**Securitiesand 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  March  31, 2002** |
|                                                     |
|                                                     | o                                       | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15 (d) OF** |
|                                                     | **THE SECURITIES EXCHANGE ACT OF 1934** |
|                                                          |                                         |  |  |

 

 

**For the transition period from       to        **

 

**Commission file number 0-28362**

 

**ClearComm,L.P.**

(Exact name ofregistrant 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’s telephonenumber, including area code: **(787) 620-0140**

 

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15 (d) of the Securities Exchange Act of1934 during the preceding 12 months and (2) has been subject to such filingrequirements 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 September 30,  2001 (unaudited) and December 31, 2000 (audited)  |   |
|                                     |                                                                                                                                              |   |
|                                     | Consolidated  Statements of Revenues and Expenses for the three-month and nine-month  periods ended September 30, 2001 and 2000 (unaudited). |   |
|                                     |                                                                                                                                              |   |
|                                     | Consolidated  Statements of Changes in Partners’ Deficit for the nine-month period ended  September 30, 2001 (unaudited)                |   |
|                                     |                                                                                                                                              |   |
|                                     | Consolidated  Statements of Cash Flows for the nine-month periods ended September 30,  2001 and 2000 (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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PART I  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 

ClearComm, L.P.

CONSOLIDATED STATEMENTSOF ASSETS, LIABILITIESAND PARTNERS’ DEFICIT

 
|                                                                                        |   | **March 31,**   |        | **December 31,** |   |
|---------------------------------------------------------------------------------------------|--------|-----------------|-------------|------------------|--------|
|                                                                                        |   | **2002**        |        | **2001**         |   |
|                                                                                        |   | **(Unaudited)** |        | **(Audited)**    |   |
| ASSETS                                                                                      |   |            |        |             |   |
| CURRENT ASSETS:                                                                             |   |            |        |             |   |
| Cash and cash equivalents                                                                   |   | $               | 20,038,090  |             | $      | 10,241,902 |   |
| Accounts receivable, net of allowance for doubtful  accounts of $17,083,935 and $18,341,025 |   | 17,934,801      |        | 19,099,986       |   |
| Accounts receivable due from officer                                                        |   | 329,087         |        | 102,000          |   |
| Insurance claim receivable                                                                  |   | 1,496,680       |        | 1,496,324        |   |
| Accounts receivable from related parties                                                    |   | —          |        | —           |   |
| Inventories                                                                                 |   | 8,081,126       |        | 10,305,254       |   |
| Prepaid expenses                                                                            |   | 1,423,717       |        | 652,279          |   |
| Total current assets                                                                        |   | 49,303,501      |        | 41,897,745       |   |
|                                                                                        |   |            |        |             |   |
| DEFERRED FINANCING COSTS, net                                                               |   | —          |        | 906,731          |   |
| PCS LICENSES, net                                                                           |   | 56,859,270      |        | 57,517,974       |   |
| PROPERTY AND EQUIPMENT, net                                                                 |   | 100,776,638     |        | 102,095,953      |   |
|                                                                                        |   | $               | 206,939,409 |             | $      | 202,418,403 |   |
| LIABILITIES AND PARTNER’S DEFICIT                                                      |   |            |        |             |   |
| CURRENT LIABILITIES:                                                                        |   |            |        |             |   |
| Accounts payable and accrued liabilities                                                    |   | $               | 20,749,350  |             | $      | 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                                                         |   | 9,899,359       |        | 8,705,353        |   |
| Note Payable to Alcatel                                                                     |   | 13,198,386      |        | 12,790,140       |   |
| Accrued interest                                                                            |   | 6,200,451       |        | 3,517,319        |   |
| Deferred income                                                                             |   | 1,371,633       |        | 1,550,665        |   |
| Total current liabilities                                                                   |   | 171,950,876     |        | 174,963,890      |   |
| LONG-TERM NOTES PAYABLE                                                                     |   | 82,597,052      |        | 81,723,962       |   |
| MINORITY INTEREST                                                                           |   | 13,080,770      |        | 13,362,939       |   |
|                                                                                        |   |            |        |             |   |
| PARTNER’S DEFICIT                                                                      |   |            |        |             |   |
| Limited partners’ capital (2,907.7 units, issued and  outstanding)                     |   | 73,039,615      |        | 73,039,616       |   |
| General partner’s capital                                                              |   | 100,000         |        | 100,000          |   |
| Undistributed losses—                                                                  |   |            |        |             |   |
| Accumulated during development stage                                                        |   | (48,704,525     | )           | (48,704,525      | )      |
| Operations                                                                                  |   | (98,124,378     | )           | (92,067,478      | )      |
| Total partners’ deficit                                                                |   | (73,689,2890    | )           | (67,632,388      | )      |
|                                                                                        |   | $               | 206,939,409 |             | $      | 202,418,403 |   |

 

The accompanying notes are integral part of these consolidatedstatements.

 

3

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ClearComm, L.P.

CONSOLIDATED STATEMENTSOF REVENUES AND EXPENSES (UNAUDITED)

 
|                                           |   | **Three-Month Period Ended March 31** |       |
|------------------------------------------------|--------|---------------------------------------|------------|
|                                           |   | **2002**                              |       | **2001** |   |
| **Revenues:**                                  |   |                                  |       |   |   |
| Service revenues                               |   | $                                     | 26,626,750 |   | $ | 25,030,382 |   |
| Handset and accessories sales                  |   | 1,353,611                             |       | 2,981,884 |   |
|                                           |   | 27,980,361                            |       | 28,012,266 |   |
|                                           |   |                                  |       |   |   |
| **Operating  Cost and Expenses:**              |   |                                  |       |   |   |
| Cost of handset and accessories                |   | 7,050,742                             |       | 8,060,352 |   |
| Interconnection expense                        |   | 978,920                               |       | 2,057,800 |   |
| Sales and dealers commissions                  |   | 1,468,300                             |       | 1,759,593 |   |
| Salaries and benefits                          |   | 4,158,188                             |       | 3,196,936 |   |
| Advertising expense                            |   | 1,651,170                             |       | 2,317,299 |   |
| Legal and professional services                |   | 2,494,392                             |       | 2,941,118 |   |
| Depreciation and amortization                  |   | 3,947,728                             |       | 5,682,180 |   |
| Provision for doubtful accounts                |   | 3,480,728                             |       | 3,968,722 |   |
| Rent expense                                   |   | 1,474,505                             |       | 2,054,225 |   |
| Taxes other than income                        |   | 380,859                               |       | 1,620,847 |   |
| Other expenses                                 |   | 654,292                               |       | 2,493,546 |   |
| Management fee to General Partner              |   | 32,000                                |       | 32,000 |   |
| Services rendered by related parties           |   | 1,543,849                             |       | 277,302 |   |
| Gain on sale of Visalia-Porterville license    |   | —                                |       | — |   |
|                                           |   | 29,315,673                            |       | 36,461,920 |   |
|                                           |   |                                  |       |   |   |
| **Loss  from Operations**                      |   | (1,335,312                            | )          | (8,449,654 | ) |
|                                           |   |                                  |       |   |   |
| **Other  Income (Expense)**                    |   |                                  |       |   |   |
| Interest income                                |   | 115,531                               |       | 184,686 |   |
| Interest expense                               |   | (5,119,286                            | )          | (4,703,966 | ) |
|                                           |   | (5,003,755                            | )          | (4,519,280 | ) |
|                                           |   |                                  |       |   |   |
| **Net  Loss before Minority Interest**         |   | (6,339,067                            | )          | (12,968,934 | ) |
| **Minority  Interest**                         |   | 282,169                               |       | 452,376 |   |
| **Net  Loss**                                  |   | $                                     | (6,056,898 | ) | $ | (12,516,558 | ) |
|                                           |   |                                  |       |   |   |
| **Net  Loss Attributable to General Partner**  |   | $                                     | (1,514,224 | ) | $ | (3,129,140 | ) |
|                                           |   |                                  |       |   |   |
| **Net  Loss Attributable to Limited Partners** |   | $                                     | (4,542,673 | ) | $ | (9,387,419 | ) |

 

The accompanying notes are integral part of these consolidatedfinancial statements.

 

4

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ClearComm, L.P.

CONSOLIDATED STATEMENTSOF CHANGES IN PARTNERS’ DEFICIT(Unaudited)

FOR THE THREE-MONTHPERIOD ENDED MARCH 31, 2002

 
|                                       |   | **Limited  Partners** |   | **General** |        |        |        |
|--------------------------------------------|--------|-----------------------|--------|-------------|-------------|-------------|-------------|
|                                       |   | **Units**             |   | **Amount**  |        | **Partner** |        | **Total** |   |
| Balance  (deficit) at December 31, 2001    |   | 2,907.7               |   | $           | (32,539,386 | )           | (35,093,001 | ) | (67,632,387 | ) |
|                                       |   |                  |   |        |        |        |        |   |   |
| Three-month  period ended March 31, 2002   |   |                  |   |        |        |        |        |   |   |
| Net loss                                   |   |                  |   | (4,542,673  | )           | (1,514,224  | )           | (6,056,898 | ) |
|                                       |   |                  |   |        |        |        |        |   |   |
| Balance  (deficit) at March  31, 2002 |   | 2,907.7               |   | $           | (37,082,059 | )           | (36,607,225 | ) | (73,689,285 | ) |

 

The accompanying notes are integral part of these consolidatedfinancial statements.

 

5

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ClearComm, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)
|                                                                                             |   | **Three-Month Periods Ended** |       |
|--------------------------------------------------------------------------------------------------|--------|-------------------------------|------------|
|                                                                                             |   | **March 31,**                 |       | **March 31,** |   |
|                                                                                             |   | **2002**                      |       | **2001** |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                             |   |                          |       |   |   |
| Net loss                                                                                         |   | $                             | (6,056,898 | ) | $ | (12,516,558 | ) |
|                                                                                             |   |                          |       |   |   |
| Adjustments to reconcile net loss for the period to  net cash used in  operating activities |   |                          |       |   |   |
| Depreciation and amortization                                                                    |   | 3,947,728                     |       | 5,682,180 |   |
| Provision for doubtful accounts                                                                  |   | 3,480,728                     |       | 3,968,722 |   |
| Minority interest                                                                                |   | (282,169                      | )          | (452,376 | ) |
| Gain from sale of Visalia-Porterville license                                                    |   | —                        |       |   |   |
| Increase in accounts receivable                                                                  |   | (2,315,543                    | )          | (2,317,792 | ) |
| Increase in accounts receivable due from officer                                                 |   | (227,087                      | )          | — |   |
| Increase in insurance claim receivable                                                           |   | (360                          | )          | — |   |
| Decrease (increase) in inventories                                                               |   | 2,224,128                     |       | 1,170,441 |   |
| Decrease (increase) in prepaid expenses and deferred  financing cost                             |   | 135,293                       |       | (40,767 | ) |
| (Decrease) increase in accounts payable and accrued  liabilities                                 |   | (7,119,365                    | )          | (800,989 | ) |
| Increase in accounts payable to related parties                                                  |   | 1,194,006                     |       | 1,696,979 |   |
| Increase in accrued interest                                                                     |   | 3,556,222                     |       | 244,007 |   |
| (Decrease) increase in deferred income                                                           |   | (179,032                      | )          | 296,507 |   |
| Total adjustments                                                                                |   | 4,414,549                     |       | 9,446,912 |   |
| Net cash provided by (used in) operating activities                                              |   | (1,642,349                    | )          | (3,069,646 | ) |
|                                                                                             |   |                          |       |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                            |   |                          |       |   |   |
| Acquisition of property and equipment                                                            |   | (1,969,709                    | )          | (233,293 | ) |
|                                                                                             |   |                          |       |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                            |   |                          |       |   |   |
| Proceeds from sale of Visalia-Porterville license                                                |   | 13,000,000                    |       | — |   |
| Capital contribution from minority interest                                                      |   | 5,000,000                     |       |   |   |
| Proceeds from issuance of notes payable to TLD                                                   |   | —                        |       |   |   |
| Payment of Note Payable to Lucent                                                                |   | —                        |       |   |   |
| Payment of Note Payable to Alcatel                                                               |   | 408,246                       |       | — |   |
| Net cash provided by financing activities                                                        |   | 13,408,246                    |       | 5,000,000 |   |
|                                                                                             |   |                          |       |   |   |
| NET INCREASE IN CASH AND CASH EQUIVALENTS                                                        |   | 9,796,188                     |       | 1,697,061 |   |
|                                                                                             |   |                          |       |   |   |
| CASH AND CASH EQUIVALENTS, beginning of period                                                   |   | 10,241,902                    |       | 9,338,798 |   |
|                                                                                             |   |                          |       |   |   |
| CASH AND CASH EQUIVALENTS, end of period                                                         |   | $                             | 20,038,090 |   | $ | 11,035,859 |   |
|                                                                                             |   |                          |       |   |   |
| SUPPLEMENTAL CASH FLOWS INFORMATION:                                                             |   |                          |       |   |   |
| Network construction costs financed through note  payable to Lucent and accounts payable         |   | $                             |       |   | $ | 2,071,613 |   |
| Accounts receivable written-off against the  allowance for doubtful accounts                     |   | $                             |       |   | $ | 3,718,949 |   |
| Interest paid                                                                                    |   | $                             |       |   | $ | 3,916,533 |   |

 

The accompanying notes are integral part of these consolidatedfinancial statements.

 

6

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CLEARCOMM, L.P.

NOTES TO INTERIMCONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

 

1.                                       BASIS OF PRESENTATION AND INTRODUCTION

 

                                                The unaudited interim consolidatedfinancial statements presented herein have been prepared in accordance withaccounting principles generally accepted in the United States for interimfinancial statements and with the instructions to Form 10-Q and Regulation S-Xpertaining to interim financial statements. Accordingly, they do not include all information and footnotes requiredby accounting principles generally accepted in the United States for completefinancial statements.  The unauditedinterim consolidated financial statements reflect all adjustments, consistingof normal recurring adjustments and accruals which, in the opinion of management,are considered necessary for a fair presentation of the Partnership’s financialposition at March 31, 2002 and results of operations and cash flows for thethree-month periods ended March 31, 2002 and 2001.  The unaudited interim consolidated financial statements should beread in conjunction with the summary of significant accounting policies andnotes to consolidated financial statements included in the Partnership’s AnnualReport on Form 10-K for the year ended December 31, 2001.  Results of operations for interim periodsare not necessarily indicative of the results that may be expected for the fullyear.

 

                                                ClearComm, L.P. (the “Partnership”) is alimited partnership organized on January 24, 1995 under the laws of the Stateof Delaware.  The Partnership was formedto file applications with the Federal Communications Commission (“FCC”) underpersonal communications service (“PCS”) frequency Block C, originallyrestricted to minorities, small businesses and designated entities, to become aprovider of broadband PCS.  ThePartnership will terminate on December 31, 2005, or earlier upon the occurrenceof certain specified events as detailed in the Partnership Agreement.

 

                                                SuperTel Communications Corp.(“SuperTel”), a Puerto Rico corporation, is the General Partner.  Its total share of the income and losses ofthe Partnership is 25% in accordance with the Partnership Agreement.  Approximately 1,600 limited partners alsoinvested in the Partnership through a private placement.

 

                                                On January 22, 1997, the Partnership wasgranted the PCS Block C licenses for Puerto Rico and certain cities inCalifornia.

 

                                                On February 4, 1999, the Partnershipentered into a joint venture agreement (the “Joint Venture Agreement”) withTelefónica Larga Distancia De Puerto Rico, Inc. (“TLD”) to jointly develop andoperate certain PCS licenses in Puerto Rico. Among the most important provisions of the Joint Venture Agreement arethe following:

 

·        ThePartnership transferred all of its Puerto Rico PCS licenses including itsrelated debt with the FCC to NewComm Wireless Services, Inc. (“NewComm”), anewly organized Puerto Rico corporation, in exchange for all of NewComm’sissued and outstanding common stock.

 

·        TLDloaned approximately $20 million to NewComm by means of a secured convertiblepromissory note payable (the “Promissory Note”).  The Promissory Note is secured by a security agreement pursuantto which a security interest is imposed upon NewComm’s assets, a Partnershipguarantee and a pledge agreement, as defined.

 

·        Oncecertain regulatory and other requirements are met, the Promissory Note will beconverted to NewComm’s common stock representing approximately 49.9% ofNewComm’s equity at the time of the exchange. Originally, TLD had the option to buy an additional .2%, which wouldhave brought its ownership to 50.1%, subject to a third party valuation ofNewComm’s stock and approval by the FCC. On June 26, 2001, the Joint Venture Agreement was amended eliminatingthe TLD Option to buy the additional .2%.

 

·        Thenew Sale Agreement provides that at any time after 14 months from the signingof the Stock Purchase Agreement with TLD, ClearComm (or TLD) may trigger ashareholder obligation to sell NewComm. Within 30 days of a notice of sale, TLD (or ClearComm as the case maybe) would have the right to purchase ClearComm’s (or TLD’s) interest.  The purchase price to be paid at that timewould be based on a valuation performed by the investment banking firm thatprepared the one under the Stock Purchase Agreement.  If TLD does not exercise its right to buy out ClearComm’sinterest, the shareholders will be bound to proceed with the sales process to attempt a sale ofNewComm.  All shareholders are bound tocooperate and undertake all that is necessary in that effort.  Further, the shareholders are bound toaccept the highest price proposed by an interested buyer, which price must bepayable in cash or freely tradable securities, or a combination thereof, andwhich must be for a price not less than the valuation prepared by theinvestment banker.  Some additionalpoints are that at the closing of the sale of NewComm the Management Agreementand the Technology Transfer Agreement held by TLD will terminate.  Also, no premium for controlling interest ordiscount for holding a minority interest in NewComm will apply.  The Sale Agreement shall continue in fullforce and effect even if the Stock Purchase Agreement with TLD, for whateverreason, does not close.

 

·        NewCommand TLD entered into certain management and technology transfer agreements.

 

 

                                                In September 1999, NewComm commencedproviding PCS services in Puerto Rico.

 

7

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                                                In each of November 2000, December 2000,and March 2001, NewComm received $5,000,000, from Syndicated CommunicationsVenture Partners IV, L.P. (Syncom), a third party, in exchange for 4.92%ownership in NewComm. Syncom has committed to contribute up to $25 million toNewComm in exchange for an 8.2% ownership interest in Newcomm.

 

                On March 2, 2002,the Partnership sold 4.08% of NewComm to a group of investors led by Fleet DevelopmentVentures for $13 million.  Prior to June30, 2002, the Partnership and TLD will contribute approximately $12.5 millioneach to NewComm in the form of equity and convertible debt, respectively, toclose the Project Finance Facility.  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.

 

2.                                       FINANCING REQUIREMENTS

 

                                                The accompanying consolidated financialstatements have been prepared on a going concern basis, which contemplates therealization of assets and the satisfaction of liabilities in the normal courseof business.  The Partnership commencedoperations in September 1999 and has incurred operating losses amounting to$6,056,898 million for the three-month period ended March 31, 2002 and incurredoperating losses of $12,516,558 million for the year ended March 31, 2001.  It also has working capital and partners’ capitaldeficits of $122,647,375 and $60,689,289 million, respectively, as of  March 31, 2002.  The Partnership is likely to continue incurring losses until suchtime as its subscriber base generates revenue in excess of the Partnership’sexpenses.  Development of a significantsubscriber base is likely to take time, during which the Partnership mustfinance its operations by means other than its revenues.

 

                                                As part of the agreement with TLD,NewComm entered into a contract with Lucent Technologies, Inc. (“Lucent”) thatrequires Lucent to build a network that uses the Code Division Multiple Access(“CDMA”) protocol.  It is expected thatthe total cost of this project will approximate $125 million.  During 2000, NewComm’s management and Lucentagreed on formally extending the 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 plusinterest.  This Promissory Note wasextended to June 30, 2002 at annual interest rate of 8%.

 

                                                During November 2000, NewComm enteredinto a $60 million bridge loan agreement (the “Bridge Loan Facility”) withABN-AMRO and BBVA (the “Banks”) with interest at 1.5% over 90-day LIBOR, whichexpired on March 15, 2001, and was extended until March 13, 2002, with an interestrate at .75% over 90-day LIBOR. The Bridge Loan is now guaranteed by Telefónica Internacional, S.A.(TISA), an affiliate of TLD.  TheMaturity date was amended on Many 30, 2002 to September 30, 2002. ClearComm andTLD continue to work towards securing a permanent financing facility, whichwill require that the Partnership, through Syncom and TLD, to each contributeapproximately $25 million in equity and convertible debt.  As part of this commitment, during thesecond half of 2000 and first half of 2001, Syncom and TLD have contributed $15million in the form of equity and convertible debt.

 

                                                Each of the Partnership’s C-Blocklicenses is subject to a FCC requirement that the Partnership construct networkfacilities that offer coverage to at least one-third of the population in themarket covered by such license within five years following the grant of theapplicable license and to at least two-thirds of the population within tenyears following the grant.  Although thePartnership’s build-out plan calls for it to exceed these minimum requirements,failure to comply with these requirements could result in the revocation of therelated licenses or the imposition of fines on the Partnership by the FCC. ThePartnership is in compliance with the FCC coverage requirements in Puerto Ricoand the California Licenses.

 

                                                Management believes that the Partnershipwill comply with all the requirements for obtaining the interim financing andbelieves that cash and cash equivalents on hand, anticipated growth in revenues,vendor financing and the permanent financing will be adequate to fund itsoperations, at a minimum, through the end of 2002.  However, in the absence of improved operating results and cashflows, and without the closing of its contemplated permanent financing, thePartnership may face liquidity problems to fund its operations and meet itsobligations.  As a result of thesematters, substantial doubt exists about the Partnership’s ability tocontinue as a going concern.  Theaccompanying consolidated financial statements do not include any adjustmentsthat might result from the outcome of this uncertainty.

 

8

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3.                                       OTHER ACCOUNTING PRONOUNCEMENTS

 

                                                In June 1998, the Financial AccountingStandards Board (“FASB”) issued Statement of Financial Accounting Standards No.133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS133”). SFAS 133 established accounting and reporting standards requiring thatevery derivative instrument (including certain derivative instruments embeddedin other contracts) be recorded in the balance sheet as either an asset orliability measured at its fair value. SFAS 133 requires that changes in thederivative’s fair value be recognized currently in earnings unless specifichedge accounting criteria are met. In June 2000, the FASB issued Statement ofFinancial Accounting Standards No. 138 (“SFAS 138”) which amends SFAS 133 forcertain derivative instruments and certain hedging activities. SFAS 133, asamended, is effective for fiscal years beginning after June 15, 2000. ThePartnership adopted SFAS 133 beginning January 1, 2001, but did not have anyderivatives.

 

                                                In June 2001, the Financial AccountingStandards Board issued SFAS No. 141, “Business Combinations” (effective July 1,2001) and SFAS No. 142, “Goodwill and Other Intangible Assets” (effective forthe Company on January 1, 2002). SFAS No. 141 prohibits pooling-of-interestsaccounting for acquisitions. SFAS No. 142 specifies that goodwill and someintangible assets will no longer be amortized but instead will be subject toperiodic impairment testing. The Company is in the process of evaluating thefinancial statement impact of adoption of SFAS No. 142.

 

4.                                       LEGAL PROCEEDINGS

 

                                                The Partnership is subject to certain legalproceedings and an FCC proceeding, which were described in the Partnership’sForm 10-K for the year ended December 31, 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’soperations rising out of Sprint’s refusal to broadcast a SID for the PuertoRico market

 

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that will not interfere with the services presentlybeing offered by MoviStar to its subscribers. During October 15th to 18th, 2001, the DistrictCourt held an evidentiary hearing related to the injunctive relief sought.  In its *Opinion and Order* of**October 29, 2001, theDistrict Court ordered Sprint to “immediately cease and desist from using SID5142 and/or any other SID which similarly interferes with plaintiff’soperations in Puerto Rico.”

 

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 ofAppeals issued an order reversing the injunction release.  On or about April 20, 2002, MoviStar filed aPetition for a Re-Hearing and the petition was denied.  However, MoviStar is continuing to pursueits 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 threepoint eight million dollars ($3,800,000).

 

 

Puerto Rico Telecommunications Regulatory Board

 

On January 31, 2002, NewComm filed a *Petition forArbitration* before the Puerto Rico Telecommunications RegulatoryBoard (“PRTRB”) whereby NewComm petitions PRTRB for arbitration of rates, termsand conditions for interconnection and related arrangements in conjunction witha revised interconnection agreement between NewComm and the Puerto RicoTelephone Company (“PRTC”).

 

Jaime L. Santiago

 

On February 22, 2002, MoviStar answered a complaintfiled by Jaime Luis Santiago Cajigas alleging damages based on Law 44 ofDecember 20, 1991, 1 L.P.R.A. § 501 et. seq., which is Puerto Rico’s LawAgainst Discrimination Based on Disability. The plaintiff is also allegingdamages under the Americans with Disabilities Act (ADA). The damages allegedagainst all defendants amounts to $1,000,000.00. The plaintiff is also claimingequitable

 

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remedies such as reinstatement to his formeremployment, with reasonable accommodation, costs and attorneys fees. The nextstep for the parties is to initiate discovery in this case.  Once discovery is completed, MoviStar willbe in a much better position to assess the case and provide more detailedinformation as to the possibilities of prevailing or opting for settlement.

 

Complaint

 

A complaint was filed against Movistar on December 7,2001. It alleges discrimination based on national origin against the Plaintiff,who was allegedly terminated from his employment for being from the DominicanRepublic. Additionally, it claims unjust termination. The Plaintiff requests$100,000 to compensate for his emotional damages, $6,000 for his alleged unjustdismissal and $10,000 as special damages for alleged unpaid compensation.

 

Movistar filed an answer to the complaint on December31, 2001. Therein MoviStar denied the allegations set forth in the complaintand plead as an affirmative defense, inter alia, that the Plaintiff wasterminated, not for his national origin, but after it was discovered that hehad lied in his employment application process when he furnished a resume tothe Defendants where he claimed that he had earned a Bachelor in Science ofCivil Engineering.

 

On January 23, 2002, MoviStar filed a Motion toDismiss for the insufficiency of the process and the service of the process. OnFebruary 6, 2002, the court ordered the Plaintiff to show cause as to why ourMotion to Dismiss should not be granted. The Plaintiff complied with the Court’s order and on February 19, 2002,filed a Motion in Compliance with the Order to Show Cause. The Court’s decisionis still pending.

 

From time to time the Partnership is involved inlitigation arising from the ordinary course of business, some of which isongoing.  The General Partner does notbelieve that any litigation involving the Partnership will have a materialadverse effect on the Partnership’s business or financial condition

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-looking Statements

 

                                                This Form 10-Q and future filings by thePartnership on Form 10-Q and Form 8-K and future oral and written statements bythe Partnership may include certain forward-looking statements, including(without limitation) statements with respect to anticipated future operatingand financial performance, growth opportunities and growth rates, acquisitionand divestitive opportunities, and other similar forecasts and statements ofexpectation.  Words such as “expects,”“anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and “should,”and variations 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.

 

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                                                Actual future performance, outcomes andresults may differ materially from those expressed in forward-lookingstatements made by the Partnership as a result of a number of importantfactors.  Examples of these factorsinclude, without limitation, failure to develop the Partnership’s PCS licensesin California due to an inability to obtain satisfactory financing or partnerscapital; rapid technological developments and changes in the telecommunicationsindustry; ongoing deregulation (and the resulting likelihood of significantlyincreased price and product/service competition) in the telecommunicationsindustry as a result of the Telecommunications Act of 1996 and other similarfederal and state legislation and the federal and state rules and regulationsenacted pursuant to that legislation; regulatory limitations on thePartnership’s ability to compete in the telecommunications services industry;and continuing consolidation in the telecommunications services industry.  In addition to these factors, actual futureperformance, outcomes and results may differ materially because of other, moregeneral factors including, without limitation, general industry and marketconditions and growth rates, domestic and international economic conditions,governmental and public policy changes and the continued availability offinancing in the amounts, at the terms and on the conditions necessary tosupport the Partnership’s future business.

 

Introduction

 

                                                The information contained in this Part I,Item 2 updates, and should be read in conjunction with, information set forthin Part II, Items 7 and 8, in the Company’s Annual Report on Form 10-K for theyear ended December 31, 2000, in addition to the interim consolidated financialstatements and accompanying notes presented in Part 1, Item 1 of thisForm 10-Q.

 

                                                The Partnership was formed in January1995 and is managed by its General Partner, SuperTel Communications Corp.  The Partnership was organized to acquire,own, consult and operate personal communication services PCS licenses in theBlock C band and to take advantage of the benefits that the FCC has set asidefor entrepreneurs.  The Partnership ownsthe Puerto Rico Licenses, which consist of two 15 MHz PCS licenses coveringPuerto Rico, and the California Licenses, which consist of four 15 MHz PCSlicenses covering the California cities of Eureka, Redding, Modesto, andMerced. The license covering Visalia-Porterville, California, was sold andtransferred to Leap Wireless on June 8, 2001 for $9,500,000.

 

                                                The Partnership commenced commercialoperations of its PCS network in Puerto Rico on September 24, 1999 when itbegan offering wireless services in Puerto Rico to the public.  Prior to that date, its income had consistedof interest earnings only.  Since thePartnership commenced commercial operations in 1999 and during 2000 was stillin the start-up process, the comparisons presented below may not be indicativeof future operations.

 

                                                The Partnership established its PuertoRico network by forming a wholly owned subsidiary, NewComm, on January 29,1999.  On February 4, 1999, thePartnership and NewComm entered into an agreement with TLD, whereby thePartnership contributed its two Puerto Rico Licenses to NewComm and TLD providedNewComm a $19,960,000 loan to develop the Puerto Rico Licenses.  TLD’s loan is pursuant to a securedconvertible promissory note (the “Note”) which is convertible into 49.9% ofNewComm’s equity.  The Note however, cannotbe converted until the FCC authorizes TLD to hold more than a 25% equity interestin NewComm.  NewComm, maintains anoption to repurchase TLD’s interests in NewComm in the last year before therestrictions on the Puerto Rico licenses lapse.

 

                                                Since January 2002 the Partnership hasbeen offering wireless DSL service in certain areas within the CaliforniaLicenses in compliance with the FCC build out requirements.

 

Results of Operations

 

                                                Three-month period ended March 31, 2002compared with three-month period ended March 31, 2001.

 

Revenues

 

                                                The Partnership’s revenues for the three-monthperiod ended March 31, 2002 totaled $27,980,361 as compared to $28,012,266 forthe same period in 2001. Revenues for the three-month period ended March 31,2002 included $26,626,750 in service revenues and $1,353,611 in handset andaccessories sales generated from NewComm’s wireless operations, as compared to$25,030,382 and $2,981,884 respectively, for the same period in 2001.  The minor decrease in revenues is mainly dueto lesser handset and accessories sales. 

 

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Expenses

 

                                                Expenses for the three-month period endedMarch 31, 2002 totaled $29,315,673 as compared to $36,461,920 for the sameperiod in 2001.  During the firstquarter of 2002, the Partnership’s expenses included $7,050,742 ($8,060,352 asof March 31, 2001) in costs of handset and accessories, $4,158,188 ($3,196,936as of March 31, 2001) for salaries and benefits, $2,494,392 ($2,941,118 as ofMarch 31, 2001) for legal and professional services, $3,947,728 ($5,682,180 asof  March 31, 2001) in depreciation andamortization, $3,480,728 ($3,968,722 as of March 31, 2001) in provision for doubtful accounts, $8,818,105($12,335,310 as of  March 31, 2001) ininterconnection, sales and dealers commissions, advertising, rent, taxes otherthan income, other expenses and management fee to General Partner, and$1,543,849 ($277,302 as of  March 31,2001) for services rendered by related parties.

 

                The decrease inexpenses of $6.7 million dollars is mainly due to a reduction in the cost ofhandset and accessories, interconnection expenses, depreciation andamortization and the provision for doubtful accounts. The reduction on thedepreciation and amortization of approximately $3,947,828 million dollars ascompared to $5,682,580 for the same period ended March 31, 2001 had asignificant impact on the net loss for the quarter ended March 31, 2002.  In summary, the $6.6 million reduction ofthe third quarter net loss as compared to the March 31, 2001 is mainly due toan increase in service revenues of $1.6 million and a reduction of overallexpenses of $6 million dollars. The reduction in expenses (taxes other thanincome) is due to a $1.3 million reversal of real estate property taxes accruedin current and prior periods based on discussions with the Puerto Rico propertytax authorities.

 

                                                The increase in interest expense($5,119,286 and $4,703,966 for the quarter ended March 31, 2002 and 2001,respectively) is attributable to the higher level of debt outstanding relatedto the FCC Note, TLD Promissory Note, Note Payable to Lucent and the BridgeLoan Facility.

 

 

Liquidity and Capital Resources

 

                                                As of March 31, 2002, the Partnership hadcash and cash equivalents amounting to $20,038,090, which are mostly related toproceeds from the sale of the Visalia-Porterville, California, license in thesecond quarter, 2001, and the Fleet Transaction.

 

                                                As part of the agreement with TLD,NewComm entered into a contract with Lucent Technologies, Inc. (“Lucent”) thatrequires Lucent to build a network that uses the Code Division Multiple Access(“CDMA”) protocol.  It is expected thatthe total cost will approximate $125 million. During 2000, NewComm’s management and Lucent agreed on formally extendingthe payment of up to $61.0 million of the total amount of network constructionpayable, at the time, under a formal financing agreement.  The financing agreement was restructured asa Promissory Note on September 26, 2001, with a principal sum of $60.5 millionplus interest, due March 15, 2002.  Thematurity date was extended to June 30, 2002 at annual interest rate of 8%.

 

                                                In addition, the Partnership owes theUnited States federal government approximately $51,339,555 (undiscounted) plusaccrued interest at 6.5% in connection with the acquisition of its PCSlicenses.  As of March 31, 2002, thenotes payable to FCC are presented net of a discount.

 

                                                The Partnership has a secured promissorynote payable to TLD, which bears interest at the floating rate of 90-day LIBORplus 1.5% and is due in March, 2004.

 

                                                The Partnership estimates that the totalcost to implement NewComm’s business plan will be approximately $200million.  This consists of approximately$125 million in costs associated with building-out the Puerto Rico Network, andapproximately $75 million to fund NewComm’s operations until these becomeprofitable.  NewComm obtained a shortterm financing (“Bridge Loan”) of $60 million was subsequently extended untilMarch 13, 2002, with an interest rate of .75% over 90-day LIBOR.  The Bridge Loan is now guaranteed byTelefónica Internacional, S.A. (TISA), an affiliate of TLD.  ClearComm and TLD continue to work towardssecuring a permanent financing facility. The Partnership anticipates that banks will be willing to provide longterm financing of $150 million, provided that the Partnership and TLDcontribute additional capital or convertible debt to NewComm.  The Partnership, through Syncom and TLD,contributed a total of $30 million of additional capital or convertible debtduring the second half of 2000 and first half of 2001.  Syncom and TLD have each contributed $15million in the form of equity and convertible debt.  Syncom invested $15 million in NewComm in exchange for 4.92% ofNewComm.  The Partnership believes thatthe capital or convertible debt contributed by Syncom and TLD, along with theextended interim financing, would fully fund NewComm’s operations through theend of 2001.

 

                                                On March 2, 2002, the Partnership sold4.08% of NewComm to a group of investors led by Fleet Development Ventures for$13 million.  Prior to June 30, 2002,the Partnership and TLD will contribute approximately $12.5 million each toNewComm in the form of equity and convertible debt, respectively, to close theProject Finance Facility.  ThePartnership believes it has obtained 

 

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sufficient funds, together with TLD, to provide NewComm with thecapital necessary for the Project Finance Facility and to fully fund NewComm’soperations.

 

                                                As a result of the restructuring of itsFCC debt in June 1998, the Partnership has no outstanding debt on itsCalifornia Licenses, which consist of 15MHz of bandwidth covering anapproximate population of 1.5 million people in Eureka, Redding, Merced, andModesto, all within the state of California. Holders of major C Block licenses covering areas surrounding the areascovered by the California Licenses are currently under bankruptcy courtproceedings, which adversely affects the Partnership’s ability to enter intojoint venture agreements to develop these licenses.  However, a re-auction of D, E, F and disaggregated C Blocklicenses was concluded on April 16, 1999. Another re-auction was concluded in January 2001.  However, this re-auction was set aside bythe Washington D.C. Court of Appeals on June 22, 2001.  The FCC has filed for an appeal of this ruling before  the United States Supreme Court. Accordingly, there continues to be uncertainty regarding the ownershipof the licenses surrounding the California Licenses.   The Partnership is actively pursuing alliances and possiblefunding mechanisms to develop its California Licenses.

 

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                                                The Partnership anticipates that earningsand cash distributions derived from its Puerto Rico Network (once it is fullyoperational), interim and permanent financing and, if necessary, additionalcapital calls from its Investors or accessing the public capital markets,should provide it with the liquidity to meet its obligations.  The Partnership also expects that once it isable to develop its California Licenses, it will have additional sources ofrevenues and profits.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUTMARKET RISK

 

                                                The Partnership’s exposure to market riskthrough derivative financial instruments and other financial instruments is notmaterial because the Partnership does not use derivative financial instrumentsand does not have foreign currency exchange risks.  The Partnership invests cash balances in excess of operatingrequirements in short-term money market funds. As of March 31, 2002, the Partnership had cash equivalents andshort-term investments of approximately $20,038,090 consisting of cash andhighly liquid, short-term investments in money market funds.

 

                                                The Partnership’s cash and cashequivalents will increase or decrease by an immaterial amount if marketinterest rates increase or decrease, and therefore, its exposure to interestrate changes has been immaterial.  ThePartnership’s loans payable to the FCC have a fixed interest rate of 6.5% and thereforeare not exposed to interest rate risks. The TLD Note relating to indebtedness of NewComm bears interest at thefloating rate of the 90-day LIBOR plus 1.5% and is due in March 2004.  The amounts owed to Lucent in connectionwith its build out of the Puerto Rico Network are now due on March 15, 2002 andbear interest at 14% per annum.  Thematurity date of the Promissory Note is June 30, 2002.

 

 

PART II: OTHER INFORMATION

 

ITEM 1.     LEGAL PROCEEDINGS

 

 

The Partnership is subject to certain legal proceedings and an FCCproceeding, which were described in the Partnership’s Form 10-K for the yearended December 31, 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’soperations arising out of Sprint’s refusal to broadcast a SID for the PuertoRico market

 

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that will not interfere with the services presentlybeing offered by MoviStar to its subscribers. During October 15th to 18th, 2001, the DistrictCourt held an evidentiary hearing related to the injunctive relief sought.  In its *Opinion and Order* of**October 29, 2001, theDistrict Court ordered Sprint to “immediately cease and desist from using SID5142 and/or any other SID which similarly interferes with plaintiff’soperations in Puerto Rico.”

 

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 ofAppeals issued an order reversing the injunction release.  On or about April 20, 2002, MoviStar filed aPetition for a Re-Hearing and the petition was denied.  However, MoviStar is continuing to pursueits 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 threepoint eight million dollars ($3,800,000).

 

 

Puerto Rico Telecommunications Regulatory Board

 

On January 31, 2002, NewComm filed a *Petition forArbitration* before the Puerto Rico Telecommunications RegulatoryBoard (“PRTRB”) whereby NewComm petitions PRTRB for arbitration of rates, termsand conditions for interconnection and related arrangements in conjunction witha revised interconnection agreement between NewComm and the Puerto RicoTelephone Company (“PRTC”).

 

Jaime L. Santiago

 

On February 22, 2002, MoviStar answered a complaintfiled by Jaime Luis Santiago Cajigas alleging damages based on Law 44 ofDecember 20, 1991, 1 L.P.R.A. § 501 et. seq., which is Puerto Rico’s LawAgainst Discrimination Based on Disability. The plaintiff is also allegingdamages under the Americans with Disabilities Act (ADA). The damages allegedagainst all defendants amounts to $1,000,000.00. The plaintiff is also claimingequitable

 

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remedies such as reinstatement to his formeremployment, with reasonable accommodation, costs and attorneys fees. The nextstep for the parties is to initiate discovery in this case.  Once discovery is completed, MoviStar willbe in a much better position to assess the case and provide more detailedinformation as to the possibilities of prevailing or opting for settlement.

 

Complaint

 

A complaint was filed against Movistar on December 7,2001. It alleges discrimination based on national origin against the Plaintiff,who was allegedly terminated from his employment for being from the DominicanRepublic. Additionally, it claims unjust termination. The Plaintiff requests$100,000 to compensate for his emotional damages, $6,000 for his alleged unjustdismissal and $10,000 as special damages for alleged unpaid compensation.

 

Movistar filed an answer to the complaint on December31, 2001. Therein MoviStar denied the allegations set forth in the complaintand plead as an affirmative defense, inter alia, that the Plaintiff wasterminated, not for his national origin, but after it was discovered that hehad lied in his employment application process when he furnished a resume tothe Defendants where he claimed that he had earned a Bachelor in Science ofCivil Engineering.

 

On January 23, 2002, MoviStar filed a Motion toDismiss for the insufficiency of the process and the service of the process. OnFebruary 6, 2002, the court ordered the Plaintiff to show cause as to why ourMotion to Dismiss should not be granted. The Plaintiff complied with the Court’s order and on February 19, 2002,filed a Motion in Compliance with the Order to Show Cause. The Court’s decisionis still pending.  A Status Conferencewas held on April 26, 2002.

 

From time to time the Partnership is involved inlitigation arising from the ordinary course of business, some of which isongoing.  The General Partner does notbelieve that any litigation involving the Partnership will have a materialadverse effect on the Partnership’s business or financial condition.

 

 

 

 

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

 

                                                (a)                                  List of Exhibits - None

 

                                                (b)                                 The Partnership did not file a Form 8-K in the quarterended September 30, 2001.

 

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

 

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SIGNATURES

 

                                                Pursuant to the requirements of theSecurities Exchange Act of 1934, the registrant has duly caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized.

 

 
|                       |   | ClearComm, L.P.                 |
|----------------------------|--------|---------------------------------|
|                       |   |                            |
|                       |   |                            |
|                       | By:    | SuperTel Communications Corp.   |
|                       |   |                            |
|                       |   |                            |
| Date:  June  19, 2002 |   | By:  /s/  Javier O. Lamoso |
|                       |   | Name: Javier O. Lamoso          |
|                       |   | Title: President                |

 

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