<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
---------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
Commission file number 333-38567
--------------------------------
WORLD WIRELESS COMMUNICATIONS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Nevada 87-0549700
------------------------------------ -----------------------
(State of other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
5670 Greenwood Plaza Blvd. Suite 340
Englewood, CO 80111
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number (303) 221-1944
--------------
Indicate by check mark whether registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes X No .
--- ---
As of October 31, 2000 there were 31,208,847 shares of the Registrant's
Common Stock, par value $0.001, issued and outstanding.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
PART I. Financial Information
Item 1. Financial Statements:
Statement Regarding Forward-Looking Disclosure..............................................1
Condensed Consolidated Balance Sheets (Unaudited) - as of
September 30, 2000 and December 31, 1999....................................................2
Condensed Consolidated Statements of Operations - (Unaudited)
for the Three Months Ended September 30, 2000 and September 30, 1999
and for the Nine Months Ended September 30, 2000 and September 30, 1999.....................4
Condensed Consolidated Statements of Cash Flow (Unaudited) -
for the Nine Months Ended September 30, 2000 and September 30, 1999.........................5
Notes to Condensed Consolidated Financial Statements (Unaudited)............................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................................................12
PART II. Other Information
Item 1. Legal Proceedings................................................................................17
Item 2. Changes in Securities............................................................................17
Item 6. Exhibits and Reports on Form 8-K.................................................................17
Signatures.......................................................................................21
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE
This report includes "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which represent the expectations or beliefs of
World Wireless Communications, Inc. and its subsidiaries (collectively the
"Company")concerning future events that involve risks and uncertainties,
including those associated with the ability of the Company to obtain financing
for its current and future operations, to manufacture (or arrange for the
manufacturing of) its products, to market and sell its products, and the ability
of the Company to establish and maintain its sales of X-traWeb(TM) products.
All statements other than statements of historical facts included in this Report
including, without limitation, the statements under "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and elsewhere herein,
are forward-looking statements. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from the
Company's expectations ("Cautionary Statements") are disclosed in this Report,
including without limitation, in connection with the forward-looking statements
included in this report. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the Cautionary Statements.
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<PAGE> 4
ITEM 1. FINANCIAL STATEMENTS
WORLD WIRELESS COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
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<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 5,279,317 $ 893,849
Investment in securities available-for-sale 78,025 130,403
Trade receivables, net of allowance for doubtful
accounts 376,333 723,355
Other receivables 174,564 584
Inventory 289,516 201,815
Prepaid expenses 38,343 10,924
------------- ------------
TOTAL CURRENT ASSETS 6,236,098 1,960,930
------------- ------------
EQUIPMENT, NET OF ACCUMULATED DEPRECIATION AND
IMPAIRMENTS 306,763 192,252
------------- ------------
GOODWILL, NET OF ACCUMULATED AMORTIZATION 257,144 385,718
------------- ------------
OTHER ASSETS, NET OF ACCUMULATED AMORTIZATION 21,659 39,314
------------- ------------
TOTAL ASSETS $ 6,821,664 $ 2,578,214
============= ============
</TABLE>
(CONTINUED)
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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<PAGE> 5
WORLD WIRELESS COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
<S> <C> <C>
CURRENT LIABILITIES
Trade accounts payable $ 128,377 $ 547,978
Accrued liabilities 322,242 338,112
Accrued lease obligation on abandoned office and
manufacturing facility -- 1,756,924
Notes payable 11,166 3,324,827
Obligation under capital leases - current portion 73,489 119,226
------------- ------------
TOTAL CURRENT LIABILITIES 535,274 6,087,067
------------- ------------
LONG-TERM OBLIGATION UNDER CAPITAL LEASES -- 21,459
------------- ------------
MANDATORILY REDEEMABLE 10% PREFERRED STOCK,
$0.001 par value; 1,000,000 shares authorized; 950 shares
designated mandatorily redeemable; 0 and 950 shares issued
and outstanding; liquidation preference of $1,000,658 -- 950,000
------------- ------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock - $0.001 par value; 50,000,000
shares authorized; issued and outstanding:
31,208,847 shares at September 30, 2000 and
21,250,015 shares at December 31, 1999 31,192 21,250
Additional paid-in capital 48,714,562 35,242,864
Unrealized gain on marketable equity securities 19,091 55,403
Unearned compensation (24,128) (48,294)
Receivable from shareholder -- (66,828)
Accumulated deficit (42,454,327) (39,684,707)
------------- ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 6,286,390 (4,480,312)
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,821,664 $ 2,578,214
============= ============
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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<PAGE> 6
WORLD WIRELESS COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPT. 30, ENDED SEPT. 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
SALES $ 376,885 $ 1,044,511 $ 1,343,124 $ 2,717,510
COST OF SALES 259,110 891,433 962,022 2,270,806
------------ ------------ ------------ ------------
GROSS PROFIT 117,775 153,078 381,102 446,704
------------ ------------ ------------ ------------
EXPENSES
Research and development expense 455,456 322,920 1,060,760 994,694
General and administrative expenses 1,285,258 1,148,110 3,807,824 3,730,130
Manufacturing activity exit costs -- -- (1,677,668) --
Amortization of goodwill 42,858 50,102 128,574 150,300
------------ ------------ ------------ ------------
TOTAL EXPENSES 1,783,572 1,521,132 3,319,490 4,875,124
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (1,665,797) (1,368,054) (2,938,388) (4,428,420)
OTHER INCOME/(EXPENSE):
Interest income 90,553 4,630 278,677 15,236
Interest expense (4,388) (746,641) (117,119) (1,578,727)
Other income 825 -- 13,610 7,716
------------ ------------ ------------ ------------
NET INCOME/(LOSS) $ (1,578,807) $ (2,110,065) $ (2,763,220) $ (5,999,627)
Preferred Stock Dividend -- 170,000 -- 820,000
------------ ------------ ------------ ------------
NET INCOME/(LOSS) APPLICABLE TO
COMMON STOCKHOLDERS $ (1,578,807) $ (2,280,065) $ (2,763,220) $ (6,819,627)
============ ============ ============ ============
Basic and Diluted Income/(Loss) Per
Common Share $ (0.05) $ (0.13) $ (.10) $ (0.41)
------------ ------------ ------------ ------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES USED IN PER SHARE
CALCULATION 31,208,847 17,522,981 28,856,083 16,835,391
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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<PAGE> 7
WORLD WIRELESS COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
----------------------------
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Loss $ (2,763,220) $ (5,999,627)
Adjustments to reconcile net loss
to net cash used by operating activities:
Amortization of goodwill 128,574 150,298
Depreciation 101,794 748,258
Amortization of debt discount -- 325,448
Amortization of unearned compensation 24,166 57,936
Compensation for stock options -- 27,829
Stock issued for interest -- 1,151,034
Stock issued for services -- 231,616
Valuation allowance on inventory (72,624) --
Provision for doubtful accounts receivable 93,304 --
Changes in operating assets and liabilities:
Accounts receivable 79,738 (376,560)
Inventory (15,077) (47,637)
Prepaid expenses/other assets 38,986 322
Accounts payable (419,280) (347,208)
Accrued liabilities (1,639,243) (353,975)
------------ ------------
NET CASH AND CASH EQUIVALENTS USED BY OPERATING
ACTIVITIES (4,442,882) (4,432,266)
------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES
Payments for the purchase of property and equipment (235,218) (94,042)
Proceeds from sale of property and equipment 18,913 --
------------ ------------
NET CASH AND CASH EQUIVALENTS
USED BY INVESTING ACTIVITIES (216,305) (94,042)
------------ ------------
</TABLE>
(CONTINUED)
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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<PAGE> 8
WORLD WIRELESS COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
----------------------------
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOW FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock $ 12,133,217 $ 3,060,083
Proceeds from exercise of warrants 1,348,423 23,377
Proceeds from the issuance of preferred stock -- 570,000
Redemption of preferred stock (950,000) --
Proceeds from borrowings, net of discounts -- 2,280,000
Principal payments on notes payable (3,362,411) (1,459,857)
Principal payments on obligation under capital lease (67,196) (108,933)
Payment of preferred dividends (57,378) --
------------ ------------
NET CASH AND CASH EQUIVALENTS PROVIDED BY
FINANCING ACTIVITIES 9,044,655 4,364,670
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,385,468 (161,638)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 893,849 614,897
------------ ------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 5,279,317 $ 453,259
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION -
Cash paid for interest was $193,719 and $60,607.
NON-CASH INVESTING AND FINANCING ACTIVITIES - NOTES 3 AND 5
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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<PAGE> 9
WORLD WIRELESS COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - The accompanying condensed
consolidated financial statements are unaudited. In the opinion of management,
all necessary adjustments (which include only normal recurring adjustments) have
been made to present fairly the financial position, results of operations and
cash flows for the periods presented. Certain information and note disclosure
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It is suggested
that these condensed consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in the December 31,
1999 annual report on Form 10-K. The results of operations for the nine month
period ended September 30, 2000 are not necessarily indicative of the operating
results to be expected for the full year.
PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the
accounts of World Wireless Communications, Inc. and its wholly owned
subsidiaries. Intercompany accounts and transactions have been eliminated in
consolidation.
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 in these financial statements
and accompanying notes. Actual results could differ from those estimates.
CONCENTRATION OF RISK AND SEGMENT INFORMATION -The Company operates solely in
the electronics industry and has assets primarily within the United States. The
Company opened a new office in Milan, Italy during June, 2000. The concentration
of business in one industry subjects the Company to a concentration of credit
risk relating to trade accounts receivable. The Company generally does not
require collateral from its customers with respect to trade receivables.
FINANCIAL INSTRUMENTS - The Company has a concentration of risk from cash in
banks in excess of insured limits. The amounts reported as cash, investments in
securities available-for-sale, other receivables, trade accounts payable,
accrued liabilities, notes payable and obligations under capital lease are
considered to be reasonable approximations of their fair values. The fair value
estimates presented herein were based on market information available to
management at the time of the preparation of the financial statements.
TRADE ACCOUNTS RECEIVABLE AND MAJOR CUSTOMERS -Sales to major customers are
defined as sales to any one customer which exceeded 10% of total sales in any of
the two reporting periods.
Sales to the major customers during each of the three months ended September 30,
2000 and 1999 are as follows: Customer "A" represented 9.5% and 25.18% of sales,
respectively; Customer "B" represented 0% and 27.0% of sales respectively;
Customer "C" represented 0% and 13.1%, respectively; and Customer "D"
represented 25.8% an 0%, respectively.
For the nine months ended September 30, 2000 and 1999 sales to major customers
were: Customer "A" represented 33.6% and 17.0% of sales, respectively; Customer
"B" represented 0% and 26.8% of sales respectively; Customer "C" represented 0%
and 15.1% of sales, respectively; and Customer
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<PAGE> 10
WORLD WIRELESS COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
"D" represented 9.1% and 0% of sales, respectively. Sales to major customers
subject the Company to the risk that the Company may not be able to continue the
current level of sales if there were a loss of a major customer.
At September 30, 2000 and December 31, 1999, an allowance for doubtful accounts
of $16,086 and $190,328, respectively, was provided against trade and other
receivables. The Company recorded net charge offs of $267,546 for the nine
months ended September 30, 2000. The charge offs were in settlement of
outstanding issues that had been evaluated in determining the allowance for
doubtful accounts as of December 31, 1999. The Company made no provision for
doubtful accounts charged to expense for the three month period ended September
30, 2000. For the nine months ended September 30, 2000 and 1999, provisions for
doubtful accounts charged to expense totaled $93,304 and $40,058, respectively.
Trade receivables and the allowance for doubtful accounts are reviewed
periodically and adjusted, accordingly.
INVENTORY - Inventory is stated at the lower of cost or market. Cost is
determined using the first-in, first-out method. In connection with the exit
from contract and in-house manufacturing, the Company recognized a write-down of
inventory of $405,466 to its liquidation value that was charged to operations as
of December 31, 1999. Reserves for inventory valuation are periodically reviewed
for adequacy and adjusted, accordingly.
RESEARCH AND DEVELOPMENT EXPENSE - Current operations are charged with all
research, engineering and product development expenses.
GOODWILL AND LONG-LIVED ASSETS -Goodwill and other long-lived assets are
evaluated periodically for impairment when indicators of impairment are present
and undiscounted cash flows estimated to be generated by those assets are less
than their carrying amounts. Goodwill is included along with other assets
acquired as a group when evaluating their recoverability. Impairment losses are
recognized to the extent estimated discounted net future cash flows expected to
be generated from those assets are less than their carrying amounts. Goodwill is
further evaluated separately and impairment losses are recognized for the excess
of the carrying amount of goodwill over management's estimation of the value and
future benefits expected to be realized from the goodwill.
The Company evaluated the recoverability of the long-lived assets and goodwill
for all acquisition during the fourth quarter of 1999, and determined that
circumstances indicate an inability to recover their carrying amount.
Accordingly, an impairment loss of $641,679 was recognized during 1999 to adjust
the carrying amount of the long-lived assets and goodwill to their estimated
expected discounted net future cash flows.
The remaining balance of goodwill is being amortized over a 5-year period from
the original acquisition dates, on a straight-line basis.
EQUIPMENT - Equipment is stated at cost. Depreciation, including amortization of
leased assets, is computed using the straight-line method over the estimated
useful lives of the equipment, which are three to seven years. Leased equipment
is amortized over the shorter of the useful life of the equipment or the term of
the lease. Depreciation expense was $36,939 and $291,914 for the three months
ended September 30, 2000 and 1999, respectively and $101,794 and $748,258 for
the nine
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<PAGE> 11
WORLD WIRELESS COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
months ended September 30, 2000 and 1999, respectively. Maintenance and repair
of equipment are charged to operations and major improvements are capitalized.
The cost of equipment was reduced, as of December 31, 1999, by a $359,822
write-down reserve attributable to the exit from manufacturing activities.
INVESTMENTS -At September 30, 2000, investment in securities consisted of common
stock of customers classified as available-for-sale and stated at quoted fair
value of $78,025. The cost of the securities was $58,935. The unrealized gain as
of September 30, 2000 was $19,091 which is shown as a separate component of
stockholders' deficit. The change in net unrealized gains on securities during
the three months ended September 30, 2000 and 1999 was a decrease in the holding
gain of $29,722 and $0, respectively. For the nine months ended September 30,
2000 and 1999, the unrealized holding loss totaled $36,312 and $0, respectively.
SALES RECOGNITION - Sales are recognized upon delivery of products or services
and acceptance by the customer. As a result of design and technology contracts,
the Company has a right to receive royalties which will be recognized upon the
related sales by customers.
STOCK-BASED COMPENSATION - Stock-based compensation to employees is measured by
the intrinsic value method. This method recognizes compensation expense related
to stock options granted to employees based on the difference between the fair
value of the underlying common stock and the exercise price of the stock option
on the date granted. Stock-based compensation to non-employees, including
directors after 1998, is measured by the fair value of the stock options and
warrants on the grant date as determined by the Black-Scholes option pricing
model.
LOSS PER SHARE - Basic loss per common share is computed by dividing net loss by
the weighted-average number of common shares outstanding during the period.
Diluted loss per share reflects potential dilution which could occur if all
potentially issuable common shares from stock purchase warrants and options or
convertible notes payable and preferred stock resulted in the issuance of common
stock. In the present position, diluted loss per share is the same as basic loss
per share because the inclusion of potentially issuable common shares at
September 30, 2000 and 1999, respectively, would have decreased the loss per
share and have been excluded from the calculation.
COMPREHENSIVE INCOME/(LOSS) - Comprehensive income/(loss) provides a measure of
overall Company performance that includes all changes in equity resulting from
transactions and events other than capital transactions. The Company's
comprehensive income and loss for the three months ended September 30, 2000 and
1999 and the comprehensive loss for the nine months ended September 30, 2000 and
1999, respectively, are as follows:
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Income/(Loss) $ (1,578,807) $ (2,280,065) $ (2,763,220) $ (6,819,627)
Unrealized Gain/(Loss)
on Marketable Equity Securities (29,722) -- (36,312) --
------------ ------------ ------------ ------------
Comprehensive Income/(Loss)
for the Period $ (1,608,529) $ (2,280,065) $ (2,799,532) $ (6,819,627)
============ ============ ============ ============
</TABLE>
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<PAGE> 12
WORLD WIRELESS COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
The Securities and Exchange Commission issued Staff Accounting Bulletin No. 101,
Revenue Recognition in Financial Statements on December 3, 1999. This bulletin
requires the application of specific criteria in determination of the timing of
revenue recognition in financial statements and is effective for all fiscal
years beginning after December 16, 1999. The Company has not determined the
effect, if any, that this bulletin may have on its financial statements for the
current fiscal year ending December 31, 2000.
The Financial Accounting Standards Board issued FASB No. 133-Accounting for
Derivative Instruments and Hedging Activities in June, 1998 to be effective for
all fiscal years beginning after June 15, 1999. The statement establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities.
The implementation of this pronouncement has been deferred to all fiscal
quarters of fiscal years beginning after June 15, 2000. Management does not
believe the adoption of FASB No. 133 will have a material impact on the
Company's operations.
NOTE 2--EXIT FROM MANUFACTURING ACTIVITIES
During the fourth quarter of 1999, the Company executed a plan to focus its
efforts primarily on enhancing and marketing its X-traWeb(TM) products whereby
all contract manufacturing was discontinued, all in-house production would be
outsourced and the Company would move its executive offices to the Denver,
Colorado area. The plan also involved liquidating the Company's raw materials
and work in process inventory and selling all equipment used in production and
contract manufacturing. The Company recognized as exit costs the related
non-cancelable obligation under a lease agreement for office and manufacturing
facilities in Salt Lake City, Utah through 2005. Future minimum lease payments
of $1,756,924 under the lease were charged to operations during the year ended
December 31, 1999.
The Company completed its relocation to the Denver, Colorado area in March,
2000. Pursuant to a Lease Termination Agreement, dated May 1, 2000, the Company
paid a $75,000 settlement payment and transferred its security deposit in the
amount of $27,742 to the benefit of a new tenant in the Salt Lake City Utah
manufacturing and office facilities and the lease agreement was terminated as of
the May 1, 2000 date.
Incident to the lease termination, the settlement funds described above were
charged to the outstanding lease liability on the Company's balance sheet
resulting in a remaining liability balance of $1,598,342. This balance was
reversed and credited to operations as manufacturing exit recoveries income
during the six months ended June 30, 2000.
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<PAGE> 13
WORLD WIRELESS COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - STOCKHOLDERS' EQUITY
During the first quarter of 2000, the Company issued 4,548,557 common shares for
gross cash proceeds of $13,646,000 received from 45 accredited investors in a
private placement offering, at $3.00 per share. These securities are exempt from
registration under the Act. In connection with the offering, a total of
$1,476,783 was incurred as placement costs.
During March, 2000, the Company issued a total 5,393,690 common shares related
to the exercise of warrants to purchase common stock at $.25 per share. The
Company received $401,218 in cash and recorded $947,204 related to the cashless
exercise of warrants as a deemed payment of the principal of the 1999 Notes, as
defined in Note 5 - Notes Payable. The warrants exercised totaled $1,348,422.
In March, 2000, the Company issued 16,474 shares of common stock upon the
cashless exercise of 18,333 stock options.
NOTE 4 - MANDATORILY REDEEMABLE PREFERRED STOCK
On May 14, 1999 the Company authorized 950 shares of senior liquidating
mandatorily redeemable 10% preferred stock with a liquidation preference of
$1,000 per share and detachable five-year warrants to purchase 4,750,000 common
shares at $0.25 per share, and issued such 950 shares of preferred stock and the
related warrants between May 15, 1999 and October 5, 1999. By their terms, the
preferred shares had to be redeemed within one year at their par value plus
accrued dividends. The preferred stock cash dividend requirement was $95,000
annually. The preferred stock was issued for proceeds of $950,000 consisting of
$700,000 cash and the deemed payment of $250,000 principal amount of 1998 bridge
loan notes.
On February 25, 2000, the Company redeemed the mandatorily redeemable preferred
stock for cash of $950,000 for the principal balance and $57,378 for the accrued
preferred dividends accrued to date.
NOTE 5 - NOTES PAYABLE
On May 14, 1999 the Company issued $2,600,000 of senior secured 16% notes
payable ("the 1999 Notes") which were to mature in one year and bore interest at
the rate of 16% annually and payable quarterly. The notes were issued for
$2,600,000 consisting of $1,600,000 in cash and the deemed payment of $1,000,000
principal amount of the 1998 bridge loan notes. The 1999 Notes were secured by
substantially all the Company's assets.
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<PAGE> 14
In March, 2000, the Company paid off the 1999 Notes outstanding with cash in the
amount of $2,377,623 and with the deemed proceeds from the exercise of warrants
to purchase 3,788,813 common shares at $.25 per share. The portion of the 1999
Notes paid by the exercise of warrants was $947,204. The warrants exercised are
included in the total warrants issued during the three months ended March 31,
2000 as discussed in Note 3. The Company also paid $35,059 in accrued interest
related to the 1999 Notes.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
When used in this discussion, the words "expect(s)", "feel(s)", "believe(s)",
"will", "may", "anticipate(s)" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements, and are urged to carefully review and consider the
various disclosures elsewhere in this Form 10-Q.
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND THREE MONTHS ENDED SEPTEMBER 30, 1999
Results of Operations
The Company recognized a net loss of $1,578,807 for the three months ended
September 30, 2000, or a $0.05 loss per share, compared to a net loss of
$2,280,065 or a $.13 loss per share for the three months ended September 30,
1999.
Sales in the three month period ended September 30, 2000 totaled $376,885
compared to $1,044,511 during the three month period ended September 30, 1999,
or a decrease of 64%. During the comparative third quarters of 2000 and 1999,
the Company derived its revenue as follows:
<TABLE>
<CAPTION>
For the Three Months Ended September 30,
----------------------------------------
Summary of Revenue by Product: 2000 1999
---------- ----------
<S> <C> <C>
Engineering Services $ -- $ 17,271
Royalties 45,172 263,041
Branded Products 176,404 78,036
Contract and Cable Manufacturing 41,211 686,163
XtraWeb 114,098 --
---------- ----------
Total Revenue $ 376,885 $1,044,511
========== ==========
</TABLE>
-12-
<PAGE> 15
During the third quarter of 2000, the Company continued to implement its plan to
focus its efforts on the X-traWeb(TM) product line, since it previously
abandoned its contract and in-house manufacturing activities. Accordingly,
engineering service revenue was $0 in the third quarter of 2000 compared to
$17,271 in the third quarter of 1999. In addition, contract and cable
manufacturing revenues decreased by $644,952, or 94%, for the three months ended
September 30, 2000 compared to the three months ended September 30, 1999.
The Company's business strategy continues to emphasize (1) the design and sales
of X-traWeb(TM) products, which contributed $114,098 in revenues during the
three months ended September 30, 2000 compared to $0 for the three months ended
September 30, 1999, and (2) the increased marketing of branded products,
including radio and antenna sales, which totaled $176,404 in the third quarter
of 2000 compared to $78,036 in the third quarter of 1999, an increase of
$98,368, or 126%.
Finally, royalties on products sold during the third quarter of 2000 by a major
customer contributed $45,172 during the three months ended September 30, 2000
compared to $263,041 for the quarter ended September 30, 1999 which represented
a decrease $217,869 or 82.8%. While the license agreement with such customer
expired by its terms in September, 2000, the Company expects to receive an
additional royalty payment with respect to such quarter in late 2000, although
there can be no assurance of such result.
Cost of sales for the three months ended September 30, 2000 totaled $259,110
compared to $891,433 for the three months ended September 30, 1999, or a
decrease of $632,323 or 70.9%.
The gross profits for the comparative quarters were $117,775, or 31.2% of sales,
in 2000 compared to $153,078, or 14.7% of sales for 1999. The increase in gross
profit percentage for the three months ended September 30, 2000 vs. 1999 was
primarily due to reduced cost of sales associated with outsourced manufacturing
of products sold in 2000. Gross profits resulting from ongoing sales activity
benefitted from an overall reduction in costs and decreases in personnel and
related expenses in the second quarter of 2000. The Company reduced total
employees from 84 as of September 30, 1999 to 48 as of September 30, 2000, or a
42.9% reduction. The majority of this employee reduction was directly
attributable to the exit from manufacturing activities.
The Company incurred research and development costs of $455,456 for the three
months ended September 30, 2000 compared to $322,920 for the three months ended
September 30, 1999, or an increase of $132,536, or 41%. These costs continue to
relate to the ongoing application development of the X-traWeb(TM) proprietary
technology in 2000.
The Company's selling, general, and administrative expenses for the three months
ended September 30, 2000 totaled $1,285,258 compared to $1,148,110 for the three
months ended September 30, 1999, or a increase of $137,148, or 12%. Over 45% of
the September 30, 2000 expenses were incurred as part of the Company's marketing
plan to promote X-traWeb(TM) products and technology solutions and expand its
operations to the European marketplace. In addition, the Company substantially
increased its advertising and promotional expenses by approximately $90,000 for
the three months ended September 30, 2000 vs. September 30, 1999 as part of this
business expansion marketing strategy in 2000.
Interest income increased to $90,553 in the third quarter of 2000 from $4,630 in
the third quarter of 1999 due to increased available funds invested in overnight
interest bearing accounts provided by
-13-
<PAGE> 16
the $13.6 million private placement of shares of common stock issued by the
Company in the first quarter of 2000. Interest expense decreased to $4,388 in
the third quarter of 2000 from a total of $746,641 in the third quarter of 1999
due to the retirement of substantially all debt outstanding in the first quarter
of 2000, and the non-recurrence in the third quarter of 2000 of amortization of
debt discount.
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND NINE MONTHS ENDED SEPTEMBER 30, 1999
Results of Operations
The Company incurred a net loss of $2,763,220 for the nine months ended
September 30, 2000, or a $.10 loss per share, compared to a net loss of
$6,819,627, or a $.41 loss per share, for the nine months ended September 30,
1999. This represents an improvement in 2000 of $4,056,407, or 59.5%, over 1999
year-to-date financial results.
Sales for the nine month period ended September 30, 2000 totaled $1,343,124
compared to $2,717,510 during the nine month period ended September 30, 1999, or
a decrease of $1,374,386 or 50.6%. During the comparative three quarters of 2000
and 1999, the Company derived its revenue as follows:
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
----------------------------------------
Summary of Revenue by Product: 2000 1999
---------- ----------
<S> <C> <C>
Engineering Services $ -- $ 857,534
Royalties 459,986 263,041
Branded Products 496,619 498,499
Contract and Cable Manufacturing 113,572 1,098,436
XtraWeb 272,947 --
---------- ----------
Total Revenue $1,343,124 $2,717,510
========== ==========
</TABLE>
During the third quarter of 2000, the Company continued to implement its
strategic plan to focus its efforts on the X-traWeb(TM) product line and abandon
its contract and in-house manufacturing activities. Consequently, the
engineering and contract manufacturing revenue declined from $1,955,970 to
$113,572, a decrease of $1,842,398, or 94.2% during the nine months ended
September 30, 2000 compared to the nine months ended September 30, 1999. Sales
of branded products, included radio and antenna sales, decreased by $1,880, or
.004%, during the first three quarters of 2000 vs. 1999. In addition, the
Company recognized total revenues from the X-traWeb(TM) product line of $272,947
during the first nine months of 2000 and had no revenues from such source during
the first three quarters of 1999. Finally, royalties contributed $459,986 in
revenue during the nine months ended September 30, 2000, compared to $263,041
for the first nine months of 1999, or an increase of $196,945 or 74.9%. Since
the license agreement with a customer expired by its terms in September, 2000,
the Company anticipates receiving its final royalty payments during the fourth
quarter of 2000, although there can be no assurance of the amount thereof (if
any).
-14-
<PAGE> 17
During June, 2000, the Company formed a new operating subsidiary, X-traWeb
Europe S.p.A., based in Milan, Italy. This subsidiary is responsible for the
development and sale of X-traWeb(TM) products through European markets,
commencing with the country of Italy. The Company had no revenues from the
European operation as of September 30, 2000. In addition, the Company formed two
additional operating subsidiaries, X-traWeb Services Corp. and X-traWeb
Financial Corp., in June 2000, which are designed to offer various services of
X-traWeb products and to provide financing capability of sales of X-traWeb
products or services, respectively, although neither entity derived any revenues
as of September 30, 2000.
Cost of sales for the nine months ended September 30, 2000 compared to 1999
declined to $962,022 in 2000 from a total of $2,270,806 in 1999, or a reduction
of $1,308,784 or 57.6%. The resulting gross profit was $381,102, or 28.4% of
sales, for the nine months ended September 30, 2000 compared to $446,704, or
16.4%, for the nine months ended September 30, 1999. This represents an
improvement of 12.0% in gross profit margin percentage for the comparable
periods and is expected to continue to increase as the Company shifts towards
higher profit margin business.
Research and development expenses increased to $1,060,760 from $994,694, or by
$66,066, or 6.6%, for the comparable nine month periods ended September 30, 2000
vs. September 30, 1999.
Total selling, general, and administrative expenses amounted to $3,807,824 for
the nine months ended September 30, 2000 compared to $3,730,130 for the nine
months ended September 30, 1999, representing an increase of $77,694, or 2.1%.
Selling and marketing expenses increased by $344,585, or 42.2%, during the nine
months ended September 30, 2000 over 1999 and represents a significant increase
in advertising, promotion, and sales related travel to market the Company's
X-traWeb(TM) products as discussed above. Total general and administrative
expenses for the comparable nine months periods ended September 30, 2000 and
1999 decreased by $266,891, or 9.6%, and resulted from (1) a decrease in
depreciation of $590,646, or 85.3%, and (2) a savings of $167,500, or 64.4%, in
facilities rent due to the termination of the Salt Lake City lease. These
expense savings were offset in part by (1) an increase in corporate travel
related expenses of $278,315 for promotion of X-traWeb(TM) products, the opening
of the X-traWeb Europe offices, and other international business opportunities,
and (2) increases of $204,780 in compensation and benefits, new stock exchange
fees expense for the American Stock Exchange of $35,167, and an increase in the
provision for doubtful accounts receivable of $53,246.
Interest income for the nine months ended September 30, 2000 was $278,677
compared to $15,236 for the nine months ended September 30, 1999, with the
increase directly attributable to increased available funds in overnight
interest bearing accounts provided by the $13.6 million private placement of
shares of common stock issued by the Company in the first quarter of 2000.
Interest expense declined to $117,119 during the nine months ended September 30,
2000 compared to $1,578,727 for the nine months ended September 30, 1999, and
represents a decrease of $1,461,608, or 92.6%. This expense reduction is
directly related to retirement of substantially all debt, and related debt
discount amortization, by the Company in the first quarter of 2000.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity at September 30, 2000 consisting of cash and cash
equivalents was $5,279,317, which represented an increase of $4,385,468 over the
Company's cash and cash equivalents of $893,849 as of December 31, 1999. The
Company's current assets were $6,236,098 as of September 30, 2000, an increase
of $4,275,168 from the Company's current assets of $1,960,930 as of December 31,
1999.
-15-
<PAGE> 18
During the first quarter of 2000, the Company raised $13,646,000 of new capital
from the sale of shares of common stock in a private placement transaction to 45
accredited investors at $3.00 per share. The proceeds of this offering, net of
$1,398,223 in placement fees, amounted to $12,247,777. The Company also paid a
total of $78,560 in placement fees related to 1999 offerings during this period.
The net proceeds from issuance of common stock were $12,169,217.
In March, 2000, the Company also issued common stock related to the exercise of
5,393,690 warrants to purchase common stock at $.25 per share. Proceeds of
$401,218 were received in cash and $947,204 was recorded as capital related to
the cashless exercise of warrants by the deemed payment of principal by
reduction of the 1999 notes issued by the Company. The warrants exercised
totaled $1,348,423.
With the proceeds of the $13,646,000 private placement, the Company, in the
first quarter of 2000, redeemed the mandatorily redeemable 10% preferred stock
in the amount of $950,000 plus accrued dividends of $57,378. In addition, the
Company paid off the 1999 notes outstanding with cash in the amount of
$2,377,623 and the cashless exercise of warrants by deemed payment of principal
in the amount of $947,204, as discussed above, and accrued interest of $35,059,
thereby discharging such debt in full.
The Company's liquidity decreased due to changes in operating assets and
liabilities during the first nine months of 2000. For the nine months ended
September 30, 2000, the net change in operating assets and liabilities utilized
net cash flow of $356,534 compared to a net decrease of cash for the nine months
ended September 30, 1999 of $1,125,058. The primary reasons for the net decrease
in cash flow during the first three quarters of 2000 were decreases in accounts
receivable levels of $79,738, which were offset in part by cash flow used to
reduce accounts payable of $419,280 and other accrued liabilities (net of
accrued lease obligation terminated during the nine months ended September 30,
2000) of $40,901. For the nine months ended September 30, 1999, accounts
receivable increased and accounts payable decreased by $376,560 and $347,208,
respectively, resulting in total net cash flow used of $723,768.
SUMMARY
During the first nine months of 2000, the Company has implemented its
redirection efforts to focus on the growth of its X-traWeb(TM) business segment
and proprietary radio products. Management has raised $13,646,000 million in new
equity capital, paid off substantially all outstanding debt, redeemed all
mandatorily redeemable preferred stock outstanding, relocated its corporate
headquarters to the Denver, Colorado area, and exited from all in-house
manufacturing activities, including termination of its lease obligation for
facilities in Utah. While the Company has recently hired additional engineering
and marketing personnel, management believes that the potential growth of
current products will require additional engineering and marketing personnel for
the X-traWeb(TM) business in advance of the receipt of substantial revenues from
such source. As a result, the Company will continue to recruit such personnel
actively. In addition, the Company realized revenues from the sales of its
X-traWeb products for the first time during the first nine months of 2000.
In addition, management is evaluating the need and availability of additional
capital to support its further business expansion in Europe and internationally.
While the Company believes that such additional financing can be obtained, there
can be no assurance that such financing will be achieved or, if made available,
on terms acceptable to the Company.
-16-
<PAGE> 19
In summary, while management is optimistic about the Company's future, it is
fully aware that anticipated revenue increases from sales of X-traWeb(TM)
products and its proprietary radios are by no means assured. New capital and
financing sources and availability may be limited. As a result, there can be no
assurance that management's efforts will be successful.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None pending
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None reported
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following documents are filed as part of this report: Financial Statements
of the Company (unaudited), including Condensed Consolidated Balance Sheets,
Condensed Consolidated Statements of Operation, Condensed Consolidated
Statements of Cash Flow and Notes to Financial Statements as at and for the
three months and nine months ended September 30, 2000 and the Exhibits which are
listed on the Exhibit Index attached hereto.
EXHIBIT INDEX
No. Description
3.1 Articles of Incorporation of the Company and all amendment thereto*
3.2 Bylaws of the Company*
4.1 Form of Common Stock Certificate*
4.2 Form of Subscription Agreement used in private financing providing
for registration rights*
5. Opinion of Connolly Epstein Chicco Foxman Engelmyer & Ewing regarding
the legality of securities being registered*
10.1 1997 Stock Option Plan*
10.2 DRCC Omnibus Stock Option Plan*
10.3 Development and License Agreement dated April 4, 1997, between DRCC
and Kyushu Matsushita Electric Co., Ltd.*
-17-
<PAGE> 20
10.4 Amended and restated Technical Development and Marketing Alliance
Agreement dated September 15, 1997, between the Company and Williams
Telemetry Services, Inc.*
10.5 Lease Agreement dated May 17, 1995, between DRCC and Pracvest
Partnership relating to the Company's American Fork City offices and
facility*
10.6 Lease Agreement dated February 12, 1996, between the Company the
Green/Praver, et al., relating to the Company's Salt Lake City
offices*
10.7 Shareholders Agreement dated May 21, 1997 between the Company,
DRCC,Philip A. Bunker and William E. Chipman, Sr.*
10.8 Asset Purchase Agreement dated October 31, 1997, between the Company
and Austin Antenna, Ltd.*
10.9 Stock Exchange Agreement dated October 31, 1997, between the Company,
TWC, Ltd. and the shareholders of TWC, Ltd.*
10.10 Settlement Agreement, Mutual Waiver and Release of All Claims dated
November 11, 1997 between Digital Radio Communications Corp. and
Digital Scientific, Inc.*
10.11 Agreement (undated) between the Company, Xarc Corporation and Donald
J. Wallace relating to the Company's acquisition of Xarc Corporation*
10.12 Promissory Note dated December 4, 1997, by the Company, payable to
William E. Chipman, Sr. in the principal amount of $125,000*
10.13 Promissory Note dated November 13, 1997, by the Company, payable to
T. Kent Rainey in the principal amount of $200,000*
10.14 Investment Banking Services Agreement dated November 19, 1997,
between The Company and PaineWebber Incorporated*
10.15 $400,000 Promissory Note dated December 24, 1997, payable to
Electronic Assembly Corporation*
10.16 $400,000 Promissory Note dated January 8, 1998, payable to Tiverton
Holdings Ltd.*
10.17 Loan Agreement by and among the Registrant and the Bridge Noteholders
dated as of May 15, 1998*
10.18 Amendment and Waiver Agreement by and among the Registrant and the
Bridge Noteholders dated August 7, 1998*
10.19 Amendment and Waiver Agreement by and among the Registrant and the
Bridge Noteholders dated September 11, 1998*
10.20 Loan Agreement by and among the Registrant and the Bridge Noteholders
dated as of May 15, 1998 (Previously filed), together with the Notes,
Pledge/Security Agreement, Pledgee/Representative Agreement,
Subordination, and Registration Rights Agreement*
10.21 Separation and Mutual Release Agreement between the Registrant and
William E. Chipman, Sr. dated as of May 26, 1998*+
-18-
<PAGE> 21
10.22 Registration Rights Agreement by and among the Registrant and the
purchasers of common stock issued pursuant to the Registrant's
Confidential Private Placement Memorandum dated September 9, 1998, as
amended*
10.23 Employment Agreement between the Registrant and James O' Callaghan
dated May 20, 1998*+
10.24 Lease agreement between the Registrant and NP#2 dated as of July 29,
1998 relating to the premises at 2441 South 3850 West, West Valley
City, Utah 84120*
10.25 Agreement between KME and the Registrant dated October 19, 1998
relating to the Registrant's providing of technical assistance and
development relating to the Giarange telephone*
10.26 Agreement between KME and the Registrant dated as of March 1, 1998
relating to the Panasonic MicroCast System*
10.27 General and Mutual Release Agreement between the Registrant and Phil
Acton dated November 2, 1998*+
10.28 Agreement and Waiver Agreement by and among the Registrant and the
Bridge Noteholders dated November 25, 1998*
10.29 1998 Employee Incentive Stock Option Plan*+
10.30 1998 Non-qualified Stock Option Plan*+
10.31 Amendment of Agreement by and among the Registrant and the Bridge
Noteholders dated as of March 26, 1999*
10.32 Loan Agreement by and among the Registrant and the Senior Secured
Noteholders dated as of May 14, 1999, together with the Notes,
Pledge/Security Agreement, Pledgee Representative Agreement,
Subordination and Registration Rights Agreement*
10.33 Two separate Agreements by and among the Registrant and the 1999
Bridge Noteholders dated August 19, 1999*
10.34 Waiver Agreement by and among the Registrant and the Bridge
Noteholders dated as of December 7, 1999*
10.35 Registration Rights Agreement by and among the Registrant and the
purchasers of common stock issued pursuant to the Registrant's
Confidential Private Placement Memorandum dated January 12, 2000 as
amended.*
10.36 Settlement Agreement and Mutual Release between Internet Telemetry
Corp. and the Registrant, dated as of August 7, 2000.*
27 Financial Data Schedules**
-19-
<PAGE> 22
----------
** Filed herewith
* Filed previously
+ Management contract or compensatory plan or arrangement filed previously
(b) The following reports on Form 8-K were filed by the Registrant during
the quarter ended September 30, 2000: None
-20-
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
DATE: November 13, 2000 WORLD WIRELESS COMMUNICATIONS, INC.
By: /s/ David D. Singer
---------------------------------------
David D. Singer
President, Chief Executive Officer
By: /s/ Roger D. Leclerc
---------------------------------------
Roger D. Leclerc
Vice President of Finance
Principal Financial Officer
-21-
<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
3.1 Articles of Incorporation of the Company and all amendment thereto*
3.2 Bylaws of the Company*
4.1 Form of Common Stock Certificate*
4.2 Form of Subscription Agreement used in private financing providing
for registration rights*
5. Opinion of Connolly Epstein Chicco Foxman Engelmyer & Ewing regarding
the legality of securities being registered*
10.1 1997 Stock Option Plan*
10.2 DRCC Omnibus Stock Option Plan*
10.3 Development and License Agreement dated April 4, 1997, between DRCC
and Kyushu Matsushita Electric Co., Ltd.*
</TABLE>
<PAGE> 25
<TABLE>
<S> <C>
10.4 Amended and restated Technical Development and Marketing Alliance
Agreement dated September 15, 1997, between the Company and Williams
Telemetry Services, Inc.*
10.5 Lease Agreement dated May 17, 1995, between DRCC and Pracvest
Partnership relating to the Company's American Fork City offices and
facility*
10.6 Lease Agreement dated February 12, 1996, between the Company the
Green/Praver, et al., relating to the Company's Salt Lake City
offices*
10.7 Shareholders Agreement dated May 21, 1997 between the Company,
DRCC,Philip A. Bunker and William E. Chipman, Sr.*
10.8 Asset Purchase Agreement dated October 31, 1997, between the Company
and Austin Antenna, Ltd.*
10.9 Stock Exchange Agreement dated October 31, 1997, between the Company,
TWC, Ltd. and the shareholders of TWC, Ltd.*
10.10 Settlement Agreement, Mutual Waiver and Release of All Claims dated
November 11, 1997 between Digital Radio Communications Corp. and
Digital Scientific, Inc.*
10.11 Agreement (undated) between the Company, Xarc Corporation and Donald
J. Wallace relating to the Company's acquisition of Xarc Corporation*
10.12 Promissory Note dated December 4, 1997, by the Company, payable to
William E. Chipman, Sr. in the principal amount of $125,000*
10.13 Promissory Note dated November 13, 1997, by the Company, payable to
T. Kent Rainey in the principal amount of $200,000*
10.14 Investment Banking Services Agreement dated November 19, 1997,
between The Company and PaineWebber Incorporated*
10.15 $400,000 Promissory Note dated December 24, 1997, payable to
Electronic Assembly Corporation*
10.16 $400,000 Promissory Note dated January 8, 1998, payable to Tiverton
Holdings Ltd.*
10.17 Loan Agreement by and among the Registrant and the Bridge Noteholders
dated as of May 15, 1998*
10.18 Amendment and Waiver Agreement by and among the Registrant and the
Bridge Noteholders dated August 7, 1998*
10.19 Amendment and Waiver Agreement by and among the Registrant and the
Bridge Noteholders dated September 11, 1998*
10.20 Loan Agreement by and among the Registrant and the Bridge Noteholders
dated as of May 15, 1998 (Previously filed), together with the Notes,
Pledge/Security Agreement, Pledgee/Representative Agreement,
Subordination, and Registration Rights Agreement*
10.21 Separation and Mutual Release Agreement between the Registrant and
William E. Chipman, Sr. dated as of May 26, 1998*+
</TABLE>
<PAGE> 26
<TABLE>
<S> <C>
10.22 Registration Rights Agreement by and among the Registrant and the
purchasers of common stock issued pursuant to the Registrant's
Confidential Private Placement Memorandum dated September 9, 1998, as
amended*
10.23 Employment Agreement between the Registrant and James O' Callaghan
dated May 20, 1998*+
10.24 Lease agreement between the Registrant and NP#2 dated as of July 29,
1998 relating to the premises at 2441 South 3850 West, West Valley
City, Utah 84120*
10.25 Agreement between KME and the Registrant dated October 19, 1998
relating to the Registrant's providing of technical assistance and
development relating to the Giarange telephone*
10.26 Agreement between KME and the Registrant dated as of March 1, 1998
relating to the Panasonic MicroCast System*
10.27 General and Mutual Release Agreement between the Registrant and Phil
Acton dated November 2, 1998*+
10.28 Agreement and Waiver Agreement by and among the Registrant and the
Bridge Noteholders dated November 25, 1998*
10.29 1998 Employee Incentive Stock Option Plan*+
10.30 1998 Non-qualified Stock Option Plan*+
10.31 Amendment of Agreement by and among the Registrant and the Bridge
Noteholders dated as of March 26, 1999*
10.32 Loan Agreement by and among the Registrant and the Senior Secured
Noteholders dated as of May 14, 1999, together with the Notes,
Pledge/Security Agreement, Pledgee Representative Agreement,
Subordination and Registration Rights Agreement*
10.33 Two separate Agreements by and among the Registrant and the 1999
Bridge Noteholders dated August 19, 1999*
10.34 Waiver Agreement by and among the Registrant and the Bridge
Noteholders dated as of December 7, 1999*
10.35 Registration Rights Agreement by and among the Registrant and the
purchasers of common stock issued pursuant to the Registrant's
Confidential Private Placement Memorandum dated January 12, 2000 as
amended.*
10.36 Settlement Agreement and Mutual Release between Internet Telemetry
Corp. and the Registrant, dated as of August 7, 2000.*
27 Financial Data Schedules**
</TABLE>
<PAGE> 27
----------
** Filed herewith
* Filed previously
+ Management contract or compensatory plan or arrangement filed previously
