From 1/30 8k comments ?
TYPE: 8-K SEQUENCE: 1 DESCRIPTION: REPORT ON FORM 8-K
CELLULARVISION USA, INC.
Item 5. Other Events Logimetrics Transaction
On December 1, 1997, CellularVision of New York, L.P. ("CVNY"), a
wholly owned subsidiary of CellularVision USA, Inc. (the "Company"), entered
into an agreement (the "Logimetrics Agreement") with Logimetrics, Inc.
("Logimetrics") pursuant to which CVNY assumed financial responsibility for
certain equipment purchased through its affiliate, CellularVision Technology &
Telecommunications, L.P. In exchange, Logimetrics agreed to continue servicing
CVNY's equipment so long as CVNY continues to meet its obligations under the
Logimetrics Agreement. Pursuant to the Logimetrics Agreement, CVNY issued and
delivered a $2,621,694.81 Secured Promissory Note to Logimetrics having a final
maturity date of July 27, 1998. Principal under such Note is amortized and also
subject to partial mandatory prepayment upon the occurrence of certain events.
Fleet National Bank
On October 21, 1997, the Company announced that CVNY had engaged Fleet
National Bank ("Fleet") to form a syndicate of senior lenders to provide a $40
million senior secured facility. Fleet committed, subject to certain conditions,
to fund more than one-third of the facility.
In late December 1997, Fleet advised the Company that the syndication
effort was on hold and would be revisited as the FCC LMDS Auction occurs.
Subordinated Exchange Notes; Certain Financial Data
On January 21, 1998, the Company issued new Subordinated Exchange
Notes, in the aggregate principal amount of $1,191,147 (the "New Notes"), to the
holders (the "Holders") of the Company's Subordinated Exchange Notes (the
"Original Notes") in exchange for $1 million in cash and as payment of $191,147
in respect of an interest payment due on December 28, 1997. Also in connection
with the issuance of the New Notes, the Holders waived certain defaults under
the Original Notes.
As of the date of the issuance of the New Notes, the Company's cash
position was approximately $1 million and its net working capital deficit was
approximately $6 million. Also as of the date of issuance of the New Notes,
property, plant and equipment was estimated at $21 million with debt under $9
million, and stockholders' equity was estimated to be approximately $12 million.
On January 22, 1998, the Company issued a press release announcing the
receipt of $1 million of cash as a result of the issuance of the New Notes and
providing the foregoing financial data; such press release is included herewith
as Exhibit 99.1 and is incorporated by reference herein.
Intensified Focus on High-Speed Internet Access Service
At year-end 1997, the Company elected to focus its immediate efforts on
bringing its high-speed Internet access service to market. Due to the increased
focus on such service, the Company de-emphasized its marketing efforts related
to selling subscription television service in the immediate future. In
conjunction with this action, on December 31, 1997, the Company reduced its
workforce by 43 people, most of whom worked in subscription television sales,
marketing and operations.
On January 26, 1998, the Company issued a press release announcing the
Company's intensified focus on high-speed Internet access service and the
commercial availability of a new high-speed access feature, SuperChargeSM; such
press release is included herewith as Exhibit 99.2 and is incorporated by
reference herein. Internet Service Marketing; Chief Marketing Officer
Gary MacGregor, vice-president of sales and marketing for CVNY, has
taken on the additional responsibility of marketing the Company's high-speed
Internet access service. Previously, Mr. MacGregor shared Internet marketing
responsibilities with Bruce Judson, the former chief marketing officer, who has
left the Company. |
