<PAGE>

  As filed with the Securities and Exchange Commission on September 10, 1999
                                                       Registration No. 333-
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                ---------------

                                   FORM S-1
                            REGISTRATION STATEMENT
                                     Under
                          THE SECURITIES ACT OF 1933

                                ---------------

                          SOMERA COMMUNICATIONS, INC.
            (Exact name of Registrant as specified in its charter)

                                ---------------

       Delaware                    5065                    77-0521878
   (State or other          (Primary Standard           (I.R.S. Employer
   jurisdiction of              Industrial               Identification
   incorporation or        Classification Code              Number)
    organization)                Number)

                             5383 Hollister Avenue
                        Santa Barbara, California 93111
                                (805) 681-3322
  (Address, including zip code, and telephone number, including area code, of
                   Registrant's principal executive offices)

                                 DAN FIRESTONE
                            Chief Executive Officer
                          Somera Communications, Inc.
                             5383 Hollister Avenue
                        Santa Barbara, California 93111
                                (805) 681-3322
(Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

                                  Copies to:

        Jeffrey D. Saper, Esq.               Patrick A. Pohlen, Esq.
    Richard Jay Silverstein, Esq.               COOLEY GODWARD LLP
         Craig N. Lang, Esq.                    5 Palo Alto Square
   WILSON SONSINI GOODRICH & ROSATI            3000 El Camino Real
       Professional Corporation                Palo Alto, CA 94306
          650 Page Mill Road                      (650) 843-5000
         Palo Alto, CA 94304
            (650) 493-9300

                                ---------------

  Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
  If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
  If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
  If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
  If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
  If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

                                ---------------

                        CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                      Proposed Maximum      Amount of
 Title of Each Class of Securities to be Registered   Offering Price(1)  Registration Fee
-----------------------------------------------------------------------------------------
<S>                                                   <C>               <C>
Common Stock $0.001 par value per share............     $115,000,000         $31,970
</TABLE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(1) Estimated pursuant to Rule 457(o) solely for the purpose of calculating
    the amount of the registration fee.

                                ---------------

  The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the     +
+Securities and Exchange Commission is effective. This prospectus is not an    +
+offer to sell these securities and we are not soliciting offers to buy these  +
+securities in any state where the offer or sale is not permitted.             +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                Subject to Completion, dated September 10, 1999

PROSPECTUS

                                       Shares

                                [LOGO OF SOMERA]

                                  Common Stock

--------------------------------------------------------------------------------

  This is our initial public offering of shares of common stock. We are
offering    shares. No public market currently exists for our shares.

  We propose to list our common stock on the Nasdaq National Market under the
symbol "SMRA." Anticipated price range of $     to $     per share.

    Investing in the shares involves risks. "Risk Factors" begin on page 6.

<TABLE>
<CAPTION>
                                                                      Per
                                                                     Share Total
                                                                     ----- -----
<S>                                                                  <C>   <C>
Public Offering Price............................................... $     $
Underwriting Discount............................................... $     $
Proceeds to Somera Communications................................... $     $
</TABLE>

  We have granted the underwriters a 30-day option to purchase up to
additional shares of common stock on the same terms and conditions as set forth
above solely to cover over-allotments, if any.

  Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

  Lehman Brothers expects to deliver the shares on or about       , 1999.


--------------------------------------------------------------------------------


Lehman Brothers

              Dain Rauscher Wessels
                a division of Dain Rauscher Incorporated

                                                      Thomas Weisel Partners LLC

      , 1999
<PAGE>

                          [INSIDE FRONT COVER ARTWORK]

          [We intend to file cover artwork and captions by amendment.]
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                         Page
                                         ----
<S>                                      <C>
Prospectus Summary......................   1
Risk Factors............................   6
Use of Proceeds.........................  16
Dividend Policy.........................  16
Capitalization..........................  17
Dilution................................  19
Selected Financial Data.................  21
Management's Discussion and Analysis of
 Financial Condition and Results of
 Operations.............................  22
Business................................  31
</TABLE>
<TABLE>
<CAPTION>
                                    Page
                                    ----
<S>                                 <C>
Management........................   41
Certain Transactions..............   50
Principal Stockholders............   52
Description of Capital Stock......   53
Shares Available for Future Sale..   56
Underwriting......................   57
Legal Matters.....................   59
Experts...........................   59
Available Information.............   60
Index to Financial Statements.....  F-1
</TABLE>

                                ---------------

                             ABOUT THIS PROSPECTUS

  You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information that is different from
that contained in this prospectus. We are offering to sell shares of common
stock and seeking offers to buy shares of common stock only in jurisdictions
where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of
the time of delivery of this prospectus or of any sale of the common stock.

  This preliminary prospectus is subject to completion prior to this offering.
Among other things, this preliminary prospectus describes our company as we
currently expect it to exist at the time of the offering.

  See the section of this prospectus entitled "Risk Factors" for a discussion
of factors that you should consider before investing in our common stock.

  Unless otherwise indicated, all information in this prospectus:

  . Reflects a 3 for 2 split of the Class A units and Class B units of Somera
    Communications, LLC, a California limited liability company;
  . Reflects the exchange of all of the Class A units and Class B units of
    Somera Communications, LLC, for shares of common stock of Somera
    Communications, Inc., a Delaware corporation, prior to this offering;
  . Reflects the assumption of the operations, assets, liabilities and
    commitments of Somera Communications, LLC by Somera Communications, Inc.
    prior to this offering;
  . Assumes the filing of our amended and restated certificate of
    incorporation, which, among other things, will authorize 200 million
    shares of common stock and 20 million shares of undesignated preferred
    stock; and
  . Assumes no exercise of the underwriters' over-allotment option.

  Certain statements under the captions "Prospectus Summary," "Risk Factors,"
"Use of Proceeds," "Management's Discussion and Analysis of Financial
Conditions and Results of Operations" and "Business" and elsewhere in this
prospectus are forward-looking statements. These forward-looking statements
include, but are not limited to, statements about our plans, objectives,
expectations and intentions and other statements contained in the prospectus
that are not historical facts. When used in this prospectus, the words
"expects," "anticipates," "intends," "plans," "believes," "seeks" and
"estimates" and similar expressions are generally intended to identify forward-
looking statements. Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause actual results to
differ materially from those expressed or implied by these forward-looking
statements, including our plans, objectives, expectations and intentions and
other factors discussed under "Risk Factors."

  All trademarks or service marks appearing in this prospectus are the property
of their respective holders.

  References in this prospectus to "Somera Communications," "we," "our," and
"us" refer to Somera Communications, Inc. and our predecessor, Somera
Communications, LLC, unless the context otherwise requires. Somera
Communications, LLC was formed in California on July 27, 1995. Somera
Communications, Inc. was incorporated as a Delaware corporation in August 1999.
The unit holders of Somera Communications, LLC will exchange all of their
outstanding units for shares of common stock of, and Somera Communications, LLC
will be succeeded by, Somera Communications, Inc. prior to this offering. Our
principal executive offices are located at 5383 Hollister Avenue, Santa
Barbara, California 93111. Our telephone number is (805) 681-3322. Our web site
address is www.somera.com. Information contained on our web site does not
constitute part of this prospectus.

  Until    1999, all dealers that buy, sell or trade the common stock, whether
or not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to unsold allotments or subscriptions.
<PAGE>

                               PROSPECTUS SUMMARY

  You should read the following summary together with the more detailed
information regarding our company, the common stock being sold in this offering
and our financial statements and related notes appearing elsewhere in this
prospectus.

  We provide telecommunications carriers with a broad range of infrastructure
equipment and related services designed to meet their specific and changing
equipment needs. We offer our customers a unique combination of new, de-
installed and refurbished equipment from a variety of manufacturers, allowing
them to make multi-vendor purchases from a single, cost-effective source. To
further address our customers' dynamic equipment needs, we offer a suite of
customized, value-added services, including asset recovery, inventory
management, technical support and other ancillary services. We sell equipment
to over 750 customers, including leading carriers such as ALLTEL Corporation,
AT&T Corporation, McLeodUSA, Inc., Sprint Corporation, United States Cellular
Corp. and Vodafone AirTouch plc. For the twelve months ended June 30, 1999, we
had net revenue of $90.6 million, gross profit of $34.5 million and net income
of $20.7 million.

  The telecommunications infrastructure equipment market has experienced
tremendous growth in recent years. Dataquest projects that worldwide sales of
telecommunications infrastructure equipment will grow from $180 billion in 1998
to $230 billion in 2002. Telecommunications carriers are facing a number of
challenges, including increased competition, the need to rapidly expand service
offerings, increased demand for communications services and technology
advancements. These challenges are having a significant impact on carriers'
equipment and service needs. Carriers have invested hundreds of billions of
dollars in telecommunications network infrastructure. To maximize the value of
their investments, carriers are expanding and upgrading their existing networks
and utilizing existing and new technologies and equipment from multiple
vendors. In addition, carriers are seeking cost-effective ways to expand and
maintain existing elements of their networks based on mature technologies. A
significant portion of the equipment replaced by carriers, referred to as de-
installed equipment, is suitable for redeployment in other parts of a carrier's
network. While historically carriers may have scrapped de-installed equipment
or let it remain idle, competitive factors increasingly require carriers to
recapture a portion of their original investment. As they attempt to respond to
their changing equipment and service needs, carriers are discovering that
traditional equipment suppliers, including original equipment manufacturers, or
OEMs, distributors and niche secondary market dealers are unable to fulfill
their complex and changing equipment needs.

  Our innovative equipment and service offerings are delivered through our team
of 75 sales and procurement professionals, who work individually with carriers
to understand, anticipate and meet their ongoing equipment requirements. Our
sales teams utilize our relationship management database, our selective
inventory and our distribution center to provide our customers with rapidly
deployable equipment solutions.

                                       1
<PAGE>


  The key benefits of our solution include:

  . Broad Multi-vendor Equipment Offering. We provide customers with an
    effective alternative to traditional telecommunications equipment supply
    channels by offering a broad range of new, de-installed and refurbished
    equipment from a variety of manufacturers. We offer infrastructure
    equipment, including switching, transmission, access, wireless, microwave
    and power products.

  . Rapid Responsiveness to Dynamic Customer Needs. We provide carriers with
    convenient access to our skilled and dedicated sales and service
    professionals who are capable of quickly identifying and responding to
    their diverse equipment needs. We are able to quickly locate and provide
    equipment to carriers by using our relationship management database and
    maintaining selective inventory.

  . Flexible Asset Recovery Programs. We provide innovative and effective
    asset recovery programs that enable carriers to cost-effectively build,
    upgrade and maintain their networks and to recapture value from their
    excess and de-installed equipment.

  . Simplified, Value-added Materials Management Services. We provide
    carriers with a full range of value-added services, including technical,
    materials management and other network deployment services that
    simplifies the management of their equipment inventory and allows them to
    focus more on their core business.

  Our objective is to be the premier provider of telecommunications
infrastructure equipment and related services to carriers worldwide. Key
elements of our strategy include:

  . Expanding our penetration of the telecommunications carrier market;

  . Expanding our product lines and service capabilities;

  . Increasing our penetration into the regional bell operating companies, or
    RBOCs;

  . Pursuing opportunities for international growth; and

  . Pursuing selective acquisitions.


                                       2
<PAGE>

                                  The Offering

<TABLE>
 <C>                                             <S>
 Common stock offered by Somera Communications..     shares

 Common stock outstanding after the offering....     shares

 Use of proceeds................................ We intend to use the net
                                                 proceeds of this offering to
                                                 repay outstanding bank
                                                 indebtedness, for capital
                                                 expenditures and for general
                                                 corporate purposes, including
                                                 working capital. See "Use of
                                                 Proceeds."

 Dividend policy................................ We do not intend to pay
                                                 dividends on our common stock.
                                                 We plan to retain earnings for
                                                 use in the operation of our
                                                 business and to fund future
                                                 growth.

 Proposed Nasdaq National Market symbol......... "SMRA"
</TABLE>

  In addition to the          shares of common stock to be outstanding after
the offering, we may issue additional shares of common stock under the
following plans and arrangements:

  . 6,750,000 shares issuable under our 1999 Stock Option Plan, consisting
    of:

   . 1,490,093 Somera Communications, LLC units underlying outstanding
     options at a weighted average exercise price of $8.09 per share, none
     of which were exercisable as of August 31, 1999, and which will be
     converted into options to purchase an equivalent number of shares under
     our 1999 Stock Option Plan; and

   . 5,259,907 shares available for future grants;

  . 207,655 Somera Communications, LLC units issuable upon exercise of
    outstanding warrants at a weighted average exercise price of $8.07 per
    share, which were fully exercisable as of August 31, 1999, and which will
    be converted into warrants exercisable for an equivalent number of shares
    of our common stock;

  . 300,000 shares available for issuance under our 1999 Employee Stock
    Purchase Plan; and

  . 300,000 shares available for issuance under our 1999 Director Option
    Plan.

                                       3
<PAGE>

                             Summary Financial Data

  The following summary financial data should be read in conjunction with our
financial statements and related notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
in this prospectus. The statements of operations for each of the years ended
December 31, 1996, 1997 and 1998 and the six months ended June 30, 1999 and the
balance sheet data at December 31, 1997, 1998 and June 30, 1999 are derived
from our financial statements that have been audited by PricewaterhouseCoopers
LLP, independent accountants, included elsewhere in this prospectus. The
statement of operations data for the six months ended June 30, 1998 is derived
from our unaudited financial statements included elsewhere in this prospectus.

<TABLE>
<CAPTION>
                                                                 Six Months
                                       Year Ended December 31, Ended June 30,
                                       ----------------------- ---------------
                                        1996    1997    1998    1998    1999
                                       ------- ------- ------- ------- -------
                                                               (unaudited)
                                        (in thousands, except per share data)
<S>                                    <C>     <C>     <C>     <C>     <C>
Statement of Operations:
Net revenue........................... $10,149 $34,603 $72,186 $34,417 $52,834
Cost of net revenue...................   5,532  20,587  43,132  21,037  34,023
                                       ------- ------- ------- ------- -------
Gross profit..........................   4,617  14,016  29,054  13,380  18,811
                                       ------- ------- ------- ------- -------
Operating expenses:
  Sales and marketing.................     780   2,593   5,747   2,394   4,385
  General and administrative..........     696   1,648   3,939   1,326   2,999
  Stock-based compensation............     --      --      --      --      193
                                       ------- ------- ------- ------- -------
    Total operating expenses..........   1,476   4,241   9,686   3,720   7,577
                                       ------- ------- ------- ------- -------
Income from operations................   3,141   9,775  19,368   9,660  11,234
Interest expense, net.................      18      82     187      75     144
                                       ------- ------- ------- ------- -------
Net income............................ $ 3,123 $ 9,693 $19,181 $ 9,585 $11,090
                                       ======= ======= ======= ======= =======
Pro-forma net income per share--
 basic(1)............................. $  0.08 $  0.25 $  0.50 $  0.25 $  0.29
                                       ------- ------- ------- ------- -------
Pro-forma weighted average shares--
 basic................................  37,500  38,052  38,063  38,063  38,063
                                       ------- ------- ------- ------- -------
Pro-forma net income per share--
 diluted(1)........................... $  0.08 $  0.25 $  0.50 $  0.25 $  0.29
                                       ------- ------- ------- ------- -------
Pro-forma weighted average shares--
 diluted..............................  37,500  38,052  38,063  38,063  38,069
                                       ------- ------- ------- ------- -------
</TABLE>
-------
(1) See Note 2 of notes to the financial statements for an explanation of the
    calculation of net income per unit--basic and diluted. Net income per
    share--basic and diluted has been stated above assuming a one-for-one
    exchange of the units of Somera Communications, LLC for shares of our
    common stock.

  The following data provides a summary of our balance sheet at June 30, 1999.
The pro-forma column gives effect to:

   .  the distribution to members of approximately $6.5 million in July
      1999;
   .  the receipt of the proceeds of $50 million from a term loan facility
      made by Fleet National Bank and the payment of $750,000 of bank fees
      associated with the facility;
   .  the payment to stockholders of a distribution of $48.5 million upon
      receipt of proceeds of the term loan facility;
   .  the repayment of an aggregate principal amount of $3.5 million to note
      holders in September 1999; and
   .  the creation of a deferred tax asset of approximately $17.0 million as
      a result of the change in tax status from a limited liability company
      to a "C" corporation.


                                       4
<PAGE>


The as adjusted column reflects the sale of     shares of common stock in this
offering at an assumed initial public offering price of $    per share after
deducting the estimated underwriting discount and offering expenses payable by
us. See "Use of Proceeds" and "Capitalization."

<TABLE>
<CAPTION>
                                                        June 30, 1999
                                                ------------------------------
                                                                    Pro-forma
                                                Actual   Pro-forma As Adjusted
                                                -------  --------- -----------
                                                       (in thousands)
<S>                                             <C>      <C>       <C>
Balance Sheet Data:
Working capital................................ $ 9,975   $ 2,409     $
Deferred tax asset.............................     --     17,000
Total assets...................................  27,202    43,720
Notes payable--net of current portion..........   1,957       --
Term debt......................................     --     49,250
Mandatorily redeemable Class B units...........  51,750       --
Total members' deficit/Stockholders' equity
 (deficit)..................................... (42,765)  (28,874)
</TABLE>

  Commencing with 1997, our fiscal years are on a 52 and 53 week basis. For
presentation purposes we are using a calendar quarter and calendar year end
convention. Our fiscal year 1997 ended on December 28, 1997 and our fiscal year
1998 ended on January 3, 1999. The six month periods presented ended on
June 28, 1998 and July 4, 1999.

                                       5
<PAGE>

                                  RISK FACTORS

  You should carefully consider the risks described below before buying shares
in this offering. The risks and uncertainties described below are not the only
risks we face. Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business operations. If
any of the following risks actually occur, our business could be harmed, the
trading price of our common stock could decline and you could lose all or part
of your investment. You should also refer to other information contained in
this prospectus, including our financial statements and related notes.

Our operating results are likely to fluctuate in future periods, which might
lead to reduced prices for our stock.

  Our annual or quarterly operating results are difficult to predict and are
likely to fluctuate significantly in the future as a result of numerous
factors, many of which are outside of our control. If our annual quarterly
operating results do not meet the expectations of securities analysts and
investors, the trading price of our stock could significantly decline. Factors
that could impact our operating results include:

  . the rate, timing and volume of orders for the telecommunications
    infrastructure equipment we sell;
  . the rate at which telecommunications carriers de-install their equipment;
  . decreases in our selling prices due to competition in the secondary
    market;
  . our ability to obtain products cost-effectively from original equipment
    manufacturers, or OEMs, distributors, carriers and other secondary
    sources of telecommunications equipment;
  . our ability to provide equipment and service offerings on a timely basis
    to satisfy customer demand;
  . variations in customer purchasing patterns due to seasonality and other
    factors;
  . write-offs due to inventory defects or obsolescence;
  . the sales cycle for equipment we sell, which can be relatively lengthy;
  . delays in the commencement of our operations in new market segments and
    geographic regions;
  . costs relating to possible acquisitions and integration of new
    businesses; and
  . general economic conditions and economic conditions specific to the
    telecommunications industry.

Our business depends upon our ability to match third party de-installed
equipment supply with carrier demand for this equipment and failure to do so
could reduce our net revenue.

  Our success depends on our continued ability to match the equipment needs of
telecommunications carriers with the supply of de-installed equipment available
in the secondary market. We depend upon maintaining business relationships with
third parties who can provide us with de-installed equipment and information on
available de-installed equipment. Failure to effectively manage these
relationships and match the needs of our customers with available supply of de-
installed equipment could damage our ability to generate net revenue. In the
event carriers decrease the rate at which they de-install their networks, or
choose not to de-install their networks at all, it would be more difficult for
us to locate this equipment, which could negatively impact our net revenue.

                                       6
<PAGE>

A downturn in the telecommunications industry could reduce demand for our
products.

  We believe that a downturn in the telecommunications industry in general or
decreased carrier operating performance could result in reduced sales to our
existing customers and make it more difficult to attract new customers. Our
business depends on the economic viability of telecommunications carriers, who,
to remain competitive, may look for alternative ways to operate more
efficiently, including reducing expenditures for, or delaying purchases of,
additional equipment.

The market for supplying equipment to telecommunications carriers is
competitive, and if we cannot compete effectively, our net revenue and gross
margins might decline.

  Competition among companies who supply equipment to telecommunications
carriers is intense. If we are unable to compete effectively against our
current or future competitors, we may have to lower our selling prices and may
experience reduced gross margins and loss of market share, either of which
could harm our business.

  Competition is likely to increase as new companies enter this market, as
current competitors expand their products and services or as our competitors
consolidate. Increased competition in the secondary market for
telecommunications equipment could also heighten demand for the limited supply
of de-installed equipment which would lead to increased prices for, and reduce
the availability of, this equipment. Any increase in these prices could
significantly impact our ability to maintain our gross margins. Any reduction
in the availability of equipment could cause us to lose customers.

  We currently face competition primarily from three sources: OEMs,
distributors and secondary market dealers who sell new and de-installed
telecommunications infrastructure equipment. Many of these competitors have
longer operating histories, greater name recognition, more established customer
relationships and significantly greater financial, technical or marketing
resources than we do. These competitors are also likely to enjoy substantial
competitive advantages over us, including the following:

  . ability to devote greater resources to the development, promotion and
    sale of their equipment and related services and adopt more aggressive
    pricing policies than we can;
  . ability to expand existing customer relationships and more effectively
    develop new customer relationships than we can, including securing long
    term purchase agreements;
  . ability to leverage their customer relationships through volume
    purchasing contracts, and other means intended to discourage customers
    from purchasing products from us;
  . ability to more rapidly adopt new or emerging technologies and increase
    the array of products offered to respond to changes in customer
    requirements;
  . greater focus and expertise on specific manufacturers or product lines;
  . ability to implement more effective electronic commerce solutions; and
  . ability to form new alliances or business combinations to rapidly acquire
    significant market share.

We do not have many formal relationships with suppliers of telecommunications
equipment and may not have access to adequate product supply.

  Historically, over 70% of our annual net revenue has been generated from the
sale of de-installed and refurbished telecommunications equipment. Typically,
we do not have supply contracts

                                       7
<PAGE>

to obtain this equipment and are dependent on the de-installation of equipment
by carriers to provide us with much of the equipment we sell. Our ability to
buy de-installed equipment from carriers is dependent on our relationships with
them. If we fail to develop and maintain these business relationships with
carriers or they are unwilling to sell de-installed equipment to us, our
ability to sell de-installed equipment will suffer.

Our customer base is concentrated and the loss of one or more of our key
customers would harm our business.

  Historically, a significant portion of our sales have been to relatively few
customers. Sales to our ten largest customers accounted for 43.8% of our net
revenue in 1998, 42.2% of our net revenue in 1997, and 35.4% of our net revenue
in 1996. In the six months ended June 30, 1999, sales to our ten largest
customers accounted for 32.4% of our net revenue. In the first six months of
1999, no single customer accounted for over 10% of our net revenue. In 1998,
ALLTEL Corporation accounted for 10.2% of our net revenue, in 1997, Vodafone
AirTouch plc accounted for 10.1% of our net revenue, and in 1996, ALLTEL
Corporation accounted for 11.4% of our net revenue. In addition, substantially
all of our sales are made on a purchase order basis, and no customer has
entered into a long-term purchasing agreement with us. As a result, we cannot
be certain that our current customers will continue to purchase from us. The
loss of, or any reduction in orders from, a significant customer would have a
negative impact on our net revenue.

We may be forced to reduce the sales prices for the equipment we sell, which
may impair our ability to maintain our gross margins.

  In the future we expect to reduce prices in response to competition and to
generate increased sales volume. If manufacturers reduce the prices of new
telecommunications equipment we may be required to further reduce the price of
the new, de-installed and refurbished equipment we sell. If we are forced to
reduce our prices or are unable to shift the sales mix towards higher margin
equipment sales, we will not be able to maintain current gross margins.

The market for de-installed telecommunications equipment is relatively new and
it is unclear whether our equipment and service offerings and our business will
achieve long-term market acceptance.

  The market for de-installed telecommunications equipment is relatively new
and evolving, and we are not certain that our potential customers will adopt
and deploy de-installed telecommunications equipment in their networks. For
example, with respect to de-installed equipment that includes a significant
software component, potential customers may be unable to obtain a license or
sublicense for the software. Even if they do purchase de-installed equipment,
our potential customers may not choose to purchase de-installed equipment from
us for a variety of reasons. Our customers may also redeploy their displaced
equipment within their own networks which would eliminate their need for our
equipment and service offerings. These internal solutions would also limit the
supply of de-installed equipment available for us to purchase, which would
limit the development of this market.

                                       8
<PAGE>

Our success depends on our ability to attract, develop and retain key
management and sales personnel.

  We depend on the performance of our executive officers and other key
employees. The loss of any member of our senior management, in particular, Dan
Firestone, our chief executive officer, or other key employees could negatively
impact our ability to execute our business strategy. In addition, we depend on
our sales professionals to serve customers in each of our markets. The loss of
any of our sales professionals could significantly disrupt our relationships
with our customers. We do not have "key person" life insurance policies on any
of our employees except for Dan Firestone.

  Our future success also depends on our ability to attract, retain and
motivate highly skilled employees. Competition for employees in the
telecommunications equipment industry is intense. Additionally, we depend on
our ability to train and develop skilled sales people and an inability to do so
would significantly harm our growth prospects and operating performance. We
have experienced, and we expect to continue to experience difficulty in hiring
and retaining highly skilled employees.

Our business may suffer if we are not successful in our efforts to keep up with
a rapidly changing market.

  The market for the equipment and services we sell is characterized by
technological changes, evolving industry standards, changing customer needs and
frequent new equipment and service introductions. Our future success in
addressing the needs of our customers will depend, in part, on our ability to
timely and cost-effectively:

  . respond to emerging industry standards and other technological changes;
  . develop our internal technical capabilities and expertise;
  . broaden our equipment and service offerings; and
  . adapt our services to new technologies as they emerge.

  Our failure in any of these areas could harm our business. Moreover, any
increased emphasis on software solutions as opposed to equipment solutions
could limit the availability of de-installed equipment, decrease customer
demand for the equipment we sell, or cause the equipment we sell to become
obsolete.

The lifecycles of telecommunications infrastructure equipment may become
shorter, which would decrease the supply of, and carrier demand for, de-
installed equipment.

  Our sales of de-installed and refurbished equipment depend upon carrier
utilization of existing telecommunications network technology. If the lifecycle
of equipment comprising carrier networks is significantly shortened for any
reason, including technology advancements, the installed base of any particular
model would be limited. This limited installed base would reduce the supply of,
and demand for, de-installed and refurbished equipment which could decrease our
net revenue.

Many of our customers are telecommunications carriers that may at any time
reduce or discontinue their purchases of the equipment we sell to them.

  If our customers choose to defer or curtail their capital spending programs,
it could have a negative impact on our sales to those telecommunications
carriers, which would harm our business.

                                       9
<PAGE>

A significant portion of our customers are emerging telecommunications carriers
who compete against existing telephone companies. These new participants only
recently began to enter these markets, and many of these carriers are still
building their networks and rolling out their services. They require
substantial capital for the development, construction and expansion of their
networks and the introduction of their services. If emerging carriers fail to
acquire and retain customers or are unsuccessful in raising needed funds or
responding to any other trends, such as price reductions for their services or
diminished demand for telecommunications services in general, then they could
be forced to reduce their capital spending programs.

If we fail to implement our strategy of purchasing equipment from and selling
equipment to regional bell operating companies, our growth will suffer.

  One of our strategies is to develop and expand our relationships with
regional bell operating companies, or RBOCs. We believe the RBOCs could provide
us with a significant source of additional net revenue. In addition, we believe
the RBOCs could provide us with a large supply of de-installed equipment. We
cannot assure you that we will be successful in implementing this strategy.
RBOCs may not choose to sell de-installed equipment to us or may not elect to
purchase this equipment from us. RBOCs may instead develop those capabilities
internally or elect to compete with us and resell de-installed equipment to our
customers or prospective customers. If we fail to successfully develop our
relationships with RBOCs or if RBOCs elect to compete with us, our growth could
suffer.

We may be exposed to risks associated with international expansion.

  We intend to continue expanding our business in international markets. This
expansion will require significant management attention and financial resources
to develop a successful international business, including sales, procurement
and support channels. We may not be able to maintain or increase international
market demand for the equipment we sell, and therefore we might not be able to
expand our international operations. We currently have limited experience
providing equipment outside the United States. Conducting business outside of
the United States involves risks, including:

  . recruiting skilled sales and technical support personnel;
  . creation of new supply and customer relationships;
  . difficulties and costs of managing and staffing international operations;
  . developing relationships with local suppliers;
  . longer collection periods for accounts receivables and greater credit
    risks regarding new customers;
  . fluctuations in currency exchange rates;
  . changes in a specific country's or region's political or economic
    conditions; and
  . difficulties in timely delivery of equipment to, and maintenance of
    inventory in, international locations.

  We cannot be certain that one or more of these factors will not harm our
future international operations.

                                       10
<PAGE>

We may fail to engage in selective acquisitions or may be subject to risks
associated with acquisitions which could harm our business.

  One of our strategies for growth is to engage in selective acquisitions. In
the event we fail to identify or take advantage of these opportunities, we may
experience difficulties in growing our business. If we make acquisitions, we
could have difficulty assimilating or retaining the acquired companies'
personnel or integrating their operations, equipment or services into our
organization. These difficulties could disrupt our ongoing business, distract
our management and employees and increase our expenses. Moreover, our
profitability may suffer because of acquisition-related costs or amortization
of acquired goodwill and other intangible assets. Furthermore, we may have to
incur debt or issue equity securities in any future acquisitions. The issuance
of equity securities would be dilutive to our existing stockholders.

Failure to manage our rapid growth effectively could harm our results of
operations.

  Since we began commercial operations in July 1995, we have experienced rapid
growth and expansion that is straining our resources. In the twelve months
ended June 30, 1999, the number of our employees increased from 67 to 120.
Continued growth could place a further strain on our management, operational
and financial resources. Our inability to manage growth effectively could harm
our business. We are in the process of upgrading our internal control and
information systems. We may not be able to install adequate control systems in
an efficient and timely manner, and our current or planned operational systems,
procedures and controls may not be adequate to support our future operations.
Delays in the implementation of new systems or operational disruptions when we
transition to new systems would impair our ability to accurately forecast sales
demand, manage our equipment inventory and record and report financial and
management information on a timely and accurate basis.

Several key members of our management team have only recently joined us and if
they are not successfully integrated into our business or fail to work together
as a management team, our business will suffer.

  Several key members of our management team have joined us since May 1, 1999,
including Gary Owen, our chief financial officer and Jeffrey Miller, our
executive vice president of sales and marketing. Additionally, we intend to
hire other key personnel, including a vice president of operations. If we
cannot effectively integrate these employees into our business, or if they
cannot work together as a management team to enable us to implement our
business strategy, our business will suffer.

Defects in the equipment we sell may seriously harm our credibility and our
business.

  Telecommunications carriers require a strict level of quality and reliability
from telecommunications equipment suppliers. Telecommunications equipment is
inherently complex and can contain undetected software or hardware errors. If
we deliver telecommunications equipment with undetected material defects, our
reputation, credibility and equipment sales could suffer. Moreover, because the
equipment we sell is integrated into our customers' networks, it can be
difficult to identify the source of a problem should one occur. The occurrence
of such defects, errors or failures could also result in delays in
installation, product returns, product liability and warranty

                                       11
<PAGE>

claims and other losses to us or our customers. In some of our contracts, we
have agreed to indemnify our customers against liabilities arising from defects
in the equipment we sell to them. Furthermore, we supply most of our customers
with guarantees that cover the equipment we offer. While we may carry insurance
policies covering these possible liabilities, these policies may not provide
sufficient protection should a claim be asserted. A material product liability
claim, whether successful or not, could be costly, damage our reputation and
distract key personnel, any of which could harm our business.

Our strategy to outsource services could impair our ability to deliver our
equipment on a timely basis.

  Currently, we depend on third parties for a variety of equipment-related
services, including engineering, repair, transportation, testing, installation
and de-installation. This outsourcing strategy involves risks to our business,
including reduced control over delivery schedules, quality and costs and the
potential absence of adequate capacity. In the event that any significant
subcontractor were to become unable or unwilling to continue to perform their
required services, we would have to identify and qualify acceptable
replacements. This process could be lengthy, and we cannot be sure that
additional sources of third party services would be available to us on a timely
basis, or at all.

Our quarterly net revenue may be subject to fluctuations due to the seasonal
purchasing patterns of our customers.

  Our quarterly net revenue may be subject to the seasonal purchasing patterns
of our customers. We expect that net revenue in the third quarter of each year
may be lower than that of the second quarter of that year. For example, our net
revenue decreased in the quarter ended June 30, 1999 compared to our net
revenue for the quarter ended March 31, 1999. We believe this trend may occur
as a result of our customers' annual budgetary, procurement and sales cycles.

Our business could be harmed if we are unable to manage our inventory needs
accurately.

  To meet customer demand in the future, we believe it is necessary to maintain
or increase some levels of inventory. Failure to maintain adequate inventory
levels in these products could hurt our ability to make sales to our customers.
In the past, we have experienced inventory shortfalls, and we cannot be certain
that we will not experience shortfalls again in the future, which could harm
our reputation and our business. Further, rapid technology advancement could
make our existing inventory obsolete and cause us to incur losses. In addition,
if our forecasts lead to an accumulation of inventories that are not sold in a
timely manner, our business could suffer.

Our failure and the failure of our suppliers and customers to be year 2000
compliant could harm our business.

  Many currently installed computer systems and software products are not
capable of distinguishing 21st century dates from 20th century dates. As a
result, beginning on January 1, 2000, computer systems and software used by
many companies and organizations in a wide variety of industries, including
telecommunications technology, transportation, utilities and finance, could
likely produce erroneous results or fail unless they have been modified or
upgraded to process date

                                       12
<PAGE>

information correctly. In addition, we face the possibility that the equipment
we sell will fail due to processing errors caused by inaccurate calculations
with respect to the year 2000. Year 2000 compliance efforts may involve
significant time and expense, and uncorrected problems could harm our business.

The corruption or interruption of key software systems we use could cause our
business to suffer.

  We rely on the integrity of key software and systems. Specifically we rely on
our relationship management database which tracks information on current excess
and de-installed equipment. This software and these systems may be vulnerable
to harmful applications, computer viruses and other forms of corruption and
interruption. In the event our software or systems are affected by any form of
corruption or interruption, it could delay or restrict our ability to meet our
customers' needs, which could harm our reputation or business.

We might need additional capital in the future, and additional financing might
not be available.

  We currently anticipate that our available cash resources, combined with the
net proceeds from this offering and financing available under our revolving
loan facility, will be sufficient to meet our anticipated working capital and
capital expenditure requirements for at least the next 12 months. However, our
resources may not be sufficient to satisfy these requirements. We may need to
raise additional funds through public or private debt or equity financings to:

  . take advantage of business opportunities, including more rapid
    international expansion or acquisitions of complementary businesses;
  . develop and maintain higher inventory levels;
  . gain access to new product lines;
  . develop new services; or
  . respond to competitive pressures.

  Any additional financing we may need might not be available on terms
favorable to us, or at all. If adequate funds are not available or are not
available on acceptable terms, our business could suffer. Moreover, if
additional funds are raised through the issuance of equity securities, the
percentage of ownership of our current stockholders will be reduced. Newly
issued equity securities may have rights, preferences and privileges senior to
those of investors in our common stock. In addition, the terms of any debt
could impose restrictions on our operations.

Our facilities could be vulnerable to damage from earthquakes and other natural
disasters.

  Our facilities are located on or near known earthquake fault zones and are
vulnerable to damage from fire, floods, earthquakes, power loss,
telecommunications failures and similar events. If a disaster occurs, our
ability to test and ship the equipment we sell would be seriously, if not
completely, impaired, and our inventory could be damaged or destroyed, which
would seriously harm our business. We cannot be sure that the insurance we
maintain against fires, floods, earthquakes and general business interruptions
will be adequate to cover our losses in any particular case.

                                       13
<PAGE>

You might not be able to sell your stock if an active public market does not
develop for our stock.

  Prior to this offering, you could not buy or sell our common stock publicly.
An active public market for our common stock may not develop or be sustained
after the offering. If a market for our common stock does not develop or is not
sustained, it may be difficult for you to sell your shares of common stock at a
price that is attractive to you, or at all. The initial public offering price
of the common stock will be determined through negotiations between the
representatives of the underwriters and us and may not be representative of the
price that will prevail in the open market.

The price of our common stock may be volatile and subject to wide fluctuations.

  The trading price of our common stock may be volatile. The stock prices of
technology and telecommunications-related companies have experienced extreme
volatility that often has been unrelated to the operating performance of these
particular companies. Fluctuations may adversely affect the trading price of
our common stock, regardless of our actual operating performance. In addition,
you may not be able to resell your shares at or above the initial public
offering price due to a number of factors, including:

  . our ability to meet growth, revenue and earnings expectations;
  . industry announcements regarding technological innovations or strategic
    relationships; and
  . conditions affecting the telecommunications industry generally.

Provisions in our charter documents might deter acquisition bids for us.

  There are provisions in our charter documents and other provisions under
Delaware law that could make it more difficult for a third party to acquire us,
even if doing so would benefit our stockholders. We have adopted a staggered
board of directors and our stockholders are unable to:

  . call special meetings of stockholders;
  . act by written consent;
  . remove any director or the entire board of directors without cause; or
  . fill any vacancy on the board of directors.

  In addition, our stockholders must meet advance notice requirements for
stockholder proposals. Our board of directors may also issue preferred stock
without any vote or further action by the stockholders.

Our officers and directors exert substantial influence over us.

  We anticipate that our executive officers, our directors and entities
affiliated with them will beneficially own an aggregate of approximately     %
of our outstanding common stock following the completion of this offering. As a
result, these stockholders will be able to exercise substantial influence over
all matters requiring approval by our stockholders, including the election of
directors and approval of significant corporate transactions. This
concentration of ownership may also have the effect of delaying or preventing a
change in our control.


                                       14
<PAGE>

Management could invest or spend the proceeds of this offering not being used
to repay debt in ways with which the stockholders might not agree.

  We intend to use a significant portion of the net proceeds of this offering
to repay our debt rather than build our business. In addition, we have no
specific allocations for any other net proceeds of this offering that are not
being used to repay debt other than a portion for capital expenditures.
Consequently, management will retain a significant amount of discretion over
the application of these proceeds. Because of the number and variability of
factors that will determine or use of these proceeds, how we spend the proceeds
may vary substantially from our current intentions.

You will incur immediate and substantial dilution.

  The initial public offering price is substantially higher than the pro-forma
net tangible book value (deficit) per share of the outstanding common stock. As
a result, investors purchasing common stock in this offering will incur
immediate and substantial dilution in the amount of $    per share. Investors
will incur additional dilution upon the exercise of outstanding stock options
and warrants. See "Dilution."

                                       15
<PAGE>

                                USE OF PROCEEDS

  We estimate the net proceeds from the offering to be approximately
$          , or $           if the underwriters exercise their over-allotment
option in full, at an assumed initial public offering price of $     per share
and after deducting the underwriting discount and estimated offering expenses.

  We intend to use $50 million of the proceeds from the offering to repay the
entire outstanding amount of our term loan facility. We also intend to use a
portion of the proceeds to repay the entire outstanding amount drawn under our
revolving loan facility, which is approximately $6.5 million as of September 1,
1999. These loans provide for various interest rates and have a maturity date
of August 31, 2004. For additional information please see "Management's
Discussion and Analysis of Financial Condition and Results of Operation--
Liquidity and Capital Resources." The proceeds from our term loan facility were
used to make a distribution to our members of $48.5 million in September 1999.
We may use a portion of the proceeds for capital expenditures and expect to use
the remaining proceeds for general corporate purposes, including working
capital. As of the date of this prospectus, we cannot specify the particular
uses for the general corporate purposes of our proceeds. Accordingly, our
management will have broad discretion in the application of the net proceeds.

  We intend to invest the remainder of the net proceeds in short-term, interest
bearing, investment grade marketable securities.

                                DIVIDEND POLICY

  While we do not plan to pay dividends, any future determination to pay
dividends will be at the discretion of the board of directors and will depend
upon our financial condition, operating results, capital requirements and other
factors the board of directors deems relevant. We plan to retain earnings for
use in the operation of our business and to fund future growth.

  From July 1995 to September 1999, we operated in the form of a limited
liability company and income was taxed directly to our equity members. During
this time, we made regular quarterly distributions to the holders of our units
based on our funds available for distribution. In 1996, we made quarterly
distributions in an annual aggregate amount of $0.06 per unit to our members.
In 1997, we made quarterly distributions in an annual aggregate amount of $0.20
per unit to our members. In 1998, we made quarterly distributions in an annual
aggregate amount of $0.43 per unit to our members. In the period beginning
January 1, 1999 through September, 1999, which includes the distribution of the
proceeds of our term loan facility, we made quarterly distributions in an
aggregate amount of $1.68 per unit to our members. See "Certain Transactions"
for additional information regarding this term loan facility.

                                       16
<PAGE>

                                 CAPITALIZATION

  The following table sets forth our short-term debt and capitalization as of
June 30, 1999. Our capitalization is presented:

  .  on an actual basis;
  .  on a pro forma basis to reflect:

   .  the distribution to members of approximately $6.5 million in July
      1999;
   .  the receipt of the proceeds of $50 million from a term loan made by a
      syndicate of financial institutions led by Fleet National Bank and the
      payment of $750,000 of bank fees associated with the facility;
   .  the distribution to members of $48.5 million upon receipt of proceeds
      of the term loan;
   .  the repayment of an aggregate principal amount of $3.5 million to note
      holders in September 1999; and
   .  the creation of a deferred tax asset of approximately $17.0 million as
      a result of the change in tax status from a limited liability company
      to a "C" corporation.

  .  on a pro forma as adjusted basis to reflect:

   .  the sale of      shares of common stock at an initial public offering
      price of $    per share in this offering, less underwriting discounts
      and commissions and estimated offering expenses; and
   .  the application of the net proceeds by us from the offering, including
      the repayment of the $50 million term loan from a syndicate of
      financial institutions led by Fleet National Bank.

  Please read the capitalization table together with the sections of this
prospectus entitled "Selected Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the financial
statements and related notes included in this prospectus.

<TABLE>
<CAPTION>
                                                       June 30, 1999
                                               ----------------------------------
                                                                       Pro-forma
                                                Actual     Pro-forma  As Adjusted
                                               --------    ---------  -----------
                                                 (in thousands, except per
                                                        share data)
<S>                                            <C>         <C>        <C>
Borrowing under revolving credit facility..... $    779    $  9,363        --
Other short-term debt ........................    1,679         179
                                               --------    --------      -----
  Total short-term debt.......................    2,458       9,542
                                               --------    --------      -----
Notes payable--net of current portion.........    1,957         --         --
                                               --------    --------      -----
Capital lease obligations.....................      541         541
                                               --------    --------      -----
Term loan facility............................      --     $ 49,250        --
                                               --------    --------      -----
Mandatorily redeemable Class B units;
 14,070 units actual, no units pro-forma
 and pro-forma as adjusted:...................   51,750         --         --
                                               --------    --------      -----
Members' deficit/stockholders' equity
 (deficit):
  Class A 23,993 units actual, no units pro-
   forma
   and pro-forma as adjusted..................  (49,793)        --
  Class B.....................................    7,028         --
Common stock, $0.001 par value;
  Authorized 200,000 shares; issued 38,603
   shares
  pro-forma and        shares pro-forma as
   adjusted...................................      --           38
Additional paid in capital ...................        --     69,435
Accumulated deficit...........................      --      (98,347)
                                               --------    --------      -----
  Total members' deficit/stockholders' equity
   (deficit)..................................  (42,765)    (28,874)
                                               --------    --------      -----
    Total capitalization...................... $ 11,483    $ 20,917
                                               ========    ========      =====
</TABLE>

                                       17
<PAGE>

  We expect there to be     shares outstanding after the offering. In addition
to the shares of common stock to be outstanding after the offering, we may
issue additional shares of common stock under the following plans and
arrangements:

  . 6,750,000 shares issuable under our 1999 Stock Option Plan, consisting
    of:

   . 1,490,093 Somera Communications, LLC units underlying outstanding
     options at a weighted average exercise price of $8.09 per share, none
     of which were exercisable as of August 31, 1999, and which will be
     converted into options to purchase an equivalent number of shares under
     our 1999 Stock Option Plan; and

   . 5,259,907 shares available for future grants;

  . 207,655 Somera Communications, LLC units issuable upon exercise of
    outstanding warrants at a weighted average exercise price of $8.07 per
    share, which were fully exercisable as of August 31, 1999, and which will
    be converted into warrants exercisable for an equivalent number of shares
    of our common stock;

  . 300,000 shares available for issuance under our 1999 Employee Stock
    Purchase Plan; and

  . 300,000 shares available for issuance under our 1999 Director Option
    Plan.

                                       18
<PAGE>

                                    DILUTION

  Our pro-forma net tangible book value (deficit) as of June 30, 1999 was
($28.9) million or ($0.76) per share. Pro-forma net tangible book value
(deficit) per share is determined by dividing the pro-forma number of
38,062,500 outstanding shares of common stock into our pro-forma (deficit),
which is our pro-forma total tangible assets less total liabilities. After
giving effect to the receipt of the estimated net proceeds from this offering,
based upon an assumed initial public offering price of $   per share and after
deducting the estimated underwriting discounts and commissions and estimated
offering expenses, our pro-forma as adjusted net tangible book value (deficit)
as of June 30, 1999 would have been approximately $   million, or $   per
share. This represents an immediate increase in pro-forma net tangible book
value (deficit) of $   per share to existing stockholders and an immediate
dilution of $   per share to new investors purchasing shares at an assumed
initial public offering price of $   per share, initial public offering price.
The following table illustrates the per share dilution:

<TABLE>
   <S>                                                             <C>     <C>
   Assumed initial public offering price per share................         $
     Pro-forma net tangible book value (deficit) per share as of
      June 30, 1999............................................... $(0.76)
     Increase per share attributable to new investors.............
                                                                   ------
   Pro-forma net tangible book value (deficit) per share after
    offering......................................................
                                                                           ----
   Dilution per share to new investors............................         $
                                                                           ====
</TABLE>

  The following table summarizes as of June 30, 1999, on the pro-forma basis
described above, the number of shares of common stock purchased from us, the
total consideration paid and the average price per share paid by existing
stockholders and by new investors before deducting the estimated underwriting
discounts and commissions and estimated offering expenses:

<TABLE>
<CAPTION>
                                             Shares         Total
                                           Purchased    Consideration   Average
                                         -------------- -------------- Price Per
                                         Number Percent Amount Percent   Share
                                         ------ ------- ------ ------- ---------
<S>                                      <C>    <C>     <C>    <C>     <C>
Existing stockholders...................            %    $         %     $
New investors...........................
                                          ----   ----    ----   ----     -----
    Total...............................         100%    $      100%     $
                                          ====   ====    ====   ====     =====
</TABLE>

  We expect to have     shares outstanding after the offering. In addition to
the shares of common stock to be outstanding after the offering, we may issue
additional shares of common stock under the following plans and arrangements:

  . 6,750,000 shares issuable under our 1999 Stock Option Plan, consisting
    of:

   . 1,490,093 Somera Communications, LLC units underlying outstanding
     options at a weighted average exercise price of $8.09 per share, none
     of which were exercisable as of August 31, 1999, and which will be
     converted into options to purchase an equivalent number of shares under
     our 1999 Stock Option Plan; and

   . 5,259,907 shares available for future grants;

  . 207,655 Somera Communications, LLC units issuable upon exercise of
    outstanding warrants at a weighted average exercise price of $8.07 per
    share, which were fully exercisable as of August 31, 1999, and which will
    be converted into warrants exercisable for an equivalent number of shares
    of our common stock;

                                       19
<PAGE>

  . 300,000 shares available for issuance under our 1999 Employee Stock
    Purchase Plan; and

  . 300,000 shares available for issuance under our 1999 Director Option
    Plan.

  To the extent that any of these options or warrants are exercised or shares
are issued, there will be further dilution to new investors.

                                       20
<PAGE>

                            SELECTED FINANCIAL DATA

  You should read the following selected financial data with our financial
statements and related notes and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" appearing elsewhere in this
prospectus. The statements of operations for the years ended December 31, 1996,
1997 and 1998, and the six months ended June 30, 1999, and the balance sheet
data at December 31, 1997, and 1998, and June 30, 1999, are derived from our
financial statements that have been audited by PricewaterhouseCoopers LLP,
independent accountants, included elsewhere in this prospectus. The statement
of operations for the six months ended June 30, 1998 is derived from our
unaudited financial statements included elsewhere in this prospectus. The
balance sheet data at December 31, 1996 is derived from our audited financial
statements that are not included in this prospectus. The unaudited financial
statements have been prepared on substantially the same basis as the audited
financial statements and include all adjustments, consisting only of normal
recurring adjustments, that we consider necessary for a fair presentation of
the balance sheet and results of operations for the period. Historical results
are not necessarily indicative of the results to be expected in the future, and
results of interim periods are not necessarily indicative of results for the
entire year.

<TABLE>
<CAPTION>
                                    Years Ended December    Six Months Ended
                                             31,                June 30,
                                   ----------------------- -------------------
                                    1996    1997    1998      1998      1999
                                   ------- ------- ------- ----------- -------
                                                           (unaudited)
                                      (in thousands, except per share data)
<S>                                <C>     <C>     <C>     <C>         <C>
Statements of Operations:
Net revenue....................... $10,149 $34,603 $72,186   $34,417   $52,834
Cost of net revenue...............   5,532  20,587  43,132    21,037    34,023
                                   ------- ------- -------   -------   -------
Gross profit......................   4,617  14,016  29,054    13,380    18,811
                                   ------- ------- -------   -------   -------
Operating expenses:
  Sales and marketing.............     780   2,593   5,747     2,394     4,385
  General and administrative......     696   1,648   3,939     1,326     2,999
  Stock-based compensation........     --      --      --        --        193
                                   ------- ------- -------   -------   -------
    Total operating expenses......   1,476   4,241   9,686     3,720     7,577
                                   ------- ------- -------   -------   -------
Income from operations............   3,141   9,775  19,368     9,660    11,234
Interest expense, net.............      18      82     187        75       144
                                   ------- ------- -------   -------   -------
Net income........................ $ 3,123 $ 9,693 $19,181   $ 9,585   $11,090
                                   ======= ======= =======   =======   =======
Pro-forma net income per share--
 basic(1)......................... $  0.08 $  0.25 $  0.50   $  0.25   $  0.29
                                   ------- ------- -------   -------   -------
Pro-forma weighted average
 shares--basic....................  37,500  38,052  38,063    38,063    38,063
                                   ------- ------- -------   -------   -------
Pro-forma net income per share--
 diluted(1)....................... $  0.08 $  0.25 $  0.50   $  0.25   $  0.29
                                   ------- ------- -------   -------   -------
Pro-forma weighted average
 shares--diluted..................  37,500  38,052  38,063    38,063    38,069
                                   ------- ------- -------   -------   -------
</TABLE>
--------
(1) See note 2 of Notes to the financial statements for an explanation of the
    calculation of net income per unit--basic and diluted. Net income per
    share--basic and diluted has been stated above assuming a one for one
    exchange of the units of Somera Communications, LLC for shares of our
    common stock.

<TABLE>
<CAPTION>
                                                  December 31,
                                             ----------------------  June 30,
                                              1996   1997    1998      1999
                                             ------ ------ --------  --------
                                                     (in thousands)
<S>                                          <C>    <C>    <C>       <C>
Balance Sheet Data:
Working capital............................. $1,797 $4,602 $  9,482  $  9,975
Total assets................................  3,882  9,281   17,009    27,202
Notes payable--net of current portion.......    662    957    3,457     1,957
Mandatorily redeemable Class B units........    --     --    51,750    51,750
Capital lease obligation--net of current
 portion....................................    --     --       --        541
Members' capital (deficit)..................  1,251  3,787  (45,136)  (42,765)
</TABLE>

  Commencing with 1997 our fiscal years are on a 52 and 53 week basis. For
presentation purposes we are using a calendar quarter and calendar year end
convention. Our fiscal years 1997 and 1998 ended on December 28, 1997 and
January 3, 1999. The six month periods presented ended on June 28, 1998 and
July 4, 1999.

                                       21
<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  The following discussion of financial condition and results of operations
should be read in conjunction with the financial statements and related notes
appearing elsewhere in this prospectus. Our actual results could differ
materially from the results contemplated by these forward-looking statements as
a result of factors, including those discussed previously, under "Risk Factors"
or in other parts of in this prospectus.

Overview

  We provide telecommunications carriers with a broad range of infrastructure
equipment and related services designed to meet their specific and changing
equipment needs. We generate revenue from sales of new, de-installed and
refurbished telecommunications infrastructure equipment. Our customers include
incumbent local exchange carriers, or ILECs, long distance carriers, or IXCs,
wireless carriers and competitive local exchange carriers, or CLECs. We do not
manufacture any of the equipment we sell.

  We purchase de-installed and refurbished equipment primarily from
telecommunications carriers, many of whom are also our customers. We purchase
the new equipment we sell primarily from OEMs and distributors. By using our
relationship management database to track carriers' excess and de-installed
equipment we are able to offer our customers a broad range of equipment. We
generally have not entered into long-term contracts or distribution
arrangements with our suppliers, and if we fail to develop and maintain our
relationships with our suppliers, our business will suffer.

  Historically, over 70% of our annual net revenue has been generated from the
sale of de-installed and refurbished equipment. We market and sell this
equipment through our industry focused sales teams. A majority of our sales to
date have been to customers located in the United States. Sales to customers
outside of the United States accounted for 13.4% of our net revenue in the six
months ended June 30, 1999, 19.7% of our net revenue in 1998, 16.5% of our net
revenue in 1997 and 6.8% of our net revenue in 1996. We expect sales to
carriers in the United States to continue to account for the majority of our
net revenue for the foreseeable future. Currently, all of our equipment sales
are denominated in U.S. dollars.

  In the first six months of 1999, no single customer accounted for more than
10% of our net revenue. In 1998, ALLTEL Corporation accounted for 10.2% of our
net revenue, in 1997, Vodafone AirTouch plc accounted for 10.1% of our net
revenue and in 1996, ALLTEL Corporation accounted for 11.4% of our net revenue.
In the six months ended June 30, 1999, Vodafone AirTouch plc accounted for
11.0% of our equipment purchases. In 1998, 1997 and 1996, no suppliers
accounted for more than 10% of our equipment purchases.

  Substantially all of our sales are made on the basis of purchase orders
rather than long-term agreements. As a result, we may commit resources to the
procurement and testing of products without having received advance purchase
commitments from customers. We anticipate that our operating results for any
given period will continue to be dependent, to a significant extent, on
purchase orders. These purchase orders can be delayed or cancelled by our
customers without penalty. Additionally, as telecommunications equipment
supplier competition increases, we may need

                                       22
<PAGE>

to lower our selling prices or pay more for the equipment we procure.
Consequently, our gross margins may decrease over time. We generally recognize
revenue, net of estimated provisions for returns and warranty obligations where
significant, when we ship equipment to our customers.

  The market for telecommunications equipment is characterized by intense
competition. We believe that our ability to remain competitive depends on
enhancing the existing service levels we provide to our customers, acquiring
access to a broader selection of equipment, developing new customer
relationships and expanding our existing customer penetration levels. Failure
to accomplish these goals could harm our growth prospects and operating
results.

Corporate History

  We were organized as a California limited liability company, or LLC, and
commenced operations in July 1995. In July 1998, we undertook a
recapitalization in which outside investors purchased Class B units
representing approximately 37.0% of Somera Communications, LLC for $51.8
million. These Class B units have significant rights and preferences over our
Class A units, including liquidation preferences, redemption rights under
specific circumstances at the option of the holder, and the right of one of
those Class B investors to elect two members to the board of managers of Somera
Communications, LLC. These rights will lapse upon the exchange of the
outstanding limited liability company units for our common stock. We used all
of the proceeds from the sale of the Class B units to repurchase a portion of
the outstanding units from a number of our initial unit holders.

  In August 1999, we entered into a credit agreement with a syndicate of
financial institutions led by Fleet National Bank. The credit facility consists
of a term loan facility for $50 million and a revolving loan facility for up to
$15 million. As of September 1, 1999, $50 million in principal was outstanding
under the term loan. Of this $50 million, $48.5 million had been distributed to
the unit holders of Somera Communications, LLC, who will become our
stockholders after the exchange of their units prior to this offering. As of
September 1, 1999, $6.5 million had been drawn under the revolving loan
facility. For more information on the Fleet National Bank credit facility,
please see "Certain Transactions."

  Prior to the consummation of this offering, we will exchange shares of our
common stock for all of the outstanding units of Somera Communications, LLC and
subsequently assume the operations, assets and liabilities of the limited
liability company.

Results of Operations

 Six Months Ended June 30, 1999 and 1998

  Net Revenue. Net revenue consists of sales of new, de-installed and
refurbished telecommunications equipment, including switching, transmission,
access, wireless, microwave and power products. Net revenue increased to $52.8
million in the six months ended June 30, 1999 from $34.4 million in the six
months ended June 30, 1998. The increase in net revenue was driven by greater
customer demand for our equipment in general. Our expansion in United States
markets and growth in significant customer accounts.

                                       23
<PAGE>

  Cost of Net Revenue. Substantially all of our cost of net revenue consists of
the costs of the equipment we purchase from third party sources. Cost of net
revenue increased to $34.0 million in the six months ended June 30, 1999 from
$21.0 million in the six months ended June 30, 1998. The increase in cost of
net revenue during this period is primarily attributable to increases in our
volume of new and de-installed equipment sales. Gross profit as a percentage of
net revenue, or gross margin, declined to 35.6% in the six months ended June
30, 1999 from 38.9% in the six months ended June 30, 1998. The decline in gross
margins was primarily due to an increase in the proportion of new equipment we
sold, which generally has lower gross margins than de-installed and refurbished
equipment, fluctuations in the prices of a number of our purchase transactions,
and increased competition in the procurement of de-installed equipment
generally.

  Sales and Marketing. Sales and marketing expenses consist primarily of
salaries, commissions and benefits for sales, marketing and procurement
employees as well as costs associated with advertising and promotions. A
majority of our sales and marketing expenses are incurred in connection with
establishing and maintaining long-term relationships with a variety of
carriers. Sales and marketing expenses increased to $4.4 million in the six
months ended June 30, 1999 from $2.4 million in the six months ended June 30,
1998. This increase was due to higher absolute commission expenses consistent
with increased gross profit upon which our sales commissions are based, as well
as the hiring of additional sales and procurement personnel, including a new
executive vice president of sales and marketing. We expect that our sales and
marketing expenses will continue to increase as we expand our product and
service offerings, increase our hiring of additional sales personnel and pay
commissions consistent with increased gross profit, although such expenses may
vary as a percentage of net revenue.

  General and Administrative. General and administrative expenses consist
principally of salary and benefit costs for executive and administrative
personnel, as well as legal, accounting and other professional fees. General
and administrative expenses increased to $3.0 million in the six months ended
June 30, 1999 from $1.3 million in the six months ended June 30, 1998. This
increase was due primarily to the increase in employees resulting from the
expansion of our operations, as well as recruitment costs. We expect that
general and administrative expenses will increase in the future as we expand
our operations, although such expenses may vary as a percentage of net revenue.

  Stock-based Compensation. The stock-based compensation charge relates to a
warrant for common stock granted in exchange for services in the six months
ended June 30, 1999. This warrant, which entitles the holder to purchase 95,155
shares of common stock, is fully vested and resulted in a one-time charge of
approximately $193,000 in the six months ended June 30, 1999. There was no
stock-based compensation charge in the six months ended June 30, 1998. In July
1999, we issued stock options to two officers and one outside director
resulting in unearned stock-based compensation of $830,000 which will be
recorded and amortized over the vesting period, generally four years of the
underlying options. The charge will be amortized to net income as follows:
$244,000 for the remainder of 1999, $367,000 in 2000, $148,000 in 2001, $63,000
in 2002 and $8,000 in 2003. We also issued a warrant to purchase 112,500 shares
of common stock in exchange for services. The warrants were immediately vested
and will result in a one-time charge of $337,000 to be recorded in our 1999
third quarter results.

                                       24
<PAGE>

  Interest Expense, Net. Interest expense, net consists of interest expense
associated with debt obligations offset by interest income earned on cash and
cash equivalent balances. Interest expense, net increased to $144,000 in the
six months ended June 30, 1999 from $75,000 in the six months ended June 30,
1998. This increase was due to a higher level of outstanding principal to
satisfy greater working capital needs.

Years Ended 1998, 1997 and 1996

  Net Revenue. Net revenue increased to $72.2 million in 1998 from $34.6
million in 1997 and $10.1 million in 1996. The increase in net revenue from
1997 to 1998 was due to significant increases of sales in both the United
States and Latin American markets, an increase in sales of new equipment and
the growth of several customer accounts. The increase in net revenue from 1996
to 1997 was primarily due to significant increases in sales of de-installed
equipment.

  Cost of Net Revenue. Cost of net revenue increased to $43.1 million in 1998
from $20.6 million in 1997 and $5.5 million in 1996. Substantially all of the
increase in cost of net revenue for each of these periods was due to the
increase in procurement costs associated with increased sales of this
equipment. The gross margin decreased to 40.2% in 1998, from 40.5% in 1997 and
45.5% in 1996. The relatively stable gross margin levels between 1998 and 1997
were due to increased volumes of sales of higher margin refurbished equipment
in 1998, offsetting an increased portion of lower margin new equipment sales in
the same period. The decrease in gross margin in 1997 and 1996 was due to a
change in sales mix to include more new equipment which has lower gross margins
than de-installed and refurbished equipment, and an increase in the cost of
procuring de-installed equipment due to greater secondary market competition.

  Sales and Marketing. Sales and marketing expenses increased to $5.7 million
in 1998 from $2.6 million in 1997 and $780,000 in 1996. The increases for each
of these periods were primarily due to the addition of sales and procurement
personnel, including sales managers, higher absolute commission expenses
consistent with increased gross profit and increased marketing efforts.

  General and Administrative. General and administrative expenses increased to
$3.9 million in 1998 from $1.6 million in 1997 and $696,000 in 1996. The
increase from 1998 compared with 1997 was due to a significant increase in
headcount resulting from the expansion of our operations, and due to
approximately $700,000 in financing costs attributable to our recapitalization
in July 1998. The increase from 1997 compared with 1996 was due primarily to
the increase in salaries and benefits payable to executive and administrative
employees resulting from the expansion of our operations.

  Interest Expense, Net. Interest expense, net increased to $187,000 in 1998,
from $82,000 in 1997, and $18,000 in 1996. The increases for those periods were
due to higher borrowing levels necessary to fund our working capital
requirements.

                                       25
<PAGE>

Quarterly Results of Operations

  The following tables set forth unaudited statement of operations data for
each of the eight quarters in the period ending June 30, 1999, as well as the
percentage of our net revenue represented by each item. In our opinion, this
unaudited information has been prepared on the same basis as the annual
financial statements. This information includes all adjustments (consisting
only of normal recurring adjustments) necessary for fair presentation when read
in conjunction with the financial statements and related notes included
elsewhere in this prospectus. The operating results for any quarter are not
necessarily indicative of results for any future period.

<TABLE>
<CAPTION>
                                                      Quarter Ended
                          -------------------------------------------------------------------------
                                     Dec.               June     Sept.    Dec,               June
                          Sept. 30,   31,    March 31,   30,      30,      31,    March 31,   30,
                            1997     1997      1998     1998     1998     1998      1999     1999
                          --------- -------  --------- -------  -------  -------  --------- -------
                                                      (in thousands)
<S>                       <C>       <C>      <C>       <C>      <C>      <C>      <C>       <C>
Statement of Operations
Data:
Net revenue.............   $8,247   $12,257   $14,258  $20,159  $16,854  $20,915   $23,248  $29,586
Cost of net revenue.....    4,847     7,478     8,688   12,349    9,853   12,242    14,609   19,414
                           ------   -------   -------  -------  -------  -------   -------  -------
Gross profit............    3,400     4,779     5,570    7,810    7,001    8,673     8,639   10,172
Operating expenses:
  Sales and marketing...      680       864       990    1,404    1,500    1,853     1,967    2,418
  General and
   administrative.......      389       543       525      801    1,597    1,016     1,420    1,579
  Stock-based
   compensation.........      --        --        --       --       --       --        --       193
                           ------   -------   -------  -------  -------  -------   -------  -------
    Total operating
     expenses...........    1,069     1,407     1,515    2,205    3,097    2,869     3,387    4,190
                           ------   -------   -------  -------  -------  -------   -------  -------
Income from operations..    2,331     3,372     4,055    5,605    3,904    5,804     5,252    5,982
Interest expense, net...       20        18        18       57       42       70        59       85
                           ------   -------   -------  -------  -------  -------   -------  -------
Net income..............   $2,311   $ 3,354   $ 4,037  $ 5,548  $ 3,862  $ 5,734   $ 5,193  $ 5,897
                           ======   =======   =======  =======  =======  =======   =======  =======

As a Percentage of
Net Revenue:
Net revenue.............    100.0%    100.0%    100.0%   100.0%   100.0%   100.0%    100.0%   100.0%
Cost of net revenue.....     58.8      61.0      60.9     61.3     58.5     58.5      62.8     65.6
                           ------   -------   -------  -------  -------  -------   -------  -------
Gross profit............     41.2      39.0      39.1     38.7     41.5     41.5      37.2     34.4
Operating expenses:
  Sales and marketing...      8.2       7.1       7.0      6.9      8.9      8.9       8.5      8.2
  General and
   administrative.......      4.7       4.4       3.7      4.0      9.4      4.8       6.1      5.3
  Stock-based
   compensation.........      --        --        --       --       --       --        --       0.7
                           ------   -------   -------  -------  -------  -------   -------  -------
    Total operating
     expenses...........     12.9      11.5      10.7     10.9     18.3     13.7      14.6     14.2
                           ------   -------   -------  -------  -------  -------   -------  -------
Income from operations..     28.3      27.5      28.4     27.8     23.2     27.8      22.6     20.2
Interest expense, net...      0.3       0.1       0.1      0.3      0.3      0.4       0.3      0.3
                           ------   -------   -------  -------  -------  -------   -------  -------
Net income..............     28.0%     27.4%     28.3%    27.5%    22.9%    27.4%     22.3%    19.9%
                           ======   =======   =======  =======  =======  =======   =======  =======
</TABLE>


                                       26
<PAGE>

  Our net revenue increased in each quarter compared to the same quarter in the
prior year due primarily to increased levels of customer demand for the
equipment we sell in general. Our gross margins declined over the period from
41.2% in the quarter ended September 30, 1997 to 34.4% in the quarter ended
June 30, 1999 due largely to an increase in our percentage of sales of new
products which have lower gross margins than de-installed and refurbished
products. Sales and marketing expenses have increased in absolute dollars for
every quarter since September 30, 1997 reflecting greater commissions paid on
increased gross profit, the addition of sales personnel and intensified
marketing efforts. General and administrative expenses increased almost every
quarter due to the increase in personnel costs and professional fees required
to support our growth. In the quarter ended September 30, 1998, general and
administrative expenses included approximately $700,000 in costs associated
with the July 1998 recapitalization.

  Historically, our net revenue and results of operations have been subject to
significant fluctuations, particularly on a quarterly basis, and could
fluctuate significantly from quarter to quarter and from year to year in the
future. Causes of such fluctuations may include the rate and timing of
customers' orders for the equipment we sell, the rate at which
telecommunications carriers de-install equipment, decreases in the prices of
the equipment we sell due to increased secondary market competition, our
ability to locate and obtain equipment, our ability to deploy equipment on a
timely basis, seasonal variations in customer purchasing, write-offs due to
inventory defects and obsolescence, the potentially long sales cycle for our
equipment, delays in the commencement of operations in new markets, costs
relating to possible acquisitions, and general economic conditions and
conditions specific to the telecommunications industry. Historically, we have
seen that our net revenue is subject to seasonal fluctuations because our
customers typically purchase less telecommunications equipment during the third
calendar quarter of each year due to the annual nature of budgetary,
procurement and sales cycles. Significant quarterly fluctuations in our net
revenue will cause significant fluctuations in our cash flows and working
capital.

Liquidity and Capital Resources

  Since inception in July 1995, we have financed our operations primarily
through cash flows from operations. Net cash generated by operating activities
was $7.0 million in the first six months of 1999, $14.9 million in 1998, $8.0
million in 1997 and $1.8 million in 1996. Substantially all of the cash
generated by operating activities was distributed to the members of Somera
Communications, LLC. In July 1998, we used $51.8 million from the sale of Class
B units to outside investors to repurchase outstanding units from a number of
our initial unit holders.

  As of June 30, 1999, we had approximately $482,000 in cash and cash
equivalents. In addition, we had a credit facility to borrow up to $17.0
million. As of June 30, 1999, we had an outstanding book balance under this
line of credit of $779,000. This line of credit was subsequently replaced by
our Fleet National Bank credit facility.

  On August 31, 1999, we entered into a credit agreement with a syndicate of
financial institutions led by Fleet National Bank. The credit agreement
provides for a term loan facility and a revolving loan facility. The term loan
facility was for an aggregate principal amount of $50 million. The revolving
loan facility allows us to borrow $15 million, with a $5 million sublimit for
the issuance of letters of credit. The obligations under the term loan facility
and the revolving loan facility are secured by a first priority lien on all our
tangible and intangible assets. We may prepay loans under the term loan
facility and revolving loan facility at any time upon prior notice to the
lenders. As of

                                       27
<PAGE>

September 1, 1999, $50 million was outstanding under the term loan facility and
$6.5 million had been drawn under the revolving loan facility. The proceeds of
our term loan facility were used to make a distribution to the members of
Somera Communications, LLC of $48.5 million in September 1999 and the remaining
$1.5 million was used to pay off a portion of outstanding balances on notes
payable. Additionally, approximately $1.5 million of our revolving loan
facility was used to pay off the current portion of the notes payable. The
remaining amount of notes payable, approximately $500,000 was satisfied from
available cash. Subject to certain voluntary or mandatory reductions by the
Company of the revolving loan facility commitment, the revolving loan facility
will be available for borrowing until August 31, 2004. At our option, loans
under each of the facilities shall bear interest at the prime rate plus an
applicable margin or LIBOR, plus an applicable margin. The applicable margin
with respect to prime rate loans shall be between 0.25% and 1.25% based upon
our debt to earnings ratio. The applicable margin with respect to LIBOR loans
shall be between 1.75% and 2.75% based upon our debt to earnings ratio. We
expect to repay and retire the outstanding balance of the term loan facility
and repay the outstanding balance of the revolving loan facility with the
proceeds of the offering.

  We anticipate significant increases in working capital in the future
primarily as a result of increased sales of equipment and higher relative
levels of inventory. We will also continue to expend significant amounts of
capital on property and equipment related to the expansion of our corporate
headquarters, distribution center and equipment testing infrastructure to
support our growth.

  We believe that cash and cash equivalents, net proceeds from this offering,
financing available under our revolving loan facility and anticipated cash flow
from operations will be sufficient to fund our working capital and capital
expenditure requirements for at least the next 12 months, although we may need
to seek additional financing during that period. We cannot assure you that such
financing will be available on acceptable terms, if at all, or that such
financing will not be dilutive to our stockholders.

Year 2000 Compliance

  Many currently installed computer systems and software products are coded to
accept, store or report only two digit entries in date code fields. Beginning
in the year 2000, these date code fields will need to be enabled to distinguish
21st century dates from 20th century dates. As a result, computer systems and
software used by many companies, including us, our vendors and our customers,
will need to be upgraded to comply with these year 2000 requirements. We could
be impacted by year 2000 issues occurring in our own infrastructure or the
infrastructure of our suppliers, customers, vendors and financial service
organizations. These year 2000 issues could include information errors and
significant information system failures. Any disruption in our operations as a
result of year 2000 issues could harm our business.

Our State of Readiness

  Overview. To address year 2000 readiness, we are implementing a corporate
program to coordinate efforts across all business functions, including
addressing risks associated with business partners and other third-party
relationships. Our internal year 2000 readiness program is divided into four
program areas: internal systems and technology compliance, product compliance,
facilities and safety compliance and supplier and business partner compliance.
We have substantially completed the assessment phase for all areas. We expect
to complete our corrective actions during the fourth

                                       28
<PAGE>

quarter of 1999. There can be no assurance that we will be able to complete
corrective action for all four phases in a timely manner, if at all, or that
the process will adequately address the year 2000 issue.

Internal Systems and Technology Compliance

  Core IT Systems. In August 1999, we completed the implementation of a J.D.
Edwards database system which included most of the major functional areas of
our business. The system is designed to further automate our business processes
and is certified by J.D. Edwards as year 2000 compliant.

  Other Information Technology Systems. Our other information technology
systems include telephone and comparable systems and other application
software. We have replaced, upgraded or plan to replace or upgrade those
systems that we assessed as not year 2000 compliant. All system compliance
projects are expected to be completed during the fourth quarter of 1999.

Product Compliance

  We do not design or manufacture any products we sell. We purchase all of our
equipment from OEMs, distributors and other third parties. Under our purchase
agreements with OEMs, equipment provided under these agreements will be year
2000 compliant. On purchases from distributors and other third parties, we
attempt to assess the state of compliance of the equipment, however, there can
be no assurance that this can be accurately determined.

Facilities and Safety Compliance

  Our facilities and safety technology systems include building systems such as
heating, cooling, fire, sprinkler and security systems. We are working with our
landlords to identify and resolve any year 2000 compliance issues in these
systems.

Supplier and Business Partner Compliance

  Our suppliers provide equipment and supplies used by us in the conduct of our
business. An assessment of our suppliers is underway to determinate the
potential level of business interruption we could incur if a supplier fails to
properly address the year 2000 issue. Our business partners provide our
financial, payroll and other operational services. We are requesting written
assurance of year 2000 compliance from our suppliers and business partners
whose Year 2000 compliance is important to our business. We will consider using
alternate sources in the cases where these parties will not provide written
assurances.

 The Costs to Address Our Year 2000 Issues

  Costs incurred in connection with the resolution of year 2000 issues to date
have consisted primarily of the purchase and implementation of our J.D. Edwards
database system and related hardware. In addition, we have incurred internal
labor costs relating to year 2000 compliance planning and assessment. As of
August 31, 1999 we have incurred capital expenditures of approximately $800,000
on year 2000 compliance and expect to incur approximately $200,000 of
additional compliance related expenditures. We do not expect additional
expenditures related to year 2000 compliance to be significant.

                                       29
<PAGE>

 Our Contingency Plans

  Specific contingency plans are being developed in connection with the
assessment and resolution of the risks we have identified. We have established
preliminary information technology contingency plans and we are continuing to
develop those plans for specific areas of risk associated with the year 2000
issue. We expect to finalize our contingency plans during the fourth quarter of
1999.

Recent Accounting Pronouncements

  In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, or SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 establishes new standards of
accounting and reporting for derivative instruments and hedging activities.
SFAS 133 requires that all derivatives be recognized at fair value in the
balance sheet, and the corresponding gains or losses be reported either in the
statement of operations or as a component of comprehensive income, depending on
the type of hedging relationship that exists. SFAS 133 will be effective for
fiscal years beginning after June 15, 2000. We do not currently hold derivative
instruments or engage in hedging activities.

Qualitative and Quantitative Disclosure About Market Risk

  We have reviewed the provisions of Financial Reporting Release No. 48
"Disclosure of Accounting Policies for Derivative Commodity Instruments and
Disclosure of Quantitative and Qualitative Information about Market Risks
Inherent in Derivative Financial Instruments, Other Financial Instruments and
Derivative Commodity Instruments." We had no holdings of derivative financial
or commodity instruments at June 30, 1999.

  All of our revenue and capital spending is denominated in U.S. dollars. As of
June 30, 1999 we were exposed to interest rate risk on our then outstanding
revolving loan facility. The table below presents principal amounts by expected
maturity and the weighed average interest rates of debt obligations which are
sensitive to changes in interest rates.

<TABLE>
<CAPTION>
                                                        Expected Maturity Date
                                                       -------------------------
                                                       1999  2000 2001 2002 2003
                                                       ----  ---- ---- ---- ----
                                                            (in thousands)
   <S>                                                 <C>   <C>  <C>  <C>  <C>
   Revolving Loan Facility............................  779   --   --   --   --
   Weighed Average Interest Rate...................... 7.75%  --   --   --   --
</TABLE>

  We believe that the fair value of our current revolving loan facility
approximates its carrying value due to its short term nature.

                                       30
<PAGE>

                                    BUSINESS

Industry Background

  The telecommunications infrastructure equipment market has experienced
tremendous growth in recent years. This growth has been driven primarily by
increased carrier competition, expanded service offerings, increased demand
among businesses and consumers and technology advancements. Dataquest projects
that worldwide sales of telecommunications infrastructure equipment will grow
from $180 billion in 1998 to $230 billion in 2002.

  Telecommunications infrastructure equipment is purchased by a wide variety of
existing and emerging carriers, including:

  . Incumbent local exchange carriers, or ILECs, such as independent local
    exchange carriers, and regional bell operating companies, or RBOCs;
  . Long distance carriers, or IXCs;
  . Wireless carriers, such as cellular service providers, personal
    communications service, or PCS, companies, paging operators and
    specialized mobile radio operators, or SMRs; and
  . Competitive local exchange carriers, or CLECs.

  These carriers are making substantial capital expenditures on
telecommunications infrastructure equipment to build, upgrade and maintain
their networks. These networks are primarily comprised of switching,
transmission, access, wireless, microwave and power equipment.

 Carrier Challenges in the Changing Telecommunications Market

  Increased Carrier Competition. Global deregulation has changed the
telecommunications industry and created significant new opportunities for
carriers. For example, in the United States, where each local telephone market
was once served by a single local exchange carrier, deregulation has now
created intense competition by allowing the entry of IXCs, CLECs, wireless
carriers and local exchange carriers from other markets. Carriers are making
substantial expenditures on equipment to establish themselves in new markets.
In this increasingly competitive environment, we believe carriers will continue
to devote significant financial resources to build, upgrade and maintain their
networks.

  Expanded Service Offerings. To differentiate themselves, carriers are rapidly
developing and offering to their customers innovative and more affordable
services. Examples of these services include high speed Internet access, one-
rate wireless and long distance plans and other services. To deliver these
expanded services, carriers must invest significant capital to increase their
network capacity and enhance their current networks.

  Increased Demand Among Businesses and Consumers. The demand among businesses
and consumers for telecommunications services has increased dramatically in
recent years. As competition among carriers has resulted in lower pricing and
greater accessibility, consumers have increased their utilization of and
dependence on new services. For example, the growth in high speed data and
Internet applications, including e-mail, web browsing and e-commerce, and the
increased availability of more flexible mobile networks, such as cellular, PCS
and paging, have increased business and consumer demand for these and other new
services. To meet this demand, carriers must

                                       31
<PAGE>

build, upgrade and maintain reliable networks capable of supporting
significantly greater volumes of traffic as well as new service offerings.

  Technology Advancements. Advancements in telecommunications technology enable
carriers to increase capacity, improve service quality and expand their service
offerings. To respond to increased competition and differentiate their service
offerings, carriers are purchasing and deploying new equipment and technologies
from a wide variety of manufacturers.

 Impact on Carrier Equipment Needs

  The foregoing challenges are fueling demand by existing and emerging carriers
for telecommunications infrastructure equipment and services. Carriers have
invested hundreds of billions of dollars in telecommunications network
infrastructure. To maximize the value of their investments, carriers are
expanding and upgrading their existing networks and utilizing existing and new
technologies and equipment from multiple vendors. In addition, carriers are
seeking cost-effective ways to expand and maintain existing network elements
based on mature technologies.

  As carriers build, maintain and upgrade their telecommunications networks,
they often replace existing equipment that still has a significant useful life.
This equipment, referred to as de-installed equipment, often is suitable for
redeployment in other parts of a carrier's network to increase network capacity
and expand service offerings. While historically carriers may have scrapped de-
installed equipment or let it remain idle, competitive factors increasingly
require carriers to attempt to recapture a portion of their original
investment. While carriers prefer to redeploy de-installed equipment within
their own networks, they are often unable to do so. In cases where redeployment
cannot be achieved, they are seeking third party assistance to regain a portion
of their initial investment.

  Carriers not only require large amounts of telecommunications equipment, but
they also need related value-added services to support the build out and
expansion of their networks. In particular, emerging carriers lack many of the
human and financial resources of existing carriers and need these value-added
services as they aggressively buildout their networks to take advantage of
opportunities to capture and retain customers. These emerging carriers seek
creative and cost effective ways to build out their networks through a
combination of services and new, de-installed and refurbished equipment. Once
they have expanded these networks, they will have the same needs as incumbent
carriers to increasingly expand their service offerings and network coverage.
This cycle of network buildouts, upgrades, expansions and maintenance by
carriers will continue to fuel the trend of increased demand for both new and
de-installed equipment.

 Limitations of Existing Equipment Providers

  To satisfy their equipment needs, carriers have traditionally purchased
equipment from original equipment manufacturers, or OEMs, distributors and
secondary market dealers. In this increasingly competitive market, many
carriers are discovering that the traditional equipment providers are unable to
fulfill their complex and changing equipment and service requirements.


                                       32
<PAGE>

  OEMs. Historically, carriers have relied on OEMs for new telecommunications
infrastructure equipment. Today, some large OEMs offer a variety of products
but do not support multi-vendor product lines. In addition, while some OEMs
offer limited trade-in programs for de-installed equipment, they typically only
cover equipment they manufactured and offer relatively low valuations. OEMs are
also encountering difficulties in serving increased numbers of carriers as
their direct sales models do not scale well and are not cost effective in
today's environment. As a result, many large OEMs are moving away from the
direct sales model and relying more upon value-added equipment providers to
deliver much of their equipment.

  Distributors. Telecommunications equipment distributors typically provide a
selection of new equipment from a list of specific manufacturers and serve a
product fulfillment role within defined product lines. While this high-volume,
low margin, transaction-oriented model offers a wider selection of equipment
than OEMs, it generally results in limited flexibility to address changing
carrier equipment requirements. Additionally, the lower margins associated with
distributor sales results in a sales force focused on sales volume and not on
creative, customized solutions. Distributors are not able to support the
complexities of effective trade-in, refurbishing and redeployment programs.

  Secondary Market Dealers. While OEMs and distributors have limited
involvement in the growing market for de-installed equipment, secondary market
dealers specialize in this type of transaction. These dealers buy and sell de-
installed equipment in niche markets and often serve as an outlet for carriers'
excess inventories. Generally these secondary market dealers lack the
management, operational and financial resources necessary to consistently and
effectively meet changing equipment requirements.

 Emerging Requirements for Telecommunications Equipment Providers

  Due to increased competition, the need to rapidly deliver expanded services,
greater demand and technology advancements, carrier demand for
telecommunications infrastructure equipment and related services has grown
significantly. In today's dynamic environment, carriers are balancing the need
to attract and retain their customers with aggressive network build out
schedules. As a result, carriers are turning to equipment providers who offer:

  . Broad selections of multi-vendor equipment and technologies available
    from a single source;
  . Rapid responses from flexible, knowledgeable sales and customer service
    representatives;
  . Asset recovery programs that offer higher returns and greater flexibility
    across a broader range of de-installed or excess equipment.
  . Technical support on a wide variety of products, including product
    selection and configuration;
  . Other equipment solutions including repair, installation and de-
    installation; and
  . Value-added materials management services including warehousing, multi-
    vendor equipment packaging, or kitting, and other network deployment
    services.

The Somera Solution

  We provide telecommunications carriers with a broad range of infrastructure
equipment and related services designed to meet their specific and changing
equipment needs. We offer our

                                       33
<PAGE>

customers a unique combination of new, de-installed and refurbished equipment
from a variety of manufacturers, allowing them to make multi-vendor purchases
from a single cost-effective source. To further address our customers' dynamic
equipment needs, we offer a suite of customized, value-added services including
asset recovery, inventory management, technical support and other ancillary
services. Our innovative equipment and service offerings are delivered through
our team of 75 trained sales and procurement professionals, who work
individually with customers to understand, anticipate and meet their ongoing
equipment requirements. Our sales teams utilize our relationship management
database, our selective inventory and our distribution center to provide our
customers with rapidly deployable equipment solutions.

  The key benefits of our solution include:

  . Broad Multi-vendor Equipment Offering. We provide customers with an
    effective alternative to traditional telecommunications equipment supply
    channels by offering a broad range of new, de-installed and refurbished
    equipment from a variety of manufacturers. We offer infrastructure
    equipment used in both wireline and wireless networks including
    switching, transmission, access, wireless, microwave and power products.
    We believe the equipment we sell provides carriers with a more flexible
    and cost-effective alternative to existing suppliers.

  . Rapid Responsiveness to Dynamic Customer Needs. We offer our customers
    rapid, customized solutions to address their unique equipment needs. We
    provide carriers with convenient access to our skilled and dedicated
    sales and service professionals who are capable of quickly identifying
    and responding to their diverse network needs. We are able to quickly
    locate and provide equipment to carriers by using our relationship
    management database and maintaining selective inventory.

  . Flexible Asset Recovery Programs. We provide innovative and effective
    asset recovery programs that enable carriers to cost-effectively build,
    upgrade and maintain their networks and to recapture value from their
    excess and de-installed equipment. Our asset recovery programs are
    customized to meet carriers' specific objectives and include equipment
    purchases, as well as trade-in, remarketing and consignment programs that
    offer carriers a creative means to recapture a portion of their original
    equipment investment.

  . Simplified, Value-added Materials Management Services. We provide
    carriers with a comprehensive, cost-effective source for buying and
    selling telecommunications infrastructure equipment that simplifies the
    management of their equipment inventory and allows them to focus more on
    their core business. We also provide carriers with a full range of value-
    added services, including technical, materials management and other
    network deployment services.

The Somera Strategy

  Our objective is to be the premier provider of telecommunications
infrastructure equipment and related services to carriers worldwide. Key
elements of our strategy include:

  . Expand Penetration of Telecommunications Carrier Market. Our strategy is
    to further penetrate our existing base of over 750 customers and to
    identify, target, and develop additional customers. We intend to increase
    our sales force and continue our highly

                                       34
<PAGE>

   interactive dialogue with carriers to better understand and respond to
   their specific equipment and service needs. We believe we have established
   a track record of providing high levels of customer service and that our
   reputation will give us access to greater customer opportunities in the
   future. We believe that our relationship management database provides us
   with the broad industry pricing and equipment deployment knowledge
   necessary to meet our customers' needs and anticipate market trends.

  . Expand Product Lines and Service Capabilities. To continue to meet the
    dynamic needs of carriers, we intend to continuously add to the depth and
    breadth of our equipment and service offerings. We intend to expand our
    product lines by increasing our access to carriers' excess equipment and
    partnering with additional OEMs and distributors. We will aggressively
    seek new supply sources to address under-served equipment segments.

  . Increase RBOC Penetration. We intend to expand our relationships with the
    RBOCs by increasing our resources dedicated to this market, including
    expanding our sales force and obtaining ISO 9000 certification for our
    distribution center and testing facilities. We also intend to further
    strengthen product expertise in those areas most heavily demanded by
    RBOCs. We believe that maintaining strong relationships with the RBOCs
    can also offer a significant potential source of de-installed equipment.

  . Pursue Opportunities for International Growth. International markets
    represent a significant opportunity for future growth. We are currently
    generating net revenue in Latin America, Europe and Asia and expect to
    continue this international expansion. We intend to add additional sales
    management and resources to focus on these markets and plan to open our
    first European office in the first six months of 2000. Entry into the
    European market gives us the opportunity to expand our current offering
    of equipment based on European standards and technology and increases our
    ability to serve foreign markets. In addition, we believe that
    international expansion by some of our existing customers will provide us
    with greater access to these foreign markets.

  . Pursue Selective Acquisitions. The secondary market for
    telecommunications equipment is highly fragmented, consisting primarily
    of suppliers offering limited products to niche markets. We believe that
    these suppliers and other equipment providers, especially those that can
    increase the breadth and depth of our equipment and service offerings and
    enable us to reach new markets or further penetrate existing markets,
    represent potential acquisition opportunities.

Equipment and Services

 Equipment

  We offer our customers a broad range of telecommunications infrastructure
equipment to address their specific and changing equipment needs. The
equipment we sell includes new, de-installed and refurbished items from a
variety of manufacturers. In 1998, we sold over 6,000 items, or SKUs, from
over 250 different manufacturers. We offer the original manufacturer's
warranty on all new equipment we sell. On de-installed and refurbished
equipment, we offer our own warranty which guarantees that the equipment will
perform up to the manufacturer's original specifications.

                                      35
<PAGE>

  The equipment we sell is grouped into several general categories including
switching, transmission, access, wireless, microwave and power products.

  Switching. Switching equipment is used by carriers to manage call traffic and
to deliver value- added service. Switches and related equipment are located in
the central office of a telecommunications carrier and serve to determine
pathways and circuits for establishing, breaking or completing voice and data
communications over the public switched telephone network, or PSTN, and the
Internet. We provide a variety of switching equipment, including switches,
circuit cards, shelves, racks and other ancillary items in support of carrier
upgrades and reconfigurations. Manufacturers of switching equipment whose
products we sell include Alcatel USA, Centigram, Lucent Technologies and Nortel
Networks.

  Transmission. Transmission equipment is used by carriers to carry information
to multiple points in a carrier's network. Transmission equipment serves as the
backbone of a telecommunications carrier's network and transmits voice and data
traffic in the form of standard electrical or optical signals. We sell a broad
range of transmission products, including channel banks, multiplexors, digital
cross-connect systems, DSX panels and echo cancellers. Manufacturers of
transmission equipment whose products we sell include ADC Telecommunications
Inc., Fujitsu Ltd., Lucent Technologies Inc., NEC Corp., Nortel Networks Inc.,
Telco Systems, Inc. and Tellabs Inc.

  Access. Access equipment is used by carriers, to provide local telephone
service and Internet access. Access equipment is used in the local loop, or
last mile, portion of the PSTN and connects a home or business to the switch in
a carrier's central office. We provide a variety of access equipment, including
digital loop carriers, channel service units/digital subscriber units,
multiplexors and network interface units. Manufacturers of access equipment
whose products we sell include ADC Telecommunications Inc., Carrier Access
Corp., Lucent Technologies Inc., NEC Corp., Newbridge Networks Corp., Nortel
Networks Inc., Telco Systems, Inc. and VINA Technologies, Inc.

  Wireless. Cell sites and other wireless equipment are used by cellular, PCS,
paging and SMR carriers to provide wireless telephone and Internet access. This
equipment is used to amplify, transmit and receive signals between mobile users
and transmission sites, including cell sites and transmission towers. We sell a
broad range of wireless equipment including radio base stations, towers,
shelters, combiners, transceivers and other related items. Manufacturers of
wireless and cell site equipment whose products we sell include Allen Telecom
Inc., Telefon AB LM Ericsson, Lucent Technologies Inc., Motorola Inc., Nortel
Networks Inc. and Siemens AG.

  Microwave. Microwave systems are used by carriers to transmit and receive
voice, data and video traffic. These systems enable point to point high speed
wireless communications. We provide a variety of microwave systems, including
antennas, dishes, coaxial cables and connectors. Manufacturers of microwave
systems whose products we sell include Alcatel Alsthom S.A., Adaptive Broadband
Corp., Digital Microwave Corp., Digital Transmission Systems Inc., Harris-
Farinon Canada Inc., Nortel Networks Inc. and Glenayre Technologies Inc.

  Power. Power equipment is used by carriers to provide direct current, or DC,
power to support their network infrastructure equipment. We sell a broad range
of power equipment, including power bays, rectifiers, batteries, breaker panels
and converters. Manufacturers of power equipment whose

                                       36
<PAGE>

products we sell include C&D Technologies, GEC, Lucent Technologies, Nortel
Networks, Peco II and Power Conversion Products.

 Services

  Unlike other equipment providers that are product driven, we are customer
focused. Our equipment and service offerings, industry focused sales teams and
internal systems and procedures are all specifically designed to meet the needs
of each carrier market we serve. We train our employees to offer high quality
service and to provide consistent, reliable customer service. We believe these
elements enable us to offer a sales force that can provide rapid, knowledgeable
and creative solutions to our customers.

  To enable carriers to focus on their core business, we offer the following
services in connection with our equipment sales and procurement:

  . Asset Recovery Programs. Our innovative asset recovery programs offer
    carriers effective solutions to manage their excess and de-installed
    equipment. These programs are customized to meet the specific objectives
    of each carrier, and include equipment purchases as well as equipment
    trade-ins, consignment and re-marketing programs. The programs allow
    carriers to easily and rapidly recapture value from excess and de-
    installed equipment.

  . Technical Services. Our technical services include product selection,
    equipment configuration, custom integration and technical support. These
    services enable carriers to supplement their internal technical
    resources.

  . Value-added Materials Management Services. Our materials management
    services include equipment procurement, kitting, warehousing and other
    inventory management and deployment services.

  . Other Services. Through our extensive network of subcontractor
    relationships and partners, we are also capable of providing specialized
    transportation services, regional warehousing, repair services,
    installation and de-installation services.

Sales, Marketing and Procurement

  Our sales organization is located primarily at our corporate headquarters in
Santa Barbara, California and is augmented by our satellite offices in Pasadena
and Los Gatos, California. As of June 30, 1999, we employed 75 sales and
procurement professionals. We generate leads primarily through direct
marketing, customer referrals and participation in industry tradeshows. Our
sales force is organized by market segment, including specialized teams focused
on the RBOCs, independent local exchange carriers, IXCs, CLECs, and wireless
carriers, including cellular, PCS and SMRs.

  Our sales force operates on a named account basis rather than by geography,
which allows us to maintain a consistent, single point of contact for each
customer. Another key feature of our selling effort is the relationships we
establish at various levels in our customers' organizations. This structure
allows us to establish multiple contacts with each customer across their
management, engineering and purchasing operations. For each type of carrier, we
employ dedicated teams with extensive market knowledge to meet the specific
equipment needs of these customers.


                                       37
<PAGE>

  Each team member has access to, and is supported by, our relationship
management database. This real time proprietary information system allows each
team to:

  . respond to customer requirements by accessing our extensive database of
    excess and de-installed equipment located at carriers, manufacturers,
    distributors and other third parties worldwide, as well as by accessing
    our select inventory;
  . access relevant detailed purchase and sale information by customer and
    part number;
  . access technical and system configuration information;
  . trace and track all customer and vendor order activity; and
  . project and anticipate customer equipment requirements.

  Each of our teams is directed by a group sales manager who is responsible for
the overall customer relationship and is supported by a number of account
executives, logistics administrators and production controllers. We believe our
dedicated team structure provides consistent high quality customer service
which builds long-term relationships with our customers. Our account executives
have frequent customer contact and oversee customer proposals while our
logistics administrators work with our production controllers as well as our
customers to coordinate sourcing, delivery and any required follow-through
procedures to ensure our customers receive quality, timely customer service.

  Our marketing effort focuses on enhancing market awareness of our brand
through industry trade shows, professional sales presentations and brochures,
an informative web site, branded giveaways and special customer events.
Additionally, we advertise in key telecommunications industry publications. We
believe the size and scope of our operations in our highly fragmented industry
gives us both a unique advantage and opportunity to further build and enhance
our brand recognition.

  In support of our sales activities, we have teams who are responsible for
procurement of the de-installed equipment we sell. Procurement teams are
organized by market segment, including specialized teams focused on wireless
carriers, wireline carriers, and new equipment OEMs and distributors. Our
procurement specialists are dedicated, on a named account basis, to purchase
de-installed equipment from carriers. We also employ a product marketing group
that develops and maintains our relationships with manufacturers and
distributors to assure the availability of new equipment for our customers.

Customers

  We sell equipment to independent local exchange carriers, RBOCs, IXCs, a
broad range of wireless carriers including cellular, PCS, paging and SMRs, and
CLECs. We have over 750 customers who are located primarily in the United
States. Customers from which we recognized at least $1,000,000 in net revenue
in the first six months of 1999 include ALLTEL Corporation, AT&T Corporation,
McLeodUSA Inc., Sprint Corporation, United States Cellular Corporation and
Vodafone AirTouch plc. In the first six months of 1999 no single customer
accounted for more than 10% of our net revenue. In 1998 ALLTEL Corporation
accounted for 10.2% of our net revenue, in 1997 Vodafone AirTouch plc accounted
for 10.1% of our net revenue, and in 1996 ALLTEL Corporation accounted for
11.4% of our net revenue. Sales to customers outside of the United States
accounted for 13.4% of our net revenue in the first six months of 1999, 19.7%
of our net revenue in 1998, 16.5% of our net revenue in 1997, and 6.8% of our
net revenue in 1996.

                                       38
<PAGE>

  The following examples demonstrate how we have helped our customers:

  Long Distance Carrier. An international long distance carrier made a
significant investment in several Lucent 4ESS and 5ESS legacy switches
installed throughout the United States. Although these switches were mature
technologies and, in some cases, were discontinued, they still performed well
and the carrier wanted to continue utilizing them. Because these were older
pieces of equipment, obtaining plug-in cards, spare parts and other items
necessary to maintain and expand the switches from the manufacturer was
difficult and expensive. Consequently, the carrier was forced to explore
alternative supply sources. In response to inquiries, we utilized our
relationship management database and network of supply channels to locate and
procure the necessary items on a rapid and cost-effective basis.

  CLEC. A CLEC specializing in providing bundled services to businesses and
other carriers had a major customer request which would require the
construction of a multi-site synchronous optical network, or SONET, OC-12 ring.
After completing the initial network expansion design based on new equipment
from an OEM, the carrier determined that the delivery would not be timely or
cost-effective enough to provide a competitive solution. After the carrier
contacted us, we reviewed the engineering specifications and project schedule.
We were able to recommend an alternate equipment configuration utilizing a
combination of available new, de-installed and refurbished equipment at 40%
less than the price quoted by the OEM. This solution allowed the carrier to
build the SONET ring and meet their customer's requirement in a cost-effective
and timely manner.

  Wireless Carrier. A major Latin American wireless carrier had contracted with
a large OEM to replace its existing cellular network with a new digital
network. Design and installation of this new digital network was to be
completed in one year. While the new network was being installed, the carrier
needed to address significant service quality issues it faced due to capacity
constraints on its existing network from rapid subscriber growth. However, the
carrier was reluctant to deploy significant capital on equipment which would
only be in service for one year. By utilizing de-installed equipment from
another carrier's network and refurbishing, testing and reconfiguring it to
meet the specific requirements of the carrier, we were able to deliver this
equipment within 30 days of their order at a significant discount to the cost
of equivalent new equipment. Furthermore, we agreed to repurchase the de-
installed digital network equipment from the implementation of the carrier's
digital network. This cost-effective solution allowed the carrier to expand
capacity to meet demand and generating additional revenues.

Competition

  The market for our equipment and service offerings is highly competitive. We
believe that the trends toward greater demand for telecommunications services,
increasing global deregulation and rapid technology advancements characterized
by shortened product lifecycles will continue to drive competition in our
industry for the foreseeable future. Increased competition may result in price
reductions, lower gross margins and loss of our market share.

  Increased competition in the secondary market for telecommunications
equipment could also heighten demand for the limited supply of de-installed
equipment, which would lead to increased prices for, and reduce the
availability of, this equipment. Any increase in these prices could
significantly impact our ability to maintain our gross margins. Any reduction
in the availability of this equipment could cause us to lose customers.

                                       39
<PAGE>

  We currently face competition primarily from OEMs, distributors and secondary
market dealers. Many of these competitors have longer operating histories,
significantly greater resources and name recognition, and a larger base of
customers. Our competitors may be able to devote greater resources to the
promotion and sale of new, de-installed and refurbished telecommunications
equipment and adopt more aggressive pricing policies. They may be able to more
effectively expand existing customer relationships and develop customer
relationships. These competitors may be able to leverage their existing
relationships to discourage our customers from purchasing additional equipment
from us. In addition, they may be able to more rapidly adopt new technologies,
increase the array of products offered in response to changes in customer
requirements and develop more expertise on specific manufacturers or product
lines. They may also be able to implement more effective electronic commerce
solutions. Moreover, some of our current and potential competitors may
establish alliances or business combinations to quickly acquire significant
market share. There can be no assurance that we will have the resources to
compete successfully in the future or that competitive pressures will not harm
our business.

Employees

  As of June 30, 1999, we had 120 full-time employees. We consider our
relations with our employees to be satisfactory. We have never had a work
stoppage, and none of our employees is represented by a collective bargaining
agreement. We believe that our future success will depend in part on our
ability to attract, integrate, retain and motivate highly qualified personnel,
and upon the continued service of our senior management and key sales
personnel. Competition for qualified personnel in the telecommunications
equipment industry and our geographic location is intense. We cannot assure you
that we will be successful in attracting, integrating, retaining and motivating
a sufficient number of qualified employees to conduct our business in the
future.

Facilities

  Our principal executive and corporate offices occupy approximately 12,500
square feet in Santa Barbara, California under a lease agreement that expires
in January 2003 with one three-year extension. Our distribution center occupies
approximately 100,000 square feet in Oxnard, California under a lease agreement
that expires in May 2004. We also have a warehouse of approximately 23,000
square feet in Santa Barbara, California under a lease agreement that expires
in March 2005. Additionally, we lease sales offices of approximately 435 square
feet in Los Gatos, California under a lease agreement that expires in April
2000 and of approximately 455 square feet in Pasadena, California under a lease
agreement that expires in May 2000. We are currently exploring additional
locations to expand our corporate facilities. We believe that our facilities
are adequate for our current operations and that additional space can be
obtained if needed.

Legal Proceedings

  From time to time, we may be involved in legal proceedings and litigation
arising in the ordinary course of business. As of the date of this prospectus,
we are not a party to or aware of any litigation or other legal proceeding that
could harm our business.

                                       40
<PAGE>

                                   MANAGEMENT

Directors and Executive Officers

  Our executive officers and directors and their ages as of August 1, 1999, are
as follows:

<TABLE>
<CAPTION>
                 Name                 Age               Positions
 ------------------------------------ --- -------------------------------------
 <C>                                  <C> <S>
 Dan Firestone....................... 37  Chairman of the Board of Directors,
                                          President and
                                          Chief Executive Officer
 Jeffrey G. Miller................... 36  Executive Vice President, Sales and
                                          Marketing
 Gary J. Owen........................ 45  Chief Financial Officer
 Gil Varon........................... 38  Director and Vice President, Wireline
                                          Division
 Walter G. Kortschak(1).............. 40  Director
 Peter Y. Chung(2)................... 31  Director
 Barry Phelps(1)(2).................. 52  Director
</TABLE>
--------
(1) Member of Compensation Committee
(2) Member of Audit Committee

  Dan Firestone co-founded Somera Communications in July 1995, has served as
our Chief Executive Officer since 1996, has served as our President since
December 1998, and has also served as our Chairman of the Board since our
inception. From 1994 to the present, Mr. Firestone has also operated SDC
Business Consulting, a private business consulting firm. In 1984, Mr. Firestone
co-founded Century Computer Marketing, a distributor of computer service spare
parts and related products, and served as its Chief Executive Officer until May
1994.

  Jeffrey G. Miller has served as our Executive Vice President, Sales and
Marketing since joining Somera Communications in May 1999. From January 1996
until May 1999, Mr. Miller served as Regional Director for North American Sales
and Operations for the Cellular Infrastructure Group of Motorola, Inc. From
1985 until January 1996, Mr. Miller worked in various capacities with AT&T,
including positions in sales management, product management, marketing, and
software development in their long distance, premises equipment, and voice
messaging business segments. Mr. Miller holds a B.S. in business administration
from Miami University and an M.B.A. from Ohio State University.

  Gary J. Owen has served as our Chief Financial Officer since joining Somera
Communications in July 1999. From January 1999 until July 1999, Mr. Owen served
as Group Finance Director for Logical Holdings Ltd., a U.K. software
development and services company. From January 1997 to January 1999, Mr. Owen
served as Group Finance Director for IFX Group plc, an international
information services company. From September 1996 to December 1996, Mr. Owen
served as a finance consultant doing project work for Fujitsu
Telecommunications Ltd. From May 1994 to September 1996, Mr. Owen served as
Director, European Operations, for Aurora Electronics, Inc., an electronic
materials management company. From 1986 until May 1994, Mr. Owen served as
Chief Financial Officer of Century Computer Marketing, a distributor of
computer service spare parts and related products. Mr. Owen holds a B.A. in
accounting and finance from Nottingham University, England. Mr. Owen is also a
qualified member of the Institute of Chartered Accountants.

  Gil Varon co-founded Somera Communications in July 1995, served as our
President from July 1995 until December 1998, has served as our Vice President,
Wireline Division since January 1999, and has served as one of our directors
since our inception. From 1995 until the present, Mr. Varon

                                       41
<PAGE>

has also served as a Senior Sales Manager. From May 1994 to June 1995, Mr.
Varon served in sales and procurement positions for Aurora Electronics, Inc.
From 1985 until May 1994, Mr. Varon served as a Group Sales Manager at Century
Computer Marketing.

  Walter G. Kortschak has served as a director of Somera Communications since
July 1998. Mr. Kortschak is a Managing Partner and Managing Member of various
entities affiliated with Summit Partners, L.P., a private equity capital firm
in Palo Alto, California, where he has been employed since June 1989. Summit
Partners, L.P., and its affiliates manage a number of venture capital funds,
including Summit Ventures V, L.P., Summit V Advisors (QP) Fund, L.P., Summit V
Advisors Fund, L.P., and Summit Investors III, L.P. Mr. Kortschak also serves
as a director of E-Tek Dynamics, Inc., an optical components and modules
company. Mr. Kortschak holds a B.S. in engineering from Oregon State
University, an M.S. in engineering from The California Institute of Technology
and an M.B.A. from the University of California, Los Angeles.

  Peter Y. Chung has served as a director of Somera Communications since July
1998. Mr. Chung is a General Partner and Member of various entities affiliated
with Summit Partners, L.P., a private equity capital firm in Palo Alto,
California, where he has been employed since August 1994. Summit Partners,
L.P., and its affiliates manage a number of venture capital funds, including
Summit Ventures V, L.P., Summit V Advisors (QP) Fund, L.P., Summit V Advisors
Fund, L.P., and Summit Investors III, L.P. From August 1989 to July 1992, Mr.
Chung worked in the Mergers and Acquisitions Department of Goldman, Sachs & Co.
Mr. Chung also serves as a director of Ditech Communications Corporation, a
telecommunications equipment company, E-Tek Dynamics, Inc., an optical
components and modules company, and Splash Technology Holdings, Inc., a
developer of color server systems. Mr. Chung holds an A.B. from Harvard
University and an M.B.A. from Stanford University.

  Barry Phelps has served as a director of Somera Communications since July
1999. Mr. Phelps is the President and Chief Executive Officer of Netcom
Systems, Inc., a network performance analysis company in Calabasas, California,
where he has been employed since November 1996. Before he became President and
Chief Executive Officer in November 1997, Mr. Phelps served as the Vice
President, Finance and Chief Financial Officer of Netcom Systems. Netcom
Systems was acquired by Bowthorpe plc in July 1999. Prior to joining Netcom
Systems, from February 1992 to November 1996, Mr. Phelps served as Chairman and
Chief Executive Officer of MICOM Communications Corporation, a data
communications equipment company which was acquired by Nortel Networks in June
1996. Mr. Phelps holds a B.S. in mathematics from St. Lawrence University and
an M.B.A. from the University of Rochester.

  The executive officers serve at the discretion of the board of directors.
There are no family relationships among any of our directors or executive
officers.

Board Composition

  We currently have five authorized directors. In accordance with the terms of
our bylaws, the terms of the directors will be divided into three classes.
Class I director terms will expire at the annual meeting of stockholders to be
held in 2000. Class II director terms will expire at the annual meeting of
stockholders to be held in 2001. Class III director terms will expire at the
annual meeting of stockholders to be held in 2002. The Class I director is Mr.
Chung, the Class II directors are

                                       42
<PAGE>

Messrs. Phelps and Varon, and the Class III directors are Messrs. Firestone and
Kortschak. At each annual meeting of stockholders after the initial
classification or special meeting in lieu of the annual meeting, the successors
to directors whose terms will then expire will be elected to serve from the
time of election and qualification until the third annual meeting following
election or special meeting held in lieu of the annual meeting. Each director
is elected at the respective meeting of our stockholders by a vote of the
holders of a plurality of the voting power represented at that meeting. In
addition, our bylaws provide that the authorized number of directors may be
changed by resolution of the board of directors. Any additional directorships
resulting from an increase in the number of directors will be distributed among
the three classes so that, as nearly as possible, each class will consist of
one-third of the total number of directors. This classification of the board of
directors may have the effect of delaying or preventing a change of control or
management of Somera Communications.

Board Committees

  Our audit committee, which consists solely of two independent directors,
reviews, acts on and reports to our board of directors on various auditing and
accounting matters, including the selection of our independent accountants, the
scope of our annual audits, fees to be paid to the independent accountants, the
performance of our independent accountants and our accounting practices and
internal controls. Messrs. Chung and Phelps are the members of our audit
committee.

  Our compensation committee establishes salaries, incentives and other forms
of compensation for officers and other employees. This committee also
administers our incentive compensation and benefit plans. Messrs. Kortschak and
Phelps are the members of the compensation committee.

Director Compensation

  Except for reimbursement of reasonable expenses incurred in connection with
serving as a director and the grant of stock options, our directors are not
compensated for their service as directors. In July 1999, we granted Mr.
Phelps, one of our non-employee directors, an option to purchase 50,000 shares
of common stock at an exercise price of $8.50 per share under our 1999 Unit
Option Plan. These options vest 25% after one year, and ratably thereafter over
a period of three years. Under our 1999 Director Option Plan, each non-employee
director will automatically be granted an option to purchase 30,000 shares of
our common stock on the date on which he or she becomes a director. In addition
to this first option grant, each outside director will automatically be granted
an option to purchase 7,500 shares on each July 1st, if on the date of such
subsequent grant he or she shall have served on the board for six months from
the date of such grant. Both the initial 30,000 share initial option grant and
subsequent 7,500 share option grant shall vest 25% after one year, and ratably
thereafter over a period of three years.

Compensation Committee Interlocks and Insider Participation

  Our compensation committee consists of Messrs. Kortschak and Phelps. Prior to
the offering, our compensation committee consisted of Messrs. Firestone and
Kortschak.

  None of the current members of our compensation committee is an officer or
employee of Somera Communications. No interlocking relationship exists between
our board of directors or

                                       43
<PAGE>

compensation committee and the board of directors or compensation committee of
any other company, nor has such an interlocking relationship existed in the
past.

Employment Agreements

  Jeffrey G. Miller. We entered into an employment agreement with Mr. Miller on
May 6, 1999. Under the agreement, we agreed to pay Mr. Miller an annual salary
of $225,000 and a bonus of up to $100,000 based on the achievement of
performance milestones. Under this agreement, Mr. Miller received a signing
bonus of $40,000. For the first year of Mr. Miller's employment, the full
performance bonus is guaranteed. In conjunction with this agreement, we have
granted Mr. Miller an option to purchase 660,093 shares of our common stock at
an exercise price of $7.57 per share with 25% of the shares subject to this
option vesting on the first anniversary of his commencement date, and 1/36th of
the remaining shares vesting monthly thereafter.

 As a part of this employment agreement, we have provided Mr. Miller with an
interest-free mortgage loan in the amount of $600,000 for the purpose of Mr.
Miller acquiring a new home. Under the agreement, the loan will be forgiven
over eight years for $50,000 per year for the first four years and $100,000 per
year for the final four years. We will retain a mortgage security interest in
the home during the term of the loan. In the event Somera Communications
experiences a change of control and Mr. Miller is terminated without cause or
constructively terminated within twelve months, the outstanding balance of the
loan will be forgiven. In the event Mr. Miller is terminated without cause by
us, the loan will be due and repayable upon one year after he is first able to
sell his shares following this offering. In addition, he would be entitled to
receive severance equal to one year of his base salary and target bonus and
additional vesting of that number of shares subject to his option that would
have become vested had Mr. Miller remained employed by us for an additional six
months. In the event Mr. Miller leaves our employment voluntarily during the
term of the loan, the loan would be due and repayable within six months of the
date of the termination of his employment.

  Gary J. Owen. We entered into an employment agreement with Mr. Owen on July
16, 1999. Under the agreement, we have agreed to pay Mr. Owen an annual salary
of $200,000 and a bonus of up to $25,000 based on the achievement of
performance milestones. Under this agreement, Mr. Owen received a signing bonus
of $15,000. For the first year of Mr. Owen's employment, $12,500 of the
performance bonus is guaranteed. In conjunction with this agreement, we have
granted Mr. Owen an option to purchase 405,000 shares of our common stock at an
exercise price of $8.50 per share with 25% of the shares subject to this option
vesting on the first anniversary of his commencement date, and 1/36th of the
remaining shares vesting monthly thereafter.

  As a part of this employment agreement, Mr. Owen is eligible to receive a
six-month interest-free mortgage loan in an amount to be determined by our
president for purposes of Mr. Owen's purchase of and relocation to a new home.
In the event Mr. Owen is terminated without cause by us, he would be entitled
to receive severance equal to nine months of his base salary and target bonus.
In addition, he would be entitled to receive additional vesting of that number
of shares subject to his option that would have become vested had Mr. Owen
remained employed by us for an additional six months. In the event of a change
of control of Somera Communications, 50% of the shares subject to Mr. Owen's
option, together with any subsequent options granted to him, will vest and
become immediately exercisable.

                                       44
<PAGE>

  Dan Firestone. Our compensation committee adopted a bonus plan for Mr.
Firestone that provides him with incentive compensation based on performance
milestones. Under this bonus plan, Mr. Firestone is eligible to receive a
bonus, in addition to his base salary, of up to 250% of his base salary based
on the company's achievement of performance milestones.

Executive Compensation

  The following table sets forth all compensation paid or accrued during 1998
to our chief executive officer and our other most highly compensated executive
officer whose salary and bonus for 1998 was more than $100,000. The table also
sets forth compensation on an annualized basis for our chief executive officer
and our other executive officers whose salaries, excluding bonuses if any, for
1999 will exceed $100,000 when calculated on an annualized basis.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                       1998 Annual Compensation
                                    ------------------------------
                                                      Other Annual 1999 Annual
   Name and Principal Positions      Salary   Bonus   Compensation   Salary
----------------------------------- -------- -------- ------------ -----------
<S>                                 <C>      <C>      <C>          <C>
Dan Firestone, Chairman of the
 Board, President and Chief
 Executive Officer................. $109,936 $219,872    $3,250     $250,000
Gil Varon, Director and Vice
 President, Wireline Division......   43,978  169,792     1,600      100,000
Jeffrey G. Miller, Executive Vice
 President, Sales and Marketing....      --       --        --       225,000
Gary J. Owen, Chief Financial
 Officer...........................      --       --        --       200,000
</TABLE>

Option Grants

  We did not grant stock options to any of our executive officers in 1998. In
1999, Somera Communications, LLC granted options to purchase Class A units
under its 1999 Unit Option Plan. Following the completion of this offering, no
further options will be granted under the 1999 Unit Option Plan and all
outstanding options under this plan will be assumed by and converted into
options to purchase common stock under the 1999 Stock Option Plan. In May 1999,
Somera Communications, LLC granted an option to Mr. Miller to purchase 660,093
Class A units at an exercise price of $7.57 per unit under our 1999 Unit Option
Plan. In July 1999, Somera Communications, LLC granted an option to Mr. Owen to
purchase 405,000 Class A units at an exercise price of $8.50 per unit under our
1999 Unit Option Plan. In July 1999, Somera Communications, LLC granted an
option to Mr. Firestone to purchase 375,000 Class A units at an exercise price
of $8.50 per unit under our 1999 Unit Option Plan. The options granted to these
executive officers are nonqualified stock options and vest over four years at
the rate of 25% of the shares subject to the option on the first anniversary of
the date of grant, and 1/36th of the remaining shares each subsequent month. A
portion of each of these options will accelerate upon a change of control or
termination of the optionee's employment. See "--Employment Agreements" for
further descriptions of these employee benefits. The options expire ten years
from the date of grant and were granted at an exercise price equal to the
deemed fair value of our common stock on the date of grant, as determined by
the board.

                                       45
<PAGE>

Employee Benefits Plans

 1999 Stock Option Plan

  Our 1999 Stock Option Plan was adopted and approved by our board in September
1999. It provides for the grant of incentive stock options to employees and
nonstatutory stock options and share purchase rights to employees, directors
and consultants. We have reserved for issuance under our 1999 Stock Option Plan
a total of 6,750,000 shares of common stock. As of August 31, 1999, no options
were outstanding under this plan. However, following the consummation of this
offering, all options granted under the 1999 Unit Option Plan will be assumed
and converted into options to purchase an equivalent number of shares of our
common stock under the 1999 Stock Option Plan. Following this assumption and
conversion, 5,259,907 shares of our common stock will remain available for
future option grants. The number of shares of common stock reserved for
issuance under this plan will be subject to an annual increase on each
anniversary beginning January 1, 2000 equal to the lesser of:

  . 2,500,000 shares;
  . 4% of the outstanding shares on each anniversary date; or
  . an amount determined by the board of directors.

  The 1999 Stock Option Plan is currently administered by the compensation
committee of our board of directors. Options and stock purchase rights granted
under the 1999 Stock Option Plan will vest as determined by the relevant
administrator, and if not assumed or substituted by a successor corporation
will accelerate and become fully vested in the event we are acquired. The
exercise price of options and stock purchase rights granted under the 1999
Stock Option Plan will be determined by the relevant administrator, although
the exercise price of incentive stock options must be at least equal to the
fair market value of our common stock on the date of grant. Options granted
under the 1999 Stock Option Plan generally vest over a four-year period. The
board of directors may amend, modify or terminate the 1999 Stock Option Plan at
any time as long as such amendment, modification or termination does not impair
vesting rights of plan participants. The 1999 Stock Option Plan will terminate
in 2009, unless terminated earlier by the board of directors.

 1999 Unit Option Plan

  Our 1999 Unit Option Plan was approved by our board of directors in May 1999.
We adopted the 1999 Unit Option Plan when we were a limited liability company.
We have reserved 2,003,289 Class A units under the 1999 Unit Option Plan. As of
August 1, 1999, options to purchase a total of 1,490,093 Class A units at a
weighted average exercise price of $8.09 per share were outstanding and 513,196
Class A units remained available for future option grants. Following the
completion of this offering, no further options will be granted under the 1999
Unit Option Plan and all outstanding options under this plan will be assumed by
and converted into options to purchase common stock under the 1999 Stock Option
Plan.

 1999 Employee Stock Purchase Plan

  Our 1999 Employee Stock Purchase Plan was adopted and approved by our board
in September 1999. Our Purchase Plan, which is intended to qualify under
Section 423 of the Internal Revenue Code, provides our employees with an
opportunity to purchase our common stock through

                                       46
<PAGE>

accumulated payroll deductions. This plan will become effective upon the
closing of this offering. A total of 300,000 shares of common stock have been
reserved for issuance under the Purchase Plan, none of which have been issued.
The number of shares reserved for issuance under the Purchase Plan will be
subject to an annual increase on each anniversary beginning January 1, 2000
equal to the lesser of:

  . the number of shares issued under the Purchase Plan in the prior year; or
  . an amount determined by the board of directors.

  The Purchase Plan will be administered by the compensation committee of our
board of directors. The Purchase Plan grants each eligible employee an option
to purchase common stock through payroll deductions up to a maximum of $25,000
for all purchases ending within the same calendar year and 5,000 shares for
each purchase period thereafter. Employees are eligible to participate if they
are employed by us for at least 20 hours per week and more than five months in
any calendar year. Unless the board of directors or its committee determines
otherwise, each offering period will run for six months. The first offering
period will commence on the date of this prospectus and end on or about August
14, 2000, and new offering periods thereafter will commence on the first
trading day on or after February 15th or August 15th. In the event we are
acquired, each outstanding option shall be assumed or an equivalent option
substituted by the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, the offering period
then in progress will be shortened by setting a new exercise date to precede
the date of the acquisition. The price at which common stock will be purchased
under the Purchase Plan is equal to 85% of the fair market value of the common
stock on the first or last day of the applicable offering period, whichever is
lower. Employees may end their participation at any time during the offering
period, and participation automatically ends on termination of employment.
Generally, the board of directors may amend, modify or terminate the Purchase
Plan at any time as long as the amendment, modification or termination does not
impair the rights of plan participants. The Purchase Plan will terminate in
2009, unless terminated earlier in accordance with its provisions.

 1999 Director Option Plan

  Our 1999 Director Option Plan was adopted and approved by our board in
September 1999. Our Director Plan provides for the grant of non-statutory stock
options to non-employee directors. The Director Plan has a term of ten years
unless terminated earlier by the board of directors. A total of 300,000 shares
of our common stock, plus an annual increase equal to the number of shares
needed to restore the number of shares of common stock that are available for
grant under the Plan to 300,000 shares, have been reserved for issuance under
the Director Plan. As of the date of this prospectus, no options have been
granted under the Director Plan.

  Our Director Plan provides that each new outside director shall automatically
be granted an option to purchase 30,000 shares of our common stock on the date
that outside director first becomes a director. In addition to this first
option grant, each outside director shall automatically be granted an option to
purchase 7,500 shares on each July 1st, if on the date of the subsequent grant
he or she shall have served on the board for six months from the date of such
grant. Options granted under the Director Plan vest at a rate of 25 percent of
the shares subject to the option on each anniversary of its grant date,
provided this director continues to serve as an outside director on these
vesting dates.

                                       47
<PAGE>

Options granted under the Director Plan are exercisable by the outside director
only while the individual remains one of our directors. The exercise price for
each first option and subsequent option grant shall be 100% of the fair market
value per share of our common stock on the date of grant.

  In the event of our merger or the sale of substantially all of our assets,
each outstanding option shall be assumed or an equivalent option substituted by
the successor corporation. In the event that the successor corporation refuses
to assume or substitute for the option, or following assumption or substitution
the director is terminated, each option granted to an outside director under
the Director Plan shall become fully vested and exercisable for a period of
thirty days after which period the option shall terminate. Options granted
under the Director Plan must be exercised within three months of the end of the
optionee's tenure as one of our directors, or within 12 months after the
director's termination by death or disability.

 401(k) Plan

  We provide a tax-qualified employee savings and retirement plan, commonly
known as a 401(k) plan, which covers our eligible employees. Under our 401(k)
plan, employees may elect to reduce their current annual compensation, on a
pre-tax basis, up to the lesser of 15% or the statutorily prescribed limit,
which is $10,000 in calendar year 1999, and have the amount of the reduction
contributed to the 401(k) plan. The 401(k) plan is intended to qualify under
Sections 401(a) and 401(k) of the Internal Revenue Code so that contributions
by our employees to the 401(k) plan and income earned on plan contributions are
not taxable to employees until withdrawn from the 401(k) plan and so that
contributions will be deductible by us when made. The trustee of the 401(k)
plan invests the assets of the 401(k) plan in the various investment options as
directed by the participants.

Limitation of Liability and Indemnification Matters

  Our certificate of incorporation limits the liability of directors to the
maximum extent permitted by Delaware law. Delaware law provides that directors
of a corporation will not be personally liable for monetary damages for breach
of their fiduciary duties as directors, except liability for:

  . any breach of their duty of loyalty to the corporation or its
    stockholders;
  . acts or omissions not in good faith or which involve intentional
    misconduct or a knowing violation of law;
  . unlawful payments of dividends or unlawful stock repurchases or
    redemptions; or
  . any transaction from which the director derived an improper personal
    benefit.

  This limitation of liability does not apply to liabilities arising under
federal and state securities laws and does not affect the availability of
equitable remedies such as injunctive relief or rescission.

  Our certificate of incorporation and bylaws provide that we shall indemnify
our directors and executive officers and may indemnify other officers,
employees and other agents to the fullest extent permitted by law. We believe
that indemnification by our bylaws covers at least negligence on the part of
indemnified parties. Our bylaws also permit us to secure insurance on behalf of
any officer, director, employee or other agent for any liability arising out of
his or her actions in their capacity, regardless of whether the bylaws would
permit indemnification.

                                       48
<PAGE>

  We have entered into agreements to indemnify our directors and executive
officers, in addition to indemnification provided for in our bylaws. These
agreements, among other things, provide for indemnification of our directors
and executive officers for expenses (including attorneys' fees), judgments,
fines and settlement amounts incurred by any director or executive officer in
any action or proceeding, including any action by or on our behalf, arising out
of the individual's services as our director or executive officer, or the
director or executive officer of any subsidiaries or any other company or
enterprise to which the person provides services at our request. We believe
that these provisions and agreements are necessary to attract and retain
qualified persons as directors and executive officers.

  At present, there is no pending litigation or proceeding involving any of our
directors, officers or employees for which indemnification is sought. We are
not aware of any threatened litigation that may result in claims for
indemnification. We currently have liability insurance for our directors and
officers and intend to extend that coverage for public securities matters.

                                       49
<PAGE>

                              CERTAIN TRANSACTIONS

Summit Financing

  On July 23, 1998, Summit Ventures V, L.P., Summit V Advisors (QP) Fund, L.P.,
Summit V Advisors Fund, L.P., Summit Investors III, L.P. and several other
investors invested an aggregate of $51.8 million in Somera Communications, LLC
in exchange for 14,070,000 Class B units. These Class B units will be exchanged
for 14,070,000 shares of common stock upon the effectiveness of the
registration statement with respect to this offering. The parties also entered
into related agreements which provided for registration rights, liquidation
preferences, transfer restrictions, and specified other rights. These related
agreements specify that the Class B investors have the authority to elect two
individuals to the board of managers of Somera Communications, LLC. Currently,
two Class B representatives, Messrs. Kortschak and Chung, are members of the
board of directors of Somera Communications, Inc. The right of the Class B
investors to designate managers of Somera Communications, LLC, and directors of
Somera Communications, Inc., as well as the transfer restrictions, will
terminate upon this offering, although we expect Messrs. Kortschak and Chung to
continue to serve as directors.

Fleet National Bank Credit Facility

  On August 31, 1999, we entered into a credit agreement, consisting of a term
loan facility and a revolving loan facility with a syndicate of financial
institutions led by Fleet National Bank. As of September 1, 1999, $50 million
was outstanding under the term loan facility and $6.5 million has been drawn
under the revolving loan facility. We used the proceeds from the term loan
facility to make a distribution to our members, including certain of our
officers and directors, in the aggregate amount of $48.5 million. We plan to
use a portion of the net proceeds of this offering to repay all outstanding
amounts under the term loan facility and revolving loan facility. For
additional information on the terms of the Fleet credit facility, please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources," and for additional information
regarding repayment of the facility, please see "Use of Proceeds."

Loan From Officers and Related Parties

  From July 1996 through November 1998, we borrowed an aggregate of $3.5
million from Dan Firestone, Gil Varon, Robert Firestone, who is Dan Firestone's
father, and Voyage Partners, a partnership whose partners include Dan Firestone
and Gil Varon, under a series of promissory notes that carried annual interest
rates that varied between eight and thirteen percent. These notes were fully
repaid in September 1999.

Miller Loan Agreement

  We have provided Jeffrey G. Miller, our executive vice president of sales and
marketing, with a $600,000 interest-free mortgage loan. This loan was made in
conjunction with his employment agreement dated May 6, 1999 to assist with Mr.
Miller's relocation to the Santa Barbara, California area and his purchase of a
home. As of August 1, 1999, approximately $587,000 was outstanding on this
loan. For additional information regarding this loan, please see "Management--
Employment Agreements".

                                       50
<PAGE>

Promoters of Somera Communications

  Mr. Firestone and Mr. Varon are each promoters for purposes of the federal
securities laws. All material transactions with such persons are described in
this section or elsewhere in this prospectus. Please see "Management" and Note
4 to the financial statements.

                                       51
<PAGE>

                             PRINCIPAL STOCKHOLDERS

  The following table sets forth information with respect to beneficial
ownership of our common stock as of August 31, 1999, as adjusted to reflect the
sale of our common stock in this offering, by:

  . each person who beneficially owns more than 5% of the common stock;
  . each of our executive officers;
  . each of our directors; and
  . all executive officers and directors as a group.

  Beneficial ownership is determined under the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to shares. Unless otherwise indicated below, to our knowledge, the
persons and entities named in the table have sole voting and sole investment
power with respect to all shares beneficially owned, subject to community
property laws where applicable. Shares of common stock subject to options that
are currently exercisable or exercisable within 60 days of August 31, 1999 are
deemed to be outstanding and to be beneficially owned by the person holding the
options for the purpose of computing the percentage ownership of that person,
but are not treated as outstanding for the purpose of computing the percentage
ownership of any other person. Unless otherwise indicated, the address for each
listed stockholder is c/o Somera Communications, 5383 Hollister Avenue, Santa
Barbara, California 93111.

  The applicable percentage of ownership for each stockholder is based on
38,062,500 shares of common stock outstanding as of 1999, together with
applicable options for that stockholder.
<TABLE>
<CAPTION>
                                                   Percentage of Ownership
                                                ------------------------------
                            Number of Shares of
                               Common Stock
 Name of Beneficial Owner   Beneficially Owned  Before Offering After Offering
--------------------------- ------------------- --------------- --------------
<S>                         <C>                 <C>             <C>
Dan Firestone..............      9,285,036           24.4%           -- %
Jeffrey G. Miller..........            --               *              *
Gary J. Owen...............            --               *              *
Gil Varon..................      9,375,000           24.6            --
Walter G. Kortschak(1).....            --             --             --
 c/o Summit Partners, L.P.
 499 Hamilton Avenue, Suite
  200
 Palo Alto, CA 94301
Peter Y. Chung(2)..........            --             --             --
 c/o Summit Partners, L.P.
 499 Hamilton Avenue, Suite
  200
 Palo Alto, CA 94301
Barry Phelps...............            --             --             --
Summit Funds(3)............     13,757,333           36.1            --
 c/o Summit Partners, L.P.
 499 Hamilton Avenue, Suite
  200
 Palo Alto, CA 94301
All executive officers and
 directors as a group (7
 persons)..................     18,660,036           49.0            --
</TABLE>
--------
 *  Represents beneficial ownership of less than 1%
(1) Mr. Kortschak, one of our directors, is a managing member of Summit
    Partners, LLC, which is the general partner of Summit Partners, V, L.P.,
    which is the general partner of each of Summit Ventures V, L.P., Summit V
    Advisors (QP) Fund, L.P. and Summit V Advisors Fund, L.P. Mr. Kortschak is
    also a general partner of Summit Investors III, L.P. Mr. Kortschak
    disclaims beneficial ownership of the shares owned by the Summit Funds,
    except to the extent of his pecuniary interest therein.
(2) Mr. Chung, one of our directors, is a member of Summit Partners, LLC, which
    is the general partner of Summit Partners V, L.P., which is the general
    partner of each of Summit Ventures V, L.P., Summit V Advisors (QP) Fund,
    L.P. and Summit V Advisors Fund, L.P. Mr. Chung disclaims beneficial
    ownership of the shares owned by the Summit Funds, except to the extent of
    his pecuniary interest therein.
(3) Consists of 12,618,986 shares of common stock owned by Summit Ventures V,
    L.P., 723,116 shares of common stock owned by Summit V Advisors (QP) Fund,
    L.P., 220,978 shares of common stock owned by Summit V Advisors Fund, L.P.,
    and 194,253 shares of common stock owned by Summit Investors III, L.P.

                                       52
<PAGE>

                          DESCRIPTION OF CAPITAL STOCK

General

  Upon the completion of this offering, we will be authorized to issue
200,000,000 shares of common stock, $0.0001 par value, and 20,000,000 shares of
undesignated preferred stock, $0.0001 par value. The following description of
our capital stock does not purport to be complete and is subject to and
qualified in its entirety by our amended and restated certificate of
incorporation and bylaws, which are included as exhibits to the registration
statement of which this prospectus forms a part, and by the provisions of
applicable Delaware law.

Common Stock

  As of August 31, 1999, there were 38,062,500 shares of common stock
outstanding which were held of record by 22 stockholders.

  The holders of common stock are entitled to one vote per share on all matters
to be voted upon by the stockholders. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of common stock are
entitled to receive ratably dividends, if any, as may be declared from time to
time by the board of directors out of funds legally available for that purpose.
In the event of our liquidation, dissolution or winding up, the holders of
common stock are entitled to share ratably in all assets remaining after
payment of liabilities, subject to prior distribution rights of preferred
stock, if any, then outstanding. The holders of common stock have no preemptive
or conversion rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to the common stock. All outstanding shares
of common stock are fully paid and nonassessable, and the shares of common
stock to be issued upon the closing of this offering will be fully paid and
nonassessable.

Preferred Stock

  The board of directors has the authority, without action by the stockholders,
to designate and issue preferred stock in one or more series and to designate
the rights, preferences and privileges of each series, any or all of which may
be greater than the rights of the common stock. It is not possible to state the
actual effect of the issuance of any shares of preferred stock upon the rights
of holders of the common stock until the board of directors determines the
specific rights of the holders of the preferred stock. However, the effects
might include, among other things, restricting dividends on the common stock,
diluting the voting power of the common stock, impairing the liquidation rights
of the common stock and delaying or preventing a change of control without
further action by the stockholders. Immediately prior to the closing no shares
of preferred stock will be outstanding, and we have no present plans to issue
any shares of preferred stock.

Warrants

  As of August 1, 1999, we had an outstanding warrant to purchase 95,155 shares
of our common stock at an exercise price of $7.57 per share, and a outstanding
warrant to purchase 112,500 shares of our common stock at an exercise price of
$8.50 per share. Each of the warrants has a two-year term. Each of the warrants
has a net exercise provision under which the holder may, in the exercise price

                                       53
<PAGE>

in cash, surrender the warrant and receive a net amount of shares, based on the
fair market value of our stock at the time of the exercise of the warrant,
after deducting the aggregate exercise price.

Registration Rights

  As of August 31, 1999, the holders of 38,062,500 shares of our common stock
or their transferees are entitled to have us register their shares under the
Securities Act. These rights are provided under the terms of an agreement
between us and the holders of these securities. Subject to limitations in the
agreement, if we register any of our common stock either for our own account or
for the account of other security holders, these holders will be entitled to
include their shares of common stock in that registration, subject to the
ability of the underwriters to limit the number of shares included in the
offering. We will be responsible for paying all registration expenses,
including reasonable legal fees, and the holders selling their shares will be
responsible for paying all other selling expenses.

Delaware Anti-takeover Law and Certain Charter and Bylaw Provisions

  Provisions of Delaware law and our amended and restated certificate of
incorporation and bylaws summarized below could make it more difficult to
acquire us by means of a tender offer, a proxy contest or otherwise and to
remove our incumbent officers and directors. These provisions are expected to
discourage coercive takeover practices and inadequate takeover bids and to
encourage persons seeking to acquire control to first negotiate with us. We
believe that the benefits of increased protection of our potential ability to
negotiate with the proponent of an unfriendly or unsolicited proposal to
acquire or restructure us outweighs the disadvantages of discouraging these
proposals because, among other things, negotiations could result in improved
acquisition terms.

 Board of Directors

  Our board of directors will be divided into three classes of directors
serving staggered three year terms. Our bylaws authorize our board of directors
to fill vacant directorships or increase the size of the board of directors.
Accordingly, even if a stockholder brings a successful proxy fight, the
stockholder would likely only be able to elect a minority of our board of
directors at any single annual meeting.

 Stockholder Meetings

  Under our amended and restated certificate of incorporation and bylaws, the
board of directors, the chairman of the board and the president may call
special meetings of stockholders but the stockholders may not call a special
meeting.

 Requirements for Advance Notification of Stockholder Nominations and Proposals

  Our bylaws establish advance notice procedures with respect to stockholder
proposals and the nomination of candidates for election as directors, other
than nominations made by or at the direction of the board of directors or a
committee thereof.

                                       54
<PAGE>

 Delaware Anti-Takeover Law

  We are subject to Section 203 of the Delaware General Corporation Law, an
anti-takeover law. In general, Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years following the date the person became
an interested stockholder, unless (with some exceptions) the "business
combination" or the transaction in which the person became an interested
stockholder is approved in a prescribed manner. Generally, a "business
combination" includes a merger, asset or stock sale, or other transaction
resulting in a financial benefit to the interested stockholder. Generally, an
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years prior to the determination of
interested stockholder status, did own) 15% or more of a corporation's voting
stock. The existence of this provision would be expected to have an anti-
takeover effect with respect to transactions not approved in advance by the
board of directors, including discouraging attempts that might result in a
premium over the market price for the shares of common stock held by
stockholders.

 Undesignated Preferred Stock

  The authorization of undesignated preferred stock makes it possible for the
board of directors to issue preferred stock with voting or other rights or
preferences that could impede the success of any attempt to change our control.
These and other provisions may have the effect of deferring hostile takeovers
or delaying changes in control or management.

Transfer Agent and Registrar

  The transfer agent and registrar for the common stock is ChaseMellon
Shareholder Services LLC.

Nasdaq National Market Listing

  We have applied to list our common stock on the Nasdaq National Market under
the symbol "SMRA."

                                       55
<PAGE>

                        SHARES AVAILABLE FOR FUTURE SALE

  Sales of substantial amounts of our common stock in the public market
following the offering could cause the market price of our common stock to fall
and could affect our ability to raise capital on terms favorable to us.

  Of the      shares to be outstanding after the offering, assuming that the
underwriters do not exercise their over-allotment option, only the      shares
of common stock sold in this offering will be freely tradable without
restriction in the public market unless the shares are held by "affiliates," as
that term is defined in Rule 144(a) under the Securities Act of 1933. For
purposes of Rule 144, an "affiliate" of an issuer is a person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by or
is under common control with, the issuer. The remaining shares of common stock
to be outstanding after the offering are "restricted securities" under the
Securities Act of 1933 and may be sold in the public market upon the expiration
of the holding periods under Rule 144, described below, subject to the volume,
manner of sale and other limitations of Rule 144.

  In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares for at least one year, including an "affiliate," is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of:

  . 1% of the then outstanding shares of our common stock (approximately
    shares immediately following the offering); or
  . the average weekly trading volume during the four calendar weeks
    preceding filing of notice of the sale of shares of common stock.

  Sales under Rule 144 are also subject to certain manner of sale provisions,
notice requirements and the availability of current public information about
us. A stockholder who is deemed not to have been an "affiliate" of ours at any
time during the 90 days preceding a sale, and who has beneficially owned
restricted shares for at least two years, would be entitled to sell shares
under Rule 144(k) without regard to the volume limitations, manner of sale
provisions or public information requirements.

  In addition, as of August 31, 1999, there were outstanding warrants to
purchase 207,655 shares of common stock and options to purchase 1,490,093
shares of common stock, of which no options were fully vested. An additional
5,259,907 shares are reserved for issuance under our 1999 Stock Option Plan. We
intend to register the shares of common stock issuable or reserved for issuance
under the 1999 Stock Option Plan as soon as practicable following the date of
this prospectus.

  Holders of 38,062,500 shares of common stock are entitled to registration
rights with respect to these shares for resale under the Securities Act of
1933. If these holders, by exercising their registration rights, cause a large
number of shares to be registered and sold in the public market, these sales
could the market price for our common stock to fall. These registration rights
may not be exercised prior to the expiration of 180 days from the date of this
prospectus. See "Description of Capital Stock--Registration Rights."

Lock-up Arrangements

  Our directors and officers, along with stockholders who hold all shares of
our common stock have agreed not to sell or otherwise dispose of any shares of
common stock for a period of 180 days after the date of this prospectus without
prior written consent.

                                       56
<PAGE>

                                  UNDERWRITING

  Under the underwriting agreement, which is filed as an exhibit to the
registration statement relating to this prospectus, the underwriters named
below, for whom Lehman Brothers Inc., Dain Rauscher Wessels, a division of Dain
Rauscher Incorporated and Thomas Weisel Partners LLC are acting as
representatives, have each agreed to purchase from us the respective number of
shares of common stock shown opposite its name below:

<TABLE>
<CAPTION>
                                                                         Number
                                                                           of
        Underwriters                                                     Shares
        ------------                                                    --------
        <S>                                                             <C>
        Lehman Brothers Inc. ..........................................
        Dain Rauscher Wessels..........................................
        Thomas Weisel Partners LLC.....................................
                                                                        --------
        Total..........................................................
                                                                        ========
</TABLE>

  The underwriting agreement provides that the underwriters' obligations to
purchase shares of common stock depend on the satisfaction of the conditions
contained in the underwriting agreement and that, if any of the shares of
common stock are purchased by the underwriters under the underwriting
agreement, all of the shares of common stock that the underwriters have agreed
to purchase under the underwriting agreement, must be purchased. The conditions
contained in the underwriting agreement include the requirement that the
representations and warranties made by us to the underwriters are true, that
there is no material change in the financial markets and that we deliver to the
underwriters customary closing documents.

  The representatives have advised us that the underwriters propose to offer
the shares of common stock directly to the public at the public offering price
set forth on the cover page of this prospectus, and to dealers, who may include
the underwriters, at this public offering price less a selling concession not
in excess of $   per share. The underwriters may allow, and the dealers may
reallow, a concession not in excess of $    per share to brokers and dealers.
After the offering, the underwriters may change the offering price and other
selling terms.

  We have granted to the underwriters an option to purchase up to an aggregate
of      additional shares of common stock, exercisable solely to cover over-
allotments, if any, at the public offering price less the underwriting
discounts shown on the cover page of this prospectus. The underwriters may
exercise this option at any time until 30 days after the date of the
underwriting agreement. If this option is exercised, each underwriter will be
committed, so long as the conditions of the underwriting agreement are
satisfied, to purchase a number of additional shares of common stock
proportionate to the underwriter's initial commitment as indicated in the table
above and we will be obligated, under the over-allotment option, to sell the
shares of common stock to the underwriters.

  We have agreed that, without the prior consent of Lehman Brothers, we will
not, directly or indirectly, offer, sell or otherwise dispose of any shares of
common stock or any securities that may be converted into or exchanged for any
shares of common stock for a period of 180 days from the date of this
prospectus. All of our executive officers and directors and stockholders
holding all of the shares of our capital stock, including all of the holders of
the warrants, have agreed under lock-up

                                       57
<PAGE>

agreements that, without prior written consent, they will not, directly or
indirectly, offer, sell or otherwise dispose of any shares of common stock or
any securities that may be converted into or exchanged for any shares of common
stock for the period ending 180 days after the date of this prospectus. See
"Shares Available for Future Sale".

  Prior to the offering, there has been no public market for the shares of
common stock. The initial public offering price has been negotiated between the
representatives and us. In determining the initial public offering price of the
common stock, the representatives considered, among other things and in
addition to prevailing market conditions:

  . our historical performance and capital structure;
  . estimates of our business potential and earning prospects;
  . an overall assessment of our management; and
  . the above factors in relation to market valuations of companies in
    related businesses.

  We have applied to list our common stock on the Nasdaq Stock Market's
National Market under the symbol "SMRA."

  We have agreed to indemnify the underwriters against liabilities, including
liabilities under the Securities Act and liabilities arising from breaches of
the representations and warranties contained in the underwriting agreement, and
to contribute to payments that the underwriters may be required to make for
these liabilities.

  Until the distribution of the common stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the underwriters
and selling group members to bid for and purchase shares of common stock. As an
exception to these rules, the representatives are permitted to engage in
transactions that stabilize the price of the common stock. These transactions
may consist of bids or purchases for the purposes of pegging, fixing or
maintaining the price of the common stock.

  The underwriters may create a short position in the common stock in
connection with the offering, which means that they may sell more shares than
are set forth on the cover page of this prospectus. If the underwriters create
a short position, then the representatives may reduce that short position by
purchasing common stock in the open market. The representatives also may elect
to reduce any short position by exercising all or part of the over-allotment
option.

  The representatives also may impose a penalty bid on underwriters and selling
group members. This means that, if the representatives purchase shares of
common stock in the open market to reduce the underwriters' short position or
to stabilize the price of the common stock, they may reclaim the amount of the
selling concession from the underwriters and selling group members that sold
those shares as part of the offering.

  In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of these purchases. The
imposition of a penalty bid might have an effect on the price of a security to
the extent that it were to discourage resales of the security by purchasers in
an offering.

  Neither we nor any of the underwriters makes any representation or prediction
as to the direction or magnitude of any effect that the transactions described
above may have on the price of

                                       58
<PAGE>

the common stock. In addition, neither we nor any of the underwriters makes any
representation that the representatives will engage in these transactions or
that these transactions, once commenced, will not be discontinued without
notice.

  Any offers in Canada will be made only under an exemption from the
requirements to file a prospectus in the relevant province of Canada in which
the sale is made.

  Purchasers of the shares of common stock offered in this prospectus may be
required to pay stamp taxes and other charges under the laws and practices of
the country of purchase, in addition to the offering price listed on the cover
page of this prospectus.

  The underwriters have informed us that they do not intend to confirm sales to
accounts over which they exercise discretionary authority in excess of 5% of
the shares of common stock offered by them.

  At our request, the underwriters have reserved up to       shares of the
common stock offered by this prospectus for sale to our officers, directors,
employees and their family members and to our business associates at the
initial public offering price set forth on the cover page of this prospectus.
These persons must commit to purchase no later than the close of business on
the day following the date of this prospectus. The number of shares available
for sale to the general public will be reduced to the extent these persons
purchase the reserved shares.

  Thomas Weisel Partners LLC, one of the representatives of the underwriters,
was organized and registered as a broker-dealer in December 1998. Since
December 1998, Thomas Weisel Partners has been named as a lead or co-manager on
63 filed public offerings of equity securities, of which 33 have been
completed, and has acted as a syndicate member in an additional 32 public
offerings of equity securities. Thomas Weisel Partners does not have any
material relationship with us or any of our officers, directors or controlling
persons, except with regard to its contractual relationship with us pursuant to
the underwriting agreement entered into in connection with this offering.

                                 LEGAL MATTERS

  Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto, California, will pass upon
the validity of the issuance of the shares of common stock offered by this
prospectus. Cooley Godward LLP will pass upon certain legal matters in
connection with this offering for the Underwriters. Jeffrey D. Saper, a member
of Wilson Sonsini Goodrich & Rosati, P.C., serves as our Secretary. As of the
date of this prospectus, a member of Wilson Sonsini Goodrich & Rosati, P.C.,
owns a warrant exercisable into 112,500 shares of our common stock.

                                    EXPERTS

  The audited financial statements of Somera Communications LLC at December 31,
1997 and 1998 and June 30, 1999 and for the years ended December 31, 1996, 1997
and 1998 and six months ended June 30, 1999 included in this prospectus have
been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

                                       59
<PAGE>

                             AVAILABLE INFORMATION

  We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act of 1933 with respect to the
shares to be sold in this offering. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits and
schedules to the registration statement. For further information with respect
to us and the shares to be sold in this offering, we refer you to the
registration statement. Statements contained in this prospectus as to the
contents of any contract, agreement or other document to which we make
reference, are not necessarily complete. In each instance we refer you to the
copy of the contract, agreement or other document filed as an exhibit to the
registration statement, and each statement is qualified in all respects by the
more complete description.

  You may read and copy all or any portion of the registration statement at the
Commission's public reference room at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices at 5670
Wilshire Boulevard, 11th Floor, Los Angeles, California 90036. You can request
copies of these documents, upon payment of a duplicating fee, by writing to the
Commission or call the Commission at 1-800-SEC-0330 for further information on
the operation of the public reference rooms. Our Commission filings, including
the registration statement, will also be available to you on the Commission's
Internet site, http://www.sec.gov.

  We intend to send to our stockholders annual reports containing audited
consolidated financial statements and quarterly reports containing unaudited
financial statements for the first three quarters of each fiscal year.

                                       60
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Report of Independent Accountants.......................................... F-2
Balance Sheets............................................................. F-3
Statements of Operations................................................... F-4
Statement of Members' Capital (Deficit).................................... F-5
Statements of Cash Flows................................................... F-6
Notes to Financial Statements.............................................. F-7
</TABLE>

                                      F-1
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Members of
Somera Communications, LLC

  In our opinion, the accompanying balance sheets and the related statements of
operations, of members' capital (deficit) and of cash flows present fairly, in
all material respects, the financial position of Somera Communications, LLC at
December 31, 1997, 1998 and June 30, 1999 and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1998 and the six months ended June 30, 1999, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

San Jose, California
September 9, 1999

To the Members of
Somera Communications, LLC

  The accompanying financial statements included herein reflect the approval by
the Company's members of the Company's 3 for 2 split of the Company's Class A
and Class B units as described in Note 10. The above opinion is in the form
that will be signed by PricewaterhouseCoopers LLP upon the effectiveness of
such event assuming that from September 9, 1999 to the effective date of such
event, no other events shall have occurred that would affect the accompanying
financial statements.

PricewaterhouseCoopers LLP
San Jose, California
September 9, 1999

                                      F-2
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                                 BALANCE SHEETS
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                      Pro-forma
                                           December 31,               June 30,
                                          ---------------  June 30,     1999
                                           1997    1998      1999     (Note 9)
                                          ------ --------  --------  -----------
                                                                     (unaudited)
<S>                                       <C>    <C>       <C>       <C>
Assets
Current assets:
  Cash and cash equivalents.............  $1,419 $  1,930  $    482   $    --
  Accounts receivable, (net of allowance
   for doubtful
   accounts of $197, $249 and $458 at
   December 31,
   1997, 1998 and June 30, 1999,
   respectively)........................   6,095   10,237    14,989     14,989
  Inventories, net......................   1,456    4,067     9,994      9,994
  Other current assets..................     169      186       229        229
                                          ------ --------  --------   --------
    Total current assets................   9,139   16,420    25,694     25,212
Property and equipment, net.............     131      547     1,380      1,380
Deferred tax asset......................     --       --        --      17,000
Other assets............................      11       42       128        128
                                          ------ --------  --------   --------
    Total assets........................  $9,281 $ 17,009  $ 27,202   $ 43,720
                                          ====== ========  ========   ========
Liabilities, Mandatorily Redeemable
 Class B Units
and Members' Capital
 (Deficit)/Stockholders' Deficit
Current liabilities:
  Accounts payable......................  $4,130 $  5,901  $ 11,660   $ 11,660
  Borrowings under revolving loan
   facility.............................     --       --        779      9,363
  Accrued commissions...................     262      496       950        950
  Other accrued liabilities.............     145      541       651        651
  Capital lease obligations--current
   portion..............................     --       --        179        179
  Notes payable--current portion........     --       --      1,500        --
                                          ------ --------  --------   --------
    Total current liabilities...........   4,537    6,938    15,719     22,803
  Capital lease obligations--net of
   current portion......................     --       --        541        541
  Notes payable--net of current
   portion..............................     957    3,457     1,957        --
  Term debt.............................     --       --        --      49,250
                                          ------ --------  --------   --------
    Total liabilities...................   5,494   10,395    18,217     72,594
                                          ------ --------  --------   --------
  Commitments (Note 5)
Mandatorily redeemable Class B units....     --    51,750    51,750        --
                                          ------ --------  --------   --------


Members' Capital (Deficit)/Stockholders'
 Deficit
Members' capital (deficit)..............   3,787  (45,136)  (42,765)       --
Common stock: $0.001 par value
  Shares authorized: pro forma 200,000
   (unaudited)
  Shares issued and outstanding
  38,063 pro forma (unaudited)..........     --       --        --          38
Additional paid in capital..............     --       --        --      69,435
Accumulated deficit.....................     --       --        --     (98,347)
                                          ------ --------  --------   --------
    Total members' capital
     (deficit)/stockholders' deficit....   3,787  (45,136)  (42,765)   (28,874)
                                          ------ --------  --------   --------
    Total liabilities and members'
     capital (deficit)/stockholders'
     deficit............................  $9,281 $ 17,009  $ 27,202   $ 43,720
                                          ====== ========  ========   ========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-3
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                            STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)

<TABLE>
<CAPTION>
                                                            Six Months Ended
                                Year Ended December 31,         June 30,
                               -------------------------- --------------------
                                 1996     1997     1998      1998       1999
                               -------- -------- -------- ----------- --------
                                                          (unaudited)
<S>                            <C>      <C>      <C>      <C>         <C>
Net revenue................... $ 10,149 $ 34,603 $ 72,186  $ 34,417   $ 52,834
Cost of net revenue...........    5,532   20,587   43,132    21,037     34,023
                               -------- -------- --------  --------   --------
      Gross profit............    4,617   14,016   29,054    13,380     18,811
                               -------- -------- --------  --------   --------
Operating expenses:
  Sales and marketing.........      780    2,593    5,747     2,394      4,385
  General and administrative..      696    1,648    3,939     1,326      2,999
  Stock based compensation....      --       --       --        --         193
                               -------- -------- --------  --------   --------
    Total operating expenses..    1,476    4,241    9,686     3,720      7,577
                               -------- -------- --------  --------   --------
      Income from operations..    3,141    9,775   19,368     9,660     11,234
Interest expense, net.........       18       82      187        75        144
                               -------- -------- --------  --------   --------
      Net income.............. $  3,123 $  9,693 $ 19,181  $  9,585   $ 11,090
                               ======== ======== ========  ========   ========
Pro-forma net income per
 unit--basic.................. $   0.08 $   0.25 $   0.50  $   0.25   $   0.29
                               -------- -------- --------  --------   --------
Pro-forma weighted average
 units--basic.................   37,500   38,052   38,063    38,063     38,063
                               -------- -------- --------  --------   --------
Pro-forma net income per
 unit--diluted................ $   0.08 $   0.25 $   0.50  $   0.25   $   0.29
                               -------- -------- --------  --------   --------
Pro-forma weighted average
 units--diluted...............   37,500   38,052   38,063    38,063     38,069
                               -------- -------- --------  --------   --------
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F-4
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                    STATEMENT OF MEMBERS' CAPITAL (DEFICIT)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                            Mandatorily
                                                                             Redeemable
                            Class A Units     Class B Units                Class B Units
                          ------------------  ---------------             ----------------
                                                                 Total
                                                               Members'
                                                                Capital
                          Number     Value    Number   Value   (Deficit)  Number   Value
                          -------  ---------  ------  -------  ---------  ------- --------
<S>                       <C>      <C>        <C>     <C>      <C>        <C>     <C>
Balances, January 1,
 1996...................   10,099  $      68     --   $   --   $      68      --  $    --
Capital contributed.....   23,651        367   3,750       46        413      --       --
Net income..............      --       2,811     --       312      3,123      --       --
Distributions to
 members................      --      (2,118)    --      (235)    (2,353)     --       --
                          -------  ---------  ------  -------  ---------  ------- --------
Balances, December 31,
 1996...................   33,750      1,128   3,750      123      1,251      --       --
Capital contributed.....      563        300     --       --         300      --       --
Net income..............      --       8,738     --       955      9,693      --       --
Distributions to
 members................      --      (6,723)    --      (734)    (7,457)     --       --
                          -------  ---------  ------  -------  ---------  ------- --------
Balances, December 31,
 1997...................   34,313      3,443   3,750      344      3,787      --       --
Conversion of Class B
 units to Class A
 units..................    2,501        344  (2,501)    (344)       --       --       --
Proceeds from issuance
 of new units...........      --         --      --       --         --    14,070   51,750
Repurchase of members'
 units..................  (12,821)   (51,750) (1,249)     --     (51,750)     --       --
Net income..............      --      11,590     --     7,591     19,181      --       --
Distributions to
 members................      --     (14,986)    --    (1,368)   (16,354)     --       --
                          -------  ---------  ------  -------  ---------  ------- --------
Balances, December 31,
 1998...................   23,993    (51,359)    --     6,223    (45,136)  14,070   51,750
Net income..............      --       6,991     --     4,099     11,090      --       --
Distributions to
 members................      --      (5,618)    --    (3,294)    (8,912)     --       --
Warrants issued in
 exchange for services..      --         193     --       --         193      --       --
                          -------  ---------  ------  -------  ---------  ------- --------
Balances, June 30,
 1999...................   23,993  $ (49,793)    --   $ 7,028  $ (42,765)  14,070 $ 51,750
                          =======  =========  ======  =======  =========  ======= ========
</TABLE>




   The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                            Six Months Ended
                              Year Ended December 31,           June 30,
                              --------------------------  --------------------
                               1996     1997      1998       1998       1999
                              -------  -------  --------  ----------- --------
                                                          (Unaudited)
<S>                           <C>      <C>      <C>       <C>         <C>
Cash flows from operating
 activities:
 Net income.................. $ 3,123  $ 9,693  $ 19,181    $ 9,585   $ 11,090
 Adjustments to reconcile net
  income to net cash provided
  by operating activities:
 Depreciation and
  amortization...............      25       54       137         46         94
 Provision for doubtful
  accounts...................      49      145        52        113        209
 Provision for write-downs
  of inventories.............      35       10        12        327        539
 Warrants issued in exchange
  for services...............     --       --        --         --         193
 Training costs financed by
  capital lease..............     --       --        --         --          65
 Changes in operating assets
  and liabilities:
  Accounts receivable........  (2,159)  (4,038)   (4,194)    (4,104)    (4,961)
  Inventories................    (927)    (529)   (2,623)    (1,598)    (6,466)
  Other current assets.......    (310)     141       (17)      (209)       (43)
  Accounts payable...........   1,736    2,352     1,771      2,899      5,759
  Accrued commissions........     112      150       234        257        454
  Other accrued
   liabilities...............      76       66       396         91        110
                              -------  -------  --------    -------   --------
   Net cash provided by
    operating activities.....   1,760    8,044    14,949      7,407      7,043
                              -------  -------  --------    -------   --------
Cash flows from investing
 activities:
 Acquisition of property and
  equipment..................    (124)     (85)     (553)      (233)      (272)
 Decrease (increase) in other
  assets ....................     (13)       5       (31)       (65)       (86)
                              -------  -------  --------    -------   --------
   Net cash used in investing
    activities...............    (137)     (80)     (584)      (298)      (358)
                              -------  -------  --------    -------   --------

Cash flows from financing
 activities:
 Payments on line of credit..     (32)     --        --         --         --
 Proceeds from issuance of
  mandatorily redeemable
  class B units..............     413      300    51,750        --         --
 Proceeds from revolving loan
  facility...................     --       --        --         --         779
 Repurchase of members'
  capital....................     --       --    (51,750)       --         --
 Proceeds from notes
  payable....................     662      295     2,500      1,500        --
 Distributions to members....  (2,353)  (7,457)  (16,354)    (8,063)    (8,912)
                              -------  -------  --------    -------   --------
   Net cash used in financing
    activities...............  (1,310)  (6,862)  (13,854)    (6,563)    (8,133)
                              -------  -------  --------    -------   --------

Net increase (decrease) in
 cash and cash equivalents...     313    1,102       511        546     (1,448)
Cash and cash equivalents,
 beginning of year...........       4      317     1,419      1,419      1,930
                              -------  -------  --------    -------   --------
Cash and cash equivalents,
 end of year................. $   317  $ 1,419  $  1,930    $ 1,965   $    482
                              =======  =======  ========    =======   ========
Supplemental disclosures of
 cash flow information:
 Cash paid during the year
  for Interest............... $    14  $    98  $    201    $    81   $    175
                              =======  =======  ========    =======   ========
 Fixed assets acquired under
  capital lease.............. $   --   $   --   $    --     $   --    $    655
                              =======  =======  ========    =======   ========
</TABLE>



   The accompanying notes are an integral part of these financial statements

                                      F-6
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                         Notes To Financial Statements

Note 1--Formation and Business of the Company:

  Somera Communications, LLC (the "Company") was formed as a Limited Liability
Company in 1995 under the laws of the State of California. The Company is a
provider of telecommunications infrastructure equipment and services to
telecommunications carriers. The Company provides customers with a combination
of new, de-installed and refurbished equipment.

Note 2--Summary of Significant Accounting Policies:

 Basis of Presentation

  Commencing with fiscal 1997, the Company's fiscal years are on a 52 or 53
week basis. The 1997 and 1998 years which ended on December 28, 1997 and
January 3, 1999 were 52 and 53 week periods, respectively. The six months
presented ended on June 28, 1998 and July 4, 1999, respectively.

 Use of Estimates

  The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.

 Revenue Recognition

  Revenue is recognized upon shipment of the equipment if remaining obligations
are insignificant and collection of the resulting receivable is probable.
Estimated equipment returns and warranty costs, which are based on the
historical experience of the Company, are recorded upon recognition of revenue
where significant.

 Income Taxes

  The Company is treated as a partnership for federal and state income tax
purposes. Consequently, federal income taxes are not payable, or provided for,
by the Company. Members are taxed individually on their share of the Company's
earnings. The Company's net income or loss is allocated among the members in
accordance with the regulations of the Company.

 Concentration of Credit Risk and Other Risks and Uncertainties

  Financial instruments which potentially expose the Company to a concentration
of credit risk principally consist of cash and cash equivalents and accounts
receivable. The Company places its temporary cash with two high credit quality
financial institutions in the United States. The Company performs ongoing
credit evaluations of its customers' financial condition and generally requires
no collateral.

                                      F-7
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)


  During the year ended December 31, 1996 one customer accounted for 11.4% of
net revenue. During the year ended December 31, 1997 one customer accounted for
10.1% of net revenue. During the year ended December 31, 1998 one customer
accounted for 10.2% of net revenue and 12.0% of the total accounts receivable
at December 31, 1998. No individual customer accounted for more than 10% of net
revenue in the six months ended June 30, 1999.

  During the six months ended June 30, 1999 one supplier accounted for 11.0% of
new, de- installed and refurbished equipment purchases.

 Financial Instruments

  The carrying amounts of certain of the Company's financial instruments,
including cash and cash equivalents, accounts receivable, borrowing under
revolving loan facility, accounts payable and notes payable approximate fair
value due to their short-term maturities.

 Cash and Cash Equivalents

  For purposes of the statement of cash flows, the Company considers all highly
liquid instruments purchased with an original or remaining maturity of three
months or less, at the date of purchase, to be cash equivalents.

 Inventories

  Inventories, which are comprised of finished goods held for resale, are
stated at the lower of cost (determined on an average cost basis) or net
realizable value. Inventories are stated net of provisions for obsolete and
slow moving items.

 Property and Equipment

  Property and equipment are recorded at cost and are stated net of accumulated
depreciation. Depreciation is recorded using the straight-line method over the
estimated useful lives of the assets. These lives vary from three to seven
years.

  Leasehold improvements are amortized over the shorter of the estimated useful
life of the asset or remaining lease term on a straight-line basis.

  Expenditures for maintenance and repairs are charged to expense as incurred.
Additions, major renewals and replacements that increase the property's useful
life are capitalized. Gains and losses on dispositions of property and
equipment are included in net income.

  During 1999 the Company adopted the provisions of Accounting Standards
Executive Committee ("AcSEC") Statement of Position ("SOP") 98-1 "Accounting
for the Costs of Computer Software Developed or Obtained for Internal Use." Any
costs capitalized are depreciated on a straight-line basis over the lesser of
the estimated useful life of three years or the term of the lease.


                                      F-8
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

 Stock-based Compensation

  The Company uses the intrinsic value method of Accounting Principles Board
Opinion No. 25 or APB 25, "Accounting for Stock Issued to Employees," in
accounting for its employee stock options, and presents disclosure of pro forma
information required under Statement of Financial Accounting Standards No. 123
or SFAS 123, "Accounting for Stock-Based Compensation."

 Pro-forma Net Income Per Unit

  Basic net income per unit is computed by dividing the net income for the
period by the weighted average number of units outstanding during the period.
Diluted net income per unit is computed by dividing the net income for the
period by the weighted average number of units and equivalent units outstanding
during the period. Equivalent units, composed of units issuable upon the
exercise of options and warrants, are included in the diluted net income per
unit computation to the extent such units are dilutive. A reconciliation of the
numerator and denominator used in the calculation of basic and pro-forma
diluted net loss per unit follows (in thousands, except per unit data):

<TABLE>
<CAPTION>
                                                             Six Months Ended
                                    Year Ended December 31,      June 30,
                                    ----------------------- -------------------
                                     1996    1997    1998      1998      1999
                                    ------- ------- ------- ----------- -------
                                                            (unaudited)
<S>                                 <C>     <C>     <C>     <C>         <C>
Numerator
  Net income                        $ 3,123 $ 9,693 $19,181   $ 9,585   $11,090
                                    ------- ------- -------   -------   -------
Denominator
  Pro-forma weighted average
   units--basic....................  37,500  38,052  38,063    38,063    38,063
  Pro-forma diluted effect of
   options and warrants to purchase
   units...........................      --      --      --        --         6
                                    ------- ------- -------   -------   -------
  Pro-forma weighted average
   units--diluted..................  37,500  38,052  38,063    38,063    38,069
                                    ------- ------- -------   -------   -------
  Pro-forma net income per unit--
   basic........................... $  0.08 $  0.25 $  0.50   $  0.25   $  0.29
                                    ======= ======= =======   =======   =======
  Pro-forma net income per unit--
   diluted......................... $  0.08 $  0.25 $  0.50   $  0.25   $  0.29
                                    ======= ======= =======   =======   =======
</TABLE>

 Comprehensive Income

  The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 130 or SFAS No. 130, "Reporting Comprehensive Income." SFAS 130
establishes standards for reporting comprehensive income and its components in
financial statements. Comprehensive income, as defined, includes all changes in
equity during a period from non-owner sources. There was no difference between
the Company's net income and its total comprehensive income for the years ended
December 31, 1996, 1997 and 1998 and for the six months ended June 30, 1998
(unaudited) and June 30, 1999.

 Unaudited Interim Results

  The accompanying interim financial statements for the period ended June 30,
1998 are unaudited. The unaudited interim financial statements have been
prepared on the same basis as the annual financial statements and, in the
option of management, reflect all adjustments, which include

                                      F-9
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

only normal recurring adjustments, necessary to present fairly in all material
respects the Company's results of operations and its cash flows for the six
months ended June 30, 1998. The financial data and other information disclosed
in these notes to financial statements related to this period are unaudited.

 Recent Accounting Pronouncements

  In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 or SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS 133 establishes new standards of
accounting and reporting for derivative instruments and hedging activities.
SFAS 133 requires that all derivatives be recognized at fair value in the
statement of financial position, and that the corresponding gains or losses be
reported either in the statement of operations or as a component of
comprehensive income, depending on the type of hedging relationship that
exists. SFAS 133 will be effective for fiscal years beginning after June 15,
2000. The Company does not currently hold derivative instruments or engage in
hedging activities.

Note 3--Balance Sheet Accounts (in thousands):

<TABLE>
<CAPTION>
                                                           December
                                                              31,        June
                                                          ------------    30,
                                                          1997   1998    1999
                                                          -----  -----  -------
<S>                                                       <C>    <C>    <C>
Property and equipment, net


Computer and telephone equipment ........................ $ 142  $ 486  $ 1,265
Office equipment and furniture...........................    32    124      191
Warehouse equipment......................................    28     73       75
Leasehold improvements...................................     8     80      159
                                                          -----  -----  -------
                                                            210    763    1,690
Less accumulated depreciation and amortization...........   (79)  (216)    (310)
                                                          -----  -----  -------
                                                          $ 131  $ 547  $ 1,380
                                                          =====  =====  =======
</TABLE>

  Depreciation and amortization expense for the years ended December 31, 1996,
1997 and 1998 and the six months ended June 30, 1998 and 1999 amounted to
$25,000, $54,000, $137,000, $46,000 (unaudited) and $94,000, respectively.

  Included in computer and telephone equipment is an amount of approximately
$655,000 representing assets held under capital lease as of June 30, 1999. This
amount represents costs incurred to date in respect of software, hardware and
related costs arising from the implementation of the Company's new accounting
system. No depreciation or amortization has been charged on these amounts for
the six months ended June 30, 1999 as the implementation was not complete.

Note 4--Notes Payable:

  Included within notes payable are amounts payable to two of the Company's
members. At December 31, 1997 and 1998 and June 30, 1999, the aggregate amount
of notes payable to these members was $319,000, $619,000 and $619,000,
respectively.

                                      F-10
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)


  In March 1998, the Company issued a $1,000,000 note payable to an outside
partnership, of which a member is a general partner. This amount remains
outstanding at December 31, 1998 and June 30, 1999.

  Interest is payable monthly on all notes at rates varying between 8% and 13%,
and all notes mature at dates between 2000 and 2002. Repayment terms are
interest only with principal due on maturity date. The notes are unsecured.

  Repayments due on notes payable in each of the next three years are as
follows (in thousands):

<TABLE>
<CAPTION>
   Year Ending December 31,
   <S>                                                                   <C>
   2000................................................................. $2,500
   2001.................................................................    585
   2002.................................................................    372
                                                                         ------
                                                                          3,457
   Less: current portion................................................ (1,500)
                                                                         ------
   Notes payable--net of current portion................................ $1,957
                                                                         ======
</TABLE>

  On October 8, 1997, the Company entered into a revolving line of credit
facility of $2,500,000. There were no borrowings on this facility during each
of the years ended December 31, 1997 and 1998. On January 12, 1999, the Company
replaced this facility with a new revolving line of credit with the same bank.
The facility includes a fixed amount of $2,000,000 plus an amount based on a
percentage of eligible accounts receivable and inventory with a maximum amount
of $17,000,000 available. The facility matures on January 31, 2001 and bears
interest at LIBOR plus 2% (7.75% at June 30, 1999). Any drawings on this
facility are collateralized by all assets of the Company. There was $779,000
outstanding on this facility at June 30, 1999.

Note 5--Commitments:

  The Company is obligated under several operating leases for both office and
warehouse space. The lease terms range in length from five years to seven
years. Rent expense, net of sublease income, for the years ended December 31,
1996, 1997 and 1998 and for the six months ended June 30, 1998 and 1999 was
$60,000, $131,000, $297,000, $127,000 (unaudited) and $234,000, respectively.

  On June 1, 1999, the Company entered into a five year lease for new warehouse
space. The lease terms include two options to renew for three years and rentals
of $38,000 are due on a monthly basis.

                                      F-11
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)


  Future minimum lease payments, under noncancelable operating and capital
leases at June 30, 1999 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                               Capital Operating
                                                               Leases   Leases
                                                               ------- ---------
   <S>                                                         <C>     <C>
   1999.......................................................  $  91   $   466
   2000.......................................................    273       926
   2001.......................................................    272       918
   2002.......................................................    182       918
   2003.......................................................    --        706
   Thereafter.................................................    --        451
                                                                -----   -------
     Total minimum lease payments.............................    818   $ 4,385
                                                                        =======
     Less amount representing interest........................    (98)
                                                                -----
     Present value of capital lease obligations...............    720
     Less current portion.....................................   (179)
                                                                -----
       Capital lease obligations--net of current portion......  $ 541
                                                                =====
</TABLE>

  Under the terms of the lease agreements, the Company is also responsible for
internal maintenance, utilities and a proportionate share (based on square
footage occupied) of property taxes. The Company is also exposed to credit risk
in the event of default of the subleasee, because the Company is still liable
to meet its obligations under the terms of the original lease agreement.

Note 6--Members' Capital (Deficit):

  Members' capital includes two classes of units--Class A and Class B. At
December 31, 1997 there were 34,313,000 Class A and 3,750,000 Class B units
outstanding. At December 31, 1998 and June 30, 1999 there were 23,993,000 Class
A units and 14,070,000 Class B units outstanding. Each unit represents the
members proportionate allocation of net income or net loss.

  On July 24, 1998, the Company authorized the issuance and sale of an
aggregate of 14,070,000 Class B units, which represented 36.97% of the
outstanding units. Consideration of $51,750,000 was received in cash for the
sale of these units. The Company then authorized the repurchase of an aggregate
of 12,821,000 Class A units and an aggregate of 1,249,000 Class B units for an
aggregate amount of $51,750,000. Each of the remaining 2,501,000 Class B units
were exchanged for one Class A unit.

  The Class A units participate in the net income of the company based on their
percentage ownership. In addition, the holder of each Class A unit is entitled
to one vote per unit. The Class B units outstanding at June 30, 1999 differ
from the Class A units as follows:

  (a) On a change in ownership the Class B unit holders may elect to redeem
      all or any part of the Class B units at an amount equal to the greater
      of:

    (i)  the original cost thereof; or

    (ii) an amount equal to the number of Class B units to be redeemed
         multiplied by the maximum consideration payable with respect to
         any unit in such a change of ownership.

                                      F-12
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)


  (b) In the event of the bankruptcy of the Company, all of the Class B units
      are subject to immediate redemption at a price equal to the original
      cost thereof.

  (c) The Class B units convert automatically on the closing of a firm
      commitment underwritten public offering of the Company's (or a
      corporate successor's) equity securities resulting in proceeds to the
      Company or such corporate successor (net of underwriting discounts and
      commissions and related offering expenses) of at least $30 million at a
      price per share to the public of at least 200% of the original cost of
      each Class B unit.

  (d) In a winding up or liquidation of the Company, the Class B units are
      paid out in preference to the Class A units up to the amount of the
      original cost of the Class B units.

  The members' liability is limited to the total balance held in the members'
capital account.

  In May 1999, the Company effected a 2,500-for-1 split of the then outstanding
Class A and Class B units. The effect of this split has been retroactively
reflected throughout the financial statements.

 Warrants

  In May 1999, warrants exercisable into 95,155 Class A units were issued in
consideration for recruitment services. The warrants become fully exercisable
upon a merger or consolidation of the Company or upon completion of the
Company's initial public offering. The warrants are exercisable at $7.57 per
unit and have a two year term. The fair value of the warrants of approximately
$193,000 has been recorded as an expense in the six months ended June 30, 1999.
This was estimated using the Black-Scholes model and the following assumptions:
dividend yield of 0%; volatility of 40%; risk free interest rate of 5.58% and a
term of two years.

 Unit Option Plan

  In May 1999 the Company adopted the 1999 unit option plan (the "Plan") under
which 2,003,000 Class A units were reserved for issuance of stock options to
employees, directors, or consultants under terms and provisions established by
the Board of Managers. Under the terms of the Plan, incentive options may be
granted to employees, and nonstatutory options may be granted to employees,
directors and consultants, at prices no less than 100% and 85%, respectively,
of the fair market value of the Class A units at the date of grant, as
determined by the Board of Members. Options granted under the Plan vest at a
rate of 25% after one year with the remaining vesting evenly over the next
three years. The options expire ten years from the date of grant.

Activity under the Plan is set forth below:

<TABLE>
<CAPTION>
                                                    Options Outstanding
                                             ----------------------------------
                                                           Weighted
                                                     Price Average   Remaining
                                  Available           per  Exercise Contractual
                                  for Grant   Units  Unit   Price      Life
                                  ---------  ------- ----- -------- -----------
<S>                               <C>        <C>     <C>   <C>      <C>
  Units reserved at plan
   inception, May 1999........... 2,003,000
  Options granted................  (660,000) 660,000 $7.57  $7.57       9.9
                                  ---------  ------- -----  -----       ---
  Balances, June 30, 1999........ 1,343,000  660,000 $7.57  $7.57       9.9
                                  =========  ======= =====  =====       ===
</TABLE>

                                      F-13
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)


  At June 30, 1999 no options outstanding were exercisable. The weighted
average fair value of options granted during the six months ended June 30, 1999
was $1.84 per unit.

 Pro-forma Unit Compensation

  The Company has adopted the disclosure-only provisions of SFAS 123 for option
grants to employees. Had compensation cost been determined based on the fair
value at the grant date for the awards in 1999 consistent with the provisions
of SFAS 123, the Company's net income for 1999 would have been as follows (in
thousands, except per unit data):

<TABLE>
<CAPTION>
                                                                    Six Months
                                                                  Ended June 30,
                                                                       1999
                                                                  --------------
   <S>                                                            <C>
   Net income--as reported.......................................    $11,090
   Net income--as adjusted.......................................    $11,052
   Net income per unit--basic as reported........................    $  0.29
   Net income per unit--basic as adjusted........................    $  0.29
   Net income per unit--diluted as reported......................    $  0.29
   Net income per unit--diluted as adjusted......................    $  0.29
</TABLE>

  The Company calculated the fair value of each option grant on the date of
grant using the Black-Scholes option pricing model as prescribed by SFAS 123
using the following assumptions:

<TABLE>
<CAPTION>
                                                                    Six Months
                                                                  Ended June 30,
                                                                       1999
                                                                  --------------
   <S>                                                            <C>
   Risk-free interest rate.......................................      5.65%
   Expected life (in years)......................................         5
   Dividend yield................................................         0%
   Expected volatility...........................................         0%
</TABLE>

  As the determination of fair value of all options granted after such time as
the Company becomes a public entity will include an expected volatility factor
in addition to the factors described in the preceding paragraph, the above
results may not be representative of future periods.

Note 7--401(k) Savings Plan:

  In February 1998, the Company adopted a 401(k) Savings Plan (the "Savings
Plan") which covers all employees. Under the Savings Plan, employees are
permitted to contribute up to 20% of gross compensation not to exceed the
annual IRS limitation for any plan year ($10,000 in 1998). The Company matches
25% of employee contributions for all employees who receive less than 50% of
their total compensation in the form of commissions. The Company made matching
contributions of $15,000, $5,000 (unaudited) and $8,000 for the year ended
December 31, 1998 and for the six months ended June 30, 1998 and 1999,
respectively.

Note 8--Geographic Information:

  The Company has adopted Statement of Financial Accounting Standards No. 131,
or SFAS 131, "Disclosures about Segments of an Enterprise and Related
Information," effective for fiscal years

                                      F-14
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

beginning after December 31, 1997. SFAS 131 supersedes Statement of Financial
Accounting Standards No. 14, or SFAS 14, "Financial Reporting for Segments of a
Business Enterprise." SFAS 131 changes current practice under SFAS 14 by
establishing a new framework on which to base segment reporting and also
requires interim reporting of segment information. Management uses one
measurement of profitability for its business. The Company markets products and
related services to customers in the United States, North America, Europe and
Latin America.

  Net revenue information by geographic area is as follows (in thousands):
<TABLE>
<CAPTION>
                                                                          Net
                                                                        Revenue
                                                                        -------
   <S>                                                                  <C>
   Year ended December 31, 1996:
     United States..................................................... $ 9,454
     Canada............................................................     392
     Latin America.....................................................     302
     Other.............................................................       1
                                                                        -------
       Total........................................................... $10,149
                                                                        =======
   Year Ended December 31, 1997:
     United States..................................................... $28,907
     Canada............................................................     409
     Latin America.....................................................   5,204
     Other.............................................................      83
                                                                        -------
       Total........................................................... $34,603
                                                                        =======
   Year Ended December 31, 1998:
     United States..................................................... $57,958
     Canada............................................................     895
     Latin America.....................................................  13,051
     Other.............................................................     282
                                                                        -------
       Total........................................................... $72,186
                                                                        =======
   Six Months Ended June 30, 1999:
     United States..................................................... $45,760
     Canada............................................................   1,178
     Latin America.....................................................   5,547
     Other.............................................................     349
                                                                        -------
       Total........................................................... $52,834
                                                                        =======
</TABLE>

  All long lived assets are maintained in the United States.

Note 9--Unaudited Pro-forma Balance Sheet Data:

  Prior to the effectiveness of the public offering by Somera Communications,
Inc., a Delaware Corporation, the unit holders of the Company will exchange all
of their outstanding units for shares of common stock of the Delaware
Corporation, and the corporation will succeed the limited liability company.
Prior to this exchange the Company has made a distribution to its members of
approximately $48.5 million financed by a new term loan. In addition the
Company repaid the notes payable discussed in Note 4 to these financial
statements. The pro-forma effect of this reorganization, the new term loan, the
payment of the above distribution, the repayment of the notes payable together
with the payment of the July distribution to members have been presented as a
separate column in the Company's balance sheet assuming that the reorganization
had occurred at June 30, 1999.

                                      F-15
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)


Note 10--Subsequent Events:

 Distribution to Members

  In July 1999 the Company paid a distribution to members of approximately
$6,359,000.

 Loan to Officer

  On July 12, 1999 the Company entered into a mortgage loan agreement under
which it advanced $600,000 to an officer of the Company. The mortgage loan has
a term of eight years, is interest free and is secured on the principal
residence of the officer. Under the terms of the mortgage loan the amount
advanced will be forgiven as to $50,000 on each of the first four anniversaries
of the note and $100,000 on each of the fifth through eighth anniversaries.

  The loan can be forgiven in full in the event that the officer's employment
is either terminated without cause or is constructively terminated within 12
months of a change in control of the Company. If the officer's employment with
the Company ceases for any other reason, including death or disability, the
remaining balance becomes repayable to the Company. The term of repayment is
dependent upon the reason for the officer's employment ceasing and ranges from
six to eighteen months from the date of termination of employment.

  As a result of the above, the Company will record a compensation charge equal
to the amount forgiven for each period the loan is outstanding.

 Option Grants and Warrant Issuance

  On July 13, 1999, the Company issued stock options to two officers and one
outside director resulting in unearned stock-based compensation of $830,000
which will be recorded and amortized over the vesting period, generally four
years of the underlying options. The charge will be amortized to net income as
follows: $244,000 for the remainder of 1999, $367,000 on 2000, $148,000 in
2001, $63,000 in 2002 and $8,000 in 2003. In addition, the Company issued a
warrant to purchase 112,500 shares of common stock in exchange for services.
The warrants were immediately vested and will result in a one-time charge of
$337,000 to be recorded in the Company's third quarter results.

 Term Loan and Revolving Loan Facility

  On August 31, 1999, the Company signed an agreement under which a syndicate
of banks provided a $50 million term loan and $15 million revolving loan
facility.

  The term loan matures on August 31, 2004 and the Company is required to make
quarterly payments of principal and interest. The term loan and revolving
credit facility are secured by all of the Company's assets.

                                      F-16
<PAGE>

                           SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)


 Distribution to Members and Repayment of Notes Payable

  On August 31, 1999, the Company paid a distribution of $48.5 million to its
members. In addition, the Company repaid the notes payable described in Note 4
to these financial statements.

 Stock Split

  On September 9, 1999 the Company approved a 3 for 2 split of its Class A and
B units which will be effected prior to any exchange of outstanding units for
shares of common stock of Somera Communications, Inc. ("Somera Delaware"), a
Delaware Corporation. All unit data and unit option plan information have been
restated to reflect the effect of the forward split.

  On September 9, 1999 the Board of Managers resolved to take all actions
necessary to assist Somera Delaware in the preparation, execution and filing
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, a Registration Statement on Form S-1 relating to the public
offering by Somera Delaware of up to $115 million of its authorized but
unissued shares of Common Stock.


                                      F-17
<PAGE>

                                       Shares


                                 [SOMERA LOGO]


                                  Common Stock


                                 -------------

                                   PROSPECTUS
                                        , 1999

                                 -------------


                                Lehman Brothers

                             Dain Rauscher Wessels
                    a division of Dain Rauscher Incorporated

                           Thomas Weisel Partners LLC
<PAGE>

                                    Part II

                     Information Not Required In Prospectus

Item 13. Other Expenses of Issuance and Distribution.

  The following table sets forth the costs and expenses, other than the
underwriting discounts and commissions, payable by the Registrant in connection
with the sale of the securities being registered. All amounts are estimates
except the SEC registration fee, the NASD filing fee and the Nasdaq/National
Market System listing fee.

<TABLE>
   <S>                                                                  <C>
   SEC Registration Fee................................................ $31,970
   NASD Filing Fee.....................................................  12,000
   Nasdaq National Market Listing Fee..................................      *
   Printing Costs......................................................      *
   Legal Fees and Expenses.............................................      *
   Accounting Fees and Expenses........................................      *
   Blue Sky Fees and Expenses..........................................      *
   Transfer Agent and Registrar Fees...................................      *
   Miscellaneous.......................................................      *
                                                                        -------
       Total........................................................... $    *
                                                                        =======
</TABLE>
--------
* To be filed by amendment

Item 14. Indemnification of Directors and Officers.

  Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended. Article IX of
our Amended and Restated Certificate of Incorporation (Exhibit 3.2 hereto) and
Article VI of our current Bylaws (Exhibit 3.3 hereto) provide for
indemnification of our directors, officers, employees and other agents to the
maximum extent permitted by Delaware law. In addition, we have entered into
Indemnification Agreements (Exhibit 10.1 hereto) with our officers and
directors. The Underwriting Agreement (Exhibit 1.1) also provides for cross-
indemnification among Somera Communications, Inc. and the Underwriters with
respect to certain matters, including matters arising under the Securities Act.

Item 15. Recent Sales of Unregistered Securities.

  Since August 1996, the company has issued and sold the following securities:

  1. In April 1997, the company issued an aggregate of 563,000 of its Class A
     units to 3 investors for an aggregate cash consideration of $300,000.

  2. On July 23, 1998, the company issued an aggregate of 14,070,000 of its
     Class B units to 8 accredited investors for an aggregate cash
     consideration of $51,750,000.

  3. On May 6, 1999, the company issued a warrant to purchase 95,155 of its
     Class A units with an exercise price of $7.57 per share to a party in
     partial consideration for the rendering of professional services to the
     company.

  4. On July 13, 1999, the company issued a warrant to purchase 112,500 of
     its Class A units with an exercise price of $8.50 per unit to a party in
     partial consideration for the rendering of professional services to the
     company.

                                      II-1
<PAGE>

  The issuances of the above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act, or Regulation D promulgated thereunder, or with respect to
issuances to employees, directors and consultants, Rule 701 promulgated under
Section 3(b) of the Securities Act as transactions by an issuer not involving a
public offering or transactions pursuant to compensatory benefit plans and
contracts relating to compensation as provided under Rule 701. The recipients
of securities in each such transaction represented their intentions to acquire
the securities for investment only and not with a view to or for sale in
connection with any distribution thereof and appropriate legends were affixed
to the share certificates and warrants issued in such transactions. All
recipients either received adequate information about us or had adequate
access, through their relationships with us, to information about us.

Item 16. Exhibits and Financial Statement Schedules.

  (a) Exhibits

<TABLE>
   <C>    <S>
    1.1*  Form of Underwriting Agreement.
    3.1   Certificate of Incorporation of Somera Communications, Inc., a
          Delaware corporation, as currently in effect.
    3.2   Form of Amended and Restated Certificate of Incorporation of Somera
          Communications, Inc. to be filed immediately following the closing of
          the offering made under this registration statement.
    3.3   Bylaws of Somera Communications, Inc., as currently in effect.
    4.1*  Specimen common stock certificate.
    5.1*  Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
   10.1   Form of Indemnification Agreement between Somera Communications, Inc.
          and each of its directors and officers.
   10.2   1999 Stock Option Plan and form of agreements thereunder (as adopted
          September 3, 1999).
   10.3   1999 Employee Stock Purchase Plan (as adopted September 3, 1999).
   10.4   1999 Director Option Plan and form of agreements thereunder (as
          adopted September 3, 1999).
   10.5   Loan Agreement by and between Somera Communications and Fleet
          National Bank, dated August 31, 1999.
   10.6   Security Agreement by and between Somera Communications and Fleet
          National Bank, dated August 31, 1999.
   10.7   Employment Agreement between Somera Communications and Jeffrey
          Miller, dated May 6, 1999.
   10.8   Employment Agreement between Somera Communications and Gary Owen,
          dated July 16, 1999.
   10.9   Lease dated January 20, 1998 between Santa Barbara Corporate Center,
          LLC and Somera Communications.
   10.10  First Amendment to Lease, dated February 2, 1998, between Santa
          Barbara Corporate Center, LLC and Somera Communications.
   10.11  Second Amendment to Lease, dated February 1, 1999, between Santa
          Barbara Corporate Center, LLC and Somera Communications.
   10.12* Industrial/Commercial Lease, dated May 12, 1999, between Sunbelt
          Properties and Somera Communications.
   10.13  Sublease, dated January 30, 1999, between GRC International, Inc. and
          Somera Communications.
   23.1   Consent of PricewaterhouseCoopers LLP.
   23.2*  Consent of Wilson Sonsini Goodrich & Rosati, P.C. (included in
          Exhibit 5.1).
   24.1   Powers of Attorney (included on signature page to Registration
          Statement).
   27.1   Financial Data Schedule.
</TABLE>
--------
*To be supplied by amendment.

                                      II-2
<PAGE>

  (b) Financial Statement Schedules.

<TABLE>
<CAPTION>
            Schedule
            --------                                ---
            <S>                                     <C>
            II - Valuation and Qualifying Accounts
</TABLE>

Item 17. Undertakings.

  The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

  Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

  The undersigned registrant hereby undertakes that:

    (1) For purposes of determining any liability under the Securities Act of
  1933, the information omitted from the form of prospectus filed as part of
  this registration statement in reliance upon Rule 430A and contained in a
  form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
  (4) or 497(h) under the Securities Act shall be deemed to be part of this
  registration statement as of the time it was declared effective.

    (2) For the purpose of determining any liability under the Securities Act
  of 1933, each post-effective amendment that contains a form of prospectus
  shall be deemed to be a new registration statement relating to the
  securities offered therein, and the offering of such securities at that
  time shall be deemed to be the initial bona fide offering thereof.

                                      II-3
<PAGE>

                                   SIGNATURES

  Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Santa
Barbara, State of California on September 10, 1999.

                                          By:
                                               /s/ Daniel A. Firestone
                                             ----------------------------------
                                                   Daniel A. Firestone
                                                 Chief Executive Officer

                               POWER OF ATTORNEY

  KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints, jointly and severally, Daniel A.
Firestone and Gary J. Owen, and each of them, as his attorney-in-fact, with
full power of substitution, for him in any and all capacities, to sign any and
all amendments to this registration statement (including post-effective
amendments), and any and all registration statements filed pursuant to Rule 462
under the Securities Act of 1933, as amended, in connection with or related to
the offering contemplated by this registration statement and its amendments, if
any, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming their signatures as they may be signed by our said
attorney to any and all amendments to said registration statement.

  Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons in the
capacities indicated on September 10, 1999:

<TABLE>
<CAPTION>
             Signatures                            Title
             ----------                            -----

<S>                                   <C>                              <C>
     /s/ Daniel A. Firestone          President, Chief Executive
_____________________________________  Officer and Chairman of the
         Daniel A. Firestone           Board (Principal Executive
                                       Officer)

        /s/ Gary J. Owen              Chief Financial Officer
_____________________________________  (Principal Financial and
            Gary J. Owen               Accounting Officer)

          /s/ Gil Varon               Director
_____________________________________
              Gil Varon

    /s/ Walter G. Kortschak           Director
_____________________________________
         Walter G. Kortschak

       /s/ Peter Y. Chung             Director
_____________________________________
           Peter Y. Chung

        /s/ Barry Phelps              Director
_____________________________________
            Barry Phelps
</TABLE>


                                      II-4
<PAGE>

                                                                     SCHEDULE II

                      REPORT OF INDEPENDENT ACCOUNTANTS ON
                          FINANCIAL STATEMENT SCHEDULE

To the Members
of Somera Communications, LLC:

  Our audits of the financial statements referred to in our report dated
September 9, 1999 appearing in this Registration Statement on Form S-1 also
included an audit of the financial statement schedule listed in Item 16 of this
Form S-1. In our opinion, this financial statement schedule presents fairly, in
all material respects, the information set forth therein when read in
conjunction with the related financial statements.

PricewaterhouseCoopers LLP

San Jose, California
September 9, 1999
<PAGE>

                                                                     SCHEDULE II

                       VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)

<TABLE>
<CAPTION>
                                               Additions
                                    Balance at Charged to            Balance at
                                    Beginning  Costs and               Ending
                                    of Period   Expenses  Deductions of Period
                                    ---------- ---------- ---------- ----------
<S>                                 <C>        <C>        <C>        <C>
Year Ended December 31, 1996
  Allowance for sales returns......    $  1       $ 79       $ 41       $ 39
  Allowance for doubtful accounts..       3         49        --          52
  Allowance for write-downs of
   inventory.......................     --         163        128         35

Year Ended December 31, 1997
  Allowance for sales returns......    $ 39       $249       $138       $150
  Allowance for doubtful accounts..      52        145        --         197
  Allowance for write-downs of
   inventory                             35        370        360         45

Year Ended December 31, 1998
  Allowance for sales returns......    $150       $424       $289       $285
  Allowance for doubtful accounts..     197        201        149        249
  Allowance for write-downs of
   inventory.......................      45        634        622         57

Six Months Ended June 30, 1999
  Allowance for sales returns......    $285       $276       $211       $350
  Allowance for doubtful accounts..     249        209        --         458
  Allowance for write-downs of
   inventory.......................      57        615         76        596

</TABLE>

<PAGE>

                                 Exhibit Index

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
  1.1*   Form of Underwriting Agreement.
  3.1    Certificate of Incorporation of Somera Communications, Inc., a
         Delaware corporation, as currently in effect.
  3.2    Form of Amended and Restated Certificate of Incorporation of Somera
         Communications, Inc. to be filed immediately following the closing of
         the offering made under this registration statement.
  3.3    Bylaws of Somera Communications, Inc., as currently in effect.
  4.1*   Specimen common stock certificate.
  5.1*   Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
 10.1    Form of Indemnification Agreement between Somera Communications, Inc.
         and each of its directors and officers.
 10.2    1999 Stock Option Plan and form of agreements thereunder (as adopted
         September 3, 1999).
 10.3    1999 Employee Stock Purchase Plan (as adopted September 3, 1999).
 10.4    1999 Director Option Plan and form of agreements thereunder (as
         adopted September 3, 1999).
 10.5    Loan Agreement by and between Somera Communications and Fleet National
         Bank, dated August 31, 1999.
 10.6    Security Agreement by and between Somera Communications and Fleet
         National Bank, dated August 31, 1999.
 10.7    Employment Agreement between Somera Communications and Jeffrey Miller,
         dated May 6, 1999.
 10.8    Employment Agreement between Somera Communications and Gary Owen,
         dated July 16, 1999.
 10.9    Lease dated January 20, 1998 between Santa Barbara Corporate Center,
         LLC and Somera Communications.
 10.10   First Amendment to Lease, dated February 2, 1998, between Santa
         Barbara Corporate Center, LLC and Somera Communications.
 10.11   Second Amendment to Lease, dated February 1, 1999, between Santa
         Barbara Corporate Center, LLC and Somera Communications.
 10.12*  Industrial/Commercial Lease, dated May 12, 1999, between Sunbelt
         Properties and Somera Communications.
 10.13   Sublease, dated January 30, 1999, between GRC International, Inc. and
         Somera Communications.
 23.1    Consent of PricewaterhouseCoopers LLP
 23.2*   Consents of Wilson Sonsini Goodrich & Rosati, P.C. (included in
         Exhibit 5.1)
 24.1    Powers of Attorney (included on signature page to Registration
         Statement)
 27.1    Financial Data Schedule
</TABLE>
--------
*To be supplied by amendment.
[{"type": "S-1", "sequence": "1", "description": "FORM S-1", "secsgml_size_bytes": 279307}]
{"company-data": {"conformed-name": "SOMERA COMMUNICATIONS INC", "cik": "0001094243", "assigned-sic": "", "irs-number": "770407502", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-86927", "film-number": "99709798"}, "business-address": {"street1": "5383 HOLLISTER AVENUE", "city": "SANTA BARBARA", "state": "CA", "zip": "93111", "phone": "8056813322"}, "mail-address": {"street1": "5383 HOLLISTER AVENUE", "city": "SANTA BARBARA", "state": "CA", "zip": "93111"}}
As filed with the Securities and Exchange Commission on September 10, 1999
                                                       Registration No. 333-
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                ---------------

                                   FORM S-1
                            REGISTRATION STATEMENT
                                     Under
                          THE SECURITIES ACT OF 1933

                                ---------------

                          SOMERA COMMUNICATIONS, INC.
            (Exact name of Registrant as specified in its charter)

                                ---------------

       Delaware                    5065                    77-0521878
   (State or other          (Primary Standard           (I.R.S. Employer
   jurisdiction of              Industrial               Identification
   incorporation or        Classification Code              Number)
    organization)                Number)

                             5383 Hollister Avenue
                        Santa Barbara, California 93111
                                (805) 681-3322
  (Address, including zip code, and telephone number, including area code, of
                   Registrant's principal executive offices)

                                 DAN FIRESTONE
                            Chief Executive Officer
                          Somera Communications, Inc.
                             5383 Hollister Avenue
                        Santa Barbara, California 93111
                                (805) 681-3322
(Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

                                  Copies to:

        Jeffrey D. Saper, Esq.               Patrick A. Pohlen, Esq.
    Richard Jay Silverstein, Esq.               COOLEY GODWARD LLP
         Craig N. Lang, Esq.                    5 Palo Alto Square
   WILSON SONSINI GOODRICH & ROSATI            3000 El Camino Real
       Professional Corporation                Palo Alto, CA 94306
          650 Page Mill Road                      (650) 843-5000
         Palo Alto, CA 94304
            (650) 493-9300

                                ---------------

  Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
  If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
  If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
  If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
  If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
  If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

                                ---------------

                        CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Proposed Maximum      Amount of
 Title of Each Class of Securities to be Registered   Offering Price(1)  Registration Fee
-----------------------------------------------------------------------------------------
Common Stock $0.001 par value per share............     $115,000,000         $31,970
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(1) Estimated pursuant to Rule 457(o) solely for the purpose of calculating
    the amount of the registration fee.

                                ---------------

  The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the     +
+Securities and Exchange Commission is effective. This prospectus is not an    +
+offer to sell these securities and we are not soliciting offers to buy these  +
+securities in any state where the offer or sale is not permitted.             +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                Subject to Completion, dated September 10, 1999

PROSPECTUS

                                       Shares

                                [LOGO OF SOMERA]

                                  Common Stock

--------------------------------------------------------------------------------

  This is our initial public offering of shares of common stock. We are
offering    shares. No public market currently exists for our shares.

  We propose to list our common stock on the Nasdaq National Market under the
symbol "SMRA." Anticipated price range of $     to $     per share.

    Investing in the shares involves risks. "Risk Factors" begin on page 6.
Per
                                                                     Share Total
                                                                     ----- -----
Public Offering Price............................................... $     $
Underwriting Discount............................................... $     $
Proceeds to Somera Communications................................... $     $
We have granted the underwriters a 30-day option to purchase up to
additional shares of common stock on the same terms and conditions as set forth
above solely to cover over-allotments, if any.

  Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

  Lehman Brothers expects to deliver the shares on or about       , 1999.

--------------------------------------------------------------------------------

Lehman Brothers

              Dain Rauscher Wessels
                a division of Dain Rauscher Incorporated

                                                      Thomas Weisel Partners LLC

      , 1999
[INSIDE FRONT COVER ARTWORK]

          [We intend to file cover artwork and captions by amendment.]
TABLE OF CONTENTS
Page
                                         ----
Prospectus Summary......................   1
Risk Factors............................   6
Use of Proceeds.........................  16
Dividend Policy.........................  16
Capitalization..........................  17
Dilution................................  19
Selected Financial Data.................  21
Management's Discussion and Analysis of
 Financial Condition and Results of
 Operations.............................  22
Business................................  31
Page
                                    ----
Management........................   41
Certain Transactions..............   50
Principal Stockholders............   52
Description of Capital Stock......   53
Shares Available for Future Sale..   56
Underwriting......................   57
Legal Matters.....................   59
Experts...........................   59
Available Information.............   60
Index to Financial Statements.....  F-1
---------------

                             ABOUT THIS PROSPECTUS

  You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information that is different from
that contained in this prospectus. We are offering to sell shares of common
stock and seeking offers to buy shares of common stock only in jurisdictions
where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of
the time of delivery of this prospectus or of any sale of the common stock.

  This preliminary prospectus is subject to completion prior to this offering.
Among other things, this preliminary prospectus describes our company as we
currently expect it to exist at the time of the offering.

  See the section of this prospectus entitled "Risk Factors" for a discussion
of factors that you should consider before investing in our common stock.

  Unless otherwise indicated, all information in this prospectus:

  . Reflects a 3 for 2 split of the Class A units and Class B units of Somera
    Communications, LLC, a California limited liability company;
  . Reflects the exchange of all of the Class A units and Class B units of
    Somera Communications, LLC, for shares of common stock of Somera
    Communications, Inc., a Delaware corporation, prior to this offering;
  . Reflects the assumption of the operations, assets, liabilities and
    commitments of Somera Communications, LLC by Somera Communications, Inc.
    prior to this offering;
  . Assumes the filing of our amended and restated certificate of
    incorporation, which, among other things, will authorize 200 million
    shares of common stock and 20 million shares of undesignated preferred
    stock; and
  . Assumes no exercise of the underwriters' over-allotment option.

  Certain statements under the captions "Prospectus Summary," "Risk Factors,"
"Use of Proceeds," "Management's Discussion and Analysis of Financial
Conditions and Results of Operations" and "Business" and elsewhere in this
prospectus are forward-looking statements. These forward-looking statements
include, but are not limited to, statements about our plans, objectives,
expectations and intentions and other statements contained in the prospectus
that are not historical facts. When used in this prospectus, the words
"expects," "anticipates," "intends," "plans," "believes," "seeks" and
"estimates" and similar expressions are generally intended to identify forward-
looking statements. Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause actual results to
differ materially from those expressed or implied by these forward-looking
statements, including our plans, objectives, expectations and intentions and
other factors discussed under "Risk Factors."

  All trademarks or service marks appearing in this prospectus are the property
of their respective holders.

  References in this prospectus to "Somera Communications," "we," "our," and
"us" refer to Somera Communications, Inc. and our predecessor, Somera
Communications, LLC, unless the context otherwise requires. Somera
Communications, LLC was formed in California on July 27, 1995. Somera
Communications, Inc. was incorporated as a Delaware corporation in August 1999.
The unit holders of Somera Communications, LLC will exchange all of their
outstanding units for shares of common stock of, and Somera Communications, LLC
will be succeeded by, Somera Communications, Inc. prior to this offering. Our
principal executive offices are located at 5383 Hollister Avenue, Santa
Barbara, California 93111. Our telephone number is (805) 681-3322. Our web site
address is www.somera.com. Information contained on our web site does not
constitute part of this prospectus.

  Until    1999, all dealers that buy, sell or trade the common stock, whether
or not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to unsold allotments or subscriptions.
PROSPECTUS SUMMARY

  You should read the following summary together with the more detailed
information regarding our company, the common stock being sold in this offering
and our financial statements and related notes appearing elsewhere in this
prospectus.

  We provide telecommunications carriers with a broad range of infrastructure
equipment and related services designed to meet their specific and changing
equipment needs. We offer our customers a unique combination of new, de-
installed and refurbished equipment from a variety of manufacturers, allowing
them to make multi-vendor purchases from a single, cost-effective source. To
further address our customers' dynamic equipment needs, we offer a suite of
customized, value-added services, including asset recovery, inventory
management, technical support and other ancillary services. We sell equipment
to over 750 customers, including leading carriers such as ALLTEL Corporation,
AT&T Corporation, McLeodUSA, Inc., Sprint Corporation, United States Cellular
Corp. and Vodafone AirTouch plc. For the twelve months ended June 30, 1999, we
had net revenue of $90.6 million, gross profit of $34.5 million and net income
of $20.7 million.

  The telecommunications infrastructure equipment market has experienced
tremendous growth in recent years. Dataquest projects that worldwide sales of
telecommunications infrastructure equipment will grow from $180 billion in 1998
to $230 billion in 2002. Telecommunications carriers are facing a number of
challenges, including increased competition, the need to rapidly expand service
offerings, increased demand for communications services and technology
advancements. These challenges are having a significant impact on carriers'
equipment and service needs. Carriers have invested hundreds of billions of
dollars in telecommunications network infrastructure. To maximize the value of
their investments, carriers are expanding and upgrading their existing networks
and utilizing existing and new technologies and equipment from multiple
vendors. In addition, carriers are seeking cost-effective ways to expand and
maintain existing elements of their networks based on mature technologies. A
significant portion of the equipment replaced by carriers, referred to as de-
installed equipment, is suitable for redeployment in other parts of a carrier's
network. While historically carriers may have scrapped de-installed equipment
or let it remain idle, competitive factors increasingly require carriers to
recapture a portion of their original investment. As they attempt to respond to
their changing equipment and service needs, carriers are discovering that
traditional equipment suppliers, including original equipment manufacturers, or
OEMs, distributors and niche secondary market dealers are unable to fulfill
their complex and changing equipment needs.

  Our innovative equipment and service offerings are delivered through our team
of 75 sales and procurement professionals, who work individually with carriers
to understand, anticipate and meet their ongoing equipment requirements. Our
sales teams utilize our relationship management database, our selective
inventory and our distribution center to provide our customers with rapidly
deployable equipment solutions.

                                       1
The key benefits of our solution include:

  . Broad Multi-vendor Equipment Offering. We provide customers with an
    effective alternative to traditional telecommunications equipment supply
    channels by offering a broad range of new, de-installed and refurbished
    equipment from a variety of manufacturers. We offer infrastructure
    equipment, including switching, transmission, access, wireless, microwave
    and power products.

  . Rapid Responsiveness to Dynamic Customer Needs. We provide carriers with
    convenient access to our skilled and dedicated sales and service
    professionals who are capable of quickly identifying and responding to
    their diverse equipment needs. We are able to quickly locate and provide
    equipment to carriers by using our relationship management database and
    maintaining selective inventory.

  . Flexible Asset Recovery Programs. We provide innovative and effective
    asset recovery programs that enable carriers to cost-effectively build,
    upgrade and maintain their networks and to recapture value from their
    excess and de-installed equipment.

  . Simplified, Value-added Materials Management Services. We provide
    carriers with a full range of value-added services, including technical,
    materials management and other network deployment services that
    simplifies the management of their equipment inventory and allows them to
    focus more on their core business.

  Our objective is to be the premier provider of telecommunications
infrastructure equipment and related services to carriers worldwide. Key
elements of our strategy include:

  . Expanding our penetration of the telecommunications carrier market;

  . Expanding our product lines and service capabilities;

  . Increasing our penetration into the regional bell operating companies, or
    RBOCs;

  . Pursuing opportunities for international growth; and

  . Pursuing selective acquisitions.

                                       2
The Offering
Common stock offered by Somera Communications..     shares

 Common stock outstanding after the offering....     shares

 Use of proceeds................................ We intend to use the net
                                                 proceeds of this offering to
                                                 repay outstanding bank
                                                 indebtedness, for capital
                                                 expenditures and for general
                                                 corporate purposes, including
                                                 working capital. See "Use of
                                                 Proceeds."

 Dividend policy................................ We do not intend to pay
                                                 dividends on our common stock.
                                                 We plan to retain earnings for
                                                 use in the operation of our
                                                 business and to fund future
                                                 growth.

 Proposed Nasdaq National Market symbol......... "SMRA"
In addition to the          shares of common stock to be outstanding after
the offering, we may issue additional shares of common stock under the
following plans and arrangements:

  . 6,750,000 shares issuable under our 1999 Stock Option Plan, consisting
    of:

   . 1,490,093 Somera Communications, LLC units underlying outstanding
     options at a weighted average exercise price of $8.09 per share, none
     of which were exercisable as of August 31, 1999, and which will be
     converted into options to purchase an equivalent number of shares under
     our 1999 Stock Option Plan; and

   . 5,259,907 shares available for future grants;

  . 207,655 Somera Communications, LLC units issuable upon exercise of
    outstanding warrants at a weighted average exercise price of $8.07 per
    share, which were fully exercisable as of August 31, 1999, and which will
    be converted into warrants exercisable for an equivalent number of shares
    of our common stock;

  . 300,000 shares available for issuance under our 1999 Employee Stock
    Purchase Plan; and

  . 300,000 shares available for issuance under our 1999 Director Option
    Plan.

                                       3
Summary Financial Data

  The following summary financial data should be read in conjunction with our
financial statements and related notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
in this prospectus. The statements of operations for each of the years ended
December 31, 1996, 1997 and 1998 and the six months ended June 30, 1999 and the
balance sheet data at December 31, 1997, 1998 and June 30, 1999 are derived
from our financial statements that have been audited by PricewaterhouseCoopers
LLP, independent accountants, included elsewhere in this prospectus. The
statement of operations data for the six months ended June 30, 1998 is derived
from our unaudited financial statements included elsewhere in this prospectus.
Six Months
                                       Year Ended December 31, Ended June 30,
                                       ----------------------- ---------------
                                        1996    1997    1998    1998    1999
                                       ------- ------- ------- ------- -------
                                                               (unaudited)
                                        (in thousands, except per share data)
Statement of Operations:
Net revenue........................... $10,149 $34,603 $72,186 $34,417 $52,834
Cost of net revenue...................   5,532  20,587  43,132  21,037  34,023
                                       ------- ------- ------- ------- -------
Gross profit..........................   4,617  14,016  29,054  13,380  18,811
                                       ------- ------- ------- ------- -------
Operating expenses:
  Sales and marketing.................     780   2,593   5,747   2,394   4,385
  General and administrative..........     696   1,648   3,939   1,326   2,999
  Stock-based compensation............     --      --      --      --      193
                                       ------- ------- ------- ------- -------
    Total operating expenses..........   1,476   4,241   9,686   3,720   7,577
                                       ------- ------- ------- ------- -------
Income from operations................   3,141   9,775  19,368   9,660  11,234
Interest expense, net.................      18      82     187      75     144
                                       ------- ------- ------- ------- -------
Net income............................ $ 3,123 $ 9,693 $19,181 $ 9,585 $11,090
                                       ======= ======= ======= ======= =======
Pro-forma net income per share--
 basic(1)............................. $  0.08 $  0.25 $  0.50 $  0.25 $  0.29
                                       ------- ------- ------- ------- -------
Pro-forma weighted average shares--
 basic................................  37,500  38,052  38,063  38,063  38,063
                                       ------- ------- ------- ------- -------
Pro-forma net income per share--
 diluted(1)........................... $  0.08 $  0.25 $  0.50 $  0.25 $  0.29
                                       ------- ------- ------- ------- -------
Pro-forma weighted average shares--
 diluted..............................  37,500  38,052  38,063  38,063  38,069
                                       ------- ------- ------- ------- -------
-------
(1) See Note 2 of notes to the financial statements for an explanation of the
    calculation of net income per unit--basic and diluted. Net income per
    share--basic and diluted has been stated above assuming a one-for-one
    exchange of the units of Somera Communications, LLC for shares of our
    common stock.

  The following data provides a summary of our balance sheet at June 30, 1999.
The pro-forma column gives effect to:

   .  the distribution to members of approximately $6.5 million in July
      1999;
   .  the receipt of the proceeds of $50 million from a term loan facility
      made by Fleet National Bank and the payment of $750,000 of bank fees
      associated with the facility;
   .  the payment to stockholders of a distribution of $48.5 million upon
      receipt of proceeds of the term loan facility;
   .  the repayment of an aggregate principal amount of $3.5 million to note
      holders in September 1999; and
   .  the creation of a deferred tax asset of approximately $17.0 million as
      a result of the change in tax status from a limited liability company
      to a "C" corporation.

                                       4
The as adjusted column reflects the sale of     shares of common stock in this
offering at an assumed initial public offering price of $    per share after
deducting the estimated underwriting discount and offering expenses payable by
us. See "Use of Proceeds" and "Capitalization."
June 30, 1999
                                                ------------------------------
                                                                    Pro-forma
                                                Actual   Pro-forma As Adjusted
                                                -------  --------- -----------
                                                       (in thousands)
Balance Sheet Data:
Working capital................................ $ 9,975   $ 2,409     $
Deferred tax asset.............................     --     17,000
Total assets...................................  27,202    43,720
Notes payable--net of current portion..........   1,957       --
Term debt......................................     --     49,250
Mandatorily redeemable Class B units...........  51,750       --
Total members' deficit/Stockholders' equity
 (deficit)..................................... (42,765)  (28,874)
Commencing with 1997, our fiscal years are on a 52 and 53 week basis. For
presentation purposes we are using a calendar quarter and calendar year end
convention. Our fiscal year 1997 ended on December 28, 1997 and our fiscal year
1998 ended on January 3, 1999. The six month periods presented ended on
June 28, 1998 and July 4, 1999.

                                       5
RISK FACTORS

  You should carefully consider the risks described below before buying shares
in this offering. The risks and uncertainties described below are not the only
risks we face. Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business operations. If
any of the following risks actually occur, our business could be harmed, the
trading price of our common stock could decline and you could lose all or part
of your investment. You should also refer to other information contained in
this prospectus, including our financial statements and related notes.

Our operating results are likely to fluctuate in future periods, which might
lead to reduced prices for our stock.

  Our annual or quarterly operating results are difficult to predict and are
likely to fluctuate significantly in the future as a result of numerous
factors, many of which are outside of our control. If our annual quarterly
operating results do not meet the expectations of securities analysts and
investors, the trading price of our stock could significantly decline. Factors
that could impact our operating results include:

  . the rate, timing and volume of orders for the telecommunications
    infrastructure equipment we sell;
  . the rate at which telecommunications carriers de-install their equipment;
  . decreases in our selling prices due to competition in the secondary
    market;
  . our ability to obtain products cost-effectively from original equipment
    manufacturers, or OEMs, distributors, carriers and other secondary
    sources of telecommunications equipment;
  . our ability to provide equipment and service offerings on a timely basis
    to satisfy customer demand;
  . variations in customer purchasing patterns due to seasonality and other
    factors;
  . write-offs due to inventory defects or obsolescence;
  . the sales cycle for equipment we sell, which can be relatively lengthy;
  . delays in the commencement of our operations in new market segments and
    geographic regions;
  . costs relating to possible acquisitions and integration of new
    businesses; and
  . general economic conditions and economic conditions specific to the
    telecommunications industry.

Our business depends upon our ability to match third party de-installed
equipment supply with carrier demand for this equipment and failure to do so
could reduce our net revenue.

  Our success depends on our continued ability to match the equipment needs of
telecommunications carriers with the supply of de-installed equipment available
in the secondary market. We depend upon maintaining business relationships with
third parties who can provide us with de-installed equipment and information on
available de-installed equipment. Failure to effectively manage these
relationships and match the needs of our customers with available supply of de-
installed equipment could damage our ability to generate net revenue. In the
event carriers decrease the rate at which they de-install their networks, or
choose not to de-install their networks at all, it would be more difficult for
us to locate this equipment, which could negatively impact our net revenue.

                                       6
A downturn in the telecommunications industry could reduce demand for our
products.

  We believe that a downturn in the telecommunications industry in general or
decreased carrier operating performance could result in reduced sales to our
existing customers and make it more difficult to attract new customers. Our
business depends on the economic viability of telecommunications carriers, who,
to remain competitive, may look for alternative ways to operate more
efficiently, including reducing expenditures for, or delaying purchases of,
additional equipment.

The market for supplying equipment to telecommunications carriers is
competitive, and if we cannot compete effectively, our net revenue and gross
margins might decline.

  Competition among companies who supply equipment to telecommunications
carriers is intense. If we are unable to compete effectively against our
current or future competitors, we may have to lower our selling prices and may
experience reduced gross margins and loss of market share, either of which
could harm our business.

  Competition is likely to increase as new companies enter this market, as
current competitors expand their products and services or as our competitors
consolidate. Increased competition in the secondary market for
telecommunications equipment could also heighten demand for the limited supply
of de-installed equipment which would lead to increased prices for, and reduce
the availability of, this equipment. Any increase in these prices could
significantly impact our ability to maintain our gross margins. Any reduction
in the availability of equipment could cause us to lose customers.

  We currently face competition primarily from three sources: OEMs,
distributors and secondary market dealers who sell new and de-installed
telecommunications infrastructure equipment. Many of these competitors have
longer operating histories, greater name recognition, more established customer
relationships and significantly greater financial, technical or marketing
resources than we do. These competitors are also likely to enjoy substantial
competitive advantages over us, including the following:

  . ability to devote greater resources to the development, promotion and
    sale of their equipment and related services and adopt more aggressive
    pricing policies than we can;
  . ability to expand existing customer relationships and more effectively
    develop new customer relationships than we can, including securing long
    term purchase agreements;
  . ability to leverage their customer relationships through volume
    purchasing contracts, and other means intended to discourage customers
    from purchasing products from us;
  . ability to more rapidly adopt new or emerging technologies and increase
    the array of products offered to respond to changes in customer
    requirements;
  . greater focus and expertise on specific manufacturers or product lines;
  . ability to implement more effective electronic commerce solutions; and
  . ability to form new alliances or business combinations to rapidly acquire
    significant market share.

We do not have many formal relationships with suppliers of telecommunications
equipment and may not have access to adequate product supply.

  Historically, over 70% of our annual net revenue has been generated from the
sale of de-installed and refurbished telecommunications equipment. Typically,
we do not have supply contracts

                                       7
to obtain this equipment and are dependent on the de-installation of equipment
by carriers to provide us with much of the equipment we sell. Our ability to
buy de-installed equipment from carriers is dependent on our relationships with
them. If we fail to develop and maintain these business relationships with
carriers or they are unwilling to sell de-installed equipment to us, our
ability to sell de-installed equipment will suffer.

Our customer base is concentrated and the loss of one or more of our key
customers would harm our business.

  Historically, a significant portion of our sales have been to relatively few
customers. Sales to our ten largest customers accounted for 43.8% of our net
revenue in 1998, 42.2% of our net revenue in 1997, and 35.4% of our net revenue
in 1996. In the six months ended June 30, 1999, sales to our ten largest
customers accounted for 32.4% of our net revenue. In the first six months of
1999, no single customer accounted for over 10% of our net revenue. In 1998,
ALLTEL Corporation accounted for 10.2% of our net revenue, in 1997, Vodafone
AirTouch plc accounted for 10.1% of our net revenue, and in 1996, ALLTEL
Corporation accounted for 11.4% of our net revenue. In addition, substantially
all of our sales are made on a purchase order basis, and no customer has
entered into a long-term purchasing agreement with us. As a result, we cannot
be certain that our current customers will continue to purchase from us. The
loss of, or any reduction in orders from, a significant customer would have a
negative impact on our net revenue.

We may be forced to reduce the sales prices for the equipment we sell, which
may impair our ability to maintain our gross margins.

  In the future we expect to reduce prices in response to competition and to
generate increased sales volume. If manufacturers reduce the prices of new
telecommunications equipment we may be required to further reduce the price of
the new, de-installed and refurbished equipment we sell. If we are forced to
reduce our prices or are unable to shift the sales mix towards higher margin
equipment sales, we will not be able to maintain current gross margins.

The market for de-installed telecommunications equipment is relatively new and
it is unclear whether our equipment and service offerings and our business will
achieve long-term market acceptance.

  The market for de-installed telecommunications equipment is relatively new
and evolving, and we are not certain that our potential customers will adopt
and deploy de-installed telecommunications equipment in their networks. For
example, with respect to de-installed equipment that includes a significant
software component, potential customers may be unable to obtain a license or
sublicense for the software. Even if they do purchase de-installed equipment,
our potential customers may not choose to purchase de-installed equipment from
us for a variety of reasons. Our customers may also redeploy their displaced
equipment within their own networks which would eliminate their need for our
equipment and service offerings. These internal solutions would also limit the
supply of de-installed equipment available for us to purchase, which would
limit the development of this market.

                                       8
Our success depends on our ability to attract, develop and retain key
management and sales personnel.

  We depend on the performance of our executive officers and other key
employees. The loss of any member of our senior management, in particular, Dan
Firestone, our chief executive officer, or other key employees could negatively
impact our ability to execute our business strategy. In addition, we depend on
our sales professionals to serve customers in each of our markets. The loss of
any of our sales professionals could significantly disrupt our relationships
with our customers. We do not have "key person" life insurance policies on any
of our employees except for Dan Firestone.

  Our future success also depends on our ability to attract, retain and
motivate highly skilled employees. Competition for employees in the
telecommunications equipment industry is intense. Additionally, we depend on
our ability to train and develop skilled sales people and an inability to do so
would significantly harm our growth prospects and operating performance. We
have experienced, and we expect to continue to experience difficulty in hiring
and retaining highly skilled employees.

Our business may suffer if we are not successful in our efforts to keep up with
a rapidly changing market.

  The market for the equipment and services we sell is characterized by
technological changes, evolving industry standards, changing customer needs and
frequent new equipment and service introductions. Our future success in
addressing the needs of our customers will depend, in part, on our ability to
timely and cost-effectively:

  . respond to emerging industry standards and other technological changes;
  . develop our internal technical capabilities and expertise;
  . broaden our equipment and service offerings; and
  . adapt our services to new technologies as they emerge.

  Our failure in any of these areas could harm our business. Moreover, any
increased emphasis on software solutions as opposed to equipment solutions
could limit the availability of de-installed equipment, decrease customer
demand for the equipment we sell, or cause the equipment we sell to become
obsolete.

The lifecycles of telecommunications infrastructure equipment may become
shorter, which would decrease the supply of, and carrier demand for, de-
installed equipment.

  Our sales of de-installed and refurbished equipment depend upon carrier
utilization of existing telecommunications network technology. If the lifecycle
of equipment comprising carrier networks is significantly shortened for any
reason, including technology advancements, the installed base of any particular
model would be limited. This limited installed base would reduce the supply of,
and demand for, de-installed and refurbished equipment which could decrease our
net revenue.

Many of our customers are telecommunications carriers that may at any time
reduce or discontinue their purchases of the equipment we sell to them.

  If our customers choose to defer or curtail their capital spending programs,
it could have a negative impact on our sales to those telecommunications
carriers, which would harm our business.

                                       9
A significant portion of our customers are emerging telecommunications carriers
who compete against existing telephone companies. These new participants only
recently began to enter these markets, and many of these carriers are still
building their networks and rolling out their services. They require
substantial capital for the development, construction and expansion of their
networks and the introduction of their services. If emerging carriers fail to
acquire and retain customers or are unsuccessful in raising needed funds or
responding to any other trends, such as price reductions for their services or
diminished demand for telecommunications services in general, then they could
be forced to reduce their capital spending programs.

If we fail to implement our strategy of purchasing equipment from and selling
equipment to regional bell operating companies, our growth will suffer.

  One of our strategies is to develop and expand our relationships with
regional bell operating companies, or RBOCs. We believe the RBOCs could provide
us with a significant source of additional net revenue. In addition, we believe
the RBOCs could provide us with a large supply of de-installed equipment. We
cannot assure you that we will be successful in implementing this strategy.
RBOCs may not choose to sell de-installed equipment to us or may not elect to
purchase this equipment from us. RBOCs may instead develop those capabilities
internally or elect to compete with us and resell de-installed equipment to our
customers or prospective customers. If we fail to successfully develop our
relationships with RBOCs or if RBOCs elect to compete with us, our growth could
suffer.

We may be exposed to risks associated with international expansion.

  We intend to continue expanding our business in international markets. This
expansion will require significant management attention and financial resources
to develop a successful international business, including sales, procurement
and support channels. We may not be able to maintain or increase international
market demand for the equipment we sell, and therefore we might not be able to
expand our international operations. We currently have limited experience
providing equipment outside the United States. Conducting business outside of
the United States involves risks, including:

  . recruiting skilled sales and technical support personnel;
  . creation of new supply and customer relationships;
  . difficulties and costs of managing and staffing international operations;
  . developing relationships with local suppliers;
  . longer collection periods for accounts receivables and greater credit
    risks regarding new customers;
  . fluctuations in currency exchange rates;
  . changes in a specific country's or region's political or economic
    conditions; and
  . difficulties in timely delivery of equipment to, and maintenance of
    inventory in, international locations.

  We cannot be certain that one or more of these factors will not harm our
future international operations.

                                       10
We may fail to engage in selective acquisitions or may be subject to risks
associated with acquisitions which could harm our business.

  One of our strategies for growth is to engage in selective acquisitions. In
the event we fail to identify or take advantage of these opportunities, we may
experience difficulties in growing our business. If we make acquisitions, we
could have difficulty assimilating or retaining the acquired companies'
personnel or integrating their operations, equipment or services into our
organization. These difficulties could disrupt our ongoing business, distract
our management and employees and increase our expenses. Moreover, our
profitability may suffer because of acquisition-related costs or amortization
of acquired goodwill and other intangible assets. Furthermore, we may have to
incur debt or issue equity securities in any future acquisitions. The issuance
of equity securities would be dilutive to our existing stockholders.

Failure to manage our rapid growth effectively could harm our results of
operations.

  Since we began commercial operations in July 1995, we have experienced rapid
growth and expansion that is straining our resources. In the twelve months
ended June 30, 1999, the number of our employees increased from 67 to 120.
Continued growth could place a further strain on our management, operational
and financial resources. Our inability to manage growth effectively could harm
our business. We are in the process of upgrading our internal control and
information systems. We may not be able to install adequate control systems in
an efficient and timely manner, and our current or planned operational systems,
procedures and controls may not be adequate to support our future operations.
Delays in the implementation of new systems or operational disruptions when we
transition to new systems would impair our ability to accurately forecast sales
demand, manage our equipment inventory and record and report financial and
management information on a timely and accurate basis.

Several key members of our management team have only recently joined us and if
they are not successfully integrated into our business or fail to work together
as a management team, our business will suffer.

  Several key members of our management team have joined us since May 1, 1999,
including Gary Owen, our chief financial officer and Jeffrey Miller, our
executive vice president of sales and marketing. Additionally, we intend to
hire other key personnel, including a vice president of operations. If we
cannot effectively integrate these employees into our business, or if they
cannot work together as a management team to enable us to implement our
business strategy, our business will suffer.

Defects in the equipment we sell may seriously harm our credibility and our
business.

  Telecommunications carriers require a strict level of quality and reliability
from telecommunications equipment suppliers. Telecommunications equipment is
inherently complex and can contain undetected software or hardware errors. If
we deliver telecommunications equipment with undetected material defects, our
reputation, credibility and equipment sales could suffer. Moreover, because the
equipment we sell is integrated into our customers' networks, it can be
difficult to identify the source of a problem should one occur. The occurrence
of such defects, errors or failures could also result in delays in
installation, product returns, product liability and warranty

                                       11
claims and other losses to us or our customers. In some of our contracts, we
have agreed to indemnify our customers against liabilities arising from defects
in the equipment we sell to them. Furthermore, we supply most of our customers
with guarantees that cover the equipment we offer. While we may carry insurance
policies covering these possible liabilities, these policies may not provide
sufficient protection should a claim be asserted. A material product liability
claim, whether successful or not, could be costly, damage our reputation and
distract key personnel, any of which could harm our business.

Our strategy to outsource services could impair our ability to deliver our
equipment on a timely basis.

  Currently, we depend on third parties for a variety of equipment-related
services, including engineering, repair, transportation, testing, installation
and de-installation. This outsourcing strategy involves risks to our business,
including reduced control over delivery schedules, quality and costs and the
potential absence of adequate capacity. In the event that any significant
subcontractor were to become unable or unwilling to continue to perform their
required services, we would have to identify and qualify acceptable
replacements. This process could be lengthy, and we cannot be sure that
additional sources of third party services would be available to us on a timely
basis, or at all.

Our quarterly net revenue may be subject to fluctuations due to the seasonal
purchasing patterns of our customers.

  Our quarterly net revenue may be subject to the seasonal purchasing patterns
of our customers. We expect that net revenue in the third quarter of each year
may be lower than that of the second quarter of that year. For example, our net
revenue decreased in the quarter ended June 30, 1999 compared to our net
revenue for the quarter ended March 31, 1999. We believe this trend may occur
as a result of our customers' annual budgetary, procurement and sales cycles.

Our business could be harmed if we are unable to manage our inventory needs
accurately.

  To meet customer demand in the future, we believe it is necessary to maintain
or increase some levels of inventory. Failure to maintain adequate inventory
levels in these products could hurt our ability to make sales to our customers.
In the past, we have experienced inventory shortfalls, and we cannot be certain
that we will not experience shortfalls again in the future, which could harm
our reputation and our business. Further, rapid technology advancement could
make our existing inventory obsolete and cause us to incur losses. In addition,
if our forecasts lead to an accumulation of inventories that are not sold in a
timely manner, our business could suffer.

Our failure and the failure of our suppliers and customers to be year 2000
compliant could harm our business.

  Many currently installed computer systems and software products are not
capable of distinguishing 21st century dates from 20th century dates. As a
result, beginning on January 1, 2000, computer systems and software used by
many companies and organizations in a wide variety of industries, including
telecommunications technology, transportation, utilities and finance, could
likely produce erroneous results or fail unless they have been modified or
upgraded to process date

                                       12
information correctly. In addition, we face the possibility that the equipment
we sell will fail due to processing errors caused by inaccurate calculations
with respect to the year 2000. Year 2000 compliance efforts may involve
significant time and expense, and uncorrected problems could harm our business.

The corruption or interruption of key software systems we use could cause our
business to suffer.

  We rely on the integrity of key software and systems. Specifically we rely on
our relationship management database which tracks information on current excess
and de-installed equipment. This software and these systems may be vulnerable
to harmful applications, computer viruses and other forms of corruption and
interruption. In the event our software or systems are affected by any form of
corruption or interruption, it could delay or restrict our ability to meet our
customers' needs, which could harm our reputation or business.

We might need additional capital in the future, and additional financing might
not be available.

  We currently anticipate that our available cash resources, combined with the
net proceeds from this offering and financing available under our revolving
loan facility, will be sufficient to meet our anticipated working capital and
capital expenditure requirements for at least the next 12 months. However, our
resources may not be sufficient to satisfy these requirements. We may need to
raise additional funds through public or private debt or equity financings to:

  . take advantage of business opportunities, including more rapid
    international expansion or acquisitions of complementary businesses;
  . develop and maintain higher inventory levels;
  . gain access to new product lines;
  . develop new services; or
  . respond to competitive pressures.

  Any additional financing we may need might not be available on terms
favorable to us, or at all. If adequate funds are not available or are not
available on acceptable terms, our business could suffer. Moreover, if
additional funds are raised through the issuance of equity securities, the
percentage of ownership of our current stockholders will be reduced. Newly
issued equity securities may have rights, preferences and privileges senior to
those of investors in our common stock. In addition, the terms of any debt
could impose restrictions on our operations.

Our facilities could be vulnerable to damage from earthquakes and other natural
disasters.

  Our facilities are located on or near known earthquake fault zones and are
vulnerable to damage from fire, floods, earthquakes, power loss,
telecommunications failures and similar events. If a disaster occurs, our
ability to test and ship the equipment we sell would be seriously, if not
completely, impaired, and our inventory could be damaged or destroyed, which
would seriously harm our business. We cannot be sure that the insurance we
maintain against fires, floods, earthquakes and general business interruptions
will be adequate to cover our losses in any particular case.

                                       13
You might not be able to sell your stock if an active public market does not
develop for our stock.

  Prior to this offering, you could not buy or sell our common stock publicly.
An active public market for our common stock may not develop or be sustained
after the offering. If a market for our common stock does not develop or is not
sustained, it may be difficult for you to sell your shares of common stock at a
price that is attractive to you, or at all. The initial public offering price
of the common stock will be determined through negotiations between the
representatives of the underwriters and us and may not be representative of the
price that will prevail in the open market.

The price of our common stock may be volatile and subject to wide fluctuations.

  The trading price of our common stock may be volatile. The stock prices of
technology and telecommunications-related companies have experienced extreme
volatility that often has been unrelated to the operating performance of these
particular companies. Fluctuations may adversely affect the trading price of
our common stock, regardless of our actual operating performance. In addition,
you may not be able to resell your shares at or above the initial public
offering price due to a number of factors, including:

  . our ability to meet growth, revenue and earnings expectations;
  . industry announcements regarding technological innovations or strategic
    relationships; and
  . conditions affecting the telecommunications industry generally.

Provisions in our charter documents might deter acquisition bids for us.

  There are provisions in our charter documents and other provisions under
Delaware law that could make it more difficult for a third party to acquire us,
even if doing so would benefit our stockholders. We have adopted a staggered
board of directors and our stockholders are unable to:

  . call special meetings of stockholders;
  . act by written consent;
  . remove any director or the entire board of directors without cause; or
  . fill any vacancy on the board of directors.

  In addition, our stockholders must meet advance notice requirements for
stockholder proposals. Our board of directors may also issue preferred stock
without any vote or further action by the stockholders.

Our officers and directors exert substantial influence over us.

  We anticipate that our executive officers, our directors and entities
affiliated with them will beneficially own an aggregate of approximately     %
of our outstanding common stock following the completion of this offering. As a
result, these stockholders will be able to exercise substantial influence over
all matters requiring approval by our stockholders, including the election of
directors and approval of significant corporate transactions. This
concentration of ownership may also have the effect of delaying or preventing a
change in our control.

                                       14
Management could invest or spend the proceeds of this offering not being used
to repay debt in ways with which the stockholders might not agree.

  We intend to use a significant portion of the net proceeds of this offering
to repay our debt rather than build our business. In addition, we have no
specific allocations for any other net proceeds of this offering that are not
being used to repay debt other than a portion for capital expenditures.
Consequently, management will retain a significant amount of discretion over
the application of these proceeds. Because of the number and variability of
factors that will determine or use of these proceeds, how we spend the proceeds
may vary substantially from our current intentions.

You will incur immediate and substantial dilution.

  The initial public offering price is substantially higher than the pro-forma
net tangible book value (deficit) per share of the outstanding common stock. As
a result, investors purchasing common stock in this offering will incur
immediate and substantial dilution in the amount of $    per share. Investors
will incur additional dilution upon the exercise of outstanding stock options
and warrants. See "Dilution."

                                       15
USE OF PROCEEDS

  We estimate the net proceeds from the offering to be approximately
$          , or $           if the underwriters exercise their over-allotment
option in full, at an assumed initial public offering price of $     per share
and after deducting the underwriting discount and estimated offering expenses.

  We intend to use $50 million of the proceeds from the offering to repay the
entire outstanding amount of our term loan facility. We also intend to use a
portion of the proceeds to repay the entire outstanding amount drawn under our
revolving loan facility, which is approximately $6.5 million as of September 1,
1999. These loans provide for various interest rates and have a maturity date
of August 31, 2004. For additional information please see "Management's
Discussion and Analysis of Financial Condition and Results of Operation--
Liquidity and Capital Resources." The proceeds from our term loan facility were
used to make a distribution to our members of $48.5 million in September 1999.
We may use a portion of the proceeds for capital expenditures and expect to use
the remaining proceeds for general corporate purposes, including working
capital. As of the date of this prospectus, we cannot specify the particular
uses for the general corporate purposes of our proceeds. Accordingly, our
management will have broad discretion in the application of the net proceeds.

  We intend to invest the remainder of the net proceeds in short-term, interest
bearing, investment grade marketable securities.

                                DIVIDEND POLICY

  While we do not plan to pay dividends, any future determination to pay
dividends will be at the discretion of the board of directors and will depend
upon our financial condition, operating results, capital requirements and other
factors the board of directors deems relevant. We plan to retain earnings for
use in the operation of our business and to fund future growth.

  From July 1995 to September 1999, we operated in the form of a limited
liability company and income was taxed directly to our equity members. During
this time, we made regular quarterly distributions to the holders of our units
based on our funds available for distribution. In 1996, we made quarterly
distributions in an annual aggregate amount of $0.06 per unit to our members.
In 1997, we made quarterly distributions in an annual aggregate amount of $0.20
per unit to our members. In 1998, we made quarterly distributions in an annual
aggregate amount of $0.43 per unit to our members. In the period beginning
January 1, 1999 through September, 1999, which includes the distribution of the
proceeds of our term loan facility, we made quarterly distributions in an
aggregate amount of $1.68 per unit to our members. See "Certain Transactions"
for additional information regarding this term loan facility.

                                       16
CAPITALIZATION

  The following table sets forth our short-term debt and capitalization as of
June 30, 1999. Our capitalization is presented:

  .  on an actual basis;
  .  on a pro forma basis to reflect:

   .  the distribution to members of approximately $6.5 million in July
      1999;
   .  the receipt of the proceeds of $50 million from a term loan made by a
      syndicate of financial institutions led by Fleet National Bank and the
      payment of $750,000 of bank fees associated with the facility;
   .  the distribution to members of $48.5 million upon receipt of proceeds
      of the term loan;
   .  the repayment of an aggregate principal amount of $3.5 million to note
      holders in September 1999; and
   .  the creation of a deferred tax asset of approximately $17.0 million as
      a result of the change in tax status from a limited liability company
      to a "C" corporation.

  .  on a pro forma as adjusted basis to reflect:

   .  the sale of      shares of common stock at an initial public offering
      price of $    per share in this offering, less underwriting discounts
      and commissions and estimated offering expenses; and
   .  the application of the net proceeds by us from the offering, including
      the repayment of the $50 million term loan from a syndicate of
      financial institutions led by Fleet National Bank.

  Please read the capitalization table together with the sections of this
prospectus entitled "Selected Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the financial
statements and related notes included in this prospectus.
June 30, 1999
                                               ----------------------------------
                                                                       Pro-forma
                                                Actual     Pro-forma  As Adjusted
                                               --------    ---------  -----------
                                                 (in thousands, except per
                                                        share data)
Borrowing under revolving credit facility..... $    779    $  9,363        --
Other short-term debt ........................    1,679         179
                                               --------    --------      -----
  Total short-term debt.......................    2,458       9,542
                                               --------    --------      -----
Notes payable--net of current portion.........    1,957         --         --
                                               --------    --------      -----
Capital lease obligations.....................      541         541
                                               --------    --------      -----
Term loan facility............................      --     $ 49,250        --
                                               --------    --------      -----
Mandatorily redeemable Class B units;
 14,070 units actual, no units pro-forma
 and pro-forma as adjusted:...................   51,750         --         --
                                               --------    --------      -----
Members' deficit/stockholders' equity
 (deficit):
  Class A 23,993 units actual, no units pro-
   forma
   and pro-forma as adjusted..................  (49,793)        --
  Class B.....................................    7,028         --
Common stock, $0.001 par value;
  Authorized 200,000 shares; issued 38,603
   shares
  pro-forma and        shares pro-forma as
   adjusted...................................      --           38
Additional paid in capital ...................        --     69,435
Accumulated deficit...........................      --      (98,347)
                                               --------    --------      -----
  Total members' deficit/stockholders' equity
   (deficit)..................................  (42,765)    (28,874)
                                               --------    --------      -----
    Total capitalization...................... $ 11,483    $ 20,917
                                               ========    ========      =====
17
We expect there to be     shares outstanding after the offering. In addition
to the shares of common stock to be outstanding after the offering, we may
issue additional shares of common stock under the following plans and
arrangements:

  . 6,750,000 shares issuable under our 1999 Stock Option Plan, consisting
    of:

   . 1,490,093 Somera Communications, LLC units underlying outstanding
     options at a weighted average exercise price of $8.09 per share, none
     of which were exercisable as of August 31, 1999, and which will be
     converted into options to purchase an equivalent number of shares under
     our 1999 Stock Option Plan; and

   . 5,259,907 shares available for future grants;

  . 207,655 Somera Communications, LLC units issuable upon exercise of
    outstanding warrants at a weighted average exercise price of $8.07 per
    share, which were fully exercisable as of August 31, 1999, and which will
    be converted into warrants exercisable for an equivalent number of shares
    of our common stock;

  . 300,000 shares available for issuance under our 1999 Employee Stock
    Purchase Plan; and

  . 300,000 shares available for issuance under our 1999 Director Option
    Plan.

                                       18
DILUTION

  Our pro-forma net tangible book value (deficit) as of June 30, 1999 was
($28.9) million or ($0.76) per share. Pro-forma net tangible book value
(deficit) per share is determined by dividing the pro-forma number of
38,062,500 outstanding shares of common stock into our pro-forma (deficit),
which is our pro-forma total tangible assets less total liabilities. After
giving effect to the receipt of the estimated net proceeds from this offering,
based upon an assumed initial public offering price of $   per share and after
deducting the estimated underwriting discounts and commissions and estimated
offering expenses, our pro-forma as adjusted net tangible book value (deficit)
as of June 30, 1999 would have been approximately $   million, or $   per
share. This represents an immediate increase in pro-forma net tangible book
value (deficit) of $   per share to existing stockholders and an immediate
dilution of $   per share to new investors purchasing shares at an assumed
initial public offering price of $   per share, initial public offering price.
The following table illustrates the per share dilution:
Assumed initial public offering price per share................         $
     Pro-forma net tangible book value (deficit) per share as of
      June 30, 1999............................................... $(0.76)
     Increase per share attributable to new investors.............
                                                                   ------
   Pro-forma net tangible book value (deficit) per share after
    offering......................................................
                                                                           ----
   Dilution per share to new investors............................         $
                                                                           ====
The following table summarizes as of June 30, 1999, on the pro-forma basis
described above, the number of shares of common stock purchased from us, the
total consideration paid and the average price per share paid by existing
stockholders and by new investors before deducting the estimated underwriting
discounts and commissions and estimated offering expenses:
Shares         Total
                                           Purchased    Consideration   Average
                                         -------------- -------------- Price Per
                                         Number Percent Amount Percent   Share
                                         ------ ------- ------ ------- ---------
Existing stockholders...................            %    $         %     $
New investors...........................
                                          ----   ----    ----   ----     -----
    Total...............................         100%    $      100%     $
                                          ====   ====    ====   ====     =====
We expect to have     shares outstanding after the offering. In addition to
the shares of common stock to be outstanding after the offering, we may issue
additional shares of common stock under the following plans and arrangements:

  . 6,750,000 shares issuable under our 1999 Stock Option Plan, consisting
    of:

   . 1,490,093 Somera Communications, LLC units underlying outstanding
     options at a weighted average exercise price of $8.09 per share, none
     of which were exercisable as of August 31, 1999, and which will be
     converted into options to purchase an equivalent number of shares under
     our 1999 Stock Option Plan; and

   . 5,259,907 shares available for future grants;

  . 207,655 Somera Communications, LLC units issuable upon exercise of
    outstanding warrants at a weighted average exercise price of $8.07 per
    share, which were fully exercisable as of August 31, 1999, and which will
    be converted into warrants exercisable for an equivalent number of shares
    of our common stock;

                                       19
. 300,000 shares available for issuance under our 1999 Employee Stock
    Purchase Plan; and

  . 300,000 shares available for issuance under our 1999 Director Option
    Plan.

  To the extent that any of these options or warrants are exercised or shares
are issued, there will be further dilution to new investors.

                                       20
SELECTED FINANCIAL DATA

  You should read the following selected financial data with our financial
statements and related notes and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" appearing elsewhere in this
prospectus. The statements of operations for the years ended December 31, 1996,
1997 and 1998, and the six months ended June 30, 1999, and the balance sheet
data at December 31, 1997, and 1998, and June 30, 1999, are derived from our
financial statements that have been audited by PricewaterhouseCoopers LLP,
independent accountants, included elsewhere in this prospectus. The statement
of operations for the six months ended June 30, 1998 is derived from our
unaudited financial statements included elsewhere in this prospectus. The
balance sheet data at December 31, 1996 is derived from our audited financial
statements that are not included in this prospectus. The unaudited financial
statements have been prepared on substantially the same basis as the audited
financial statements and include all adjustments, consisting only of normal
recurring adjustments, that we consider necessary for a fair presentation of
the balance sheet and results of operations for the period. Historical results
are not necessarily indicative of the results to be expected in the future, and
results of interim periods are not necessarily indicative of results for the
entire year.
Years Ended December    Six Months Ended
                                             31,                June 30,
                                   ----------------------- -------------------
                                    1996    1997    1998      1998      1999
                                   ------- ------- ------- ----------- -------
                                                           (unaudited)
                                      (in thousands, except per share data)
Statements of Operations:
Net revenue....................... $10,149 $34,603 $72,186   $34,417   $52,834
Cost of net revenue...............   5,532  20,587  43,132    21,037    34,023
                                   ------- ------- -------   -------   -------
Gross profit......................   4,617  14,016  29,054    13,380    18,811
                                   ------- ------- -------   -------   -------
Operating expenses:
  Sales and marketing.............     780   2,593   5,747     2,394     4,385
  General and administrative......     696   1,648   3,939     1,326     2,999
  Stock-based compensation........     --      --      --        --        193
                                   ------- ------- -------   -------   -------
    Total operating expenses......   1,476   4,241   9,686     3,720     7,577
                                   ------- ------- -------   -------   -------
Income from operations............   3,141   9,775  19,368     9,660    11,234
Interest expense, net.............      18      82     187        75       144
                                   ------- ------- -------   -------   -------
Net income........................ $ 3,123 $ 9,693 $19,181   $ 9,585   $11,090
                                   ======= ======= =======   =======   =======
Pro-forma net income per share--
 basic(1)......................... $  0.08 $  0.25 $  0.50   $  0.25   $  0.29
                                   ------- ------- -------   -------   -------
Pro-forma weighted average
 shares--basic....................  37,500  38,052  38,063    38,063    38,063
                                   ------- ------- -------   -------   -------
Pro-forma net income per share--
 diluted(1)....................... $  0.08 $  0.25 $  0.50   $  0.25   $  0.29
                                   ------- ------- -------   -------   -------
Pro-forma weighted average
 shares--diluted..................  37,500  38,052  38,063    38,063    38,069
                                   ------- ------- -------   -------   -------
--------
(1) See note 2 of Notes to the financial statements for an explanation of the
    calculation of net income per unit--basic and diluted. Net income per
    share--basic and diluted has been stated above assuming a one for one
    exchange of the units of Somera Communications, LLC for shares of our
    common stock.
December 31,
                                             ----------------------  June 30,
                                              1996   1997    1998      1999
                                             ------ ------ --------  --------
                                                     (in thousands)
Balance Sheet Data:
Working capital............................. $1,797 $4,602 $  9,482  $  9,975
Total assets................................  3,882  9,281   17,009    27,202
Notes payable--net of current portion.......    662    957    3,457     1,957
Mandatorily redeemable Class B units........    --     --    51,750    51,750
Capital lease obligation--net of current
 portion....................................    --     --       --        541
Members' capital (deficit)..................  1,251  3,787  (45,136)  (42,765)
Commencing with 1997 our fiscal years are on a 52 and 53 week basis. For
presentation purposes we are using a calendar quarter and calendar year end
convention. Our fiscal years 1997 and 1998 ended on December 28, 1997 and
January 3, 1999. The six month periods presented ended on June 28, 1998 and
July 4, 1999.

                                       21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  The following discussion of financial condition and results of operations
should be read in conjunction with the financial statements and related notes
appearing elsewhere in this prospectus. Our actual results could differ
materially from the results contemplated by these forward-looking statements as
a result of factors, including those discussed previously, under "Risk Factors"
or in other parts of in this prospectus.

Overview

  We provide telecommunications carriers with a broad range of infrastructure
equipment and related services designed to meet their specific and changing
equipment needs. We generate revenue from sales of new, de-installed and
refurbished telecommunications infrastructure equipment. Our customers include
incumbent local exchange carriers, or ILECs, long distance carriers, or IXCs,
wireless carriers and competitive local exchange carriers, or CLECs. We do not
manufacture any of the equipment we sell.

  We purchase de-installed and refurbished equipment primarily from
telecommunications carriers, many of whom are also our customers. We purchase
the new equipment we sell primarily from OEMs and distributors. By using our
relationship management database to track carriers' excess and de-installed
equipment we are able to offer our customers a broad range of equipment. We
generally have not entered into long-term contracts or distribution
arrangements with our suppliers, and if we fail to develop and maintain our
relationships with our suppliers, our business will suffer.

  Historically, over 70% of our annual net revenue has been generated from the
sale of de-installed and refurbished equipment. We market and sell this
equipment through our industry focused sales teams. A majority of our sales to
date have been to customers located in the United States. Sales to customers
outside of the United States accounted for 13.4% of our net revenue in the six
months ended June 30, 1999, 19.7% of our net revenue in 1998, 16.5% of our net
revenue in 1997 and 6.8% of our net revenue in 1996. We expect sales to
carriers in the United States to continue to account for the majority of our
net revenue for the foreseeable future. Currently, all of our equipment sales
are denominated in U.S. dollars.

  In the first six months of 1999, no single customer accounted for more than
10% of our net revenue. In 1998, ALLTEL Corporation accounted for 10.2% of our
net revenue, in 1997, Vodafone AirTouch plc accounted for 10.1% of our net
revenue and in 1996, ALLTEL Corporation accounted for 11.4% of our net revenue.
In the six months ended June 30, 1999, Vodafone AirTouch plc accounted for
11.0% of our equipment purchases. In 1998, 1997 and 1996, no suppliers
accounted for more than 10% of our equipment purchases.

  Substantially all of our sales are made on the basis of purchase orders
rather than long-term agreements. As a result, we may commit resources to the
procurement and testing of products without having received advance purchase
commitments from customers. We anticipate that our operating results for any
given period will continue to be dependent, to a significant extent, on
purchase orders. These purchase orders can be delayed or cancelled by our
customers without penalty. Additionally, as telecommunications equipment
supplier competition increases, we may need

                                       22
to lower our selling prices or pay more for the equipment we procure.
Consequently, our gross margins may decrease over time. We generally recognize
revenue, net of estimated provisions for returns and warranty obligations where
significant, when we ship equipment to our customers.

  The market for telecommunications equipment is characterized by intense
competition. We believe that our ability to remain competitive depends on
enhancing the existing service levels we provide to our customers, acquiring
access to a broader selection of equipment, developing new customer
relationships and expanding our existing customer penetration levels. Failure
to accomplish these goals could harm our growth prospects and operating
results.

Corporate History

  We were organized as a California limited liability company, or LLC, and
commenced operations in July 1995. In July 1998, we undertook a
recapitalization in which outside investors purchased Class B units
representing approximately 37.0% of Somera Communications, LLC for $51.8
million. These Class B units have significant rights and preferences over our
Class A units, including liquidation preferences, redemption rights under
specific circumstances at the option of the holder, and the right of one of
those Class B investors to elect two members to the board of managers of Somera
Communications, LLC. These rights will lapse upon the exchange of the
outstanding limited liability company units for our common stock. We used all
of the proceeds from the sale of the Class B units to repurchase a portion of
the outstanding units from a number of our initial unit holders.

  In August 1999, we entered into a credit agreement with a syndicate of
financial institutions led by Fleet National Bank. The credit facility consists
of a term loan facility for $50 million and a revolving loan facility for up to
$15 million. As of September 1, 1999, $50 million in principal was outstanding
under the term loan. Of this $50 million, $48.5 million had been distributed to
the unit holders of Somera Communications, LLC, who will become our
stockholders after the exchange of their units prior to this offering. As of
September 1, 1999, $6.5 million had been drawn under the revolving loan
facility. For more information on the Fleet National Bank credit facility,
please see "Certain Transactions."

  Prior to the consummation of this offering, we will exchange shares of our
common stock for all of the outstanding units of Somera Communications, LLC and
subsequently assume the operations, assets and liabilities of the limited
liability company.

Results of Operations

 Six Months Ended June 30, 1999 and 1998

  Net Revenue. Net revenue consists of sales of new, de-installed and
refurbished telecommunications equipment, including switching, transmission,
access, wireless, microwave and power products. Net revenue increased to $52.8
million in the six months ended June 30, 1999 from $34.4 million in the six
months ended June 30, 1998. The increase in net revenue was driven by greater
customer demand for our equipment in general. Our expansion in United States
markets and growth in significant customer accounts.

                                       23
Cost of Net Revenue. Substantially all of our cost of net revenue consists of
the costs of the equipment we purchase from third party sources. Cost of net
revenue increased to $34.0 million in the six months ended June 30, 1999 from
$21.0 million in the six months ended June 30, 1998. The increase in cost of
net revenue during this period is primarily attributable to increases in our
volume of new and de-installed equipment sales. Gross profit as a percentage of
net revenue, or gross margin, declined to 35.6% in the six months ended June
30, 1999 from 38.9% in the six months ended June 30, 1998. The decline in gross
margins was primarily due to an increase in the proportion of new equipment we
sold, which generally has lower gross margins than de-installed and refurbished
equipment, fluctuations in the prices of a number of our purchase transactions,
and increased competition in the procurement of de-installed equipment
generally.

  Sales and Marketing. Sales and marketing expenses consist primarily of
salaries, commissions and benefits for sales, marketing and procurement
employees as well as costs associated with advertising and promotions. A
majority of our sales and marketing expenses are incurred in connection with
establishing and maintaining long-term relationships with a variety of
carriers. Sales and marketing expenses increased to $4.4 million in the six
months ended June 30, 1999 from $2.4 million in the six months ended June 30,
1998. This increase was due to higher absolute commission expenses consistent
with increased gross profit upon which our sales commissions are based, as well
as the hiring of additional sales and procurement personnel, including a new
executive vice president of sales and marketing. We expect that our sales and
marketing expenses will continue to increase as we expand our product and
service offerings, increase our hiring of additional sales personnel and pay
commissions consistent with increased gross profit, although such expenses may
vary as a percentage of net revenue.

  General and Administrative. General and administrative expenses consist
principally of salary and benefit costs for executive and administrative
personnel, as well as legal, accounting and other professional fees. General
and administrative expenses increased to $3.0 million in the six months ended
June 30, 1999 from $1.3 million in the six months ended June 30, 1998. This
increase was due primarily to the increase in employees resulting from the
expansion of our operations, as well as recruitment costs. We expect that
general and administrative expenses will increase in the future as we expand
our operations, although such expenses may vary as a percentage of net revenue.

  Stock-based Compensation. The stock-based compensation charge relates to a
warrant for common stock granted in exchange for services in the six months
ended June 30, 1999. This warrant, which entitles the holder to purchase 95,155
shares of common stock, is fully vested and resulted in a one-time charge of
approximately $193,000 in the six months ended June 30, 1999. There was no
stock-based compensation charge in the six months ended June 30, 1998. In July
1999, we issued stock options to two officers and one outside director
resulting in unearned stock-based compensation of $830,000 which will be
recorded and amortized over the vesting period, generally four years of the
underlying options. The charge will be amortized to net income as follows:
$244,000 for the remainder of 1999, $367,000 in 2000, $148,000 in 2001, $63,000
in 2002 and $8,000 in 2003. We also issued a warrant to purchase 112,500 shares
of common stock in exchange for services. The warrants were immediately vested
and will result in a one-time charge of $337,000 to be recorded in our 1999
third quarter results.

                                       24
Interest Expense, Net. Interest expense, net consists of interest expense
associated with debt obligations offset by interest income earned on cash and
cash equivalent balances. Interest expense, net increased to $144,000 in the
six months ended June 30, 1999 from $75,000 in the six months ended June 30,
1998. This increase was due to a higher level of outstanding principal to
satisfy greater working capital needs.

Years Ended 1998, 1997 and 1996

  Net Revenue. Net revenue increased to $72.2 million in 1998 from $34.6
million in 1997 and $10.1 million in 1996. The increase in net revenue from
1997 to 1998 was due to significant increases of sales in both the United
States and Latin American markets, an increase in sales of new equipment and
the growth of several customer accounts. The increase in net revenue from 1996
to 1997 was primarily due to significant increases in sales of de-installed
equipment.

  Cost of Net Revenue. Cost of net revenue increased to $43.1 million in 1998
from $20.6 million in 1997 and $5.5 million in 1996. Substantially all of the
increase in cost of net revenue for each of these periods was due to the
increase in procurement costs associated with increased sales of this
equipment. The gross margin decreased to 40.2% in 1998, from 40.5% in 1997 and
45.5% in 1996. The relatively stable gross margin levels between 1998 and 1997
were due to increased volumes of sales of higher margin refurbished equipment
in 1998, offsetting an increased portion of lower margin new equipment sales in
the same period. The decrease in gross margin in 1997 and 1996 was due to a
change in sales mix to include more new equipment which has lower gross margins
than de-installed and refurbished equipment, and an increase in the cost of
procuring de-installed equipment due to greater secondary market competition.

  Sales and Marketing. Sales and marketing expenses increased to $5.7 million
in 1998 from $2.6 million in 1997 and $780,000 in 1996. The increases for each
of these periods were primarily due to the addition of sales and procurement
personnel, including sales managers, higher absolute commission expenses
consistent with increased gross profit and increased marketing efforts.

  General and Administrative. General and administrative expenses increased to
$3.9 million in 1998 from $1.6 million in 1997 and $696,000 in 1996. The
increase from 1998 compared with 1997 was due to a significant increase in
headcount resulting from the expansion of our operations, and due to
approximately $700,000 in financing costs attributable to our recapitalization
in July 1998. The increase from 1997 compared with 1996 was due primarily to
the increase in salaries and benefits payable to executive and administrative
employees resulting from the expansion of our operations.

  Interest Expense, Net. Interest expense, net increased to $187,000 in 1998,
from $82,000 in 1997, and $18,000 in 1996. The increases for those periods were
due to higher borrowing levels necessary to fund our working capital
requirements.

                                       25
Quarterly Results of Operations

  The following tables set forth unaudited statement of operations data for
each of the eight quarters in the period ending June 30, 1999, as well as the
percentage of our net revenue represented by each item. In our opinion, this
unaudited information has been prepared on the same basis as the annual
financial statements. This information includes all adjustments (consisting
only of normal recurring adjustments) necessary for fair presentation when read
in conjunction with the financial statements and related notes included
elsewhere in this prospectus. The operating results for any quarter are not
necessarily indicative of results for any future period.
Quarter Ended
                          -------------------------------------------------------------------------
                                     Dec.               June     Sept.    Dec,               June
                          Sept. 30,   31,    March 31,   30,      30,      31,    March 31,   30,
                            1997     1997      1998     1998     1998     1998      1999     1999
                          --------- -------  --------- -------  -------  -------  --------- -------
                                                      (in thousands)
Statement of Operations
Data:
Net revenue.............   $8,247   $12,257   $14,258  $20,159  $16,854  $20,915   $23,248  $29,586
Cost of net revenue.....    4,847     7,478     8,688   12,349    9,853   12,242    14,609   19,414
                           ------   -------   -------  -------  -------  -------   -------  -------
Gross profit............    3,400     4,779     5,570    7,810    7,001    8,673     8,639   10,172
Operating expenses:
  Sales and marketing...      680       864       990    1,404    1,500    1,853     1,967    2,418
  General and
   administrative.......      389       543       525      801    1,597    1,016     1,420    1,579
  Stock-based
   compensation.........      --        --        --       --       --       --        --       193
                           ------   -------   -------  -------  -------  -------   -------  -------
    Total operating
     expenses...........    1,069     1,407     1,515    2,205    3,097    2,869     3,387    4,190
                           ------   -------   -------  -------  -------  -------   -------  -------
Income from operations..    2,331     3,372     4,055    5,605    3,904    5,804     5,252    5,982
Interest expense, net...       20        18        18       57       42       70        59       85
                           ------   -------   -------  -------  -------  -------   -------  -------
Net income..............   $2,311   $ 3,354   $ 4,037  $ 5,548  $ 3,862  $ 5,734   $ 5,193  $ 5,897
                           ======   =======   =======  =======  =======  =======   =======  =======

As a Percentage of
Net Revenue:
Net revenue.............    100.0%    100.0%    100.0%   100.0%   100.0%   100.0%    100.0%   100.0%
Cost of net revenue.....     58.8      61.0      60.9     61.3     58.5     58.5      62.8     65.6
                           ------   -------   -------  -------  -------  -------   -------  -------
Gross profit............     41.2      39.0      39.1     38.7     41.5     41.5      37.2     34.4
Operating expenses:
  Sales and marketing...      8.2       7.1       7.0      6.9      8.9      8.9       8.5      8.2
  General and
   administrative.......      4.7       4.4       3.7      4.0      9.4      4.8       6.1      5.3
  Stock-based
   compensation.........      --        --        --       --       --       --        --       0.7
                           ------   -------   -------  -------  -------  -------   -------  -------
    Total operating
     expenses...........     12.9      11.5      10.7     10.9     18.3     13.7      14.6     14.2
                           ------   -------   -------  -------  -------  -------   -------  -------
Income from operations..     28.3      27.5      28.4     27.8     23.2     27.8      22.6     20.2
Interest expense, net...      0.3       0.1       0.1      0.3      0.3      0.4       0.3      0.3
                           ------   -------   -------  -------  -------  -------   -------  -------
Net income..............     28.0%     27.4%     28.3%    27.5%    22.9%    27.4%     22.3%    19.9%
                           ======   =======   =======  =======  =======  =======   =======  =======
26
Our net revenue increased in each quarter compared to the same quarter in the
prior year due primarily to increased levels of customer demand for the
equipment we sell in general. Our gross margins declined over the period from
41.2% in the quarter ended September 30, 1997 to 34.4% in the quarter ended
June 30, 1999 due largely to an increase in our percentage of sales of new
products which have lower gross margins than de-installed and refurbished
products. Sales and marketing expenses have increased in absolute dollars for
every quarter since September 30, 1997 reflecting greater commissions paid on
increased gross profit, the addition of sales personnel and intensified
marketing efforts. General and administrative expenses increased almost every
quarter due to the increase in personnel costs and professional fees required
to support our growth. In the quarter ended September 30, 1998, general and
administrative expenses included approximately $700,000 in costs associated
with the July 1998 recapitalization.

  Historically, our net revenue and results of operations have been subject to
significant fluctuations, particularly on a quarterly basis, and could
fluctuate significantly from quarter to quarter and from year to year in the
future. Causes of such fluctuations may include the rate and timing of
customers' orders for the equipment we sell, the rate at which
telecommunications carriers de-install equipment, decreases in the prices of
the equipment we sell due to increased secondary market competition, our
ability to locate and obtain equipment, our ability to deploy equipment on a
timely basis, seasonal variations in customer purchasing, write-offs due to
inventory defects and obsolescence, the potentially long sales cycle for our
equipment, delays in the commencement of operations in new markets, costs
relating to possible acquisitions, and general economic conditions and
conditions specific to the telecommunications industry. Historically, we have
seen that our net revenue is subject to seasonal fluctuations because our
customers typically purchase less telecommunications equipment during the third
calendar quarter of each year due to the annual nature of budgetary,
procurement and sales cycles. Significant quarterly fluctuations in our net
revenue will cause significant fluctuations in our cash flows and working
capital.

Liquidity and Capital Resources

  Since inception in July 1995, we have financed our operations primarily
through cash flows from operations. Net cash generated by operating activities
was $7.0 million in the first six months of 1999, $14.9 million in 1998, $8.0
million in 1997 and $1.8 million in 1996. Substantially all of the cash
generated by operating activities was distributed to the members of Somera
Communications, LLC. In July 1998, we used $51.8 million from the sale of Class
B units to outside investors to repurchase outstanding units from a number of
our initial unit holders.

  As of June 30, 1999, we had approximately $482,000 in cash and cash
equivalents. In addition, we had a credit facility to borrow up to $17.0
million. As of June 30, 1999, we had an outstanding book balance under this
line of credit of $779,000. This line of credit was subsequently replaced by
our Fleet National Bank credit facility.

  On August 31, 1999, we entered into a credit agreement with a syndicate of
financial institutions led by Fleet National Bank. The credit agreement
provides for a term loan facility and a revolving loan facility. The term loan
facility was for an aggregate principal amount of $50 million. The revolving
loan facility allows us to borrow $15 million, with a $5 million sublimit for
the issuance of letters of credit. The obligations under the term loan facility
and the revolving loan facility are secured by a first priority lien on all our
tangible and intangible assets. We may prepay loans under the term loan
facility and revolving loan facility at any time upon prior notice to the
lenders. As of

                                       27
September 1, 1999, $50 million was outstanding under the term loan facility and
$6.5 million had been drawn under the revolving loan facility. The proceeds of
our term loan facility were used to make a distribution to the members of
Somera Communications, LLC of $48.5 million in September 1999 and the remaining
$1.5 million was used to pay off a portion of outstanding balances on notes
payable. Additionally, approximately $1.5 million of our revolving loan
facility was used to pay off the current portion of the notes payable. The
remaining amount of notes payable, approximately $500,000 was satisfied from
available cash. Subject to certain voluntary or mandatory reductions by the
Company of the revolving loan facility commitment, the revolving loan facility
will be available for borrowing until August 31, 2004. At our option, loans
under each of the facilities shall bear interest at the prime rate plus an
applicable margin or LIBOR, plus an applicable margin. The applicable margin
with respect to prime rate loans shall be between 0.25% and 1.25% based upon
our debt to earnings ratio. The applicable margin with respect to LIBOR loans
shall be between 1.75% and 2.75% based upon our debt to earnings ratio. We
expect to repay and retire the outstanding balance of the term loan facility
and repay the outstanding balance of the revolving loan facility with the
proceeds of the offering.

  We anticipate significant increases in working capital in the future
primarily as a result of increased sales of equipment and higher relative
levels of inventory. We will also continue to expend significant amounts of
capital on property and equipment related to the expansion of our corporate
headquarters, distribution center and equipment testing infrastructure to
support our growth.

  We believe that cash and cash equivalents, net proceeds from this offering,
financing available under our revolving loan facility and anticipated cash flow
from operations will be sufficient to fund our working capital and capital
expenditure requirements for at least the next 12 months, although we may need
to seek additional financing during that period. We cannot assure you that such
financing will be available on acceptable terms, if at all, or that such
financing will not be dilutive to our stockholders.

Year 2000 Compliance

  Many currently installed computer systems and software products are coded to
accept, store or report only two digit entries in date code fields. Beginning
in the year 2000, these date code fields will need to be enabled to distinguish
21st century dates from 20th century dates. As a result, computer systems and
software used by many companies, including us, our vendors and our customers,
will need to be upgraded to comply with these year 2000 requirements. We could
be impacted by year 2000 issues occurring in our own infrastructure or the
infrastructure of our suppliers, customers, vendors and financial service
organizations. These year 2000 issues could include information errors and
significant information system failures. Any disruption in our operations as a
result of year 2000 issues could harm our business.

Our State of Readiness

  Overview. To address year 2000 readiness, we are implementing a corporate
program to coordinate efforts across all business functions, including
addressing risks associated with business partners and other third-party
relationships. Our internal year 2000 readiness program is divided into four
program areas: internal systems and technology compliance, product compliance,
facilities and safety compliance and supplier and business partner compliance.
We have substantially completed the assessment phase for all areas. We expect
to complete our corrective actions during the fourth

                                       28
quarter of 1999. There can be no assurance that we will be able to complete
corrective action for all four phases in a timely manner, if at all, or that
the process will adequately address the year 2000 issue.

Internal Systems and Technology Compliance

  Core IT Systems. In August 1999, we completed the implementation of a J.D.
Edwards database system which included most of the major functional areas of
our business. The system is designed to further automate our business processes
and is certified by J.D. Edwards as year 2000 compliant.

  Other Information Technology Systems. Our other information technology
systems include telephone and comparable systems and other application
software. We have replaced, upgraded or plan to replace or upgrade those
systems that we assessed as not year 2000 compliant. All system compliance
projects are expected to be completed during the fourth quarter of 1999.

Product Compliance

  We do not design or manufacture any products we sell. We purchase all of our
equipment from OEMs, distributors and other third parties. Under our purchase
agreements with OEMs, equipment provided under these agreements will be year
2000 compliant. On purchases from distributors and other third parties, we
attempt to assess the state of compliance of the equipment, however, there can
be no assurance that this can be accurately determined.

Facilities and Safety Compliance

  Our facilities and safety technology systems include building systems such as
heating, cooling, fire, sprinkler and security systems. We are working with our
landlords to identify and resolve any year 2000 compliance issues in these
systems.

Supplier and Business Partner Compliance

  Our suppliers provide equipment and supplies used by us in the conduct of our
business. An assessment of our suppliers is underway to determinate the
potential level of business interruption we could incur if a supplier fails to
properly address the year 2000 issue. Our business partners provide our
financial, payroll and other operational services. We are requesting written
assurance of year 2000 compliance from our suppliers and business partners
whose Year 2000 compliance is important to our business. We will consider using
alternate sources in the cases where these parties will not provide written
assurances.

 The Costs to Address Our Year 2000 Issues

  Costs incurred in connection with the resolution of year 2000 issues to date
have consisted primarily of the purchase and implementation of our J.D. Edwards
database system and related hardware. In addition, we have incurred internal
labor costs relating to year 2000 compliance planning and assessment. As of
August 31, 1999 we have incurred capital expenditures of approximately $800,000
on year 2000 compliance and expect to incur approximately $200,000 of
additional compliance related expenditures. We do not expect additional
expenditures related to year 2000 compliance to be significant.

                                       29
Our Contingency Plans

  Specific contingency plans are being developed in connection with the
assessment and resolution of the risks we have identified. We have established
preliminary information technology contingency plans and we are continuing to
develop those plans for specific areas of risk associated with the year 2000
issue. We expect to finalize our contingency plans during the fourth quarter of
1999.

Recent Accounting Pronouncements

  In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, or SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 establishes new standards of
accounting and reporting for derivative instruments and hedging activities.
SFAS 133 requires that all derivatives be recognized at fair value in the
balance sheet, and the corresponding gains or losses be reported either in the
statement of operations or as a component of comprehensive income, depending on
the type of hedging relationship that exists. SFAS 133 will be effective for
fiscal years beginning after June 15, 2000. We do not currently hold derivative
instruments or engage in hedging activities.

Qualitative and Quantitative Disclosure About Market Risk

  We have reviewed the provisions of Financial Reporting Release No. 48
"Disclosure of Accounting Policies for Derivative Commodity Instruments and
Disclosure of Quantitative and Qualitative Information about Market Risks
Inherent in Derivative Financial Instruments, Other Financial Instruments and
Derivative Commodity Instruments." We had no holdings of derivative financial
or commodity instruments at June 30, 1999.

  All of our revenue and capital spending is denominated in U.S. dollars. As of
June 30, 1999 we were exposed to interest rate risk on our then outstanding
revolving loan facility. The table below presents principal amounts by expected
maturity and the weighed average interest rates of debt obligations which are
sensitive to changes in interest rates.
Expected Maturity Date
                                                       -------------------------
                                                       1999  2000 2001 2002 2003
                                                       ----  ---- ---- ---- ----
                                                            (in thousands)
Revolving Loan Facility............................  779   --   --   --   --
   Weighed Average Interest Rate...................... 7.75%  --   --   --   --
We believe that the fair value of our current revolving loan facility
approximates its carrying value due to its short term nature.

                                       30
BUSINESS

Industry Background

  The telecommunications infrastructure equipment market has experienced
tremendous growth in recent years. This growth has been driven primarily by
increased carrier competition, expanded service offerings, increased demand
among businesses and consumers and technology advancements. Dataquest projects
that worldwide sales of telecommunications infrastructure equipment will grow
from $180 billion in 1998 to $230 billion in 2002.

  Telecommunications infrastructure equipment is purchased by a wide variety of
existing and emerging carriers, including:

  . Incumbent local exchange carriers, or ILECs, such as independent local
    exchange carriers, and regional bell operating companies, or RBOCs;
  . Long distance carriers, or IXCs;
  . Wireless carriers, such as cellular service providers, personal
    communications service, or PCS, companies, paging operators and
    specialized mobile radio operators, or SMRs; and
  . Competitive local exchange carriers, or CLECs.

  These carriers are making substantial capital expenditures on
telecommunications infrastructure equipment to build, upgrade and maintain
their networks. These networks are primarily comprised of switching,
transmission, access, wireless, microwave and power equipment.

 Carrier Challenges in the Changing Telecommunications Market

  Increased Carrier Competition. Global deregulation has changed the
telecommunications industry and created significant new opportunities for
carriers. For example, in the United States, where each local telephone market
was once served by a single local exchange carrier, deregulation has now
created intense competition by allowing the entry of IXCs, CLECs, wireless
carriers and local exchange carriers from other markets. Carriers are making
substantial expenditures on equipment to establish themselves in new markets.
In this increasingly competitive environment, we believe carriers will continue
to devote significant financial resources to build, upgrade and maintain their
networks.

  Expanded Service Offerings. To differentiate themselves, carriers are rapidly
developing and offering to their customers innovative and more affordable
services. Examples of these services include high speed Internet access, one-
rate wireless and long distance plans and other services. To deliver these
expanded services, carriers must invest significant capital to increase their
network capacity and enhance their current networks.

  Increased Demand Among Businesses and Consumers. The demand among businesses
and consumers for telecommunications services has increased dramatically in
recent years. As competition among carriers has resulted in lower pricing and
greater accessibility, consumers have increased their utilization of and
dependence on new services. For example, the growth in high speed data and
Internet applications, including e-mail, web browsing and e-commerce, and the
increased availability of more flexible mobile networks, such as cellular, PCS
and paging, have increased business and consumer demand for these and other new
services. To meet this demand, carriers must

                                       31
build, upgrade and maintain reliable networks capable of supporting
significantly greater volumes of traffic as well as new service offerings.

  Technology Advancements. Advancements in telecommunications technology enable
carriers to increase capacity, improve service quality and expand their service
offerings. To respond to increased competition and differentiate their service
offerings, carriers are purchasing and deploying new equipment and technologies
from a wide variety of manufacturers.

 Impact on Carrier Equipment Needs

  The foregoing challenges are fueling demand by existing and emerging carriers
for telecommunications infrastructure equipment and services. Carriers have
invested hundreds of billions of dollars in telecommunications network
infrastructure. To maximize the value of their investments, carriers are
expanding and upgrading their existing networks and utilizing existing and new
technologies and equipment from multiple vendors. In addition, carriers are
seeking cost-effective ways to expand and maintain existing network elements
based on mature technologies.

  As carriers build, maintain and upgrade their telecommunications networks,
they often replace existing equipment that still has a significant useful life.
This equipment, referred to as de-installed equipment, often is suitable for
redeployment in other parts of a carrier's network to increase network capacity
and expand service offerings. While historically carriers may have scrapped de-
installed equipment or let it remain idle, competitive factors increasingly
require carriers to attempt to recapture a portion of their original
investment. While carriers prefer to redeploy de-installed equipment within
their own networks, they are often unable to do so. In cases where redeployment
cannot be achieved, they are seeking third party assistance to regain a portion
of their initial investment.

  Carriers not only require large amounts of telecommunications equipment, but
they also need related value-added services to support the build out and
expansion of their networks. In particular, emerging carriers lack many of the
human and financial resources of existing carriers and need these value-added
services as they aggressively buildout their networks to take advantage of
opportunities to capture and retain customers. These emerging carriers seek
creative and cost effective ways to build out their networks through a
combination of services and new, de-installed and refurbished equipment. Once
they have expanded these networks, they will have the same needs as incumbent
carriers to increasingly expand their service offerings and network coverage.
This cycle of network buildouts, upgrades, expansions and maintenance by
carriers will continue to fuel the trend of increased demand for both new and
de-installed equipment.

 Limitations of Existing Equipment Providers

  To satisfy their equipment needs, carriers have traditionally purchased
equipment from original equipment manufacturers, or OEMs, distributors and
secondary market dealers. In this increasingly competitive market, many
carriers are discovering that the traditional equipment providers are unable to
fulfill their complex and changing equipment and service requirements.

                                       32
OEMs. Historically, carriers have relied on OEMs for new telecommunications
infrastructure equipment. Today, some large OEMs offer a variety of products
but do not support multi-vendor product lines. In addition, while some OEMs
offer limited trade-in programs for de-installed equipment, they typically only
cover equipment they manufactured and offer relatively low valuations. OEMs are
also encountering difficulties in serving increased numbers of carriers as
their direct sales models do not scale well and are not cost effective in
today's environment. As a result, many large OEMs are moving away from the
direct sales model and relying more upon value-added equipment providers to
deliver much of their equipment.

  Distributors. Telecommunications equipment distributors typically provide a
selection of new equipment from a list of specific manufacturers and serve a
product fulfillment role within defined product lines. While this high-volume,
low margin, transaction-oriented model offers a wider selection of equipment
than OEMs, it generally results in limited flexibility to address changing
carrier equipment requirements. Additionally, the lower margins associated with
distributor sales results in a sales force focused on sales volume and not on
creative, customized solutions. Distributors are not able to support the
complexities of effective trade-in, refurbishing and redeployment programs.

  Secondary Market Dealers. While OEMs and distributors have limited
involvement in the growing market for de-installed equipment, secondary market
dealers specialize in this type of transaction. These dealers buy and sell de-
installed equipment in niche markets and often serve as an outlet for carriers'
excess inventories. Generally these secondary market dealers lack the
management, operational and financial resources necessary to consistently and
effectively meet changing equipment requirements.

 Emerging Requirements for Telecommunications Equipment Providers

  Due to increased competition, the need to rapidly deliver expanded services,
greater demand and technology advancements, carrier demand for
telecommunications infrastructure equipment and related services has grown
significantly. In today's dynamic environment, carriers are balancing the need
to attract and retain their customers with aggressive network build out
schedules. As a result, carriers are turning to equipment providers who offer:

  . Broad selections of multi-vendor equipment and technologies available
    from a single source;
  . Rapid responses from flexible, knowledgeable sales and customer service
    representatives;
  . Asset recovery programs that offer higher returns and greater flexibility
    across a broader range of de-installed or excess equipment.
  . Technical support on a wide variety of products, including product
    selection and configuration;
  . Other equipment solutions including repair, installation and de-
    installation; and
  . Value-added materials management services including warehousing, multi-
    vendor equipment packaging, or kitting, and other network deployment
    services.

The Somera Solution

  We provide telecommunications carriers with a broad range of infrastructure
equipment and related services designed to meet their specific and changing
equipment needs. We offer our

                                       33
customers a unique combination of new, de-installed and refurbished equipment
from a variety of manufacturers, allowing them to make multi-vendor purchases
from a single cost-effective source. To further address our customers' dynamic
equipment needs, we offer a suite of customized, value-added services including
asset recovery, inventory management, technical support and other ancillary
services. Our innovative equipment and service offerings are delivered through
our team of 75 trained sales and procurement professionals, who work
individually with customers to understand, anticipate and meet their ongoing
equipment requirements. Our sales teams utilize our relationship management
database, our selective inventory and our distribution center to provide our
customers with rapidly deployable equipment solutions.

  The key benefits of our solution include:

  . Broad Multi-vendor Equipment Offering. We provide customers with an
    effective alternative to traditional telecommunications equipment supply
    channels by offering a broad range of new, de-installed and refurbished
    equipment from a variety of manufacturers. We offer infrastructure
    equipment used in both wireline and wireless networks including
    switching, transmission, access, wireless, microwave and power products.
    We believe the equipment we sell provides carriers with a more flexible
    and cost-effective alternative to existing suppliers.

  . Rapid Responsiveness to Dynamic Customer Needs. We offer our customers
    rapid, customized solutions to address their unique equipment needs. We
    provide carriers with convenient access to our skilled and dedicated
    sales and service professionals who are capable of quickly identifying
    and responding to their diverse network needs. We are able to quickly
    locate and provide equipment to carriers by using our relationship
    management database and maintaining selective inventory.

  . Flexible Asset Recovery Programs. We provide innovative and effective
    asset recovery programs that enable carriers to cost-effectively build,
    upgrade and maintain their networks and to recapture value from their
    excess and de-installed equipment. Our asset recovery programs are
    customized to meet carriers' specific objectives and include equipment
    purchases, as well as trade-in, remarketing and consignment programs that
    offer carriers a creative means to recapture a portion of their original
    equipment investment.

  . Simplified, Value-added Materials Management Services. We provide
    carriers with a comprehensive, cost-effective source for buying and
    selling telecommunications infrastructure equipment that simplifies the
    management of their equipment inventory and allows them to focus more on
    their core business. We also provide carriers with a full range of value-
    added services, including technical, materials management and other
    network deployment services.

The Somera Strategy

  Our objective is to be the premier provider of telecommunications
infrastructure equipment and related services to carriers worldwide. Key
elements of our strategy include:

  . Expand Penetration of Telecommunications Carrier Market. Our strategy is
    to further penetrate our existing base of over 750 customers and to
    identify, target, and develop additional customers. We intend to increase
    our sales force and continue our highly

                                       34
interactive dialogue with carriers to better understand and respond to
   their specific equipment and service needs. We believe we have established
   a track record of providing high levels of customer service and that our
   reputation will give us access to greater customer opportunities in the
   future. We believe that our relationship management database provides us
   with the broad industry pricing and equipment deployment knowledge
   necessary to meet our customers' needs and anticipate market trends.

  . Expand Product Lines and Service Capabilities. To continue to meet the
    dynamic needs of carriers, we intend to continuously add to the depth and
    breadth of our equipment and service offerings. We intend to expand our
    product lines by increasing our access to carriers' excess equipment and
    partnering with additional OEMs and distributors. We will aggressively
    seek new supply sources to address under-served equipment segments.

  . Increase RBOC Penetration. We intend to expand our relationships with the
    RBOCs by increasing our resources dedicated to this market, including
    expanding our sales force and obtaining ISO 9000 certification for our
    distribution center and testing facilities. We also intend to further
    strengthen product expertise in those areas most heavily demanded by
    RBOCs. We believe that maintaining strong relationships with the RBOCs
    can also offer a significant potential source of de-installed equipment.

  . Pursue Opportunities for International Growth. International markets
    represent a significant opportunity for future growth. We are currently
    generating net revenue in Latin America, Europe and Asia and expect to
    continue this international expansion. We intend to add additional sales
    management and resources to focus on these markets and plan to open our
    first European office in the first six months of 2000. Entry into the
    European market gives us the opportunity to expand our current offering
    of equipment based on European standards and technology and increases our
    ability to serve foreign markets. In addition, we believe that
    international expansion by some of our existing customers will provide us
    with greater access to these foreign markets.

  . Pursue Selective Acquisitions. The secondary market for
    telecommunications equipment is highly fragmented, consisting primarily
    of suppliers offering limited products to niche markets. We believe that
    these suppliers and other equipment providers, especially those that can
    increase the breadth and depth of our equipment and service offerings and
    enable us to reach new markets or further penetrate existing markets,
    represent potential acquisition opportunities.

Equipment and Services

 Equipment

  We offer our customers a broad range of telecommunications infrastructure
equipment to address their specific and changing equipment needs. The
equipment we sell includes new, de-installed and refurbished items from a
variety of manufacturers. In 1998, we sold over 6,000 items, or SKUs, from
over 250 different manufacturers. We offer the original manufacturer's
warranty on all new equipment we sell. On de-installed and refurbished
equipment, we offer our own warranty which guarantees that the equipment will
perform up to the manufacturer's original specifications.

                                      35
The equipment we sell is grouped into several general categories including
switching, transmission, access, wireless, microwave and power products.

  Switching. Switching equipment is used by carriers to manage call traffic and
to deliver value- added service. Switches and related equipment are located in
the central office of a telecommunications carrier and serve to determine
pathways and circuits for establishing, breaking or completing voice and data
communications over the public switched telephone network, or PSTN, and the
Internet. We provide a variety of switching equipment, including switches,
circuit cards, shelves, racks and other ancillary items in support of carrier
upgrades and reconfigurations. Manufacturers of switching equipment whose
products we sell include Alcatel USA, Centigram, Lucent Technologies and Nortel
Networks.

  Transmission. Transmission equipment is used by carriers to carry information
to multiple points in a carrier's network. Transmission equipment serves as the
backbone of a telecommunications carrier's network and transmits voice and data
traffic in the form of standard electrical or optical signals. We sell a broad
range of transmission products, including channel banks, multiplexors, digital
cross-connect systems, DSX panels and echo cancellers. Manufacturers of
transmission equipment whose products we sell include ADC Telecommunications
Inc., Fujitsu Ltd., Lucent Technologies Inc., NEC Corp., Nortel Networks Inc.,
Telco Systems, Inc. and Tellabs Inc.

  Access. Access equipment is used by carriers, to provide local telephone
service and Internet access. Access equipment is used in the local loop, or
last mile, portion of the PSTN and connects a home or business to the switch in
a carrier's central office. We provide a variety of access equipment, including
digital loop carriers, channel service units/digital subscriber units,
multiplexors and network interface units. Manufacturers of access equipment
whose products we sell include ADC Telecommunications Inc., Carrier Access
Corp., Lucent Technologies Inc., NEC Corp., Newbridge Networks Corp., Nortel
Networks Inc., Telco Systems, Inc. and VINA Technologies, Inc.

  Wireless. Cell sites and other wireless equipment are used by cellular, PCS,
paging and SMR carriers to provide wireless telephone and Internet access. This
equipment is used to amplify, transmit and receive signals between mobile users
and transmission sites, including cell sites and transmission towers. We sell a
broad range of wireless equipment including radio base stations, towers,
shelters, combiners, transceivers and other related items. Manufacturers of
wireless and cell site equipment whose products we sell include Allen Telecom
Inc., Telefon AB LM Ericsson, Lucent Technologies Inc., Motorola Inc., Nortel
Networks Inc. and Siemens AG.

  Microwave. Microwave systems are used by carriers to transmit and receive
voice, data and video traffic. These systems enable point to point high speed
wireless communications. We provide a variety of microwave systems, including
antennas, dishes, coaxial cables and connectors. Manufacturers of microwave
systems whose products we sell include Alcatel Alsthom S.A., Adaptive Broadband
Corp., Digital Microwave Corp., Digital Transmission Systems Inc., Harris-
Farinon Canada Inc., Nortel Networks Inc. and Glenayre Technologies Inc.

  Power. Power equipment is used by carriers to provide direct current, or DC,
power to support their network infrastructure equipment. We sell a broad range
of power equipment, including power bays, rectifiers, batteries, breaker panels
and converters. Manufacturers of power equipment whose

                                       36
products we sell include C&D Technologies, GEC, Lucent Technologies, Nortel
Networks, Peco II and Power Conversion Products.

 Services

  Unlike other equipment providers that are product driven, we are customer
focused. Our equipment and service offerings, industry focused sales teams and
internal systems and procedures are all specifically designed to meet the needs
of each carrier market we serve. We train our employees to offer high quality
service and to provide consistent, reliable customer service. We believe these
elements enable us to offer a sales force that can provide rapid, knowledgeable
and creative solutions to our customers.

  To enable carriers to focus on their core business, we offer the following
services in connection with our equipment sales and procurement:

  . Asset Recovery Programs. Our innovative asset recovery programs offer
    carriers effective solutions to manage their excess and de-installed
    equipment. These programs are customized to meet the specific objectives
    of each carrier, and include equipment purchases as well as equipment
    trade-ins, consignment and re-marketing programs. The programs allow
    carriers to easily and rapidly recapture value from excess and de-
    installed equipment.

  . Technical Services. Our technical services include product selection,
    equipment configuration, custom integration and technical support. These
    services enable carriers to supplement their internal technical
    resources.

  . Value-added Materials Management Services. Our materials management
    services include equipment procurement, kitting, warehousing and other
    inventory management and deployment services.

  . Other Services. Through our extensive network of subcontractor
    relationships and partners, we are also capable of providing specialized
    transportation services, regional warehousing, repair services,
    installation and de-installation services.

Sales, Marketing and Procurement

  Our sales organization is located primarily at our corporate headquarters in
Santa Barbara, California and is augmented by our satellite offices in Pasadena
and Los Gatos, California. As of June 30, 1999, we employed 75 sales and
procurement professionals. We generate leads primarily through direct
marketing, customer referrals and participation in industry tradeshows. Our
sales force is organized by market segment, including specialized teams focused
on the RBOCs, independent local exchange carriers, IXCs, CLECs, and wireless
carriers, including cellular, PCS and SMRs.

  Our sales force operates on a named account basis rather than by geography,
which allows us to maintain a consistent, single point of contact for each
customer. Another key feature of our selling effort is the relationships we
establish at various levels in our customers' organizations. This structure
allows us to establish multiple contacts with each customer across their
management, engineering and purchasing operations. For each type of carrier, we
employ dedicated teams with extensive market knowledge to meet the specific
equipment needs of these customers.

                                       37
Each team member has access to, and is supported by, our relationship
management database. This real time proprietary information system allows each
team to:

  . respond to customer requirements by accessing our extensive database of
    excess and de-installed equipment located at carriers, manufacturers,
    distributors and other third parties worldwide, as well as by accessing
    our select inventory;
  . access relevant detailed purchase and sale information by customer and
    part number;
  . access technical and system configuration information;
  . trace and track all customer and vendor order activity; and
  . project and anticipate customer equipment requirements.

  Each of our teams is directed by a group sales manager who is responsible for
the overall customer relationship and is supported by a number of account
executives, logistics administrators and production controllers. We believe our
dedicated team structure provides consistent high quality customer service
which builds long-term relationships with our customers. Our account executives
have frequent customer contact and oversee customer proposals while our
logistics administrators work with our production controllers as well as our
customers to coordinate sourcing, delivery and any required follow-through
procedures to ensure our customers receive quality, timely customer service.

  Our marketing effort focuses on enhancing market awareness of our brand
through industry trade shows, professional sales presentations and brochures,
an informative web site, branded giveaways and special customer events.
Additionally, we advertise in key telecommunications industry publications. We
believe the size and scope of our operations in our highly fragmented industry
gives us both a unique advantage and opportunity to further build and enhance
our brand recognition.

  In support of our sales activities, we have teams who are responsible for
procurement of the de-installed equipment we sell. Procurement teams are
organized by market segment, including specialized teams focused on wireless
carriers, wireline carriers, and new equipment OEMs and distributors. Our
procurement specialists are dedicated, on a named account basis, to purchase
de-installed equipment from carriers. We also employ a product marketing group
that develops and maintains our relationships with manufacturers and
distributors to assure the availability of new equipment for our customers.

Customers

  We sell equipment to independent local exchange carriers, RBOCs, IXCs, a
broad range of wireless carriers including cellular, PCS, paging and SMRs, and
CLECs. We have over 750 customers who are located primarily in the United
States. Customers from which we recognized at least $1,000,000 in net revenue
in the first six months of 1999 include ALLTEL Corporation, AT&T Corporation,
McLeodUSA Inc., Sprint Corporation, United States Cellular Corporation and
Vodafone AirTouch plc. In the first six months of 1999 no single customer
accounted for more than 10% of our net revenue. In 1998 ALLTEL Corporation
accounted for 10.2% of our net revenue, in 1997 Vodafone AirTouch plc accounted
for 10.1% of our net revenue, and in 1996 ALLTEL Corporation accounted for
11.4% of our net revenue. Sales to customers outside of the United States
accounted for 13.4% of our net revenue in the first six months of 1999, 19.7%
of our net revenue in 1998, 16.5% of our net revenue in 1997, and 6.8% of our
net revenue in 1996.

                                       38
The following examples demonstrate how we have helped our customers:

  Long Distance Carrier. An international long distance carrier made a
significant investment in several Lucent 4ESS and 5ESS legacy switches
installed throughout the United States. Although these switches were mature
technologies and, in some cases, were discontinued, they still performed well
and the carrier wanted to continue utilizing them. Because these were older
pieces of equipment, obtaining plug-in cards, spare parts and other items
necessary to maintain and expand the switches from the manufacturer was
difficult and expensive. Consequently, the carrier was forced to explore
alternative supply sources. In response to inquiries, we utilized our
relationship management database and network of supply channels to locate and
procure the necessary items on a rapid and cost-effective basis.

  CLEC. A CLEC specializing in providing bundled services to businesses and
other carriers had a major customer request which would require the
construction of a multi-site synchronous optical network, or SONET, OC-12 ring.
After completing the initial network expansion design based on new equipment
from an OEM, the carrier determined that the delivery would not be timely or
cost-effective enough to provide a competitive solution. After the carrier
contacted us, we reviewed the engineering specifications and project schedule.
We were able to recommend an alternate equipment configuration utilizing a
combination of available new, de-installed and refurbished equipment at 40%
less than the price quoted by the OEM. This solution allowed the carrier to
build the SONET ring and meet their customer's requirement in a cost-effective
and timely manner.

  Wireless Carrier. A major Latin American wireless carrier had contracted with
a large OEM to replace its existing cellular network with a new digital
network. Design and installation of this new digital network was to be
completed in one year. While the new network was being installed, the carrier
needed to address significant service quality issues it faced due to capacity
constraints on its existing network from rapid subscriber growth. However, the
carrier was reluctant to deploy significant capital on equipment which would
only be in service for one year. By utilizing de-installed equipment from
another carrier's network and refurbishing, testing and reconfiguring it to
meet the specific requirements of the carrier, we were able to deliver this
equipment within 30 days of their order at a significant discount to the cost
of equivalent new equipment. Furthermore, we agreed to repurchase the de-
installed digital network equipment from the implementation of the carrier's
digital network. This cost-effective solution allowed the carrier to expand
capacity to meet demand and generating additional revenues.

Competition

  The market for our equipment and service offerings is highly competitive. We
believe that the trends toward greater demand for telecommunications services,
increasing global deregulation and rapid technology advancements characterized
by shortened product lifecycles will continue to drive competition in our
industry for the foreseeable future. Increased competition may result in price
reductions, lower gross margins and loss of our market share.

  Increased competition in the secondary market for telecommunications
equipment could also heighten demand for the limited supply of de-installed
equipment, which would lead to increased prices for, and reduce the
availability of, this equipment. Any increase in these prices could
significantly impact our ability to maintain our gross margins. Any reduction
in the availability of this equipment could cause us to lose customers.

                                       39
We currently face competition primarily from OEMs, distributors and secondary
market dealers. Many of these competitors have longer operating histories,
significantly greater resources and name recognition, and a larger base of
customers. Our competitors may be able to devote greater resources to the
promotion and sale of new, de-installed and refurbished telecommunications
equipment and adopt more aggressive pricing policies. They may be able to more
effectively expand existing customer relationships and develop customer
relationships. These competitors may be able to leverage their existing
relationships to discourage our customers from purchasing additional equipment
from us. In addition, they may be able to more rapidly adopt new technologies,
increase the array of products offered in response to changes in customer
requirements and develop more expertise on specific manufacturers or product
lines. They may also be able to implement more effective electronic commerce
solutions. Moreover, some of our current and potential competitors may
establish alliances or business combinations to quickly acquire significant
market share. There can be no assurance that we will have the resources to
compete successfully in the future or that competitive pressures will not harm
our business.

Employees

  As of June 30, 1999, we had 120 full-time employees. We consider our
relations with our employees to be satisfactory. We have never had a work
stoppage, and none of our employees is represented by a collective bargaining
agreement. We believe that our future success will depend in part on our
ability to attract, integrate, retain and motivate highly qualified personnel,
and upon the continued service of our senior management and key sales
personnel. Competition for qualified personnel in the telecommunications
equipment industry and our geographic location is intense. We cannot assure you
that we will be successful in attracting, integrating, retaining and motivating
a sufficient number of qualified employees to conduct our business in the
future.

Facilities

  Our principal executive and corporate offices occupy approximately 12,500
square feet in Santa Barbara, California under a lease agreement that expires
in January 2003 with one three-year extension. Our distribution center occupies
approximately 100,000 square feet in Oxnard, California under a lease agreement
that expires in May 2004. We also have a warehouse of approximately 23,000
square feet in Santa Barbara, California under a lease agreement that expires
in March 2005. Additionally, we lease sales offices of approximately 435 square
feet in Los Gatos, California under a lease agreement that expires in April
2000 and of approximately 455 square feet in Pasadena, California under a lease
agreement that expires in May 2000. We are currently exploring additional
locations to expand our corporate facilities. We believe that our facilities
are adequate for our current operations and that additional space can be
obtained if needed.

Legal Proceedings

  From time to time, we may be involved in legal proceedings and litigation
arising in the ordinary course of business. As of the date of this prospectus,
we are not a party to or aware of any litigation or other legal proceeding that
could harm our business.

                                       40
MANAGEMENT

Directors and Executive Officers

  Our executive officers and directors and their ages as of August 1, 1999, are
as follows:
Name                 Age               Positions
 ------------------------------------ --- -------------------------------------
Dan Firestone....................... 37  Chairman of the Board of Directors,
                                          President and
                                          Chief Executive Officer
 Jeffrey G. Miller................... 36  Executive Vice President, Sales and
                                          Marketing
 Gary J. Owen........................ 45  Chief Financial Officer
 Gil Varon........................... 38  Director and Vice President, Wireline
                                          Division
 Walter G. Kortschak(1).............. 40  Director
 Peter Y. Chung(2)................... 31  Director
 Barry Phelps(1)(2).................. 52  Director
--------
(1) Member of Compensation Committee
(2) Member of Audit Committee

  Dan Firestone co-founded Somera Communications in July 1995, has served as
our Chief Executive Officer since 1996, has served as our President since
December 1998, and has also served as our Chairman of the Board since our
inception. From 1994 to the present, Mr. Firestone has also operated SDC
Business Consulting, a private business consulting firm. In 1984, Mr. Firestone
co-founded Century Computer Marketing, a distributor of computer service spare
parts and related products, and served as its Chief Executive Officer until May
1994.

  Jeffrey G. Miller has served as our Executive Vice President, Sales and
Marketing since joining Somera Communications in May 1999. From January 1996
until May 1999, Mr. Miller served as Regional Director for North American Sales
and Operations for the Cellular Infrastructure Group of Motorola, Inc. From
1985 until January 1996, Mr. Miller worked in various capacities with AT&T,
including positions in sales management, product management, marketing, and
software development in their long distance, premises equipment, and voice
messaging business segments. Mr. Miller holds a B.S. in business administration
from Miami University and an M.B.A. from Ohio State University.

  Gary J. Owen has served as our Chief Financial Officer since joining Somera
Communications in July 1999. From January 1999 until July 1999, Mr. Owen served
as Group Finance Director for Logical Holdings Ltd., a U.K. software
development and services company. From January 1997 to January 1999, Mr. Owen
served as Group Finance Director for IFX Group plc, an international
information services company. From September 1996 to December 1996, Mr. Owen
served as a finance consultant doing project work for Fujitsu
Telecommunications Ltd. From May 1994 to September 1996, Mr. Owen served as
Director, European Operations, for Aurora Electronics, Inc., an electronic
materials management company. From 1986 until May 1994, Mr. Owen served as
Chief Financial Officer of Century Computer Marketing, a distributor of
computer service spare parts and related products. Mr. Owen holds a B.A. in
accounting and finance from Nottingham University, England. Mr. Owen is also a
qualified member of the Institute of Chartered Accountants.

  Gil Varon co-founded Somera Communications in July 1995, served as our
President from July 1995 until December 1998, has served as our Vice President,
Wireline Division since January 1999, and has served as one of our directors
since our inception. From 1995 until the present, Mr. Varon

                                       41
has also served as a Senior Sales Manager. From May 1994 to June 1995, Mr.
Varon served in sales and procurement positions for Aurora Electronics, Inc.
From 1985 until May 1994, Mr. Varon served as a Group Sales Manager at Century
Computer Marketing.

  Walter G. Kortschak has served as a director of Somera Communications since
July 1998. Mr. Kortschak is a Managing Partner and Managing Member of various
entities affiliated with Summit Partners, L.P., a private equity capital firm
in Palo Alto, California, where he has been employed since June 1989. Summit
Partners, L.P., and its affiliates manage a number of venture capital funds,
including Summit Ventures V, L.P., Summit V Advisors (QP) Fund, L.P., Summit V
Advisors Fund, L.P., and Summit Investors III, L.P. Mr. Kortschak also serves
as a director of E-Tek Dynamics, Inc., an optical components and modules
company. Mr. Kortschak holds a B.S. in engineering from Oregon State
University, an M.S. in engineering from The California Institute of Technology
and an M.B.A. from the University of California, Los Angeles.

  Peter Y. Chung has served as a director of Somera Communications since July
1998. Mr. Chung is a General Partner and Member of various entities affiliated
with Summit Partners, L.P., a private equity capital firm in Palo Alto,
California, where he has been employed since August 1994. Summit Partners,
L.P., and its affiliates manage a number of venture capital funds, including
Summit Ventures V, L.P., Summit V Advisors (QP) Fund, L.P., Summit V Advisors
Fund, L.P., and Summit Investors III, L.P. From August 1989 to July 1992, Mr.
Chung worked in the Mergers and Acquisitions Department of Goldman, Sachs & Co.
Mr. Chung also serves as a director of Ditech Communications Corporation, a
telecommunications equipment company, E-Tek Dynamics, Inc., an optical
components and modules company, and Splash Technology Holdings, Inc., a
developer of color server systems. Mr. Chung holds an A.B. from Harvard
University and an M.B.A. from Stanford University.

  Barry Phelps has served as a director of Somera Communications since July
1999. Mr. Phelps is the President and Chief Executive Officer of Netcom
Systems, Inc., a network performance analysis company in Calabasas, California,
where he has been employed since November 1996. Before he became President and
Chief Executive Officer in November 1997, Mr. Phelps served as the Vice
President, Finance and Chief Financial Officer of Netcom Systems. Netcom
Systems was acquired by Bowthorpe plc in July 1999. Prior to joining Netcom
Systems, from February 1992 to November 1996, Mr. Phelps served as Chairman and
Chief Executive Officer of MICOM Communications Corporation, a data
communications equipment company which was acquired by Nortel Networks in June
1996. Mr. Phelps holds a B.S. in mathematics from St. Lawrence University and
an M.B.A. from the University of Rochester.

  The executive officers serve at the discretion of the board of directors.
There are no family relationships among any of our directors or executive
officers.

Board Composition

  We currently have five authorized directors. In accordance with the terms of
our bylaws, the terms of the directors will be divided into three classes.
Class I director terms will expire at the annual meeting of stockholders to be
held in 2000. Class II director terms will expire at the annual meeting of
stockholders to be held in 2001. Class III director terms will expire at the
annual meeting of stockholders to be held in 2002. The Class I director is Mr.
Chung, the Class II directors are

                                       42
Messrs. Phelps and Varon, and the Class III directors are Messrs. Firestone and
Kortschak. At each annual meeting of stockholders after the initial
classification or special meeting in lieu of the annual meeting, the successors
to directors whose terms will then expire will be elected to serve from the
time of election and qualification until the third annual meeting following
election or special meeting held in lieu of the annual meeting. Each director
is elected at the respective meeting of our stockholders by a vote of the
holders of a plurality of the voting power represented at that meeting. In
addition, our bylaws provide that the authorized number of directors may be
changed by resolution of the board of directors. Any additional directorships
resulting from an increase in the number of directors will be distributed among
the three classes so that, as nearly as possible, each class will consist of
one-third of the total number of directors. This classification of the board of
directors may have the effect of delaying or preventing a change of control or
management of Somera Communications.

Board Committees

  Our audit committee, which consists solely of two independent directors,
reviews, acts on and reports to our board of directors on various auditing and
accounting matters, including the selection of our independent accountants, the
scope of our annual audits, fees to be paid to the independent accountants, the
performance of our independent accountants and our accounting practices and
internal controls. Messrs. Chung and Phelps are the members of our audit
committee.

  Our compensation committee establishes salaries, incentives and other forms
of compensation for officers and other employees. This committee also
administers our incentive compensation and benefit plans. Messrs. Kortschak and
Phelps are the members of the compensation committee.

Director Compensation

  Except for reimbursement of reasonable expenses incurred in connection with
serving as a director and the grant of stock options, our directors are not
compensated for their service as directors. In July 1999, we granted Mr.
Phelps, one of our non-employee directors, an option to purchase 50,000 shares
of common stock at an exercise price of $8.50 per share under our 1999 Unit
Option Plan. These options vest 25% after one year, and ratably thereafter over
a period of three years. Under our 1999 Director Option Plan, each non-employee
director will automatically be granted an option to purchase 30,000 shares of
our common stock on the date on which he or she becomes a director. In addition
to this first option grant, each outside director will automatically be granted
an option to purchase 7,500 shares on each July 1st, if on the date of such
subsequent grant he or she shall have served on the board for six months from
the date of such grant. Both the initial 30,000 share initial option grant and
subsequent 7,500 share option grant shall vest 25% after one year, and ratably
thereafter over a period of three years.

Compensation Committee Interlocks and Insider Participation

  Our compensation committee consists of Messrs. Kortschak and Phelps. Prior to
the offering, our compensation committee consisted of Messrs. Firestone and
Kortschak.

  None of the current members of our compensation committee is an officer or
employee of Somera Communications. No interlocking relationship exists between
our board of directors or

                                       43
compensation committee and the board of directors or compensation committee of
any other company, nor has such an interlocking relationship existed in the
past.

Employment Agreements

  Jeffrey G. Miller. We entered into an employment agreement with Mr. Miller on
May 6, 1999. Under the agreement, we agreed to pay Mr. Miller an annual salary
of $225,000 and a bonus of up to $100,000 based on the achievement of
performance milestones. Under this agreement, Mr. Miller received a signing
bonus of $40,000. For the first year of Mr. Miller's employment, the full
performance bonus is guaranteed. In conjunction with this agreement, we have
granted Mr. Miller an option to purchase 660,093 shares of our common stock at
an exercise price of $7.57 per share with 25% of the shares subject to this
option vesting on the first anniversary of his commencement date, and 1/36th of
the remaining shares vesting monthly thereafter.

 As a part of this employment agreement, we have provided Mr. Miller with an
interest-free mortgage loan in the amount of $600,000 for the purpose of Mr.
Miller acquiring a new home. Under the agreement, the loan will be forgiven
over eight years for $50,000 per year for the first four years and $100,000 per
year for the final four years. We will retain a mortgage security interest in
the home during the term of the loan. In the event Somera Communications
experiences a change of control and Mr. Miller is terminated without cause or
constructively terminated within twelve months, the outstanding balance of the
loan will be forgiven. In the event Mr. Miller is terminated without cause by
us, the loan will be due and repayable upon one year after he is first able to
sell his shares following this offering. In addition, he would be entitled to
receive severance equal to one year of his base salary and target bonus and
additional vesting of that number of shares subject to his option that would
have become vested had Mr. Miller remained employed by us for an additional six
months. In the event Mr. Miller leaves our employment voluntarily during the
term of the loan, the loan would be due and repayable within six months of the
date of the termination of his employment.

  Gary J. Owen. We entered into an employment agreement with Mr. Owen on July
16, 1999. Under the agreement, we have agreed to pay Mr. Owen an annual salary
of $200,000 and a bonus of up to $25,000 based on the achievement of
performance milestones. Under this agreement, Mr. Owen received a signing bonus
of $15,000. For the first year of Mr. Owen's employment, $12,500 of the
performance bonus is guaranteed. In conjunction with this agreement, we have
granted Mr. Owen an option to purchase 405,000 shares of our common stock at an
exercise price of $8.50 per share with 25% of the shares subject to this option
vesting on the first anniversary of his commencement date, and 1/36th of the
remaining shares vesting monthly thereafter.

  As a part of this employment agreement, Mr. Owen is eligible to receive a
six-month interest-free mortgage loan in an amount to be determined by our
president for purposes of Mr. Owen's purchase of and relocation to a new home.
In the event Mr. Owen is terminated without cause by us, he would be entitled
to receive severance equal to nine months of his base salary and target bonus.
In addition, he would be entitled to receive additional vesting of that number
of shares subject to his option that would have become vested had Mr. Owen
remained employed by us for an additional six months. In the event of a change
of control of Somera Communications, 50% of the shares subject to Mr. Owen's
option, together with any subsequent options granted to him, will vest and
become immediately exercisable.

                                       44
Dan Firestone. Our compensation committee adopted a bonus plan for Mr.
Firestone that provides him with incentive compensation based on performance
milestones. Under this bonus plan, Mr. Firestone is eligible to receive a
bonus, in addition to his base salary, of up to 250% of his base salary based
on the company's achievement of performance milestones.

Executive Compensation

  The following table sets forth all compensation paid or accrued during 1998
to our chief executive officer and our other most highly compensated executive
officer whose salary and bonus for 1998 was more than $100,000. The table also
sets forth compensation on an annualized basis for our chief executive officer
and our other executive officers whose salaries, excluding bonuses if any, for
1999 will exceed $100,000 when calculated on an annualized basis.

                           Summary Compensation Table
1998 Annual Compensation
                                    ------------------------------
                                                      Other Annual 1999 Annual
   Name and Principal Positions      Salary   Bonus   Compensation   Salary
----------------------------------- -------- -------- ------------ -----------
Dan Firestone, Chairman of the
 Board, President and Chief
 Executive Officer................. $109,936 $219,872    $3,250     $250,000
Gil Varon, Director and Vice
 President, Wireline Division......   43,978  169,792     1,600      100,000
Jeffrey G. Miller, Executive Vice
 President, Sales and Marketing....      --       --        --       225,000
Gary J. Owen, Chief Financial
 Officer...........................      --       --        --       200,000
Option Grants

  We did not grant stock options to any of our executive officers in 1998. In
1999, Somera Communications, LLC granted options to purchase Class A units
under its 1999 Unit Option Plan. Following the completion of this offering, no
further options will be granted under the 1999 Unit Option Plan and all
outstanding options under this plan will be assumed by and converted into
options to purchase common stock under the 1999 Stock Option Plan. In May 1999,
Somera Communications, LLC granted an option to Mr. Miller to purchase 660,093
Class A units at an exercise price of $7.57 per unit under our 1999 Unit Option
Plan. In July 1999, Somera Communications, LLC granted an option to Mr. Owen to
purchase 405,000 Class A units at an exercise price of $8.50 per unit under our
1999 Unit Option Plan. In July 1999, Somera Communications, LLC granted an
option to Mr. Firestone to purchase 375,000 Class A units at an exercise price
of $8.50 per unit under our 1999 Unit Option Plan. The options granted to these
executive officers are nonqualified stock options and vest over four years at
the rate of 25% of the shares subject to the option on the first anniversary of
the date of grant, and 1/36th of the remaining shares each subsequent month. A
portion of each of these options will accelerate upon a change of control or
termination of the optionee's employment. See "--Employment Agreements" for
further descriptions of these employee benefits. The options expire ten years
from the date of grant and were granted at an exercise price equal to the
deemed fair value of our common stock on the date of grant, as determined by
the board.

                                       45
Employee Benefits Plans

 1999 Stock Option Plan

  Our 1999 Stock Option Plan was adopted and approved by our board in September
1999. It provides for the grant of incentive stock options to employees and
nonstatutory stock options and share purchase rights to employees, directors
and consultants. We have reserved for issuance under our 1999 Stock Option Plan
a total of 6,750,000 shares of common stock. As of August 31, 1999, no options
were outstanding under this plan. However, following the consummation of this
offering, all options granted under the 1999 Unit Option Plan will be assumed
and converted into options to purchase an equivalent number of shares of our
common stock under the 1999 Stock Option Plan. Following this assumption and
conversion, 5,259,907 shares of our common stock will remain available for
future option grants. The number of shares of common stock reserved for
issuance under this plan will be subject to an annual increase on each
anniversary beginning January 1, 2000 equal to the lesser of:

  . 2,500,000 shares;
  . 4% of the outstanding shares on each anniversary date; or
  . an amount determined by the board of directors.

  The 1999 Stock Option Plan is currently administered by the compensation
committee of our board of directors. Options and stock purchase rights granted
under the 1999 Stock Option Plan will vest as determined by the relevant
administrator, and if not assumed or substituted by a successor corporation
will accelerate and become fully vested in the event we are acquired. The
exercise price of options and stock purchase rights granted under the 1999
Stock Option Plan will be determined by the relevant administrator, although
the exercise price of incentive stock options must be at least equal to the
fair market value of our common stock on the date of grant. Options granted
under the 1999 Stock Option Plan generally vest over a four-year period. The
board of directors may amend, modify or terminate the 1999 Stock Option Plan at
any time as long as such amendment, modification or termination does not impair
vesting rights of plan participants. The 1999 Stock Option Plan will terminate
in 2009, unless terminated earlier by the board of directors.

 1999 Unit Option Plan

  Our 1999 Unit Option Plan was approved by our board of directors in May 1999.
We adopted the 1999 Unit Option Plan when we were a limited liability company.
We have reserved 2,003,289 Class A units under the 1999 Unit Option Plan. As of
August 1, 1999, options to purchase a total of 1,490,093 Class A units at a
weighted average exercise price of $8.09 per share were outstanding and 513,196
Class A units remained available for future option grants. Following the
completion of this offering, no further options will be granted under the 1999
Unit Option Plan and all outstanding options under this plan will be assumed by
and converted into options to purchase common stock under the 1999 Stock Option
Plan.

 1999 Employee Stock Purchase Plan

  Our 1999 Employee Stock Purchase Plan was adopted and approved by our board
in September 1999. Our Purchase Plan, which is intended to qualify under
Section 423 of the Internal Revenue Code, provides our employees with an
opportunity to purchase our common stock through

                                       46
accumulated payroll deductions. This plan will become effective upon the
closing of this offering. A total of 300,000 shares of common stock have been
reserved for issuance under the Purchase Plan, none of which have been issued.
The number of shares reserved for issuance under the Purchase Plan will be
subject to an annual increase on each anniversary beginning January 1, 2000
equal to the lesser of:

  . the number of shares issued under the Purchase Plan in the prior year; or
  . an amount determined by the board of directors.

  The Purchase Plan will be administered by the compensation committee of our
board of directors. The Purchase Plan grants each eligible employee an option
to purchase common stock through payroll deductions up to a maximum of $25,000
for all purchases ending within the same calendar year and 5,000 shares for
each purchase period thereafter. Employees are eligible to participate if they
are employed by us for at least 20 hours per week and more than five months in
any calendar year. Unless the board of directors or its committee determines
otherwise, each offering period will run for six months. The first offering
period will commence on the date of this prospectus and end on or about August
14, 2000, and new offering periods thereafter will commence on the first
trading day on or after February 15th or August 15th. In the event we are
acquired, each outstanding option shall be assumed or an equivalent option
substituted by the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, the offering period
then in progress will be shortened by setting a new exercise date to precede
the date of the acquisition. The price at which common stock will be purchased
under the Purchase Plan is equal to 85% of the fair market value of the common
stock on the first or last day of the applicable offering period, whichever is
lower. Employees may end their participation at any time during the offering
period, and participation automatically ends on termination of employment.
Generally, the board of directors may amend, modify or terminate the Purchase
Plan at any time as long as the amendment, modification or termination does not
impair the rights of plan participants. The Purchase Plan will terminate in
2009, unless terminated earlier in accordance with its provisions.

 1999 Director Option Plan

  Our 1999 Director Option Plan was adopted and approved by our board in
September 1999. Our Director Plan provides for the grant of non-statutory stock
options to non-employee directors. The Director Plan has a term of ten years
unless terminated earlier by the board of directors. A total of 300,000 shares
of our common stock, plus an annual increase equal to the number of shares
needed to restore the number of shares of common stock that are available for
grant under the Plan to 300,000 shares, have been reserved for issuance under
the Director Plan. As of the date of this prospectus, no options have been
granted under the Director Plan.

  Our Director Plan provides that each new outside director shall automatically
be granted an option to purchase 30,000 shares of our common stock on the date
that outside director first becomes a director. In addition to this first
option grant, each outside director shall automatically be granted an option to
purchase 7,500 shares on each July 1st, if on the date of the subsequent grant
he or she shall have served on the board for six months from the date of such
grant. Options granted under the Director Plan vest at a rate of 25 percent of
the shares subject to the option on each anniversary of its grant date,
provided this director continues to serve as an outside director on these
vesting dates.

                                       47
Options granted under the Director Plan are exercisable by the outside director
only while the individual remains one of our directors. The exercise price for
each first option and subsequent option grant shall be 100% of the fair market
value per share of our common stock on the date of grant.

  In the event of our merger or the sale of substantially all of our assets,
each outstanding option shall be assumed or an equivalent option substituted by
the successor corporation. In the event that the successor corporation refuses
to assume or substitute for the option, or following assumption or substitution
the director is terminated, each option granted to an outside director under
the Director Plan shall become fully vested and exercisable for a period of
thirty days after which period the option shall terminate. Options granted
under the Director Plan must be exercised within three months of the end of the
optionee's tenure as one of our directors, or within 12 months after the
director's termination by death or disability.

 401(k) Plan

  We provide a tax-qualified employee savings and retirement plan, commonly
known as a 401(k) plan, which covers our eligible employees. Under our 401(k)
plan, employees may elect to reduce their current annual compensation, on a
pre-tax basis, up to the lesser of 15% or the statutorily prescribed limit,
which is $10,000 in calendar year 1999, and have the amount of the reduction
contributed to the 401(k) plan. The 401(k) plan is intended to qualify under
Sections 401(a) and 401(k) of the Internal Revenue Code so that contributions
by our employees to the 401(k) plan and income earned on plan contributions are
not taxable to employees until withdrawn from the 401(k) plan and so that
contributions will be deductible by us when made. The trustee of the 401(k)
plan invests the assets of the 401(k) plan in the various investment options as
directed by the participants.

Limitation of Liability and Indemnification Matters

  Our certificate of incorporation limits the liability of directors to the
maximum extent permitted by Delaware law. Delaware law provides that directors
of a corporation will not be personally liable for monetary damages for breach
of their fiduciary duties as directors, except liability for:

  . any breach of their duty of loyalty to the corporation or its
    stockholders;
  . acts or omissions not in good faith or which involve intentional
    misconduct or a knowing violation of law;
  . unlawful payments of dividends or unlawful stock repurchases or
    redemptions; or
  . any transaction from which the director derived an improper personal
    benefit.

  This limitation of liability does not apply to liabilities arising under
federal and state securities laws and does not affect the availability of
equitable remedies such as injunctive relief or rescission.

  Our certificate of incorporation and bylaws provide that we shall indemnify
our directors and executive officers and may indemnify other officers,
employees and other agents to the fullest extent permitted by law. We believe
that indemnification by our bylaws covers at least negligence on the part of
indemnified parties. Our bylaws also permit us to secure insurance on behalf of
any officer, director, employee or other agent for any liability arising out of
his or her actions in their capacity, regardless of whether the bylaws would
permit indemnification.

                                       48
We have entered into agreements to indemnify our directors and executive
officers, in addition to indemnification provided for in our bylaws. These
agreements, among other things, provide for indemnification of our directors
and executive officers for expenses (including attorneys' fees), judgments,
fines and settlement amounts incurred by any director or executive officer in
any action or proceeding, including any action by or on our behalf, arising out
of the individual's services as our director or executive officer, or the
director or executive officer of any subsidiaries or any other company or
enterprise to which the person provides services at our request. We believe
that these provisions and agreements are necessary to attract and retain
qualified persons as directors and executive officers.

  At present, there is no pending litigation or proceeding involving any of our
directors, officers or employees for which indemnification is sought. We are
not aware of any threatened litigation that may result in claims for
indemnification. We currently have liability insurance for our directors and
officers and intend to extend that coverage for public securities matters.

                                       49
CERTAIN TRANSACTIONS

Summit Financing

  On July 23, 1998, Summit Ventures V, L.P., Summit V Advisors (QP) Fund, L.P.,
Summit V Advisors Fund, L.P., Summit Investors III, L.P. and several other
investors invested an aggregate of $51.8 million in Somera Communications, LLC
in exchange for 14,070,000 Class B units. These Class B units will be exchanged
for 14,070,000 shares of common stock upon the effectiveness of the
registration statement with respect to this offering. The parties also entered
into related agreements which provided for registration rights, liquidation
preferences, transfer restrictions, and specified other rights. These related
agreements specify that the Class B investors have the authority to elect two
individuals to the board of managers of Somera Communications, LLC. Currently,
two Class B representatives, Messrs. Kortschak and Chung, are members of the
board of directors of Somera Communications, Inc. The right of the Class B
investors to designate managers of Somera Communications, LLC, and directors of
Somera Communications, Inc., as well as the transfer restrictions, will
terminate upon this offering, although we expect Messrs. Kortschak and Chung to
continue to serve as directors.

Fleet National Bank Credit Facility

  On August 31, 1999, we entered into a credit agreement, consisting of a term
loan facility and a revolving loan facility with a syndicate of financial
institutions led by Fleet National Bank. As of September 1, 1999, $50 million
was outstanding under the term loan facility and $6.5 million has been drawn
under the revolving loan facility. We used the proceeds from the term loan
facility to make a distribution to our members, including certain of our
officers and directors, in the aggregate amount of $48.5 million. We plan to
use a portion of the net proceeds of this offering to repay all outstanding
amounts under the term loan facility and revolving loan facility. For
additional information on the terms of the Fleet credit facility, please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources," and for additional information
regarding repayment of the facility, please see "Use of Proceeds."

Loan From Officers and Related Parties

  From July 1996 through November 1998, we borrowed an aggregate of $3.5
million from Dan Firestone, Gil Varon, Robert Firestone, who is Dan Firestone's
father, and Voyage Partners, a partnership whose partners include Dan Firestone
and Gil Varon, under a series of promissory notes that carried annual interest
rates that varied between eight and thirteen percent. These notes were fully
repaid in September 1999.

Miller Loan Agreement

  We have provided Jeffrey G. Miller, our executive vice president of sales and
marketing, with a $600,000 interest-free mortgage loan. This loan was made in
conjunction with his employment agreement dated May 6, 1999 to assist with Mr.
Miller's relocation to the Santa Barbara, California area and his purchase of a
home. As of August 1, 1999, approximately $587,000 was outstanding on this
loan. For additional information regarding this loan, please see "Management--
Employment Agreements".

                                       50
Promoters of Somera Communications

  Mr. Firestone and Mr. Varon are each promoters for purposes of the federal
securities laws. All material transactions with such persons are described in
this section or elsewhere in this prospectus. Please see "Management" and Note
4 to the financial statements.

                                       51
PRINCIPAL STOCKHOLDERS

  The following table sets forth information with respect to beneficial
ownership of our common stock as of August 31, 1999, as adjusted to reflect the
sale of our common stock in this offering, by:

  . each person who beneficially owns more than 5% of the common stock;
  . each of our executive officers;
  . each of our directors; and
  . all executive officers and directors as a group.

  Beneficial ownership is determined under the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to shares. Unless otherwise indicated below, to our knowledge, the
persons and entities named in the table have sole voting and sole investment
power with respect to all shares beneficially owned, subject to community
property laws where applicable. Shares of common stock subject to options that
are currently exercisable or exercisable within 60 days of August 31, 1999 are
deemed to be outstanding and to be beneficially owned by the person holding the
options for the purpose of computing the percentage ownership of that person,
but are not treated as outstanding for the purpose of computing the percentage
ownership of any other person. Unless otherwise indicated, the address for each
listed stockholder is c/o Somera Communications, 5383 Hollister Avenue, Santa
Barbara, California 93111.

  The applicable percentage of ownership for each stockholder is based on
38,062,500 shares of common stock outstanding as of 1999, together with
applicable options for that stockholder.
Percentage of Ownership
                                                ------------------------------
                            Number of Shares of
                               Common Stock
 Name of Beneficial Owner   Beneficially Owned  Before Offering After Offering
--------------------------- ------------------- --------------- --------------
Dan Firestone..............      9,285,036           24.4%           -- %
Jeffrey G. Miller..........            --               *              *
Gary J. Owen...............            --               *              *
Gil Varon..................      9,375,000           24.6            --
Walter G. Kortschak(1).....            --             --             --
 c/o Summit Partners, L.P.
 499 Hamilton Avenue, Suite
  200
 Palo Alto, CA 94301
Peter Y. Chung(2)..........            --             --             --
 c/o Summit Partners, L.P.
 499 Hamilton Avenue, Suite
  200
 Palo Alto, CA 94301
Barry Phelps...............            --             --             --
Summit Funds(3)............     13,757,333           36.1            --
 c/o Summit Partners, L.P.
 499 Hamilton Avenue, Suite
  200
 Palo Alto, CA 94301
All executive officers and
 directors as a group (7
 persons)..................     18,660,036           49.0            --
--------
 *  Represents beneficial ownership of less than 1%
(1) Mr. Kortschak, one of our directors, is a managing member of Summit
    Partners, LLC, which is the general partner of Summit Partners, V, L.P.,
    which is the general partner of each of Summit Ventures V, L.P., Summit V
    Advisors (QP) Fund, L.P. and Summit V Advisors Fund, L.P. Mr. Kortschak is
    also a general partner of Summit Investors III, L.P. Mr. Kortschak
    disclaims beneficial ownership of the shares owned by the Summit Funds,
    except to the extent of his pecuniary interest therein.
(2) Mr. Chung, one of our directors, is a member of Summit Partners, LLC, which
    is the general partner of Summit Partners V, L.P., which is the general
    partner of each of Summit Ventures V, L.P., Summit V Advisors (QP) Fund,
    L.P. and Summit V Advisors Fund, L.P. Mr. Chung disclaims beneficial
    ownership of the shares owned by the Summit Funds, except to the extent of
    his pecuniary interest therein.
(3) Consists of 12,618,986 shares of common stock owned by Summit Ventures V,
    L.P., 723,116 shares of common stock owned by Summit V Advisors (QP) Fund,
    L.P., 220,978 shares of common stock owned by Summit V Advisors Fund, L.P.,
    and 194,253 shares of common stock owned by Summit Investors III, L.P.

                                       52
DESCRIPTION OF CAPITAL STOCK

General

  Upon the completion of this offering, we will be authorized to issue
200,000,000 shares of common stock, $0.0001 par value, and 20,000,000 shares of
undesignated preferred stock, $0.0001 par value. The following description of
our capital stock does not purport to be complete and is subject to and
qualified in its entirety by our amended and restated certificate of
incorporation and bylaws, which are included as exhibits to the registration
statement of which this prospectus forms a part, and by the provisions of
applicable Delaware law.

Common Stock

  As of August 31, 1999, there were 38,062,500 shares of common stock
outstanding which were held of record by 22 stockholders.

  The holders of common stock are entitled to one vote per share on all matters
to be voted upon by the stockholders. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of common stock are
entitled to receive ratably dividends, if any, as may be declared from time to
time by the board of directors out of funds legally available for that purpose.
In the event of our liquidation, dissolution or winding up, the holders of
common stock are entitled to share ratably in all assets remaining after
payment of liabilities, subject to prior distribution rights of preferred
stock, if any, then outstanding. The holders of common stock have no preemptive
or conversion rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to the common stock. All outstanding shares
of common stock are fully paid and nonassessable, and the shares of common
stock to be issued upon the closing of this offering will be fully paid and
nonassessable.

Preferred Stock

  The board of directors has the authority, without action by the stockholders,
to designate and issue preferred stock in one or more series and to designate
the rights, preferences and privileges of each series, any or all of which may
be greater than the rights of the common stock. It is not possible to state the
actual effect of the issuance of any shares of preferred stock upon the rights
of holders of the common stock until the board of directors determines the
specific rights of the holders of the preferred stock. However, the effects
might include, among other things, restricting dividends on the common stock,
diluting the voting power of the common stock, impairing the liquidation rights
of the common stock and delaying or preventing a change of control without
further action by the stockholders. Immediately prior to the closing no shares
of preferred stock will be outstanding, and we have no present plans to issue
any shares of preferred stock.

Warrants

  As of August 1, 1999, we had an outstanding warrant to purchase 95,155 shares
of our common stock at an exercise price of $7.57 per share, and a outstanding
warrant to purchase 112,500 shares of our common stock at an exercise price of
$8.50 per share. Each of the warrants has a two-year term. Each of the warrants
has a net exercise provision under which the holder may, in the exercise price

                                       53
in cash, surrender the warrant and receive a net amount of shares, based on the
fair market value of our stock at the time of the exercise of the warrant,
after deducting the aggregate exercise price.

Registration Rights

  As of August 31, 1999, the holders of 38,062,500 shares of our common stock
or their transferees are entitled to have us register their shares under the
Securities Act. These rights are provided under the terms of an agreement
between us and the holders of these securities. Subject to limitations in the
agreement, if we register any of our common stock either for our own account or
for the account of other security holders, these holders will be entitled to
include their shares of common stock in that registration, subject to the
ability of the underwriters to limit the number of shares included in the
offering. We will be responsible for paying all registration expenses,
including reasonable legal fees, and the holders selling their shares will be
responsible for paying all other selling expenses.

Delaware Anti-takeover Law and Certain Charter and Bylaw Provisions

  Provisions of Delaware law and our amended and restated certificate of
incorporation and bylaws summarized below could make it more difficult to
acquire us by means of a tender offer, a proxy contest or otherwise and to
remove our incumbent officers and directors. These provisions are expected to
discourage coercive takeover practices and inadequate takeover bids and to
encourage persons seeking to acquire control to first negotiate with us. We
believe that the benefits of increased protection of our potential ability to
negotiate with the proponent of an unfriendly or unsolicited proposal to
acquire or restructure us outweighs the disadvantages of discouraging these
proposals because, among other things, negotiations could result in improved
acquisition terms.

 Board of Directors

  Our board of directors will be divided into three classes of directors
serving staggered three year terms. Our bylaws authorize our board of directors
to fill vacant directorships or increase the size of the board of directors.
Accordingly, even if a stockholder brings a successful proxy fight, the
stockholder would likely only be able to elect a minority of our board of
directors at any single annual meeting.

 Stockholder Meetings

  Under our amended and restated certificate of incorporation and bylaws, the
board of directors, the chairman of the board and the president may call
special meetings of stockholders but the stockholders may not call a special
meeting.

 Requirements for Advance Notification of Stockholder Nominations and Proposals

  Our bylaws establish advance notice procedures with respect to stockholder
proposals and the nomination of candidates for election as directors, other
than nominations made by or at the direction of the board of directors or a
committee thereof.

                                       54
Delaware Anti-Takeover Law

  We are subject to Section 203 of the Delaware General Corporation Law, an
anti-takeover law. In general, Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years following the date the person became
an interested stockholder, unless (with some exceptions) the "business
combination" or the transaction in which the person became an interested
stockholder is approved in a prescribed manner. Generally, a "business
combination" includes a merger, asset or stock sale, or other transaction
resulting in a financial benefit to the interested stockholder. Generally, an
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years prior to the determination of
interested stockholder status, did own) 15% or more of a corporation's voting
stock. The existence of this provision would be expected to have an anti-
takeover effect with respect to transactions not approved in advance by the
board of directors, including discouraging attempts that might result in a
premium over the market price for the shares of common stock held by
stockholders.

 Undesignated Preferred Stock

  The authorization of undesignated preferred stock makes it possible for the
board of directors to issue preferred stock with voting or other rights or
preferences that could impede the success of any attempt to change our control.
These and other provisions may have the effect of deferring hostile takeovers
or delaying changes in control or management.

Transfer Agent and Registrar

  The transfer agent and registrar for the common stock is ChaseMellon
Shareholder Services LLC.

Nasdaq National Market Listing

  We have applied to list our common stock on the Nasdaq National Market under
the symbol "SMRA."

                                       55
SHARES AVAILABLE FOR FUTURE SALE

  Sales of substantial amounts of our common stock in the public market
following the offering could cause the market price of our common stock to fall
and could affect our ability to raise capital on terms favorable to us.

  Of the      shares to be outstanding after the offering, assuming that the
underwriters do not exercise their over-allotment option, only the      shares
of common stock sold in this offering will be freely tradable without
restriction in the public market unless the shares are held by "affiliates," as
that term is defined in Rule 144(a) under the Securities Act of 1933. For
purposes of Rule 144, an "affiliate" of an issuer is a person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by or
is under common control with, the issuer. The remaining shares of common stock
to be outstanding after the offering are "restricted securities" under the
Securities Act of 1933 and may be sold in the public market upon the expiration
of the holding periods under Rule 144, described below, subject to the volume,
manner of sale and other limitations of Rule 144.

  In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares for at least one year, including an "affiliate," is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of:

  . 1% of the then outstanding shares of our common stock (approximately
    shares immediately following the offering); or
  . the average weekly trading volume during the four calendar weeks
    preceding filing of notice of the sale of shares of common stock.

  Sales under Rule 144 are also subject to certain manner of sale provisions,
notice requirements and the availability of current public information about
us. A stockholder who is deemed not to have been an "affiliate" of ours at any
time during the 90 days preceding a sale, and who has beneficially owned
restricted shares for at least two years, would be entitled to sell shares
under Rule 144(k) without regard to the volume limitations, manner of sale
provisions or public information requirements.

  In addition, as of August 31, 1999, there were outstanding warrants to
purchase 207,655 shares of common stock and options to purchase 1,490,093
shares of common stock, of which no options were fully vested. An additional
5,259,907 shares are reserved for issuance under our 1999 Stock Option Plan. We
intend to register the shares of common stock issuable or reserved for issuance
under the 1999 Stock Option Plan as soon as practicable following the date of
this prospectus.

  Holders of 38,062,500 shares of common stock are entitled to registration
rights with respect to these shares for resale under the Securities Act of
1933. If these holders, by exercising their registration rights, cause a large
number of shares to be registered and sold in the public market, these sales
could the market price for our common stock to fall. These registration rights
may not be exercised prior to the expiration of 180 days from the date of this
prospectus. See "Description of Capital Stock--Registration Rights."

Lock-up Arrangements

  Our directors and officers, along with stockholders who hold all shares of
our common stock have agreed not to sell or otherwise dispose of any shares of
common stock for a period of 180 days after the date of this prospectus without
prior written consent.

                                       56
UNDERWRITING

  Under the underwriting agreement, which is filed as an exhibit to the
registration statement relating to this prospectus, the underwriters named
below, for whom Lehman Brothers Inc., Dain Rauscher Wessels, a division of Dain
Rauscher Incorporated and Thomas Weisel Partners LLC are acting as
representatives, have each agreed to purchase from us the respective number of
shares of common stock shown opposite its name below:
Number
                                                                           of
        Underwriters                                                     Shares
        ------------                                                    --------
Lehman Brothers Inc. ..........................................
        Dain Rauscher Wessels..........................................
        Thomas Weisel Partners LLC.....................................
                                                                        --------
        Total..........................................................
                                                                        ========
The underwriting agreement provides that the underwriters' obligations to
purchase shares of common stock depend on the satisfaction of the conditions
contained in the underwriting agreement and that, if any of the shares of
common stock are purchased by the underwriters under the underwriting
agreement, all of the shares of common stock that the underwriters have agreed
to purchase under the underwriting agreement, must be purchased. The conditions
contained in the underwriting agreement include the requirement that the
representations and warranties made by us to the underwriters are true, that
there is no material change in the financial markets and that we deliver to the
underwriters customary closing documents.

  The representatives have advised us that the underwriters propose to offer
the shares of common stock directly to the public at the public offering price
set forth on the cover page of this prospectus, and to dealers, who may include
the underwriters, at this public offering price less a selling concession not
in excess of $   per share. The underwriters may allow, and the dealers may
reallow, a concession not in excess of $    per share to brokers and dealers.
After the offering, the underwriters may change the offering price and other
selling terms.

  We have granted to the underwriters an option to purchase up to an aggregate
of      additional shares of common stock, exercisable solely to cover over-
allotments, if any, at the public offering price less the underwriting
discounts shown on the cover page of this prospectus. The underwriters may
exercise this option at any time until 30 days after the date of the
underwriting agreement. If this option is exercised, each underwriter will be
committed, so long as the conditions of the underwriting agreement are
satisfied, to purchase a number of additional shares of common stock
proportionate to the underwriter's initial commitment as indicated in the table
above and we will be obligated, under the over-allotment option, to sell the
shares of common stock to the underwriters.

  We have agreed that, without the prior consent of Lehman Brothers, we will
not, directly or indirectly, offer, sell or otherwise dispose of any shares of
common stock or any securities that may be converted into or exchanged for any
shares of common stock for a period of 180 days from the date of this
prospectus. All of our executive officers and directors and stockholders
holding all of the shares of our capital stock, including all of the holders of
the warrants, have agreed under lock-up

                                       57
agreements that, without prior written consent, they will not, directly or
indirectly, offer, sell or otherwise dispose of any shares of common stock or
any securities that may be converted into or exchanged for any shares of common
stock for the period ending 180 days after the date of this prospectus. See
"Shares Available for Future Sale".

  Prior to the offering, there has been no public market for the shares of
common stock. The initial public offering price has been negotiated between the
representatives and us. In determining the initial public offering price of the
common stock, the representatives considered, among other things and in
addition to prevailing market conditions:

  . our historical performance and capital structure;
  . estimates of our business potential and earning prospects;
  . an overall assessment of our management; and
  . the above factors in relation to market valuations of companies in
    related businesses.

  We have applied to list our common stock on the Nasdaq Stock Market's
National Market under the symbol "SMRA."

  We have agreed to indemnify the underwriters against liabilities, including
liabilities under the Securities Act and liabilities arising from breaches of
the representations and warranties contained in the underwriting agreement, and
to contribute to payments that the underwriters may be required to make for
these liabilities.

  Until the distribution of the common stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the underwriters
and selling group members to bid for and purchase shares of common stock. As an
exception to these rules, the representatives are permitted to engage in
transactions that stabilize the price of the common stock. These transactions
may consist of bids or purchases for the purposes of pegging, fixing or
maintaining the price of the common stock.

  The underwriters may create a short position in the common stock in
connection with the offering, which means that they may sell more shares than
are set forth on the cover page of this prospectus. If the underwriters create
a short position, then the representatives may reduce that short position by
purchasing common stock in the open market. The representatives also may elect
to reduce any short position by exercising all or part of the over-allotment
option.

  The representatives also may impose a penalty bid on underwriters and selling
group members. This means that, if the representatives purchase shares of
common stock in the open market to reduce the underwriters' short position or
to stabilize the price of the common stock, they may reclaim the amount of the
selling concession from the underwriters and selling group members that sold
those shares as part of the offering.

  In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of these purchases. The
imposition of a penalty bid might have an effect on the price of a security to
the extent that it were to discourage resales of the security by purchasers in
an offering.

  Neither we nor any of the underwriters makes any representation or prediction
as to the direction or magnitude of any effect that the transactions described
above may have on the price of

                                       58
the common stock. In addition, neither we nor any of the underwriters makes any
representation that the representatives will engage in these transactions or
that these transactions, once commenced, will not be discontinued without
notice.

  Any offers in Canada will be made only under an exemption from the
requirements to file a prospectus in the relevant province of Canada in which
the sale is made.

  Purchasers of the shares of common stock offered in this prospectus may be
required to pay stamp taxes and other charges under the laws and practices of
the country of purchase, in addition to the offering price listed on the cover
page of this prospectus.

  The underwriters have informed us that they do not intend to confirm sales to
accounts over which they exercise discretionary authority in excess of 5% of
the shares of common stock offered by them.

  At our request, the underwriters have reserved up to       shares of the
common stock offered by this prospectus for sale to our officers, directors,
employees and their family members and to our business associates at the
initial public offering price set forth on the cover page of this prospectus.
These persons must commit to purchase no later than the close of business on
the day following the date of this prospectus. The number of shares available
for sale to the general public will be reduced to the extent these persons
purchase the reserved shares.

  Thomas Weisel Partners LLC, one of the representatives of the underwriters,
was organized and registered as a broker-dealer in December 1998. Since
December 1998, Thomas Weisel Partners has been named as a lead or co-manager on
63 filed public offerings of equity securities, of which 33 have been
completed, and has acted as a syndicate member in an additional 32 public
offerings of equity securities. Thomas Weisel Partners does not have any
material relationship with us or any of our officers, directors or controlling
persons, except with regard to its contractual relationship with us pursuant to
the underwriting agreement entered into in connection with this offering.

                                 LEGAL MATTERS

  Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto, California, will pass upon
the validity of the issuance of the shares of common stock offered by this
prospectus. Cooley Godward LLP will pass upon certain legal matters in
connection with this offering for the Underwriters. Jeffrey D. Saper, a member
of Wilson Sonsini Goodrich & Rosati, P.C., serves as our Secretary. As of the
date of this prospectus, a member of Wilson Sonsini Goodrich & Rosati, P.C.,
owns a warrant exercisable into 112,500 shares of our common stock.

                                    EXPERTS

  The audited financial statements of Somera Communications LLC at December 31,
1997 and 1998 and June 30, 1999 and for the years ended December 31, 1996, 1997
and 1998 and six months ended June 30, 1999 included in this prospectus have
been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

                                       59
AVAILABLE INFORMATION

  We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act of 1933 with respect to the
shares to be sold in this offering. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits and
schedules to the registration statement. For further information with respect
to us and the shares to be sold in this offering, we refer you to the
registration statement. Statements contained in this prospectus as to the
contents of any contract, agreement or other document to which we make
reference, are not necessarily complete. In each instance we refer you to the
copy of the contract, agreement or other document filed as an exhibit to the
registration statement, and each statement is qualified in all respects by the
more complete description.

  You may read and copy all or any portion of the registration statement at the
Commission's public reference room at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices at 5670
Wilshire Boulevard, 11th Floor, Los Angeles, California 90036. You can request
copies of these documents, upon payment of a duplicating fee, by writing to the
Commission or call the Commission at 1-800-SEC-0330 for further information on
the operation of the public reference rooms. Our Commission filings, including
the registration statement, will also be available to you on the Commission's
Internet site, http://www.sec.gov.

  We intend to send to our stockholders annual reports containing audited
consolidated financial statements and quarterly reports containing unaudited
financial statements for the first three quarters of each fiscal year.

                                       60
SOMERA COMMUNICATIONS, LLC

                         INDEX TO FINANCIAL STATEMENTS
Page
                                                                            ----
Report of Independent Accountants.......................................... F-2
Balance Sheets............................................................. F-3
Statements of Operations................................................... F-4
Statement of Members' Capital (Deficit).................................... F-5
Statements of Cash Flows................................................... F-6
Notes to Financial Statements.............................................. F-7
F-1
REPORT OF INDEPENDENT ACCOUNTANTS

To the Members of
Somera Communications, LLC

  In our opinion, the accompanying balance sheets and the related statements of
operations, of members' capital (deficit) and of cash flows present fairly, in
all material respects, the financial position of Somera Communications, LLC at
December 31, 1997, 1998 and June 30, 1999 and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1998 and the six months ended June 30, 1999, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

San Jose, California
September 9, 1999

To the Members of
Somera Communications, LLC

  The accompanying financial statements included herein reflect the approval by
the Company's members of the Company's 3 for 2 split of the Company's Class A
and Class B units as described in Note 10. The above opinion is in the form
that will be signed by PricewaterhouseCoopers LLP upon the effectiveness of
such event assuming that from September 9, 1999 to the effective date of such
event, no other events shall have occurred that would affect the accompanying
financial statements.

PricewaterhouseCoopers LLP
San Jose, California
September 9, 1999

                                      F-2
SOMERA COMMUNICATIONS, LLC

                                 BALANCE SHEETS
                     (in thousands, except per share data)
Pro-forma
                                           December 31,               June 30,
                                          ---------------  June 30,     1999
                                           1997    1998      1999     (Note 9)
                                          ------ --------  --------  -----------
                                                                     (unaudited)
Assets
Current assets:
  Cash and cash equivalents.............  $1,419 $  1,930  $    482   $    --
  Accounts receivable, (net of allowance
   for doubtful
   accounts of $197, $249 and $458 at
   December 31,
   1997, 1998 and June 30, 1999,
   respectively)........................   6,095   10,237    14,989     14,989
  Inventories, net......................   1,456    4,067     9,994      9,994
  Other current assets..................     169      186       229        229
                                          ------ --------  --------   --------
    Total current assets................   9,139   16,420    25,694     25,212
Property and equipment, net.............     131      547     1,380      1,380
Deferred tax asset......................     --       --        --      17,000
Other assets............................      11       42       128        128
                                          ------ --------  --------   --------
    Total assets........................  $9,281 $ 17,009  $ 27,202   $ 43,720
                                          ====== ========  ========   ========
Liabilities, Mandatorily Redeemable
 Class B Units
and Members' Capital
 (Deficit)/Stockholders' Deficit
Current liabilities:
  Accounts payable......................  $4,130 $  5,901  $ 11,660   $ 11,660
  Borrowings under revolving loan
   facility.............................     --       --        779      9,363
  Accrued commissions...................     262      496       950        950
  Other accrued liabilities.............     145      541       651        651
  Capital lease obligations--current
   portion..............................     --       --        179        179
  Notes payable--current portion........     --       --      1,500        --
                                          ------ --------  --------   --------
    Total current liabilities...........   4,537    6,938    15,719     22,803
  Capital lease obligations--net of
   current portion......................     --       --        541        541
  Notes payable--net of current
   portion..............................     957    3,457     1,957        --
  Term debt.............................     --       --        --      49,250
                                          ------ --------  --------   --------
    Total liabilities...................   5,494   10,395    18,217     72,594
                                          ------ --------  --------   --------
  Commitments (Note 5)
Mandatorily redeemable Class B units....     --    51,750    51,750        --
                                          ------ --------  --------   --------

Members' Capital (Deficit)/Stockholders'
 Deficit
Members' capital (deficit)..............   3,787  (45,136)  (42,765)       --
Common stock: $0.001 par value
  Shares authorized: pro forma 200,000
   (unaudited)
  Shares issued and outstanding
  38,063 pro forma (unaudited)..........     --       --        --          38
Additional paid in capital..............     --       --        --      69,435
Accumulated deficit.....................     --       --        --     (98,347)
                                          ------ --------  --------   --------
    Total members' capital
     (deficit)/stockholders' deficit....   3,787  (45,136)  (42,765)   (28,874)
                                          ------ --------  --------   --------
    Total liabilities and members'
     capital (deficit)/stockholders'
     deficit............................  $9,281 $ 17,009  $ 27,202   $ 43,720
                                          ====== ========  ========   ========
The accompanying notes are an integral part of these financial statements.

                                      F-3
SOMERA COMMUNICATIONS, LLC

                            STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)
Six Months Ended
                                Year Ended December 31,         June 30,
                               -------------------------- --------------------
                                 1996     1997     1998      1998       1999
                               -------- -------- -------- ----------- --------
                                                          (unaudited)
Net revenue................... $ 10,149 $ 34,603 $ 72,186  $ 34,417   $ 52,834
Cost of net revenue...........    5,532   20,587   43,132    21,037     34,023
                               -------- -------- --------  --------   --------
      Gross profit............    4,617   14,016   29,054    13,380     18,811
                               -------- -------- --------  --------   --------
Operating expenses:
  Sales and marketing.........      780    2,593    5,747     2,394      4,385
  General and administrative..      696    1,648    3,939     1,326      2,999
  Stock based compensation....      --       --       --        --         193
                               -------- -------- --------  --------   --------
    Total operating expenses..    1,476    4,241    9,686     3,720      7,577
                               -------- -------- --------  --------   --------
      Income from operations..    3,141    9,775   19,368     9,660     11,234
Interest expense, net.........       18       82      187        75        144
                               -------- -------- --------  --------   --------
      Net income.............. $  3,123 $  9,693 $ 19,181  $  9,585   $ 11,090
                               ======== ======== ========  ========   ========
Pro-forma net income per
 unit--basic.................. $   0.08 $   0.25 $   0.50  $   0.25   $   0.29
                               -------- -------- --------  --------   --------
Pro-forma weighted average
 units--basic.................   37,500   38,052   38,063    38,063     38,063
                               -------- -------- --------  --------   --------
Pro-forma net income per
 unit--diluted................ $   0.08 $   0.25 $   0.50  $   0.25   $   0.29
                               -------- -------- --------  --------   --------
Pro-forma weighted average
 units--diluted...............   37,500   38,052   38,063    38,063     38,069
                               -------- -------- --------  --------   --------
The accompanying notes are an integral part of these financial statements.

                                      F-4
SOMERA COMMUNICATIONS, LLC

                    STATEMENT OF MEMBERS' CAPITAL (DEFICIT)
                                 (in thousands)
Mandatorily
                                                                             Redeemable
                            Class A Units     Class B Units                Class B Units
                          ------------------  ---------------             ----------------
                                                                 Total
                                                               Members'
                                                                Capital
                          Number     Value    Number   Value   (Deficit)  Number   Value
                          -------  ---------  ------  -------  ---------  ------- --------
Balances, January 1,
 1996...................   10,099  $      68     --   $   --   $      68      --  $    --
Capital contributed.....   23,651        367   3,750       46        413      --       --
Net income..............      --       2,811     --       312      3,123      --       --
Distributions to
 members................      --      (2,118)    --      (235)    (2,353)     --       --
                          -------  ---------  ------  -------  ---------  ------- --------
Balances, December 31,
 1996...................   33,750      1,128   3,750      123      1,251      --       --
Capital contributed.....      563        300     --       --         300      --       --
Net income..............      --       8,738     --       955      9,693      --       --
Distributions to
 members................      --      (6,723)    --      (734)    (7,457)     --       --
                          -------  ---------  ------  -------  ---------  ------- --------
Balances, December 31,
 1997...................   34,313      3,443   3,750      344      3,787      --       --
Conversion of Class B
 units to Class A
 units..................    2,501        344  (2,501)    (344)       --       --       --
Proceeds from issuance
 of new units...........      --         --      --       --         --    14,070   51,750
Repurchase of members'
 units..................  (12,821)   (51,750) (1,249)     --     (51,750)     --       --
Net income..............      --      11,590     --     7,591     19,181      --       --
Distributions to
 members................      --     (14,986)    --    (1,368)   (16,354)     --       --
                          -------  ---------  ------  -------  ---------  ------- --------
Balances, December 31,
 1998...................   23,993    (51,359)    --     6,223    (45,136)  14,070   51,750
Net income..............      --       6,991     --     4,099     11,090      --       --
Distributions to
 members................      --      (5,618)    --    (3,294)    (8,912)     --       --
Warrants issued in
 exchange for services..      --         193     --       --         193      --       --
                          -------  ---------  ------  -------  ---------  ------- --------
Balances, June 30,
 1999...................   23,993  $ (49,793)    --   $ 7,028  $ (42,765)  14,070 $ 51,750
                          =======  =========  ======  =======  =========  ======= ========
The accompanying notes are an integral part of these financial statements.

                                      F-5
SOMERA COMMUNICATIONS, LLC

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)
Six Months Ended
                              Year Ended December 31,           June 30,
                              --------------------------  --------------------
                               1996     1997      1998       1998       1999
                              -------  -------  --------  ----------- --------
                                                          (Unaudited)
Cash flows from operating
 activities:
 Net income.................. $ 3,123  $ 9,693  $ 19,181    $ 9,585   $ 11,090
 Adjustments to reconcile net
  income to net cash provided
  by operating activities:
 Depreciation and
  amortization...............      25       54       137         46         94
 Provision for doubtful
  accounts...................      49      145        52        113        209
 Provision for write-downs
  of inventories.............      35       10        12        327        539
 Warrants issued in exchange
  for services...............     --       --        --         --         193
 Training costs financed by
  capital lease..............     --       --        --         --          65
 Changes in operating assets
  and liabilities:
  Accounts receivable........  (2,159)  (4,038)   (4,194)    (4,104)    (4,961)
  Inventories................    (927)    (529)   (2,623)    (1,598)    (6,466)
  Other current assets.......    (310)     141       (17)      (209)       (43)
  Accounts payable...........   1,736    2,352     1,771      2,899      5,759
  Accrued commissions........     112      150       234        257        454
  Other accrued
   liabilities...............      76       66       396         91        110
                              -------  -------  --------    -------   --------
   Net cash provided by
    operating activities.....   1,760    8,044    14,949      7,407      7,043
                              -------  -------  --------    -------   --------
Cash flows from investing
 activities:
 Acquisition of property and
  equipment..................    (124)     (85)     (553)      (233)      (272)
 Decrease (increase) in other
  assets ....................     (13)       5       (31)       (65)       (86)
                              -------  -------  --------    -------   --------
   Net cash used in investing
    activities...............    (137)     (80)     (584)      (298)      (358)
                              -------  -------  --------    -------   --------

Cash flows from financing
 activities:
 Payments on line of credit..     (32)     --        --         --         --
 Proceeds from issuance of
  mandatorily redeemable
  class B units..............     413      300    51,750        --         --
 Proceeds from revolving loan
  facility...................     --       --        --         --         779
 Repurchase of members'
  capital....................     --       --    (51,750)       --         --
 Proceeds from notes
  payable....................     662      295     2,500      1,500        --
 Distributions to members....  (2,353)  (7,457)  (16,354)    (8,063)    (8,912)
                              -------  -------  --------    -------   --------
   Net cash used in financing
    activities...............  (1,310)  (6,862)  (13,854)    (6,563)    (8,133)
                              -------  -------  --------    -------   --------

Net increase (decrease) in
 cash and cash equivalents...     313    1,102       511        546     (1,448)
Cash and cash equivalents,
 beginning of year...........       4      317     1,419      1,419      1,930
                              -------  -------  --------    -------   --------
Cash and cash equivalents,
 end of year................. $   317  $ 1,419  $  1,930    $ 1,965   $    482
                              =======  =======  ========    =======   ========
Supplemental disclosures of
 cash flow information:
 Cash paid during the year
  for Interest............... $    14  $    98  $    201    $    81   $    175
                              =======  =======  ========    =======   ========
 Fixed assets acquired under
  capital lease.............. $   --   $   --   $    --     $   --    $    655
                              =======  =======  ========    =======   ========
The accompanying notes are an integral part of these financial statements

                                      F-6
SOMERA COMMUNICATIONS, LLC

                         Notes To Financial Statements

Note 1--Formation and Business of the Company:

  Somera Communications, LLC (the "Company") was formed as a Limited Liability
Company in 1995 under the laws of the State of California. The Company is a
provider of telecommunications infrastructure equipment and services to
telecommunications carriers. The Company provides customers with a combination
of new, de-installed and refurbished equipment.

Note 2--Summary of Significant Accounting Policies:

 Basis of Presentation

  Commencing with fiscal 1997, the Company's fiscal years are on a 52 or 53
week basis. The 1997 and 1998 years which ended on December 28, 1997 and
January 3, 1999 were 52 and 53 week periods, respectively. The six months
presented ended on June 28, 1998 and July 4, 1999, respectively.

 Use of Estimates

  The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.

 Revenue Recognition

  Revenue is recognized upon shipment of the equipment if remaining obligations
are insignificant and collection of the resulting receivable is probable.
Estimated equipment returns and warranty costs, which are based on the
historical experience of the Company, are recorded upon recognition of revenue
where significant.

 Income Taxes

  The Company is treated as a partnership for federal and state income tax
purposes. Consequently, federal income taxes are not payable, or provided for,
by the Company. Members are taxed individually on their share of the Company's
earnings. The Company's net income or loss is allocated among the members in
accordance with the regulations of the Company.

 Concentration of Credit Risk and Other Risks and Uncertainties

  Financial instruments which potentially expose the Company to a concentration
of credit risk principally consist of cash and cash equivalents and accounts
receivable. The Company places its temporary cash with two high credit quality
financial institutions in the United States. The Company performs ongoing
credit evaluations of its customers' financial condition and generally requires
no collateral.

                                      F-7
SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

  During the year ended December 31, 1996 one customer accounted for 11.4% of
net revenue. During the year ended December 31, 1997 one customer accounted for
10.1% of net revenue. During the year ended December 31, 1998 one customer
accounted for 10.2% of net revenue and 12.0% of the total accounts receivable
at December 31, 1998. No individual customer accounted for more than 10% of net
revenue in the six months ended June 30, 1999.

  During the six months ended June 30, 1999 one supplier accounted for 11.0% of
new, de- installed and refurbished equipment purchases.

 Financial Instruments

  The carrying amounts of certain of the Company's financial instruments,
including cash and cash equivalents, accounts receivable, borrowing under
revolving loan facility, accounts payable and notes payable approximate fair
value due to their short-term maturities.

 Cash and Cash Equivalents

  For purposes of the statement of cash flows, the Company considers all highly
liquid instruments purchased with an original or remaining maturity of three
months or less, at the date of purchase, to be cash equivalents.

 Inventories

  Inventories, which are comprised of finished goods held for resale, are
stated at the lower of cost (determined on an average cost basis) or net
realizable value. Inventories are stated net of provisions for obsolete and
slow moving items.

 Property and Equipment

  Property and equipment are recorded at cost and are stated net of accumulated
depreciation. Depreciation is recorded using the straight-line method over the
estimated useful lives of the assets. These lives vary from three to seven
years.

  Leasehold improvements are amortized over the shorter of the estimated useful
life of the asset or remaining lease term on a straight-line basis.

  Expenditures for maintenance and repairs are charged to expense as incurred.
Additions, major renewals and replacements that increase the property's useful
life are capitalized. Gains and losses on dispositions of property and
equipment are included in net income.

  During 1999 the Company adopted the provisions of Accounting Standards
Executive Committee ("AcSEC") Statement of Position ("SOP") 98-1 "Accounting
for the Costs of Computer Software Developed or Obtained for Internal Use." Any
costs capitalized are depreciated on a straight-line basis over the lesser of
the estimated useful life of three years or the term of the lease.

                                      F-8
SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

 Stock-based Compensation

  The Company uses the intrinsic value method of Accounting Principles Board
Opinion No. 25 or APB 25, "Accounting for Stock Issued to Employees," in
accounting for its employee stock options, and presents disclosure of pro forma
information required under Statement of Financial Accounting Standards No. 123
or SFAS 123, "Accounting for Stock-Based Compensation."

 Pro-forma Net Income Per Unit

  Basic net income per unit is computed by dividing the net income for the
period by the weighted average number of units outstanding during the period.
Diluted net income per unit is computed by dividing the net income for the
period by the weighted average number of units and equivalent units outstanding
during the period. Equivalent units, composed of units issuable upon the
exercise of options and warrants, are included in the diluted net income per
unit computation to the extent such units are dilutive. A reconciliation of the
numerator and denominator used in the calculation of basic and pro-forma
diluted net loss per unit follows (in thousands, except per unit data):
Six Months Ended
                                    Year Ended December 31,      June 30,
                                    ----------------------- -------------------
                                     1996    1997    1998      1998      1999
                                    ------- ------- ------- ----------- -------
                                                            (unaudited)
Numerator
  Net income                        $ 3,123 $ 9,693 $19,181   $ 9,585   $11,090
                                    ------- ------- -------   -------   -------
Denominator
  Pro-forma weighted average
   units--basic....................  37,500  38,052  38,063    38,063    38,063
  Pro-forma diluted effect of
   options and warrants to purchase
   units...........................      --      --      --        --         6
                                    ------- ------- -------   -------   -------
  Pro-forma weighted average
   units--diluted..................  37,500  38,052  38,063    38,063    38,069
                                    ------- ------- -------   -------   -------
  Pro-forma net income per unit--
   basic........................... $  0.08 $  0.25 $  0.50   $  0.25   $  0.29
                                    ======= ======= =======   =======   =======
  Pro-forma net income per unit--
   diluted......................... $  0.08 $  0.25 $  0.50   $  0.25   $  0.29
                                    ======= ======= =======   =======   =======
Comprehensive Income

  The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 130 or SFAS No. 130, "Reporting Comprehensive Income." SFAS 130
establishes standards for reporting comprehensive income and its components in
financial statements. Comprehensive income, as defined, includes all changes in
equity during a period from non-owner sources. There was no difference between
the Company's net income and its total comprehensive income for the years ended
December 31, 1996, 1997 and 1998 and for the six months ended June 30, 1998
(unaudited) and June 30, 1999.

 Unaudited Interim Results

  The accompanying interim financial statements for the period ended June 30,
1998 are unaudited. The unaudited interim financial statements have been
prepared on the same basis as the annual financial statements and, in the
option of management, reflect all adjustments, which include

                                      F-9
SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

only normal recurring adjustments, necessary to present fairly in all material
respects the Company's results of operations and its cash flows for the six
months ended June 30, 1998. The financial data and other information disclosed
in these notes to financial statements related to this period are unaudited.

 Recent Accounting Pronouncements

  In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 or SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS 133 establishes new standards of
accounting and reporting for derivative instruments and hedging activities.
SFAS 133 requires that all derivatives be recognized at fair value in the
statement of financial position, and that the corresponding gains or losses be
reported either in the statement of operations or as a component of
comprehensive income, depending on the type of hedging relationship that
exists. SFAS 133 will be effective for fiscal years beginning after June 15,
2000. The Company does not currently hold derivative instruments or engage in
hedging activities.

Note 3--Balance Sheet Accounts (in thousands):
December
                                                              31,        June
                                                          ------------    30,
                                                          1997   1998    1999
                                                          -----  -----  -------
Property and equipment, net

Computer and telephone equipment ........................ $ 142  $ 486  $ 1,265
Office equipment and furniture...........................    32    124      191
Warehouse equipment......................................    28     73       75
Leasehold improvements...................................     8     80      159
                                                          -----  -----  -------
                                                            210    763    1,690
Less accumulated depreciation and amortization...........   (79)  (216)    (310)
                                                          -----  -----  -------
                                                          $ 131  $ 547  $ 1,380
                                                          =====  =====  =======
Depreciation and amortization expense for the years ended December 31, 1996,
1997 and 1998 and the six months ended June 30, 1998 and 1999 amounted to
$25,000, $54,000, $137,000, $46,000 (unaudited) and $94,000, respectively.

  Included in computer and telephone equipment is an amount of approximately
$655,000 representing assets held under capital lease as of June 30, 1999. This
amount represents costs incurred to date in respect of software, hardware and
related costs arising from the implementation of the Company's new accounting
system. No depreciation or amortization has been charged on these amounts for
the six months ended June 30, 1999 as the implementation was not complete.

Note 4--Notes Payable:

  Included within notes payable are amounts payable to two of the Company's
members. At December 31, 1997 and 1998 and June 30, 1999, the aggregate amount
of notes payable to these members was $319,000, $619,000 and $619,000,
respectively.

                                      F-10
SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

  In March 1998, the Company issued a $1,000,000 note payable to an outside
partnership, of which a member is a general partner. This amount remains
outstanding at December 31, 1998 and June 30, 1999.

  Interest is payable monthly on all notes at rates varying between 8% and 13%,
and all notes mature at dates between 2000 and 2002. Repayment terms are
interest only with principal due on maturity date. The notes are unsecured.

  Repayments due on notes payable in each of the next three years are as
follows (in thousands):
Year Ending December 31,
2000................................................................. $2,500
   2001.................................................................    585
   2002.................................................................    372
                                                                         ------
                                                                          3,457
   Less: current portion................................................ (1,500)
                                                                         ------
   Notes payable--net of current portion................................ $1,957
                                                                         ======
On October 8, 1997, the Company entered into a revolving line of credit
facility of $2,500,000. There were no borrowings on this facility during each
of the years ended December 31, 1997 and 1998. On January 12, 1999, the Company
replaced this facility with a new revolving line of credit with the same bank.
The facility includes a fixed amount of $2,000,000 plus an amount based on a
percentage of eligible accounts receivable and inventory with a maximum amount
of $17,000,000 available. The facility matures on January 31, 2001 and bears
interest at LIBOR plus 2% (7.75% at June 30, 1999). Any drawings on this
facility are collateralized by all assets of the Company. There was $779,000
outstanding on this facility at June 30, 1999.

Note 5--Commitments:

  The Company is obligated under several operating leases for both office and
warehouse space. The lease terms range in length from five years to seven
years. Rent expense, net of sublease income, for the years ended December 31,
1996, 1997 and 1998 and for the six months ended June 30, 1998 and 1999 was
$60,000, $131,000, $297,000, $127,000 (unaudited) and $234,000, respectively.

  On June 1, 1999, the Company entered into a five year lease for new warehouse
space. The lease terms include two options to renew for three years and rentals
of $38,000 are due on a monthly basis.

                                      F-11
SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

  Future minimum lease payments, under noncancelable operating and capital
leases at June 30, 1999 are as follows (in thousands):
Capital Operating
                                                               Leases   Leases
                                                               ------- ---------
1999.......................................................  $  91   $   466
   2000.......................................................    273       926
   2001.......................................................    272       918
   2002.......................................................    182       918
   2003.......................................................    --        706
   Thereafter.................................................    --        451
                                                                -----   -------
     Total minimum lease payments.............................    818   $ 4,385
                                                                        =======
     Less amount representing interest........................    (98)
                                                                -----
     Present value of capital lease obligations...............    720
     Less current portion.....................................   (179)
                                                                -----
       Capital lease obligations--net of current portion......  $ 541
                                                                =====
Under the terms of the lease agreements, the Company is also responsible for
internal maintenance, utilities and a proportionate share (based on square
footage occupied) of property taxes. The Company is also exposed to credit risk
in the event of default of the subleasee, because the Company is still liable
to meet its obligations under the terms of the original lease agreement.

Note 6--Members' Capital (Deficit):

  Members' capital includes two classes of units--Class A and Class B. At
December 31, 1997 there were 34,313,000 Class A and 3,750,000 Class B units
outstanding. At December 31, 1998 and June 30, 1999 there were 23,993,000 Class
A units and 14,070,000 Class B units outstanding. Each unit represents the
members proportionate allocation of net income or net loss.

  On July 24, 1998, the Company authorized the issuance and sale of an
aggregate of 14,070,000 Class B units, which represented 36.97% of the
outstanding units. Consideration of $51,750,000 was received in cash for the
sale of these units. The Company then authorized the repurchase of an aggregate
of 12,821,000 Class A units and an aggregate of 1,249,000 Class B units for an
aggregate amount of $51,750,000. Each of the remaining 2,501,000 Class B units
were exchanged for one Class A unit.

  The Class A units participate in the net income of the company based on their
percentage ownership. In addition, the holder of each Class A unit is entitled
to one vote per unit. The Class B units outstanding at June 30, 1999 differ
from the Class A units as follows:

  (a) On a change in ownership the Class B unit holders may elect to redeem
      all or any part of the Class B units at an amount equal to the greater
      of:

    (i)  the original cost thereof; or

    (ii) an amount equal to the number of Class B units to be redeemed
         multiplied by the maximum consideration payable with respect to
         any unit in such a change of ownership.

                                      F-12
SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

  (b) In the event of the bankruptcy of the Company, all of the Class B units
      are subject to immediate redemption at a price equal to the original
      cost thereof.

  (c) The Class B units convert automatically on the closing of a firm
      commitment underwritten public offering of the Company's (or a
      corporate successor's) equity securities resulting in proceeds to the
      Company or such corporate successor (net of underwriting discounts and
      commissions and related offering expenses) of at least $30 million at a
      price per share to the public of at least 200% of the original cost of
      each Class B unit.

  (d) In a winding up or liquidation of the Company, the Class B units are
      paid out in preference to the Class A units up to the amount of the
      original cost of the Class B units.

  The members' liability is limited to the total balance held in the members'
capital account.

  In May 1999, the Company effected a 2,500-for-1 split of the then outstanding
Class A and Class B units. The effect of this split has been retroactively
reflected throughout the financial statements.

 Warrants

  In May 1999, warrants exercisable into 95,155 Class A units were issued in
consideration for recruitment services. The warrants become fully exercisable
upon a merger or consolidation of the Company or upon completion of the
Company's initial public offering. The warrants are exercisable at $7.57 per
unit and have a two year term. The fair value of the warrants of approximately
$193,000 has been recorded as an expense in the six months ended June 30, 1999.
This was estimated using the Black-Scholes model and the following assumptions:
dividend yield of 0%; volatility of 40%; risk free interest rate of 5.58% and a
term of two years.

 Unit Option Plan

  In May 1999 the Company adopted the 1999 unit option plan (the "Plan") under
which 2,003,000 Class A units were reserved for issuance of stock options to
employees, directors, or consultants under terms and provisions established by
the Board of Managers. Under the terms of the Plan, incentive options may be
granted to employees, and nonstatutory options may be granted to employees,
directors and consultants, at prices no less than 100% and 85%, respectively,
of the fair market value of the Class A units at the date of grant, as
determined by the Board of Members. Options granted under the Plan vest at a
rate of 25% after one year with the remaining vesting evenly over the next
three years. The options expire ten years from the date of grant.

Activity under the Plan is set forth below:
Options Outstanding
                                             ----------------------------------
                                                           Weighted
                                                     Price Average   Remaining
                                  Available           per  Exercise Contractual
                                  for Grant   Units  Unit   Price      Life
                                  ---------  ------- ----- -------- -----------
Units reserved at plan
   inception, May 1999........... 2,003,000
  Options granted................  (660,000) 660,000 $7.57  $7.57       9.9
                                  ---------  ------- -----  -----       ---
  Balances, June 30, 1999........ 1,343,000  660,000 $7.57  $7.57       9.9
                                  =========  ======= =====  =====       ===
F-13
SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

  At June 30, 1999 no options outstanding were exercisable. The weighted
average fair value of options granted during the six months ended June 30, 1999
was $1.84 per unit.

 Pro-forma Unit Compensation

  The Company has adopted the disclosure-only provisions of SFAS 123 for option
grants to employees. Had compensation cost been determined based on the fair
value at the grant date for the awards in 1999 consistent with the provisions
of SFAS 123, the Company's net income for 1999 would have been as follows (in
thousands, except per unit data):
Six Months
                                                                  Ended June 30,
                                                                       1999
                                                                  --------------
Net income--as reported.......................................    $11,090
   Net income--as adjusted.......................................    $11,052
   Net income per unit--basic as reported........................    $  0.29
   Net income per unit--basic as adjusted........................    $  0.29
   Net income per unit--diluted as reported......................    $  0.29
   Net income per unit--diluted as adjusted......................    $  0.29
The Company calculated the fair value of each option grant on the date of
grant using the Black-Scholes option pricing model as prescribed by SFAS 123
using the following assumptions:
Six Months
                                                                  Ended June 30,
                                                                       1999
                                                                  --------------
Risk-free interest rate.......................................      5.65%
   Expected life (in years)......................................         5
   Dividend yield................................................         0%
   Expected volatility...........................................         0%
As the determination of fair value of all options granted after such time as
the Company becomes a public entity will include an expected volatility factor
in addition to the factors described in the preceding paragraph, the above
results may not be representative of future periods.

Note 7--401(k) Savings Plan:

  In February 1998, the Company adopted a 401(k) Savings Plan (the "Savings
Plan") which covers all employees. Under the Savings Plan, employees are
permitted to contribute up to 20% of gross compensation not to exceed the
annual IRS limitation for any plan year ($10,000 in 1998). The Company matches
25% of employee contributions for all employees who receive less than 50% of
their total compensation in the form of commissions. The Company made matching
contributions of $15,000, $5,000 (unaudited) and $8,000 for the year ended
December 31, 1998 and for the six months ended June 30, 1998 and 1999,
respectively.

Note 8--Geographic Information:

  The Company has adopted Statement of Financial Accounting Standards No. 131,
or SFAS 131, "Disclosures about Segments of an Enterprise and Related
Information," effective for fiscal years

                                      F-14
SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

beginning after December 31, 1997. SFAS 131 supersedes Statement of Financial
Accounting Standards No. 14, or SFAS 14, "Financial Reporting for Segments of a
Business Enterprise." SFAS 131 changes current practice under SFAS 14 by
establishing a new framework on which to base segment reporting and also
requires interim reporting of segment information. Management uses one
measurement of profitability for its business. The Company markets products and
related services to customers in the United States, North America, Europe and
Latin America.

  Net revenue information by geographic area is as follows (in thousands):
Net
                                                                        Revenue
                                                                        -------
Year ended December 31, 1996:
     United States..................................................... $ 9,454
     Canada............................................................     392
     Latin America.....................................................     302
     Other.............................................................       1
                                                                        -------
       Total........................................................... $10,149
                                                                        =======
   Year Ended December 31, 1997:
     United States..................................................... $28,907
     Canada............................................................     409
     Latin America.....................................................   5,204
     Other.............................................................      83
                                                                        -------
       Total........................................................... $34,603
                                                                        =======
   Year Ended December 31, 1998:
     United States..................................................... $57,958
     Canada............................................................     895
     Latin America.....................................................  13,051
     Other.............................................................     282
                                                                        -------
       Total........................................................... $72,186
                                                                        =======
   Six Months Ended June 30, 1999:
     United States..................................................... $45,760
     Canada............................................................   1,178
     Latin America.....................................................   5,547
     Other.............................................................     349
                                                                        -------
       Total........................................................... $52,834
                                                                        =======
All long lived assets are maintained in the United States.

Note 9--Unaudited Pro-forma Balance Sheet Data:

  Prior to the effectiveness of the public offering by Somera Communications,
Inc., a Delaware Corporation, the unit holders of the Company will exchange all
of their outstanding units for shares of common stock of the Delaware
Corporation, and the corporation will succeed the limited liability company.
Prior to this exchange the Company has made a distribution to its members of
approximately $48.5 million financed by a new term loan. In addition the
Company repaid the notes payable discussed in Note 4 to these financial
statements. The pro-forma effect of this reorganization, the new term loan, the
payment of the above distribution, the repayment of the notes payable together
with the payment of the July distribution to members have been presented as a
separate column in the Company's balance sheet assuming that the reorganization
had occurred at June 30, 1999.

                                      F-15
SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

Note 10--Subsequent Events:

 Distribution to Members

  In July 1999 the Company paid a distribution to members of approximately
$6,359,000.

 Loan to Officer

  On July 12, 1999 the Company entered into a mortgage loan agreement under
which it advanced $600,000 to an officer of the Company. The mortgage loan has
a term of eight years, is interest free and is secured on the principal
residence of the officer. Under the terms of the mortgage loan the amount
advanced will be forgiven as to $50,000 on each of the first four anniversaries
of the note and $100,000 on each of the fifth through eighth anniversaries.

  The loan can be forgiven in full in the event that the officer's employment
is either terminated without cause or is constructively terminated within 12
months of a change in control of the Company. If the officer's employment with
the Company ceases for any other reason, including death or disability, the
remaining balance becomes repayable to the Company. The term of repayment is
dependent upon the reason for the officer's employment ceasing and ranges from
six to eighteen months from the date of termination of employment.

  As a result of the above, the Company will record a compensation charge equal
to the amount forgiven for each period the loan is outstanding.

 Option Grants and Warrant Issuance

  On July 13, 1999, the Company issued stock options to two officers and one
outside director resulting in unearned stock-based compensation of $830,000
which will be recorded and amortized over the vesting period, generally four
years of the underlying options. The charge will be amortized to net income as
follows: $244,000 for the remainder of 1999, $367,000 on 2000, $148,000 in
2001, $63,000 in 2002 and $8,000 in 2003. In addition, the Company issued a
warrant to purchase 112,500 shares of common stock in exchange for services.
The warrants were immediately vested and will result in a one-time charge of
$337,000 to be recorded in the Company's third quarter results.

 Term Loan and Revolving Loan Facility

  On August 31, 1999, the Company signed an agreement under which a syndicate
of banks provided a $50 million term loan and $15 million revolving loan
facility.

  The term loan matures on August 31, 2004 and the Company is required to make
quarterly payments of principal and interest. The term loan and revolving
credit facility are secured by all of the Company's assets.

                                      F-16
SOMERA COMMUNICATIONS, LLC

                   Notes To Financial Statements--(Continued)

 Distribution to Members and Repayment of Notes Payable

  On August 31, 1999, the Company paid a distribution of $48.5 million to its
members. In addition, the Company repaid the notes payable described in Note 4
to these financial statements.

 Stock Split

  On September 9, 1999 the Company approved a 3 for 2 split of its Class A and
B units which will be effected prior to any exchange of outstanding units for
shares of common stock of Somera Communications, Inc. ("Somera Delaware"), a
Delaware Corporation. All unit data and unit option plan information have been
restated to reflect the effect of the forward split.

  On September 9, 1999 the Board of Managers resolved to take all actions
necessary to assist Somera Delaware in the preparation, execution and filing
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, a Registration Statement on Form S-1 relating to the public
offering by Somera Delaware of up to $115 million of its authorized but
unissued shares of Common Stock.

                                      F-17
Shares

                                 [SOMERA LOGO]

                                  Common Stock

                                 -------------

                                   PROSPECTUS
                                        , 1999

                                 -------------

                                Lehman Brothers

                             Dain Rauscher Wessels
                    a division of Dain Rauscher Incorporated

                           Thomas Weisel Partners LLC
Part II

                     Information Not Required In Prospectus

Item 13. Other Expenses of Issuance and Distribution.

  The following table sets forth the costs and expenses, other than the
underwriting discounts and commissions, payable by the Registrant in connection
with the sale of the securities being registered. All amounts are estimates
except the SEC registration fee, the NASD filing fee and the Nasdaq/National
Market System listing fee.
SEC Registration Fee................................................ $31,970
   NASD Filing Fee.....................................................  12,000
   Nasdaq National Market Listing Fee..................................      *
   Printing Costs......................................................      *
   Legal Fees and Expenses.............................................      *
   Accounting Fees and Expenses........................................      *
   Blue Sky Fees and Expenses..........................................      *
   Transfer Agent and Registrar Fees...................................      *
   Miscellaneous.......................................................      *
                                                                        -------
       Total........................................................... $    *
                                                                        =======
--------
* To be filed by amendment

Item 14. Indemnification of Directors and Officers.

  Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended. Article IX of
our Amended and Restated Certificate of Incorporation (Exhibit 3.2 hereto) and
Article VI of our current Bylaws (Exhibit 3.3 hereto) provide for
indemnification of our directors, officers, employees and other agents to the
maximum extent permitted by Delaware law. In addition, we have entered into
Indemnification Agreements (Exhibit 10.1 hereto) with our officers and
directors. The Underwriting Agreement (Exhibit 1.1) also provides for cross-
indemnification among Somera Communications, Inc. and the Underwriters with
respect to certain matters, including matters arising under the Securities Act.

Item 15. Recent Sales of Unregistered Securities.

  Since August 1996, the company has issued and sold the following securities:

  1. In April 1997, the company issued an aggregate of 563,000 of its Class A
     units to 3 investors for an aggregate cash consideration of $300,000.

  2. On July 23, 1998, the company issued an aggregate of 14,070,000 of its
     Class B units to 8 accredited investors for an aggregate cash
     consideration of $51,750,000.

  3. On May 6, 1999, the company issued a warrant to purchase 95,155 of its
     Class A units with an exercise price of $7.57 per share to a party in
     partial consideration for the rendering of professional services to the
     company.

  4. On July 13, 1999, the company issued a warrant to purchase 112,500 of
     its Class A units with an exercise price of $8.50 per unit to a party in
     partial consideration for the rendering of professional services to the
     company.

                                      II-1
The issuances of the above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act, or Regulation D promulgated thereunder, or with respect to
issuances to employees, directors and consultants, Rule 701 promulgated under
Section 3(b) of the Securities Act as transactions by an issuer not involving a
public offering or transactions pursuant to compensatory benefit plans and
contracts relating to compensation as provided under Rule 701. The recipients
of securities in each such transaction represented their intentions to acquire
the securities for investment only and not with a view to or for sale in
connection with any distribution thereof and appropriate legends were affixed
to the share certificates and warrants issued in such transactions. All
recipients either received adequate information about us or had adequate
access, through their relationships with us, to information about us.

Item 16. Exhibits and Financial Statement Schedules.

  (a) Exhibits
1.1*  Form of Underwriting Agreement.
    3.1   Certificate of Incorporation of Somera Communications, Inc., a
          Delaware corporation, as currently in effect.
    3.2   Form of Amended and Restated Certificate of Incorporation of Somera
          Communications, Inc. to be filed immediately following the closing of
          the offering made under this registration statement.
    3.3   Bylaws of Somera Communications, Inc., as currently in effect.
    4.1*  Specimen common stock certificate.
    5.1*  Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
   10.1   Form of Indemnification Agreement between Somera Communications, Inc.
          and each of its directors and officers.
   10.2   1999 Stock Option Plan and form of agreements thereunder (as adopted
          September 3, 1999).
   10.3   1999 Employee Stock Purchase Plan (as adopted September 3, 1999).
   10.4   1999 Director Option Plan and form of agreements thereunder (as
          adopted September 3, 1999).
   10.5   Loan Agreement by and between Somera Communications and Fleet
          National Bank, dated August 31, 1999.
   10.6   Security Agreement by and between Somera Communications and Fleet
          National Bank, dated August 31, 1999.
   10.7   Employment Agreement between Somera Communications and Jeffrey
          Miller, dated May 6, 1999.
   10.8   Employment Agreement between Somera Communications and Gary Owen,
          dated July 16, 1999.
   10.9   Lease dated January 20, 1998 between Santa Barbara Corporate Center,
          LLC and Somera Communications.
   10.10  First Amendment to Lease, dated February 2, 1998, between Santa
          Barbara Corporate Center, LLC and Somera Communications.
   10.11  Second Amendment to Lease, dated February 1, 1999, between Santa
          Barbara Corporate Center, LLC and Somera Communications.
   10.12* Industrial/Commercial Lease, dated May 12, 1999, between Sunbelt
          Properties and Somera Communications.
   10.13  Sublease, dated January 30, 1999, between GRC International, Inc. and
          Somera Communications.
   23.1   Consent of PricewaterhouseCoopers LLP.
   23.2*  Consent of Wilson Sonsini Goodrich & Rosati, P.C. (included in
          Exhibit 5.1).
   24.1   Powers of Attorney (included on signature page to Registration
          Statement).
   27.1   Financial Data Schedule.
--------
*To be supplied by amendment.

                                      II-2
(b) Financial Statement Schedules.
Schedule
            --------                                ---
II - Valuation and Qualifying Accounts
Item 17. Undertakings.

  The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

  Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

  The undersigned registrant hereby undertakes that:

    (1) For purposes of determining any liability under the Securities Act of
  1933, the information omitted from the form of prospectus filed as part of
  this registration statement in reliance upon Rule 430A and contained in a
  form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
  (4) or 497(h) under the Securities Act shall be deemed to be part of this
  registration statement as of the time it was declared effective.

    (2) For the purpose of determining any liability under the Securities Act
  of 1933, each post-effective amendment that contains a form of prospectus
  shall be deemed to be a new registration statement relating to the
  securities offered therein, and the offering of such securities at that
  time shall be deemed to be the initial bona fide offering thereof.

                                      II-3
SIGNATURES

  Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Santa
Barbara, State of California on September 10, 1999.

                                          By:
                                               /s/ Daniel A. Firestone
                                             ----------------------------------
                                                   Daniel A. Firestone
                                                 Chief Executive Officer

                               POWER OF ATTORNEY

  KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints, jointly and severally, Daniel A.
Firestone and Gary J. Owen, and each of them, as his attorney-in-fact, with
full power of substitution, for him in any and all capacities, to sign any and
all amendments to this registration statement (including post-effective
amendments), and any and all registration statements filed pursuant to Rule 462
under the Securities Act of 1933, as amended, in connection with or related to
the offering contemplated by this registration statement and its amendments, if
any, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming their signatures as they may be signed by our said
attorney to any and all amendments to said registration statement.

  Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons in the
capacities indicated on September 10, 1999:
Signatures                            Title
             ----------                            -----
/s/ Daniel A. Firestone          President, Chief Executive
_____________________________________  Officer and Chairman of the
         Daniel A. Firestone           Board (Principal Executive
                                       Officer)

        /s/ Gary J. Owen              Chief Financial Officer
_____________________________________  (Principal Financial and
            Gary J. Owen               Accounting Officer)

          /s/ Gil Varon               Director
_____________________________________
              Gil Varon

    /s/ Walter G. Kortschak           Director
_____________________________________
         Walter G. Kortschak

       /s/ Peter Y. Chung             Director
_____________________________________
           Peter Y. Chung

        /s/ Barry Phelps              Director
_____________________________________
            Barry Phelps
II-4
SCHEDULE II

                      REPORT OF INDEPENDENT ACCOUNTANTS ON
                          FINANCIAL STATEMENT SCHEDULE

To the Members
of Somera Communications, LLC:

  Our audits of the financial statements referred to in our report dated
September 9, 1999 appearing in this Registration Statement on Form S-1 also
included an audit of the financial statement schedule listed in Item 16 of this
Form S-1. In our opinion, this financial statement schedule presents fairly, in
all material respects, the information set forth therein when read in
conjunction with the related financial statements.

PricewaterhouseCoopers LLP

San Jose, California
September 9, 1999
SCHEDULE II

                       VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)
Additions
                                    Balance at Charged to            Balance at
                                    Beginning  Costs and               Ending
                                    of Period   Expenses  Deductions of Period
                                    ---------- ---------- ---------- ----------
Year Ended December 31, 1996
  Allowance for sales returns......    $  1       $ 79       $ 41       $ 39
  Allowance for doubtful accounts..       3         49        --          52
  Allowance for write-downs of
   inventory.......................     --         163        128         35

Year Ended December 31, 1997
  Allowance for sales returns......    $ 39       $249       $138       $150
  Allowance for doubtful accounts..      52        145        --         197
  Allowance for write-downs of
   inventory                             35        370        360         45

Year Ended December 31, 1998
  Allowance for sales returns......    $150       $424       $289       $285
  Allowance for doubtful accounts..     197        201        149        249
  Allowance for write-downs of
   inventory.......................      45        634        622         57

Six Months Ended June 30, 1999
  Allowance for sales returns......    $285       $276       $211       $350
  Allowance for doubtful accounts..     249        209        --         458
  Allowance for write-downs of
   inventory.......................      57        615         76        596
Exhibit Index
Exhibit
 Number                                Description
 -------                               -----------
1.1*   Form of Underwriting Agreement.
  3.1    Certificate of Incorporation of Somera Communications, Inc., a
         Delaware corporation, as currently in effect.
  3.2    Form of Amended and Restated Certificate of Incorporation of Somera
         Communications, Inc. to be filed immediately following the closing of
         the offering made under this registration statement.
  3.3    Bylaws of Somera Communications, Inc., as currently in effect.
  4.1*   Specimen common stock certificate.
  5.1*   Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
 10.1    Form of Indemnification Agreement between Somera Communications, Inc.
         and each of its directors and officers.
 10.2    1999 Stock Option Plan and form of agreements thereunder (as adopted
         September 3, 1999).
 10.3    1999 Employee Stock Purchase Plan (as adopted September 3, 1999).
 10.4    1999 Director Option Plan and form of agreements thereunder (as
         adopted September 3, 1999).
 10.5    Loan Agreement by and between Somera Communications and Fleet National
         Bank, dated August 31, 1999.
 10.6    Security Agreement by and between Somera Communications and Fleet
         National Bank, dated August 31, 1999.
 10.7    Employment Agreement between Somera Communications and Jeffrey Miller,
         dated May 6, 1999.
 10.8    Employment Agreement between Somera Communications and Gary Owen,
         dated July 16, 1999.
 10.9    Lease dated January 20, 1998 between Santa Barbara Corporate Center,
         LLC and Somera Communications.
 10.10   First Amendment to Lease, dated February 2, 1998, between Santa
         Barbara Corporate Center, LLC and Somera Communications.
 10.11   Second Amendment to Lease, dated February 1, 1999, between Santa
         Barbara Corporate Center, LLC and Somera Communications.
 10.12*  Industrial/Commercial Lease, dated May 12, 1999, between Sunbelt
         Properties and Somera Communications.
 10.13   Sublease, dated January 30, 1999, between GRC International, Inc. and
         Somera Communications.
 23.1    Consent of PricewaterhouseCoopers LLP
 23.2*   Consents of Wilson Sonsini Goodrich & Rosati, P.C. (included in
         Exhibit 5.1)
 24.1    Powers of Attorney (included on signature page to Registration
         Statement)
 27.1    Financial Data Schedule
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*To be supplied by amendment.