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(1)

Each share of Common Stock is also paired with a stock purchase right under the Registrant’s Stockholder Rights Plan.

(2)

Pursuant to Rule 416, this registration statement also registers an indeterminate number of shares of Common Stock as may be issued upon outstanding shares upon stock splits, stock dividends or similar situations (and conversely, upon reverse stock splits).

(3)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, and based upon the average high and low prices of the Common Stock on September 24, 2002 as reported on the Nasdaq SmallCap Market.

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We may not be able to close the merger if all the conditions to the merger are not satisfied, including the approval of the merger and merger agreement by the stockholders of Telaxis, approval of the issuance of shares of our common stock in the merger by our stockholders, regulatory approvals and satisfaction of the other closing conditions set forth in the merger agreement.

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If the merger is not completed, our stock price and future business and operations could be adversely affected. The price of our common stock may decline to the extent that the current market price of our common stock reflects a market assumption that the merger will be completed and the costs related to the merger, such as legal, accounting and some of the fees of our financial advisor, must be paid even if the merger is not completed.

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We expect to incur significant costs associated with the merger. We will incur direct transaction costs in connection with the merger that will be expensed. The combined entity may incur charges to operations in the quarter in which the merger is completed or the following quarters, to reflect costs associated with integrating the two companies. There can be no assurance that the combined company will not incur additional material changes in subsequent quarters to reflect additional costs associated with the merger.

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The combined company will continue to have the risks that each of P-Com and Telaxis were subject to before the merger. Telaxis will represent a substantial portion of the operations, businesses and results of the combined company. As a result, the combined company will be susceptible to the risks to which both P-Com and Telaxis are subject. The risks Telaxis is subject include the following: dependence on a limited number of customers, the expense of defending and the outcome of current and future stockholder litigation, newly created and developed narrow product initiatives and the delays and difficulties of establishing regulatory approval and market acceptance of such initiatives. You can learn more about the risks of Telaxis’ business by reviewing its publicly available 10-K annual report for the year-ended December 31, 2001 and 10-Q quarterly report for the quarter-ended June 30, 2002.

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Customer and employee uncertainty related to the merger could harm the combined company if we are able to close the merger. Our customers may, in response to the announcement or consummation of the merger, delay or defer purchasing decisions. Any delay or deferral in purchasing decisions by our customers could adversely affect the business of the combined company. Similarly, our employees may experience uncertainty about their future role with the combined company until or after strategies with regard to Telaxis are announced or executed. This may adversely affect our ability to attract and retain key management, marketing and technical personnel.

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We may not realize any benefits from the merger if we do not successfully meet the challenges necessary to realize any potential benefits of the merger, including the successful integration of the two companies. Achieving the benefits of the merger will depend in part on the integration of the technology, operations and personnel of P-Com and Telaxis. The integration process will be a complex, time-consuming and expensive process and may disrupt our business if not completed in a timely and efficient manner. Some of the specific challenges include the following: demonstrating to our customers that the merger will not result in adverse changes in client service standards or business focus, persuading our employees that our business cultures are compatible and timely release of products to market. There is no assurance that we will successfully integrate the business, operations or product lines of P-Com and Telaxis, or that we will realize any of the anticipated benefits of the merger.

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new product development to respond to market demand;

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integration of various elements of complex technology;

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timely and efficient implementation of manufacturing and assembly processes at turnkey suppliers and design and manufacturing cost reduction programs for existing product lines;

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development and completion of related software tools, system performance, quality and reliability of systems; and

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timely, efficient and cost-effective completion of system design process.

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customers’ seasonal purchasing and budgetary cycles, as well as their own buildout schedules;

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compliance with customers’ internal procedures for approving large expenditures and evaluating and accepting new technologies;

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compliance with governmental or other regulatory standards;

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difficulties associated with customers’ ability to secure financing;

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negotiation of purchase and service terms for each sale;

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price negotiations required to secure purchase orders; and

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education of customers as to the potential applications of our products and services, as well as related product-life cost savings.

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changes in regulatory requirements;

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costs and risks of localizing systems (homologation) in foreign countries;

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delays in receiving and processing components and materials;

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availability of suitable export financing;

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timing and availability of export licenses, tariffs and other trade barriers;

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difficulties in staffing and managing foreign operations, branches and subsidiaries;

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difficulties in managing distributors;

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potentially adverse tax consequences;

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the burden of complying with a wide variety of complex foreign laws and treaties;

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difficulty in accounts receivable collections, if applicable; and

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political and economic instability.

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market acceptance of and continuing demand for our products;

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our ability to protect our intellectual property;

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the impact of competitive products, pricing and customer service and support;

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our ability to obtain additional financing to support our operations;

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obtaining and maintaining regulatory approval where required; and

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changing market conditions and other risks detailed in this prospectus.

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(1)

our annual report on Form 10-K for the fiscal year ended December 31, 2001 filed on April 1, 2002;

(2)

our quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2002 and June 30, 2002 filed on May 15, 2002 and August 14, 2002, respectively;

(3)

our current reports on form 8-K filed on June 26, 2002, July 9, 2002 and September 12, 2002;

(4)

the description of our common stock contained in our registration statement on Form 8-A filed on January 12, 1995, including any amendments or reports filed for the purpose of updating such descriptions; and

(5)

the description of our preferred stock purchase rights, contained in our registration statement on Form 8-A filed on October 9, 1997, including any amendments or reports filed for the purpose of updating such descriptions.

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*

Less than one percent.

(1)

Assumes that all shares being offered by the selling stockholders under this prospectus are sold, and that the selling stockholders acquire no additional shares of common stock before the completion of this offering.

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a block trade in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

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purchases by a broker-dealer as principal and resale by such broker-dealer for its account under this prospectus;

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an exchange distribution in accordance with the rules of the respective exchange;

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ordinary brokerage transactions and transactions in which the broker solicits purchasers; and

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in privately negotiated transactions.

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