charge of its management. The purchase price for Infotel Argentina S.A. consisted of $900,000 in cash and 454,545 shares of common stock. The Agreement allows us to rescind the purchase in the event that the CNC does not approve the sale of Infotel Argentina S.A. to us and receive repayment of the purchase price. On February 29 , 2000, we signed an agreement to purchase Digital Way, S.A., a Peruvian telecommunications company. Digital Way currently owns licenses for spectrum in the 2.3 to 2.5 GHz range, and has national and international long-distance concessions as well as value added licenses for services in Peru. The purchase price for Digital Way consisted of $400,000 in cash and 181,100 shares of common stock. We also agreed to pay Digital Way in increments of money and shares of common stock based on certain milestones including the transfer and the acquisition of additional licenses. Under the agreement, Digital Way will also receive additional shares if, on the one year anniversary of the agreement, our share price drops below the share price on the closing date of -22- the agreement. Accordingly, we will be obligated to issue sufficient shares to assure that the total value of the shares shall equal $900,000 based on the share price on the anniversary of the agreement. We sought and received approval for this acquisition from the Peruvian government. In March 2000, we signed an agreement to acquire 25% of El Salvador Telecom, S.A. de C.V. ("SalTel") a telecommunications company in El Salvador. Pursuant to the terms of the letter of intent, we paid $1,000,000 to that company as an advance payment of the purchase price. The agreement provided that the purchase was conditioned upon the company's acquisition of certain licenses and the occurrence of certain other conditions which have not been met. As a result we sought the return of the $1,000,000 payment. To date the company has returned all $1,000,000. Regulation We intend to offer our services exclusively over licensed frequencies in each of the countries in which we operate. In the United States, our frequencies are licensed by the Federal Communications Commission. In Argentina, by the Comision Nacional de Comunicaciones. In Peru by the Telecommunications Concessions Department of the Ministry of Transport, Communciations, Housing and Construction. We are either applying directly for licenses in some countries or applying jointly with local partners in other countries. Some countries require, for example, domestic control of any entity licensed to use radio frequency within their territory. Within the United States, we operate under licenses issued by the FCC. These licenses are issued in the 2.5 GHz frequency range and can be revoked if the licensee or its assignee is in violation of any of the operation provisions under the license. The licenses are issued in the United States for a fixed time period and can be renewed. Yearly reports are required to be filed with the FCC to establish that the licensee or its assignee is complying with the requirements of the license. Outside the United States, rules and regulations are quite varied. In Argentina, the proposed frequencies for licenses are between 2.4 GHz and 2.6 GHz and are granted by the CNC. Licenses are granted for periods of 10 years, but may be extended for lengthier periods at the discretion of the CNC. In Peru, frequencies for licenses are also between 2.4 GHz and 2.6 GHz and are granted for periods of 20 years. As in the United States, licenses may be revoked if the licensee violates any of the license provisions. There are significant differences in the clarity of regulations as well as in the consistency of their enforcement by the regulatory authorities abroad, and changes in governments may result in substantial changes in the enforcement of regulations. For example, in September 2000, the government of Argentina revoked licenses for lower transmission frequencies, those ranging between 2.5 and 4.0 Gigahertz or GHz for all communication carriers, including those of the Company's subsidiary, Infotel Argentina, S.A. Although we have resubmitted the necessary paperwork to obtain licenses in Argentina, it is unclear at this point whether the government will decide whether to reissue the licenses. A denial of our most recent application or a significant delay in consideration of our application could either prevent us from conducting our planned operations in Argentina or materially adversely affect our ability to do so. In addition to these laws, our business operations also make us subject to laws pertaining to transmitters of information over the Internet. The law relating to liability of Internet service providers and online service providers for information carried on or disseminated through their networks is currently unsettled. A number of lawsuits have sought to impose liability for defamatory speech and indecent materials. A recent federal statute seeks to impose liability, in some circumstances, for transmission of obscene or indecent materials. In one case, a court has held that an -23- online service provider could be found liable for defamatory matter provided through its service, on the ground that the service provider exercised active editorial control over postings to its service. Other courts have held that Internet service providers and online service providers may, under certain circumstances, be subject to damages for copying or distributing copyrighted materials. The Telecommunications Act of 1996 prohibits, and imposes criminal penalties and civil liability for using, an interactive computer service for transmitting indecent or obscene communications. Although we intend to conduct our operations in a manner which reduces the risk of liability under these laws, we cannot assure you that we will avoid liability entirely under these laws. Business Locations Our business headquarters is located at 520 Third Street, Oakland, California, 94607. We also have offices located in Concord, California, Buenos Aires, Argentina and Lima/Callao, Peru. Our office space at One Post Street, San Francisco, was leased on a month-to-month basis. We vacated these offices on August 31, 1999. The actual rent paid, for the fiscal year ended September 30, 1999, was $22,341. In April 1999, we entered into a 5-year lease for approximately 6,000 square feet of office space in Jack London Square, Oakland, California. The lease commenced on June 5, 1999. The triple net rental agreement is for $10,038 per month during the first year. The lease provides for an annual increase based on the indexed cost of living adjustments. Additionally, the lease provides for the landlord's participation in partial reimbursement over the terms of the lease to us for leasehold improvements for which we pay. We began to occupy this space on September 1, 1999. The minimum annual rent is $120,456 for the fiscal years ended September 30, 2000, 2001, 2002 and 2003, and $81,642 for the period October 1, 2003 to June 4, 2004. We also entered into a lease for office space to operate our network operation center at 2962 Treat Boulevard, Suite C, in Concord, California 94518. The triple net rental agreement is for $1,890 per month. The lease provides for an annual increase based on the indexed cost of living adjustments. Additionally, the lease provides for the landlord's participation in partial reimbursement over the terms of the lease to us for leasehold improvements we make. We commenced occupation of this 1680 square foot space on May 1, 1997. The lease expired on April 30, 2000. We are now occupying the premises on a month-to-month basis. We have lease space by virtue of our acquisition of Infotel Argentina, S.A.. The lease is for approximately 1,500 square feet and is leased on a month-to-month basis. The monthly rent is approximately $2,000 per month. The lease started on January 1, 1999 and expires on December 31, 2003. We have leased space in Peru by virtue of our acquisition of Digital Way, S.A.. The lease is for three office spaces within the same building approximately 4,350, 57.53 and 40.99 square feet respectively and is due to expire May 1, 2010. The monthly rent is approximately $4,444.06 per month with a nominal annual increase. Patents/Intellectual Property We recently received a patent from the United States Patent and Trademark Office for our distributed wireless call processing system, which has been issued patent number 6,055,429. We do not have other patents pending pertaining to other technologies. -24- We currently use the service mark "World Wide Wireless Communications", however, this particular name is currently not protected by any trademark or copyright protection. We have applied to register the service mark consisting of both the name itself and a design logo with the United States Patent and Trademark Office. We are currently considering changing our corporate name from World Wide Wireless Communications, Inc. to another name. Legal Matters On August 26, 1999, we filed suit against Credit Bancorp, in U.S. District Court in San Francisco, regarding improprieties on the part of Credit Bancorp relating to a loan. The case was settled on October 11, 1999. As part of the settlement agreement, Credit Bancorp agreed to convert the original loans granted to us to a convertible debenture in the amount of $740,000. On October 11, 1999, we issued a convertible unsecured debenture for $740,000 to Credit Bancorp in settlement of this obligation. The terms of this convertible unsecured debenture are 7% interest per annum payable, semiannually on the last day of February and September, with the principal due September 30, 2002. All amounts of unpaid principal and accrued interest of this debenture are convertible at any time at the conversion price of $1.60 per share of unregistered, restricted shares of our common stock. Credit Bancorp's receiver has agreed to convert principal and accrued interest owing on the debenture into 482,734 shares of our common stock. The Securities and Exchange Commission commenced an informal inquiry of our company in August, 2000. We have voluntarily complied with their requests for information and we intend to fully cooperate with the inquiry. In December 1999, we entered into an amended lease agreement regarding a lease for the license covering Concord, California and the surrounding area. We have recently received a Notice of Default from the lessor. The Notice of Default is based on a requirement in the amended agreement that the balance of the purchase price for the assignment of the license be paid by December 1, 2000. Our management has been advised by counsel, that payment of the balance of the purchase price prior to the FCC's consent to the assignment of the license may constitute a premature assignment in violation of the FCC's rules. The assignment application has not been filed with the FCC for the FCC to make a definitive ruling on this issue. At this point, no formal legal action has been taken by the Lessor. -25- MANAGEMENT Our executive officers and directors and their ages as of March 1, 2001 are as follows: Name Age Position Period of Service - ---- --- -------- ----------------- Douglas P. Haffer....... 52 Chairman of the Board, April 1998 to present CEO and CFO Dana Miller............. 39 Vice President May 1998 to present Ramsey Sweis............ 35 Director May 1998 to present Robert Klein............ 52 Director May 1998 to present Sonny Rath.............. 36 Director January 2001 to present John Cutter............. 71 Director January 2001 to present Douglas P. Haffer has practiced law in San Francisco, Beverly Hills, and Washington D.C. for twenty-five years. During that time he served as general counsel and/or vice president, and on the Board of Directors, of several corporations, including Commercial Bank of San Francisco, Aca Joe Inc., Finet Holdings Corporation, Worldwide Wireless Inc. and Uniprise Systems, Incorporated. His legal practice concentrated primarily on providing legal counseling to small or start-up businesses. In addition, a significant part of his practice contained an international aspect involving foreign investors seeking investment platforms in the United States. Mr. Haffer attended the University of Wisconsin, Madison from 1965 to 1969 where he received his Bachelor of Arts degree with honors with a major in Latin American history, and was elected to Phi Beta Kappa. He then attended the Harvard Law School from which he graduated in 1972 with a Juris Doctor degree. Mr. Haffer lived in Latin America for seven years and reads, writes and speaks Spanish fluently. He has been a lecturer and adjunct professor of law at the University of San Francisco Law School and at the Law School at the University of California at Davis. Dana Miller was Director of Licensing and Acquisitions for National Micro-Vision Systems, Inc. from 1995 to 1996. He worked extensively with the Federal Communications Commission and FCC legal counsel and was responsible for compliance with all FCC regulations. Mr. Miller also coordinated acquisitions of microwave television licenses throughout the United States. He has negotiated FCC lease agreements with educational institutions and nonprofit organizations. From 1996 to 1998 Mr. Miller was a self-employed telecommunications consultant. He is an expert in FCC license application, FCC petition, and license acquisition and maintenance. His accomplishments include resolution of a recent long-term, complex conflict between us and another national wireless firm, freeing us up to implement high-speed wireless Internet operations in the San Francisco metropolitan area. Ramsey Sweis has had extensive experience in management and in the product design industry. He has been a leader and developer of high performance teams by enabling, training and motivating team members. In the recent past he has provided computer and engineering services to General Motors and Chrysler Corporation. In connection with those activities Mr. Sweis has developed designs between engineering, prototype models, tooling and vendor sources. Mr. Sweis resides in Roseville, Michigan. He currently serves as a Program Manager for Hanke Training & Design of Clawson Michigan. From 1997 to 1999 Mr. Sweis served as a designer for Computer and Engineering Services of Rochester Hills, Michigan. From 1991 to 1997, Mr. Sweis was a design leader for Megatech Engineering of Warren Michigan. -26- Robert Klein's experience includes an active twenty-year career in the securities industry handling a wide range of duties including management roles and institutional trading. For the past fifteen years a major emphasis has been placed on packaging complex transactions on behalf of corporate clients resulting in the creation and sale of marketable securities. The past five years has been spent on public company development. Since 1993, Mr. Klein has been self-employed through Weissgeld Capital Group, Ltd, a company he founded. In the past, he served as a director for three brokerage firms, including Yorkton Securities. He is currently a director of Asdar Inc. Mr. Klein has a degree in Applied Mathematics from the University of Waterloo, and an FCSI designation from the Canadian Securities Institute. Sonny Rath offers significant experience in the telecommunications industry. Most recently, he served as Head of Operations and Channel Partner Development for the Vicorp Division of Quest Communications from February 2000 to the present. Prior to that he held senior management positions at Quest from May 1999 to February 2000 and Allegiance Telecom from Mary 1999 to May 1999. Mr. Rath also spent eleven years at GTE Communications, now Verizon, in various positions ultimately becoming Senior Project Manager of Information Technology designing technology infrastructure. Mr. Rath has a degree in Mechanical Engineering. Mr. Rath was our Chief Operating Officer from January 2001 to February 2001, and will continue to serve as one of our consultants and as a director. John Cutter has a long history of initiating, developing and managing businesses from the ground up. He currently serves as Executive Vice President of Pacific Lasercraft, a company founded to develop and market a patented laser-guided woodworking tool Mr. Cutter designed. He also serves as Chairman of Seabright Laboratories, which he founded to design and produce patented environmentally friendly pest control products. He has worked at that company since 1995. Mr. Cutter has founded and/or managed numerous different entities including Cutter Laboratories, Pacific Waters, The California Cystic Fibrosis Research Foundation and Cutter Lumber Products. Director Compensation Directors receive no compensation for serving as directors, except that: o Mr. Sweis received options to purchase 250,000 shares of common stock on October 22, 1998, at an exercise price of $0.095 per share. All of Mr. Sweis' options vested immediately upon the date of grant. The expiration date for Mr. Sweis to exercise the options is October 21, 2003. To date, Mr. Sweis has not exercised any options for shares of common stock. o Mr. Klein received options to purchase 250,000 shares of common stock on October 22, 1998, at an exercise price of $0.095 per share. All of Mr. Klein's options vested immediately upon the date of grant. The expiration date for Mr. Klein to exercise the options is October 21, 2003. To date, Mr. Klein has not exercised any options for shares of common stock. o Mr. Guidfar received options to purchase 100,000 shares of common stock in August, 2000, at an exercise price of $0.59 per share. All of Mr. Guidfar's options vested immediately upon the date of grant. The expiration date for Mr. Guidfar to exercise the options is August, 2005. To date, Mr. Guidfar has not exercised any options for shares of common stock. Mr. Guidfar resigned from the Board in December 2000. -27- Employment Contracts We have entered into an employment agreement with Mr. Haffer, which provides for an initial term of three years commencing February 1, 2000 at an initial annual base salary of $230,000 plus an annual performance bonus of not less than $23,000. Any bonus in excess of $23,000 will be at the sole discretion of our Board and will not be tied to a fixed set of objective criteria. Mr. Haffer's employment agreement also contains a termination provision that requires us to pay him his annual compensation and minimum bonus amounts remaining on his three-year contract if he is terminated without cause. Audit Committee of the Board of Directors On January 31, 2001, the Board established an audit committee. The audit committee of the Board of Directors consists of three non-employee directors, John Cutter, Robert Klein and Ramsey Sweis, all of whom are independent directors. The audit committee reviews results and recommendations in each external audit, reviews the procedures we use to prepare financial statements and related management commentary and meets periodically with management to review our major financial risk exposures. The Board of Directors adopted a written charter for the Audit Committee and elected John Cutter as its Chairman. Executive Compensation The following table summarizes information regarding the salary and bonus we paid to Mr. Haffer, our Chief Executive Officer, during the fiscal year ended September 30, 2000. Mr. Haffer was the only officer who received a salary plus bonus that exceeded $100,000 during that period. Summary Compensation Table Annual Compensation Long-Term Compensation - -------------------------------------------------------------------------------- Awards Securities Underlying Restricted Options Name and Principal Stock and Position Year Salary Bonus Awards Warrants - -------------------------------------------------------------------------------- Douglas P. Haffer 2000 220,000 23,000* 0 800,000 Chairman, CEO and CFO 1999 106,000 16,017 0 800,000 - -------------------------------------------------------------------------------- * Bonus was earned in fiscal year 2000 but was received in fiscal year 2001. Option Grants The following table sets forth information concerning grants of stock options to Doug Haffer, Chief Executive officer. He is the only named executive officer for the fiscal year ended September 30, 2000. All options were granted under the 1998 Stock Option Plan. Shareholders never approved our 1998 Stock Option Plan, and therefore, all incentive stock options granted under the 1998 Stock Option Plan are classified and taxed as non-statutory stock options. -28- Options Granted during Fiscal Year 2000
Number of Percent of Fiscal Securities options Options Year Underlying granted to Exercise Exercised Options Options employees Price as of Expiration Granted Granted from 9/30/99 ($/Share) 9/30/00 Date ------- ------- ------------ -------- ------- ---- Douglas P. Haffer 2000 800,000 50% $1.62 0 2/1/05 Chairman, Chief Executive Officer, Chief Financial Officer 1998 800,000 43% $0.095 0 10/22/03
In October 1998, Mr. Haffer received an option to purchase 800,000 shares of our common stock at an exercise price of $0.095 per share. All 800,000 shares vested immediately. The expiration date is 5 years from the date of grant. The grant of shares was intended to be an incentive stock option, but our shareholders never approved the plan and therefore, the options are being classified as non-statutory stock options. On February 1, 2000, Mr. Haffer received another option to purchase 800,000 shares of our common stock at an exercise price "at the lowest price permitted under our 1998 Stock Option Plan such that the grant or exercise of the options will not create a taxable event." All 800,000 shares vested immediately. The expiration date of the option is 5 years from the date of grant. The option will be treated as non-statutory stock options. Aggregated Options/SARSs as of September 30, 2000
Number of Securities Underlying Value of Unexercised In-the Unexercised Options/SARs at -Money Options/ SARs at September 30, 2000 September 30, 2000 Exercisable/Unexercisable Exercisable/Unexercisable Name Douglas P. Haffer. 1,600,000/0 0/0 Chairman, CEO & CFO
1998 Stock Option Plan Our Board of Directors adopted a 1998 Stock Incentive Plan in August 1998 reserving 3,000,000 shares for issuance. The Plan provided for the grant of incentive stock options, as defined in Section 422 of the Internal Revenue Code, to our officers and employees, and non-statutory stock options to employees, directors and consultants. However, our shareholders never approved our 1998 Stock Option Plan, and therefore, all incentive stock options granted under the 1998 Stock Option Plan were classified and taxed as non-statutory stock options. The exercise price of incentive stock options granted under the 1998 Stock Option Plan must be at least equal to the fair market value of our common stock on the date of grant. However, for -29- any employee holding more than 10% of the voting power of all classes of our stock, the exercise price will be no less than 110% of the fair market value on the date of grant. Non-statutory stock options granted to a person who at the time the option is granted does not hold more than 10% of the voting power of all classes of our stock will have an exercise price of no less than 85% of the fair market value of the stock on the date of grant. Options granted to our employees will become exercisable over a period of no longer than 5 years, and no less than 20% of the shares covered will become exercisable annually. No options will be exercisable prior to one year from the date it is granted unless the Board specifically determines otherwise. In no event will any option be exercisable after the expiration of 10 years from the date it is granted, and no Incentive Stock Option granted to a holder of more than 10% of the voting power of all classes of our stock will be exercisable after the expiration of 5 years from the date it is granted. With respect to the non-statutory options if the employee's status as an employee with us terminates for any reason, other than death or disability, then the optionee may exercise stock options for a period of no less than three-months following such cessation. The three-month period is extended to 12-months for termination due to death or disability. In the event of a merger or consolidation in which we are not the surviving entity, or a sale of all or substantially all of our assets or capital stock, if the surviving entity does not tender to the optionee's stock options or capital stock of substantially the same economic benefit as optionee's unexercised options, then the Board may grant to optionees the right to exercise any unexpired options for a period of thirty days. 2001 Stock Option Plan Our Board adopted a 2001 Stock Incentive Plan on January 31, 2001 reserving 7,500,000 shares of our Common Stock for issuance. The Plan will be administered by the Board of Directors or by a Committee that the Board will designate. The Plan provides for the grant of incentive stock options, as defined in the Internal Revenue Code of 1986 to employees of the company and non-statutory stock options to directors, employees and consultants of the company. The exercise price of incentive stock options granted under the 2001 Stock Option Plan will be determined by the Board or the Committee, but shall be no less than the fair market value of the stock on the date the option is granted. However, for any employee holding more than 10% of the shares outstanding of all classes of our stock, the exercise price will be no less than 110% of the fair market value on the date of grant. Each option will be granted in the form of an agreement setting forth the terms and conditions of the grant. Options granted to our employees will become exercisable over a period of no longer than 10 years, and no less than 20% of the shares covered shall be exercisable annually. If an optionee's status as an employee, director or consultant with us terminates for any reason, other than death or disability, then the optionee may exercise the option in the three-month period following such cessation or the termination of the term of the Option as set out in the Option Agreement. Any shares that are not exercisable on the date of termination shall become available for issuance under the Plan. The three-month period is extended to twelve months for termination due to death or disability. Under the Plan, the Board can also grant Stock Appreciation Rights to Employees, or Directors of or Consultants to the Company. Similarly, if we enter into a transaction agreement with another company and the surviving entity refuses to assume or continue the stock option awards -30- previously granted, the time during which the awards may be exercised shall be accelerated and the stock awards terminated if not exercised after such acceleration. The Board may from time to time amend the Plan but only with the approval, within twelve months, of the shareholders where the amendment will increase the shares reserved for stock awards, modify the requirements as to eligibility for participation in the Plan or modify the Plan in any other way if such modification requires shareholder approval in order for the Plan to comply with Section 422 of the Code or with requirements of Rule 16b-3. The shareholders were required to approve the Plan within twelve months of when we received Board approval. The shareholders approved the plan on March 1, 2001. -31- PRINCIPAL AND SELLING SHAREHOLDERS Principal Shareholders The following table sets forth the beneficial ownership of our common stock as of March 1, 2001 and as adjusted to reflect the sale of the shares of common stock offered hereby: o the chief executive officer, each of the executive officers named in the summary compensation table and each of our directors; o all executive officers and directors as a group; o each person or entity who we know beneficially owns more than 5% of our outstanding shares of common stock. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock held by them. Applicable ownership is based on 93,417,795 shares of common stock outstanding as of February 28, 2001. Beneficial ownership is determined in accordance with the rules of the SEC. Shares of common stock subject to options or warrants that are presently exercisable or exercisable within 60 days of February 28, 2001 are deemed outstanding for the purpose of computing the percentage ownership of the person or entity holding options or warrants, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or entity. If any shares are issued upon exercise of options, warrants or other rights to acquire our capital stock that are presently outstanding or granted in the future or reserved for future issuance under our stock plan, there will be further dilution to new public investors. For purposes of calculating the number of shares of common stock beneficially owned after the offering, we have assumed the sale of all shares covered by the registration statement of which this prospectus is a part. Accordingly, in determining the number of shares of common stock beneficially owned after the offering, the total number of shares of common stock deemed outstanding includes: (1) the shares of common stock covered by the registration statement on behalf of Grenville Finance Ltd. and (2) shares of common stock issuable upon exercise of warrants and covered by this registration statement. -32- Beneficial Ownership of Common Stock
Number of Percentage of Shares Shares Outstanding Beneficially Prior to After Owned Offering Offering ----- -------- -------- Named Executive Officers and Directors(1) Douglas P. Haffer ................................. 6,541,073 6.5% 4.4% Ramsey Sweis ...................................... 250,000 * * Robert Klein ...................................... 250,000 * * John Cutter ....................................... 2,613,500 2.8% 1.8% Sonny Rath ........................................ 0 * * Executive Officers and Directors as a Group..............................................10,988,573 11.6% 7.1% Name of Beneficial Owners - ------------------------- Michael Lynch 12,700,064 13.4% 8.1% C/o Robert J Stemler Esquire Keesal Young & Logan P.O. Box 1730 Long Beach, CA 90801-1730 Amro International S.A., 8,028,000 8.0% 5.3% C/o Ultra Finance Ltd. Grossmuenster Platz 26 P.O. Box 4401 Zurich, Switzerland CH8022 The Endeavor Capital Fund, S.A. 5,017,857 5.1% 3.4% 14/14 Divrea Chaim Street Jerusalem 94479, Israel Celeste Trust Reg. 7,024,370 7.5% 4.7% C/o Trevisa-Treuhand-Ansalt Landstrasse 8 9496 Furstentums Balzers, Liechtenstien
* Less than 1%. The address for each of the named executive officers and directors is c/o World Wide Wireless Communications, Inc., 520 Third Street, Suite 101, Oakland, CA 94607. Mr. Haffer's total includes 1,600,000 shares subject to options that are immediately exercisable. Mr. Sweis's total includes 250,000 shares subject to options that are immediately exercisable. -33- Mr. Klein's total includes 250,000 shares subject to options that are immediately exercisable. Amro International's total includes 1,800,000 shares issuable upon exercise of the warrant and 4,800,000 shares underlying a principal amount of debentures issued of $2,400,000 (based on a per share price of $0.50). Endeavor Capital Fund's total includes 1,125,000 shares issuable upon exercise of the warrant and 3,000,000 shares underlying a principal amount of debentures issued of $1,500,000 (based on a per share price of $0.50). Celeste Trust Reg. filed a Form 13(g) with the Securities and Exchange Commission disclosing that it was the beneficial owner of 7,024,370 shares of common stock. We are not sure how the entity acquired all its shares but we do know Celeste Trust Reg. holds 705,000 shares issuable upon exercise of certain warrants and approximately 3,760,000 shares underlying certain convertible debentures that were issued pursuant to a Securities Purchase Agreement entered into April 14, 2000 and as amended. Selling Shareholders Overview The number of shares we are registering is based in part on our good faith estimate of the maximum number of shares we may issue to Grenville Finance Ltd. under the common stock purchase agreement. Accordingly, the number of shares we are registering for issuance under the common stock purchase agreement may be higher than the number we actually issue under the common stock purchase agreement. Grenville Finance Ltd. Grenville Finance Ltd. is engaged in the business of investing in publicly traded equity securities for its own account. Other than the warrants we issued to Grenville Finance Ltd. in connection with the closing of the common stock purchase agreement, it has no other commitments or arrangements to purchase or sell any of our securities. There are no business relationships between Grenville Finance Ltd. and us other than the common stock purchase agreement and accompanying documents. Assuming Grenville Finance Ltd. sells all shares acquired under the common stock purchase agreement and upon exercise of the warrant, Grenville Finance Ltd. will no longer hold any of our common stock. Andrews Corporation Andrew Corporation received warrants to purchase shares of our common stock in connection with a loan agreement we entered into with them. Andrew Corporation has not held any positions or offices or had material relationships with us or any of our affiliates within the past three years other than serving as our systems integrator. Selling shareholders are under no obligation to sell all or any portion of their shares. Particular selling shareholders may not have a present intention of selling their shares and may sell less than the number of shares indicated. The following table assumes that the selling shareholders will sell -34- all of their shares. The selling shareholders currently hold unregistered shares of our common stock and/or warrants for the purchase of common stock. The table below provides the names of the selling shareholders, the number of shares and the percentage the selling shareholders beneficially own before this offering based on our common stock outstanding of 93,417,795 as of February 28, 2001. It also explains the number of shares of common stock the selling shareholders may resell under this prospectus and assuming that the selling shareholders sell all the shares they are entitled to sell under this prospectus, how many shares of common stock and the percentage the selling stockholders will beneficially own after completion of the offering, based on our common stock outstanding on February 28, 2001 and the issuance of shares included in this prospectus. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Except as indicated, we believe each person possesses sole voting power and investment power with respect to all the shares of common stock owned by such person, subject to community property laws where applicable. In computing the number of shares beneficially owned by a person and the percentage of ownership of that person, shares of common stock subject to options or warrants held by that person are currently exercisable or exercisable within 60 days are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage of ownership of any other person. Number of Percentage of Number of Shares Shares Outstanding Shares Beneficially Being Name of Selling Shareholder Owned Prior to After Offered Offering Offering Grenville Finance Ltd. (1) (2) 65,000,000 41% 0 65,000,000 P. O. Box 146 Road Town, Tortola British Virgin Islands Andrew Corporation (3) 200,000 * * 200,000 10500 West 153 Street Orland Park, IL 60462 (1) Represents the shares which may be purchased by Grenville Finance Ltd. through a private line of credit agreement, as further described in this prospectus. We will receive the sale price of any common stock that we sell through the private equity line of credit agreement and Grenville Finance Ltd. may resell those shares pursuant to this prospectus. (2) This total also includes 15,000,000 shares that are issuable upon exercise of the warrant. (3) This total represents 200,000 shares exercisable under their warrants. -35- CERTAIN RELATED PARTY TRANSACTIONS Mr. Andy Reckles, a previous nominee for election to the Board of Directors, is a partner with Union Atlantic, LC. Union Atlantic, LC served as a placement agent for a securities purchase agreement to issue convertible subordinated debentures which we entered into with certain investors in April, 2000. As the placement agent for the Debentures Agreement, Union Atlantic, LC received a placement agent fee. We recently reached an agreement with the investors whereby we amended the Debentures Agreement and the first amendment thereto (the "Second Amendment"). As part of the Second Amendment, Union Atlantic, LC served as a consultant to the investors and received a consultant fee. Union Atlantic, LC will receive certain fees every time we exercise options as part of the equity line agreement as described in this prospectus. In addition, Mr. Reckles also entered into a stock purchase agreement with us wherein he purchased 2,000,000 shares of our common stock for $0.125 per share. Mr. Reckles withdrew his nomination for the Board prior to the shareholder meeting held on March 1, 2001. We intend to enter into a Consulting Agreement with Mr. Reckles whereby he will provide advisory services to management and the Board. He will receive shares in consideration for his services. As of March 1, 2001, other than the discussion above and employment agreements and stock option plans, there have been no transactions to which we were a party involving $60,000 or more and in which any director, executive officer or holder of more than five percent of our capital stock had a material interest. DESCRIPTION OF SECURITIES General We are authorized to issue up to 300,000,000 shares of common stock, $.001 par value per share and 10,000,000 shares of preferred stock, $.001 par value per share. As of March 1, 2001, 93,417,795 shares were issued and outstanding. We have no preferred stock outstanding. All of the outstanding capital stock is and will be, fully paid and non-assessable. Common Stock Previously our articles of incorporation authorized us to issue a maximum of 100,000,000 shares of common stock. On March 1, 2001, we received requisite shareholder approval to authorize the issuance of an additional 200,000,000 shares. Accordingly, the total number of shares currently authorized is 300,000,000. As of February 28, 2001, the transfer agent informs us that there were 93,417,795 shares of common stock outstanding. Owners of common stock are entitled to one vote for each share held of record on all matters to be voted on by shareholders, except that, upon giving the legally required notice. Subject to the rights of any holders of preferred stock, the owners of common stock are entitled to receive dividends when, as and if declared by the Board of Directors out of funds legally available therefore. In the event of a liquidation, dissolution or winding up of our business, the common stock shareholders are entitled to share ratably in all assets remaining which are available for distribution to them after payment of liabilities and preferences to holders of preferred stock. Holders of common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to the Common Stock. -36- We have reserved 7,500,000 shares of common stock for issuance under our 2001 Stock Option Plan. In addition, we had 3,000,000 shares reserved in our 1998 Stock Option Plan. We are obligated to issue additional shares of common stock pursuant to the terms of our various common stock purchase warrants, and an indeterminate number of additional shares of common stock to be issued pursuant to 4% Convertible Debentures described below to the investors under certain agreements. Preferred Stock On March 1, 2001 our shareholders approved the issuance of 10,000,000 shares of preferred stock. The Board is vested with the authority to designate one or more series of preferred stock with powers, preferences, rights, restrictions, qualifications and other terms and conditions as the Board may determine from time to time. If the board of directors creates a new series of preferred stock any effect on the common stock holders will not be determinable until the rights accompanying the series have been designated. The issuance of preferred stock could adversely affect the voting power, liquidation rights or other rights of the common stock owners or other series of preferred stock. Warrants/Options Under our Securities Purchase Agreement dated April 14, 2000, as amended, we issued warrants to purchase an aggregate of 3,600,000 shares of common stock to certain shareholders. In addition, the shareholders have the right to acquire warrants to purchase an additional 1,440,000 shares of common stock as of the date of this prospectus. The warrants allow the holders to purchase shares of our common stock at a price of $2.00 per share. The warrants allow for the holders to exercise their warrants without the payment of cash by surrendering shares otherwise purchasable upon exercise of the warrant with a fair market value equal to the exercise price for the shares they are purchasing. The exercise price is subject to adjustments if we declare a stock split or dividend of our common stock and will be adjusted lower on a weighted average basis if we issue shares of our common stock at below the exercise price of the warrant then in effect. The warrants are exercisable when issued and have a term of five years. On January 14, 2001 we issued a warrant to purchase no less than 200,000 shares of our common stock at an exercise price of $0.23 in connection with our loan agreement with Andrew Corporation. Andrew Corporation may exercise the warrants until January 24, 2005. In addition, Andrew Corporation is entitled to additional warrants to purchase up to 300,000 shares of our common stock if we obtain a bridge loan where we distribute warrants to the potential investor in excess of the warrants issued to Andrew. As consideration for the opening of the equity line of credit, on January 26, 2001 we granted Grenville Finance Ltd. a warrant to purchase 15 million shares of common stock. Grenville Finance Ltd. may exercise this warrant at any time prior to February 12, 2004 for $0.20 per share of common stock. The common stock issuable upon exercise of those warrants is included in this registration statement. As of March 1, 2001 we have issued stock options to purchase up to 4,284,917 shares of our common stock through our stock option plan to employees, directors and officers. These option -37- holders will not assume any of the privileges of our shareholders until they have exercised their options. Subordinated Debentures We originally entered into a securities purchase agreement dated April 14, 2000 to issue 4% Convertible Subordinated Debentures to certain investors with a principal amount of $1,312,000 subject to certain conditions. On November 14, 2000 we reached an agreement with these investors whereby we amended the original securities agreement and the first amendment thereto. In exchange for a waiver by the investors of any breach of the original securities agreement and the first amendment, we agreed to increase the principal amount of the debentures by $2,128,000 and to issue an additional 3,996,113 restricted shares of common stock to them. Under this agreement, the investors may convert the debentures at a conversion price equal to the lesser of $0.64 and an amount equal to 85% of the average of the closing trading prices of the common stock for the five consecutive trading days immediately prior to the conversion. At no time shall the conversion price be below the floor price. The floor price is $0.64 for the period between October 1, 2000 and October 14, 2000, $0.50 for the period between October 14, 2000 and May 30, 2001 and zero thereafter. However, if our aggregate revenue for the last three quarters of the year 2000 and the first quarter of year 2001 is less than $13.5 million then as of May 14, 2001 the floor price shall be zero. Each debenture has an interest rate of 4.0% per year on the aggregate price of the principal. The interest shall be due and payable upon conversion, redemption or maturity of this debenture and any interest that has accrued will be deemed to be part of the aggregate principal amount for purposes of determining interest thereafter payable and amounts thereafter convertible into common stock. If during any period a holder is unable to immediately trade any common stock issued or issuable upon conversion of the debentures due to the postponement of filing, or delay or suspension of effectiveness of the registration statement, the investors have the option of using the conversion price applicable on any conversion date within ten trading days following the black out period or any price that would have been applicable on any conversion date earlier in the black out period or within the ten trading days thereafter. Under the amended agreement, we reserve the right to redeem the debentures if the per share market value of the common stock is less than $1.00. The redemption price is calculated at 120% of the principal amount and 100% of the unpaid interest accrued on those debentures being redeemed. To effect the redemption we must provide five days notice to the investors. The total principal amount of debentures to be redeemed shall not be less than $1,000,000. To qualify for the redemption we must have the full amount of the redemption price in cash or cash equivalents available. Registration Rights As part of our equity line of credit financing with Grenville Finance Ltd. we agreed to file a registration statement within forty-five (45) days of the agreement. Under the registration rights agreement, we agreed to register all the shares purchasable pursuant to the equity line of credit as well as any shares underlying the warrants. The purchasers may purchase up to $50,000,000 worth of shares of our common stock and 15,000,000 shares underlying the warrants. We shall incur all costs related to the registration statement and shall use our best efforts to cause the registration to become effective within ninety (90) days. -38- We are required to register the shares underlying the warrants issued to Andrew Corporation. Under the registration rights agreement, Andrew Corporation at its option may elect to piggy back the registration of its shares on the registration statement prepared and filed for another selling shareholder or for us. If the shares are not registered within six months of the agreement, we are required to prepare and file a shelf registration covering all registrable securities for an offering to be made on a continuous basis. THE COMMON STOCK PURCHASE AGREEMENT Summary On January 26, 2001, we entered into a common stock purchase agreement with Grenville Finance Ltd., a British Virgin Island corporation, for the future issuance and purchase of shares of our common stock. The common stock purchase agreement establishes what is sometimes referred to as an equity line of credit or an equity draw down facility. In general, the equity line of credit operates as follows: the investor, Grenville Finance Ltd., has committed to provide us with up to $50 million as we request it over a twenty-four month period, in return for common stock, as well as warrants to purchase shares of common stock. Once every 22 trading days, we may request a draw down of up to $1,500,000 of the committed money, subject to a formula based on the average common stock price and average trading volume. Each draw down must be at least $50,000. The amount of money that Grenville Finance Ltd. will provide to us and the number of shares we will issue to Grenville Finance Ltd. in return for that money is settled twice during a 29 day trading period following the draw down request based on the formula in the stock purchase agreement. Grenville Finance Ltd. will receive a fifteen percent discount to the volume weighted average stock price for that 29 day period We will receive the amount of the draw down less an escrow agent fee of $750 for each draw down amount and an 8% placement fee payable to the placement agent, Union Atlantic, LC, which introduced us to Grenville Finance. As consideration for the opening of the equity line of credit, we granted Grenville Finance Ltd. a warrant to purchase 15 million shares of common stock. Grenville Finance Ltd. may exercise this warrant at any time prior to February 12, 2004 for $0.265 per share of common stock. The common stock issuable upon exercise of those warrants is included in this registration statement. Based on a review of our trading volume and stock price history and the number of draw downs we estimate making, we are registering 50,000,000 shares of common stock for possible issuance under the common stock purchase agreement and 15,000,000 shares underlying the warrants for common shares delivered to Grenville Finance Ltd. The common stock purchase agreement does not permit us to draw down funds if the issuance of shares of common stock to Grenville Finance Ltd. pursuant to the draw down would result in Grenville Finance Ltd. owning more than 9.9% of our outstanding common stock on the draw down exercise day. -39- The Draw Down Procedure And The Stock Purchases We may request a draw down by faxing a draw down notice to Grenville Finance Ltd., setting our the amount of the draw down we wish to exercise and the minimum threshold price, if any, at which we are willing to sell the shares. Amount Of The Draw No draw may exceed the lesser of: (i) $1,500,000; or (ii) the amount that is derived from the following formula: o The total trading volume for the 60 calendar days immediately prior to the date we give notice of the draw down; multiplied by o The average of the volume-weighted average daily prices for the 60 calendar days immediately prior to the date we give notice of the draw down; multiplied by o 10% Number Of Shares The next 22 trading days immediately following the draw down notice are used to determine the actual amount of money Grenville Finance Ltd. will provide and the number of shares we will issue in return. The amount of the draw down and the number of shares to be issued is determined and settled twice for the 22 trading days period, on the 13th and 24th trading days following the draw down notice, and is calculated based on the following formula: Number of shares of common stock = Sum over each of the 22 trading days over 1/22 of the draw down amount divided by 85% of the volume-weighted average daily price for our shares on each trading day. If the daily price for any given trading day during the draw down period is below the threshold price we set in the draw down notice, then that day is not included in the calculation of the number of shares to be issued and the draw down amount that Grenville Finance Ltd. is to pay us is correspondingly reduced by 1/22 for that day. Thus, if the daily price for that day is below the threshold price, we will not issue any shares and Grenville Finance Ltd. will not purchase any shares for that day. In addition, if the trading of our common stock on the OTC Bulletin Board has been suspended for more than three hours in the aggregate, we will not issue any shares and Grenville Finance Ltd. will not purchase any shares for that day. Sample Calculation Of Stock Purchases The following is an example of the calculation of the draw down amount and the number of shares to be issued to Grenville Finance Ltd. in connection with that draw down based on certain assumptions. -40- Sample Draw Down Amount Calculation Suppose we provide a draw down notice to Grenville Finance Ltd. and we specified in the notice a threshold price of $0.18. Assume that: (i) the total trading volume of our common stock for the 60 calendar days prior to the draw down notice is 20,000,000 shares; and (ii) the average of the volume-weighted average daily price for the 60 calendar days prior to the draw down notice is $0.20. You can apply the formula to these hypothetical numbers as follows: o The total trading volume for the 60 calendar days immediately prior to the date we give notice of the draw down (20,000,000); multiplied by o The average of the volume-weighted average daily prices for the 60 calendar days immediately prior to the date we give notice of the draw down ($0.20); multiplied by o 10% On these assumed facts, the maximum amount that can be drawn down under the formula would be capped at $400,000, subject to further adjustments if the volume-weighted average daily price of our common stock for any of the 22 trading days following the draw down notice is below the threshold price we set at $0.18. For example, if the volume-weighted average daily price of our common stock is below $0.18 on two of those 22 trading days, the $400,000 would be reduced by 1/22 for each of those days and our draw down amount would be 20/22 of $400,000 or $363,636. Sample Calculation Of Number Of Shares Assume that we have made a draw down request of $400,000, the maximum amount based on the foregoing sample draw down amount calculation. In addition, assume we set a threshold price of $0.18 and that the volume-weighted average daily price for our common stock is set forth in the table below. The number of shares to be issued based on any trading day during the draw down period is calculated from the formula: o 1/22 of the draw down amount of $400,000; divided by o 85% of the volume-weighted average daily price. For the first trading day in the example in the table below, the calculation is as follows: 1/22 of $400,000 is $18,182. Divide $18,182 by 85% of the volume-weighted average daily price for that day of $0.2188 per share, to get 97,763 shares. Perform this calculation for each of the 22 trading -41- days, excluding any day on which the volume-weighted average daily price is below the $0.18 threshold price, and add the results to determine the number of shares to be issued. In the table below, there are two days which must be excluded: days 16 and 17. After excluding the days that are below the threshold price, the amount of our draw down in this example would be $363,636 and the total number of shares we would issue to Grenville Finance Ltd. would be 1,858,707, so long as those shares would not cause Grenville Finance Ltd. to beneficially own more than 9.9% of our then outstanding common stock. Grenville Finance Ltd. would pay $0.1956 per share for those shares. NUMBER OF SHARES VOLUME-WEIGHTED 1/22 OF REQUESTED OF COMMON STOCK AVERAGE DAILY STOCK DRAW DOWN TO BE ISSUED FOR TRADING DAYS PRICE AMOUNT THE TRADING DAY - -------------------------------------------------------------------------------- 1 $0.2188 $18,182 97,763 - -------------------------------------------------------------------------------- 2 $0.2188 $18,182 97,763 - -------------------------------------------------------------------------------- 3 $0.2031 $18,182 105,320 - -------------------------------------------------------------------------------- 4 $0.25 $18,182 85,562 - -------------------------------------------------------------------------------- 5 $0.2969 $18,182 72,046 - -------------------------------------------------------------------------------- 6 $0.3125 $18,182 68,450 - -------------------------------------------------------------------------------- 7 $0.25 $18,182 85,562 - -------------------------------------------------------------------------------- 8 $0.2344 $18,182 91,257 - -------------------------------------------------------------------------------- 9 $0.2969 $18,182 72,046 - -------------------------------------------------------------------------------- 10 $0.2031 $18,182 105,320 - -------------------------------------------------------------------------------- 11 $0.2031 $18,182 105,320 - -------------------------------------------------------------------------------- 12 $0.2344 $18,182 91,257 - -------------------------------------------------------------------------------- 13 $0.2656 $18,182 80,537 - -------------------------------------------------------------------------------- 14 $0.2188 $18,182 97,763 - -------------------------------------------------------------------------------- 15 $0.2031 $18,182 105,320 - -------------------------------------------------------------------------------- 16 $0.1719 -- ** - -------------------------------------------------------------------------------- 17 $0.1562 -- ** - -------------------------------------------------------------------------------- 18 $0.2031 $18,182 105,320 - -------------------------------------------------------------------------------- 19 $0.2188 $18,182 97,763 - -------------------------------------------------------------------------------- 20 $0.2188 $18,182 97,763 - -------------------------------------------------------------------------------- 21 $0.2344 $18,182 91,257 - -------------------------------------------------------------------------------- 22 $0.2031 $18,182 105,320 - -------------------------------------------------------------------------------- TOTAL $363,636 1,858,709 - -------------------------------------------------------------------------------- * The share prices are illustrative only and should not be interpreted as a forecast of share prices or the expected or historical volatility of the share prices of our common stock. ** Excluded because the volume-weighted average daily price is below the threshold specified in our hypothetical draw down notice. In this fictitious example, we would receive the amount of our draw down ($363,636) less an 8% finder's fee paid to Union Atlantic, LC, less a $750 escrow fee, for net proceeds to us of $333,795. The delivery of the requisite number of shares and payment of the draw will take place -42- through an escrow agent, Epstein, Becker & Green, P.C. The escrow agent pays 92% of the draw to us, after subtracting its escrow fee, and 8% to Union Atlantic, LC in satisfaction of the finder's fee. Only one draw down can occur during this 22 day period. Necessary Conditions Before Grenville Finance Ltd. Is Obligated To Purchase Our Shares The following conditions must be satisfied before Grenville Finance Ltd. is obligated to purchase the common stock that we wish to sell: o A registration statement for the shares we will be issuing must be declared effective by the Securities and Exchange Commission and must remain effective and available as of the draw down settlement date for making resales of the common stock purchased by Grenville Finance Ltd.; o There can be no material adverse effect on our business, operations, properties, prospectus or financial condition that is material and adverse to us, taken as a whole or any condition, circumstance or situation that would prohibit or otherwise materially interfere with our ability to perform our material obligations under the common stock purchase agreement or the registration rights agreement or to perform our obligations under any other material agreement; o We must not have merged or consolidated with or into another company or transferred all or substantially all of our assets to another company unless the acquiring company has agreed to honor the stock purchase agreement; o No statute, rule, regulation, executive order, decree, ruling or injunction may be in effect which prohibits consummation of the transaction contemplated by the common stock purchase agreement; o No litigation or proceeding involving us or any of our affiliates, can be pending, nor any investigation by any governmental authority threatened against us or any of our affiliates which seeks to restrain, prevent or change the transaction contemplated by the common stock purchase agreement or seeking damages in connection with the transaction; o Trading in our common stock must not have been suspended by the Securities and Exchange Commission or the OTC Bulletin Board nor shall minimum prices have been established on securities whose trades are reported by the OTC Bulletin Board. On each draw down settlement date for the sale of common stock, we must deliver an opinion from our counsel about these matters. As a further condition under the common stock purchase agreement, we may not draw down funds if the issuance of shares of common stock to Grenville Finance Ltd. in that draw down would result in Grenville Finance Ltd. and its affiliates owning more than 9.9% of our common stock outstanding as of the draw down settlement date. Restrictions On Our Future Financings The common stock purchase agreement limits our ability to raise money by selling our securities for cash at a discount to the current market price until the earlier of (i) twenty-four months -43- from the effective date of the registration statement; or (ii) sixty days after the entire $50 million commitment amount has been purchased by Grenville Finance Ltd. There are important exceptions to this limitation. We can sell our shares for cash at a discount to the current market price: o In a registered public offering of our securities underwritten by one or more established investment banks; o In one or more private placements where the purchasers do not have registration rights; o Under any employee benefit plan approved by our shareholders; o Under any compensatory plan for directors, officers, full-time employees or key consultants; o In connection with a strategic partnership or other business transaction, the principal purpose of which is not simply to raise money; o In one or more private placements with registration rights; provided that for each such private placement, we have drawn down the maximum amount allowed under the agreement for two consecutive months immediately prior to the month during which such financing is entered into, and we agree to exercise draw downs for each month thereafter until the aggregate purchase price of such draw downs equals the aggregate gross proceeds received by us in the private placement; and o In a transaction for which Grenville Finance Ltd. has given its written approval. The Warrant Issued To Grenville Finance Ltd. As consideration for the opening of the equity line of credit, we granted Grenville Finance Ltd. a warrant to purchase 15 million shares of common stock. Grenville Finance Ltd. may exercise this warrant at any time prior to February 12, 2004 for $0.265 per share of common stock. The common stock issuable upon exercise of those warrants is included in this registration statement. Costs Of Closing The Transaction At the initial closing of the transaction on January 26, 2001, we delivered the requisite opinion of counsel to Grenville Finance Ltd. and paid the escrow agent, Epstein, Becker & Green P.C., $20,000 for Grenville Finance Ltd.'s legal, administrative and escrow costs and for the ordinary services of the escrow agent for the closing of the draw downs. In addition, we issued a warrant to purchase 15 million shares of our common stock to Grenville Finance Ltd. Upon the closing of each draw down, we are required to pay the escrow agent $750 as escrow expenses, and 8% of each draw down to Union Atlantic, LC as a finder's fee. Termination Of The Common Stock Purchase Agreement The equity line of credit under the common stock purchase agreement shall terminate if any of the following events occurs: -44- o We suffer a material adverse change in our business, operations, properties, prospectus or financial condition and we have not cured the condition within sixty days; o Our common stock is delisted from the OTC Bulletin Board unless the delisting is in connection with the listing of such shares on the Nasdaq National Market, SmallCap Market, the American Stock Exchange or the New York Stock Exchange; or o We file for protection from creditors Indemnification Of Grenville Finance Ltd. Grenville Finance Ltd. is entitled to customary indemnification from us on any losses or liabilities suffered by it based on material misstatements or omissions contained in the registration statement and the prospectus, except as they relate to information supplied by Grenville Finance Ltd. to us for inclusion in the registration statement and prospectus. Grenville Finance Ltd.'s Resale Of The Common Stock To permit Grenville Finance Ltd. to resell the common stock issued to it under the common stock purchase agreement and under the warrant, we agreed to register those shares and to maintain that registration. To that end, we will prepare and file such amendments and supplements to the registration statement and the prospectus as may be necessary in accordance with the Securities Act and the rules and regulations thereunder, in order to keep it effective until the earlier of: o The date that all of the shares of common stock covered by the registration statement of which this prospectus is a part have been disposed of pursuant to the registration statement; o The date that all of the shares of common stock have been sold pursuant to the registration statement; o The date that all of the shares of common stock have been otherwise transferred to persons who trade such shares without restriction under the Securities Act of 1933 and we have delivered new certificates or other evidences of ownership of such common stock without any restrictive legend; or o Subject to the securities laws, the dates that all of the shares of common stock may be sold without any time, volume or manner limitations under Rule 144(k), any volume limitations under Rule 144 or similar provisions then in effect under the Securities Act of 1933. The Number Of Shares We Will Issue To Grenville Finance Ltd. The number of shares of common stock that we will issue to Grenville Finance Ltd. is limited by the terms of the agreement and depends on six factors: o The number of draw downs we exercise; o The total trading volume of our common stock for the 60 calendar days before each draw down period; -45- o The volume-weighted average daily prices of our common stock for the 60 calendar days before each draw down period; o The volume-weighted average daily price of our common stock on each of the 22 days during a draw down period; and o The limitation that following the purchase of the shares issued in a draw down, Grenville may not hold more than 9.9% of our outstanding shares. The fewer the number of draw downs we exercise, the fewer the shares we will issue to Grenville Finance Ltd. The common stock purchase agreement provides for one draw down for each draw period consisting of 22 trading days. Thus, any decision by us to delay or forego any draw down opportunity may result in our being unable to exercise all draw downs available in the 24 month period. The volume-weighted average daily prices and the average daily trading volume prior to a draw down period determine the maximum amount of the draw down for the period. A decline in the trading volume or price of our common stock may result in a reduction in the amount of money we are able to draw down and a corresponding reduction in the number of shares we must issue for that period. The volume-weighted average daily price of our common stock for each of the 22 trading days within a draw down period and the draw down amount determine the number of shares we will issue to Grenville Finance Ltd. Grenville Finance Ltd. will purchase those shares at a 15% discount to the volume-weighted average daily price. For any given draw down period, the lower the volume-weighted average daily price, the more shares of common stock Grenville Finance Ltd. will receive for the draw down amount. Based on a review of our trading volume and stock price history, a consideration of the factors above and the number of authorized but unissued shares, we are registering 65,000,000 shares of common stock for possible issuance under the common stock purchase agreement, including shares underlying the warrants for common stock that will be granted to Grenville Finance Ltd. We may file addition registration statements to register additional shares at some future date for issuance under the common stock purchase agreement. In addition to the 50,000,000 shares that we may sell to Grenville Finance Ltd. through the draw down, we are registering an additional 15,000,000 shares that are issuable under the warrant. Transfer Agent The transfer agent for our common stock is Manhattan Transfer Register Co., Post Office Box 361, Holbrook, New York, 11741-0361. -46- PRICE RANGE OF COMMON STOCK Our common stock has been traded on the OTC Bulletin Board from January 1998 to present under the symbol WLGS. The security traded under the symbol UPPI from October 1997 through July 1998. However, there were no inside quotes reported for 1997. The market for our common stock has often been sporadic and limited. The following table sets forth in the periods indicated the range of high and low bid prices per share of our common stock traded as reported by the OTC Bulletin Board. ---------------------------------------------------------------- Quarter End Low Bid High Bid ---------------------------------------------------------------- 3/31/98 0.25 1.31 ---------------------------------------------------------------- 6/30/98 0.25 2.05 ---------------------------------------------------------------- 9/30/98 0.11 0.60 ---------------------------------------------------------------- 12/31/98 0.09 0.51 ---------------------------------------------------------------- 3/31/99 0.12 0.51 ---------------------------------------------------------------- 6/30/99 0.25 3.99 ---------------------------------------------------------------- 9/30/99 0.875 1.73 ---------------------------------------------------------------- 12/31/99 0.62 2.01 ---------------------------------------------------------------- 3/31/00 1.06 7.78 ---------------------------------------------------------------- 6/30/00 1.45 5.31 ---------------------------------------------------------------- 9/30/00 0.78 3.065 ---------------------------------------------------------------- 12/31/00 0.1719 0.8438 ---------------------------------------------------------------- Since our shares began trading on the OTC Bulletin Board in 1997, the prices for our shares have fluctuated widely. There may be many factors which may explain these variations, but we believe that among these factors include the following: o the demand for our common stock; o the number of market makers for our common stock; o developments in the market for broadband Internet access and wireless transmission in particular; and o changes in the performance of the stock market in general. In recent years, the stock market has experienced extreme price and volume fluctuations that have had a substantial effect on the market prices for many telecommunications, Internet and emerging growth companies such as ours, which may be unrelated to the operating performances of the specific companies. Companies that have experienced volatility in the market price of their stock have been the object of securities class action litigation. If we become the object of securities class action litigation, it could result in substantial costs and a diversion of our management's attention and resources and have an adverse effect on our business, financial condition and results of operations. In addition, holders of shares of our common stock could suffer substantial losses as a result of fluctuations and declines in the stock price. -47- There are approximately 309 holders of record of our common stock as of March 1, 2001. We have never declared or paid any dividends on our common stock, and we do not expect to declare or pay any cash dividends in the forseeable future. The payment of dividends, if any, in the future is within the discretion of our board of directors and will depend upon our earnings, if any, our capital requirements and financial condition and other factors. The trading of our shares is subject to limitations set forth in Rule 15g-9 of the Securities Exchange Act. This rule imposes sales practice requirements on broker-dealers who sell so-called penny stocks to persons other than established customers, accredited investors or institutional investors. Accredited investors are generally defined to include individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouses during the previous two years and expected annual income of that amount during the current year. For sales of shares to other persons broker-dealers must make special suitability determinations, must obtain the written consent of the purchaser to the sale prior to consummating the sale and is generally prohibited from making cold-calls or other unsolicited inquiries to purchasers without complying with these rules. These rules may adversely affect the ability of broker-dealers and others to sell our shares or to sell shares in the secondary market. -48- PLAN OF DISTRIBUTION General Grenville Finance Ltd. is offering the shares of common stock for its account as a statutory underwriter, and not for our account. We will not receive any proceeds from any sale by Grenville Finance Ltd. of shares of our common stock. Grenville Finance Ltd. may offer for sale up to $50,000,000 of common stock acquired by it pursuant to the terms of the common stock purchase agreement more fully described under the section above entitled "Common Stock Purchase Agreement" and the warrant that we issued to Grenville Finance Ltd. in connection with the equity line of credit. Grenville Finance Ltd. is deemed to be a statutory underwriter within the meaning of the Securities Act of 1933 in connection with such sales of shares of common stock and will be acting as an underwriter in its resales of the shares of common stock under this prospectus. In addition, Andrew Corporation and any broker-dealers that act in connection with the resale of common stuck offered by this prospectus may also be deemed to be underwriters. Grenville Finance Ltd. has, prior to any sales, agreed not to effect any offers or sales of the shares of common stock in any manner other than as specified in the prospectus and not to purchase or induce others to purchase shares of common stock in violation of any applicable state and federal securities laws, rules and regulations and the rules and regulations of the OTC Bulletin Board. To permit Grenville Finance Ltd. to resell the common shares issued to it under the common stock purchase agreement, we agreed to register those shares and to maintain that registration. To that end, we have agreed with Grenville Finance Ltd. that we will prepare and file such amendments and supplements to the registration statement and the prospectus as may be necessary in accordance with the Securities Act of 1933 and the rules and regulations promulgated thereunder, to keep it effective until the earliest of any of the following dates: o The date that all of the common stock has been disposed of pursuant to the registration statement; o The date that all of the common stock has been sold pursuant to the registration statement; o The date the holders receive an opinion from our counsel, which shall be reasonably acceptable to Grenville Finance Ltd., that the common stock may be sold under the provisions of Rule 144 without limitation to volume; o All common stock has been otherwise transferred to persons who may trade such common stock without restrictions under the Securities Act of 1933, and we delivered a new certificate or other evidence of ownership of such common stock not bearing a restrictive legend; or o All common stock may be sold without any time, volume or manner limitations pursuant to Rule 144(k) or any similar provisions then in effect under the Securities Act of 1933 in the opinion of our counsel, which counsel shall be reasonably acceptable to Grenville Finance Ltd. Shares of common stock offered through this prospectus may be sold from time to time by the selling shareholders, or by pledgees, donees, transferees or other successors in interest to the selling shareholders. We will supplement this prospectus to disclose the names of any pledgees, donees, transferees or other successors in interest that intend to offer common stock through this prospectus. Sales may be made on the OTC Bulletin Board or otherwise at prices and at terms then prevailing or at prices related to the then current market price, or in private negotiated transactions, or in a combination of these methods. The selling shareholders will act independently of us in making decisions with respect to the form, timing, manner and size of each sale. (We have been informed by the selling shareholders that there are no existing arrangements between either of them and any other stockholder, broker, dealer, underwriter or agent relating to the sale or distribution of shares of common stock which may be sold by the selling shareholders through this prospectus. Grenville Finance Ltd. is an underwriter and Andrew Corporation may be deemed to be an underwriter in connection with resales of their shares.) -49- The common shares may be sold in one or more of the following manners: o a block trade in which the broker or dealer so engaged will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; o purchases by a broker or dealer for its account under this prospectus; or o ordinary brokerage transactions and transactions in which the broker solicits purchases. In effecting sales, brokers or dealers engaged by the selling shareholders may arrange for other brokers or dealers to participate. Except as disclosed in a supplement to this prospectus, no broker-dealer will paid more than a customary brokerage commission in connection with any sale the common shares by the selling shareholders. Brokers or dealers may receive commissions, discounts or other concessions from the selling shareholders in amounts to be negotiated immediately prior to the sale. The compensation to a particular broker-dealer may be in excess of customary commissions. Profits on any resale of the common shares as a principal by such broker-dealers and any commissions received by such broker-dealers may be deemed to be underwriting discounts and commissions under the Securities Act of 1933. Any broker-dealer participating in such transactions as agent may receive commissions from the selling shareholders (and, if they act as agent for the purchaser of such common shares, from such purchaser). Broker-dealers who acquire common shares as principal may thereafter resell such common shares from time so time in transactions (which may involve crosses and block transactions and which may involve sales to and through other broker-dealers, including transactions of the nature described above) in the over-the-counter market, in negotiated transactions or otherwise at market prices prevailing at the time of sale or at negotiated prices, and in connection with such resales may pay to or receive from the purchasers of such common shares commissions computed as described above. Brokers or dealers who acquire common shares as principal and any other participating brokers or dealers may be deemed to he underwriters in connection with resales of the common shares. In addition, any common shares covered by this prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this prospectus. We will not receive any of the proceeds from the sale of these common shares, although we have paid the expenses of preparing this prospectus and the related registration statement of which it is a part. Grenville Finance Ltd. is subject to the applicable provisions of the Securities Exchange Act of 1934, including without limitation, Rule 10b-5 and Regulation M thereunder. Under applicable rules and regulations under the Exchange Act of 1934, any person engaged in a distribution of the common shares may not simultaneously purchase such securities for a period beginning when such person becomes a distribution participant and ending upon such person's completion of participation in a distribution. In addition, in connection with the transactions in the common shares, Grenville Finance Ltd. and we will be subject to applicable provisions of the Exchange Act of 1934 and the rules and regulations under that Act, including, without limitation, the rules set forth above. These restrictions may affect the marketability of the common shares. The selling shareholders will pay all commissions and their own expenses, if any, associated with the sale of the common shares, other than the expenses associated with preparing this prospectus and the registration statement of which it is a part. Underwriting compensation and expenses The underwriting compensation for Grenville Finance Ltd. will depend on the amount of financing that we are able to obtain under the common stock purchase agreement. Grenville Finance Ltd. will purchase shares under the stock purchase agreement at a price equal to 85% of the volume-weighted average daily price of our common stock reported on the OTC Bulletin Board, for each day in the pricing period with respect to each drawdown request. We also issued to Grenville Finance Ltd. a warrant to purchase 15,000,000 shares of our common stock at an exercise price of $0.265, which was 115% of the average closing bid price for our common stock during the fifteen trading days prior to January 26, 2001, the date on which the common stock purchase agreement was signed. The closing price for our common stock on the OTC Bulletin Board on February 28, 2001 was $0.1875. The warrant expires February 12, 2004. -50- In addition, we are obligated to pay Union Atlantic, LC, as compensation for its services as Grenville Finance Ltd.'s placement agent, a cash fee equal to 8% of the gross proceeds received from Grenville Finance Ltd. under the common stock purchase agreement for drawdowns under the equity line of credit. Union Atlantic, LC previously received shares of common stock underlying certain warrants in connection with a Securities Purchase Agreement entered into April 14, 2000 with certain investors. Two of Union Atlantic, LC's partners purchased shares of common stock through our public offering. One of those partners, Andrew Reckles was formerly a nominee for our Board of Directors, however, he withdrew from consideration prior to the shareholders meeting. LEGAL MATTERS Certain legal matters in connection with the common stock being offered hereby will be passed upon by Foley & Lardner, One Maritime Plaza, Sixth Floor, San Francisco, California 94111. EXPERTS The summary financial data for the fiscal years ended September 30, 2000, and 1999 have been derived from the Financial Statements and Notes to Financial Statements, audited by Reuben E. Price & Co., San Francisco, independent auditors. The summary of financial data for the first quarter of fiscal year 2001 was derived from the Unaudited Financial Statements and Notes to Financial Statements by Reuben E. Price & Co, San Francisco, independent auditors. These financial statements are included in reliance upon the authority of that firm as an expert in accounting and auditing. ADDITIONAL INFORMATION A registration statement on Form SB-2, including amendments, relating to the shares offered has been filed with the Securities and Exchange Commission, Office of Small Business Policy, Washington, D.C. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. Statements made in this prospectus as to the contents of any contract or other document are not necessarily complete and, in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each statement about those contracts and other documents is qualified in all respects. The registration statement and exhibits and schedules can be inspected without charge and copies can be made at proscribed rates, at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0300. In addition the Commission maintains a World Wide Web site on the Internet at http://www.sec.gov that contains reports, proxy and information statements and other documents filed electronically with the Commission, including the registration statement. We file a 10-KSB for each fiscal year and 10-QSB reports for the first three quarters of each year. We intend to furnish our shareholders with annual reports containing financial statements audited by our independent public accountants and quarterly reports containing unaudited financial information for the first three quarters of each fiscal year. -51- FINANCIAL STATEMENTS Index to Consolidated financial statements Independent Auditor's Report................................................F-2 Consolidated Balance Sheet..................................................F-3 Consolidated Statements of Operations and Comprehensive Income..............F-4 Statements of Shareholders' Equity..........................................F-5 Consolidated Statements of Cash Flows.......................................F-6 The accompanying notes are an integral part of these financial statements...F-6 Notes to Consolidated Financial Statements..................................F-7 Unaudited Financial Statements for the First Quarter of Fiscal Year 2001............................................................F-17 F-1 Independent Auditor's Report INDEPENDENT AUDITORS' REPORT Board of Directors World Wide Wireless Communications, Inc. We have audited the accompanying consolidated balance sheet of World Wide Wireless Communications, Inc., as of September 30, 2000, and the related consolidated statements of operations, consolidated statements of cash flows, and statement of stockholders' equity for the years ended September 30, 2000 and 1999. We did not audit the balance sheet and related statement of income, cash flows and shareholders equity of Infotel Argentina and Digital Way. These statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to amounts included for Infotel Argentina and Digital Way, is based solely upon the reports of the other auditors. Infotel Argentina was purchased on December 31, 1999 and Digital Way was purchased on February 29, 2000, in transactions accounted for as purchases. The financial statements of the newly acquired subsidiaries are included in the consolidated financial statements of World Wide Wireless Communications, Inc. and reflect total assets of 5% for Infotel Argentina and 5% for Digital Way for the year ended September 30, 2000. These financial statements are the responsibility of World Wide Wireless Communications, Inc.'s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of World Wide Wireless Communications, Inc. as of September 30, 2000 and the consolidated results of its operations, cash flows, and stockholder's equity for the years ended September 30, 2000 and 1999 in conformity with generally accepted accounting principles of the United States. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company has suffered recurring losses that raises substantial doubt about its ability to continue as a going concern. Realization of a major portion of the assets is dependent upon the Company's ability to meet its future financing requirements, and the success of future operations, the outcome of which cannot be determined at this time. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Reuben E. Price & Co. December 13, 2000 F-2 World Wide Wireless Communications, Inc. Consolidated Balance Sheet Assets Current Assets: September 30, 2000 Cash and cash equivalents $ 3,111,150 Refund receivable 500,000 Inventory 750,458 Prepaid and other 402,950 ------------ Total Current Assets 4,764,558 ------------ Frequency licenses 1,175,067 ------------ Option on frequency licenses 500,000 ------------ Deposits in Acquisition 395,012 ------------ Fixed Assets: Equipment 2,466,736 Furniture and fixtures 91,938 Leasehold improvements 424,710 Less: Accumulated depreciation and amortization (176,234) Total Fixed Assets 2,807,150 ------------ Other Assets 61,775 ------------ Total Assets $ 9,703,562 ============ Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 1,645,829 Accrued expenses 715,720 ------------ Total Current Liabilities 2,361,549 Convertible debentures 5,227,678 ------------ Total Liabilities 7,589,227 ------------ Commitments and Contingencies - Minority interest 115,150 ------------ Stockholders' Equity: Common stock, par value $ .001 per share, 100,000,000 shares authorized, 86,264,163 issued and outstanding 86,264 Additional paid-in capital 17,069,330 Accumulated deficit (15,155,249) Other comprehensive income (loss) (1,160) ------------ Total Stockholders' Equity 1,999,185 ------------ Total Liabilities and Stockholders' Equity $ 9,703,562 ============ The accompanying notes are an integral part of these financial statements. F-3 World Wide Wireless Communications Inc. Consolidated Statements of Operations and Comprehensive Income For the Year Ended For the Year September 30, 2000 Ended September 30, 1999 Revenue $ 524,245 $ Cost of revenue 336,716 ------------ ----------- Gross profit 187,529 ------------ ----------- Operating Expenses General and administrative 7,065,788 2,383,330 Impairment Loss 1,500,000 ------------ ----------- Total Operating Expenses (8,565,788) (2,383,330) ------------ ----------- Operating (Loss) (8,378,259) (2,383,330) ------------ ----------- Other Income (Expense) Interest income 52,857 - Interest (expense) (70,706) - ------------ ----------- Total Other (Expense) (17,849) ------------ ----------- Net Loss (8,396,108) (2,383,330) ------------ ----------- Other Comprehensive Income (Loss) Foreign currency translation (1,160) ------------ ----------- Total Other Comprehensive Income (Loss) (1,160) ------------ ----------- Total Comprehensive Income (Loss) (8,397,268) (2,383,330) ============ ============ Loss Per Share (Basic and Diluted) $ (0.10) $ (0.04) ============ ============= Basic and Diluted Weighted Average Shares Outstanding 81,656,614 56,113,645 ============ ============ The accompanying notes are an integral part of these financial statements. F-4 World Wide Wireless Communications, Inc. Consolidated Statements of Cash Flows For the Year For the Year Ended Ended September 30, 2000 September 30, 1999 CASH FLOWS FROM OPERATING ACTIVITIES: Total Comprehensive Income (Loss) $ (8,397,268) $ (2,383,330) Adjustments to reconcile net loss from operations to net cash used by operating activities: Common stock issued for services 1,142,445 615,996 Impairment loss 1,500,00 Depreciation and amortization expense 164,450 13,506 Changes in operating assets and liabilities: (Increase) in inventory (750,458) (Increase) in prepaid and other (336,560) (62,740) (Increase) in other assets (5,742) (20,077) Increase in accounts payable, trade 1,645,829 Increase in accrued expenses 224,251 4,321 ------------ ------------ Net Cash (Used) by Operating Activities (4,813,053) (1,832,324) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of fixed assets (2,531,850) (336,384) Refund receivable (500,000) Deposits in acquisition (395,012) Acquisition of frequency licenses (1,175,067) Acquisition of intangible assets (41,327) Acquisition of option on frequency licenses - (500,000) ------------ ------------ Net Cash (Used) by Investing Activities (4,643,256) (836,384) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from convertible debentures 5,639,678 328,000 Proceeds from issuance of common stock 6,652,699 2,614,074 ------------ ------------ Net Cash Provided by Financing Activities 12,292,377 2,942,074 ------------ ------------ NET INCREASE IN CASH AND CASH EQUIVALENTS 2,836,068 273,366 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 275,082 1,716 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,111,150 $ 275,082 ------------ ------------ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Interest paid $ - $ - Income taxes paid $ - $ - SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES Interest accrued on debentures, added to the principal of the debentures $ 27,678 $ - Debentures converted to capital stock $ 740,000 $ - Capital stock issued in acquisition of subsidiaries $ 1,500,000 $ - The accompanying notes are an integral part of these financial statements F-5 World Wide Wireless Communications, Inc. Statements of Shareholders' Equity Common Stock
Accumulated Additional Other Paid-in Accumulated Comprehensive Total Shares Amount Capital Deficit Income Equity ---------- --------- ----------- ------------- ------------- ------------ Balance, September 30, 1998 47,341,993 $ 47,342 $ 3,843,038 $ (4,375,811) $ - (485,431) Common stock issued in private placement between $0.05 and $0.435 per share 19,303,950 19,304 2,594,770 2,614,074 Common stock issued for services 4,538,000 4,538 611,458 615,996 Net loss for the fiscal year ended, September 30, 1999 (2,383,330) (2,383,330) ---------- --------- ----------- ------------ -------- ----------- Balance, September 30, 1999 71,183,943 71,184 7,049,266 (6,759,141) - 361,309 Common stock issued in private Placement between $0.25 and $6.125 per share 11,548,745 11,549 6,641,150 6,652,699 Common stock issued in Conversion of debentures at $0.625 per share 462,500 462 739,538 740,000 Common stock issued for services 2,433,330 2,433 1,140,012 1,142,445 Common stock issued for acquisition of subsidiaries 635,645 636 1,499,364 1,500,000 Net loss for the fiscal year ended, September 30, 2000 (8,396,108) (8,396,108) Other comprehensive income: Foreign currency adjustment (1,160) (1,160) ---------- --------- ----------- ------------ -------- ----------- Balance, September 30, 2000 86,264,163 $ 86,264 $17,069,330 $(15,155,249) $ (1,160) $ 1,999,185 ========== ========= =========== ============ ======== ===========
The accompanying notes are an integral part of these financial statements. F-6 Notes to Consolidated Financial Statements NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization The consolidated financial statements presented are those of World Wide Wireless Communications, Inc., (the Company) and its subsidiaries, Infotel Argentina, S.A. (Argentina) and Digital Way, S.A. (Peru). The Company is engaged in activities related to advanced wireless communications, including the acquisition of radio-frequency spectrum both in the United States and internationally. The Company also plans to license its Distributed Wireless Call Processing System technology. Consolidated Financial Statements The accounts of the Company and its consolidated subsidiaries are included in the consolidated financial statements after elimination of significant intercompany accounts and transactions. The consolidated subsidiaries are Infotel Argentina, S.A. of Argentina and Digital Way S.A. of Peru. Cash Equivalents For purposes of the Statement of Cash Flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Balances in bank accounts may, from time to time, exceed federal insured limits. The Company has never experienced any loss, and believes its credit risk to be limited. Inventory Inventory is entirely made up of equipment intended to be sold to customers as part of the Company's fixed wireless internet services. Inventory is valued at the lower of cost or market. Operating Intangible Assets The frequency licenses are not yet placed in service and consequently are not being amortized. Fixed Assets Furniture, fixtures and equipment are depreciated over their useful lives of 5 to 10 years, using the straight-line method of depreciation. Leasehold improvements are amortized over a 5-year period that coincides with the initial period of the lease, using the straight-line method of amortization. Amortizable intangibles, consisting primarily of software, are amortized over a two year period. Long-Lived Assets The Company reviews its long-lived assets on a quarterly basis to determine any impairment in accordance with Statement of Financial Accounting Standards No. 121. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Value of Financial Instruments For cash and cash equivalents and accrued expenses, the carrying amounts in the Balance Sheet represent their fair market value. The carrying amount of the debentures payable approximates fair value because of similar current rates at which the Company could borrow funds with consistent remaining maturities. F-7 NOTE 1-- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Segment Information The Company adopted Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" (SFAS No. 131) in 1999. This statement establishes standards for the reporting of information about operating segments in annual and interim financial statements and requires restatement of prior year information. The company has three geographic reportable operating segments: United States, Peru, and Argentina. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. SFAS No. 131 also requires disclosures about products and services, geographic areas and major customers. Comprehensive Income and Foreign Currency Transactions As of October 1, 1999 the Company adopted FASB Statement No. 130, Reporting Comprehensive Income. The financial statements of the Company's foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average rates of exchange in effect during the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholder's equity. The sole component of other comprehensive income is a foreign currency translation adjustment related to the subsidiary Digital Way in Peru. Recent Accounting Pronouncements In June 1998 and June 1999 respectively, the Financial Accounting Standards Board issued SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133), and SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities- Deferral of the Effective Date of FASB No. 133" (SFAS no.137). The Company is required to adopt SFAS No. 133 and SFAS no. 137 in the year ended September 30, 2001. These pronouncements establish methods of accounting for derivative financial instruments and hedging activities related to those instruments as well as other hedging activities. To date, the Company has not entered into any derivative financial instruments or hedging activities. Basic and Diluted Net Loss Per Share The calculation of basic and diluted net loss per share is in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share". NOTE 2 -- GOING CONCERN The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has experienced losses since inception, and had an accumulated deficit of $15,155,249 at September 30, 2000. Net losses are expected for the foreseeable future. Management plans to continue the implementation of its business plan to place the Company's assets in service to generate related revenue. Simultaneously, the Company is continuing to secure additional capital through sales of common stock through the current operating cycle. There is no assurance that management will be successful in its efforts. NOTE 3 -- ACQUISITIONS Argentina On December 31, 1999, the Company acquired a 51% interest in Infotel Argentina S.A., a Buenos Aires based company which owns Multi-channel Multipoint Distribution Service (MMDS) licenses in eight of the largest Argentine cities including Buenos Aires. The price was $1,500,000, made up of $900,000 in cash and $600,000 paid in 454,545 shares of company stock. Infotel also engages in telephone system integration and F-8 NOTE 3 -- ACQUISITIONS (continued) engineering projects. The minority interest in net loss is not recognized, because the Company anticipates being fully responsible for the subsidiaries losses. Impairment Loss The Argentine government has revoked all MMDS licenses, including those held by the Company's subsidiary, Infotel. The Company and Infotel have taken all prescribed steps in order to secure the re-issuance of the licenses, and talks are on-going with the appropriate Argentine government agencies. However, there is no guarantee that the licenses will be reissued to Infotel. Therefore, management is recognizing an impairment of the frequency licenses asset in the amount of the Company's investment of $1,500,000. Peru On February 29, 2000, the Company purchased 100% of Digital Way S.A., a Peruvian telecommunications company. The price was $1,300,000, made up of $400,000 cash and $900,000 paid in 181,100 shares of company stock. Digital Way S.A., holds MMDS licenses in the Lima-Callao area. It holds local and international long distance telephone licenses. India In June 2000, the Company entered into an agreement with a group of Indian businessmen to establish a joint venture, World Wide Wireless Communications (India) Ltd., to establish fixed wireless data service in India. A refundable deposit of $248,350 (shown as part of Deposits in Acquisitions) was posted with the Indian government as part of the process of applying for both frequency and internet service provider licenses. These license applications are pending. Thailand In May 2000, the Company entered into a joint venture with World Star T.V. Communication Co. Ltd. (WSTV), a Thai corporation, to provide fixed wireless data services in Thailand. WSTV currently owns frequency licenses in Bangkok and other major areas in Thailand. As of September 30, 2000, $146,662 has been invested, and is shown as part of Deposits in Acquisition. In August 2000, the Company entered into a Letter of Intent with E-Z Net Co. Ltd. of Bangkok for E-Z Net to provide internet service provider services to the new joint venture. The required governmental approvals are pending. El Salvador On March 11, 2000, the Company entered into a letter of intent with El Salvador Telecomuniciones S.A. de C.V. for the purpose of acquiring a 25% ownership interest in that company in El Salvador. Pursuant to the terms of the letter of intent, the Company paid $1,000,000 to that company as an advance payment of the purchase price, which was to total $3,500,000. The agreement provided that the purchase was conditioned upon the company's acquisition of certain licenses, and the occurrence of certain other conditions that were not met. As a result, the Company has entered into an agreement for the refund of the advance payment. The Company has received $500,000, and is scheduled to receive the remainder in January 2001. This amount is shown as an account receivable and is secured by a bank letter of credit. Pro Forma Data The following pro forma data is presented on a combined basis, as if Infotel Argentina S.A. and Digital Way S.A.(Peru) had been acquired at the date of their formation, January 18, 1999 and March 28, 1999, respectively: F-9 NOTE 3 -- ACQUISITIONS (continued) September 30, 2000 1999 ---- ---- Total Assets $ 9,703,562 $ 1,472,125 Total Liabilities 7,633,671 979,553 Total Shareholders Equity 2,069,891 3,492,572 For the Year Ended September 30, 2000 1999 ---- ---- Revenues $ 671,907 $ 135,690 Expenses 9,010,946 2,479,874 ----------- ----------- Net (Loss) $(8,339,039) $(2,344,184) Basic and Diluted Loss Per Share (0.10) (0.04) NOTE 4 -- COMMITMENTS AND CONTINGENCIES Litigation In November 1998, the Company and its predecessor affiliates filed an action against the lessor of its leases for the Concord and San Marcos, California multipoint distribution service channels. The complaint alleged breach of contract as well as intentional and negligent interference with prospective economic advantage. The Company also sought a preliminary injunction as a result of the lessor's assertion that the predecessor companies and the Company were in default on said leases. The Superior Court of California for the County of Los Angeles issued a preliminary injunction against the lessor to restrain it from taking any further action against the Company and its predecessors. Thereafter, the lessor cross-complained against the Company and its predecessors alleging breach of contract. The preliminary injunction of the Company against the lessor remained in effect until December 9, 1999, when a settlement agreement was signed. The settlement provided for the Company to pay $27,375 to the lessor, relating to lease obligations. This amount is recorded as an expense in the financial statements for the fiscal years ended September 30 1998 and 1999. The Company further agreed to sign a consulting agreement with the lessor for one year, whereby the Company will issue the equivalent of $20,000 of its restricted common stock, the value of which is to be computed at 80% of the market value of the Company's unrestricted shares. Additionally, under this consulting agreement, the Company agreed to execute a promissory note in favor of the lessor in the amount of $40,000, payable at $1,000 per month, commencing December 1, 1999, with a final payment of $28,000 on December 1, 2000. Under terms of the settlement agreement, the Company also has option to purchase the Concord and San Marcos leases for a price of $250,000 each, less lease payments already made. The Company elected to exercise the option to purchase the Concord lease, and the appropriate transfer procedure has been initiated with the U.S. Federal Communications Commission (FCC). The Company believes that under current FCC regulations it is not required to pay the $250,000 purchase price until such time as the FCC has approved the transfer of the license. The Company borrowed from Credit Bancorp $328,000 in August 1999 and $412,000 in October 1999. The terms of this loan are 7% interest per annum payable, semiannually on the last day of February and September, with the principal due September 30, 2002. On August 6, 1999, the Company filed suit against Credit Bancorp, in U.S. District Court in San Francisco, regarding improprieties on the part of Credit Bancorp relating to the August 1999 loan. The case was settled on October 11, 1999. As part of the settlement agreement, Credit Bancorp agreed to convert the original loans granted to the Company to a convertible debenture in the amount of $740,000. On October 11, 1999, the Company issued a convertible unsecured debenture for $740,000 to Credit Bancorp in settlement of this obligation. The terms of this convertible unsecured debenture are 7% interest per annum payable semiannually on the last day of February and September, with the principal due September 30, 2002. Credit Bancorp notified the Company that it wants to convert the debentures into common stock. As of December 2000, the Company has not issued the securities. F-10 NOTE 4 -- COMMITMENTS AND CONTINGENCIES (continued) principal and accrued interest of this debenture are convertible at any time at the conversion price of $1.60 per share of unregistered, restricted shares of the Company's stock, adjusted for any stock splits. In November 1999, the Securities and Exchange Commission (SEC) filed suit against Credit Bancorp alleging violations of various securities laws in connection with its actions in relation to the Company (and others), and seeking various forms of relief including disgorgement of its illegal gains. At this time, management believes that if the suit is successful, certain benefits may accrue to the Company, including the cancellation of the $740,000 convertible debenture. Operating Leases The Company's office space at One Post Street, San Francisco, was leased on a month to month basis. The Company vacated these offices on August 31, 1999. The actual rent paid, for the fiscal year ended September 30, 1999, was $22,341. In April 1999, the Company entered into a 5-year lease for approximately 6,000 square feet of office space in Jack London Square, Oakland, California. The lease commenced on June 5, 1999. The triple net rental agreement is for $10,038 per month during the first year, with a rental deposit of $20,077 shown as an Other Asset on the financial statements. The lease provides for an annual increase based on the indexed cost of living adjustments. Additionally, the lease provides for the landlord's participation in partial reimbursement over the terms of the lease to the Company for leasehold improvements paid by the Company. The Company commenced its occupancy of this space on September 1, 1999. The minimum annual rent is $120,456 for the fiscal years ended September 30, 2001, 2002 and 2003, and $81,642 for the period October 1, 2003 to June 4, 2004. The Company leases (under assignment) all of the channel capacity for certain multipoint distribution service (MDS) and multi-channel multipoint distribution service (MMDS) channels from three carriers that are licensed by the FCC as specified in 47 C.F.R. Paragraph 21.901(b). These MDS/MMDS leases provide for a monthly lease fee of 2% of gross subscriber revenue or a minimum monthly rental aggregating approximately $1,150. The minimum aggregate annual rent is $13,800 for 1999, $67,160 for 2000, and $9,500 for 2001, adjusted annually by changes in the Consumer Price Index. Each of the leases contain three ten-year renewal options, and an option to purchase each license for $225,000, adjusted upon changes in the Consumer Price Index since lease inception. In conjunction with the multi-point distribution service and multi-channel multi-point distribution service licenses, the Company has acquired (under assignment) transmission sites in the geographical areas covered by the licenses. These site leases have varying terms and conditions, and at September 30, 2000, the minimum annual rental is $42,000 per fiscal year ending September 30, 2001 through 2004. The company has based eight Instructional Television Fixed Service channels for use as MMDS channels from the Shekinah Network, as described more fully in Note 5 below. These leases provide for a monthly lease fee of 5% of gross system receipts, with a minimum of $500 per channel. The minimum aggregate annual fee is $60,000 per fiscal year ending September 30, 2001 through 2004. Administrative The Securities and Exchange Commission (SEC) commenced an informal inquiry of the Company in August 2000. Management has voluntarily complied with their requests for information and intends to fully cooperate with the inquiry. F-11 NOTE 4 -- COMMITMENTS AND CONTINGENCIES (continued) Rents paid for fiscal years ended September 30, 2000 and 1999 are as follows: 2000 1999 ---- ---- Former office location, San Francisco $ - $ 22,341 Current office location, Oakland 128,460 38,814 Current office location, Concord 22,412 - Distribution service channel leases 98,110 21,300 Transmission sites 85,501 42,000 --------- --------- Total $ 334,483 $ 124,455 ========= ========= The minimum annual rentals under current lease obligations for future fiscal years ended September 30 are as follows: 2001 2002 2003 2004 Remainder ---- ---- ---- ---- --------- Office location, Oakland $128,460 $128,460 $128,460 $ 74,935 None Office location, Concord 23,916 23,916 13,951 None None Distribution service channel leases 69,600 60,000 60,000 60,000 None Transmission sites 42,000 42,000 42,000 42,000 None -------- -------- -------- -------- Total $263,976 $254,376 $244,411 $176,936 None NOTE 5 -- STOCKHOLDERS EQUITY During the fiscal year ended September 30, 2000, the Company sold 11,548,745 shares of its common stock for net cash proceeds of $6,652,699. The company issued 2,598,602 shares of its common stock for services at an aggregate value of $1,142,445. Stock issued for services was at the cash price for the shares at the time of issuance. The Company issued 470,373 shares of its common stock for the acquisition of subsidiaries at an aggregate value of $1,500,000. Stock issued for assets was at the cash price for the shares at the time of issuance. During the fiscal year ended September 30, 1999, the Company sold 19,303,950 shares of its common stock for net cash proceeds of $2,614,074. The Company also issued 4,538,000 shares of its common stock for services at an aggregate value of $615,996. Stock issued for services was at the cash price for the shares at the time of issuance. NOTE 6 -- OPTIONS ON FREQUENCY LICENSES On November 25, 1998, the Company entered into an option agreement with Shekinah Network to pay $500,000 to lease eight Instructional Television Fixed Service channels for the Company's high-speed wireless internet connections, as authorized by the Federal Communication Commission. This agreement also provides the Company an exclusive option to lease excess capacity on Shekinah's remaining thirty-two Instructional Television Fixed Service channels, as they become available. The F-12 NOTE 6 -- OPTIONS ON FREQUENCY LICENSES (continued) monthly minimum transmission fee to be paid to Shekinah for each license or application optioned, will be five percent (5%) of the gross system receipts or five hundred dollars, whichever is greater. Amortization of the licenses will begin when the available channels are placed in service. Instructional Television Fixed Service licenses can only be owned by Federal Communication Commission approved educational, religious or non-profit entities. In the event that the Federal Communication Commission rules and regulations change to allow commercial companies to own these licenses or the Company establishes an educational, religious or non-profit affiliate, the agreement also provides the Company an option to pay Shekinah $150,000 per-market or channel group on an individual basis or $3,500,000 for all forty channels. The option period extends for ten years, with three additional ten-year term renewals. NOTE 7 -- INCOME TAXES A reconciliation between the actual income tax benefit and the federal statutory rate follows: Fiscal years ended September 30, 2000 1999 ---- ---- Amount % % % ------ - - - Computed income tax benefit at statutory rate $ 2,848,407 (34)% $ 810,332 $(34) Operating loss with no current tax benefit (2,848,407) (34)% ($810,332) (34)% ----------- --------- Income tax benefit None None At September 30, 1999, the Company had a net operating loss carryforward for federal tax purposes of approximately $6,760,000 which if unused to offset future taxable income, will expire between the years 2010 to 2019, and approximately $2,154,000 for state tax purposes, which will expire if unused in 2004 and 2005. A valuation allowance has been recognized to offset the related deferred tax assets due to the uncertainty of realizing any benefit therefrom. During 2000 and 1999, no changes occurred in the conclusions regarding the need for a 100% valuation allowance in all tax jurisdictions. Under section 382 of the Internal Revenue Code, the utilization of net operating loss carryforwards is limited after an ownership change, as defined, to an annual amount equal to the market value of the loss corporation's outstanding stock immediately before the date of the ownership change multiplied by the highest Federal long-term tax exempt rate in effect for any month in the 3 calendar month period ending in the calendar month in which the ownership change occurred. Due to the ownership changes as a result of the May 1998 reorganization and subsequent stock issuances, any future realization of the Company's net operating losses will be severely limited. Significant components of the Company's deferred tax assets are as follows: 2000 1999 ---- ---- Net operating loss carryforwards $ 14,999,561 $ 6,759,141 Valuation allowance (14,999,561) (6,759,141) ----------- ---------- Net deferred tax assets None None NOTE 8 -NET LOSS PER COMMON SHARE Net loss per common share, basic and diluted, has been computed using weighted average common shares outstanding. The effect of outstanding stock options and warrants has been excluded from the dilutive computation, as their inclusion would be anti-dilutive. F-13 NOTE 8 -NET LOSS PER COMMONS SHARE (continued) Fiscal Year Ended September 30, 2000 1999 ---- ---- Net Income (Loss) $(8,397,268) $(2,383,330) =========== =========== Weighted average number of common shares 81,656,614 56,113,645 =========== ========== Basic and diluted loss per share $ (0.10) $ (0.04) =========== =========== The following common stock equivalents have been excluded from the dilutive computation, as their inclusion would be anti-dilutive. Stock Options 3,750,000 2,950,000 Convertible warrants 3,600,000 - ----------- ----------- 7,350,000 2,950,000 =========== =========== NOTE 9 - STOCK OPTION PLANS Nonstatutory Stock Options The Company has issued stock options under nonstatutory stock option agreements. The options are granted at the fair market value of the shares at the date the option is granted. The options are granted for a period of 5 years, and are fully exercisable during the term of the option period or within thirty (30) days of the participant's resignation or termination. Combined transactions in non-employee options for the fiscal years ended September 30, 2000 and 1999 are as follows: 2000 1999 ---- ---- Average Average Number of Exercise Number of Exercise Shares Price Shares Price Options outstanding October 1 500,000 0.095 - - Granted - - 500,000 0.095 Cancelled/Expired - - - - Exercised - - - - ------------------------------------------ Options outstanding, September 30 500,000 0.095 500,000 0.095 ======= ===== ======= ===== Incentive Stock Plan The Company adopted an incentive stock plan on August 5, 1998, which has not yet been approved by the shareholders. The options are granted at the fair market value of the shares at the date that the option is granted. The options are granted for a period of 10 years, and are exercisable after one year from the date of grant, at a vested rate of 20% per year during the term of the option period or within thirty (30) days of the participant's resignation or termination. The Company has limited the number of shares under this plan to 3,000,000 shares of its capital stock for this plan. The number of shares of stock covered by each outstanding option, and the exercise price per share thereof set forth in each such option, shall be proportionately adjusted for any stock split, and or, stock dividend. All such options are being treated as nonstatutory stock options until the incentive stock plan is approved by the shareholders. Combined transactions in employee options for the fiscal years ended September 30, 2000 and 1999 are as follows: F-14 NOTE 9 - STOCK OPTION PLANS (continued) 2000 1999 ---- ---- Average Average Number of Exercise Number of Exercise Shares Price Shares Price Options outstanding October 1 2,450,000 $0.095 800,000 $0.095 Granted 1,600,000 1.125 1,650,000 0.095 Cancelled/Expired (800,000) 0.095 - - Exercised - - - - ------------------------------------------- Options outstanding, September 30 3,250,000 0.602 2,450,000 0.095 ========= ====== ========= ====== Compensation Costs The Company applies APB Opinion 25 in accounting for its stock compensation plans discussed above. Accordingly, no compensation costs have recognized for these plans in 2000 or 1999. Had compensation costs been determined on the basis of fair value pursuant to FASB Statement No. 123, net loss and loss per share would have been increased as follows: 2000 1999 Net loss: $(8,396,108) $(2,383,330) =========== ========== Pro forma $(8,391,562) $(2,441,575) =========== =========== Basic and Diluted loss per share: As reported $ (0.10) $ (0.04) =========== =========== Pro forma $ (0.10) $ (0.04) =========== =========== The fair value of each option granted is estimated on the grant date using the Black-Scholes model. The following assumptions were made in estimating fair value: Assumption Plans Dividend yield 0% Risk-free interest rate 7% Expected life 5 years Expected volatility 97% NOTE 10 - SEGMENT INFORMATION September 30, 2000 ------------------ USA Argentina Peru Total Assets $ 9,691,532 $ 544,692 4494,430 Total Liabilities & Minority Interest 7,170,914 485,492 764,273 Total Shareholders Equity 2,520,617 59,200 (269,843) For the Year Ended September 30, 2000 ------------------------------------- Revenue 2,903 521,343 - Cost of Sales - 336,717 - ---------- -------- -------- Gross Profit 2,903 184,626 - Expenses 7,875,836 (360,426) 274,926 ---------- -------- -------- Net Loss $(7,875,836) $(175,800) $(274,926) F-15 NOTE 11 - SECURITIES PURCHASE AGREEMENT On April 14, 2000, the Company entered into a Securities Purchase Agreement with six investors, for the purchase of investment units, consisting of common stock, common stock purchase warrants, 4% subordinated debentures and preferred stock. Pursuant to the Securities Purchase Agreement, the investors purchased 760,000 shares of common stock, warrants to purchase 3,600,000 shares of common stock, and subordinated debentures with a principal amount of $3,280,000, for a total amount of $4,800,000. The investors have the option to purchase additional shares of common stock, warrants and series A preferred stock (when authorized) from the Company for a maximum amount of $1,920,000. The investors will be required to purchase these securities if an effective registration statement under the Securities Act is in effect with respect to all the common stock issued and issuable upon the exercise of the warrant and conversion of the subordinated debentures and series A preferred stock. On August 10, 2000, the Company agreed with the investors to modify certain terms of the earlier funding agreement. Under the new terms of this agreement, the Company agreed to issue 608,000 shares of common stock to the investors, in exchange for $1,920,000 and the investors' forbearance of certain rights under the original agreement. The conversion price of the subordinated debentures was amended to the lesser of 110% of the average per share market value for the five consecutive trading days immediately preceding the original issue date, and 85% of the average per share market value for the five consecutive trading days immediately prior to the conversion date. The Company also agreed to change the floor price to $1.00 for the period between August 10, 2000 and October 14, 2000, $0.64 from the period between October 14, 2000 and April 14, 2001, and zero thereafter. Notwithstanding these changes, under this amendment, if the Company's revenues for fiscal year 2000 fall below $13.5 million, then the floor price will be zero as of April 1, 2001. Furthermore, the exercise price of the warrants to purchase the Company's shares was changed to $2.00. On November 15, 2000, the Company reached an agreement with the investors amending the original securities agreement and the first amendment thereto. In exchange for a waiver by the investors for any breach of the original agreement and the first amendment, the Company agreed to increase the principal amount of the debentures by $2,128,000, and to issue an additional 3,996,113 restricted shares of common stock to them. The investors returned to the Company the 760,000 shares previously issued under the original Securities Purchase Agreement and agreed to cancel the 608,000 shares that were never issued under the first amendment. Under this agreement, the investors may convert the debentures at a conversion price equal to the lesser of $.64 and an amount equal to 85% of the average of the closing trading prices of the common stock for the five consecutive trading days immediately prior to the conversion. At no time shall the conversion price be below the floor price. The floor price is $.64 for the period between October 1, 2000 and October 14, 2000, $.50 for the period between October 14, 2000 and September 1, 2001, and zero thereafter. However, if the Company's aggregate revenue for the last three quarters of the year 2000 and the first quarter of the year 2001 is less than $13.5 million, then as of May 14, 2001, the floor price shall be zero. Under the amended agreement, the Company reserves the right to redeem the debentures if the per share market value of the common stock is less than $1.00. The redemption price is calculated at 120% of the principal amount, and 100% of the unpaid interest accrued on those debentures being redeemed. Pursuant to the most recent amended agreement, the Company must file a SB-2 registration statement on December 15, 2000 which must be made effective by May 15, 2001. If the Company fails to abide by these amendments, the Company will be required to pay certain liquidated damages. F-16
World Wide Wireless Communications, Inc. & Subsidiaries Condensed Consolidated Balance Sheet December 31, September 30, 2000 2000 ---- ---- (unaudited) (see note 1) ----------- ------------ Assets Current Assets: Cash & cash equivalents $ 984,274 $ 3,111,150 Other current assets 1,768,023 1,653,408 -------------------- --------------------- Total Current Assets 2,752,297 4,764,558 -------------------- --------------------- Frequency licenses 1,175,067 1,175,067 -------------------- --------------------- Option on frequency licenses 500,000 500,000 -------------------- --------------------- Deposit in acquisition 395,012 395,012 -------------------- --------------------- Fixed Assets: Equipment 2,993,691 2,466,736 Furniture and fixtures 91,938 91,938 Leasehold improvements 424,710 424,710 Less: Accumulated depreciation & amortization (258,110) (176,234) -------------------- --------------------- Total Fixed Assets 3,252,229 2,807,150 -------------------- --------------------- Other assets 63,949 61,775 -------------------- --------------------- Total Assets $ 8,138,554 $ 9,703,562 ==================== ===================== Liabilities and Stockholders' Equity Current Liabilities: Accounts payable, trade $ 1,962,598 $ 1,645,829 Accrued expenses 572,571 715,720 -------------------- --------------------- Total Current Liabilities 2,535,169 2,361,549 Convertible debentures 5,323,202 5,227,678 -------------------- --------------------- Total Liabilities 7,858,371 7,589,227 -------------------- --------------------- Commitments and Contingencies - - Minority interest 115,150 115,150 -------------------- --------------------- Stockholders' Equity: Common stock, par value $.001 per share, 100,000,000 shares authorized, 89,880,276 issued and outstanding at December 31, 2000 89,881 86,264 Additional paid-in capital 17,065,714 17,069,330 Accumulated deficit (16,986,514) (15,155,249) Accumulated other comprehensive loss (4,048) (1,160) -------------------- --------------------- Total Stockholders Equity 165,033 1,999,185 -------------------- --------------------- Total Liabilities and Stockholders' Equity $ 8,138,554 $ 9,703,562 ==================== =====================
F-17
World Wide Wireless Communications, Inc. & Subsidiaries Condensed Consolidated Statement of Operations UNAUDITED Three Months Three Months Ended December 31, Ended December 2000 1999 ------------------ ------------------- Revenue $ 316,591 $ - Cost of goods sold 256,196 - ------------------ ------------------- Gross profit 60,395 - Operating expenses 1,860,011 829,189 ------------------ ------------------- Operating income (loss) (1,799,616) (829,189) Other income (expense) (31,650) - ------------------ ------------------- Net profit (loss) $ (1,831,266) $ (829,189) ================== =================== Basic and diluted loss per share $ (0.02) $ (0.01) ================== =================== Number of shares used in computing basic and diluted loss per share 89,880,276 71,791,046 ================== ===================
F-18 World Wide Wireless Communications, Inc. & Subsidiaries Condensed Consolidated Statement of Cash Flows UNAUDITED
For the For the Three Months Three Months Ended Ended December 31, December 31, 2000 1999 ------------------ ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (1,831,266) $ (829,189) Adjustments to reconcile net loss from operations to net cash used by operating activities: Other comprehensive (loss) (2,888) - Common stock issued for services - 15,910 Depreciation and amortization expense 86,352 21,903 Interest payable added to principal of debentures 95,524 - Changes in operating assets and liabilities: (Increase) decrease in prepaid and other (185,239) 60,580 Decrease in accounts receivable 63,974 - (Decrease) in accrued expenses (143,149) (132,317) Increase in accounts payable 316,771 - ------------------ ----------------- Net Cash (Used) by Operating Activities (1,599,921) (263,113) ------------------ ----------------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of frequency licenses - (1,200,000) Purchase of fixed assets (526,955) (114,520) ------------------ ----------------- Net Cash (Used) by Investing Activities (526,955) (1,314,520) ------------------ ----------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock - 1,827,654 Proceeds from loan - 412,000 ------------------ ----------------- Net Cash Provided by Financing Activities - 2,239,654 ------------------ ----------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,126,876) 62,021 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,111,150 275,082 ------------------ ----------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $984,274 $337,103 ================== ================= SUPPLEMENTAL DISCLOSURES OF CASH: Interest paid $ - $ - Income taxes paid $ - $ - SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: Interest accrued on debentures, added to the principal of the debentures $ 95,524 $ -
F-19 WORLD WIDE WIRELESS COMMUNICATIONS, INC & SUBSIDIARIES NOTES TO THE INTERIM UNAUDITED FINANCIAL STATEMENTS NOTE 1 - NOTES TO THE INTERIM UNAUDITED FINANCIAL STATEMENTS. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements included in this Form 10-QSB. The results of operations for any interim period are not necessarily indicative of results for the full year. These statements should be read in conjunction with the audited financial statements and accompanying notes for the year ended September 30, 2000. The balance sheet at September 30, 2000 has been derived from audited financial statements, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Organization The consolidated financial statements presented are those of World Wide Wireless Communications, Inc., (the Company) and its subsidiaries, Infotel Argentina, S.A. and Digital Way, S.A.. The Company is engaged in activities related to advanced wireless communications, including the acquisition of radio-frequency spectrum both in the United States and internationally. The Company also plans to license its Distributed Wireless Call Processing System technology. On December 31, 1999, The Company acquired a 51% interest in Infotel Argentina S.A., a Buenos Aires based company which owns Multi-channel Multipoint Distribution Service (MMDS) licenses in eight of the largest Argentine cities including Buenos Aires. Infotel also engages in telephone system integration and engineering projects. Recently, the Argentine goverment revoked all MMDS licenses including those issued to Infotel Argentina. All proscribed steps have been taken to secure the reissuance of the licenses and talks are ongoing with the appropriate Argentine govermental agencies. On February 29, 2000, the Company purchased 100% of Digital Way S.A. a Peruvian telecommunications company. Digital Way holds MMDS licenses in the Lima-Callao area. It holds local and international long distance telephone licenses. Consolidated Financial Statements The accounts of the Company and its consolidated subsidiaries are included in the consolidated financial statements after elimination of significant intercompany accounts and transactions. The consolidated subsidiaries are Infotel Argentina of Argentina and Digital Way S.A. of Peru. NOTE 2 COMPREHENSIVE INCOME AND FOREIGN CURRENCY TRANSACTIONS Total comprehensive loss was $2,888 for the three months ended December 31, 2000. There was no comprehensive income or loss for the three months ended December 31, 1999. NOTE 3 - BASIC AND DILUTED NET LOSS PER SHARE CALCULATION The calculation of basic and diluted net loss per share is in accordance with Statement of Financial Accounting Standard No. 128 "Earnings Per Share". F-20 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 24. INDEMNIFICATION OF OFFICERS AND DIRECTORS Our Bylaws provide that we may indemnify any director, officer, agent or employee against all expenses and liabilities, including counsel fees, reasonably incurred by or imposed upon them in connection with any proceeding to which they may become involved by reason of their being or having been a director, officer, employee or agent of our Company. Moreover, our Bylaws provide that we shall have the right to purchase and maintain insurance on behalf of any such persons whether or not we would have the power to indemnify such person against the liability insured against. Insofar as indemnification for liabilities arising under the Securities Act, we have been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. Item 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION Expenses of the Registrant in connection with the issuance and distribution of the securities being registered are estimated as follows: Securities and Exchange Commission filing fee $ 3,250 Accountant's fees and expenses $10,000 Legal fees and expenses $25,000 Postage $ 1,000 Miscellaneous $ 1,000 -------- Total $40,250 The Registrant will bear all expenses shown above. Item 26. Recent Sales of Unregistered Securities The following is a list of our sales of our common stock during the past three years which were not registered under the Securities Act. None of these sales involved the use of or payments to an underwriter. In all instances in which we issued shares under the exemption from the registration requirements of the Securities Act under Section 4(2) of the Securities Act, all purchasers had access to the type of information found in a registration statement and all purchasers were sophisticated investors. On July 21, 1998, as part of a corporate reorganization, we issued 1,724,138 shares of our common stock to TSI Technologies, Inc., 5,275,662 shares to Worldwide Wireless, Inc., 1,586,300 shares to Ken Olson and 1,413,900 to Douglas Haffer all in exchange for the assets of Worldwide Wireless Inc. and TSI Technologies. These shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. No underwriters were involved in the issuance and no commissions were paid. On October 15, 1998, under terms of a Settlement and General Release, we issued 50,000 shares of common stock to a former consultant in compensation for services rendered, -52- approximating $2,450, at a per share price of $0.050. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. Also on October 15, 1998, as part of a corporate reorganization, we issued 1,724,138 shares of our common stock to TSI Technologies, Inc., 5,275,662 shares to Worldwide Wireless, Inc., 1,586,300 shares to Ken Olson and 1,413,900 to Douglas Haffer all in exchange for the assets of Worldwide Wireless Inc. and TSI Technologies. These shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. On December 8, 1998, we completed a private placement of 16,285,000 shares of our common stock to a group of accredited investors. Our common stock was sold for between $0.0027 and $0.1394 per share. In addition, approximately 1,543,000 shares of the total number of shares issued were granted to one individual in consideration of consulting services. We raised approximately $736,380. No underwriters were used in completing these transactions. We believe that we have satisfied the exemption from the securities registration requirements provided by Section 3(b) of the Securities Act and Rule 504 of Regulation D promulgated thereunder in that offering. The aggregate offering price received in the offering did not exceed $1,000,000 within the twelve months before the start of and during the offering. The securities were sold in a private placement to only accredited investors, all of whom had a pre-existing personal or business relationship with us or our officers or directors and each of whom provided representations that they were accredited investors and were purchasing for investment and not with a view to resale in connection with a public offering. On April 2, 1999, under terms of a Settlement and General Release, we issued 800,000 shares of common stock to a former employee in compensation for services rendered, approximating $75,200, at a per share price of $0.095. This per share price is in line with the sale of common stock for cash at this period of time. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. On April 2, 1999, under terms of a Settlement and General Release, we issued 25,000 shares of common stock to another former employee in compensation for services rendered, approximating $2,350, at a per share price of $0.095. This per share price is in line with the sale of common stock for cash at this period of time. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. No underwriters were involved in the issuance and no commissions were paid. On April 12, 1999, under terms of a Settlement and General Release, we issued 825,000 shares of common stock to a former director and a former employee in compensation for services rendered, approximating $81,000, at a per share price of $0.098. This per share price is in line with the sale of common stock for cash at this period of time. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. No underwriters were involved in the issuance and no commissions were paid. On May 6, 1999, as part of a corporate reorganization, we issued 2,593,744 shares of our common stock to TSI Technologies, Inc., 8,969,355 shares to Worldwide Wireless, Inc., 3,033,660 shares to Ken Olson and 2,403,232 to Douglas Haffer all in exchange for the assets of Worldwide Wireless Inc. and TSI Technologies. These shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. No underwriters were involved in the issuance and no commissions were paid. -53- On May 14, 1999, under terms of a Compromise and Settlement Agreement, we issued 600,000 shares of common stock to cover approximately $56,400 of various outstanding obligations to Corporate Architects for consulting services rendered, at a per share price of $0.095. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. No underwriters were involved in the issuance and no commissions were paid. On May 25, 1999, under terms of a Compromise and Settlement Agreement, we issued 750,000 shares of common stock as settlement of obligations owing to Corporate Solutions, LLC for consulting services rendered. The amount of the outstanding claims was approximately $310,000, at a per share price of $0.40. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. On December 31, 1999, we completed a private placement of 19,164,452 shares of our common stock to a group of accredited purchasers as defined under Rule 502 of Regulation D. Our common stock was sold for between $0.05 and $0.435 per share. No underwriters were used in completing these transactions. We raised approximately $4,310,505. In addition, approximately 2,377,340 shares of the total number of shares issued were granted to one individual in consideration of consulting services. The shares were issued in reliance upon the exemption to registration provided by section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. On March 1, 2000, we issued 181,100 shares of common stock to four individuals in connection with the purchase of all outstanding shares of Digital Way, S.A., a Peruvian company. These shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. On March 17, 2000, we issued 1,763,372 shares of common stock to Douglas Haffer. Mr. Haffer was entitled to receive a similar number of shares for services rendered to Worldwide Wireless, Inc. in 1998. Mr. Haffer transferred his right to receive those shares from Worldwide Wireless, Inc. to us in exchange for the 1,763,372 shares of common stock we issued to him. We retain the right to receive shares from Worldwide Wireless, Inc. - Worldwide Wireless, Inc. has yet to satisfy this obligation. The shares we issued to Mr. Haffer were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. On March 21, 2000, we completed a private placement of 3,687,000 shares of our common stock to a group of accredited investors. Our common stock was sold for between $0.30 and $3.20 per share. We raised $3,861,280. We believe that we have satisfied the exemption from the securities registration requirements provided by section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder in this offering. The securities were sold in a private placement to only accredited investors. On April 14, 2000, we sold $1,312,000 of 4% convertible subordinated debentures and related warrants to seven investors pursuant to the exemption from the securities regulation requirement provided by section 4(2) of the Securities Act. The convertible debentures are convertible at the election of the holders into shares of common stock. In connection with this offering, the seven investors also received warrants to purchase a total of 3,600,000 shares of our common stock at an exercise price equal to 120% of the market price of our common stock as of the date the warrants were issued. The warrants are exercisable when issued and have a term of five years. The securities were sold in a private placement to only accredited investors pursuant to 4(2) of the Securities Act. -54- On August 10, 2000, we amended the Securities Purchase Agreement. We agreed to issue an additional 608,000 shares of common stock in exchange for $1,920,000 and the investors' forbearance of certain rights under the original agreement. These shares were never issued due to the Second Amendment on November 15, 2000. These shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. No underwriters were involved in the issuance and no commissions were paid. These shares were ultimately registered. On November 15, 2000, we agreed to amend the Securities Purchase Agreement to issue 3,996,113 restricted shares of common stock to the selling shareholders and to increase the principal amount of the debentures held by the selling shareholders in consideration for the selling shareholders' waiver of any of our defaults and breaches of the prior Securities Purchase Agreement. These shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. No underwriters were involved in the issuance and no commissions were paid. These shares were ultimately registered. On January 24, 2001, we agreed to issue warrants to Andrew Corporation in connection with the Loan Agreement signed with them. We agreed to issue warrants to purchase no more than 500,000 and no less than 200,000 shares of common stock in lieu of interest on the loan. The exercise price is $0.23 and the warrants are exercisable until January 24, 2005. These shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. No underwriters were involved in the issuance and no commissions were paid. These shares were ultimately registered. On January 26, 2001, we signed a common stock purchase agreement with Grenville Finance Ltd. for the future issuance and purchase of our common stock. The common stock purchase agreement establishes what is sometimes termed an equity line of credit or an equity draw down facility. Grenville Finance Ltd. committed up to $50 million to purchase our common stock over a twenty-four month period. The amount of securities issued will be based on various draw downs described in further detail in the prospectus under the section "Common Stock Purchase Agreement". We also granted Grenville Finance Ltd. a warrant to purchase 15 million shares of common stock. Grenville Finance Ltd. may exercise this warrant at any time prior to February 12, 2004 for $0.265 per share of common stock. These shares were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act. During the period from our incorporation through the present we have granted options to purchase common stock to our employees, officers and consultants pursuant to our 1998 stock option plan. These options were granted pursuant to the exemption from the registration requirements set forth in Section 3(b) of the Securities Act and Rule 701 promulgated thereunder. The option share exercise prices between $0.095 and $1.62 per share. No payment was received by the company in connection with the grant of the options. Item 6. Exhibits EXHIBITS EXHIBIT NO. DOCUMENT ------------ -------- * 3.1 Articles of Incorporation. -55- EXHIBIT NO. DOCUMENT ------------ -------- * 3.2 Amendment to Articles of Incorporation * 3.3 Amendment to Articles of Incorporation. * 3.4 By-laws. * 4.1 Form of Certificate Evidencing shares of Common Stock of World Wide Wireless Communications, Inc. * 4.2 Convertible Unsecured Debenture for $740,000 issued by World Wide Wireless Communications, Inc. to Credit Bancorp. 5.1 Opinion Letter of Foley & Lardner regarding the Legality of the Shares being Registered * 10.1 Lease Agreement Between World Wide Wireless Communications, Inc. and Shekinah Network. * 10.2 South Bend MMDS Lease Agreement. * 10.3 Lease Agreement Between World Wide Wireless Communications, Inc. and Shekinah Network Vail, Colorado. * 10.4 Lease Agreement Between World Wide Wireless Communications, Inc. and Shekinah Network Aspen, Colorado * 10.5 Lease Agreement Between World Wide Wireless Communications, Inc. and Shekinah Network Grand Rapids, Michigan. * 10.6 Lease Agreement Between World Wide Wireless Communications, Inc. and Shekinah Network La Grande, Oregon, * 10.7 Lease Agreement Between World Wide Wireless Communications, Inc. and Shekinah Network Pierre, South Dakota. * 10.8 Lease Agreement Between World Wide Wireless Communications, Inc. and Shekinah Network Ukiah, California. * 10.9 Lease Agreement Between World Wide Wireless Communications, Inc. and Shekinah Network Key West, Florida. *** 10.10 Lease Agreement Between World Wide Wireless Communications, Inc. and Shekinah Network Hilo, Hawaii. *** 10.11 Lease Agreement Between World Wide Wireless Communications, Inc. and Shekinah Network Hot Springs, Arkansas. *** 10.12 Supply Agreement between World Wide Wireless Communications, Inc. and Andrew Corporation dated March 13, 2000. * 10.13 Stock Purchase Agreement dated November 30, 1999 Between Infotel Argentina S.A. and World Wide Wireless Communications, Inc. * 10.14 Agreement for Purchase of All Outstanding Shares of Digital Way, S.A. by World Wide Wireless Communications, Inc., dated February 29, 2000. * 10.15 Letter of Intent dated March 22, 2000 Between SALTEL and World Wide Wireless Communications, Inc. * 10.16 Security Purchase Agreement Among World Wide Wireless Communications, Inc. and the Purchasers Named Therein. -56- EXHIBIT NO. DOCUMENT ------------ -------- * 10.17 Registration Rights Agreements Among World Wide Wireless Communications, Inc. and the Purchasers Named Therein. * 10.18 Escrow Agreement Among the Purchasers Named Therein, the Representative of the Purchasers and the Escrow Agent. * 10.19 Form of Debenture of World Wide Wireless Communications, Inc. with Respect to the 4% Convertible Debenture Due 2005. * 10.20 Form of Warrant to Purchase Shares of World Wide Communications, Inc. Issued in the Offering. **** 10.21 Amendment to the Securities Purchase Agreement dated August 10, 2000 entered into between World Wide Wireless Communications and the selling shareholders named therein. *** 10.22 Second Amendment dated November 15, 2000 to the Securities Purchase Agreement between World Wide Wireless Communications, Inc. and the Purchases Named Therein. **** 10.23 Agreement between World Wide Wireless Communications, Inc. and Mr. Neelam Kumar Oswal. **** 10.24 Joint Venture Agreement between World Wide Wireless Communications, Inc. and World Thai Star Co. Ltd. ** 10.26 Compromise and Settlement Agreement between World Wide Wireless Communications, Inc. and Corporate Solutions LLC, dated May 25, 1999. *** 10.27 Written Agreement between Jorge Emilio Zedan and Wide Wireless Communications, Inc. *** 10.28 Employment Agreement between Douglas Haffer and World Wide Wireless Communications, Inc. ***** 10.29 Non-statutory Stock Option Agreement between World Wide Wireless Communications, Inc. and Douglas Haffer dated October 22, 1998 ***** 10.30 Non-statutory Stock Option Agreement between World Wide Wireless Communications, Inc. and Douglas Haffer dated February 1, 2000. ***** 10.31 Non-statutory Stock Option Agreement between World Wide Wireless Communications, Inc. and Wayne Caldwell dated October 27, 1999. ***** 10.32 Non-statutory Stock Option Agreement between World Wide Wireless Communications, Inc. and Wayne Caldwell dated October 27, 2000. ***** 10.33 Non-statutory Stock Option Agreement between World Wide Wireless Communications, Inc. and Ramsey Sweis. ***** 10.34 Non-statutory Stock Option Agreement between World Wide Wireless Communications, Inc. and Robert Klein. ***** 10.35 Non-statutory Stock Option Agreement between World Wide Wireless Communications, Inc. and Mohammad Ali Guidfar. *** 10.36 World Wide Wireless Communications, Inc. Incentive Stock Option Plan -57- EXHIBIT NO. DOCUMENT ------------ -------- ****** 10.37 Common Stock Purchase Agreement between World Wide Wireless Communications, Inc. and Grenville Finance Ltd. dated January 26, 2001. ****** 10.38 Escrow Agreement between World Wide Wireless Communications, Inc., Grenville Finance Ltd. and Epstein, Becker & Green. ****** 10.39 Form of Warrant to Purchase Shares of World Wide Wireless Communications, Inc. Provided in the Offering. ****** 10.40 Registration Rights Agreement between World Wide Wireless and Grenville Finance. ****** 10.41 Draw Down Notice/ Compliance Certificate. ****** 10.42 Stock Purchase Agreement between World Wide Wireless Communications, Inc. and Andrew S. Reckles. ****** 10.43 Stock Purchase Agreement between World Wide Wireless Communications, Inc. and Paul Mannion. 10.44 Loan Agreement between Andrew Corporation and World Wide Wireless Communications, Inc. 10.45 Registration Rights Agreement between Andrew Corporation and World Wide Wireless Communications, Inc. 10.46 Form of Warrant to Purchase Shares of Common Stock of World Wide Wireless Communications, Inc. for Andrew Corporation. * 21.1 Subsidiaries 23.1 Please refer to Exhibit 5.1. 23.2 Consent of Reuben E. Price & Co. -58- * Filed with the registration statement on Form SB-2 filed with the Securities and Exchange Commission on May 31, 2000. ** Filed will the registration statement on Form SB-2 filed with the Securities and Exchange Commission on June 30, 2000. *** Filed with the registration statement on Form SB-2 filed with the Securities and Exchange Commission on December 15, 2000. **** Filed with the annual report on Form 10-KSB filed with the Securities and Exchange Act on December 28, 2000. ***** Filed with the Post Effective Amendment on Form SB-filed with the Securities and Exchange Commission on January 26, 2001. ****** Filed with the quarterly report filed on Form 10-QSB filed with the Securities and Exchange Commission on February 20, 2001. -59- UNDERTAKINGS a) The Registrant hereby undertakes that it will: 1) File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to: (i) Include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement; and (iii) Include any additional or changed material information on the plan of distribution. 2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the bona fide offering. 3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the Offering. b) Insofar as indemnification for liabilities arising under the Securities Act 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 Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer 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 small business issuer 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 Securities Act and will be governed by the final adjudication of such issue. c) The Registrant hereby undertakes that: 1) For the purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be a part of this registration statement as of the time it was declared effective. 2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. -60- SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe the registrant meets all of the requirements of filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned on March 14, 2001. World Wide Wireless Communications, Inc. By /s/ Douglas Haffer ----------------------------- Douglas P. Haffer President, Chief Executive Officer and Chief Financial Officer In accordance with the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ Douglas Haffer President & CEO, CFO and Chairman March 14, 2001 - -------------------------- (Principal Accounting Officer) Douglas P. Haffer /s/ Ramsey Sweis Director March 14, 2001 - -------------------------- Ramsey Sweis /s/ Robert Klein Director March 14, 2001 - -------------------------- Robert Klein Director March ___,2001 - -------------------------- Jack Cutter Director March __, 2001 - -------------------------- Sonny Rath -61- EX-5.1 2 0002.txt OPINION FOLEY & LARDNER ATTORNEYS AT LAW BRUSSELS ONE MARITIME PLAZA, SIXTH FLOOR ORLANDO CHICAGO SAN FRANCISCO, CALIFORNIA 94111-3404 SACRAMENTO DENVER TELEPHONE: (415) 434-4484 SAN DIEGO DETROIT FACSIMILE: (415) 434-4507 SAN FRANCISCO JACKSONVILLE TALLAHASSEE LOS ANGELES TAMPA MADISON WASHINGTON, D.C. MILWAUKEE WEST PALM BEACH WRITER'S DIRECT LINE 415-438-6436 CLIENT/MATTER NUMBER 069053-0100 March 14, 2001 World Wide Wireless Communications, Inc. 520 Third Street, Suite 101 Oakland, California 94607 Re: World Wide Wireless Communications, Inc. Legality of Shares Gentlemen: We have acted as counsel to World Wide Wireless Communications, Inc. (the "Company"), in connection with the registration for resale of 65,200,000 Shares of Common Stock (the "Shares") issuable to Grenville Finance Ltd. and Andrew Corporation under the certain Common Stock Purchase Warrants ("the Warrants") and issuable to Grenville Finance Ltd. under the Equity Line of Credit, as described in the Company's Registration Statement on Form SB-2 filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended. We have reviewed such documents and have made such inquiries as we have deemed necessary and appropriate to render the opinion set forth herein. We have assumed that all documents that have been submitted to us as originals are true and correct and those documents submitted to us, as copies conform to the originals of those documents. Assuming that the shares are issued in accordance with the terms of the Warrants, and the terms of the Equity Line of Credit as described in the Common Stock Purchase Agreement the shares will be, when issued, duly authorized, validly issued, fully paid and non-assessable. We are not providing an opinion as to any other statements contained in the Form SB-2 registration statement, nor as to matters that occur after the date thereof. Foley & Lardner March 14, 2001 Page 2 We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the heading "Legal Matters." Sincerely, /s/ Foley & Lardner FOLEY & LARDNER EX-10.44 3 0003.txt LOAN AGREEMENT LOAN AGREEMENT This Loan Agreement dated as of January 24, 2001 ("Agreement") is made by and between World Wide Wireless Communications, Inc., a Nevada corporation (the "Company"), and Andrew Corporation, a Delaware corporation ("Andrew"). RECITALS WHEREAS, the Company is indebted to Andrew for $1,800,458.36 incurred in connection with the purchase of certain products and services from Andrew (the "Obligations"), the payment of which is past due. WHEREAS, this Agreement is intended to document the Obligations (which will be evidenced by a note), and Andrew is willing to accept payment of the Obligations as provided, and under the terms and conditions set forth, herein. AGREEMENT NOW, THEREFORE, in order to induce Andrew to accept payment of the Obligations as provided herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Company hereby represents, warrants, covenants and agrees as follows: 1. REPAYMENT OF OBLIGATIONS. 1.1. On the date of this Agreement, the Company shall pay to Andrew $100,000 (the "Initial Payment"). 1.2. Beginning on February 15, 2001, the Company shall pay to Andrew $100,000 on the 15th day of each month on the terms specified in the Note; provided, however, that: (a) after such time as the Company's Registration Statement on Form SB-2 (Reg. No. 333-38158) has been declared effective by the Securities and Exchange Commission, the Company shall pay to Andrew an additional $150,000 on the 15th day of each month, commencing with the next monthly payment due, on the terms specified in the Note; and (b) in the event that investors introduced by Union Atlantic L.C. or any affiliate thereof ("Investors") acquire equity in the Company with an aggregate value greater than the total of both operating and non-operating expenses ("Total Expenses") as set forth in the attached Exhibit 1 during the one-month period beginning on the 16th day of a month and ending on the 15th day of the following month (such aggregate value for such period being the "Monthly Purchased Equity Value"), then the Company shall pay to Andrew on such 15th day an additional amount equal to 50% of the Monthly Purchased Equity Value in excess of Total Expenses on the terms specified in the Note. 2. CONDITIONS TO EFFECTIVENESS; COVENANT. 2.1. The Company shall have executed and delivered a Promissory Note evidencing the Obligations substantially in the form of the attached Exhibit 2 (the "Note"). 2.2. Andrew shall have received the Initial Payment. 2.3. The Company shall have issued to Andrew a warrant to purchase not less than 200,000 shares of common stock of the Company ("Common Stock") at an exercise price equal to the closing sale price per share of the Common Stock on the date of this Agreement on the Nasdaq National Market (or if no such sale price is reported, the average of the high and low bid prices so reported), in form and substance satisfactory to Andrew. The Company shall issue to Andrew another warrant to purchase up to an additional 300,000 shares of Common Stock, on a pari passu basis with those Investors that participate in the bridge loan, to the extent those investors receive warrant coverage (relative to the amount loaned by them) greater than Andrew. In no event shall Andrew be issued warrants to initially purchase more than 500,000 share of Common Stock (the warrants actually issued to Andrew being hereinafter referred to as the "Warrants"). 2.4. The Company shall have entered into with Andrew a Registration Rights Agreement relating to the shares of common stock issuable pursuant to the Warrant, in form and substance satisfactory to Andrew (the "Registration Rights Agreement"). 2.5. The Company shall have delivered to Andrew (i) an opinion of counsel for the Company covering the execution and enforceability of this Agreement, the Note, the Warrant and the Registration Rights Agreement and (ii) a certified copy of the resolutions of its Board of Directors authorizing the transactions contemplated hereby. 3. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to Andrew that: 3.1. The Company is existing and in good standing under the laws of the State of Nevada, is duly qualified, in good standing and authorized to do business in each jurisdiction where failure to do so might have a material adverse impact on the consolidated assets, condition or prospects of the Company; the execution, delivery and performance of this Agreement, the Note, the Warrant and all related documents and instruments are within the Company's powers and have been authorized by all necessary corporate action. 3.2. The execution, delivery and performance of this Agreement, the Note, the Warrant, the Registration Rights Agreement and all related documents and instruments have received any and all necessary governmental approval, and do not and will not contravene or conflict with any provision of law or of the charter or bylaws of the Company or any agreement affecting the Company or its property. 2 4. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute and "Event of Default" under this Agreement: (a) failure to pay, when and as due, any principal or other amounts payable under this Agreement or the Note, or failure to comply with or perform any agreement or covenant of the Company contained herein; or (b) any representation, warranty, schedule, certificate, financial statement, report, notice, or other writing furnished by or on behalf of the Company to Andrew is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified; or (c) this Agreement shall be repudiated or become unenforceable incapable of performance by the Company or the Company shall fail to perform any agreement or covenant contained herein; or (d) any bankruptcy, insolvency, reorganization, arrangement, readjustment, liquidation, dissolution, or similar proceeding, domestic or foreign, is instituted by or against the Company, or the Company shall take any steps toward, or to authorize, such a proceeding; or (e) the Company shall make a general assignment for the benefit of its creditors, shall enter into any composition or similar agreement, or shall suspend the transaction of all or a substantial portion of its usual business. 5. RIGHTS AND REMEDIES UPON DEFAULT. 5.1. Upon the occurrence and during the continuance of any Event of Default specified in Sections 6(a)-(c), Andrew at its option may declare the Note immediately due and payable without notice or demand of any kind. Upon the occurrence of any Event of Default specified in Sections 6(d)-(e), the Note shall be immediately and automatically due and payable without action of any kind on the part of Andrew. Upon the occurrence and during the continuance of any Event of Default, Andrew may exercise any rights and remedies under the Note and any related document or instrument at law or in equity. 5.2. Andrew may, by written notice to the Company, at any time and from time to time, waive any Event of Default, which shall be for such period and subject to such conditions as shall be specified in any such notice. In the case of any such waiver, Andrew and the Company shall be restored to their former position and rights hereunder, and any Event of Default so waived shall be deemed to be cured and not continuing; but no such waiver shall extend to or impair any subsequent or other Event of Default. No failure to exercise, and no delay in exercising, on the part of Andrew of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 3 5.3. The Company also agrees to pay all fees, costs and expenses of Andrew, including reasonable attorneys' fees, incurred in connection with the enforcement or protection of any of its rights and remedies hereunder. 6. MISCELLANEOUS. 6.1. Amendments, Waivers, etc. None of the terms or provisions of this Agreement may be amended, waived, altered or modified except by an instrument in writing duly executed by the Company and Andrew. 6.2. Termination of this Agreement. This Agreement shall terminate upon indefeasible payment in full of the Obligations. 6.3. Home Office Payment. All payments made by the Company to Andrew in connection with this Agreement or the Notes shall be made by electronic transfer of immediately available funds to the account of Andrew Corporation, Bank of America NT & SA, 231 South LaSalle Street, Chicago, Illinois 60697, Account No. 86663-00194, ABA #071000039, or to such other account(s) as Andrew may specify from time to time in writing to the Company. 6.4. Notices. All notices, requests and other required communications hereunder shall be in writing and shall be deemed to have been given or made (i) if delivered personally, when so delivered, (ii) if sent by facsimile, on the date sent (provided that there is written confirmation of receipt and a conforming notice or communication is delivered as set forth herein), (iii) if mailed by registered or certified mail (postage paid, return receipt requested), on the date five days after deposit in the mail, or (iv) if by Federal Express or another nationally recognized overnight courier service, on the next business day; in each case addressed as set forth on the signature page hereto, or to such other address as may be hereafter designated in writing by the respective parties hereto. 6.5. Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of either party hereto shall bind and inure to the benefit of its successors and assigns whether so expressed or not, except that the Company may not transfer or assign any of its rights or interest hereunder without the prior written consent of Andrew. 6.6. Governing Law. In all respects, including all matters of construction, validity and performance, this Agreement, the Note and the obligations arising hereunder or thereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Illinois applicable to contracts made and performed in such state, without regard to the principles thereof regarding conflict of laws. 6.7. Attorneys Fees. The prevailing party in any legal dispute between the parties shall be entitled to reimbursement in full for all legal fees and costs incurred by it. 4 6.8. Counterparts. This Agreement may be signed in any number of counterparts with the same effect as if the signature(s) on each counterpart were upon the same instrument. 6.9. Entire Agreement. This Agreement contains the entire understanding of the pates and supersedes all previous oral and written communications, agreements and understandings between the parties with respect to the subject matter herein. IN WITNESS WHEREOF, each of the parties hereto has caused this Loan Agreement to be executed and delivered by its duly authorized officer on the date first set forth above. WORLD WIDE WIRELESS COMMUNICATIONS, INC. By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- Address for Notices: 520 Third Street, Suite 101 Oakland, CA 94607 Attention: _____________ Telephone: (510) 839-6100 Facsimile: (510) 839-7088 ANDREW CORPORATION By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- Address for Notices: 10500 W. 153rd Street Orland Park, IL 60462 Attention: Treasurer Telephone: (708) 873-2551 Facsimile: (708) 349-5287 5 EX-10.45 4 0004.txt REGISTRATION RIGHTS AGREEMENT [GCD Revisions - 1/24/2001] REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of January __, 2001, by and among World Wide Wireless Communications, Inc., a Nevada corporation (the "Company"), and Andrew Corporation ("Andrew") referred to herein as "Andrew" or, where the context requires, as a Holder. This Agreement is being entered into pursuant to the Loan Agreement, dated as of the date hereof between the Company and Andrew (the "Loan Agreement"). The Company and Andrew agree as follows: 1. Definitions. ----------- Capitalized terms used and not otherwise defined herein have the meanings given such terms in the Loan Agreement. As used in this Agreement, the following terms have the following meanings: "Advice" has the meaning set forth in Section 3(m). "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person. For the purposes of this definition, "control," when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms of "affiliated," "controlling" and "controlled" have meanings correlative to the foregoing. "Board" has the meaning set forth in Section 3(n). "Business Day" means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the state of Illinois generally are authorized or required by law or other government actions to close. "Commission" means the Securities and Exchange Commission. "Common Stock" means the Company's Common Stock, par value $.001 per share. "Effectiveness Period" has the meaning set forth in Section 2. "Event" has the meaning set forth in Section 7(e)(i). "Event Date" has the meaning set forth in Section 7(e)(i). "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Holder" or "Holders" means the holder or holders, as the case may be, from time to time of the Warrants or Registrable Securities. "Indemnified Party" has the meaning set forth in Section 5(c). "Indemnifying Party" has the meaning set forth in Section 5(c). "Losses" has the meaning set forth in Section 5(a). "Person" means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind. "Proceeding" means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. "Prospectus" means the prospectus included in the Registration Statement (including a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus. "Registrable Securities" means the shares of Common Stock issuable upon exercise of the Warrants. "Registration Statement" means the registration statements and any additional registration statements contemplated by Section 2, including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference in such registration statement. "Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. -2- "Rule 158" means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Securities Act" means the Securities Act of 1933, as amended. "Special Counsel" means any special counsel to the Holders, for which the Holders will be reimbursed by the Company pursuant to Section 4. "Warrant" or "Warrants" means the stock purchase warrant for the initial purchase of up to 200,000 shares of Common Stock, subject to adjustment, and the subsequent stock purchase warrant for issued initially to Andrew on this date, any warrant or warrants issued to Andrew thereafter for the purchase of additional shares of Common Stock, and any warrants issued in exchange therefor. "Warrant Shares" means shares of Common Stock issued upon exercise of the Warrants. 2. Piggy-Back Registration; Demand Registration. -------------------------------------------- (a) If at any time when there is not an effective Registration Statement covering Warrant Shares, the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, the Company shall send to each Holder of Registrable Securities written notice of such determination and, if within 30 days after receipt of such notice, any such holder shall so request in writing, (which request shall specify the Registrable Securities intended to be disposed of by the Purchasers), the Company will cause the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by the Holder, to the extent requisite to permit the disposition of the Registrable Securities so to be registered, provided that if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to such Holder and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay expenses in accordance with Section 4 hereof), and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities being registered pursuant to this -3- Section 7(d) for the same period as the delay in registering such other securities. The Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 7(d) that are eligible for sale pursuant to Rule 144(k) of the Securities Act. In the case of an underwritten public offering, if the managing underwriter(s) or underwriter(s) should reasonably object to the inclusion of the Registrable Securities in such registration statement, then if the Company after consultation with the managing underwriter(s) should reasonably determine that the inclusion of such Registrable Securities, would materially adversely affect the offering contemplated in such registration statement, and based on such determination recommends inclusion in such registration statement of fewer or none of the Registrable Securities of the Holders, then (x) the number of Registrable Securities of the Holders included in such registration statement shall be reduced pro-rata among such Holders (based upon the number of Registrable Securities requested to be included in the registration), if the Company after consultation with the underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y) none of the Registrable Securities of the Holders shall be included in such registration statement, if the Company after consultation with the underwriter(s) recommends the inclusion of none of such Registrable Securities; provided, however, that if Securities are being offered for the account of other persons or entities as well as the Company, such reduction shall not represent a greater fraction of the number of Registrable Securities intended to be offered by the Holders than the fraction of similar reductions imposed on such other persons or entities (other than the Company). (b) If, on the six month anniversary of the Initial Issue Date, the Company shall not have included (or offered Holders the opportunity to include Registrable Shares therein) Registrable Shares in a registration statement as contemplated in Section 2(a), upon request of any Holder the Company shall prepare and file with the Commission a "shelf" Registration Statement covering all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form SB-2 (and converted to Form S-3 as soon as the Company becomes eligible to register for resale the Registrable Securities on Form S-3). The Company shall (i) not permit any securities other than the Registrable Securities to be included in the Registration Statement and (ii) use its best efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the Effectiveness Date, and to keep such Registration Statement continuously effective under the Securities Act until such date as is the earlier of (x) the date when all Registrable Securities covered by such Registration Statement have been sold or (y) the date on which the Registrable Securities may be sold without any restriction pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion letter, addressed to the Company's transfer agent to such effect (the "Effectiveness Period"). 3. Registration Procedures. ----------------------- In connection with the Company's registration obligations hereunder, the Company shall: -4- (a) Not less than ten Business Days prior to the filing of the Registration Statement or any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated therein by reference), the Company shall (i) furnish to the Holder and any Special Counsel, copies of all such documents proposed to be filed, which documents (other than those incorporated by reference) will be subject to the review of such Holders and such Special Counsel, and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of counsel to such Holders, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities or any Special Counsel, shall reasonably object in writing within three Business Days of their receipt thereof. (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to the Registration Statement as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) respond as promptly as possible to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and as promptly as possible provide the Holders true and complete copies of all correspondence from and to the Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented. (c) Notify the Holders of Registrable Securities to be sold and any Special Counsel as promptly as possible (and, in the case of (i)(A) below, not less than five days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one Business Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) if at any time any of the representations and warranties of the Company contained in any agreement contemplated hereby ceases to be true and correct in all material respects; (v) of the receipt by the Company of -5- any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (vi) of the occurrence of any event that makes any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or - -6- that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of, (i) any order suspending the effectiveness of the Registration Statement or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. (e) If requested by the Holders of a majority in interest of the Registrable Securities, (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees should be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment. (f) Furnish to each Holder and any Special Counsel, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference, to the extent requested by such Person and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. (g) Promptly deliver to each Holder and any Special Counsel, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request; and the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. (h) Prior to any public offering of Registrable Securities, use its best efforts to register or qualify or cooperate with the selling Holders, and any Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement; provided, -6- however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or subject the Company to any material tax in any such jurisdiction where it is not then so subject. (i) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to a Registration Statement, which certificates shall be free of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any Holders may request at least two Business Days prior to any sale of Registrable Securities. (j) Upon the occurrence of any event contemplated by Section 3(c)(vi), as promptly as possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (k) Use its best efforts to cause all Registrable Securities relating to such Registration Statement to be eligible for quotation on the National Association of Securities Dealers, Inc.'s OTC Bulletin Board (the "OTC Bulletin Board") and any other securities exchange, quotation system, market or over-the-counter bulletin board, if any, on which similar securities issued by the Company are then listed as and when required pursuant to the Purchase Agreement. (l) Comply in all material respects with all applicable rules and regulations of the Commission and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 not later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company after the effective date of the Registration Statement, which statement shall conform to the requirements of Rule 158. (m) The Company may require each selling Holder to furnish to the Company information regarding such Holder and the distribution of such Registrable Securities as is required by law to be disclosed in the Registration Statement, and the Company may exclude from such registration the Registrable Securities of any such Holder who unreasonably fails to furnish such information within 15 Business Days after receiving such request. If the Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Company, then such Holder has the right to require (if such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force) the deletion of the reference to such Holder in any -7- amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be required. The Holder covenants and agrees that (i) it will not sell any Registrable Securities under the Registration Statement until it has received copies of the Prospectus as then amended or supplemented as contemplated in Section 3(g) and notice from the Company that such Registration Statement and any post-effective amendments thereto have become effective as contemplated by Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will comply with the prospectus delivery requirements of the Securities Act as applicable to them in connection with sales of Registrable Securities pursuant to the Registration Statement. (n) If (i) there is material non-public information regarding the Company which the Company's Board of Directors (the "Board") reasonably determines not to be in the Company's best interest to disclose and which the Company is not otherwise required to disclose, or (ii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board reasonably determines not to be in the Company's best interest to disclose, then the Company may postpone or suspend filing or effectiveness of a registration statement for a period not to exceed 15 consecutive days, provided that the Company may not postpone or suspend its obligation under this Section 3(n) for more than 30 days in the aggregate during any 365-day period; provided, however, that no such postponement or suspension shall be permitted for consecutive 15 day periods, arising out of the same set of facts, circumstances or transactions. (o) At its sole discretion, add the Registrable Shares to any currently filed registration statement as an amendment to said registration statement in order to save filing and legal costs in connection with the procurement of the Registration Statement, provided that the Company has a reasonable belief that the registration statement will be deemed effective in the appropriate time period, and further that it is not in any way violating any covenants with other investors in connection with such registration statement by adding the Registrable Shares to said registration statement. 4. Registration Expenses. --------------------- All fees and expenses incident to the performance of or compliance with this Agreement by the Company, and all fees and expenses (other than underwriting discounts or commissions) of the Holders (including the reasonable fees and expenses of Special Counsel for the Holders), shall be borne by the Company whether or not the Registration Statement is filed or becomes effective and whether or not any Registrable Securities are sold pursuant to the Registration Statement. 5. Indemnification. --------------- (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, -8- directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, or arising out of or relating to any violation by the Company or its agents of the Securities Act or any rule or regulation promulgated under the Securities Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection with a registration of Registrable Securities pursuant to this Agreement, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, which information was reasonably relied on by the Company for use therein or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, the directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon any untrue statement of a material fact contained in the Registration Statement, any Prospectus, or any form of prospectus, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in the Registration Statement or such Prospectus and that such information was reasonably relied upon by the Company for use in the Registration Statement, such Prospectus or such form of prospectus or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus. -9- (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the "Indemnifying Party) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party. An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in -10- such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the -12- immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. -11- 6. Rule 144. -------- As long as any Holder owns Warrants or Warrant Shares, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. As long as any Holder owns Warrants or Warrant Shares, if the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders and make publicly available in accordance with Rule 144(c) promulgated under the Securities Act annual and quarterly financial statements, together with a discussion and analysis of such financial statements in form and substance substantially similar to those that would otherwise be required to be included in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as any other information required thereby, in the time period that such filings would have been required to have been made under the Exchange Act. The Company further covenants that it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Person to sell Underlying Shares and Warrant Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act, including providing any legal opinions referred to in the Loan Agreement. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements. 7. Miscellaneous. ------------- (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has, as of the date hereof entered into any agreement currently in effect, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as disclosed in the Company's filings with the Commission, neither the Company nor any of its subsidiaries has previously entered into any agreement currently in effect granting any registration rights with respect to any of its securities to any Person. (c) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or -12- consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and each of the Holders. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. (d) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., Chicago time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m., Chicago time, on any date and earlier than 11:59 p.m., Chicago time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be addressed to: If to the Company: World Wide Wireless Communications Inc. 520 Third Street Suite 101 Oakland, California 94607 Attention: Mr. Douglas Haffer Telephone No.: (510) 839-6100 Facsimile No.: (510) 839-7088 If to the Holder: Andrew Corporation 10500 W 153rd Street Orland Park, Illinois 60642-3099 Attention: Jeffrey Gittelman Telephone No.: (708) 873-2551 Facsimile No.: (708) 349-5287 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. (e) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns and shall inure to the benefit of each Holder and its successors and assigns. The Company may not assign this -13- Agreement or any of its rights or obligations hereunder without the prior written consent of each Holder. (f) Assignment of Registration Rights. The rights of each Holder hereunder, including the right to have the Company register for resale Registrable Securities in accordance with the terms of this Agreement, shall be automatically assignable by each Holder to any Affiliate of such Holder, any other Holder or Affiliate of any other Holder of all or a portion of the Securities or the Registrable Securities if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this Section, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions of this Agreement, and (v) such transfer has been made in accordance with the applicable requirements of the Loan Agreement. In addition, each Holder has the right to assign its rights hereunder to any other Person with the prior written consent of the Company, which consent shall not be unreasonably withheld. The rights to assignment shall apply to the Holders (and to subsequent) successors and assigns. (g) Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. (h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to principles of conflicts of law thereof. (i) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. (j) Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable in any respect, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. -14- (k) Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -15- IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed by their respective authorized persons as of the date first indicated above. WORLD WIDE WIRELESS COMMUNICATIONS, INC. By:_______________________________ Name: Title: ANDREW CORPORATION By:________________________________ Name: Title: -16- EX-10.46 5 0005.txt FORM OF WARRANT [ THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF WORLD WIDE WIRELESS COMMUNICATIONS, INC. Expires February15, 2006 No. W-__ Chicago, Illinois January __, 2001 FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, WORLD WIDE WIRELESS COMMUNICATIONS, INC., a Nevada corporation (together with its successors and assigns, the "Issuer"), hereby certifies that ANDREW CORPORATION or its registered assigns is entitled to subscribe for and purchase, during the period specified in this Warrant, up to 200,000 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non-assessable common stock, par value $0.001 per share, of the Issuer (the "Common Stock"), at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 7 hereof. 1. Term. The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on the date of issuance of this Warrant and shall expire at 5:00 p.m., Chicago time, on February15, 2006 (such period being the "Term"). Prior to the end of the Term, the Issuer will not take any action that would terminate this Warrant. 2. Method of Exercise Payment; Issuance of New Warrant; Registration, Transfer and Exchange. (a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time during the Term. (b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such Holder's election (i) by certified or official bank check, (ii) if the Per Share Market Value is greater than the Warrant Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, by receiving shares equal to the value (as determined below) of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Issuer together with the properly endorsed Subscription Form annexed hereto and notice of such election in which event the Issuer shall issue to the Warrantholder a number of shares of Common Stock computed using the following formula: X= Y(A-B) ----- A Where X= number of shares of Common Stock to be issued to the Holder Y= number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A= the Per Share Market Value of one share of the Common Stock (at the date of such calculation) B= Warrant Price (as adjusted to the date of such calculation), or (iii) by a combination of the foregoing methods of payment selected by the Holder of this Warrant. In any case where the consideration payable upon such exercise is being paid in whole or in part pursuant to the provisions of clause (ii) of this subsection (b), such exercise shall be accompanied by written notice from the Holder specifying the manner of payment thereof and containing a calculation showing the number of shares of Warrant Stock with respect to which rights are being surrendered thereunder and the net number of shares to be issued after giving effect to such surrender. (c) Issuance of Stock Certificates. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, -2- (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the shares of Warrant Stock so purchased as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been cancelled in payment or partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder hereof at the Issuer's expense within such time. (d) Registration. This Warrant shall be numbered and shall be registered in a Warrant register (the "Warrant Register"). The Issuer shall be entitled to treat the registered holder of this Warrant on the Warrant Register (the "Holder") as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such Warrant on the part of any other person, and shall not be liable for any registration of transfer of Warrants that are registered or are to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with the actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration of transfer, or with such knowledge of such facts that its participation therein amounts to bad faith. This Warrant shall be registered initially in the name of the Holder as set forth in the first sentence of this Warrant. (e) Transfer of Warrant. This Warrant will not be sold, transferred, assigned or hypothecated, in part or in whole (other than by will or pursuant to the laws of descent and distribution), except to registered assigns of the Holder and thereafter only upon delivery thereof duly endorsed by the Holder or by its duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment or authority to transfer. In all cases of transfer by an attorney, the original power of attorney, duly approved, or an official copy thereof, duly certified, shall be deposited with the Issuer. Upon any registration of transfer, the Issuer shall deliver a new Warrant or Warrants to the persons entitled thereto. This Warrant may be exchanged at the option of the Holder hereof for another Warrant, or other Warrants, of different denominations, of like tenor and representing in the aggregate the right to purchase a like number of shares of Common Stock upon surrender to the Issuer or its duly authorized agent. Notwithstanding the foregoing, the Issuer shall have no obligation to cause Warrants to be transferred on its books to any person if such transfer would violate the Securities Act. (f) Compliance with Securities Laws. (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. -3- (ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing shares of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. (iii) The restrictions imposed by this subsection (f) upon the transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise hereof shall terminate (A) when such securities shall have been effectively registered under the Securities Act, (B) upon the Issuer's receipt of an opinion of counsel, in form and substance reasonably satisfactory to the Issuer, addressed to the Issuer to the effect that such restrictions are no longer required to ensure compliance with the Securities Act or (C) upon the Issuer's receipt of other evidence reasonably satisfactory to the Issuer that such registration is not required. Whenever such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the Issuer (or its transfer agent and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock, new stock certificates) of like tenor not bearing the applicable legends required by paragraph (ii) above relating to the Securities Act and state securities laws. (g) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof or of any shares of Warrant Stock issued upon such exercise, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such Holder shall fail to make any such request, the failure shall not affect the continuing obligation of the Issuer to afford such rights to such Holder. 3. Stock Fully Paid; Reservation and Listing of Shares; Covenants. -------------------------------------------------------------- (a) Stock Fully Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock that may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issue upon exercise of -4- this Warrant a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. (b) Payment of Taxes. The Issuer will pay all documentary stamp taxes, if any, attributable to the issuance of Warrant Stock; provided, however, that the Issuer shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issue or delivery of any certificates for Warrant Stock in a name other than that of the Holder of Warrants in respect of which such Warrant Stock is issued. (c) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. The transfer agent for the Common Stock (the "Transfer Agent"), and every subsequent transfer agent, if any, for the Warrant Stock will be irrevocably authorized and directed at all times until the end of the Term to reserve such number of authorized and unissued shares of Common Stock as shall be required for such purpose. The Issuer will keep a copy of this Agreement on file with the Transfer Agent and with every subsequent transfer agent for of the Issuer's securities issuable upon the exercise of the Warrants. The Issuer will supply the Transfer Agent or any subsequent transfer agent with duly executed certificates for such purpose and will itself provide or otherwise make available any cash which may be distributable as provided in Section 6 of this Agreement. All Warrants surrendered in the exercise of the rights thereby evidenced shall be canceled, and such canceled Warrants shall constitute sufficient evidence of the number of Shares that have been issued upon the exercise of such Warrants. No shares of Common Stock shall be subject to reservation in respect of unexercised Warrants subsequent to the end of the Term. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer. (d) Covenants. The Issuer shall not by any action, including amending the certificate of incorporation or the by-laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) not amend or modify any provision of the certificate of -5- incorporation or by-laws of the Issuer in any manner that would adversely affect in any way the powers, preferences or relative participating, optional or other special rights of the Common Stock or which would adversely affect the rights of the Holder of this Warrant, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant. (e) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock. (f) Rights and Obligations under the Registration Rights Agreement. This Warrant and the Warrant Stock are entitled to the benefits and subject to the terms of the Registration Rights Agreement dated as of even date herewith between the Issuer and the Holder (as amended from time to time, the "Registration Rights Agreement"). The Issuer shall keep or cause to be kept a copy of the Registration Rights Agreement, and any amendments thereto, at its chief executive office and shall furnish, without charge, copies thereof to the Holder upon request. 4. Adjustment of Warrant Price and Warrant Share Number. The number and kind of Securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events as follows: -6- (a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale. In case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"): (a) consolidate with or merge into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or (d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Warrant is not exercised prior to such Triggering Event, or is redeemed in connection with such Triggering Event, to receive at the Warrant Price in effect at the time immediately prior to the consummation of such Triggering Event in lieu of the Common Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such Holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments and increases (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for in Section 4 hereof. (b) Subdivision or Combination of Shares. If the Issuer, at any time while this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be proportionately reduced (as at the effective date of such subdivision or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so subdividing, as at the applicable record date, whichever is earlier) to reflect the increase in the total number of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the case of a combination of shares, the Warrant Price shall be proportionately increased (as at the effective date of such combination or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so combining, as at the applicable record date, whichever is earlier) to reflect the reduction in the total number of shares of Common Stock outstanding as a result of such combination. (c) Certain Dividends and Distributions. If the Issuer, at any time while this Warrant is outstanding, shall: (i) Stock Dividends. Pay a dividend in, or make any other distribution to its stockholders (without consideration therefor) of, shares of Common Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall take a record of the Holders of the Issuer's Capital Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the date of such payment or other distribution), to that price determined by multiplying the Warrant Price in effect immediately prior to such record date (or if no such record is taken, then immediately prior to such payment or other distribution), by a fraction (1) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, -7- and (2) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution (plus in the event that the Issuer paid cash for fractional shares, the number of additional shares which would have been outstanding had the Issuer issued fractional shares in connection with said dividends); or (ii) Other Dividends. Pay a dividend on, or make any distribution of its assets upon or with respect to (including, but not limited to, a distribution of its property as a dividend in liquidation or partial liquidation or by way of return of capital), the Common Stock (other than as described in clause (i) of this subsection (c)), or in the event that the Issuer shall offer options or rights to subscribe for shares of Common Stock, or issue any Common Stock Equivalents, to all of its holders of Common Stock, then on the record date for such payment, distribution or offer or, in the absence of a record date, on the date of such payment, distribution or offer, the Holder shall receive what the Holder would have received had it exercised this Warrant in full immediately prior to the record date of such payment, distribution or offer or, in the absence of a record date, immediately prior to the date of such payment, distribution or offer. (d) Most Favored Nation. If, during the 12 months following the Original Issue Date, the Issuer issues stock purchase warrants to any person containing antidilution provisions more favorable to the holders of such warrants than those contained in this Section 4, such more favorable provisions shall be deemed to be incorporated herein without further action of the parties and shall thereafter apply to this Warrant as if stated herein. (e) Other Action Affecting Common Stock. In case after the Original Issue Date the Issuer shall take any action affecting its Common Stock, other than an action described in any of the foregoing subsections (a) through (g) of this Section 4, inclusive, and the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principle of this Section 4, then the Warrant Price shall be adjusted in such manner and at such time as the Board may in good faith determine to be equitable in the circumstances. (f) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant Price pursuant to any of the foregoing provisions of this Section 4, the Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole share, to the product obtained by multiplying the Warrant Share Number immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately before giving effect to such adjustment and the denominator of which shall be the Warrant Price immediately after giving effect to such adjustment. If the Issuer shall be in default under any provision contained in Section 3 of this Warrant so that shares issued at the Warrant Price adjusted in accordance with this Section 4 would not be validly issued, the adjustment of the Warrant Share Number provided for in the foregoing sentence shall nonetheless be made and the Holder of this Warrant shall be entitled to purchase such greater number of shares at the lowest price at which such shares may then be validly issued under applicable law. Such exercise shall not constitute a -8- waiver of any claim arising against the Issuer by reason of its default under Section 3 of this Warrant. (g) Form of Warrant after Adjustments. The form of this Warrant need not be changed because of any adjustments in the Warrant Price or the number and kind of Securities purchasable upon the exercise of this Warrant. 5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this Warrant be submitted to one of the national accounting firms currently known as the "big five" selected by the Holder, provided that the Issuer shall have ten days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and such Holder within 30 days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer. 6. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with and exercise hereof, but in lieu of such fractional shares, the Issuer shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Per Share Market Value then in effect. 7. Definitions. For the purposes of this Warrant, the following terms have the following meanings: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by the Issuer after the Original Issue Date, except (i) Warrant Stock and (ii) any shares of Common Stock issuable upon conversion of the Debentures or Preferred Stock. "Board" means the Board of Directors of the Issuer. "Capital Stock" means and includes (i) any and all shares, interests, participations or other equivalents of or interests in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership -9- interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type. "Commission" means the Securities and Exchange Commission. "Common Stock" means the Common Stock, $0.001 par value, of the Issuer and any other Capital Stock into which such stock may hereafter be changed. "Common Stock Equivalent" means any Convertible Security or warrant, option or other right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Security (other than a warrant or stock option issued pursuant to any stock or option or similar equity-based compensation plan for employees, officers, directors or consultants. "Convertible Securities" means evidences of indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term "Convertible Security" means one of the Convertible Securities. "Debenture" means the Issuer's Convertible Debentures due 2005. "Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign. "Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders. "Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant. "Issuer" means World Wide Wireless Communications, Inc., a Nevada corporation, and its successors. "Majority Holders" means at any time the Holders of Warrants exercisable for a majority of the shares of Warrant Stock issuable under the Warrants at the time outstanding. "NASDAQ" means the National Association of Securities Dealers Automated Quotation System. -10- "Original Issue Date" means January __, 2001. "Other Common" means any other Capital Stock of the Issuer of any class that shall be authorized at any time after the date of this Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount. "Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature. "Per Share Market Value" means on any particular date (a) the closing price per share of the Common Stock on such date on the Nasdaq National Market, The Nasdaq SmallCap Market or other registered national stock exchange on which the Common Stock is then listed or if there is no such price on such date, then the closing price on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not listed then on the Nasdaq National Market, The Nasdaq SmallCap Market or any registered national stock exchange, the closing price for a share of Common Stock in the over-the-counter market, as reported by NASDAQ or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices) at the close of business on such date, or (c) if the Common Stock is not then reported by the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the "Pink Sheet" quotes for the relevant conversion period, as determined in good faith by the Holder, or (d) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as determined by an Independent Appraiser selected in good faith by the Majority Holders; provided, however, that the Issuer, after receipt of the determination by such Independent Appraiser, shall have the right to select an additional Independent Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period. The determination of fair market value by an Independent Appraiser shall be based upon the fair market value of the Issuer determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights. "Preferred Stock" means the Issuer's Series A Convertible Preferred Stock, par value $.01 per share and stated value $1,000 per share. "Registration Rights Agreement" has the meaning specified in Section 3(f) hereof. -11- "Registration Statement" has the meaning set forth in the Registration Rights Agreement. "Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect. "Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries. "Trading Day" means (a) a day on which the Common Stock is traded on the Nasdaq National Market, The Nasdaq SmallCap Market or other registered national stock exchange on which the Common Stock has been listed, or (b) if the Common Stock is not listed on the Nasdaq National Market, The Nasdaq SmallCap Market or any registered national stock exchange, a day or which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of Illinois are authorized or required by law or other government action to close. "Term" has the meaning specified in Section 1 hereof. "Voting Stock", as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by reason of the happening of a contingency. "Warrants" means the Warrants issued pursuant to the Loan Agreement, dated January __, 2001, including this Warrant, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of this Warrant. "Warrant Price" means the lesser of $_____ and the initial exercise price of any warrants hereafter issued to Union Atlantic, as such price may be adjusted from time to time as shall result from the adjustments specified in Section 4 hereof. -12- "Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock that may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof. "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants. 8. Other Notices. In case at any time: (A) the Issuer shall make any distributions to the holders of Common Stock; or (B) the Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class or of any Common Stock Equivalents or Convertible Securities or other rights; or (C) there shall be any reclassification of the Capital Stock of the Issuer; or (D) there shall be any capital reorganization by the Issuer; or (E) there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or (F) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or distribution to holders of Common Stock; then, in each of such cases, the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be, shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their certificates for Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be. Such notice shall be given at least 20 days prior to the action in question and not less than 20 days prior to the record date or the date on which the Issuer's transfer books are closed in respect thereto. The Issuer shall give to the Holder notice of all -13- meetings and actions by written consent of its stockholders, at the same time in the same manner as notice of any meetings of stockholders is required to be given to stockholders who do not waive such notice (or, if such requires no notice, then two Trading Days written notice thereof describing the matters upon which action is to be taken). The Issuer also shall give the Holder notice of the issuance of any stock purchase warrants, within ten days following such issuance, if such warrants result in the application of Section 4(d) or are issued to Union Atlantic, which notice shall be accompanied by a copy of the form of warrant issued. 9. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Majority Holders; provided, however, that no such amendment or waiver shall reduce the Warrant Share number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 9 without the consent of the Holder of this Warrant. 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. 11. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., Chicago time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m., Chicago time, on any date and earlier than 11:59 p.m., Chicago time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: If to the Issuer: World Wide Wireless Communications, Inc. 520 Third Street Suite 101 Oakland, California Attention: Mr. Douglas Haffer Telephone No.: (510) 839-6100 Facsimile No.: (510) 839-7088 If to the Holder: -14- Andrew Corporation 10500 W 153rd Street Orland Park, Illinois 60642-3099 Attention: Jeffrey Gittelman Telephone No.: (708) 873-2551 Facsimile No.: (708) 349-5287 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. 12. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 13. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock. 14. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein. 15. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]. -15- IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written. WORLD WIDE WIRELESS COMMUNICATIONS, INC. By:__________________________ Name: Title: EXERCISE FORM (To be executed by the Registered Holder upon Exercise of the Warrant) TO: WORLD WIDE WIRELESS COMMUNICATIONS, INC. The undersigned holder hereby exercises the right to purchase _________________ shares of Common Stock (the "Warrant Stock") of World Wide Wireless Communications, Inc., a Nevada corporation (the "Company"), evidenced by the attached Warrant (the "Warrant"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant. 1. Form of Warrant Price. The holder intends that payment of the Warrant Price shall be made as: _________ a. "Cash Exercise" with respect to _________________ Warrant Stock; and/or _________ b. "Cashless Exercise" with respect to _______________ Warrant Stock (to the extent permitted by the terms of the Warrant). 2. Payment of Warrant Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Stock to be issued pursuant hereto, the holder shall pay the sum of $___________________ to the Company in accordance with the terms of the Warrant. 3. Delivery of Warrant Stock. The Company shall deliver to the holder __________ Warrant Stock in accordance with the terms of the Warrant. Date: _______________ __, ______ Name of Registered Holder: ---------------------------- By:_________________________ Name: Title: ASSIGNMENT (To be signed only upon transfer of Warrant) FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers all of the rights of the undersigned under the within Warrant, with respect to the number of shares of Common Stock of WORLD WIDE WIRELESS COMMUNICATIONS, INC. covered thereby set forth hereinbelow unto: Name of Assignee Address No. of Shares Dated: __________, 20__ ______________________________________ (Signature must conform in all respects to name of holder as specified on the face of the Warrant) __________________________________________ (Address) Signed in the presence of: - -------------------------------- CH01/12126778.4 EX-23.2 6 0006.txt CONSENT REUBEN E. PRICE & CO. PUBLIC ACCOUNTANCY CORPORATION FOUNDED 1942 703 MARKET STREET SAN FRANCISCO, CA 94103 (415) 982-3556 (415) 957-1178 FAX 12 March, 2001 Mr. Douglas P. Haffer, President World Wide Wireless Communications, Inc. 520 Third Street, Suite 101 Oakland, California 94607 Dear Mr. Haffer: Please accept this letter as our consent to include in your Form SB-2 our reports on World Wide Wireless Communications, Inc.'s consolidated balance sheet dated September 30, 2000 and the related consolidated statements of operations, consolidated statements of cash flows, and statements of stockholders' equity for the years ended September 30, 2000 and 1999. Sincerely, /s/ REUBEN E. PRICE & CO. -----END PRIVACY-ENHANCED MESSAGE-----