**Securities and Exchange Commission**

**Washington, D.C. 20549**

 

 

**FORM 10-Q**

 

** **

| **(Mark  One)** |   |                                                      |
|-----------------|--------|-----------------------------------------------------------|
| ý          |   | **QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF** |
|            |   | **THE  SECURITIES EXCHANGE ACT OF 1934**                  |

 

**For the quarterly period ended June30, 2002**

 

| o      |   | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF** |
|--------|--------|------------------------------------------------------------|
|   |   | **THE  SECURITIES EXCHANGE ACT OF 1934**                   |

 

 

**For thetransition period from           to**

 

**Commissionfile number 0-28362**

 

**ClearComm,L.P.**

(Exact name of registrant as specified in its charter)

 

 
| **Delaware**                                                     | **66-0514434**       |
|------------------------------------------------------------------|----------------------|
| (State  or other jurisdiction of                                 | (I.R.S.  Employer    |
| incorporation  or organization)                                  | Identification  No.) |
|                                                             |                 |
| **268 Muñoz Rivera Ave. Suite 2206  Hato Rey, Puerto Rico** | **00918-1929**       |
| (Address  of principal executive offices)                        | (Zip Code)           |

 

Registrant’stelephone number, including area code: **(787) 620-0140**

 

 

Indicate by check mark whether the registrant(1) has filed all reports required to be filed by Section 13 or 15 (d) of theSecurities Exchange Act of 1934 during the preceding 12 months and (2) has beensubject to such filing requirements for the past 90 days.

Yes   ý  No   o

 

 

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ClearComm,L.P.

INDEX

 
| PART I   FINANCIAL INFORMATION |                                                                                                                                        |
|------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
|                                     |                                                                                                                                        |
| Item 1.                                  | Financial Statements                                                                                                                        |   |
|                                     |                                                                                                                                        |   |
|                                     | Consolidated  Statements of Assets, Liabilities and Partners’ Deficit as of June 30, 2002  (unaudited) and December 31, 2001 (audited) |   |
|                                     |                                                                                                                                        |   |
|                                     | Consolidated  Statements of Revenues and Expenses for the three-month and six-month periods  ended June 30, 2002 and 2001 (unaudited). |   |
|                                     |                                                                                                                                        |   |
|                                     | Consolidated  Statements of Changes in Partners’ Deficit for the six-month period ended  June 30, 2002 (unaudited)                |   |
|                                     |                                                                                                                                        |   |
|                                     | Consolidated  Statements of Cash Flows for the six-month periods ended June 30, 2002  and 2001 (unaudited)                             |   |
|                                     |                                                                                                                                        |   |
|                                     | Notes  to Interim Consolidated Financial Statements (unaudited)                                                                             |   |
|                                     |                                                                                                                                        |   |
| Item  2                                  | Management’s  Discussion and Analysis of Financial Condition and Results of Operations                                                 |   |
|                                     |                                                                                                                                        |   |
| Item  3                                  | Quantitative  Disclosure About Market Risk.                                                                                                 |   |
|                                     |                                                                                                                                        |   |
| PART II                                  | OTHER INFORMATION                                                                                                                           |   |
|                                     |                                                                                                                                        |   |
| Item  1.                                 | Legal  Proceedings                                                                                                                          |   |
|                                     |                                                                                                                                        |   |
| Item 6.                                  | Exhibits and  Reports on Form 8-K                                                                                                           |   |
|                                     |                                                                                                                                        |   |
| Signatures.                              |                                                                                                                                        |
|                                     |                                                                                                                                        |
| Exhibit Index.                           |                                                                                                                                        |

 

 

2

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PARTI   FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

 

ClearComm,L.P.

CONSOLIDATED STATEMENTS OF ASSETS,LIABILITIESAND PARTNERS’ DEFICIT

 
|                                                                                        |   | **June 30,**    |        | **December 31,**  |   |
|---------------------------------------------------------------------------------------------|--------|-----------------|-------------|-------------------|--------|
|                                                                                        |   | **2002**        |        | **2001**          |   |
|                                                                                        |   | **(Unaudited)** |        | **(Audited****)** |   |
| **ASSETS**                                                                                  |   |            |        |              |   |
| CURRENT ASSETS:                                                                             |   |            |        |              |   |
| Cash and cash equivalents                                                                   |   | $               | 17,246,750  |              | $      | 10,241,902 |   |
| Accounts receivable, net  of allowance for doubtful accounts of $17,083,935 and $18,341,025 |   | 17,319,848      |        | 19,099,986        |   |
| Accounts receivable due  from officer                                                       |   | 391,314         |        | 102,000           |   |
| Insurance claim receivable                                                                  |   | 1,496,680       |        | 1,496,324         |   |
| Investment in Emilio’s                                                                 |   | 238,266         |        | —            |   |
| Inventories                                                                                 |   | 11,097,074      |        | 10,305,254        |   |
| Prepaid expenses                                                                            |   | 1,769,469       |        | 652,279           |   |
| Total current assets                                                                        |   | 49,559,401      |        | 41,897,745        |   |
|                                                                                        |   |            |        |              |   |
| DEFERRED FINANCING COSTS,  net                                                              |   | —          |        | 906,731           |   |
| PCS LICENSES, net                                                                           |   | 56,200,567      |        | 57,517,974        |   |
| PROPERTY AND EQUIPMENT,  net                                                                |   | 98,949,158      |        | 102,095,953       |   |
|                                                                                        |   | $               | 204,709,126 |              | $      | 202,418,403 |   |
| LIABILITIES AND PARTNER’S  DEFICIT                                                     |   |            |        |              |   |
| CURRENT LIABILITIES:                                                                        |   |            |        |              |   |
| Accounts payable and  accrued liabilities                                                   |   | $               | 24,202,318  |              | $      | 27,868,716 |   |
| Note payable to Lucent  Technologies                                                        |   | 60,531,697      |        | 60,531,697        |   |
| Bridge Loan Facility                                                                        |   | 60,000,000      |        | 60,000,000        |   |
| Accounts payable to  related parties                                                        |   | 9,774,448       |        | 8,705,353         |   |
| Note Payable to Alcatel                                                                     |   | 7,436,029       |        | 12,790,140        |   |
| Accrued interest                                                                            |   | 2,658,916       |        | 3,517,319         |   |
| Deferred income                                                                             |   | 1,281,400       |        | 1,550,665         |   |
| Total current liabilities                                                                   |   | 165,884,808     |        | 174,963,890       |   |
| LONG-TERM NOTES PAYABLE                                                                     |   | 92,475,463      |        | 81,723,962        |   |
| MINORITY INTEREST                                                                           |   | 12,760,072      |        | 13,362,939        |   |
|                                                                                        |   |            |        |              |   |
| PARTNER’S DEFICIT                                                                      |   |            |        |              |   |
| Limited partners’ capital  (2,907.7 units, issued and outstanding)                     |   | 73,039,616      |        | 73,039,616        |   |
| General partner’s capital                                                              |   | 100,000         |        | 100,000           |   |
| Undistributed losses—                                                                  |   |            |        |              |   |
| Accumulated during  development stage                                                       |   | (48,704,525     | )           | (48,704,525       | )      |
| Operations                                                                                  |   | (90,846,308     | )           | (92,067,478       | )      |
| Total partners’ deficit                                                                |   | (66,411,217     | )           | (67,632,388       | )      |
|                                                                                        |   | $               | 204,709,126 |              | $      | 202,418,403 |   |

 

The accompanying notes are integral part ofthese consolidated statements.

 

 

3

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ClearComm,L.P.

CONSOLIDATEDSTATEMENTS OF REVENUES AND EXPENSES(UNAUDITED)

 
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
|--------------------------------------------------------|--------|----------------------------------------|------------|--------------------------------------|--------|-------------|--------|-------------|------------|
|                                                   |   | **Three-Month  Periods Ended June 30** |       | **Six-Month  Periods Ended June 30** |   |
|                                                   |   | **2002**                               |       | **2001**                             |   | **2002**    |   | **2001**    |       |
| **Revenues:**                                          |   |                                   |       |                                 |   |        |   |        |       |
| Service revenues                                       |   | $                                      | 25,443,665 |                                 | $      | 27,345,079  |   | $           | 52,070,415 |   | $ | 52,375,461 |   |
| Handset and accessories  sales                         |   | 2,359,450                              |       | 6,174,279                            |   | 3,713,061   |   | 9,156,163   |       |
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
|                                                   |   | 27,803,115                             |       | 33,519,358                           |   | 55,783,476  |   | 61,531,624  |       |
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
| **Operating Cost and Expenses:**                       |   |                                   |       |                                 |   |        |   |        |       |
| Cost of handset and  accessories                       |   | 5,381,502                              |       | 9,700,493                            |   | 12,432,244  |   | 17,760,845  |       |
| Interconnection expense                                |   | 2,001,828                              |       | 400,316                              |   | 2,980,748   |   | 2,458,116   |       |
| Sales and dealers  commissions                         |   | 791,209                                |       | 589,815                              |   | 2,259,509   |   | 2,349,408   |       |
| Salaries and benefits                                  |   | 3,177,705                              |       | 3,123,051                            |   | 7,335,893   |   | 6,319,987   |       |
| Advertising expense                                    |   | 3,240,163                              |       | 4,852,781                            |   | 4,891,333   |   | 7,170,080   |       |
| Legal and professional  services                       |   | 2,203,500                              |       | 3,309,562                            |   | 4,697,892   |   | 6,250,680   |       |
| Depreciation and  amortization                         |   | 4,071,901                              |       | 4,315,997                            |   | 8,019,629   |   | 9,998,177   |       |
| Provision for doubtful  accounts                       |   | 1,974,286                              |       | 1,935,110                            |   | 5,455,014   |   | 5,903,832   |       |
| Rent expense                                           |   | 2,697,291                              |       | 1,841,529                            |   | 4,171,796   |   | 3,895,754   |       |
| Taxes other than income                                |   | 1,544,366                              |       | 1,836,279                            |   | 1,925,225   |   | 3,457,126   |       |
| Other expenses                                         |   | 1,829,360                              |       | 2,157,845                            |   | 2,483,652   |   | 4,651,391   |       |
| Management fee to General  Partner                     |   | 30,000                                 |       | 32,000                               |   | 62,000      |   | 64,000      |       |
| Services rendered by  related parties                  |   | 1,477,493                              |       | 398,268                              |   | 3,021,342   |   | 675,570     |       |
| Gain on sale of  Visalia-Porterville license           |   | —                                 |       | (4,814,337                           | )      | —      |   | (4,814,337  | )          |
| Gain on sale of NewComm’s  Stock to Fleet         |   |                                   |       |                                 |   | (12,569,784 | )      |        |       |
|                                                   |   | 30,420,604                             |       | 29,678,709                           |   | 47,166,489  |   | 66,140,629  |       |
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
| **Income (Loss) from Operations**                      |   | (2,617,489                             | )          | 3,840,649                            |   | 8,616,983   |   | (4,609,005  | )          |
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
| **Other Income (Expense)**                             |   |                                   |       |                                 |   |        |   |        |       |
| Interest income                                        |   | 189,931                                |       | 122,329                              |   | 305,462     |   | 307,015     |       |
| Interest expense                                       |   | (3,615,072                             | )          | (4,653,842                           | )      | (8,734,358  | )      | (9,357,808  | )          |
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
|                                                   |   | (3,425,141                             | )          | (4,531,513                           | )      | (8,428,896  | )      | (9,050,793  | )          |
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
| **Net Income (Loss) before Minority Interest**         |   | (6,042,630                             | )          | (690,864                             | )      | 188,087     |   | (13,659,798 | )          |
| **Minority Interest**                                  |   | 750,914                                |       | 254,316                              |   | 1,033,083   |   | 706,692     |       |
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
| **Net Income (Loss)**                                  |   | $                                      | (5,291,716 | )                                    | $      | (436,548    | )      | $           | 1,221,170  |   | $ | (12,953,106 | ) |
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
| **Net Income (Loss) Attributable to General Partner**  |   | $                                      | (1,322,929 | )                                    | $      | (109,137    | )      | $           | 305,292    |   | $ | (3,238,277 | )  |
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
| **Net Income (Loss) Attributable to Limited Partners** |   | $                                      | (3,968,787 | )                                    | $      | (327,411    | )      | $           | 915,887    |   | $ | (9,714,830 | ) |
|                                                   |   |                                   |       |                                 |   |        |   |        |       |
|                                                        |        |                                        |            |                                      |        |             |        |             |            |  |  |  |  |  |  |  |  |

 

The accompanying notes are integral part ofthese consolidated financial statements.

 

4

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ClearComm,L.P.

CONSOLIDATEDSTATEMENTS OF CHANGES IN PARTNERS’ DEFICIT(Unaudited)

FORTHE THREE-MONTH PERIOD ENDED JUNE 30, 2002

 
|                                   |   | **Limited  Partners** |   | **General** |        |        |        |
|----------------------------------------|--------|-----------------------|--------|-------------|-------------|-------------|-------------|
|                                   |   | **Units**             |   | **Amount**  |        | **Partner** |        | **Total** |   |
| Balance (deficit) at December 31, 2001 |   | 2,907.7               |   | $           | (50,724,291 | )           | (16,908,097 | ) | (67,632,388 | ) |
| Three-month period ended June 30, 2002 |   |                  |   |        |        |        |        |   |   |
| Net loss                               |   |                  |   | 915,878     |        | 305,293     |        | 1,221,171 |   |
| Balance (deficit) at June 30, 2002     |   | 2,907.7               |   | $           | (49,808,413 | )           | (16,602,804 | ) | (66,411,217 | ) |

 

The accompanying notes are integral part ofthese consolidated financial statements.

 

5

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ClearComm,L.P.

CONSOLIDATED STATEMENTS OFCASH FLOWS(UNAUDITED)
|                                                                                                 |   | **Six-Month Periods Ended** |       |
|------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|
|                                                                                                 |   | **June 30,**                |       | **June 30,** |   |
|                                                                                                 |   | **2002**                    |       | **2001** | ** ** |
| **CASH  FLOWS FROM OPERATING ACTIVITIES**                                                            |   |                        |       |   |   |
| Net (Income)                                                                                         |   | $                           | 1,221,170  |   | $ | (12,953,106 | ) |
|                                                                                                 |   |                        |       |   |   |
| Adjustments to reconcile  net (income) for the period to net cash used in  operating activities |   |                        |       |   |   |
| Depreciation and amortization                                                                        |   | 8,019,629                   |       | 9,998,177 |   |
| Provision for doubtful  accounts                                                                     |   | 5,455,014                   |       | 5,903,832 |   |
| Minority interest                                                                                    |   | (1,033,083                  | )          | (706,692 | ) |
| Gain from sale of  Visalia-Porterville license                                                       |   | —                      |       | — |   |
| Increase in accounts  receivable                                                                     |   | (3,674,876                  | )          | (5,930,768 | ) |
| Increase in accounts  receivable due from officer                                                    |   | (289,314                    | )          | — |   |
| Increase in insurance  claim receivable                                                              |   | (360                        | )          | (946,494 | ) |
| Increase in inventories                                                                              |   | (791,820                    | )          | (2,863,383 | ) |
| Increase in prepaid  expenses and deferred financing cost                                            |   | (210,459                    | )          | (274,571 | ) |
| (Decrease) increase in  accounts payable and accrued liabilities                                     |   | (3,666,397                  | )          | 4,215,794 |   |
| Increase in accounts  payable to related parties                                                     |   | 1,069,095                   |       | 2,646,249 |   |
| Increase (decrease) in  accrued interest                                                             |   | (3,890,126                  | )          | 1,785,588 |   |
| (Decrease) increase in  deferred incom                                                               |   | (269,265                    | )          | 121,758 |   |
| Total adjustments                                                                                    |   | 718,038                     |       | 13,949,490 |   |
| Net cash provided by  operating activities                                                           |   | 1,939,208                   |       | 996,384 |   |
|                                                                                                 |   |                        |       |   |   |
| CASH FLOWS FROM INVESTING  ACTIVITIES:                                                               |   |                        |       |   |   |
| Acquisition of property  and equipment                                                               |   | (3,555,427                  | )          | (4,841,232 | ) |
| Gain on Sale of Stock to  Fleet                                                                      |   | (12,569,783                 | )          | — |   |
| Investment in Emilio’s                                                                          |   | (238,266                    | )          | — |   |
| Net cash (used in)  operating activities                                                             |   | (16,363,476                 | )          | (4,841,232 | ) |
|                                                                                                 |   |                        |       |   |   |
| CASH FLOWS FROM FINANCING  ACTIVITIES:                                                               |   |                        |       |   |   |
| Proceeds from sale of  Visalia-Porterville license                                                   |   | —                      |       | 9,500,000 |   |
| Proceeds from the sale  Stock to NewComm                                                             |   | 13,000,000                  |       | — |   |
| Capital contribution from  minority interest                                                         |   | —                      |       | 5,000,000 |   |
| Proceeds from issuance of  notes payable to TLD                                                      |   | 13,783,225                  |       | 4,990,000 |   |
| Payment of Note Payable to  Lucent                                                                   |   | —                      |       | (8,298,808 | ) |
| Payment of Note Payable to  Alcatel                                                                  |   | (5,354,111                  | )          |   |   |
| Net cash provided by  financing activities                                                           |   | 21,429,114                  |       | 11,191,192 |   |
|                                                                                                 |   |                        |       |   |   |
| NET INCREASE IN CASH AND  CASH EQUIVALENTS                                                           |   | 7,004,846                   |       | 7,346,344 |   |
|                                                                                                 |   |                        |       |   |   |
| CASH AND CASH EQUIVALENTS,  beginning of period                                                      |   | 10,241,902                  |       | 9,338,798 |   |
|                                                                                                 |   |                        |       |   |   |
| CASH AND CASH EQUIVALENTS,  end of period                                                            |   | $                           | 17,246,750 |   | $ | 16,685,142 |   |
|                                                                                                 |   |                        |       |   |   |
| SUPPLEMENTAL CASH FLOWS  INFORMATION:                                                                |   |                        |       |   |   |
| Network construction costs  financed through note payable to Lucent and accounts payable             |   | $                           | —     |   | $ | 10,132,389 |   |
| Accounts receivable  written-off against the allowance for doubtful accounts                         |   | $                           | 2,942,358  |   | $ | 3,718,949 |   |
| Interest paid                                                                                        |   | $                           | 7,032,035  |   | $ | 6,307,071 |   |

 

The accompanying notes are integral part ofthese consolidated financial statements.

 

6

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CLEARCOMM,L.P.

NOTESTO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

 

1.                                       BASIS OFPRESENTATION AND INTRODUCTION

 

                Theunaudited interim consolidated financial statements presented herein have beenprepared in accordance with accounting principles generally accepted in theUnited States for interim financial statements and with the instructions toForm 10-Q and Regulation S-X pertaining to interim financial statements.  Accordingly, they do not include allinformation and footnotes required by accounting principles generally acceptedin the United States for complete financial statements.  The unaudited interim consolidated financialstatements reflect all adjustments, consisting of normal recurring adjustmentsand accruals which, in the opinion of management, are considered necessary fora fair presentation of the Partnership’s financial position at  June 30, 2002 and results of operations andcash flows for the three-month periods ended June 30, 2002 and 2001.  Theunaudited interim consolidated financial statements should be read inconjunction with the summary of significant accounting policies and notes toconsolidated financial statements included in the Partnership’s Annual Reporton Form 10-K for the year ended December 31, 2001.  Results of operations for interim periods are not necessarilyindicative of the results that may be expected for the full year.

 

                ClearComm,L.P. (the “Partnership”) is a limited partnership organized on January 24, 1995under the laws of the State of Delaware. The Partnership was formed to file applications with the FederalCommunications Commission (“FCC”) under personal communications service (“PCS”)frequency Block C, originally restricted to minorities, small businesses anddesignated entities, to become a provider of broadband PCS.  The Partnership will terminate on December31, 2005, or earlier upon the occurrence of certain specified events as detailedin the Partnership Agreement.

 

                SuperTelCommunications Corp. (“SuperTel”), a Puerto Rico corporation, is the GeneralPartner.  Its total share of the incomeand losses of the Partnership is 25% in accordance with the PartnershipAgreement.  Approximately 1,600 limitedpartners also invested in the Partnership through a private placement.

 

                OnJanuary 22, 1997, the Partnership was granted the PCS Block C licenses forPuerto Rico and certain cities in California.

 

                OnFebruary 4, 1999, the Partnership entered into a joint venture agreement (the“Joint Venture Agreement”) with Telefónica Larga Distancia De Puerto Rico, Inc.(“TLD”) to jointly develop and operate certain PCS licenses in PuertoRico.  Among the most importantprovisions of the Joint Venture Agreement are the following:

 

•                  The Partnership transferredall of its Puerto Rico PCS licenses including its related debt with the FCC toNewComm Wireless Services, Inc. (“NewComm”), a newly organized Puerto Ricocorporation, in exchange for all of NewComm’s issued and outstanding common stock.

 

•                  TLD loaned approximately $20million to NewComm by means of a secured convertible promissory note payable(the “Promissory Note”).  The PromissoryNote is secured by a security agreement pursuant to which a security interestis imposed upon NewComm’s assets, a Partnership guarantee and a pledgeagreement, as defined.

 

•                  Once certain regulatory andother requirements are met, the Promissory Note will be converted to NewComm’scommon stock representing approximately 49.9% of NewComm’s equity at the timeof the exchange.  Originally, TLD hadthe option to buy an additional .2%, which would have brought its ownership to50.1%, subject to a third party valuation of NewComm’s stock and approval bythe FCC.  On June 26, 2001, the JointVenture Agreement was amended eliminating the TLD Option to buy the additional..2%.  However, by means of a StockPurchase Agreement dated as of March 12, 2002, and subject to certainconditions, the Partnership has agreed to sell an amount of shares equal to0.2% of NewComm to TLD.

 

•                  The new Sale Agreementprovides that at any time after 14 months from the signing of the StockPurchase Agreement with TLD, that is, any time after May 2003, ClearComm (orTLD), as the case may be, may trigger a shareholder obligation to sell NewComm.  Within 30 days of a notice of sale, TLD (orClearComm as the case may be) would have the right to purchase ClearComm’s (orTLD’s) interest.  The purchase price tobe paid at that time would be based on a valuation performed by the investmentbanking firm that prepared the one under the Stock Purchase Agreement.  If TLD does not exercise its right to buyout ClearComm’s interest, the shareholders will be bound to proceed with thesales 

 

7

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process to attempt a sale of NewComm. All shareholders are bound to cooperate and undertake all that isnecessary in that effort.  Further, theshareholders are bound to accept the highest price proposed by an interestedbuyer, which price must be payable in cash or freely tradable securities, or acombination thereof, and which must be for a price not less

 

•                  than the valuation preparedby the investment  banker.  Some additional points are that at theclosing of the sale of NewComm the Management Agreement and the TechnologyTransfer Agreement held by TLD will terminate. Also, no premium for controlling interest or discount for holding aminority interest in NewComm will apply. The Sale Agreement shall continue in full force and effect even if theStock Purchase Agreement with TLD, for whatever reason, does not close.

 

•                  NewComm and TLD entered intocertain management and technology transfer agreements.

 

 

                InSeptember 1999, NewComm commenced providing PCS services in Puerto Rico.

 

                Ineach of November 2000, December 2000, and March 2001, NewComm received$5,000,000, from Syndicated Communications Venture Partners IV, L.P. (Syncom),a third party, in exchange for approximately 4.92% ownership in NewComm. Syncomhas committed to contribute up to $25 million to NewComm in exchange for anapproximately 8.2% ownership interest in NewComm.

 

                OnMarch 2, 2002, the Partnership sold approximately 4.08% of NewComm to a groupof investors led by Fleet Development Ventures for $13 million.  The Partnership and TLD contributed approximately$9 million each to NewComm in the form of equity and convertible debt,respectively. The Partnership and TLD have committed an additional $7.5M eachto close the Project Finance Facility. The Partnership believes it has obtained sufficient funds, together withTLD, to provide NewComm with the capital necessary for the Project FinanceFacility and to fully fund NewComm’s operations.

 

                OnApril 16, 2002, ClearComm, L.P. entered into a Shareholders’ Agreement to forma joint venture with eMilios International, L.L.C., a Florida Limited LiabilityCorporation, to promote and establish in Puerto Rico the eMilios concept.  The joint venture was formed under a PuertoRico Corporation named Internet Surfing Stores of Puerto Rico, Inc.(“ISS”).  The Partnership owns 49% andeMilios International owns 51% of ISS.

 

                TheeMilios concept involves internet communication galleries that are gearedtowards educating people in the use of computers and the internet, and acts asa communication and recreational center as well.  The broadband connectivity that is offered at eMilios allows thestores to efficiently offer internet communications and also access to a greatvariety of interactive content, such as cyber games, as well as software andtools for free lancers and small business entities.   The service is provided and collected with a proprietary smartcard and software application.  Thecommitment of the Partnership to ISS is $1 Million and eMilios Internationalhas committed $500,000 in cash plus trade-name, systems, software, andtechnology know-how equivalent to $500,000. The Partnership is responsible for the management and day-to-dayoperations of ISS.  ISS already has two(2) stores under construction and it expects to have a total of four (4) openby the first quarter of 2003.  Theinvestment has the benefit of an exit mechanism.  At any time after 2003, ClearComm can force the acquisitions ofits shares in ISS or the sale of the whole company.

 

2.             FINANCINGREQUIREMENTS

 

                Theaccompanying consolidated financial statements have been prepared on a goingconcern basis, which contemplates the realization of assets and thesatisfaction of liabilities in the normal course of business.  The Partnership commenced operations inSeptember 1999 and has realized a net income amounting to $1,221,174million forthe six-month period ended June 30, 2002 and incurred operating losses of$12,953,106 million for the six month period ended June 30, 2001.  It also has working capital defining andpartners’ capital deficits of $ 116.3 and $66.4 million, respectively, as ofJune 30, 2002.  The Partnership islikely to continue incurring losses until such time as its subscriber basegenerates revenue in excess of the Partnership’s expenses.  Development of a significant subscriber baseis likely to take time, during which the Partnership must finance itsoperations by means other than its revenues.

 

                Aspart of the agreement with TLD, NewComm entered into a contract with LucentTechnologies, Inc. (“Lucent”) that requires Lucent to build a network that usesthe Code Division Multiple Access (“CDMA”) protocol.  It is expected that the total cost of this project willapproximate $125 million.  During 2000, NewComm’smanagement and Lucent agreed on formally extending the

 

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payment of up to $61.0 million of the totalamount due under the contract under a formal financing agreement.  The financing agreement extends payments foran eight-month period (through June 2001) at an annual interest rate of 1.5%over 90-day LIBOR.  NewComm’s managementand Lucent restructured this financing agreement, by means of a Promissory Noteissued on September 26, 2001 for the principal sum of $60.5 million plus 8% interest.   The parties are currently under negotiatingto make this part of a permanent debt facility.

 

During November 2000,NewComm entered into a $60 million bridge loan agreement (the “Bridge LoanFacility”) with ABN-AMRO and BBVA (the “Banks”) with interest at 1.5% over90-day LIBOR, which expired on March 15, 2001, and was extended until March 13,2002, with an interest rate at .75% over 90-day LIBOR.  The Bridge Loan is now guaranteed byTelefónica Internacional, S.A. (TISA), an affiliate of TLD.  On May 30, 2002, the Maturity date wasamended to September 30, 2002. ClearComm and TLD continue to work towardssecuring a permanent financing facility, which will require the Partnership,through Syncom and TLD, to each contribute a total of approximately $25 millionin equity and convertible debt.  As partof this commitment, during the second half of 2000, the first half of 2001, andsecond quarter of 2002, the Partnership, Syncom and TLD have contributed atotal of $24 million in the form of equity and convertible debt, respectively.

 

                Eachof the Partnership’s C-Block licenses is subject to a FCC requirement that thePartnership constructs network facilities that offer coverage to at leastone-third of the population in the market covered by such license within fiveyears following the grant of the applicable license and to at least two-thirdsof the population within ten years following the grant.   The Partnership is in compliance with theFCC coverage requirements in Puerto Rico and the California Licenses.

 

                Managementbelieves that the Partnership will comply with all the requirements forobtaining the financing and believes that cash and cash equivalents on hand,anticipated growth in revenues, vendor financing and the permanent financingwill be adequate to fund its operations, at a minimum, through the end of2002.  However, in the absence ofimproved operating results and cash flows, and without the closing of itscontemplated permanent financing, the Partnership may face liquidity problemsto fund its operations and meet its obligations.  As a result of these matters, substantial doubt exists about thePartnership’s ability to continue as a going concern.  The accompanying consolidated financialstatements do not include any adjustments that might result from the outcome ofthis uncertainty.

 

3.             OTHERACCOUNTING PRONOUNCEMENTS

 

                InJune 1998, the Financial Accounting Standards Board (“FASB”) issued Statementof Financial Accounting Standards No. 133, “Accounting for DerivativeInstruments and Hedging Activities” (“SFAS 133”). SFAS 133 establishedaccounting and reporting standards requiring that every derivative instrument(including certain derivative instruments embedded in other contracts) berecorded in the balance sheet as either an asset or liability measured at itsfair value. SFAS 133 requires that changes in the derivative’s fair value berecognized currently in earnings unless specific hedge accounting criteria aremet. In June 2000, the FASB issued Statement of Financial Accounting StandardsNo. 138 (“SFAS 138”) which amends SFAS 133 for certain derivative instrumentsand certain hedging activities. SFAS 133, as amended, is effective for fiscalyears beginning after June 15, 2000. The Partnership adopted SFAS 133 beginningJanuary 1, 2001, but did not have any derivatives.

 

                InJune 2001, the Financial Accounting Standards Board issued SFAS No. 141,“Business Combinations” (effective July 1, 2001) and SFAS No. 142, “Goodwilland Other Intangible Assets” (effective for the Company on January 1, 2002).SFAS No. 141 prohibits pooling-of-interests accounting for acquisitions. SFASNo. 142 specifies that goodwill and some intangible assets will no longer beamortized but instead will be subject to periodic impairment testing. TheCompany is in the process of evaluating the financial statement impact ofadoption of SFAS No. 142.

 

4.             LEGALPROCEEDINGS

 

                ThePartnership is subject to certain legal proceedings and an FCC proceeding,which were described in the Partnership’s Form 10-K for the year ended December31, 2001.

 

Sprint/Centennial

 

On September 21, 2001, NewComm Wireless Services, Inc.d/b/a MoviStar (“MoviStar”) filed a *Complaint*and *Motion and Memorandum of Law RequestingTemporary Restraining Order and Preliminary Injunction* in theFederal District Court for the District of Puerto Rico, which alleged seriousand unlawful interruptions, interferences and irreparable damages to MoviStar’s

 

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operations rising out of Sprint’s refusal to broadcastan SID for the Puerto Rico market that will not interfere with the servicespresently being offered by MoviStar to its subscribers.  During October 15th to 18th,2001, the District Court held an evidentiary hearing related to the injunctiverelief sought.  In its *Opinion andOrder* of**October 29, 2001, the District Courtordered Sprint to “immediately cease and desist from using SID 5142 and/or anyother SID which similarly interferes with plaintiff’s operations in PuertoRico.”

 

On October 30, 2001, Centennial filed a *Motion ofIntervention of Right* in which it requested leave from the DistrictCourt to join the Sprint litigation. Despite MoviStar’s opposition, the District Court granted Centennial’smotion on November 5, 2001.  Both Sprintand Centennial are currently appealing, in the First Circuit Court of Appeals,the injunctive relief granted by the District

 

Court of Puerto Rico. On April 6, 2002, the First Circuit Court of Appeals issued an orderreversing the injunction release.  On orabout April 20, 2002, MoviStar filed a Petition for a Re-Hearing and thepetition was denied.  However, MoviStaris continuing to pursue its damage claims.

 

 

PRAICO

 

This is a civil action for breach of contract andcollection of moneys before the Superior Court of San Juan on September 17,2001, wherein the NewComm Wireless Services, Inc. (“NewComm”) is suing thePuerto Rican American Insurance Company (“PRAICO”) demanding the payment ofclaims made by NewComm under insurance policies issued by PRAICO.  NewComm attempts to recover four milliondollars ($4,000,000) against PRAICO to recover from PRAICO under an insurancepolicy issued by that company to cover theft and damages of handsets sold tothe public.  The four million dollarclaim covers approximately four thousand (4,000) phones reported as either lostor stolen.  The complaint has been filedbut no answer has been filed to date. The parties are currently in negotiations for a settlement of thesubject claim.  PRAICO has offered thesum of two million dollars ($2,000,000) as settlement.  NewComm has made a counteroffer of$3,800,000. The parties are currently negotiating in good faith to settle thismatter.

 

 

 

ITEM 2. MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-looking Statements

 

                ThisForm 10-Q and future filings by the Partnership on Form 10-Q and Form 8-K andfuture oral and written statements by the Partnership may include certainforward-looking statements, including (without limitation) statements withrespect to anticipated future operating and financial performance, growthopportunities and growth rates, acquisition and divestitive opportunities, andother similar forecasts and statements of expectation.  Words such as “expects,” “anticipates,”“intends,” “plans,” “believes,” “seeks,” “estimates,” and “should,” andvariations of these words and similar expressions, are intended to identifythese forward-looking statements. Forward-looking statements by the Partnership are based on estimates,projections, beliefs and assumptions of management and are not guarantees offuture performance.  The Partnershipdisclaims any obligation to update or revise any forward-looking statementbased on the occurrence of future events, the receipt of new information, orotherwise.

 

                Actualfuture performance, outcomes and results may differ materially from thoseexpressed in forward-looking statements made by the Partnership as a result ofa number of important factors.  Examplesof these factors include, without limitation, failure to develop thePartnership’s PCS licenses in California due to an inability to obtainsatisfactory financing or partners capital; rapid technological developmentsand changes in the telecommunications industry; ongoing deregulation (and theresulting likelihood of significantly increased price and product/servicecompetition) in the telecommunications industry as a result of theTelecommunications Act of 1996 and other similar federal and state legislationand the federal and state rules and regulations enacted pursuant to thatlegislation; regulatory limitations on the Partnership’s ability to compete inthe telecommunications services industry; and continuing consolidation in thetelecommunications services industry. In addition to these factors, actual future performance, outcomes and resultsmay differ materially because of other, more general factors including, withoutlimitation, general industry and market conditions and growth rates, domesticand international economic conditions, governmental and public policy changesand the continued availability of financing in the amounts, at the terms and onthe conditions necessary to support the Partnership’s future business.

 

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Introduction

 

                Theinformation contained in this Part I, Item 2 updates, and should be read inconjunction with, information set forth in Part II, Items 7 and 8, in theCompany’s Annual Report on Form 10-K for the year ended December 31, 2000, inaddition to the interim consolidated financial statements and accompanyingnotes presented in Part 1, Item 1 of this Form 10-Q.

 

                ThePartnership was formed in January 1995 and is managed by its General Partner,SuperTel Communications Corp.  ThePartnership was organized to acquire, own, consult and operate personalcommunication services PCS licenses in the Block C band and to take advantageof the benefits that the FCC has set aside for entrepreneurs.  The Partnership owns the Puerto RicoLicenses, which consist of two 15 MHz PCS licenses covering Puerto Rico, andthe California Licenses, which consist of four 15 MHz PCS licenses covering theCalifornia cities of Eureka, Redding, Modesto, and Merced. The license coveringVisalia-Porterville, California, was sold and transferred to Leap Wireless onJune 8, 2001 for $9,500,000.

 

 

                ThePartnership commenced commercial operations of its PCS network in Puerto Ricoon September 24, 1999 when it began offering wireless services in Puerto Ricoto the public.  Prior to that date, itsincome had consisted of interest earnings only.  Since the Partnership commenced commercial operations in 1999 andduring 2000 was still in the start-up process, the comparisons presented belowmay not be indicative of future operations.

 

                ThePartnership established its Puerto Rico network by forming a wholly ownedsubsidiary, NewComm, on January 29, 1999. On February 4, 1999, the Partnership and NewComm entered into anagreement with TLD, whereby the Partnership contributed its two Puerto RicoLicenses to NewComm and TLD provided NewComm a $19,960,000 loan to develop thePuerto Rico Licenses.  TLD’s loan ispursuant to a secured convertible promissory note (the “Note”) which isconvertible into 49.9% of NewComm’s equity. The Note however, cannot be converted until the FCC authorizes TLD tohold more than a 25% equity interest in NewComm.  By means of a Stock Purchase Agreement executed on March 12,2002, the Partnership has agreed to sell shares equal to 0.2% in NewComm to TLDconditioned to obtaining permanent financing and a clear exit path for thePartnership.  The transaction is subjectto FCC approval also.

 

                SinceJanuary 2002 the Partnership has been offering wireless DSL service in certainareas within the California Licenses in compliance with the FCC build outrequirements.

 

Results of Operations

 

                Three-monthperiod ended June 30, 2002 compared with three-month period ended June 30,2001.

 

Revenues

 

                ThePartnership’s revenues for the three-month period ended June 30 2002 totaled27,803,115 as compared to $33,519,358 for the same period in 2001. Revenues forthe three-month period ended June 30, 2002 included $25,443,665 in servicerevenues and $2,359,450 in handset and accessories sales generated fromNewComm’s wireless operations, as compared to $27,345,079 and $6,174,279respectively, for the same period in 2001. The decrease in revenues is mainly due to lesser handset and accessoriessales which were reduced significantly due to adjusting prices of the handsetunits.

 

Expenses

 

                Expensesfor the three-month period ended June 30, 2002 totaled $30,420,604 as comparedto $29,678,709 for the same period in 2001. During the  second  quarter of 2002, the Partnership’s expenses included $5,381,502 ($9,700,493 as ofJune 30, 2001) in costs of handset and accessories, $3,177,705 ($3,123,051 asof June 30, 2001) for salaries and benefits, $2,203,500 ($3,309,562 as of June30, 2001) for legal and professional services, $4,071,901($4,315,997 as of  June 30, 2001) in depreciation andamortization, $1,974,286 ($1,935,110 as of June 30, 2001) in provision for doubtful accounts, $12,102,217($11,710,565 as of  June 30, 2001) ininterconnection, sales and dealers commissions, advertising, rent, taxes otherthan income, other expenses and management fee to General Partner, and1,477,493 ($398,268 as of  June 30, 2001)for services rendered by related parties. However,  the Arthur Andersenfirm closed  in the month of June of2002 and the firm’s local office closed at approximately the same time.  Efforts by Deloitte & Touche  to contact former account managers andresponsible partner have been unsuccessful. Therefore, Deloitte & Touche has been unable to complete theirreview of the Partnership's financial statements presented herein.  Furthermore, without notes and documents ofthe former auditors, new expenses groupings have been created for thisreport.  Thus, a line by line 

 

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comparison of the expenses for thethree-month period that ended June 30, 2002 with the same period of expenses of2001 may seem unclear.

 

                Theoverall decrease in expenses of $4 million dollars is mainly due to a reductionin the cost of handsets and accessories. The $29.7 million total expenses forthe three months period ended June 30, 2001 included a gain on the sale of theVisalia Porterville License which resulted in a reduction of $4.8 million.  Therefore, actual expenses for that quarterwere $34.5 as compared to $30.4 for the three month period ended June 30, 2002.

 

                Thedecrease in interest expense ($3,615,072 and $4,653,842 for the quarter endedJune 30, 2002 and 2001, respectively) is attributable to the reduction of debtoutstanding related to the Note Payable to Alcatel.

 

Six-month period ended June30, 2002 compared with six-month period ended June 30, 2001

 

Revenues

 

ThePartnership’s revenues for the six-month period ended June 30, 2002 totaled$55,783,476 as compared to $61,531,624 for the same period in 2001. Revenues for the six-month period ended June 30, 2001 included $52,375,461 inservice revenue and $9,156,163 in handset and accessories sales generated fromNewComm’s wireless operations, as compared to $52,070,415, and $3,713,061respectively, for the same period in 2002.  The decrease in revenues ismainly due the reduction in handset and accessories sales and a pricingadjustment to the handsets.

 

Expenses

 

Expenses for the six-monthperiod ended June 30, 2002 totaled $47,166,489 as compared to $66,140,629 forthe same period in 2001.  During the six-month period ended June 30, 2002,the Partnership’s expenses included $12,432,244 ($17,760,845 as of June 30,2001) in costs of handset and accessories, $7,335,893 ($6,319,987 as of June30, 2001) for salaries and benefits, $4,697,892 ($6,250,680 as of June 30,2001) for legal and professional services, $8,019,629 ($9,998,177 as of June30, 2001) in depreciation and amortization, $5,455,014 ($5,903,832 as of June30, 2001) in provision for doubtful accounts, $------- ($24,045,875 as of June30, 2001) in interconnection, sales and dealers commissions, advertising, rent,taxes other than income, other expenses and management fee to General Partner,$3,021,342 ($675,570 as of June 30, 2001) for services rendered by relatedparties and a one time gain of 12,569,788 on the sale of stock to Fleet for thesix month period ended in June 2002 and a one time gain of $4,814,337 from thesale of the Visalia-Porterville, California, license.  However, the Arthur Andersen firm closed in the month of June of2002 and the firm’s local office closed at approximately the same time. Effortsby Deloitte & Touche to contact former account managers and responsiblepartner have been unsuccessful. Therefore, Deloitte & Touche has beenunable to complete their review of the Partnership's financial statementspresented herein.  Furthermore, withoutnotes and documents of the former auditors, new expenses groupings have beencreated for this report. And, a line by line comparison of the expenses for thesix-month period that ended June 30, 2002 with the same period of expenses of2001 may seem unclear.

The reduction in interestexpense ($8,734,358 and $9,357,808 for the six-month periods ended June 30,2002 and 2001, respectively) is related to reduction in the Note Payable toAlcatel of $5.4 million.

Net profit of $1,221,174 forthe six-month period ended June 30, 2001 includes a $12.6 million gain on thesale of the Partnership’s stock on NewComm to Fleet. Without such gain thePartnership incurred in operating losses of $ 13.8 million as compared to a netloss of $12,953,106 for the same period in 2001; the loss reflects the ongoingcosts of meeting the competition of existing cellular and PCS operators inorder to develop a subscriber base.  To meet competition, a significantsubsidy is granted in the sale of handsets and accessories, on which a negativemargin of $3,526,214 and $8,604,682 was generated during the six-month periodsended June 30, 2002 and 2001, respectively.   The Partnership’s net lossfor the first half of 2001 was offset by the, one time, $4,814,337 gain on saleof Visalia-Porterville, California, license.

 

 

Liquidity and Capital Resources

 

                Asof June 30, 2002, the Partnership had cash and cash equivalents amounting to$17,246,750, which are mostly related to proceeds from the sale of theVisalia-Porterville, California, license in the second quarter, 2001, and theFleet Transaction.

 

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                Aspart of the agreement with TLD, NewComm entered into a contract with LucentTechnologies, Inc. (“Lucent”) that required Lucent to build a network that usesthe Code Division Multiple Access (“CDMA”) protocol.  The total cost of the original network was approximately $125million.  During 2000, NewComm’smanagement and Lucent agreed on formally extending the payment of up to $61.0million of the total amount of network construction payable, at the time, undera formal financing agreement.  Thefinancing agreement was restructured as a Promissory Note on September 26,2001, with a principal sum of $60.5 million plus interest, due March 15,2002.  The maturity date was extended toJune 30, 2002 at annual interest rate of 8%, and NewComm is at the presentnegotiating a restructuring of this debt to a permanent facility.

 

                Inaddition, the Partnership owes the United States federal government approximately$51,339,555 (undiscounted) plus accrued interest at 6.5% in connection with theacquisition of its PCS licenses.  As ofJune 30, 2002, the notes payable to FCC are presented net of a discount.

 

                ThePartnership has a secured promissory note payable to TLD, which bears interestat the floating rate of 90-day LIBOR plus 1.5% and is due in March, 2004.

 

                ThePartnership estimates that the total cost to implement NewComm’s business planwill be approximately $200 million. This consists of approximately $125 million in costs associated withbuilding-out the Puerto Rico Network, and approximately $75 million to fundNewComm’s operations until these become profitable.  NewComm obtained a short term financing (“Bridge Loan”) of $60million was subsequently extended until March 13, 2002, with an interest rateof .75% over 90-day LIBOR.  The BridgeLoan is now guaranteed by Telefónica Internacional, S.A. (TISA), an affiliateof TLD.  ClearComm and TLD continue towork towards securing a permanent financing facility.  The Partnership anticipates that banks, together with Lucent,will be willing to provide long term financing of approximately $150 million,provided that the Partnership and TLD contribute additional capital or convertibledebt to NewComm.  The Partnership,through Syncom and TLD, contributed a total of $30 million of additionalcapital or convertible debt during the second half of 2000 and first half of2001.  In the second quarter thePartnership and TLD each contributed an additional $9 million convertible debtand capital, respectively.  Syncominvested $15 million in NewComm in exchange for 4.92% of NewComm. ClearCommsold approximately 4.08% of its interest in NewComm in exchange of $13 Millionduring the first quarter of 2002.  ThePartnership believes that the capital or convertible debt contributed by Syncomand TLD, along with the extended interim financing, will fully fund NewComm’soperations through the end of 2002.

 

                OnMarch 2, 2002, the Partnership sold 4.08% of NewComm to a group of investorsled by Fleet Development Ventures for $13 million.  During the second quarter of 2002, the Partnership and TLDcontributed approximately $9 million each to NewComm in the form of equity andconvertible debt, respectively.  ThePartnership believes it has obtained sufficient funds, together with TLD, toprovide NewComm with the capital necessary for the Project Finance Facility andto fully fund NewComm’s operations.

 

                Asa result of the restructuring of its FCC debt in June 1998, the Partnership hasno outstanding debt on its California Licenses, which consist of 15MHz ofbandwidth covering an approximate population of 1.1 million people in Eureka,Redding, Merced, and Modesto, all within the state of California.  Holders of major C Block licenses coveringareas surrounding the areas covered by the California Licenses are currentlyunder bankruptcy court proceedings, which adversely affect the Partnership’sability to enter into joint venture agreements to develop these licenses.  However, a re-auction of D, E, F anddisaggregated C Block licenses was concluded on April 16, 1999.  Another re-auction was concluded in January2001.  However, this re-auction was setaside by the Washington D.C. Court of Appeals on June 22, 2001.  The FCC has filed for an appeal of thisruling before the United States Supreme Court, and the Court has accepted toreview the case.  Accordingly, therecontinues to be uncertainty regarding the ownership of the licenses surroundingthe California Licenses.   ThePartnership is actively pursuing alliances and possible funding mechanisms todevelop its California Licenses.

 

                ThePartnership anticipates that earnings and cash distributions derived from itsPuerto Rico Network (once it is fully operational), interim and permanentfinancing and, if necessary, additional capital calls from its Investors oraccessing the public capital markets, should provide it with the liquidity tomeet its obligations.  The Partnershipalso expects that once it is able to develop its California Licenses, it willhave additional sources of revenues and profits.

 

ITEM 3. QUANTITATIVE ANDQUALITATIVE DISCLOSURE ABOUT MARKET RISK

 

                ThePartnership’s exposure to market risk through derivative financial instrumentsand other financial instruments is not material because the Partnership doesnot use derivative financial instruments and does not have foreign currencyexchange risks.  The Partnership investscash balances in excess of operating requirements in short-term money marketfunds.  As of June 30, 2002, the

 

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Partnership had cash equivalents andshort-term investments of approximately $17,246,750 consisting of cash andhighly liquid, short-term investments in money market funds.

 

                ThePartnership’s cash and cash equivalents will increase or decrease by animmaterial amount if market interest rates increase or decrease, and therefore,its exposure to interest rate changes has been immaterial.  The Partnership’s loans payable to the FCChave a fixed interest rate of 6.5% and therefore are not exposed to interestrate risks.  The TLD Note relating toindebtedness of NewComm bears interest at the floating rate of the 90-day LIBORplus 1.5% and is due in March 2004.  ThePartnership, TLD, and Lucent are currently under negotiations to restructurethe approximately $61 million debt owed to Lucent.

 

 

 

PART II: OTHER INFORMATION

 

ITEM 1.  LEGAL PROCEEDINGS

 

 

Information regardinglegal proceedings is disclosed in Part I, Item 1, Notes to Interim ConsolidatedFinancial Statements (unaudited), Section 4, and is hereby incorporated intoPart II, Item 1 by this reference.

 

 

 

 

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

 

(a)                                  List ofExhibits

 

Exhibit 99:  Certifications by the Chief Executive Officeand Chief Financial Officer pursuant to Section 1350 of Chapter b3 of Title 18of the United States Code.

 

                (b)           The Partnership filed a Form 8-K onAugust 9, 2002.

 

ITEMS 2, 3, 4 and 5 are not applicable andhave been omitted.

 

 

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SIGNATURES

 

                Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

 

 
|                        |   | ClearComm, L.P.                |
|-----------------------------|--------|--------------------------------|
|                        |   |                           |
|                        |   |                           |
|                        | By:    | SuperTel Communications Corp.  |
|                        |   |                           |
|                        |   |                           |
| Date:  August 29, 2002 |   | By:  /s/ Javier O. Lamoso |
|                        |   | Name: Javier O. Lamoso         |
|                        |   | Title: President               |

 

 

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