AIRSPAN NETWORKS INC. QUARTERLY REPORT MARCH 29, 2009 UNAUDITED 1
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AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
1
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
2
ITEM 1. EXACT NAME OF THE ISSUER AND THE ADDRESS OF ITS PRINCIPAL EXECUTIVE
OFFICES
Airspan Networks Inc. Investor Relations
777 Yamato Road, Suite 310 Charlotte Laurent-Ottomane
Boca Raton, FL 33431 Tel: 561-395-4581
Office: (561) 893-8670 [email protected]
Fax: (561) 893-8671 Airspan Networks Inc.
Web: www.airspan.com 777 Yamato Road, Suite 310
Boca Raton, FL 33431
ITEM 2. SHARES OUTSTANDING
March 29, 2009 December 31, 2008 December 31, 2007
Common Stock, $.0003 par value per share
Number of shares authorized
Number of shares outstanding and tradable
Estimated number of beneficial shareholders
Total number of shareholders of record
100,000,000
59,814,232
9,500
278
100,000,000
59,472,165
100,000,000
58,542,517
Preferred Stock, $.0001 par value per share
Number of shares authorized
Number of shares outstanding1
Freely tradable shares
Number of beneficial shareholders
Total number of shareholders of record
250,000
200,690
0
1
1
250,000
200,690
250,000
200,690
1 Represents shares of Series B Convertible Preferred Stock, $.0001 par value per share. All of the shares of Series
B Convertible Preferred Stock are held by Oak Investment Partners XI, LP, which is an affiliate of Airspan
Networks Inc. (―Airspan‖ or the ―Company‖). For more information regarding our Series B Convertible Preferred
Stock, please see ―Item 1A. Risk Factors - The holders of our Series B preferred stock are entitled to a liquidation
preference of $290.00 per share of Series B preferred stock on any liquidation or sale of our Company before
holders of our common stock receive any cash or other distribution (in such a liquidation or sale).‖, ―Item 1A. Risk
Factors - We have a significant stockholder whose interests may conflict with our other stockholders.‖ and Note 11
to the audited Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended
December 31, 2008.
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
3
ITEM 3. INTERIM FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Stockholders’ Equity
Notes to Unaudited Condensed Consolidated Financial Statements
Page #
4
5
6
7
8
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
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AIRSPAN NETWORKS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share data)
March 29, 2009 December 31, 2008
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 3,601 $ 14,675
Restricted cash 109 163
Short-term investments 3,919 7,710
Accounts receivable, less allowance for doubtful accounts of
$5,257 at March 29, 2009 and $5,169 at December 31, 2008
15,040 16,502
Inventory 17,171 17,311
Prepaid expenses and other current assets 4,309 5,327
Total current assets 44,149 61,688
Property, plant and equipment, net 4,305 4,398
Intangible assets, net 797 941
Other non-current assets 2,512 2,884
Total assets $ 51,763 $ 69,911
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,072 $ 10,843
Deferred revenue 7,004 7,486
Customer advances 337 224
Other accrued expenses 8,884 10,227
Revolving line of credit 5,077 12,500
Current portion of long-term debt 485 486
Total current liabilities 28,859 41,766
Long-term debt 1,217 1,217
Accrued interest on long-term debt 159 157
Total liabilities 30,235 43,140
Commitments and contingencies
Stockholders' equity
Series B convertible preferred stock, $0.0001 par value;
250,000 shares authorized at March 29, 2009 and December
31, 2008; 200,690 shares issued at March 29, 2009 and
December 31, 2008
- -
Common stock, $0.0003 par value; 100,000,000 shares
authorized at March 29, 2009 and December 31, 2008;
59,814,232 and 59,472,165 shares issued at March 29, 2009
and December 31, 2008, respectively
18 18
Note receivable – stockholder (87 ) (87 )
Additional paid-in capital 353,276 352,741
Accumulated deficit (331,679 ) (325,901 )
Total stockholders' equity 21,528 26,771
Total liabilities and stockholders' equity $ 51,763 $ 69,911
The accompanying notes are an integral part of these condensed consolidated financial statements.
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
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AIRSPAN NETWORKS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for share and per share data)
Quarter ended Quarter ended
March 29, 2009 March 30, 2008
(unaudited) (unaudited)
Revenue $ 11,131 $ 17,159 Cost of revenue (7,831 ) (11,923 )
Gross profit 3,300 5,236
Operating expenses:
Research and development 3,328 6,936
Sales and marketing 2,254 4,239
Bad debts - 47
General and administrative 3,099 4,140
Amortization of intangibles 144 234
Restructuring 103 -
Total operating expenses 8,928 15,596
Loss from operations (5,628 ) (10,360 ) Interest (expense) income, net (123 ) 116
Other (expense) income, net (142 ) 242
Loss before income taxes (5,893 ) (10,002 ) Income tax benefit (provision) 115
(50 )
Net loss $ (5,778 ) $ (10,052 )
Net loss per share - basic and diluted $ (0.10 ) $ (0.17 )
Weighted average shares outstanding - basic and diluted 59,726,082 58,599,702
The accompanying notes are an integral part of these condensed consolidated financial statements.
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
6
AIRSPAN NETWORKS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year to date Year to date
March 29, 2009 March 30, 2008
(unaudited) (unaudited)
Cash flows from operating activities Net loss $ (5,778 ) $ (10,052 )
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 796 996
Accrued interest on long-term debt 2 38
Non-cash stock compensation 535 736
Loss on disposal of property, plant and equipment
1
-
Bad debts
-
47
Changes in operating assets and liabilities:
Decrease in receivables 1,461 10,151
Decrease in inventories 140
665
Decrease in other current assets 1,018
732
Decrease in accounts payables (3,771 ) (2,931 )
Decrease in deferred revenue (481 ) (2,053 )
Increase in customer advances 112 613
Decrease in other accrued expenses (1,344 ) (1,244 )
Decrease (increase) in other operating assets 426
(39 )
Net cash used in operating activities (6,883 ) (2,341 )
Cash flows from investing activities
Purchase of property, plant and equipment (559 ) (590 )
Purchase of investment securities (359 ) (1,657 )
Sale of investment securities 4,150 4,500
Net cash provided by investing activities 3,232
2,253
Cash flows from financing activities
Repayment of borrowings under line of credit (7,423 ) -
Proceeds from the exercise of stock options - 62
Net cash (used in)/provided by financing activities (7,423 ) 62
Decrease in cash and cash equivalents (11,074 ) (26 )
Cash and cash equivalents, beginning of period 14,675 30,815
Cash and cash equivalents, end of period $ 3,601 $ 30,789
The accompanying notes are an integral part of these condensed consolidated financial statements.
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except for share data)
Preferred Stock Common Stock
Note
Receivable -
Stockholder
Accumulated
Other
Comprehensive
Income Deficit Total
Shares Par Value Shares Par Value
Additional
Paid-In
Capital
Balance at
December 31, 2007 200,690 - 58,542,517 $ 17 $ 349,718 $ (87) $ - $ (276,123) $ 73,525
Comprehensive loss:
Net loss (49,778) (49,778)
Comprehensive loss (49,778) Issuance of common
stock - employee share
purchase plan 661,494 1 303 304
Exercise of stock
options 100,625 62 62
Issuance of common stock – 401 K plan 146,226 127
127
Vesting of restricted
stock 21,303 - - Stock compensation
expense 2,531 2,531
Balance at
December 31, 2008 200,690 - 59,472,165 $ 18 $ 352,741 $ (87) $ - $ (325,901) $ 26,771
Comprehensive loss:
Net loss (5,778) (5,778)
Comprehensive loss (5,778) Issuance of common
stock – 401 K plan 310,192 26 26
Vesting of restricted stock 31,875 - -
Stock compensation
expense 509 509
Balance at
March 29, 2009 200,690 - 59,814,232 $ 18 $ 353,276 $ (87) $ - $ (331,679) $ 21,528
The accompanying notes are an integral part of these condensed consolidated financial statements.
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Airspan Networks Inc. (―Airspan‖ or the ―Company‖) is a global supplier of broadband wireless equipment
supporting the Worldwide Interoperability for Microwave Access (―WiMAX‖) protocol standard, which provides a
wide area telecommunication access network to connect end-users to telecom backbone networks. The WiMAX
standard is established by the WiMAX Forum®, a self-regulatory, industry standards-setting organization. While
our main product focus is WiMAX, we utilize other supplemental technologies, including Wireless Fidelity and
Voice-over-Internet Protocol, which allow communications network operators and service providers to deliver high-
speed data and voice services cost-effectively using wireless communications rather than wired infrastructure.
Historically, the primary market for our wireless systems has been fixed (stationary) point to multi-point
applications. Our development of new technology has expanded the market to include portable and mobile
applications. The Company’s main operations are in Uxbridge, United Kingdom, and Airport City, Israel, with
corporate headquarters in Boca Raton, Florida.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America for interim financial information.
Accordingly, they do not include all of the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature.
The interim operating results are not necessarily indicative of operating results expected in subsequent periods or for
the year as a whole.
The condensed consolidated balance sheet at December 31, 2008 has been derived from the audited financial
statements at that date included in our Form 10-K for the year ended December 31, 2008 but does not include all of
the information and footnotes required by accounting principles generally accepted in the United States of America
for complete financial statements. For further information, refer to the consolidated financial statements and
footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2008. Our Annual
Report on Form 10-K can be found online at www.sec.gov.
All notes to the condensed consolidated financial statements are shown in thousands, except for share and per
share data.
NOTE 2 - INVENTORY
Inventory consists of the following:
March 29,
2009
December 31,
2008
Purchased parts and materials $ 8,423 $ 6,047
Work in progress 1,826 1,275
Finished goods and consumables 10,343 13,592
Inventory provision (7,271) (7,567)
Deferred cost of sales 3,850 3,964
$ 17,171 $ 17,311
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
9
NOTE 3 - ACCRUED RESTRUCTURING CHARGES
The total restructuring charge in 2008 was $1.9 million, including $1.5 million related to headcount reduction
and $0.4 million of asset write-offs related to the restructuring. In the first quarter of 2009, the total restructuring
charge was $0.1 million.
The restructuring charges and their utilization are summarized as follows:
Balance at
Beginning of
Period
Restructuring
Charge Utilized
Balance at
End of Period
Three months ended March 29, 2009
One-time termination benefits $ 414 $ 103 $ (517) $ -
Contract termination costs - - - -
Other associated costs - - - -
$ 414 $ 103 $ (517) $ -
Year ended December 31, 2008
One-time termination benefits $ - $ 1,519 $ (1,105) $ 414
Contract termination costs 796 - (796) -
Other associated costs - - - -
$ 796 $ 1,519 $ (1,901) $ 414
NOTE 4 - COMMITMENTS AND CONTINGENCIES
Commitments
As of March 29, 2009, our material commitments consisted of obligations on operating leases, repayment of
principal and interest owed on the loans made to us by the Finnish Funding Agency for Technology and Innovation
(―Tekes‖) and purchase commitments to our manufacturing subcontractors. These purchase commitments totaled
$10.5 million at March 29, 2009. We have no material capital commitments.
Warranty
The Company provides a limited warranty for periods, usually ranging from 12 to 24 months, to all purchasers
of its new equipment. Warranty expense is accrued on the sale of equipment and is recognized as a cost of revenue.
The expense is estimated based on analysis of historic costs and other relevant factors.
Information regarding the changes in the Company’s product warranty liabilities is as follows for the three
months ended March 29, 2009.
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
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Balance at
beginning of
period
Accrual for
warranties
issued
during the
period
Accruals
related to
pre-existing
warranties
(including
changes in
estimates)
Settlements
made (in
cash or in
kind) during
the period
Balance at
end of
period
Three months ended March 29, 2009
Product warranty liability $ 567 - - (1) $ 566
Other guarantees
At March 29, 2009, the Company had pledged cash to the banks as collateral for guarantees aggregating $1.0
million, of which $0.1 million is recorded as restricted cash in current assets and $0.9 million is recorded as other
non-current assets. The Company has also issued guarantees to customers under the line of credit provided by
Silicon Valley Bank for a total of $1.6 million, which does not require any related pledge of cash collateral. The
Company has not recognized any liability for these guarantees as in management’s opinion the likelihood of having
to make payments under the guarantees is remote. These guarantees will all expire before the end of the first quarter
of 2010 with the majority expiring in 2009.
In addition to the guarantees mentioned above, the Company has issued a guarantee to Tekes, the main public
funding organization for research and development in Finland, for the repayment of loans taken out by its fully
consolidated subsidiary, Airspan Networks (Finland) Oy. These loans totaled $1.9 million at March 29, 2009, which
includes $0.2 million of accrued interest, and are recorded in current and long-term debt. This guarantee expires
only when Airspan Networks (Finland) Oy has fulfilled all its obligations to Tekes.
Legal claims
Beginning in July 2001, the Company, its President and Chief Executive Officer Eric D. Stonestrom, its former
Senior Vice President and Chief Financial Officer, its Chairman Matthew Desch and its former Executive Vice
President and Chief Operating Officer Jonathan Paget (the ―Individual Defendants‖) were named as defendants in a
class action complaint alleging violations of the federal securities laws in the United States District Court for the
Southern District of New York. A Consolidated Amended Complaint, which is now the operative complaint, was
filed on April 19, 2002.
The purported class action alleges violations of Sections 11 and 15 of the Securities Act of 1933 and Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The essence of the
complaint is that defendants issued and sold the Company’s common stock pursuant to the Registration Statement
for the July 20, 2000 Initial Public Offering (―IPO‖) without disclosing to investors that certain underwriters in the
offering had solicited and received excessive and undisclosed commissions from certain investors. The complaint
also alleges that the Registration Statement for the IPO failed to disclose that the underwriters allocated Company
shares in the IPO to customers in exchange for the customers’ promises to purchase additional shares in the
aftermarket at pre-determined prices above the IPO price, thereby maintaining, distorting and/or inflating the market
price for the shares in the aftermarket. The action seeks damages in an unspecified amount.
This action is being coordinated with approximately three hundred other nearly identical actions filed against
other companies. On July 15, 2002, the Company moved to dismiss all claims against it and the Individual
Defendants. On October 9, 2002, the Court dismissed the Individual Defendants from the case without prejudice.
This dismissal disposed of the Section 15 and 20(a) control person claims without prejudice, since these claims were
asserted only against the Individual Defendants. On February 19, 2003, the Court dismissed the Section 10(b) claim
against the Company, but denied the motion to dismiss the Section 11 claim.
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
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At the Court’s request, plaintiffs selected six ―focus‖ cases, which do not include Airspan. The Court indicated
that its decisions in the six focus cases are intended to provide strong guidance for the parties in the remaining cases.
On August 14, 2007, the plaintiffs filed amended complaints in the six focus cases, and on September 27, 2007, the
plaintiffs moved to certify a class in these cases. On November 14, 2007, the defendants in the six focus cases filed
motions to dismiss. On March 26, 2008, the District Court dismissed the Section 11 claims of those members of the
putative classes in the focus cases who sold their securities for a price in excess of the initial offering price and those
who purchased outside the previously certified class period. With respect to all other claims, the motions to dismiss
were denied. On October 10, 2008, at the request of the plaintiffs, the motion for class certification was withdrawn,
without prejudice.
On April 3, 2009, the plaintiffs submitted to the Court a motion for preliminary approval of a settlement of the
approximately 300 coordinated cases, which includes Airspan, the underwriter defendants in Airspan’s class action
lawsuit, and the plaintiff class in Airspan’s class action lawsuit. The insurers for the issuer defendants in the
coordinated cases will make the settlement payment on behalf of the issuers, including Airspan. The settlement is
subject to termination by the parties under certain circumstances, and Court approval. There is no assurance that the
Court will approve the settlement.
Due to the inherent uncertainties of litigation, we cannot accurately predict the outcome of this matter. If the
settlement is not approved, the litigation continues, and Airspan is found liable, the Company is unable to estimate
or predict the potential damages that might be awarded, whether such damages would be greater than Airspan’s
insurance coverage, and whether such damages would have a material impact on its results of operations or financial
condition in any future period.
From time to time, the Company receives and reviews offers from third parties with respect to licensing their
patents and other intellectual property in connection with the manufacture of our WiMAX and other products.
There can be no assurance that disputes will not arise with such third parties if no agreement can be reached
regarding the licensing of such patents or intellectual property. The Company resolved its previously reported
patent dispute with Wi-Lan Inc. (―Wi-Lan‖) in connection with the sale of a number of CDMA (―Code Division
Multiple Access‖) related patents to Wi-Lan on April 30, 2009. For more information regarding this sale, please see
Note 9.
Except as set forth above, we are not currently subject to any other material legal proceedings. We may from
time to time become a party to various other legal proceedings arising in the ordinary course of our business.
NOTE 5 - STOCK COMPENSATION
At March 29, 2009, the Company had three stock option plans (the 1998 Stock Option and Restricted Stock
Plan, the 2001 Supplemental Stock Option Plan, and the 2003 Supplemental Stock Option Plan), the 2004 Omnibus
Equity Compensation Plan, and the 2000 Employee Stock Purchase Plan. Employee stock options granted under all
of the plans generally vest over a four-year period and expire on the tenth anniversary of their issuance. Restricted
stock is common stock that is subject to a risk of forfeiture or other restrictions that will lapse upon satisfaction of
specified performance conditions and/or the passage of time. Awards of restricted stock that vest only by the
passage of time will generally fully vest after four years from the date of grant. At March 29, 2009, the Company
had reserved a total of 16,413,976 shares of its common stock for issuance under the above plans.
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
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The following table summarizes share-based compensation expense under Statement of Financial Accounting
Standards No. 123(R), Share-Based Payment (―SFAS 123(R)‖), for the three months ended March 29, 2009 and
March 30, 2008, which was allocated as follows (in thousands): Three months ended
March 29, March 30,
2009 2008
Research and development $ 137 $ 280
Sales and marketing 116 147
General and administrative 263 276
Stock-based compensation expense included in operating expense 516 703
Cost of sales 19 33
Total stock-based compensation $ 535 $ 736
SFAS 123(R) requires companies to estimate the fair value of share-based awards on the date of grant using an
option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an
expense in our consolidated statement of operations over the requisite service periods. Compensation expense for all
share-based awards is recognized using the straight-line single-option method. Because share-based compensation
expense is based on awards that are ultimately expected to vest, share-based compensation expense has been
reduced to account for estimated forfeitures. SFAS 123(R) requires forfeitures to be estimated at the time of grant
and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
To calculate option-based compensation under SFAS 123(R), we used the Black-Scholes option-pricing model.
Our determination of fair value of option-based awards on the date of grant using the Black-Scholes model is
affected by our stock price as well as assumptions regarding a number of subjective variables. These variables
include, but are not limited to our expected stock price volatility over the term of the awards, and actual and
projected employee stock option exercise behaviors.
Fair Value and Assumptions Used to Calculate Fair Value under SFAS 123(R)
There were no restricted stock shares granted during the first three months of 2009 or 2008. The fair value of
each restricted stock award is estimated on the date of grant using the intrinsic value method.
There were no options granted during the first three months of 2009. The weighted average fair value of each
option granted during the first three months of 2008 was $0.78. The fair value of each option award is estimated on
the date of grant using the Black-Scholes option pricing model, using the following weighted average assumptions:
Three Months Ended
March 29,
2009
March 30,
2008
Expected volatility 107 % 80 %
Risk-free interest rate 1.75 % 2.77 %
Expected life (years) 5 5
Expected dividend yield 0 % 0 %
AIRSPAN NETWORKS INC.
QUARTERLY REPORT
MARCH 29, 2009
UNAUDITED
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Assumptions for Option-Based Awards under SFAS 123(R)
The expected volatility is determined based on historical price changes of our common stock over a period of
time which approximates the expected option term.
The risk-free interest rate assumption is based upon observed interest rates appropriate for the term of our stock
options.
The expected term of options is estimated based on our historical data regarding exercise behavior.
The dividend yield assumption is based on our history and expectation of no dividend payouts.
As share-based compensation expense recognized in the consolidated statement of operations is based on
awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures were estimated based
on our historical experience.
NOTE 6 - NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE
Net loss attributable to common stockholders per share is computed using the weighted average number of
shares of common stock outstanding less the number of shares subject to repurchase. Shares associated with stock
options and common stock to be issued on the conversion of Series B Preferred Stock are not included in the
calculation of diluted net loss attributable to common stockholders per share as they are anti-dilutive.
The following table sets forth the computation of basic and diluted net loss per share for the periods indicated:
Quarter Ended
March 29,
2009 March 30,
2008
(unaudited)
Numerator:
Net loss $ (5,778 ) $ (10,052 )
Denominator:
Weighted average common shares outstanding basic and diluted 59,726,082 58,599,702
Net loss per share- basic and diluted $ (0.10 ) $ (0.17 )
There were 7,804,199 stock options outstanding at March 29, 2009 and 6,907,538 stock options outstanding at
March 30, 2008 that were excluded from the computation of diluted net loss per share as their effect was anti-
dilutive. If the Company had reported net income, the calculation of these per share amounts would have included
the dilutive effect of these common stock equivalents using the treasury stock method for stock options. There were
200,690 shares of convertible preferred stock at March 29, 2009 and March 30, 2008, respectively, that were also
excluded from the computation of diluted net loss per share as their effect was anti-dilutive. The 200,690 shares of
convertible preferred stock would be convertible into 21,630,856 common shares as of March 29, 2009 and March
30, 2008, respectively. There were 53,037 and 107,940 non-vested shares of restricted stock at March 29, 2009 and
March 30, 2008, respectively, that were excluded from the computation of diluted net loss per share as their effect
was anti-dilutive.
NOTE 7 - GEOGRAPHICAL INFORMATION
As a developer and supplier of broadband wireless equipment and other technologies, the Company has one
reportable segment. The revenue of this single segment is comprised primarily of revenue from products and, to a
lesser extent, services. The majority of the Company’s revenue is generated from products manufactured in the
AIRSPAN NETWORKS INC.
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MARCH 29, 2009
UNAUDITED
14
United Kingdom, Mexico and Israel, with additional revenue generated from sales of original equipment
manufacturers’ products.
An analysis of revenue by geographical market is given below:
Quarter Ended
March 29, 2009 March 30, 2008
(unaudited) USA and Canada $ 1,409 $ 2,508
Asia 712 2,027
Europe 1,828 3,361
Africa and the Middle East 1,537 5,210
Latin America and Caribbean 5,645 4,053
$ 11,131 $ 17,159
NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS
In April 2009, the Financial Accounting Standards Board (―FASB‖) issued FSP 107-1 and Accounting
Principles Board (―APB‖) 28-1, Interim Disclosures about Fair Value of Financial Instruments (―FSP 107-1‖). FSP
107-1 amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about
fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual
financial statements. FSP 107-1 also amends APB Opinion No. 28, Interim Financial Reporting, to require those
disclosures in summarized financial information at interim reporting periods. FSP 107-1 is effective for interim
reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009.
FSP 107-1 does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In
periods after initial adoption, FSP 107-1 requires comparative disclosures only for periods ending after initial
adoption. The Company does not expect the changes associated with the adoption of FSP 107-1 to have a material
impact on its consolidated financial statements.
In April 2009, the FASB issued FSP 115-2 and 124-2, Recognition and Presentation of Other-Than-Temporary
Impairments (―FSP 115-2 and 124-2‖). FSP 115-2 and 124-2 amends the other-than-temporary impairment
guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure
of other-than-temporary impairments on debt and equity securities in the financial statements. FSP 115-2 and 124-2
does not amend existing recognition and measurement guidance related to other-than-temporary impairments of
equity securities. FSP 115-2 and 124-2 is effective for interim and annual reporting periods ending after June 15,
2009, with early adoption permitted for periods ending after March 15, 2009. FSP 115-2 and 124-2 does not require
disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial
adoption, FSP 115-2 and 124-2 requires comparative disclosures only for periods ending after initial adoption. The
Company does not expect the changes associated with the adoption of FSP 115-2 and 124-2 to have a material effect
on the determination or reporting of its financial results.
In April 2009, the FASB issued FSP 157-4, Determining Fair Value When the Volume and Level of Activity
for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (―FSP
157-4‖). FSP 157-4 provides additional guidance for estimating fair value in accordance with SFAS No. 157, Fair
Value Measurements, when the volume and level of activity for the asset or liability have significantly decreased.
FSP 157-4 also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4
is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009. FSP 157-4 does not require disclosures for earlier periods presented for
comparative purposes at initial adoption. In periods after initial adoption, FSP 157-4 requires comparative
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disclosures only for periods ending after initial adoption. The Company does not expect the changes associated with
the adoption of FSP 157-4 to have a material effect on the determination or reporting of its financial results.
NOTE 9 – SUBSEQUENT EVENT
On April 30, 2009, the Company sold a number of CDMA related patents to Wi-LAN for total consideration of
$11 million. On the same date, the Company entered into a perpetual non-exclusive license with Wi-LAN for a one-
time payment of $3 million. Of the net $8 million proceeds, $2 million was used for repayment of outstanding
borrowings under the revolving line of credit.
On April 30, 2009, the Company entered into an amendment to the Amended and Restated Loan and Security
Agreement with SVB. Under this amendment, the revolving line of credit available to the Company was capped at
$6.9 million the then current outstanding borrowing. As a result of the sale of CDMA related patents to Wi-LAN,
this facility was reduced by $2 million to $4.9 million.
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ITEM 4. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion should be read in conjunction with the Company’s Annual Report on Form 10-K for
the year ended December 31, 2008, as well as the financial statements and notes thereto. Except for historical
matters contained herein, statements made in this quarterly report are forward-looking and are made
pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Without
limiting the generality of the foregoing, words such as “may”, “will”, “to”, “plan”, “expect”, “believe”,
“anticipate”, “intend”, “could”, “would”, “estimate”, or “continue” or the negative other variations thereof
or comparable terminology are intended to identify forward-looking statements. Investors and others are
cautioned that a variety of factors, including certain risks, may affect our business and cause actual results to
differ materially from those set forth in the forward-looking statements. The Company is also subject to the
risks and uncertainties described in its filings with the Securities and Exchange Commission, including those
set forth in its Annual Report on Form 10-K for the year ended December 31, 2008.
Overview
We are a global supplier of broadband wireless equipment supporting the WiMAX protocol standard, which
provides a wide area telecommunication access network to connect end users to telecom backbone networks. Our
primary target customers are communications service providers and other network operators that deploy WiMAX
networks in licensed and unlicensed (license exempt) spectrums worldwide.
Historically, our business addressed communications service providers that used fixed, non-WiMAX wireless
infrastructure to deliver services in those parts of their service areas that are difficult or not cost effective to reach
using copper or fiber. We now offer a comprehensive range of WiMAX solutions to support these traditional fixed
wireless applications as well as the broader market for the mobile applications that WiMAX is expected to enable.
We are leveraging many years of experience in complex radio systems design to provide innovative and cost
effective products for all types of WiMAX users.
We have transitioned our company over the last four years to focus on WiMAX product development and sales
and marketing. As a result, a majority of our resources are dedicated to WiMAX-based products and we are
dependent on the acceptance of WiMAX solutions in the marketplace.
Critical Accounting Policies and Estimates
Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting
principles generally accepted in the United States of America. We review the accounting policies used in reporting
our financial results on a regular basis. The preparation of these financial statements requires us to make estimates
and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of
contingent assets and liabilities. On an ongoing basis, we evaluate our process used to develop estimates. We base
our estimates on historical experience and on various other assumptions that are believed to be reasonable for
making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates due to actual outcomes being different from those on which we based
our assumptions.
Our significant accounting policies were described in Note 1 to our audited Consolidated Financial Statements
and our critical accounting policies were included in the Management’s Discussion and Analysis of Financial
Condition and Results of Operations section in our Annual Report on Form 10-K for the year ended December 31,
2008. With the exception of the items discussed in Note 8 in the accompanying Condensed Consolidated Financial
Statements, there have been no significant changes to these policies and no recent accounting pronouncements or
changes in accounting pronouncements during the three months ended March 29, 2009. Our Annual Report on
Form 10-K can be found online at www.sec.gov.
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A. Results of Operations
Comparison of the Quarter Ended March 29, 2009 to the Quarter Ended March 30, 2008
Revenue
Revenue totaled $11.1 million for the quarter ended March 29, 2009, representing a 35% decrease from the
$17.2 million reported for the quarter ended March 30, 2008. WiMAX revenues decreased to $10.0 million in the
quarter ending March 29, 2009 from $13.3 million in the quarter ending March 30, 2008. Non-WiMAX revenues
decreased to $1.2 million in the quarter ending March 29, 2009 from $3.9 million in the quarter ending March 30,
2008. The first quarter historically has seasonally lower revenue than other quarters.
Geographically, in the first three months of 2009, approximately 51% of our revenue was derived from
customers in Mexico, Latin America and the Caribbean, 16% from customers in Europe, 14% from customers in
Africa and the Middle East, 13% from customers in the United States and Canada and 6% from customers in Asia.
Cost of Revenue
Cost of revenue reduced 34% to $7.8 million in the quarter ended March 29, 2009 from $11.9 million in the
quarter ended March 30, 2008, primarily due to decreased sales. The gross profit for the first quarter of 2009 was
$3.3 million (30% of revenue) compared to a gross profit of $5.2 million (31% of revenue) for the first quarter of
2008.
Total Operating Expenses
Total operating expenses decreased 43% to $8.9 million in the quarter ending March 29, 2009 from $15.6
million in the quarter ending March 30, 2008. The decrease is primarily due to a 30% reduction of personnel, in
conjunction with reduced travel, trade show and subcontract development expenses in the first quarter of 2009.
Research and Development Expenses
Research and development expenses decreased 52% to $3.3 million in the quarter ended March 29, 2009 from
$6.9 million in the quarter ended March 30, 2008. The decrease year over year is primarily due to reduced personnel
and subcontract development costs.
Sales and Marketing Expenses
Sales and marketing expenses decreased 47% to $2.3 million in the quarter ended March 29, 2009 from $4.2
million in the quarter ended March 30, 2008. The decrease as compared to the first quarter of 2008 is primarily
attributable to lower headcount related costs, travel costs and trade show expenses in the first quarter of 2009.
Bad Debt Provision
In the first quarter of 2009, we did not record a provision for bad debts. We recorded bad debt provisions of
$47 thousand in the first quarter of 2008.
General and Administrative Expenses
General and administrative expenses decreased 25% to $3.1 million in the quarter ended March 29, 2009 from
$4.1 million in the quarter ended March 30, 2008. The decrease from the first quarter of 2008 was primarily
attributable to reduced headcount related costs and reduced professional fees in the first quarter of 2009.
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Amortization of Intangibles
We recorded amortization of intangibles expense of $0.1 million in the first quarter of 2009 compared with
amortization of intangibles expense of $0.2 million for the first quarter of 2008. The amortization expense arises
primarily as a result of our acquisition of intangible assets in connection with the ArelNet and Radionet acquisitions
in June and November 2005, respectively. The amortization of other intangibles related to an acquisition of assets in
2003. Such amortization of other intangibles ended in 2008.
Restructuring
In the first quarter of 2009, we recorded a restructuring charge of $0.1 million. In the first quarter of 2008, we
did not record a restructuring charge.
Interest Income (Expense), Net
At March 29, 2009, the outstanding principal and accrued interest payable on loans made to us by the Finnish
Funding Agency for Technology and Innovation (the ―Tekes Loans‖) was $1.9 million. We also had outstanding
borrowings under the bank line of credit of $5.1 million. In the first quarter of 2009, we had interest income of $44
thousand compared to interest income of $0.3 million in the first quarter of 2008 primarily due to lower bank
balances in the first quarter of 2009 and lower average interest rates. Interest expense did not change materially in
the first quarter of 2009 compared to 2008.
Other Income (Expense), Net
Other income (expense), net decreased to an expense of $0.1 million in the first quarter of 2009 from income of
$0.2 million in the first quarter of 2008, primarily due to foreign exchange differences on non-cash balances.
Income Tax Credits (Charge), Net
In the first quarter of 2009, we recorded a net tax credit of $0.1 million compared to a net tax charge of $50
thousand in the first quarter of 2008. The tax credit in the first quarter of 2009 primarily relates to research and
development tax credits in the United Kingdom. No other income tax benefit has been recorded for the tax losses
generated because we have incurred operating losses since inception.
Net Loss Attributable to Common Stockholders
For the reasons described above, we incurred a net loss of $5.8 million, or $(0.10) per share, in the quarter
ended March 29, 2009, compared to a net loss of $10.1 million, or $(0.17) per share, in the quarter ended March 30,
2008.
Liquidity and Capital Resources
As of March 29, 2009 we had cash, cash equivalents, short-term investments and current restricted cash of $7.6
million, as compared to $22.5 million at December 31, 2008. As of March 29, 2009, this consisted of cash and cash
equivalents totaling $3.6 million, short-term investments totaling $3.9 million and $0.1 million of restricted cash in
current assets. In addition, we had restricted cash of $1.1 million in other non-current assets. We have no material
capital commitments.
Since inception, we have financed our operations through private sales of convertible preferred stock, public
offerings of common stock and a secured bank line of credit.
Effective March 25, 2009, we and our wholly-owned subsidiary, Airspan Communications Limited, entered
into an Amended and Restated Loan and Security Agreement with Silicon Valley Bank (―SVB‖). The term of the
credit line expires on March 31, 2010. Prior to the amendment to the Amended and Restated Loan and Security
Agreement discussed below, we were able to, subject to certain adjustments, borrow up to the lesser of
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(i) $20 million, and (ii) (a) 80% of eligible accounts receivable plus (as long as the Company’s worldwide cash and
investments exceeded $20 million, and the Company’s cash and investments maintained at SVB and its affiliates
exceeded $15 million) and (b) the lesser of (1) 60% of eligible inventory, and (2) $8 million. In February 2009, the
Company repaid $7.4 million under our agreement with SVB as the Company was no longer eligible to borrow
against inventory, as the Company’s worldwide cash and investments did not exceed $20 million and the
Company’s cash and investments maintained at SVB and its affiliates did not exceed $15 million. The Company
was not eligible to make borrowings under the inventory portion of the line at March 29, 2009. We are currently
drawing on the credit line and we expect to continue to use it in 2009. The credit facility requires us to satisfy
certain financial covenants, including the maintenance of a minimum Tangible Net Worth and a minimum Adjusted
Quick Ratio (as defined in the Amended and Restated Loan and Security Agreement). As of March 29, 2009, the
minimum tangible net worth requirement under our agreement with SVB was $18 million and the Company’s actual
tangible net worth was $22.0 million. The amended required minimum tangible net worth at June 30, 2009,
September 30, 2009 and December 31, 2009 and thereafter is $14 million, $13 million and $12 million, respectively,
subject to certain adjustments based on positive earnings and equity issuances. Assuming that we are able to
achieve our planned sales levels and contain expenses and cash resources used in accordance with our 2009 financial
plan, we currently believe that we will be able to meet the required minimum tangible net worth covenants as
amended and restated. The credit facility also contains various provisions that restrict our use of cash and operating
flexibility. These provisions could have important consequences for us, including (i) causing us to use a portion of
our cash flow from operations for debt repayment and/or service rather than other perceived needs, (ii) precluding us
from incurring additional debt financing for future working capital or capital expenditures, and (iii) impacting our
ability to take advantage of significant, perceived business opportunities, such as acquisition opportunities or to react
to market conditions. Our failure to meet financial and other covenants would give rise to a default under the
Amended and Restated Loan and Security Agreement. In the event of an uncured default, the Amended and
Restated Loan and Security Agreement provides that all amounts owed to SVB may be declared immediately due
and payable and that SVB has the right to enforce its security interest in our assets.
The Amended and Restated Loan and Security Agreement is secured by collateral, including all of our rights
and interests in substantially all of our personal property, including accounts receivable, inventory, equipment,
general intangibles, intellectual property, books and records, contract rights and proceeds of the above items. At
March 29, 2009, $5.1 million of indebtedness was outstanding under our agreement with SVB. During most of the
first quarter of 2009, advances under our agreement with SVB bore interest at SVB’s prime rate plus a percentage
ranging from 0.0% to 1.75% per annum depending on certain financial and collateral tests. Effective March 25,
2009, amounts payable under the Amended and Restated Loan and Security Agreement bear interest at SVB’s prime
rate plus 4.0% subject to a minimum rate of 8.0% per annum.
On April 30, 2009, we sold a number of CDMA related patents to Wi-Lan Inc. (―Wi-Lan‖) for total
consideration of $11.0 million and received net cash proceeds (after a one-time payment of $3.0 million to Wi-Lan
for a perpetual non-exclusive license to their WiMAX and Wi-Fi patents) of $8.0 million. Of the net $8 million
proceeds, $2 million was used for repayment of outstanding borrowings under the revolving line of credit. On April
30, 2009, the Company entered into an amendment to the Amended and Restated Loan and Security Agreement with
SVB. Under this amendment, the revolving line of credit available to the Company was reduced to $4.9 million
after the sale of CDMA related patents to Wi-LAN.
For the three months ended March 29, 2009, we used $6.9 million of cash for operating activities, compared
with an operating cash outflow of $2.3 million for the three months ended March 30, 2008. The operating cash
outflow for the first three months of 2009 was primarily a result of the:
net loss of $5.8 million; decrease of $3.8 million in accounts payable; and
decrease of $1.3 million in accrued expenses. The cash outflow was partially offset by the: decrease of $1.5 million in receivables; and decrease of $1.0 million in other current assets.
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Days sales outstanding were at 64 days at the end of the first quarter of 2009, up from 60 days at the end of the
fourth quarter of 2008. The change from the end of the fourth quarter of 2008 to the end of the first quarter of 2009
primarily reflects the lower revenue and net accounts receivable balances in the most recent period. Inventory turns
were 2.4 for the first quarter of 2009, down from 3.1 for the fourth quarter of 2008, primarily due to lower cost of
sales for the first quarter of 2009.
The net cash provided by investing activities for the three months ended March 29, 2009 was $3.2 million. The
investing cash inflow for the first three months of 2009 resulted from $3.8 million of net proceeds from the sale of
investment securities, net of $0.6 million of fixed asset purchases.
Our net cash used in financing activities for the three months ended March 29, 2009 was $7.4 million related to
the repayment of borrowings under the line of credit.
As of March 29, 2009, our material commitments consisted of obligations on operating leases, repayment of
principal and interest owed on the Tekes Loans and purchase commitments to our manufacturing subcontractors.
These purchase commitments totaled $10.5 million at March 29, 2009 and $11.9 million at March 30, 2008.
Until we are able to generate positive cash flow from operations, if ever, we intend to use our existing cash
resources and the Amended and Restated Loan and Security Agreement, if available, together with, depending on
market conditions and opportunities, the net proceeds of equity financings and asset sales to finance our operations.
We expect to fund our operations during the remainder of 2009 from existing cash resources, the continued use of
our loan facility with SVB, the sale of certain assets and the receipt of research and development tax credits.
However, there can be no certainty that we will not require additional funding in the next 12 months or, if needed,
that any such funding will be available.
We recognize that our need for capital in future periods may increase due to a variety of factors, estimates and
assumptions. If our projected demand for capital materially increases and our then current and/or projected cash
resources have not increased a comparable amount, we may need to modify our existing business plan or seek new
capital which may be available only on terms that may not be acceptable to the Company, especially in light of
current adverse economic conditions. If we are compelled to adopt further measures to conserve cash resources due
to the lack of availability of capital, such measures may adversely affect our results of operations and the short-term
and/or long-term prospects for our business.
We have raised equity in the past and may in the future seek to raise additional equity or debt capital to assist us
in financing an acquisition and/or our on-going business operations or those of any business that we may in the
future acquire. Among other securities, we may seek to sell additional shares of common stock, or shares of an
existing or newly designated class of preferred stock or debt securities. We have not, as of the date of this report,
entered into any definitive financing arrangements other than those described above. Particularly in light of
extraordinary market conditions, there can be no assurance that we will be able to secure equity or debt capital in
amounts and on terms acceptable to us. Although we will seek to secure financing on terms and conditions
favorable to the Company and its existing shareholders, we may seek to raise capital by issuing securities, which,
under certain circumstances, enjoy certain preferences and/or priorities relative to the common stock or which may
result in material dilution of the interests of our existing shareholders.
B. Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
ITEM 5. LEGAL PROCEEDINGS
Beginning in July 2001, the Company, its President and Chief Executive Officer Eric D. Stonestrom, its former
Senior Vice President and Chief Financial Officer, its Chairman Matthew Desch and its former Executive Vice
President and Chief Operating Officer Jonathan Paget (the ―Individual Defendants‖) were named as defendants in a
class action complaint alleging violations of the federal securities laws in the United States District Court for the
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Southern District of New York. A Consolidated Amended Complaint, which is now the operative complaint, was
filed on April 19, 2002.
The purported class action alleges violations of Sections 11 and 15 of the Securities Act of 1933 and Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The essence of the
complaint is that defendants issued and sold the Company’s common stock pursuant to the Registration Statement
for the July 20, 2000 Initial Public Offering (―IPO‖) without disclosing to investors that certain underwriters in the
offering had solicited and received excessive and undisclosed commissions from certain investors. The complaint
also alleges that the Registration Statement for the IPO failed to disclose that the underwriters allocated Company
shares in the IPO to customers in exchange for the customers’ promises to purchase additional shares in the
aftermarket at pre-determined prices above the IPO price, thereby maintaining, distorting and/or inflating the market
price for the shares in the aftermarket. The action seeks damages in an unspecified amount.
This action is being coordinated with approximately three hundred other nearly identical actions filed against
other companies. On July 15, 2002, the Company moved to dismiss all claims against it and the Individual
Defendants. On October 9, 2002, the Court dismissed the Individual Defendants from the case without prejudice.
This dismissal disposed of the Section 15 and 20(a) control person claims without prejudice, since these claims were
asserted only against the Individual Defendants. On February 19, 2003, the Court dismissed the Section 10(b) claim
against the Company, but denied the motion to dismiss the Section 11 claim.
At the Court’s request, plaintiffs selected six ―focus‖ cases, which do not include Airspan. The Court indicated
that its decisions in the six focus cases are intended to provide strong guidance for the parties in the remaining cases.
On August 14, 2007, the plaintiffs filed amended complaints in the six focus cases, and on September 27, 2007, the
plaintiffs moved to certify a class in these cases. On November 14, 2007, the defendants in the six focus cases filed
motions to dismiss. On March 26, 2008, the District Court dismissed the Section 11 claims of those members of the
putative classes in the focus cases who sold their securities for a price in excess of the initial offering price and those
who purchased outside the previously certified class period. With respect to all other claims, the motions to dismiss
were denied. On October 10, 2008, at the request of the plaintiffs, the motion for class certification was withdrawn,
without prejudice.
On April 3, 2009, the plaintiffs submitted to the Court a motion for preliminary approval of a settlement of the
approximately 300 coordinated cases, which includes Airspan, the underwriter defendants in Airspan’s class action
lawsuit, and the plaintiff class in Airspan’s class action lawsuit. The insurers for the issuer defendants in the
coordinated cases will make the settlement payment on behalf of the issuers, including Airspan. The settlement is
subject to termination by the parties under certain circumstances, and Court approval. There is no assurance that the
Court will approve the settlement.
Due to the inherent uncertainties of litigation, we cannot accurately predict the outcome of this matter. If the
settlement is not approved, the litigation continues, and Airspan is found liable, the Company is unable to estimate
or predict the potential damages that might be awarded, whether such damages would be greater than Airspan’s
insurance coverage, and whether such damages would have a material impact on its results of operations or financial
condition in any future period.
From time to time, the Company receives and reviews offers from third parties with respect to licensing their
patents and other intellectual property in connection with the manufacture of our WiMAX and other products.
There can be no assurance that disputes will not arise with such third parties if no agreement can be reached
regarding the licensing of such patents or intellectual property. The Company resolved its previously reported
patent dispute with Wi-Lan in connection with the sale of a number of CDMA related patents to Wi-Lan on April
30, 2009. For more information regarding this sale, please see Note 9 to the Unaudited Condensed Consolidated
Financial Statements included elsewhere in this report.
Except as set forth above, we are not currently subject to any other material legal proceedings. We may from
time to time become a party to various other legal proceedings arising in the ordinary course of our business.
ITEM 6. DEFAULTS UPON SENIOR SECURITIES
The Company is not in material default with respect to any of its material indebtedness.
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ITEM 7. OTHER INFORMATION
On April 30, 2009, we and our wholly-owned subsidiary, Airspan Communications Limited, entered into a First
Amendment to Amended and Restated Loan and Security Agreement (the ―First Amendment‖) with SVB. For a
description of the First Amendment, please see ―Item 4. Management’s Discussion and Analysis or Plan of
Operation—Liquidity and Capital Resources‖ of this report, which is incorporated herein by reference. In addition,
the First Amendment is attached as an exhibit hereto.
For a description of the agreement that we entered into with Wi-Lan in connection with the sale of a number of
CDMA related patents, please see Note 9 to the Unaudited Condensed Consolidated Financial Statements included
elsewhere in this report, which is incorporated herein by reference.
ITEM 8. EXHIBITS
On April 30, 2009, we and our wholly-owned subsidiary, Airspan Communications Limited, entered into the
First Amendment with SVB. For a description of the First Amendment, please see ―Item 4. Management’s
Discussion and Analysis or Plan of Operation—Liquidity and Capital Resources‖ of this report, which is
incorporated herein by reference. In addition, the First Amendment is attached as an exhibit hereto.
For a description of the agreement that we entered into with Wi-Lan in connection with the sale of a number of
CDMA related patents, please see Note 9 to the Unaudited Condensed Consolidated Financial Statements included
elsewhere in this report, which is incorporated herein by reference.
Other than as set forth above, there are no changes or updates to the material contracts, Second Amended
and Restated Articles of Incorporation, as amended, or Amended and Restated Bylaws of the Company that are
attached as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.
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ITEM 9. ISSUER’S CERTIFICATIONS
I, Eric Stonestrom, certify that:
1. I have reviewed this quarterly disclosure statement of Airspan Networks Inc.;
2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this disclosure
statement; and
3. Based on my knowledge, the financial statements, and other financial information included or incorporated
by reference in this disclosure statement, fairly present in all material respects the financial condition,
results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure
statement.
May 15, 2009
/s/ Eric Stonestrom
Eric Stonestrom
Chief Executive Officer
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ITEM 9. ISSUER’S CERTIFICATIONS (continued)
I, David Brant, certify that:
1. I have reviewed this quarterly disclosure statement of Airspan Networks Inc.;
2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this disclosure
statement; and
3. Based on my knowledge, the financial statements, and other financial information included or incorporated
by reference in this disclosure statement, fairly present in all material respects the financial condition,
results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure
statement.
May 15, 2009
/s/ David Brant
David Brant
Chief Financial Officer
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