18 April 2003 Coronado, CA Lightwave -- USA Broadband, Inc. (USBU - no website), a Delaware corporation, today said it has completed all closing requirements for the purchase of 49 percent of the shares of stock in Cable California, SA de CV, a Mexican corporation, from Dick Clark International Cable Ventures, Ltd. (DCICV; we're not sure if it's that Dick Clark, but we're looking into it). USA Broadband will form a Mexican entity, allowing for the increase of its ownership position in Cable California in the future, subject to governmental approvals.
Cable California has been awarded a 30-year advanced telecommunications broadband concession from the Mexican government to construct and operate an 870-MHz fiber-optic network providing high-speed Internet, telephone, data, and multi-channel cable television to residents and businesses in the greater Tijuana, Mexico, metropolitan area. Cable California is constructing a 1,300-mi broadband network and has completed the first phase of this cable build, including its programming head end, central operations center, and over 100 mi of cable plant now serving approximately 2,000 customers.
In addition, USBU acquired certain assets -- including office and computer equipment, vehicles, machinery, and satellite equipment -- from Las Americas Broadband, Inc. (LABN) of Colorado. These assets are related to Cable California's operations in Mexico. USBU also acquired LABN's rights and obligations under a previous agreement among LABN, Cable California, Carlos Bustamante Sr., and LABN Mexico, SA de C.V., which will allow USBU to manage and operate the cable television system in Tijuana. In addition, USBU is the recipient of a $7,000,000 promissory note payable by Cable California, formerly held by LABN.
In exchange for these acquisitions, USBU paid $250,000 in cash, issued 2,500,000 shares of its common stock to DCICV, 2,250,000 shares of its common stock to LABN, and 250,000 shares of its common stock to Bustamante. In addition, USBU assumed $1,250,000 of debt, liabilities, and other financial obligations of Cable California and LABN. USBU also reduced the outstanding principal amount of a promissory note issued by LABN in favor of USBU from $890,276 to $500,000. The amended note will remain as presently collateralized by assets of LABN, including its cable television system in Tehachapi, CA.
Richard Lubic, Las Americas Broadband president and CEO, has agreed to provide management services to USA Broadband and Cable California SA de CV under a management services contract. He has also agreed to serve as chairman of the board of USA Broadband, Inc. and as senior management specialist of Cable California.