Clearwire 2010 Annual Report Download - page 69

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business fails to perform as we expect, we may require substantial additional capital in the near and long-term to be
able to continue to operate.
Although our primary focus in 2011 is on operating our current business, we are seeking additional capital that
would allow us to continue the development of our 4G mobile broadband network. We will also continue to evaluate
our plans and strategies, which may result in changes to our plans that could be material and that may significantly
increase our capital requirements in the near and/or long term. These changes may include, among other things,
improving our network coverage in markets we have previously launched by increasing site density and/or our
coverage area, modifying our sales and marketing strategy and/or acquiring additional spectrum. We also may elect
to deploy alternative technologies to mobile WiMAX, such as LTE, either in place of, or together with, mobile
WiMAX if we determine it is necessary to cause the 4G mobile broadband services we offer to remain competitive
or to expand the number and types of devices that may be used to access our services.
The amount and timing of any additional financings to satisfy our additional capital needs are difficult to
estimate at this time. If we are unable to raise sufficient additional capital that we may determine is necessary or
desirable for our business, our business prospects, financial condition and results of operations may be adversely
affected. A special committee of our board of directors has been formed to explore sources of additional capital and
to pursue other strategic alternatives for our business. Sources of additional capital could include issuing additional
equity securities in public or private offerings or seeking additional debt financing. Any additional equity financing
would be dilutive to our stockholders. With our existing indebtedness, including the financing completed in 2010, it
may be difficult for us to obtain additional debt financing on acceptable terms or at all. If we were successful in
obtaining additional debt financing it would increase our future financial commitments. We may also decide to sell
additional equity or debt securities in our domestic or international subsidiaries, which may dilute our ownership
interest in, or reduce or eliminate our income, if any, from those entities.
Further, to satisfy our need for additional capital, as discussed above, we may elect to sell certain assets, which
we believe are not essential to our business. In the second half of 2010, we initiated a process to seek bids for the
potential sale of certain excess spectrum. During the process, we received offers to purchase varying amounts of our
spectrum from multiple parties, some of whom also expressed interest in exploring other strategic transactions.
Currently, we are evaluating the offers received for our spectrum and holding discussions with the interested parties.
As a result, we have not yet made a determination as to whether to proceed with a sale, if any.
Lastly, recent distress in the financial markets has resulted in extreme volatility in securities prices, diminished
liquidity and credit availability and declining valuations of certain investments. We have assessed the implications
of these factors on our current business and determined that external factors have not had a significant impact to our
financial position or liquidity during 2010. If the national or global economy or credit market conditions in general
were to deteriorate in the future, it is possible that such changes could adversely affect our ability to obtain
additional external financing.
Cash Flow Analysis
The following analysis includes the sources and uses of cash for the Sprint WiMAX Business for the first
eleven months of 2008 prior to the Closing and the sources and uses of cash for Clearwire subsequent to the Closing.
The statement of cash flows includes the activities that were paid by Sprint on behalf of us prior to the Closing.
Financing activities include funding advances from Sprint through November 28, 2008. Further, the net cash used in
operating activities and the net cash used in investing activities for capital expenditures and acquisitions of spectrum
licenses and patents represent transfers of expenses or assets paid for by other Sprint subsidiaries.
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