-----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, KV6DifBBFY0NoUNaghY+3leklOCaUfNLQWzhg8PhI8QEADBIqRaA+X4NTtfzmGPS AU7bpBssbGAqxBeekGmn6A== 0000914749-98-000012.txt : 19980813 0000914749-98-000012.hdr.sgml : 19980813 ACCESSION NUMBER: 0000914749-98-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAI WIRELESS SYSTEMS INC CENTRAL INDEX KEY: 0000914749 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 061324691 STATE OF INCORPORATION: CT FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-22888 FILM NUMBER: 98684266 BUSINESS ADDRESS: STREET 1: 18 CORPORATE WOODS BLVD STREET 2: THIRD FLOOR CITY: ALBANY STATE: NY ZIP: 12211 BUSINESS PHONE: 5184622632 MAIL ADDRESS: STREET 1: 18 CORPORATE WOODS BLVD STREET 2: 3RD FLOOR CITY: ALBANY STATE: NY ZIP: 12211 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended JUNE 30, 1998 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. Commission File Number: 0-22888 CAI WIRELESS SYSTEMS, INC. (Exact name of registrant as specified in its charter)
Connecticut 06-1324691 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
18 Corporate Woods Boulevard, Albany, New York 12211 (Address and zip code of principal executive offices) (518) 462-2632 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ Number of shares outstanding of each of registrant's class of common stock at August 10, 1998: CLASS OUTSTANDING SHARES Common Stock, no par value 40,543,039 PART I. FINANCIAL INFORMATION. ITEM 1. FINANCIAL STATEMENTS.
CAI WIRELESS SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS JUNE 30, 1998 MARCH 31, 1998 (UNAUDITED) ASSETS Cash and cash equivalents $ 960,438 $ 1,275,020 Restricted cash 2,307,446 9,134,651 Debt service escrow 16,659,433 16,418,922 Subscriber accounts receivable, net 555,503 387,144 Prepaid expenses 596,766 661,669 Property and equipment, net 46,842,656 49,898,337 Wireless channel rights, net 190,860,525 194,050,792 Investment in CS Wireless Systems, Inc. 33,335,527 43,337,527 Investment in TelQuest Satellite Services LLC 2,209,568 3,174,732 Goodwill, net of accumulated amortization 22,526,159 22,985,876 Debt financing costs, net 5,947,707 7,079,424 Other assets 2,828,739 3,061,780 ----------- ----------- Total Assets $325,630,467 $351,465,874 ============ ============ LIABILITIES AND SHAREHOLDERS' DEFICIT LIABILITIES Accounts payable $ 4,347,667 $ 4,852,091 Accrued expenses 22,261,516 12,253,286 Wireless channel rights obligations 4,072,100 4,832,971 Interim debt financing 45,000,000 45,000,000 Long term notes 311,618,543 312,088,506 ------------ ------------ 387,299,826 379,026,854 ------------ ------------ Commitments and Contingencies SHAREHOLDERS' DEFICIT Common stock, 100,000,000 shares authorized, no par value; 40,543,039 shares issued and outstanding 275,770,764 275,770,764 Additional paid-in capital 101,711,759 101,711,759 Accumulated deficit (439,151,882) (405,043,503) ------------ ------------ (61,669,359) (27,560,980) ------------ ------------ Total Liabilities and Shareholders' Deficit $ 325,630,467 $ 351,465,874 ============= =============
See notes to consolidated financial statements.
CAI WIRELESS SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) QUARTER ENDED JUNE 30, 1998 1997 Revenues $ 5,632,967 $ 8,091,252 ---------- ---------- Costs and expenses: Programming and licensing 3,656,685 3,702,910 General and administrative 6,327,175 7,472,333 Depreciation and amortization 6,819,622 7,938,832 ---------- ---------- 16,803,482 19,114,075 ---------- ---------- Operating loss (11,170,515) (11,022,823) ---------- ---------- Other income (expense): Interest expense (12,909,875) (10,973,673) Equity in net losses of affiliates (10,967,164) (6,616,000) Interest income and other income 939,175 860,637 ---------- ---------- (22,937,864) (16,729,036) ---------- ---------- Net loss (34,108,379) (27,751,859) Preferred stock dividends - (3,567,958) ----------- ---------- Loss applicable to common shareholders $(34,108,379) $(31,319,817) =========== =========== Loss per common share $ (0.84) $ (0.77) ======== ======== Average common and equivalent shares outstanding 40,543,039 40,540,539 ========== ==========
See notes to consolidated financial statements. CAI WIRELESS SYSTEMS, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY FOR THE QUARTER ENDED JUNE 30, 1998 (UNAUDITED) AND THE YEAR ENDED MARCH 31, 1998
ADDITIONAL COMMON STOCK PAID-IN ACCUMULATED TOTAL SHARES AMOUNT CAPITAL DEFICIT EQUITY Balance at March 31, 1997 40,540,539 $275,769,414 $ - $(161,079,224) $114,690,190 Common stock issued in exchange for BANX warrants 2,500 1,350 - - 1,350 Senior preferred stock and accumulated dividends contributed to capital pursuant to the BANX termination agreement on March 3, 1998 - - 101,711,759 - 101,711,759 Preferred stock dividends accrued - - - (13,891,025) (13,891,025) Net loss - - (230,073,254) (230,073,254) ---------- ------------ ------------ ------------ ------------ Balance at March 31, 1998 40,543,039 275,770,764 101,711,759 (405,043,503) (27,560,980) Net loss - - - (34,108,379) (34,108,379) ---------- ------------ ------------ ------------ ------------ Balance at June 30, 1998 40,543,039 $275,770,764 $101,711,759 $(439,151,882) $ (61,669,359) ========== ============ ============ ============= =============
See notes to consolidated financial statements. CAI WIRELESS SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Quarter Ended June 30, 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (34,108,379) $ (27,751,859) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 6,819,622 7,938,832 Equity in net losses of affiliates 10,967,164 6,616,000 Gain on sale of assets (28,971) - Debt financing costs and discount amortization 1,861,258 711,500 Debt service escrow interest income (240,511) (702,142) Changes in assets and liabilities: Subscriber accounts receivable (168,359) (97,009) Other assets (600,956) (54,169) Accounts payable and accrued expenses 9,900,282 7,559,589 ----------- ----------- Net cash used in operating activities (5,598,850) (5,779,258) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Funds provided from restricted investment account 6,827,205 - Purchase of wireless channel rights - (1,238,253) Purchase of equipment (418,250) (1,850,022) Proceeds from sale of equipment 53,650 - Payments received from CS Wireless Systems, Inc. 157,412 386,298 Investment in TelQuest Satellite Services LLC (411,567) - Loan to related parties - (100,000) Cash paid for investment - (356,025) Other 37,260 (269,053) ----------- ----------- Net cash provided by (used in) investing activities 6,245,710 (3,427,055) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from interim debt financing - 8,500,000 Repayment of debt including wireless channel rights obligations (834,997) (504,580) Debt financing costs paid (126,445) (1,462,619) ----------- ----------- Net cash provided by (used in) financing activities (961,442) 6,532,801 ----------- ----------- NET DECREASE IN CASH AND CASH EQUIVALENTS (314,582) (2,673,512) Cash and cash equivalents, beginning of year 1,275,020 10,471,918 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 960,438 $ 7,798,406 =========== =========== CASH PAYMENTS DURING THE PERIOD FOR INTEREST $ 10,794 $ 97,531 ======== ========
See notes to consolidated financial statements. CAI WIRELESS SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by generally accepted accounting principles for complete financial statements. The Company does not have comprehensive income pursuant to SFAS No. 130 for the periods presented and, accordingly, a comprehensive income disclosure has not been included. The consolidated financial statements include the accounts of CAI Wireless Systems, Inc. and its wholly-owned subsidiaries (the "Company" or "CAI"). All intercompany transactions have been eliminated in consolidation. CAI's 60% investment in CS Wireless Systems, Inc. ("CS Wireless") and 25% investment in TelQuest Satellite Services LLC ("TSS") are accounted for on the equity method since CAI does not control day to day operations of either company. Current summarized financial information regarding CS Wireless is presented in Note 5. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of results for interim periods have been included. Certain items in the prior period financial statements have been reclassified to conform with the current period's presentation. Operating results for the quarter ended June 30, 1998 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 1999. The unaudited financial statements presented herein should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended March 31, 1998 which is on file with the Securities and Exchange Commission. NOTE 2. CHAPTER 11 FILING On July 30, 1998 (the "Petition Date"), CAI Wireless Systems, Inc., a Connecticut corporation, and one of its wholly-owned subsidiaries, Philadelphia Choice Television, Inc., a Delaware corporation ("PCT" and together with CAI, the "Debtors"), filed voluntary petitions for relief under Chapter 11, Title 11 of the United States Code (the "Bankruptcy Code") with the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), Wilmington, Delaware. The bankruptcy cases (the "Cases") of CAI and PCT are being jointly administered, for procedural purposes only, before the Bankruptcy Court under Case No. 98-1765 (JJF). Pursuant to Sections 1107 and 1108 of the Bankruptcy Code, the Debtors, as debtors and debtors-in-possession, have continued to manage and operate their assets and businesses pending the confirmation of a joint reorganization plan and subject to the supervision and orders of the Court. Because CAI is operating as debtor-in-possession under Chapter 11 of the Bankruptcy Code, the existing directors and officers of CAI continue to manage the operations of CAI, subject to the supervision and orders of the Bankruptcy Court. The Debtors expect to reorganize under Chapter 11 and have proposed a joint reorganization plan (the "Plan"), which was filed with the Bankruptcy Court on the Petition Date, and filed by the Company on a Current Report on Form 8-K dated July 1, 1998. The Plan has already been voted on and accepted by the requisite number of creditors prior to the Petition Date. Under the Plan, holders of CAI's 12 1/4 % Senior Notes due 2002 (the "Senior Notes") will receive approximately $16,400,000 in cash, $100,000,000 in new senior notes due 2004 and 91% of the equity of reorganized CAI. Holders of subordinated indebtedness of CAI will receive their pro rata share of the remaining 9% of the equity in reorganized CAI. The equity interests granted to the Company's debtholders will be subject to dilution for the issuance of stock options to members of CAI's senior management and for equity issued in connection with the Exit Facility (defined below). The Plan does not provide for any distribution to existing shareholders of CAI. CAI WIRELESS SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2. CHAPTER 11 FILING (CONTINUED) At this time, it is not possible to predict the outcome of the Debtors' Chapter 11 cases or their effect on the Debtors' business. Although management intends that CAI will emerge from bankruptcy in a prompt and expeditious manner during September 1998, there can be no assurance that the Plan will be consummated. Reference is made to Item 7 - "Management's Discussion and Analysis of Results of Operations and Financial Condition" and the Report of Independent Public Accountants included in CAI's Annual Report on Form 10-K for the fiscal year ended March 31, 1998, filed with the Securities and Exchange Commission on June 30, 1998, which indicates the substantial doubt about CAI's ability to continue as a going concern. The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities and commitments in the normal course of business. The Chapter 11 filing, as well as related circumstances and the losses from operations, continue to raise substantial doubt about the Company's ability to continue as a going concern. The appropriateness of reporting on the going concern basis is dependent upon, among other things, confirmation of the Plan, future operations, and the ability to generate sufficient cash from operations and financing sources to meet obligations. The consolidated financial statements included herein do not include any adjustments relating to the commencement of the Cases. NOTE 3. DIP FINANCING AND EXIT FACILITY DIP FINANCING. In connection with the Cases, CAI consummated a $60,000,000 Debtor-in-Possession financing arrangement (the "DIP Facility") provided by Merrill Lynch Global Allocation Fund, Inc. ("MLGAF"). The DIP financing is governed by an Amended and Restated Note Purchase Agreement dated as of July 30, 1998 (the "NPA") between CAI and MLGAF, a copy of which was filed as an exhibit to CAI's Current Report on Form 8-K dated August 3, 1998. Of the $60,000,000 provided to CAI under the DIP Facility, $49,105,894 represented the outstanding principal, interest and fees due to the Purchaser pursuant to that certain Note Purchase Agreement dated as of November 24, 1997 (the "Existing Note Purchase Agreement") among CAI, certain of its subsidiaries and MLGAF. All such amounts outstanding under the Existing Note Purchase Agreement were converted into DIP Notes as if there had been a purchase under the DIP Facility Agreement in the amount of $49,105,894. The remaining amount, $10,894,106, was made available to CAI for its use during the Chapter 11 case, in accordance with the terms of an approved budget. The indebtedness under the DIP Facility is represented by promissory notes in the aggregate principal amount of $60,000,000 (the "DIP Notes"), which notes bear interest at the per annum rate of 13% and mature on January 29, 1999 (the "Maturity Date"). A commitment fee of (i) 1% for the three-month period commencing with the Petition Date, (ii) 4% for the next succeeding three-month period, and (iii) 2% for each three-month period thereafter, of the aggregate principal amount of the DIP Notes will be earned quarterly in advance and payable on the Maturity Date. CAI's obligations under the DIP Notes are secured by a first priority lien on, and security interest in, all of CAI's assets, including the stock of its wholly-owned subsidiaries, and a pledge of its holdings in CS Wireless Systems, Inc., TelQuest Satellite Services LLC and Wireless Enterprises, L.L.C., an CAI WIRELESS SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 3. DIP FINANCING AND EXIT FACILITY CONTINUED MMDS-operator programming cooperative. In addition, certain of CAI's wholly- owned subsidiaries have guaranteed CAI's obligations under the DIP Notes and have secured such guaranty by granting to MLGAF a first lien on, and security interest in, all of such subsidiaries' assets. The Bankruptcy Court approved the DIP Facility on an interim basis on July 30, 1998. A final hearing before the Bankruptcy Court on any objections to the DIP Facility is scheduled for August 25, 1998. EXIT FACILITY. CAI is seeking to obtain an $80,000,000 credit facility (the "Exit Facility"), the proceeds of which will be used to repay all outstanding amounts under the DIP Facility and to fund CAI's operations for approximately 12 months following the consummation of the bankruptcy. Based upon the advice of CAI's financial advisor, BT Alex. Brown Incorporated, CAI anticipates that the Exit Facility will consist of two tranches of secured debt. The first tranche would consist of approximately $30,000,000 principal amount of senior secured notes (the "Senior Secured A Notes"), which would be secured by a first priority lien on and security interest in (i) substantially all of CAI's existing and after-acquired assets, (ii) the stock of the Company's subsidiaries, and (iii) selected assets that are held by certain of the Company's subsidiaries, in each case subject to certain limited exceptions and qualifications. The second tranche would consist of approximately $50,000,000 principal amount of senior secured notes (the "Senior Secured B Notes"), which would be secured by a second priority lien on and security interest in the same assets. CAI anticipates the Senior Secured A Notes will accrue interest semi- annually at a rate of approximately 10.5% per annum, payable at maturity, and the Senior Secured B Notes at a rate of approximately 13.0% per annum, payable at maturity. The maturity date for both the Senior Secured A Notes and the Senior Secured B Notes (together, the "New Senior Secured Facility") is expected to be in September, 2000. CAI anticipates that the Senior Secured A Notes and the Senior Secured B Notes will require the payment at maturity of certain commitment and other fees (collectively, the "Facility Fees") of approximately 1% and 7%, respectively. CAI further anticipates that prospective purchasers of the Senior Secured A Notes and Senior Secured B Notes would expect to receive six-year warrants to purchase shares of Common Stock of CAI, which would be exercisable for $.01 per share and would contain usual and customary registration rights and standard anti-dilution protections. Although no definitive negotiations have taken place with any prospective exit lenders, depending upon a wide variety of factors including the actual interest rate of such notes, the Facility Fees, the apparent prospects of reorganized CAI at the time of consummation of the Plan, and the interest of prospective lenders, it is anticipated that warrants to acquire approximately 2% and 10% of the common equity of reorganized CAI would be issued to purchasers of the Senior Secured A Notes and Senior Secured B Notes, respectively. The economic terms of the New Senior Secured Facility are interrelated and the interest rate, Facility Fees and equity components of the proposed New Senior Secured Facility may vary without significantly affecting the overall economic impact of the proposed New Senior Secured Facility on CAI or its current stakeholders. If the New Senior Secured Facility is provided in significant part by one or more current holders of CAI's Senior Notes, CAI anticipates offering each holder of Senior Notes the non-transferable right to subscribe for up to 65% of the principal amount of Senior Secured A Notes and Senior Secured B Notes. CAI WIRELESS SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 3. DIP FINANCING AND EXIT FACILITY CONTINUED Under the terms of the NPA, MLGAF was granted the right, but not the obligation, to assume up to 35% of the New Senior Secured Facility. If and to the extent that holders of Senior Notes wish to subscribe for more than the entire principal amount of the New Senior Secured Facility (subject to MLGAF's aforementioned right under the NPA), the right to subscribe would be allocated on a PRO RATA basis, in accordance with the amount of each current holder of Senior Notes wishes to invest in the New Senior Secured Facility. The foregoing is a summary of certain anticipated terms of the New Senior Secured Facility and is qualified in its entirety by reference to the New Senior Secured Facility. As of the date hereof, CAI has not received any commitments with respect to all or any part of the New Senior Secured Facility and there can be no assurance that the terms of the actual New Senior Secured Facility will not vary from the terms described above or that the New Senior Secured Facility can be obtained at all. NOTE 4. LITIGATION IN RE CAI WIRELESS SYSTEMS, INC., DEBTOR, Chapter 11 Case No.98-1765 (JJF), pending before the United States Bankruptcy Court for the District of Delaware, Wilmington, Delaware. See Note 2 above. CAI has been named in six class action lawsuits alleging various violations of the federal securities laws filed in the United States District Court for the Northern District of New York. The actions were consolidated into one lawsuit entitled IN RE CAI WIRELESS SYSTEMS, INC. SECURITIES LITIGATION (96-CV-1857) (the "Securities Lawsuit"), which is currently pending in the Northern District of New York. The amended, consolidated complaint, which names the Company, Jared E. Abbruzzese, chairman and chief executive officer of the Company, John J. Prisco, president, chief operating officer and a director of the Company, and Alan Sonnenberg, the former president of the Company, as defendants, alleges a variety of violations of the anti-fraud provisions of the Federal securities laws by CAI arising out of its alleged disclosure (or alleged omission from disclosure) regarding its Internet and other flexible use of MMDS spectrum, as well as its business relationship with Bell Atlantic and NYNEX. Specifically, the complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 10b-5 promulgated under the Exchange Act during the specified Class Period (May 23, 1996 through December 6, 1996). The Company has notified the carrier of its Directors' and Officers' Liability insurance policy, which is intended to cover not only the Company's officers and directors, but also the Company, itself, against claims such as those made in the Securities Lawsuit. The policy covers up to $5,000,000 of any covered liability, subject to a retention amount of $500,000. The Securities Lawsuit is in its preliminary stages. A scheduling conference was held on June 3, 1997, at which the briefing schedule for defendants' motion to dismiss was agreed upon among the parties. The defendants' motion to dismiss was heard by the Northern District of New York on October 17, 1997 and is still pending. While the motion is pending, all other deadlines affecting motions and discovery have been postponed. The Company and individual defendants are contesting the Securities Lawsuit vigorously and believe it is entirely without merit at this time. The Plan provides no recovery for claims against the CAI WIRELESS SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 4. LITIGATION (CONTINUED) Company arising out of the Securities Lawsuit. Reference is made to description of Class CAI-7 contained in the Plan, filed as an exhibit to CAI's Current Report on Form 8-K dated July 1, 1998. Accordingly, management believes the Securities Lawsuit will not have a material adverse effect on the Company's earnings, financial condition or liquidity. The Company is also a defendant in JOE HAND PROMOTIONS, INC. V. 601 L&P, INC. V. CAI WIRELESS SYSTEMS, INC. , JOE HAND PROMOTIONS, INC. V. CAI WIRELESS SYSTEMS, INC. D/B/A POPVISION WIRELESS CABLE AND JOE HAND PROMOTIONS V. CAROL VALICEE D/B/A MARV'S BAR & RESTAURANT V. CAI WIRELESS SYSTEMS, INC. D/B/A POPVISION WIRELESS CABLE TV pending in the U.S. District Court for the Eastern District of Pennsylvania. These actions arise out of the alleged improper broadcasts of certain sporting events in commercial establishments in violation of Federal statutes. The plaintiff is the exclusive distributor of such sporting events in the greater Philadelphia area for commercial establishments, and has alleged the improper broadcast by CAI in approximately five instances. The lawsuits are in preliminary stages and are being vigorously defended by CAI. NOTE 5. INVESTMENTS IN CS WIRELESS SYSTEMS, INC. AND TELQUEST SATELLITE SERVICES LLC CS WIRELESS SYSTEMS, INC. The Company's 60% investment in CS Wireless reflects an equity loss of $10,002,000 (based on CAI's pro-rata share of CS's net loss of $16,668,000 for the three-month period ended March 31, 1998). There is no amortization of goodwill associated with this investment, since the related goodwill was written off as of March 31, 1998. The following is an unaudited condensed consolidated balance sheet of CS derived from its Form 10-Q as of March 31, 1998:
ASSETS Cash and cash equivalents $ 65,010,000 Restricted cash 5,030,000 Other current assets 2,103,000 Systems and equipment, net 52,625,000 Wireless channel rights, net 169,228,000 Goodwill, net of accumulated amortization 47,310,000 Investment in and loans to equity affiliates 7,732,000 Debt issuance costs and other assets, net 10,975,000 ----------- Total Assets $360,013,000 =========== LIABILITIES AND EQUITY Accounts payable and accrued expenses $ 8,300,000 FCC Auction payable 3,757,000 Other liabilities 676,000 Debt 291,719,000 Equity 55,561,000 ----------- Total Liabilities and Equity $360,013,000 ===========
CAI WIRELESS SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 5. INVESTMENTS IN CS WIRELESS SYSTEMS, INC. AND TELQUEST SATELLITE SERVICES LLC (CONTINUED) The following is an unaudited condensed consolidated statement of operations of CS derived from its March 31, 1998 Form 10-Q for the period presented:
Quarter Ended MARCH 31, 1998 Revenues $ 6,823,000 ----------- Operating expenses: Systems operations 3,908,000 General and administrative 4,119,000 Depreciation and amortization 7,224,000 ----------- Total operating expenses 15,251,000 ----------- Operating loss (8,428,000) Interest income 1,017,000 Interest expense (8,271,000) Equity in losses of affiliates (986,000) ----------- Net loss $(16,668,000) ===========
TELQUEST SATELLITE SERVICES LLC. The Company's investment in TSS reflects an equity loss of $736,000 based on CAI's pro-rata share of TSS's net losses approximating $2,944,000 for the three months ended June 30, 1998. Additionally, the investment has been reduced by $208,300 reflecting depreciation of the equipment on lease to TSS. TSS has negative net worth of $4,751,000 at June 30, 1998. NOTE 6. OPERATING SEGMENT INFORMATION The following information is provided for operating segments for the quarter ended June 30, 1998 as determined by senior management and subject to meeting quantitative thresholds. While CAI is a corporate holding company and not an operating segment, it is shown separately for clarity in segment reporting. AMI, a wholly owned subsidiary of CAI, holds the stock of entities owning or leasing a substantial portion of CAI's spectrum rights. CAI WIRELESS SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 6: OPERATING SEGMENT INFORMATION (CONTINUED)
ALBANY NEW YORK PHILADELPHIA CORPORATE MARKET MARKET MARKET AMI ALL OTHER(1) Revenues External $ - $ 766,300 $ 850,989 $ 3,526,503 $ - $ 489,175 Inter-company 579,000 - - - 4,166,137 72,772 Interest expense (12,876,382) - - 341 (21,653) (11,499) Depreciation & amortization (519,668) (366,840) (970,170) (2,117,400) (3,117,480) (2,548,544) Segment l (25,795,124) (240,450) (1,398,791) (1,428,194) (581,932) (4,663,888) Assets 418,757,104 2,653,491 1,269,478 10,648,711 183,947,856 35,599,034 Due from segments 307,396,573 - - - - - Due to parent - (11,331,845) (28,884,701) (26,635,444) (183,280,129) (57,264,454) Expenditures for segment assets 1,354 10,144 3,047 60,330 - 101,852
(1) includes the Boston Market Total revenues, income(loss), and assets are reconciled as follows:
REVENUES (EXTERNAL) INCOME (LOSS) ASSETS Total reported for identified segments $5,143,792 $(29,444,491) $617,276,640 Boston Market (included in All Other) - (2,372,124) 17,201,477 All Other (excluding Boston Market) 489,175 (2,291,764) 18,397,557 Elimination of inter-segment balances - - (309,400,690) Elimination of inter-segment investments - - (17,844,517) ---------- ------------ ------------ Consolidated totals $5,632,967 $(34,108,379) $325,630,467 ========== ============ ============
NOTE 7. SUBSEQUENT EVENTS On July 30, 1998, the Company was informed by PricewaterhouseCoopers LLP ("PWC") that PWC had resigned from its engagement as the Company's independent accountant. The Company was informed by PWC that it had resigned from the engagement due to a conflict of interest arising as the result of the July 1, 1998 merger of Price Waterhouse, LLP and Coopers & Lybrand L.L.P. Prior to the merger, Coopers & Lybrand L.L.P. acted as the Company's independent accountant. Price Waterhouse, LLP, acted as collateral agent and administrative agent for MLGAF under a Note Purchase CAI WIRELESS SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 7. SUBSEQUENT EVENTS (CONTINUED) Agreement dated as of November 24, 1997, as amended from time to time. PWC will continue to act as collateral agent and administrative agent for MLGAF under the Amended and Restated Note Purchase Agreement dated as of July 30, 1998 between the Company and MLGAF. Except as discussed below, the reports of Coopers & Lybrand L.L.P. on the Company's financial statements for the past two fiscal years contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle. The report of Coopers & Lybrand L.L.P. delivered in connection with the Company's audited financial statements for the years ended March 31, 1998 and 1997 contained an explanatory paragraph which indicated that there was substantial doubt regarding the Company's ability to continue as a going concern. In connection with its audits for the two most recent fiscal years and through July 30, 1998, there have been no disagreements with Coopers & Lybrand L.L.P. or PWC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of Coopers & Lybrand L.L.P. would have caused them to made reference thereto in their report on the financial statements for such years. During the two most recent fiscal years and through July 30, 1998, there have been no reportable events (as defined in Regulation S-K item 304(a)(1)(v)) involving the Company. The Company is currently seeking independent accountants to replace PWC. The Company requested that PWC furnish it with a letter addressed to the SEC stating whether or not PWC agrees with the above statements. A copy of such letter, dated August 6, 1998, was filed as Exhibit 16 on The Company's Current Report on Form 8-K dated August 6, 1998. PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The statements contained in this Quarterly Report on Form 10-Q, including the exhibits hereto, relating to the Company's future operations may constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Actual results of the Company may differ materially from those in the forward-looking statements and may be affected by a number of factors including Bankruptcy or District Court actions or proceedings related to the bankruptcy of CAI and Philadelphia Choice Television, Inc., the Company's ability to obtain additional financing, the Company's ability to attract one or more strategic partners and such strategic partner's willingness to enter into arrangements with CAI on a timely basis, the terms of such arrangements, the receipt of regulatory approvals for alternative uses of its MMDS spectrum, the success of CAI's trials in various of its markets, the commercial viability of any alternative use of MMDS spectrum, consumer acceptance of any new products offered or to be offered by CAI, subscriber equipment availability, practical success of CAI's engineered technology, tower space availability, absence of interference and the ability of the Company to redeploy or sell excess equipment, the assumptions, risks and uncertainties set forth below in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere herein, as well as other factors contained herein and in the Company's other securities filings. Furthermore, there can be no assurance that the financing obtained by the Company to date will enable it to meet its future cash needs. GENERAL. On July 30, 1998 (the "Petition Date"), CAI Wireless Systems, Inc., a Connecticut corporation, and one of its wholly-owned subsidiaries, Philadelphia Choice Television, Inc., a Delaware corporation ("PCT" and together with CAI, the "Debtors"), filed voluntary petitions for relief under Chapter 11, Title 11 of the United States Code (the "Bankruptcy Code") with the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), Wilmington, Delaware. The bankruptcy cases (the "Cases") of CAI and PCT are being jointly administered, for procedural purposes only, before the Bankruptcy Court under Case No. 98-1765 (JJF). Pursuant to Sections 1107 and 1108 of the Bankruptcy Code, the Debtors, as debtors and debtors-in-possession, have continued to manage and operate their assets and businesses pending the confirmation of a joint reorganization plan and subject to the supervision and orders of the Court. Because CAI is operating as debtor- in-possession under Chapter 11 of the Bankruptcy Code, the existing directors and officers of CAI continue to manage the operations of CAI, subject to the supervision and orders of the Bankruptcy Court. The Debtors expect to reorganize under Chapter 11 and have proposed a joint reorganization plan (the "Plan"), which was filed with the Bankruptcy Court on the Petition Date, and filed by the Company on a Current Report on Form 8-K dated July 1, 1998. The Plan has already been voted on and accepted by the requisite number of creditors prior to the Petition Date. Under the Plan, holders of CAI's 12 1/4 % Senior Notes due 2002 (the "Senior Notes") will receive approximately $16,400,000 in cash, $100,000,000 in new senior notes due 2004 and 91% of the equity of reorganized CAI. Holders of subordinated indebtedness of CAI will receive their pro rata share of the remaining 9% of the equity in reorganized CAI. The equity interests granted to the Company's debtholders will be subject to dilution for the issuance of stock options to members of CAI's senior management and for equity issued in connection with the Exit Facility (defined below). The Plan does not provide for any distribution to existing shareholders of CAI. At this time, it is not possible to predict the outcome of the Debtors' Chapter 11 cases or their effect on the Debtors' business. Reference is made to Item 7 - "Management's Discussion and Analysis of Results of Operations and Financial Condition" and the Report of Independent Public Accountants included in CAI's Annual Report on Form 10-K for the fiscal year ended March 31, 1998, filed with the Securities and Exchange Commission on June 30, 1998, which indicates the substantial doubt about CAI's ability to continue as a going concern. The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities and commitments in the normal course of business. The Chapter 11 filing, as well as related circumstances and the losses from operations, continue to raise substantial doubt about the Company's ability to continue as a going concern. The appropriateness of reporting on the going concern basis is dependent upon, among other things, confirmation of the Plan, future operations, and the ability to generate sufficient cash from operations and financing sources to meet obligations. The consolidated financial statements included herein do not include any adjustments relating to the commencement of the Cases. DIP FINANCING. In connection with the Cases, CAI consummated a $60,000,000 Debtor-in-Possession financing arrangement (the "DIP Facility") provided by Merrill Lynch Global Allocation Fund, Inc. ("MLGAF"). The DIP financing is governed by an Amended and Restated Note Purchase Agreement dated as of July 30, 1998 (the "NPA") between CAI and MLGAF, a copy of which was filed as an exhibit to CAI's Current Report on Form 8-K dated August 3, 1998. Of the $60,000,000 provided to CAI under the DIP Facility, $49,105,894 represented the outstanding principal, interest and fees due to the Purchaser pursuant to that certain Note Purchase Agreement dated as of November 24, 1997 (the "Existing Note Purchase Agreement") among CAI, certain of its subsidiaries and MLGAF. All such amounts outstanding under the Existing Note Purchase Agreement were converted into DIP Notes as if there had been a purchase under the DIP Facility Agreement in the amount of $49,105,894. The remaining amount, $10,894,106, was made available to CAI for its use during the Chapter 11 case, in accordance with the terms of an approved budget. The indebtedness under the DIP Facility is represented by promissory notes in the aggregate principal amount of $60,000,000 (the "DIP Notes"), which notes bear interest at the per annum rate of 13% and mature on January 29, 1999 (the "Maturity Date"). A commitment fee of (i) 1% for the three-month period commencing with the Petition Date, (ii) 4% for the next succeeding three-month period, and (iii) 2% for each three-month period thereafter, of the aggregate principal amount of the DIP Notes will be earned quarterly in advance and payable on the Maturity Date. CAI's obligations under the DIP Notes are secured by a first priority lien on, and security interest in, all of CAI's assets, including the stock of its wholly-owned subsidiaries, and a pledge of its holdings in CS Wireless Systems, Inc., TelQuest Satellite Services LLC and Wireless Enterprises, LLC, an MMDS-operator programming cooperative. In addition, certain of CAI's wholly-owned subsidiaries have guaranteed CAI's obligations under the DIP Notes and have secured such guaranty by granting to MLGAF a first lien on, and security interest in, all of such subsidiaries' assets. The Bankruptcy Court approved the DIP Facility on an interim basis on July 30, 1998. A final hearing before the Bankruptcy Court on any objections to the DIP Facility is scheduled for August 25, 1998. EXIT FACILITY. CAI is seeking to obtain an $80,000,000 credit facility (the "Exit Facility"), the proceeds of which will be used to repay all outstanding amounts under the DIP Facility and to fund CAI's operations for approximately 12 months following the consummation of the bankruptcy. Based upon the advice of CAI's financial advisor, BT Alex. Brown Incorporated, CAI anticipates that the Exit Facility will consist of two tranches of secured debt. The first tranche would consist of approximately $30,000,000 principal amount of senior secured notes (the "Senior Secured A Notes"), which would be secured by a first priority lien on and security interest in (i) substantially all of CAI's existing and after-acquired assets, (ii) the stock of the Company's subsidiaries, and (iii) selected assets that are held by certain of the Company's subsidiaries, in each case subject to certain limited exceptions and qualifications. The second tranche would consist of approximately $50,000,000 principal amount of senior secured notes (the "Senior Secured B Notes"), which would be secured by a second priority lien on and security interest in the same assets. CAI anticipates the Senior Secured A Notes will accrue interest semi-annually at a rate of approximately 10.5% per annum, payable at maturity, and the Senior Secured B Notes at a rate of approximately 13.0% per annum, payable at maturity. The maturity date for both the Senior Secured A Notes and the Senior Secured B Notes (together, the "New Senior Secured Facility") is expected to be in September, 2000. CAI anticipates that the Senior Secured A Notes and the Senior Secured B Notes will require the payment at maturity of certain commitment and other fees (collectively, the "Facility Fees") of approximately 1% and 7%, respectively. CAI further anticipates that prospective purchasers of the Senior Secured A Notes and Senior Secured B Notes would expect to receive six- year warrants to purchase shares of Common Stock of CAI, which would be exercisable for $.01 per share and would contain usual and customary registration rights and standard anti-dilution protections. Although no definitive negotiations have taken place with any prospective exit lenders, depending upon a wide variety of factors including the actual interest rate of such notes, the Facility Fees, the apparent prospects of reorganized CAI at the time of consummation of the Plan, and the interest of prospective lenders, it is anticipated that warrants to acquire approximately 2% and 10% of the common equity of reorganized CAI would be issued to purchasers of the Senior Secured A Notes and Senior Secured B Notes, respectively. The economic terms of the New Senior Secured Facility are interrelated and the interest rate, Facility Fees and equity components of the proposed New Senior Secured Facility may vary without significantly affecting the overall economic impact of the proposed New Senior Secured Facility on CAI or its current stakeholders. If the New Senior Secured Facility is provided in significant part by one or more current holders of CAI's Senior Notes, CAI anticipates offering each holder of Senior Notes the non-transferable right to subscribe for up to 65% of the principal amount of Senior Secured A Notes and Senior Secured B Notes. Under the terms of the NPA, MLGAF was granted the right, but not the obligation, to assume up to 35% of the New Senior Secured Facility. If and to the extent that holders of Senior Notes wish to subscribe for more than the entire principal amount of the New Senior Secured Facility (subject to MLGAF's aforementioned right under the NPA), the right to subscribe would be allocated on a PRO RATA basis, in accordance with the amount of each current holder of Senior Notes wishes to invest in the New Senior Secured Facility. The foregoing is a summary of certain anticipated terms of the New Senior Secured Facility and is qualified in its entirety by reference to the New Senior Secured Facility. As of the date hereof, CAI has not received any commitments with respect to all or any part of the New Senior Secured Facility and there can be no assurance that the terms of the actual New Senior Secured Facility will not vary from the terms described above or that the New Senior Secured Facility can be obtained at all. LIQUIDITY AND CAPITAL RESOURCES CAI's primary sources of liquidity are cash flows from operations, trade credit and borrowings under the Existing Credit Facility for the period prior to July 30, 1998 and subsequently under the DIP Facility. During the quarter ended June 30, 1998, CAI expended approximately $5,600,000 of cash to fund operating activities. CAI also expended approximately $418,000 for equipment, $412,000 to TSS in fulfillment of its investment obligation and $835,000 in debt payments. The cash requirements were primarily funded by existing cash balances maintained in the restricted investment account. At June 30, 1998, CAI had available funds of approximately $3,268,000, of which $2,307,000 was restricted and all of which will be used to fund the operations of the Company. CAI is committed through additional open purchase orders as of June 30, 1998 to spend approximately $2,500,000, primarily for capital expenditures associated with additional development its digital transmission facilities. The Company's operating plans, including digital video, voice and two-way data, Internet and intranet access services and testing, will require additional funding. The Company's ability to raise additional funds through secured loans and the issuance of certain equity is currently limited by the terms of the Indenture governing the Company's 12.25% Senior Notes due 2002, the terms of various outstanding securities and/or the terms of the NPA. Additionally, assuming confirmation of the Plan, the Company's ability to raise additional funds through secured loans and the issuance of certain equity is expected to be limited under the terms of the new Senior Notes that will be issued to the holders of CAI's 12.25% Senior Notes at the consummation of the Plan, and under the terms of the New Senior Secured Facility. There can be no assurance that the funds obtained by the Company in connection with the DIP Facility, or that funds anticipated to be obtained by CAI upon consummation of the New Senior Secured Facility, and as permitted under the terms of the New Senior Secured Facility and the indenture governing the new Senior Notes will enable CAI to meet its future cash needs. RESULTS OF OPERATIONS JUNE 30, 1998 COMPARED TO JUNE 30, 1997 The Company's strategy is not to pursue analog-based television subscriber growth while it evaluates its business opportunities in addition to subscription television including high-speed Internet and Intranet access, as well as digital video and telephony services. The policy has had a negative impact on the Company's subscription revenues. As of June 30, 1998, the Company's subscriber base had decreased by approximately 16,600 to 49,100 subscribers from approximately 65,700 at June 30, 1997. Consequently, subscriber revenues decreased $2,042,000 for the quarter ended June 30, 1998 compared to the corresponding period last year. Operating expenses were $16,803,000 and $19,114,000 for the quarter ended June 30, 1998 and 1997, respectively. Programming costs, which decreased by $46,000, did not decline in proportion to the revenue decline due to minimum provisions provided by certain of the programming agreements. The $2,311,000 reduction in operating expenses for the first quarter versus last year's first quarter reflects lower technical, customer service and marketing costs approximating $1,349,000 which were in-line with the decline in subscribers, offset by an increase in general and administrative expenses of $204,000 consisting of incremental increases in financial and corporate restructuring costs, attorneys fees in the class action lawsuit, and various FCC filings. The remaining decrease of approximately $1,120,000 reflects lower depreciation and amortization, primarily due to a reduction in goodwill amortization resulting from the goodwill write-down at March 31, 1998, offset by greater depreciation related to the Boston digital project. Interest expense was $12,910,000 and $10,974,000 for the quarters ended June 30, 1998 and 1997, respectively. This increase is primarily due to the interest on the interim debt financing in the 1998 quarter that did not exist during the comparable quarter last year. The decrease in CAI's investment in CS Wireless of $10,002,000 reflects primarily the Company's 60% pro rata share of the $16,668,000 net loss reported by CS Wireless for the three months ended March 31, 1998. The aggregate decrease in this investment was $6,616,000 for the same period last year. The decrease in CAI's investment in TSS of $736,000 reflects primarily the Company's 25% pro-rata share of the estimated $2,944,000 loss of TSS from April 1, 1998 to June 30, 1998, plus another $208,300 reflecting CAI's depreciation on the equipment leased to TSS. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Reference is made to Note 4 of Notes to Consolidated Financial Statements in Part I, Item 1 of this filing. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a) EXHIBITS. The following exhibits are filed herewith or incorporated by reference as indicated:
Incorporation by Reference Page EXHIBIT NO. DESCRIPTION (SEE LEGEND) REFERENCE 3.1 Amended and Restated Certificate of Incorporation of CAI [1] Exhibit 3.1 3.2 Amended and Restated Bylaws of CAI [1] Exhibit 3.2 4.1 Amended and Restated Note Purchase Agreement dated as of July 30, 1998 between Registrant and Merrill Lynch Global Allocation Fund, Inc. [2] Exhibit 4.1 16. Letter by PricewaterhouseCoopers to Securities and Exchange Commission dated August 6, 1998 [3] Exhibit 16. 27. Financial Data Schedule 99.1 Disclosure Statement dated as of June 30, 1998 [4] Exhibit 99.1 99.2 Disclosure Statement Supplement dated as of July 15, 1998 [5] Exhibit 99.1 99.3 Interim Order Authorizing Postpetition Financing [2] Exhibit 99.1 99.4 Press Release dated July 30, 1998 [2] Exhibit 99.2
LEGEND [1] Incorporated by reference to the exhibits to the Quarterly Report on Form 10-Q for September 30, 1995. [2] Incorporated by reference to the exhibit to the Current Report on Form 8-K dated August 3, 1998. [3] Incorporated by reference to the exhibit to the Current Report on Form 8-K dated August 6, 1998. [4] Incorporated by reference to the exhibit to the Current Report on Form 8-K dated July 1, 1998. [5] Incorporated by reference to the exhibit to the Current Report on Form 8-K dated July 16, 1998. Filed herewith. b) REPORTS ON FORM 8-K. (1) Form 8-K filed July 1, 1998, regarding the following: Item 5. Other Events: The Company commenced a solicitation of votes on June 30, 1998 with respect to a pre-packaged reorganization plan and upon acceptance, intends to file a voluntary petition under Chapter 11 of the Bankruptcy Code. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits C. Exhibits 99.1 Disclosure Statement dated as of June 30, 1998 (2) Form 8-K filed July 16, 1998, regarding the following: Item 5. Other Events The Company disseminated a Disclosure Statement Supplement to certain impaired creditors which sets forth additions and/or amendments to the Disclosure Statement originally sent to certain impaired creditors. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits C. Exhibits 99.1 Disclosure Statement Supplement dated as of July 15, 1998 (3) Form 8-K filed August 3, 1998, regarding the following: Item 3. Bankruptcy or Receivership The Company filed voluntary petitions for relief under Chapter 11, Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware, Wilmington, Delaware. CAI, as Debtor-in- possession, will continue to manage and operate its assets and business with its existing directors and officers, subject to the supervision and orders of the Court. Concurrent with filing the voluntary petitions, CAI sold 13% senior secured notes due January 29, 1999 to Merrill Lynch Global Allocation Fund, Inc. which provided for the rollover of the existing bridge financing with the remaining $10,894,000 available for use during the Chapter 11 proceedings, in accordance with the terms of an approved budget. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits C. Exhibits 4.1 Amended and Restated Note Purchase Agreement dated as of July 30, 1998 between Registrant and Merrill Lynch Global Allocation Fund, Inc. 99.1 Interim Order Authorizing Postpetition Financing. 99.2 Press Release dated July 30, 1998. (4) Form 8-K filed August 6, 1998, regarding the following: Item 4. Changes in Registrant's Certifying Accountant PricewaterhouseCoopers LLP resigned from its engagement as the Company's independent accountant due to a conflict of interest arising as a result of the merger of the two accounting firms. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
SIGNATURE TITLE DATE /S/ Chairman, Chief Executive Officer August 12, 1998 JARED E. ABBRUZZESE and Director (Principal Executive Officer) /S/ Executive Vice President, Chief August 12, 1998 JAMES P. ASHMAN Financial Officer and Director (Principal Financial Officer) /S/ Vice President and Controller August 12, 1998 ARTHUR J. MILLER (Principal Accounting Officer)
EX-27 2
5 CAI Wireless Systems, Inc. and Subsidiaries Financial Data Schedule As of and For the Three Months Ended June 30, 1998 3-MOS MAR-31-1999 APR-01-1998 JUN-30-1998 3,267,884 0 793,613 238,110 0 0 91,981,605 45,138,949 325,630,467 0 311,618,543 0 0 275,770,764 (337,440,123) 325,630,467 0 5,632,967 0 16,803,482 10,967,164 29,200 12,909,875 (34,108,379) 0 (34,108,379) 0 0 0 (34,108,379) (0.84) (0.84)
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