SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the Quarterly Period Ended December 31, 1997
or
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from __________to__________
Commission file number 000-23051
WIRELESS DATA SOLUTIONS, INC.
(Name of small business issuer as specified in its charter)
Utah 93-0734888
(State of Incorporation) (I.R.S. Employer Identification No.)
1016 Shores Acres Drive
Leesburg, Florida 34784
(Address of principal executive offices)
(352) 323-1295
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 __
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Not applicable
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock, as of the latest practicable date:
February 18, 1998
There were 8,888,728 shares of the Issuer's common stock at no par value,
outstanding as of February 13, 1998.
PART I
FINANCIAL INFORMATION
WIRELESS DATA SOLUTIONS, INC.
Balance Sheets
December 31, 1997 December 31, 1996
----------------- ------------------
Assets
Current Assets
Cash and cash equivalents 42,376 16,475
Trade accounts receivable,
net of $6,000 estimated
allowance for doubtful
accounts 649,496 789,480
Inventory 189,208 233,446
------------------ ------------------
Total Current Assets 881,080 1,039,401
------------------ ------------------
Fixed Assets:
Office fixtures and equipment 15,033 15,033
Leasehold Improvements 12,894 12,894
------------------ ------------------
Sub-Total 27,927 27,927
------------------ ------------------
Less: Accumulated Depreciation
and Amortization 27,927 27,927
------------------ ------------------
Net Fixed Assets 0 0
------------------ ------------------
Other Assets:
Deferred service contract 185,800
Due from related parties 256,442 205,509
Security deposits 3,113 3,113
------------------ ------------------
Total Other Assets 445,355 208,622
------------------ ------------------
TOTAL ASSETS 1,326,435 1,248,023
------------------ ------------------
Liabilities and Stockholders'(Deficit)
Current Liabilities
Trade accounts payable 245,386 305,967
Current portion of other liabilities 19,010 23,655
Advance from Customers 17,969 9,800
Other accrued liabilities 56,943 13,716
Service contract payable in stock 196,400
------------------ ----------------
Total Current Liabilities 535,708 353,138
------------------ ----------------
Other Liabilities
Accrued salaries, related
payroll taxes, reimbursable
expenses payable to officers 692,132 692,132
Less: Current portion 0 0
---------------- ----------------
Total Other Liabilities 692,132 692,132
----------------- -----------------
TOTAL LIABILITIES 1,227,840 1,045,270
----------------- ----------------
Minority interests in
consolidated subsidiaries 20,000 20,000
STOCKHOLDERS' DEFICIENCY
Preferred Stock, $.002 par value;
3,000,000 shares authorized;
no shares issued or outstanding 0 0
Common Stock, $.001 par value;
25,000,000 shares authorized;
8,019,720 shares issued and
outstanding at 12/31/96 &
8,164,720 at 12/31/97 8,165 8,020
Common Stock options outstanding 11,250 11,250
Additional paid-in-capital 1,378,485 1,321,830
Deficit (1,270,532) (1,109,574)
------------------ -----------------
Sub-Total 127,368 231,526
------------------ -----------------
Receivable from related entity
for sale of common stock (48,773) (48,773)
------------------ -----------------
Total Stockholders' equity 78,595 182,753
------------------ -----------------
Total Liabilities And Stockholders'
Deficit 1,326,435 1,248,023
================== =================
See notes to financial statements.
Consolidated Statements of Operations
For the Three Month Periods
Ended December 31, 1997 and December 31, 1996
Three Months Three Months
Ended Ended
Dec. 31, 1997 Dec. 31, 1996
------------- -------------
REVENUES
Net product sales 411,633 623,708
Other Income 12,000 12,000
------------- -------------
Total Revenues 423,633 635,708
------------- -------------
COST OF SALES
Products 246,638 274,432
------------- -------------
Total Cost of Sales 246,638 274,432
------------- -------------
Gross Profit 176,995 361,276
Operating Expenses 217,444 286,211
Income before Interest (40,449) 75,065
Interest expense, net of interest income 360 2,025
------------- -------------
Income before taxes (40,809) 73,040
Provision for income taxes (3,666) 0
------------- -------------
Income Before Minority Interests (37,143) 73,040
------------- -------------
Income from continuing operations (37,143) 73,040
NET EARNINGS (37,143) 73,040
============= =============
See notes to financial statements.
WIRELESS DATA SOLUTIONS, INC.
Statement of Cash Flows
For the Three Month Periods
Ended December 31, 1997 and December 31, 1996
Three Months Three Months
Ended Ended
Dec. 31, 1997 Dec. 31, 1996
------------- -------------
Operating Activities:
Net Income (37,143) 73,040
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Prior period adjustment 63,010
Changes in Operating Assets
and Liabilities:
Decrease in accounts receivable 112,090 (374,840)
Decrease in inventory 51,527 115,996
Decrease in accounts payable (166,414) 123,142
Decrease in deferred service charge 10,300
Increase in other payables 686 (32,743)
------------- --------------
Net cash provided by operating
activities (28,954) (32,395)
------------- --------------
Financing Activities:
Increase in due from related parties (12,000) (94,009)
Increase in due to related parties
and related expenses 50,000
Net cash provided by financing
activities (12,000) (44,009)
------------- -------------
Net increase in cash (40,954) (76,404)
Cash at beginning of period 83,330 92,879
-------------- -------------
Cash at end of period 42,376 16,475
============== =============
See notes to financial statements
Notes to Financial Statements
Note 1 - Summary of Accounting Policies
- ---------------------------------------
The summary of Wireless Data Solution's, Inc. (the "Company") significant
accounting policies are incorporated by reference to the Company's
Registration Statement filed on Form 10-SB, as amended, dated February 12,
1998.
The accompanying unaudited condensed financial statements reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation of the results of operations, financial position and cash flows.
The results of the interim period are not necessarily indicative of the
results for the full year.
Item 2. Management's Discussion and Analysis or Plan of Operation.
- -------------------------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
The Company's current assets totaled approximately $881,000 as of
December 31, 1997 with approximately $839,000 in accounts receivable and
inventory, representing a slight decrease over the same period in 1996. This
slight decrease was a result of several customers pushing orders for the
Company's products back to the first calendar quarter of 1998. The Company
anticipates an increase in demand from such customers in the quarter
commencing January 1, 1998.
Management believes that cash flow from operations and current cash
balances will be sufficient to fund operations and expenses for the near
future. The Company also may use its "credit line" from Brian Watts, an
affiliate of the Company, on which the Company owed, as of the end of the
quarter ending December 31, 1997, approximately $256,000, for additional
liquidity needs as required.
Results of Operations
- ----------------------
Revenues for the quarter ended December 31, 1997 decreased approximately
$212,000 from the corresponding quarter in 1996. The decrease was a result of
several customers pushing orders for the Company's products back to the first
calendar quarter of 1998. The Company anticipates an increase in demand from
such customers in the quarter commencing January 1, 1998. As a result of the
decrease in revenue, the Company had a net loss of $37,143 for the quarter
ended December 31, 1997 compared to a net profit of $73,040 for the
corresponding quarter in 1996.
Financial Condition
- -------------------
Cash holdings for the quarter ended December 31, 1997 increased from
approximately $16,000 to approximately $42,000 over the corresponding quarter
in 1996. This increase resulted from a decrease in sales of the Company's
products as described above and the resulting decrease in demand for inventory
purchase. Inventory similarly decreased by approximately $44,000 from the
quarter ended December 31, 1997 from the corresponding quarter in 1996 as a
result of the decrease in sales.
Forward-Looking Statements
- ---------------------------
The foregoing and subsequent discussion contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, which are intended to be
covered by the safe harbors created thereby. These forward-looking statements
include the plans and objectives of management for future and possible further
capitalization of the Company. The forward-looking statements contained
herein are based on current expectations that involve numerous risks and
uncertainties. Assumptions relating to such current expectations involve
judgments with respect to, among other things, future economic, competitive
and market conditions and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are beyond and
control of the Company. Although the Company believes that the assumptions
could be inaccurate and therefore there can be no assurance that the forward-
looking statements included in this Form 10-QSB will prove to be accurate. In
light of the significant uncertainties inherent in the forward-looking
statements included herein, the inclusion of such information should not be
regarded as a representation of the Company or any other person that the
objectives and plans of the Company will be achieved.
PART II
Item 1. Legal Proceedings.
- ---------------------------
Not applicable.
Item 2. Changes in Securities and Use of Proceeds.
- ---------------------------------------------------
None; not applicable.
Item 3. Defaults Upon Senior Securities.
- -----------------------------------------
There has been no material default in the payment of principal, interest,
a sinking or purchase fund installment, or any other material default not
cured within 30 days with respect to any indebtedness of the Company exceeding
five percent (5%) of the total assets of the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
- -------------------------------------------------------------
No matters were submitted to a vote of the Company's security holders
during the third quarter of the fiscal year covered by this report.
Item 5. Other Information.
- ---------------------------
The Company has no other information to report.
Item 6. Exhibits and Reports on Form 8-K.
- ------------------------------------------
(a) Exhibits
Exhibit
Number Description
2.1* Agreement dated March 1, 1984, between Heartland Oil & Mineral
Corporation and Gold Genie Worldwide, an Oregon partnership
2.2* Buy/Sell Agreement dated March 1, 1984, between the Company and
Heartland Oil & Mineral Corporation
3.1* Articles of Incorporation of Gold Genie Worldwide, Inc., filed
on March 7, 1984
3.2* Certificate of Amendment to the Articles of Incorporation of
Products, Services and Technology Corporation, filed on June 13,
1988
3.3* Articles of Domestication of Products, Services and Technology
Corporation, filed on June 2, 1997
3.4* Articles of Amendment to the Articles of Incorporation of
Products, Services and Technology Corporation, filed on June 13,
1997
3.5* Bylaws of Products, Services and Technology Corporation dated as
of June 2, 1997
10.1* Settlement Agreement and Release dated December 17, 1987,
between Heartland Diversified Industries, Inc., the Company, and
certain individuals
10.2* Agreement, dated April 19, 1988, by and between the Company,
Heartland Diversified Industries, Inc., Distributed Networks,
Inc., and certain shareholders of Distributed Networks, Inc.
10.3* Buy/Sell Agreement, dated March 27, 1996, by and between the
Company and Heartland Diversified Industries, Inc.
10.4* Consulting Agreement dated April 15, 1997, among Products,
Services & Technology Corporation, David Wood and Henry Hanson
11 Statement regarding computation of per share earnings
24 Power of Attorney
27 Financial Data Schedule
99* Gold Genie Worldwide, Inc. Offering Prospectus, dated July 24,
1985
1 Summaries of all exhibits contained in this Registration
Statement are modified in their entirety by reference to such
exhibits.
* Incorporated by reference herein to the Company's Form 10-SB,
as amended, dated as of February 12, 1998.
(b) Forms 8-K filed during the last quarter. None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
February 19, 1998 WIRELESS DATA SOLUTIONS, INC.
/s/ Michael B. McLaughlin
-------------------------
Michael B. McLaughlin
President & Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS by these presents that each person whose signature to
this Quarterly Report appears below hereby constitutes and appoints Paul B.
Ingram and John L. Naylor, and each of them as his true and lawful attorney-
in-fact and agent, with full power of substitution, to sign on his behalf
individually and in the capacity stated below and to perform any acts
necessary to be done in order to file all amendments and post-effective
amendments to this Quarterly Report, and any and all instruments or documents
filed as part of or in connection with this Quarterly Report or the amendments
thereto and each of the undersigned does hereby ratify and confirm all that
said attorney-in-fact and agent, or his substitutes, shall do or cause to be
done by virtue hereof.
In accordance with the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly caused this
report to be signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
February 18, 1998 /s/ Michael B. McLaughlin
-------------------------
Michael B. McLaughlin
Michael B. McLaughlin, President and Chief
Executive Officer (Principal Executive
Officer) and Director.
February 18, 1998 /s/ Patrick Makovec
-------------------
Patrick Makovec
Patrick Makovec, Chief Financial
Officer, (Principal Accounting and
Financial Officer)
February 18, 1998 /s/ Brian Blankenburg
---------------------
Brian Blankenburg
Brian Blankenburg, Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statements of Wireless Data Solutions, Inc. and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> DEC-30-1997
<CASH> 42,376
<SECURITIES> 0
<RECEIVABLES> 649,496
<ALLOWANCES> 0
<INVENTORY> 189,208
<CURRENT-ASSETS> 881,080
<PP&E> 27,927
<DEPRECIATION> 27,927
<TOTAL-ASSETS> 1,326,435
<CURRENT-LIABILITIES> 535,708
<BONDS> 0
0
0
<COMMON> 8,165
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,326,435
<SALES> 411,633
<TOTAL-REVENUES> 432,633
<CGS> 246,638
<TOTAL-COSTS> 217,444
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 360
<INCOME-PRETAX> (40,809)
<INCOME-TAX> (3,666)
<INCOME-CONTINUING> (37,143)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (37,143)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
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