Securities and Exchange Commission
Washington, D. C. 20549
_______________
Form 10-SB/A
______________
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of the Securities Exchange Act of 1934
Worldwide Wireless Networks, Inc.
(Name of registrant in its charter)
Nevada 88-0286466
(State of incorporation) (I. R. S. Employer Identification No.)
770 The City Drive South, Suite 3700
Orange, California 92868
(714) 937-5500
(Address and telephone number of principal executive offices and principal
place of business)
________________
Securities registered pursuant to Section 12(b) of the Act:
None
________________
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001
Title of each class
<PAGE>
Table of Contents
PART I
Item 1: Description of Business.............................................3
Item 2: Management's Discussion and Analysis or Plan of Operations..........8
Item 3: Description of Property............................................14
Item 4: Security Ownership of Certain Beneficial Owners and Management.....14
Item 5: Directors, Executive Officers, Promoters and Control Persons ......16
Item 6: Executive Compensation.............................................17
Item 7: Certain Relationships and Related Transactions.....................18
Item 8: Description of Securities .........................................18
PART II
Item 1: Market Price for Common Equity and Dividends of
Worldwide Wireless and Other Shareholder Matters...............18
Item 2: Legal Proceedings..................................................19
Item 3: Changes In and Disagreements With Accountants......................19
Item 4: Recent Sales of Unregistered Securities............................20
Item 5: Indemnification of Directors and Officers..........................20
PART F/S
Index to Financial Statements..............................................21
PART III
Item 1: Index to and Description of Exhibits...............................22
2
<PAGE>
FORWARD LOOKING STATEMENTS
In this registration statement references to "Worldwide Wireless," "we,"
"us," and "our" refer to Worldwide Wireless Networks, Inc.
This Form 10-SB contains certain forward-looking statements. For this
purpose any statements contained in this Form 10-SB that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology are intended
to identify forward-looking statements. These statements by their nature
involve substantial risks and uncertainties, and actual results may differ
materially depending on a variety of factors, many of which are not within
Worldwide Wireless' control. These factors include but are not limited to
economic conditions generally and in the industries in which Worldwide
Wireless may participate; competition within Worldwide Wireless' chosen
industry, including competition from much larger competitors; technological
advances and failure by Worldwide Wireless to successfully develop business
relationships.
PART I
ITEM 1: DESCRIPTION OF BUSINESS
Business Development
Worldwide Wireless Networks, Inc. was incorporated in the state of Nevada
on June 10, 1992 as Second Investors Group, Inc. On June 19, 1998 Second
Investors effected a name change to Progressive Environmental Recovery
Corporation. On March 5, 1999 Progressive Environmental changed its name to
Worldwide Wireless Networks, Inc. We were organized as a "blank check"
company and our purpose was to seek out investment opportunities in emerging
companies but we remained inactive until our reverse merger with Pacific Link
Internet, Inc. ("Pacific Link") in April of 1999. (See, "Part I, Item 2:
Management's Discussion and Analysis - Reverse Merger Treatment.")
As a result of the reverse merger we acquired the business assets of
Pacific Link, a California corporation, doing business as Global Pacific
Internet. Pacific Link operated wireless network systems for customers in the
Orange County, California area. Pursuant to the merger agreement, we issued
7,000,000 common shares in exchange for the 583,000 common shares held by
Pacific Link shareholders, which was 100% of that company's outstanding
shares. The directors and officers of Worldwide Wireless resigned and the
management of Pacific Link filled the vacancies, and the former shareholders
of Pacific Link obtained 62.5% of the total voting power at that time.
Due to a conflict with corporate names in California, Worldwide Wireless
is doing business as Global Pacific Internet in California.
Our short operating history and operating losses raise substantial doubt
about our ability to continue as a going concern. This fact is reported by
our independent auditor Crouch, Bierwolf & Chisholm.
Business
Worldwide Wireless is doing business as "Global Pacific Internet" within
the Orange County area. We are a networking solutions company which
specializes in high speed Internet access using our own wireless network.
Other products we provide include direct service links which are connections
of a customer's computer network to the Internet via our wireless network,
and/or frame relays, which is a wired connection from a customer's computer to
a router which sends the data to the desired end connection. We also provide
web hosting and network consulting. We serve all sizes of commercial business
and the home office market.
3
<PAGE>
We began large scale commercial operations in April 1999 and have
accomplished the following:
* Service to approximately 165 commercial customers with high-speed
data network services.
* Expansion of a high-speed wireless network which currently serves
approximately 80% of the Orange County, California area.
* Delivery of DSL (Digital Subscriber Line) and 100 Mbps wireless
service to our customers, which are high speed Internet access
options.
* Opening of a co-location facility to offer central office services
to customers.
* Hiring of a direct sales force with support and management teams.
Wireless Network
-----------------
We have the technical expertise to build and operate large scale wireless
networks without relying on an existing wire-based network, such as a
telephone network's copper lines. Our wireless network allows the user to
connect to an Internet service provider bandwidth via a radio modem.
Typically a customer relies on an incumbent local exchange carrier such as a
telephone company's copper wires or a cable company's television coaxial plant
to provide the physical means for the customer to connect to the Internet.
Our primary network implementation is a wireless network consisting of a
network operations center, centralized base stations known as
"points-of-presence ("POP"s)," and distribution radios which connect to the
end customer. We currently operate a wireless network which has been
operational for approximately twelve (12) months and covers an estimated 80%
of the Orange County area. We rely on fourteen POPs, which are generally
located on the top of tall buildings. We negotiate a long term site license
for each POP location.
The typical POP site consists of one indoor/outdoor equipment cabinet
(62" h X 23" w X 34"d) and an array of four (4) to eight (8) small sectional
antennas (42" h X 4" w). The sectional antennas can be painted any color to
match existing surroundings. There is no roof penetration and once the system
is installed there are minimum inspections. We pay for all costs associated
with the installation and our unit requires a single phase 110 volt outlet for
power.
As part of our network expansion and in the course of normal operations,
we are negotiating to expand our rights associated with the current POP
locations as well as acquire additional point-of-presence locations.
Management currently believes that the market for these facilities is
reasonable for its purposes; however, the ability to acquire and maintain
these rights at reasonable pricing will be a material factor in the success of
the company.
In general, our end customers must be within five miles of a POP and
have line-of-sight visibility between the POP and an antenna located at their
building. The five mile standard is based upon the equipment we use, existing
interference and equipment reliability. Other companies may use greater
distances from a POP, but we have established five miles as a guideline for
our connections. Each end customer must install a rooftop or window radio
with an antenna. When the customer accesses the Internet the signal travels
over their building's wiring or wireless network to the rooftop or window
antenna. The antenna sends the data signal to a nearby POP, where the signal
is communicated to our broadband switching center and then onto its final
destination.
Our wireless network provides flexibility, quick installation and quality
service for Internet users. For example, during the Panasonic Shock Wave
Beach Games in August of 1999 we established a temporary wireless system which
provided Internet access to the participants on the beach. We usually can
install the necessary equipment at a customers business within two to five
days. Actual installation of a wireless system may take as little as four
hours. Installation and incorporation into our wireless network can be
accomplished as fast as within 48 hours following a signed service order. This
can be accomplished when we rely on installation scheduling and preparation
prior to contract signing. However, we generally plan for a three week time
period for completion of
4
<PAGE>
installation. We provide a quality service because we manage our network
traffic by using routing equipment that measures and controls packet flows
(data bundled for transmission), and we install equipment with performance
levels that meet or exceed those required by the customer.
Our wireless network is engineered to provide high reliability and wide
area coverage. We generally operate at a greater than 98% uptime. Our
wireless networks are capable of high speeds of 128 kbps through 100 Mbps
speeds. Mbps represents the transmission speed of data in terms of bits per
second. Our wireless system and digital subscriber lines, which are copper
lines that connect to a local phone company system and then directly to the
Internet, provide connection to the Internet at high speeds. Our connections
can provide transmissions at greater speeds than a dial up connection. For
example, a dial up modem transmits at 28,000 to 56,000 bps, a T1 line, which
is a dedicated line with a bundle of twenty-four voice or data lines,
transmits at 1-10 Mbps and our wireless network and digital subscriber lines
transmit at 100 Mbps. These high speed connections allow files, documents and
voice transmissions to be dispatched over the Internet in much shorter time
periods.
We operate on a combination of licensed frequencies of 23 Ghz and
unlicensed frequencies in the 2.4 Ghz ISM bandwidth, 5.8 Ghz ISM bandwidth,
and 5.2 Ghz UNII bandwidth ranges. Ghz, (giga hertz) is a measurement of
electromagnetic energy which is equivalent to one "wave" or cycle per second.
The bandwidth range determines whether licensure is required. Licensed
frequencies require application to the FCC, unlicensed frequencies are part of
the radio spectrum that the general public may use for personal radios.
Licensure is determined on a site-by-site basis depending on the distance and
type of network link. Reliability is achieved through redundant radio links
and wired line back-up. Security is provided through spread spectrum radio
links and encryption, among other standard security measures. Our radio modem
transmits data by a microwave frequency which changes 32 times a second.
During our twelve months of operations we have not experienced any significant
weather interference, however we are not sure how a wireless network in
geographical areas with more severe weather than southern California would be
affected.
Principal Services
High-speed Internet: We offer connections to the Internet at speeds from
128 kbps to 100 Mbps. This service provides always-connected, secure access
for all sizes of commercial businesses. These connections are primarily
supported by our wireless network with the balance of customers being served
by DSL and leased T-1 circuits. We enhance our service by balancing and
distributing our traffic across our upstream connections, which include
Digital Broadcast Networks, Savis, and Exodus networks. As of September 23,
1999 we have approximately 165 high-speed wireless customers.
Dial-up Internet Access: As of September 23, 1999 we provide Internet
access to 1,772 Internet users using dial-up connections. This service is
marketed to the general public throughout Orange County and to our commercial
customers to support work-at-home, remote server access, and other business
applications.
Data Center Services: We offer web hosting, web sites and co-location
services to our customers. Our co-location service allows a customer located
outside our wireless network to physically place a computer connected to the
customer's network in a secure facility with a high-speed physical connection
to the Internet. As of September 30, 1999 we provided such services to 164
customers.
Network Consulting: We have substantial expertise in building and
operating large-scale wireless, ATM, and Internet Protocol networks. We offer
design and implementation services for private wireless networks and
consulting services to develop network hardware components. As of September
23, 1999 we have generated approximately $50,000 in revenues from these
services.
Sales and Marketing
Our historical sales have resulted from domestic operations primarily
located in Orange County. This area has technology-oriented businesses that
represent our prime targeted customers. By focusing our initial expansion to
markets in southern California, management believes that we can efficiently
leverage our network assets, brand
5
<PAGE>
equity, central facilities, administration, and technical resources which
currently exist.
We generally work with the end customer when providing network access.
We believe that a direct customer relationship provides the opportunity for us
to cross-sell network products, improve customer satisfaction, and reduces the
chance of customer attrition. In May 1999, we created a direct sales force of
eight sales agents. This sales force markets our services to businesses of
all sizes within our network service area. The sales force is supported by
our customer service, technical experts, and outbound telemarketing
activities.
At the local level, we advertise in general print media and through
publications targeted at the information professional. This direct sales
activity is supplemented by telemarketing sales agents and through customer
referrals. During late 1999 we established an e-commerce site,
www.airwareproducts.com to sell wireless network equipment to enterprise
customers and Internet service providers.
Our backlog results from the difference in timing between a firm customer
order and installation of service. In general, the target interval for
installation is three weeks. As of September 23, 1999, we estimate the
monthly recurring revenue of contracts pending but not installed to be
approximately $30,000.
Competition
Our market is crowded with companies which provide Internet networks and
Internet access to businesses and individuals. We face competition from
existing network and Internet service providers most of whom have financial
resources, brand recognition, work coverage, technical resources, and sales
forces much larger than ours. These providers may have substantial financial
and technical resources directed at markets served by us. As a result we may
need to adjust pricing of our products, expend more funds to acquire customers
and may experience higher customer attrition. In addition, we can not assure
that we can successfully compete with the larger and more established
companies that already provide Internet service.
In the wireless market we compete with Teligent, Inc., Winstar
Communications, Inc., and NEXTLINK Communications, Inc. who offer wireless
directional, high-speed network services. Pacific Bell, AT&T, World Com,
Qwest, Cox Communications, Sprint and similarly situated telecommunications
companies offer Internet products as stand-alone products or in a bundle with
telecommunications, network services, or wide-area networking. Covad and
Rythms Net Connections are representative of service providers who provide
high-speed network facilities primarily by using state-of-the-art modems in
conjunction with the facilities of incumbent local exchange carriers.
Time Warner, @Work, and similar cable companies have converted cable
television coaxial lines to support bidirectional, high-speed network
services. We also compete with Internet dedicated access companies such as:
Verlo, Concentric, and Level 3. These companies specialize in Internet
protocol products which include data center services, web hosting, virtual
private networking, network consulting, and related products.
We compete with these companies by offering rapid installation, technical
performance, quality of customer service and price. We have the capacity to
deliver Internet service in 48 hours because at a minimum our service may only
require installation of a radio and antennae at a customer's site. Competing
technologies that rely on physical wiring may require 30 to 45 days for the
necessary wiring to be installed. We develop our networks primarily with our
own internal engineering expertise and we believe the use of our own personnel
increases the uniqueness of our service and prevents direct copy by our
competition. Use of our own technical network configuration, radio
technology, and POP site implementations reduce costs and improve performance.
Although pricing is an important factor in the customer's purchase
decisions, we believe that customer relationships, customer service and
consistent quality will be the key to generating customer loyalty. During the
past several years management has observed market prices for network services
declining, which is a trend management believes will likely continue. As
prices decline for any given speed of service, we expect that our total number
of customers will increase due to more individuals and companies deciding to
use such services. As the total number of customers increase, the proportion
of customers purchasing our high-speed services, which are more
6
<PAGE>
expensive in comparison to our other services, will increase because the cost
to upgrade a customer's speed is generally minimal.
Many of our competitors rely on existing networks of copper lines owned
by third parties. We believe these networks are facing increased demand from
individuals and businesses for new services at a reasonable cost. Our
management believes that elimination of reliance on third parties reduces our
costs by eliminating the expense of payments to such third parties for labor
costs associated with installation and costs of troubleshooting network
problems. Further, we believe that capital expenditures associated with
constructing our wireless network are substantially lower because we do not
have to physically construct a wire network.
Principal Suppliers
Our principle suppliers provide hardware and software that is
incorporated into our networks. While no single vendor represents a majority
of capital spending, network performance depends on the operation and support
of these products. We rely on third-party vendors for equipment, upstream
bandwidth, operational software, and product support. We currently rely on
six vendors for our equipment and four vendors for upstream bandwidth access.
Our product availability and network performance may be diminished when and if
these providers limit availability of service, delay product, or deviate from
our expectations for performance. However, management believes these vendors
can be replaced within 60 days. Our agreements with these suppliers typically
require specific performance on our part for financial, service, or
operational actions, and any failure in our performance could result in
penalties or increased cost of operation. As is customary for the industry,
damages owed by a company for failure to provide bandwidth are generally
limited to service credits for the circuits affected.
Trademark, License and Intellectual Property
Our primary service mark in our service area of Orange County is Global
Pacific Internet. We are currently seeking trademark protection for "Global
Pacific Internet" and "Worldwide Wireless Networks, Inc.". The success of our
business depends in part on brand recognition, trade secrets, network
hardware, and software which may be proprietary or purchased from
third-parties. We rely upon a combination of licenses, confidentiality
agreements and other contractual covenants to establish and protect our
technology and other intellectual property rights. Although we do not believe
that our intellectual property infringes on the rights of any party,
third-parties may assert claims for infringement which may be successful or
require substantial resources to defend.
We currently hold two FCC private operational fixed microwave radio
station licenses (See, "Government Regulations," below). Both licenses will
expire in July of 2009
Product Development
We conduct research and development as an incidental activity to our
ordinary operations. Therefore, we have not spent any material amount for
research and development during the past two fiscal years. We expect to
devote substantial resources to increase market penetration within our current
service area as well as expand our wireless network to other areas in southern
California.
In May of 1999 we entered into a joint venture with Bridge Technology,
Inc. Pursuant to the agreement we will provide our know how to and $50,000
for capitalization of Pacific Bridge Net, a subsidiary of Bridge Technology.
Pacific Bridge Net will develop a wireless Internet access system for the
Asian market. We cannot assure we will be successful in the Asian market. We
will have a 20% interest in the venture and will have the right to sell the
radio equipment which is developed during the venture in the United States.
In December of 1999 we beta tested a prototype radio with a built in firewall
and integrated router which may eliminate the need for a proxy server or
complicated network configuration. The results were promising yet more
testing is needed.
7
<PAGE>
Government Regulation
At the federal level, the FCC has jurisdiction over the use of the
electromagnetic spectrum (i.e., wireless services) and has exclusive
jurisdiction over all interstate telecommunications services, that is, those
that originate in one state and terminate in another state. State regulatory
commissions generally have jurisdiction over intrastate communications, that
is, those that originate and terminate in the same state. Municipalities and
other local jurisdictions may regulate limited aspects of our business by, for
example, imposing zoning and franchise requirements and requiring installation
permits. We are also subject to taxation at the federal and state levels and
may be subject to varying taxes and fees from local jurisdictions.
A large portion of our wireless networks operate in a radio spectrum not
requiring licensure under current regulations. As an Internet service
provider we are not currently directly regulated by the Federal Communications
Commission or state Public Utilities Commission. However, as required by law,
we license frequency spectrum directly from the Federal Communications
Commission for a portion of the high-speed portions of our wireless network.
Changes in the law or the interpretation of existing law may cause increased
regulation of our business or restrictions on the unlicenced radio spectrum
currently used in the wireless networks.
Employees
We currently have approximately 36 full time employees with expertise in
sales, engineering, customer service, and finance. The majority of our
employees are based in Orange County, California. We believe we have good
relations with our employees and none are covered by any collective bargaining
agreement.
Reports to Security Holders
Worldwide Wireless has voluntarily elected to file this Form 10-SB
registration statement in order to become a reporting company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Following
the effective date of this registration statement, we will be required to
comply with the reporting requirements of the Exchange Act. We will file
annual, quarterly and other reports with the Securities and Exchange
Commission ("SEC"). We also will be subject to the proxy solicitation
requirements of the Exchange Act and, accordingly, will furnish an annual
report with audited financial statements to our stockholders.
We currently use an investor relations firm, Columbia Financial Group,
and interested persons may call at (888) 301-6271. On our behalf, Columbia
Financial Group has obtained membership to Internet Stock Market Resources,
Inc. Internet Stock Market Resources, Inc. is an information exchange which
provides up-to-date information on publicly traded companies to its members.
Interested persons may also visit our web site at www.wwwn.com.
Available Information
Copies of this registration statement may be inspected, without charge,
at the SEC's Public Reference Room at 450 Fifth Street N.W., Washington, D.C.
20549 and at the Pacific Regional offices of the SEC located at 5670 Wilshire
Boulevard 11th Floor, Los Angeles, California 90036-3648. The public may
obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0300. Copies of this material also should be available
through the Internet by using the SEC's EDGAR Archive, which is located at
http://www.sec.gov.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
Overview
We are a networking solutions company which provides high speed Internet
access using our own wireless
8
<PAGE>
network, dial-up Internet access, data center services and network consulting.
Since April of 1999 we have had large scale commercial operations and have
developed a commercial customer base, a direct sales force and have expanded
our wireless network. Our primary market is currently Orange County,
California, where we operate our wireless network. While we have experienced
revenue growth since our inception, we have operated at a net loss.
Management believes that our continued expansion will result in additional
losses for the foreseeable future.
Revenues. We generate revenues primarily through annuity-like service
contracts with customers, sale and installation of wireless networks, and
network consulting. We recognize revenues when services are completed. We
believe that growth in revenue will come from additional penetration in
markets currently served by existing networks, expansion of complimentary
product lines to existing and new customers, and geographic expansion using
currently deployed technologies. We have spent, and will continue to spend,
significant resources on these activities.
Cost of Revenues. Cost of revenues consist of third-party network usage
costs, depreciation of network equipment, technical staff costs, and occupancy
costs. Third-party network costs are expensed in the period when services are
rendered and are generally proportional to the number of customers.
Investment in network equipment is related primarily to geographic network
expansion and incremental customer installations, which results in increased
depreciation expense in future periods.
We do not currently anticipate that inflation will have a material impact
on our results of operations.
Sales and Marketing. Sales and marketing expenses include salaries,
sales commissions, employee benefits, travel and related expenses for our
direct sales force, fees paid to third-party sales agents, marketing and sales
support functions. In an effort to increase our revenues, user base and brand
awareness, we expect to increase significantly the amount of spending on sales
and marketing over the next year. Marketing costs associated with increasing
our user base, which to date have been minimal, are expensed in the period
incurred.
General and Administrative. General and administrative expenses include
salaries, employee benefits and expenses for our executive, finance, legal,
and human resources personnel. In addition, general and administrative
expenses include fees for professional services and occupancy costs. We
expect general and administrative expenses to increase in absolute dollars as
we continue to expand our administrative infrastructure to support the
anticipated growth of our business, including costs associated with being a
public company.
Reverse Merger Treatment
In April of 1999 Worldwide Wireless completed a merger with Pacific Link
Internet, Inc., a California corporation doing business as Global Pacific
Internet. Pacific Link was incorporated in September of 1997 and its
operations began in August of 1997. As a result of the merger Worldwide
Wireless acquired the business operations, services and assets of Pacific Link
which are a significant part of our ongoing business and the services that we
sell. In conformance with generally accepted accounting principles, the
merger has been accounted for as a "reverse merger" and the accounting
survivor is Pacific Link.
The reverse merger was completed pursuant to the statutory requirements
of California and Nevada through the exchange of 7,000,000 shares of the
Worldwide Wireless' common stock for 100% of the outstanding stock of Pacific
Link. The merger was structured as a tax free statutory merger pursuant to
Section 368 (a)(1)(A) of the Internal Revenue Code of 1986, as amended.
Worldwide Wireless raised $1,000,000 in anticipation of the merger and
provided this as the only asset of the newly combined organization. The
merger was treated as a reverse merger for accounting purposes, therefore the
September 30, 1999 period is consolidated and the December 31, 1998 and 1997
period is that of Pacific Link, only.
Recent Developments
On October 27, 1999, we entered into a contract to purchase wireless
telecommunications equipment from Adaptive Broadband Corporation. Pursuant to
the agreement we have committed to purchase 2,624 units, 5,120
9
<PAGE>
units and 7,760 units during the first, second and third years of the
agreement, respectively. Units consist of subscriber units or access points.
Subscriber units refer to individual customers and access points refer to
POPs. The agreement may be terminated by written notice from either party for
occurrence of several specific events, notably, if either party is not
satisfied with the performance of the other party. Obligations of the
agreement will survive early termination to the extent purchase orders are
accepted by Adaptive Broadband Corporation and minimum additional payments are
required.
We anticipate that approximately 20% of the equipment purchased as a
result of the agreement will be used in our own wireless operations and the
remaining 80% will be resold to third parties. We expect to purchase a
minimum of $4.4 million, $6.4 million and $7.76 million in such equipment for
the first, second and third year of the agreement. As of this filing we
anticipate that this agreement will provide additional revenues from wireless
equipment sales, however, we cannot assure what effect the commitments
required under the agreement will have on our results of operations.
Liquidity and Capital Resources
Since Pacific Link's inception, it has financed its operations primarily
through the private placement of equity securities, loans, leasing
arrangements, cash-flow from operations and the merger completed with
Worldwide Wireless in April 1999. As of September 30, 1999 cash reserves
totaled $82,309 with total current assets of $328,440.
We have posted operating losses since inception. Our working capital
deficit as of September 30, 1999 is $1,036,165. Our long term debt was $5,267
as of September 30, 1999. However, our current liabilities were $1,364,605
with 43.4% of that amount attributed to the current portion of long term
liabilities due and 39.5% of the current liabilities was allocated to accounts
payable. We anticipate that the current portion of long term liabilities will
decrease by approximately 33.8% when certain capital lease obligations expire
in late 1999 and early 2000. We have paid interest rates ranging from 15.5%
to 32.5%, or an average of 21.7%, on such obligations because we were a new
company without a credit history.
As of September 30, 1999, our principal commitments consisted of office,
roof-rights payments, and equipment leases. Future minimum principal payments
on notes payable were approximately $554,777. Future minimum lease payments
were $42,910 with $40,887 through 2000 and $5,484 through 2001. Future
minimum operating lease payments at December 31, 1998 were $1,127,308 through
the year 2003, with over $200,000 due each year from 1999 through 2002.
The consolidated cash flows show net cash used for our operating
activities was $636,081 for the nine months ended September 30, 1999. Net
cash used for operating activities consisted primarily of net operating losses
and network asset purchases. Net cash provided by our financing activities
was $1,565,473 for the nine months ended September 30, 1999. Net cash
provided by financing activities was principally attributable to the sale of
securities by Worldwide Wireless prior to the merger in April 1999.
We expect to continue to incur significant capital expenditures in the
future in our current market of Orange County, including additions and
enhancements to our server and network infrastructure, software licenses and
furniture, fixtures and equipment. The actual amount of capital expenditures
will depend on the rate of growth in our user base and available resources,
which is difficult to predict and which could change dramatically over time.
Technological advances may also require us to make capital expenditures to
develop or acquire new equipment or technology.
We intend to launch wireless networks in Los Angeles, San Diego, Santa
Barbara and Ontario, California, and in Honolulu, Hawaii. We anticipate that
during this expansion we will remain unprofitable in each market for at least
12 to 18 months after launch. We expect that we will require $1,000,000 in
addition to revenues, during the next 12 months to fund our operations. We
intend to use a combination of our cash, debt, and future securities offerings
to fund our capital expenditures in a manner which minimizes our cost of
capital.
10
<PAGE>
We have investigated the availability, source and terms for external debt
financing and are currently in preliminary negotiations for such financing.
We cannot assure that we will be able to obtain such financing on terms
agreeable to us. Also, the acquisition of funding through the issuance of
debt could result in a substantial portion of our cash flows from operations
being dedicated to the payment of principal and interest on the indebtedness,
and could render us more vulnerable to competitive and economic downturns.
Any future securities offerings will be effected in compliance with
applicable exemptions under federal and state laws. The purchasers and manner
of issuance will be determined according to our financial needs and the
available exemptions. After determination of the availability of debt
financing we may elect to offer securities and, accordingly, will determine
the type of offering or the type or number of securities which we will offer
at that time. However, we can not assure that a future securities offering
will be successful. We have no plans to make a public offering of our common
stock at this time. We also note that if we issue more shares of our common
stock our shareholders may experience dilution in the value per share of their
common stock.
If we are unable to obtain additional funds on terms agreeable to us, we
will suspend our expansion plans into new markets and will restructure our
operations to rely on operating cash flow.
Results of Operations
The following table sets forth selected consolidated statements of
operating data as a percentage of total revenues:
<TABLE>
<CAPTION>
Year Ended Interim Period
Dec 31 Dec 31 Ended September, 30
1997 1998 1998 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues ........................ $ 271,841 $ 841,841 $ 629,387 $ 1,228,457
AS A PERCENTAGE OF REVENUES
Cost of revenues................. 69.6% 51.1% 62.5% 41.7%
Gross profit..................... 30.3% 48.9% 37.4% 58.2%
Operating expenses:
Selling ...................... 25.3% 18.8% 19.9% 29.1%
General and administrative ... 51.1% 54.0% 31.7% 85.3%
Total operating expenses ..... 76.4% 72.9% 58.4% 115.4%
Loss from operations ............ 46.0% 24.0% 17.4% 57.2%
Other income (expense), net...... 10.4% 15.0% 2.1% 0.7%
Net loss ........................ 56.5% 39.2% 19.5% 58.0%
</TABLE>
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Revenues for the period ended September 30,1999 were $1,228,457, which
represented an increase of $599,070 from $629,387 for the period ended
September 30, 1998. The increase was primarily attributable to revenues
generated from acquisition of new wireless customers from which we generated
approximately $673,194 of our total revenues for such period. Dial up
customers generated approximately $200,238 of our total revenues for such
interim period. The balance of $355,025 resulted from other services.
11
<PAGE>
Cost of revenues for the September 1999 period was $513,073, which
represented an increase of $119,143 from $393,930 recorded for the September
1998 period. The increase was primarily attributable to increased third-party
network service expense related to the growth in our user base and
depreciation related to our network costs.
Selling expenses for the September 1999 period were $357,573, which
represented an increase of $231,803 from $125,770 for the September 1998
period. The increase was primarily due to the hiring of additional direct
sales force personnel and success-based sales commissions.
General and administrative expenses for the September 1999 period were
$1,048,316, which represented an increase of $848,717, from $199,599 for the
September 1998 period. The increase was primarily due to the hiring of
additional administrative personnel and increased professional and consulting
expense. We also will experience increases in our general and administrative
expenses due to preparation of the annual and quarterly reports which will be
required of us once we become a fully reporting company.
Interest expense consists primarily of interest expense on capital
equipment leases. Interest expense for the September 1999 was $26,484, which
represented an increase of $571 from interest expense of $25,913 for the
September 1998 period. The increase was primarily attributable to interest on
a capital lease and additional long term debt.
Our net loss for the September 1999 period totaled $712,990, or $.07 per
share, compared to $123,086, or $.02 per share for September 1998. As
discussed above the 1999 period was impacted by costs associated with
increases in the number of sales personnel and hiring additional
administrative personnel and professional and consulting expenses
YEARS ENDED DECEMBER 31, 1998 AND 1997.
Revenues for the year ended December 31, 1998 were $841,841, which
represented an increase of $570,000, or 209.6%, from $271,841 for the year
ended December 31, 1997. The increase was primarily attributable to revenues
generated from incremental sales to new customers of high-speed wireless
network services and dial up services.
Cost of revenues for the year ended December 31, 1998 was $430,600, which
represented an increase of $241,218, or 127.3%, from $189,382 for the year
ended December 31, 1997. The increase was primarily attributable to increased
third-party network service expense, such as T1 and dial up connections.
Selling expenses for the year ended December 31, 1998 were $158,592,
which represented an increase of $89,765, or 130.4%, from $68,827 for the year
ended December 31, 1997. General and administrative expenses for the year
ended December 31, 1998 were $455,126, which represented an increase of
$316,157, or 227.5%, from $138,939 for the year ended December 31, 1997. The
increase was primarily due to the hiring of additional administrative
personnel.
Interest expense consists primarily of interest expense on capital
equipment leases. Interest expense for the year ended December 31, 1998 was
$51,455, which represented an increase of $32,761 or 175.2%, from interest
expense of $18,692 at the year ended December 31, 1997. The increase was
primarily attributable to leasing additional equipment to expand our services.
The net loss for the year ended December 31, 1998 was $330,183, or $.05
per share, compared to $153,493, or $.02 per share, for the year ended
December 31, 1997. The continued loss is primarily a result of our continued
development of our network and additional employees.
Factors Affecting Future Operations
Our operating results may fluctuate substantially in the future as a
result of a variety of factors, many of which are outside of our control,
including those discussed elsewhere in this filing. We plan to significantly
12
<PAGE>
increase our operating expenses and capital expenditures to expand our sales
and marketing efforts, promote the brand, continue to enhance the features and
functionality of our product line, upgrade our internal network
infrastructure, pursue new distribution channels and hire new personnel across
all levels of our organization. We determine our operating expenses largely
on the basis of anticipated growth in our revenues, however, some of our
expenses are fixed in the short term. There are risks associated with the
timing and achievement of revenue targets due to a variety of factors, and
there can be no assurance that revenues will increase commensurately with
expenses. We believe that our expenses will exceed our revenues for the
foreseeable future. As a result of these and other factors, our operating
results may vary substantially from quarter to quarter.
Seasonal Aspects
Our business is not seasonal because the sale of our services is not
linked to seasonal variables.
Year 2000 Compliance
Many existing computer systems and software are coded to accept only two
digit entries in the date code field and cannot distinguish 21st century dated
from 20th century dates. If not corrected, various problems may arise from
the improper processing of dates and date-sensitive calculations by computers
and other machinery as the Year 2000 is approached and reached. These
problems include system failures or miscalculations causing disruptions of
operations including, among other things, a temporary inability to process
transactions, send invoices or engage in similar business activities. As a
result, many companies' software and computer systems may need to be upgraded
or replaced to comply with these "Year 2000" requirements.
State of Readiness. We have implemented the following assessment and
process in an effort to assess and remedy any Year 2000 issued which could
impact our existing operations:
Phase I: Assessment of Operations (completed in July 1999);
Phase II: Prepare Formal Test Plan (completed in August 1999);
Phase III: Implement Test (completed in September 1999); and
Phase IV: Remediation of Year 2000 issues (completed October 1999).
We have completed our formal assessment of the impact that the Year 2000
problem may have on our existing operations and believe the following four
distinct areas of our existing operations may be affected by the Year 2000
problem:
* DATA NETWORKS. Because the Year 2000 risk was a known factor during
the majority of our network construction, our design and third-party equipment
was compliant from inception. We believe that the network is currently
compliant.
* MONITORING AND CONTROL SYSTEMS. We use third-party equipment and
software and as a result, our ability to address Year 2000 issues is to a
large extent dependent upon the Year 2000 readiness of these third-parties'
hardware and software products. These products include servers manufactured
by Compaq, Intel, Dell and similarly situated computer manufacturers, network
equipment manufactured by Cisco, database management, financial application
and other software.
We have reviewed documentation on Year 2000 compliance prepared by the
third-parties from whom we have purchased hardware and software products.
Based upon our review of such documentation and the fact that we either
purchased the most current product versions available from these third-parties
or installed the latest patches or upgrades available, we believe these
applications are Year 2000 compliant with the exception of three servers which
are scheduled for replacement. We estimate that the remaining expenditures to
upgrade these systems for compliance is $10,000.
13
<PAGE>
* THIRD-PARTY NETWORK PROVIDERS. We are dependent on our third-party
network services carriers to provide access between their networks and our
network. We have initiated discussions with all of our providers to determine
the extent to which we are vulnerable to these third-parties' Year 2000
issues. We have obtained Year 2000 readiness disclosure statements from these
carriers which confirm that their systems are Year 2000 compliant or that they
are in the process of becoming Year 2000 compliant. Wherever practical, we
use diverse pathways and providers to minimize the risk that a single
third-party failure will disrupt service to our customers.
* NON-OPERATIONAL SYSTEMS. Our non-operational technology systems,
such as heating and air conditioning, security systems, accounting, and other
embedded technology, may also be subject to Year 2000 risks. We have reviewed
Year 2000 compliance statements from the manufacturers of our non-operating
systems. Based on our assessment to date, we believe that these systems are
Year 2000 compliant.
In addition, we plan to continue to assess and test any new systems that
we add to our operations for Year 2000 compliance.
The Risks. If Year 2000 issues prevent our users from accessing the
Internet, our business and operations will suffer. Any failure on our systems
and our communications infrastructure with respect to the Year 2000 problem
could result in:
- increased user turnover and corresponding loss of revenues; or
- increased allocation of our resources to address Year 2000.
Contingency Plans. Since we believe our system and third-party providers
and systems are Year 2000 compliant we have not established any contingency
plans other than to have technical support teams on site during the December
31, 1999 and January 3, 2000 time period.
ITEM 3: DESCRIPTION OF PROPERTY
Our principal executive offices are located in Orange, California, where
we lease 5,307 square feet of office space with roof rights for antennas. We
renewed the lease on March 30, 1999 and it will expire in 2004. The monthly
rent varies from approximately $10,083 in the first year to $11,145 in the
fifth year. This office space is in good condition and satisfies our current
space needs.
We also lease two office spaces in Irvine, California. One office space
located at 5 Park Place is 1,062 square feet and houses our sales agents.
Such lease will expire in April of 2003 and requires a basic rent payment of
$2,549 per month which is subject to adjustments for the term of the lease.
The other office space located at 8001 Irvine Center Drive is subleased to a
computer consulting company for the costs of the lease which is approximately
$4,021 per month.
ITEM 4: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our
outstanding common stock of; (i) each person or group known by us to own
beneficially more than 5% of our outstanding common stock, (ii) each of our
executive officers, (iii) each of our director's and (iv) all executive
officers and directors as a group. Beneficial ownership is determined in
accordance with the rules of the SEC and generally includes voting or
investment power with respect to securities. Except as indicated by footnote,
the persons named in the table below have sole voting power and investment
power with respect to all shares of common stock shown as beneficially owned
by them. The percentage of beneficial ownership is based on 11,799,988 shares
of common stock outstanding and options and warrants exercisable within 60
days as of January 31, 2000.
14
CERTAIN BENEFICIAL OWNERS
Common Stock Beneficially Owned
--------------------------------
Name and Address of Number of Shares of
Beneficial Owners Common Stock Percentage of Class
- --------------------------- ------------------- -------------------
Sean LeMons 777,600 (1) 6.4%
15123 Brookhurst #205
Westminster, California 92683
Ming-Chau Yeung 774,000 (2) 6.3%
9 Red Coat Place
Irvine, California 92602
(1) Includes options to purchase 3,600 shares exercisable within 60 days.
Disputed Beneficial Ownership
In September of 1998 Pacific Link entered into an options agreement with
DFL Capital Partners, LLC. According to the agreement DFL Capital Partners,
LLC was granted the option to buy 50,000 common shares at $0.10 per share.
The right to exercise the option vested immediately and remained exercisable
for ten (10) years The amount of common shares subject to the options would
adjust according to recapitalizations of Pacific Link. The parties to this
agreement are currently in a dispute as to the application of this agreement
to our common shares. We may have up to 700,000 common shares subject to
these options and if the optionee exercises the options it may become a 5%
shareholder.
MANAGEMENT
Common Stock Beneficially Owned
-------------------------------
Name and Address of Number of Shares of
Beneficial Ownership Common Stock Percentage of Class
- ---------------------------- ------------------- -------------------
Dennis and Susan Shen 3,084,500 (2) 26.1%
770 The City Drive South,
Suite 3700
Orange, California 92868
Jack Tortorice 2,910,500 (3) 24.6%
770 The City Drive South,
Suite 3700
Orange, California 92868
Charles C. Bream III 140,000 (4) 1.1%
770 The City Drive South,
Suite 3700
Orange, California 92868
All executive officers and
Directors as a group 6,135,000 51.3%
(2) Dennis is the record owner of 500,000 shares and options to purchase
4,500 shares, he and Susan Shen jointly own 1,806,000 shares, they
share voting and investment power of 774,000 shares held by Susan's
mother, Ming-Chau Yeung.
(3) Includes options to purchase 4,500 shares exercisable within 60 days.
(4) Represents options to purchase 140,000 shares exercisable within 60
days.
15
<PAGE>
ITEM 5: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our directors, executive officers and key employees and their respective
ages and positions are set forth below. Biographical information for each of
those persons is also presented below. Our executive officers are appointed
by our Board of Directors and serve at its discretion. Dennis and Susan Shen
are married.
Directors and Officers
Name Age Position Held
- ------- ----- -----------------
Jack Tortorice 50 Chief Executive Officer and Chairman of
the Board
Charles C. Bream III 55 President, Chief Operating Officer,
Director
Dennis Shen 32 Director
Susan Shen 29 Secretary/Treasurer
Thomas J. Rotert 33 Director
Jack Tortorice. Chief Executive Officer and Director since April of
1999. He served as CEO, Chairman of the Board and a Director of Pacific Link
from October 1997 to May 1999. Prior to joining Pacific Link he was general
manager for the sales and marketing division of Frontier Communications from
January 1995 to June 1997. Prior positions include: General manager for sales
and operations of ITT Courier related to computer equipment sales; Vice
President of Sales for Automatic Data Processing selling payroll outsourcing;
and sales positions for Wang Labs and Xerox. Mr. Tortorice graduated with an
Masters in Business Administration from Pepperdine University in 1989 and
received a bachelor's degree in economics from Edinboro in Pennsylvania in
1973.
Charles C. Bream III. President, Chief Operating Officer, and Director
since January 10, 2000. Mr. Bream has extensive experience with
telecommunication products and services. From September 1994 to May 1999 Mr.
Bream was the CEO of Net Command Tech, Inc., a firm which sold
telecommunications surveillance products. From March 1995 through October
1997 he was the Senior Vice President of General Research Corp., a
telecommunications products company.
Dennis Shen. Served as President and a Director since April of 1999. In
January of 2000 he resigned as President. In May of 1992 Mr. Shen was the
founder, President and Chief Technical Officer for Global Pacific, which
later became Pacific Link. He was responsible for network design and
implementation and later led the transition of that company from a computer
reseller to an Internet service provided in 1995. Mr Shen has extensive
experience in large-scale wireless network implementations. He was a featured
speaker at World Expo '94 and Unlicenced Spectrum-Wireless Internet Access in
1999.
Susan Shen. Secretary and Chief Financial Officer since April of 1999.
Mrs. Shen is responsible for accounting and human resources activities for
Worldwide Wireless. She joined Global Pacific in May of 1995 as an
accountant, and subsequently became the Chief Financial Officer of that
company in August of 1996. She has prior experience in computer sales and was
employed as a purchasing agent. She received a bachelor's degree in
mathematics from California State Politechnic University, Pamona in 1994.
Thomas J. Rotert. Mr. Rotert was appointed as a Director on October 1,
1999. He also serves as our general counsel. He is a licensed attorney in
the state of California and practices in the areas of corporate transactional
law and civil litigation. From May 1998 to the present, he has been a partner
in the law firm of Schuman & Associates, located in Costa Mesa, California.
From October 1997 through May 1998 he was employed as an attorney for Sayer &
Associates, a California firm. He was litigation counsel for Bollington &
Roberts, another California firm, from 1992 to October 1997. He received a
Juris doctorate from Western State University in 1993 and a bachelor's from
the University of Kansas in 1989. Mr. Rotert filed a Chapter 7 voluntary
bankruptcy petition in February 1998 in the Central District of California
Division of the United States Bankruptcy Court, which was discharged in June
of 1998.
16
<PAGE>
ITEM 6: EXECUTIVE COMPENSATION
The following table shows compensation of our executive officers for our
last completed fiscal year.
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------
Other
Fiscal Annual
Name and Principal Position Year Salary ($) Bonus Compensation
- ---------------------------- ------ ---------- ------- --------------
Jack Tortorice 1998 $ 50,000 $ 0 $ 0
Chief Executive Officer
and Director
Dennis Shen 1998 50,000 0 0
President and Director
Susan Shen 1998 0 0 0
Chief Financial Officer
and Secretary
Compensation of Directors
We do not have any standard arrangement for compensation of our directors
for any services provided as director, including services for committee
participation or for special assignments.
Employment Contracts
On January 1, 1999, we amended the employment agreements with Messrs.
Tortorice and Shen. Each agreement is for an initial term of five years,
terminating on December 31, 2003. However, the agreement automatically renews
for one year for the next four years after the initial term. Mr. Tortorice
receives a salary of $98,000 per year and Mr. Shen receives a salary of
$70,000 per year. Both have a $500 car allowance per month and will be
reimbursed for expenses incurred on our behalf. We may terminate the
agreement for cause, as defined in the agreement. Pursuant to the agreement,
if we terminate the agreement we have agreed to buy back their original
shares, 3,500 common shares, for $25 a share and we will distribute a pro rata
share of profits to each of them. Messrs. Tortorice and Shen may terminate
the agreement by giving us 30 days notice.
On January 1, 2000, we entered into an employment agreement with Mr.
Bream for an initial term of five years, terminating on December 31, 2004.
Mr. Bream agreed to be employed as our President and Chief Operating Officer
for an interim period of sixty (60) days after which time he will become our
Chief Executive Officer for the remainder of the term of the contract. Mr.
Bream receives a salary of $120,000 per year and stock options pursuant to our
employee stock option plan for an aggregate of 580,000 common shares. Such
options include the right to purchase 100,000 common shares with an exercise
price of $3.00, which vest immediately, and the right to purchase 20,000
common shares each month for the first twenty-four months of employment.
Worldwide Wireless may terminate Mr. Bream's employment with written
notification with out cause and for cause, as defined in the agreement.
Worldwide Wireless is obligated to pay a severance payment equal to six months
of salary if termination is without cause. Mr. Bream may terminate the
employment with thirty-days written notice.
17
<PAGE>
ITEM 7: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following information summarizes certain transactions either we
engaged in during the past two years or we propose to engage in involving our
executive officers, directors, 5% stockholders or immediate family members of
such persons:
During the year ended December 31, 1997, Pacific Link borrowed $15,000,
interest free, from Ming Chau Yeung, a shareholder and mother of Susan Shen,
our Secretary/Treasurer. The entire $15,000 was paid in April of 1999.
During 1997 and 1998 Pacific Link advanced funds to Messrs. Shen and
Tortorice, our officers, and Sean LeMons, our 5% shareholder. Mr. Shen
received $13,148, Mr. Tortorice received $31,174 and Mr. LeMons received
$10,485. These advances remain outstanding and are non-interest bearing and
due upon demand.
During 1999 and 1998 Worldwide Wireless has retained the law firm of
Schumann & Associates for various legal matters. Thomas J. Rotert, our
director, has personally provided such legal services. We have paid Schumann
& Associates approximately $24,000 in legal fees for the services rendered by
Mr. Rotert. Mr. Rotert has an approximate 30% interest in the law firm. We
intend to continue using the services of Schumann and Associates in the
future.
ITEM 8: DESCRIPTION OF SECURITIES
Common Stock
Pursuant to the Articles of Merger filed April 9, 1999 we are authorized
to issue 50,000,000 shares of common stock, par value $.001, of which
11,799,988 were issued and outstanding as of December 31, 1999. All shares of
common stock have equal rights and privileges with respect to voting,
liquidation and dividend rights. Each share of common stock entitles the
holder thereof (i) to one non-cumulative vote for each share held of record of
all matters submitted to a vote of the stockholders, (ii) to participate
equally and to receive any and all such dividends as may be declared by the
Board of Directors out of funds legally available; and (iii) to participate
pro rata in any distribution of assets available for distribution upon our
liquidation. Our stockholders have no preemptive rights to acquire additional
shares of common stock or any other securities.
Preferred Stock
We have not authorized or issued any preferred stock.
PART II
ITEM 1: MARKET PRICE FOR COMMON EQUITY AND DIVIDENDS
OF WORLDWIDE WIRELESS AND OTHER SHAREHOLDER MATTERS
Our common stock is traded over-the-counter and quoted on the OTC NASDAQ
Electronic Bulletin Board under the symbol "WWWN". The following table
represents the range of the high and low bid prices of our stock as reported
by the Nasdaq Trading and Market Services for each fiscal quarter for the last
two fiscal years ending December 31, 1998 and the nine month interim period
ended September 30, 1999. Such quotations represent prices between dealers
and may not include retail markups, markdowns, or commissions and may not
necessarily represent actual transactions.
Year Quarter High Low
---- ------------- ---- -----
1997 Third Quarter 0.25 0.125
Fourth Quarter 0.13 0.13
18
<PAGE>
1998 First Quarter 0.125 0.1
1999 First Quarter 4.0 4.0
Second Quarter 6.0 0.40625
Third Quarter 4.75 2.875
During 1997 and 1998 our market was sporadically and thinly traded.
There was no trading activity during the second, third and fourth quarters of
1998. Trading activity increased in August of 1999. The price per share of
companies similarly situated to Worldwide Wireless have exhibited extreme
volatility in response to company specific information as well as general
market conditions. Shareholders should consider the possibility of the loss
of the entire value of their shares.
As of September 30, 1999, we had approximately 36 stockholders of record.
Management controls 50.7% of our outstanding shares. We have 400,000 common
shares subject to warrants and 7,558,160 common shares subject to the resale
limitations of Rule 144. We may have 50,000 to 700,000 common shares subject
to options pending the resolution of a disputed options contract entered into
by Pacific Link in September of 1998. (See, "Part I, Item 4: "Disputed
Beneficial Ownership", above)
Dividends
We have not declared dividends on our common stock and do not anticipate
paying dividends on our common stock in the foreseeable future.
Stock Splits
In June 1998, our Board of Directors authorized a 30-for-1 reverse split
of our common stock. In March 1999, our Board of Directors authorized a
4-for-1 forward split of our common stock. All per share information in this
registration statement has been retroactively restated to reflect these
changes.
OTC Bulletin Board Eligibility Rule
In January of 1999, the SEC granted approval of amendments to the NASD
OTC Bulletin Board Eligibility Rule 6530 and 6540. These amendments now
require a company listed on the OTC Bulletin Board to be a reporting company
and current in its reports filed with the SEC. As a result of this rule
change we have voluntarily filed this registration statement in order to
become a fully reporting company and maintain the listing of our common stock
on the OTC Bulletin Board. The rule requires that the SEC come to a position
of no further comment regarding the registration statement before a company is
considered compliant. We cannot assure that the SEC will come to such a
position in regards to this registration statement prior to our phase-in date
of March 8, 2000. According to the rules, if we are not in compliance at our
phase-in-date our common stock will be removed from the OTC Bulletin Board. At
that time we intend to move our listing to the National Quotation Bureau's
Pink Sheets. This possible move to the "pink sheets" may adversely affect the
market, if any, in our stock.
ITEM 2: LEGAL PROCEEDINGS
We are not involved in any material pending legal proceedings, other than
routine litigation incidental to our business, to which we are a party or of
which any of our property is subject.
ITEM 3: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have had no change in, or disagreements with, our principal
independent accountant during our last two fiscal years.
19
<PAGE>
ITEM 4: RECENT SALES OF UNREGISTERED SECURITIES
The following discussion describes all securities we have sold within the
past three fiscal years without registration:
On March 21, 1997, we issued an aggregate of 1,332 common shares (10,000
pre-reverse and forward shares at $.001 par), valued at $10, to our then
president and director, Cheryl A. Jamison, for services as an officer and
director. The issuance of such shares was exempt from registration under the
Securities Act of 1933 by reason of Section 4(2) as a private transaction not
involving a public distribution.
On June 18, 1998, we issued an aggregate of 4,512,500 common shares
(1,128,125 pre-reverse and forward shares at an average of $.007 per share),
valued at $7,898, to eight persons pursuant to Rule 504. 800,000 of such
shares were subsequently canceled due to lack of consideration. Such shares
were issued for services rendered for or on our behalf. No underwriting
discounts or commissions were paid for this offering.
On January 15, 1999, we issued an aggregate of 122,444 common shares
(30,611 pre-forward shares at an average of $.031 per share), valued at $950,
to Mutual Ventures Corporation for investment banking services provided to us
during 1998. The issuance of such shares was exempt from registration under
the Securities Act of 1933 by reason of Section 4(2) as a private transaction
not involving a public distribution.
On January 15, 1999 we authorized the issuance of 200,000 common shares
to Badland Securities, Inc. for an agreed upon price of $1,000,000, or $5 per
share, to be held in escrow until completion of our merger with Pacific Link.
The issuance of such shares was exempt from registration under the Securities
Act of 1933 by reason of Section 4(2) as a private transaction not involving a
public distribution.
On June 1, 1999, we agreed to issue warrants to Columbia Financial Group
in consideration for services rendered on our behalf. The warrants are
exercisable until May 31, 2004 for an aggregate of 400,000 common shares at an
aggregate exercise price of $1,700,000. The issuance of such shares was
exempt from registration under the Securities Act of 1933 by reason of Section
4(2) as a private transaction not involving a public distribution.
On June 10, 1999, we sold 400,000 common shares to Andrew Taubman for
$100,000, or $0.25 per share. The issuance of such shares was exempt from
registration under the Securities Act of 1933 by reason of Section 4(2) as a
private transaction not involving a public distribution.
On December 6 and 8, 1999 we sold an aggregate of 200,000 common shares,
100,000 on each date, to SGS Holdings for $400,000, or $2.00 per share. The
issuance of such shares was exempt from registration under the Securities Act
of 1933 by reason of Section 4(2) as a private transaction not involving a
public distribution.
In each of the private transactions above, we believe that each purchaser
(i) was aware that the securities had not been registered under federal
securities laws, (ii) acquired the securities for his/her/its own account for
investment purposes of the federal securities laws, (iii) understood that the
securities would need to be indefinitely held unless registered or an
exemption from registration applied to a proposed disposition and (iv) was
aware that the certificate representing the securities would bear a legend
restricting its transfer. We believe that, in light of the foregoing, the
sale of our securities to the respective acquirers did not constitute the sale
of an unregistered security in violation of the federal securities laws and
regulations by reason of the exemptions provided under Sections 3(b) and 4(2)
of the Securities Act, and the rules and regulations promulgated thereunder.
ITEM 5: INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation and bylaws provide for the indemnification
of present and former directors and officers and each person who serves at our
request as our officer or director. To the full extent of Nevada Revised
Statutes Sections 78.7502 and 78.751 indemnification for
20
<PAGE>
a director is mandatory and indemnification for an officer, agent or employee
is permissive. We will indemnify such individuals against all costs, expenses
and liabilities reasonably incurred in a threatened, pending or completed
action, suit or proceeding brought because such individual is our director or
officer. Such individual must have conducted himself in good faith and
reasonably believed that his conduct was in, or not opposed to, our best
interest. In a criminal action he must not have had a reasonable cause to
believe his conduct was unlawful. This right of indemnification shall not be
exclusive of other rights the individual is entitled to as a matter of law or
otherwise.
We will not indemnify an individual adjudged liable due to his negligence
or wilful misconduct toward us, adjudged liable to us, or if he improperly
received personal benefit. Indemnification in a derivative action is limited
to reasonable expenses incurred in connection with the proceeding. Also, we
are authorized to purchase insurance on behalf of an individual for
liabilities incurred whether or not we would have the power or obligation to
indemnify him pursuant to our bylaws.
PART F/S
INDEX TO FINANCIAL STATEMENTS
Worldwide Wireless Networks, Inc. Consolidated Financial Statements September
30, 1999 (unaudited) and December 31, 1998.
Page
Independent Accountants Report F-3
Consolidated Balance Sheets F-4
Consolidated Statement of Operations F-6
Consolidated Statement of Stockholders Equity F-7
Consolidated Statement of Cash Flow F-8
Notes to Financial Statements F-10
21
<PAGE>
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Consolidated Financial Statements
September 30, 1999(unaudited) and December 31, 1998
<PAGE> 22
C O N T E N T S
Accountants' Report....................................................... 3
Consolidated Balance Sheets .............................................. 4
Consolidated Statements of Operations .....................................6
Consolidated Statements of Stockholders' Equity ...........................7
Consolidated Statements of Cash Flows......................................8
Notes to the Consolidated Financial Statements ............................9
<PAGE> 23
CROUCH, BIERWOLF & CHISHOLM
Certified Public Accountants
50 West Broadway, Suite 1130
Salt Lake City, Utah 84101
Office (801) 363-1175
Fax (801) 363-0615
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Worldwide Wireless Networks, Inc. (formerly Pacific Link Internet, Inc.):
We have audited the accompanying consolidated balance sheets of Worldwide
Wireless Networks, Inc. (formerly Pacific Link Internet, Inc.) as of December
31, 1998 and the related consolidated statements of operations, stockholders'
equity and cash flows for the year ended December 31, 1998 and from inception
on August 1, 1997 through December 31, 1997. 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 in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Worldwide Wireless Networks,
Inc. (formerly Pacific Link Internet, Inc.) as of December 31, 1998 and the
results of its operations and cash flows for the year ended December 31, 1998
and from inception on August 1, 1997 through December 31, 1997 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has recurring operating losses and is
dependent upon financing to continue operations. These factors raise
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in the Note
2. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
February 24, 1999, except for Note 9 and 1a, as to
which the date is April 1, 1999
<PAGE> 24
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Consolidated Balance Sheets
ASSETS
-------
September 30 December 31
1999 1998
-------------- --------------
CURRENT ASSETS (unaudited)
Cash (Note 1) $ 82,309 $ -
Accounts receivable (net of allowance for
doubtful accounts of $10,000 and
$2,200, respectively) 183,085 29,340
Employee advance 1,451 -
Inventory 34,459 -
Prepaid Expenses 27,136 -
-------------- --------------
Total Current Assets 328,440 29,340
-------------- --------------
PROPERTY & EQUIPMENT (Note 1)
Office equipment 99,947 28,833
Leased equipment 209,751 209,751
Machinery equipment 947,765 226,878
-------------- --------------
1,257,463 465,462
Less:
Accumulated depreciation - leased equipment (182,549) (130,111)
Accumulated depreciation (183,054) (28,491)
-------------- --------------
Total Property & Equipment 891,860 306,860
-------------- --------------
OTHER ASSETS
Investments 50,000 -
Deferred Charges (Note 1) 26,766 10,428
Deposits 26,471 15,184
-------------- --------------
Total Other Assets 103,237 25,612
-------------- --------------
TOTAL ASSETS $ 1,323,537 $ 361,812
============== ==============
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 25
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Consolidated Balance Sheets continued
LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------
September 30 December 31
1999 1998
-------------- --------------
(unaudited)
CURRENT LIABILITIES
Bank overdrafts $ - $ 4,092
Accounts payable 539,480 522,337
Accrued expenses 16,262 -
Lines of credit (Note 5) 91,929 98,471
Unearned revenue (Note 1) 124,514 23,542
Current portion of long-term liabilities
(Note 4) 592,420 102,517
-------------- --------------
Total Current Liabilities 1,364,605 750,959
-------------- --------------
LONG TERM LIABILITIES (Note 4)
Unearned Revenue (Note 1) - 17,948
Notes payable 4,777 9,277
Notes payable-related party 550,000 31,300
Capital lease obligations 42,910 88,190
Less current portion (592,420) (102,517)
-------------- --------------
Total long term Liabilities 5,267 44,198
-------------- --------------
TOTAL LIABILITIES 1,369,872 795,157
-------------- --------------
STOCKHOLDERS' EQUITY
Common stock, 25,000,000 shares
of $.001 par value authorized,
11,599,988 and 500,000 shares issued
and outstanding 11,600 500
Additional paid in capital 1,193,545 104,645
Retained earnings (1,196,666) (483,676)
Officer Loans (Note 3) (54,814) (54,814)
-------------- --------------
Total Stockholders' Equity (46,335) (433,345)
-------------- --------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,323,537 $ 361,812
============== ===============
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE> 26
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Consolidated Statements of Operations
From
Inception on
For the nine For the year August 1,1997
Months ended Ended Through
September 30 December 31, December 31,
1999 1998 1998 1997
------------ ------------ ------------ ------------
(unaudited) (unaudited)
REVENUES $ 1,228,457 $ 629,387 $ 841,841 $ 271,841
COST OF SALES 513,073 393,930 430,600 189,382
------------ ------------ ------------ ------------
GROSS PROFIT 715,384 235,457 411,241 82,459
------------ ------------ ------------ ------------
SELLING EXPENSES 357,573 125,770 158,592 68,827
BAD DEBT EXPENSE 12,667 19,654 94,861 15,657
GENERAL &
ADMINISTRATIVE EXPENSES 1,048,316 199,599 455,126 138,939
------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 1,418,556 345,023 708,579 223,423
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) (703,172) (109,566) (297,338) (140,964)
------------ ------------ ------------ ------------
OTHER INCOME
AND (EXPENSES)
Miscellaneous income 16,666 12,393 19,410 6,163
Interest expense (26,484) (25,913) (51,455) (18,692)
------------ ------------ ------------ ------------
Total Other Income
and (Expenses) (9,818) (13,520) (32,045) (12,529)
------------ ------------ ------------ ------------
INCOME (LOSS)
BEFORE INCOME TAXES (712,990) (123,086) (329,383) (153,493)
PROVISION FOR
INCOME TAXES (Note 1) - - 800 -
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (712,990) $ (123,086) $ (330,183) $ (153,493)
============ ============ ============ ============
NET INCOME (LOSS)
PER SHARE $ (.07) $ (.02) $ (.05) $ (.02)
============ ============ ============ =============
WEIGHTED AVERAGE
OUTSTANDING SHARES 10,122,214 6,500,000 6,500,000 6,426,667
============ ============ ============ =============
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE> 27
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Consolidated Statements of Stockholders' Equity
From inception on August 1, 1997 through December 31, 1998
and September 30, 1999 (unaudited)
Additional Retained
Common Stock Paid in Earnings
Shares Amount Capital (Deficit)
------------ -------- ------------- ------------
Balance at inception on
August 1, 1997 - $ - $ - $ -
Shares issued to organizers
for cash 420,000 420 2,080 -
Net income (loss) for the
period ended December 31,
1997 - - - (153,493)
------------ -------- ------------- ------------
Balance on December 31, 1997 420,000 420 2,080 (153,493)
Shares issued for cash 80,000 80 102,565 -
Net income (loss) for the year
ended December 31, 1998 - - - (330,183)
------------ -------- ------------- ------------
Balance on December 31, 1998 500,000 500 104,645 (483,676)
April 1999 - Reverse
acquisition and
reorganization adjustment 10,499,988 10,500 (10,500) -
Stock issued for cash at
$5 per share 200,000 200 999,800 -
Stock issued for cash at
$.25 per share 400,000 400 99,600 -
Net income (loss) for the
nine months ended
September 30, 1999
(unaudited) - - - (712,990)
------------ -------- ------------- ------------
Balance on September 30, 1999
(unaudited) 11,599,988 $11,600 $ 1,193,545 $(1,196,666)
============ ======== ============= ===========
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE> 28
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
From inception
For the nine For the year on August 1,
months ended ended 1997 through
September 30 December 31 December 31,
1999 1998 1998 1997
------------- -------------- ------------- --------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income (loss) $ (712,990) $ (123,086) $ (330,183) $ (153,493)
Non-cash items:
Depreciation & amortization 207,001 48,868 97,736 26,362
Bad debt - 49,653 94,836 15,657
(Increase)/decrease in current assets:
Accounts receivable (161,545) (13,654) (17,401) (14,114)
Accounts receivable-related party - - (39,486) (18,853)
Employee advance (1,451) (75) - -
Prepaid Expenses (27,136) 3,784 3,263 (3,263)
Deferred Charges (16,338) - (10,428) -
Inventory (34,459) - - -
Increase/(decrease)in current
liabilities:
Bank overdraft (4,092) 8,600 4,092 -
Accounts payable 17,143 102,947 336,665 128,317
Accrued expenses 14,762 (1,764) - -
Unearned revenue 83,024 - 41,490 -
------------- -------------- ------------- --------------
Net Cash Provided (Used)
by Operating Activities (636,081) 75,273 180,584 (19,387)
------------- -------------- ------------- --------------
Cash Flows from Investing Activities
Purchase of property and equipment (785,796) (91,518) (187,411) (57,269)
Cash paid for deposits (11,287) (6,113) (6,113) (9,071)
Cash paid for Investments (50,000) - - -
------------- -------------- ------------- --------------
Net Cash Provided (Used)
by Investing Activities (847,083) (97,631) (193,524) (66,340)
------------- -------------- ------------- --------------
Cash Flows from Financing Activities
Advances on line of credit - - 3,860 54,719
Cash paid on line of credit (6,542) (2,852) - -
Cash from sale of stock 100,000 72,645 72,645 32,500
Cash received from debt financing 550,000 - - 35,000
Principal payments on long-term debt (77,985) (48,389) (64,519) (35,538)
Cash received in merger with
Worldwide 1,000,000 - - -
------------- -------------- ------------- --------------
Net Cash Provided (Used)
by Financing Activities 1,565,473 21,404 11,986 86,681
------------- -------------- ------------- --------------
Increase/(decrease) in Cash 82,309 (954) (954) 954
Cash and Cash Equivalents
at Beginning of Period - 954 954 -
------------- -------------- ------------- --------------
Cash and Cash Equivalents
at End of Period $ 82,309 $ - $ - $ 954
============= ============== ============= ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE> 29
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Consolidated Statements of Cash Flows
(continued)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Supplemental Cash Flow Information:
Cash paid for interest $ 26,484 $ 25,913 $ 61,725 $ 8,422
Cash paid for income taxes $ - $ - $ - $ -
Non-cash financing transaction:
Purchase of equipment
with lease obligations $ - $ - $ 24,784 $ 184,967
F-9
</TABLE>
<PAGE> 30
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Notes to Financial Statements
December 31, 1998 and September 30, 1999 (Unaudited)
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
The audited financial statements presented for December 31, 1998 and 1997,
are those of Worldwide Wireless Networks, Inc. (formerly Pacific Link Internet,
Inc.) (The Company). The Company was incorporated under the laws of the State of
California on September 22, 1997, however operations began on August 1, 1997.
The Company provides wireless internet access to business and individuals. The
Company's headquarters are located in Orange, California.
On April 1, 1999 the Company merged with Worldwide Wireless Networks, Inc.
(Worldwide) a public shell with no operations, and changed the name to Worldwide
Wireless Networks, Inc. Worldwide was organized in the State of Nevada on June
10, 1992. Worldwide recently raised $1,000,000 in anticipation of the merger,
and provided this as the only asset to the newly combined organization. The
merger was treated as a reverse merger for accounting purposes, therefore the
September 30, 1999 period is consolidated and the December 31,1998 and 1997 is
that of the accounting acquirer (Pacific Link Internet, Inc.) only.
b. Recognition of Revenue, Deferred Charges, Unearned Revenue
The Company recognizes income and expense on the accrual basis of
accounting. During October and November 1998, the Company entered into various
sales agreements whereby, a third party financial institution pays a factored
sales amount to the Company for sales contracts received from customers with
terms of 1 to 3 years. The Company has deferred the revenue on these contracts
to be recognized over the time of the contract. Unearned revenue has been
established on the books in order to defer the revenues received from the third
party on these contracts. The corresponding factoring fee has been deferred as
an asset called "deferred charges" and is also recognized over the life of the
contract. All other sales are recorded when the services are completed.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements. The 1998 and 1997 weighted average shares have been retroactively
restated for the 7,000,000 shares issued in the merger for comparability
purposes.
F-10
<PAGE> 31
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Notes to Financial Statements
December 31, 1998 and September 30, 1999 (Unaudited)
NOTE 1 - Summary of Significant Accounting Policies (continued)
d. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating loss
carryforwards totaling approximately $1,200,000 that will be offset against
future taxable income. These NOL carryforwards begin to expire in the year
2013. No tax benefit has been reported in the financial statements because the
Company believes there is a 50% or greater chance the carryforward will expire
unused.
Deferred tax assets and the valuation account is as follows at December 31,
1998 and September 30, 1999.
1999 1998
----------- -----------
Deferred tax asset:
NOL carrryforward $ 406,000 $ 163,000
Valuation allowance (406,000) (163,000)
----------- -----------
Total $ - $ -
=========== ===========
e. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three
months or less to be cash equivalents.
f. Property and Equipment
Expenditures for property and equipment and for renewals and
betterments, which extend the originally estimated economic life of assets or
convert the assets to a new use, are capitalized at cost. Expenditures for
maintenance, repairs and other renewals of items are charged to expense. When
items are disposed of, the cost and accumulated depreciation are eliminated from
the accounts, and any gain or loss is included in the results of operations.
The provision for depreciation is calculated using the straight-line method
over the estimated useful lives of the assets. Depreciation expense for the
period ended September 30, 1999, December 31,1998 and 1997 is $207,001, $97,736
and $26,362, respectively.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered recurring
operating losses and is dependent upon raising capital to continue operations.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty. It is managements plan to merge with a public
company, register its stock and raise capital from the public market in order to
expand its operations to a profitable level.
F-11
<PAGE> 32
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Notes to Financial Statements
December 31, 1998 and September 30, 1999 (Unaudited)
NOTE 3 - Related Party Transactions
During the year ended December 31, 1997, the Company borrowed $15,000 from
Ming Chan Yeung, a shareholder of the Company, the entire $15,000 is outstanding
at December 31, 1998, and $0 at September 30, 1999.
During the year ended December 31, 1998, the Company borrowed $16,300 from
Zhi Gang Zhang, a shareholder of the Company, the entire $16,300 is outstanding
at December 31, 1998, and $0 at September 30, 1999.
During the year ended December 31, 1997, the Company advanced funds to three
officers and directors as follows: Dennis Shen - $1,364, Jack Tortorice -
$12,161, and Sean LeMons - $2,369. During 1998, the Company advanced additional
funds to these officers as follows: Dennis Shen - $11,783, Jack Tortorice -
$19,013, and Sean LeMons - $8,116 for totals outstanding at December 31, 1998
and September 30, 1999 of $13,148, $31,174 and $10,485, respectively. These
advances are non-interest bearing and due upon demand. The officer loans
receivable are shown as a contra equity account for disclosure purposes.
NOTE 4 - Long-Term Liabilities
Long Term Liabilities are detailed in the following schedules as of
December 31, 1998 and September 30, 1999.
December 31 September 30
Notes payable is detailed as follows: 1998 1999
------------- --------------
(unaudited)
Note payable to a corporation, payments due
monthly of $500 through July 2000, bears
interest at 7%, secured by equipment and
other assets. 9,277 4,777
------------- --------------
Total Notes Payable 9,277 4,777
------------- --------------
Notes payable related party is detailed as follows:
Note payable to a shareholder, non interest
bearing, due upon demand, unsecured note $ 15,000 $ -
Note payable to a shareholder, non interest
bearing, due upon demand, unsecured note 16,300 -
F-12
<PAGE> 33
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Notes to Financial Statements
December 31, 1998 and September 30, 1999 (Unaudited)
NOTE 4 - Long-Term Liabilities (continued)
December 31 September 30
1998 1999
------------- --------------
(Unaudited)
Note payable to a shareholder, bears interest
at 10%, due March 2000, unsecured - 50,000
Note payable to a shareholder, bears interest
at 9%, due March 2000, unsecured - 500,000
------------- --------------
Total notes payable - related party 31,300 550,000
------------- --------------
Capital lease obligations are detailed in the following schedule as of
December 31, 1998 and September 30, 1999:
December 31 September 30
1998 1999
------------- --------------
(Unaudited)
Capital lease obligation to a corporation
for antenna equipment, lease payments due
monthly of $710 through January 2001,
bears interest at 19.7%, secured by antenna
equipment. $ 13,790 $ 9,078
Capital lease obligation to a corporation
for wireless equipment, lease payments due
monthly of $175 through May 2001,
bears interest at 18%, secured by
wireless equipment. 4,091 2,954
Capital lease obligation to a corporation
for wireless equipment, lease payments due
monthly of $1,244 through October 2000,
bears interest at 15.5%, secured by wireless
equipment. 23,689 16,332
Capital lease obligation to a corporation
for equipment, lease payments due monthly
of $1,248 through December 1999, bears
interest at 32.5%, secured by equipment. 12,644 5,358
Capital lease obligation to a corporation
for equipment, lease payments due monthly
of $841 through October 1999, bears
interest at 17%, secured by equipment. 7,792 1,837
F-13
<PAGE> 34
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Notes to Financial Statements
December 31, 1998 and September 30, 1999 (Unaudited)
NOTE 4 - Long-Term Liabilities (continued)
December 31 September 30
1998 1999
-------------- -------------
Capital lease obligation to a corporation
for equipment, lease payments due monthly
of $721 through January 2000, bears
interest at 19.4%, secured by equipment. 8,388 3,397
Capital lease obligation to a corporation
for equipment, lease payments due monthly
of $545 through August 1999, bears
interest at 19.2%, secured by equipment. 3,582 -
Capital lease obligation to a corporation
for equipment, lease payments due monthly
of $997 through December 1999, bears
interest at 24.1%, secured by equipment. 10,532 3,954
Capital lease obligation to a corporation
for equipment, lease payments due monthly
of $680 through January 1999, bears
interest at 24.1%, secured by equipment. 667 -
Capital lease obligation to a corporation
for equipment, lease payments due monthly
of $338 through July 1999, bears
interest at 19.1%, secured by equipment. 2,219 -
Capital lease obligation to a corporation
for equipment, lease payments due monthly
of $205 through April 1999, bears
interest at 15.2%, secured by equipment. 796 -
-------------- -------------
Total Lease Obligations 88,190 42,910
-------------- -------------
Total long term liabilities 128,767 597,687
Less current portion of:
Notes payable 5,526 4,777
Notes payable - related party(note 2) 31,300 550,000
Capital lease obligations 65,691 37,643
-------------- -------------
Total current portion 102,517 592,420
-------------- -------------
Net Long Term Liabilities $ 26,250 $ 5,267
============== =============
F-14
<PAGE>35
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Notes to Financial Statements
December 31, 1998 and September 30, 1999 (Unaudited)
NOTE 4 - Long-Term Liabilities (continued)
Future minimum principal payments on notes payable are as follows at
September 30, 1999:
2000 554,777
-----------
Total notes payable $ 554,777
===========
Future minimum lease payments are as follows at September 30, 1999:
2000 40,887
2001 5,484
-----------
46,371
Less portion
representing interest (3,461)
-----------
Total $ 42,910
===========
NOTE 5 - Lines of Credit
The Company has two lines of credit with two banks with total credit of
$56,000. The average interest rate is 11.75%. The balances due at December 31,
1998 and September 30, 1999 were $98,471 and $91,929, respectively.
NOTE 6 - Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. In these financial
statements, assets, liabilities, revenues and expenses involve reliance on
management's estimates. Actual results could differ from those estimates.
NOTE 7 - Commitments and Contingencies
The Company has an operating lease for office space. Monthly lease
payments are due of $2,549 for sixty months starting May 1, 1998 and ending
April 30, 2003.
The Company has an operating lease for antenna space on a roof. The
agreement calls for monthly payments of $350 the first six months, $450 the next
six months, and $500 for the remaining 48 months of the sixty-month contract.
The lease began on September 15, 1998 and ends on August 31, 2003.
F-15
<PAGE> 36
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Notes to Financial Statements
December 31, 1998 and September 30, 1999 (Unaudited)
NOTE - 7 Commitments and Contingencies (continued)
The Company has an operating lease for office space. Monthly lease payments
are due of $4,021 for sixty months starting October 15, 1998 and ending
September 30, 2003.
The Company has an operating lease for office space. Monthly lease
payments are due of $10,083 and the lease expires in March 2004.
The Company has an operating lease for roof space. Monthly lease payments
are due of $250 for sixty months starting September 15, 1998 and ending August
31, 2003.
The Company has an operating lease for roof space. Monthly lease payments
are due of $300 for sixty months starting November 16, 1998 and ending October
31, 2003.
The Company has an operating lease for roof space that could potentially
secure up to three antennas. The agreement calls for minimum monthly payments
for the initial antenna of $1,000 the first twelve months, $1,050 the next
twelve months, $1,103 the following twelve months, $1,158 the next twelve
months, and $1,216 for the remaining twelve months of the sixty-month contract.
Each additional antenna (limit of three total) will require monthly payments of
$750 the first twelve months, $788 the next twelve months, $827 the following
twelve months, $868 the next twelve months, and $912 the remaining twelve
months. The lease began on October 1, 1998 and ends on September 30, 2003.
The Company has an operating lease for roof space. Monthly lease payments
are due of $500 for use of a one directional antenna or $650 for use of a two
directional antenna for sixty months starting October 1, 1998 and ending
September 30, 2003.
The Company has an operating lease for roof space. Monthly lease payments
are due of $250 for thirty-six months starting December 2, 1998 and ending
November 30, 2001.
Future minimum operating lease payments are as follows at December 31, 1998:
1999 $ 234,195
2000 234,195
2001 234,587
2002 232,506
2003 191,825
-----------
Total $1,127,308
===========
The Company is obligated under employment contracts to officers of the
Company through December 31, 2003, for $110,000 total compensation per year.
F-16
<PAGE> 37
Worldwide Wireless Networks, Inc.
(formerly Pacific Link Internet, Inc.)
Notes to Financial Statements
December 31, 1998 and September 30, 1999 (Unaudited)
NOTE - 8 Unaudited Information
The September 30, 1999 consolidated information furnished herein was taken
from the books and records of the Company without audit. However, such
information reflects all adjustments which are, in the opinion of management,
necessary to properly reflect the results of the nine months then ended. All
adjustments made are of a normal recurring nature. The information presented is
not necessarily indicative of the results from operations expected for the full
year.
NOTE 9 - Reverse Acquisition and Reorganization
Effective April 1, 1999, Pacific Link Internet, Inc. (Pacific) (a private
company) was acquired by Worldwide Wireless Internet, Inc. (Worldwide) (a public
company). Worldwide issued 7,000,000 shares to the shareholders of Pacific in
exchange for all shares of Pacific, thus making it a wholly owned subsidiary of
Worldwide. The agreement provides for the acquisition to be treated as a
reverse acquisition, thus making Pacific the accounting survivor. Because the
historical financial information in these financial statements prior to the
reverse acquisition (April 1, 1999) is that of the accounting acquirer
(Pacific), a reverse acquisition and reorganization adjustment is used on the
statement of stockholders' equity to bring the pre-acquisition equity of Pacific
up to the consolidated post-acquisition equity of Worldwide. The actual shares
issued by Worldwide to the shareholders of Pacific was 7,000,000 shares. The
difference between the 7,000,000 shares issued and the 10,499,988 reverse
acquisition adjustment represents the 3,499,988 shares held by the original
pre-merger shareholders of the public company (Worldwide). The management of
Worldwide resigned and the management and board of Pacific filled the vacancy.
F-17
<PAGE> 38
PART III
ITEM 1: INDEX TO AND DESCRIPTION OF EXHIBITS
Exhibit
Number Description Location
2.1 Articles of Incorporation of Second Investors Group, Filed Nov. 8, 1999
dated June 10, 1992
2.2 Certificate of Amendment to Articles of Incorporation
filed June 19, 1998 Filed Nov. 8, 1999
2.3 Certificate of Amendment to Articles of Incorporation
filed March 5, 1999 Filed Nov. 8, 1999
2.4 Articles of Merger filed April 9, 1999 Filed Nov. 8, 1999
2.5 Amended and Restated Bylaws of Worldwide Wireless Filed Nov. 8, 1999
6.1 Lease Agreement between Worldwide Wireless and
NL-Orange, LP dated March 30, 1999 Filed Nov. 8, 1999
6.2 Consultant Agreement between Worldwide Wireless
and Columbia Financial Group, dated June 1, 1999 Filed Nov. 8, 1999
6.3 Form of Employment Agreement Filed Nov. 8, 1999
6.4 Microwave radio status license call sign WP0T648
between Worldwide Wireless and the FCC, dated
July 7, 1999 Filed Nov. 8, 1999
6.5 Microwave radio status license call sign WP0T649
between Worldwide Wireless and the FCC, dated
July 7, 1999 Filed Nov. 8, 1999
6.6 Agreement between Bridge Technology, Inc. and Filed Nov. 8, 1999
Worldwide Wireless, dated May 20, 1999.
6.7 Purchase Agreement between Adaptive Broadband
Corporation and Worldwide Wireless,
dated October 27, 1999 Filed Nov. 8, 1999
6.8 Employment Agreement between Charles Bream
and Worldwide Wireless, dated January 10, 2000 See attached
8.1 Agreement and Plan of Merger between Worldwide
Wireless and Pacific Link Internet, Inc.,
dated March 31, 1999 Filed Nov. 8, 1999
22.1 Subsidiaries of the Registrant Filed Nov. 8, 1999
27.1 Financial Data Schedule See attached
________________________
<PAGE> 39
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
Worldwide Wireless has caused this registration statement to be signed on its
behalf by the undersigned, who is duly authorized.
Date 2/9/2000 Worldwide Wireless Networks, Inc.
--------
/s/ Jack Tortorice
By: _______________________________
Jack Tortorice, CEO
OFFICER/DIRECTOR EMPLOYMENT CONTRACT
This contract for employment of an officer and/or director (the "agreement")
is entered into between Pacific Link Internet, Inc., a California corporation
d.b.a. "Global Pacific Internet" as a subsidiary of Worldwide Wireless
Networks, Inc., a Nevada corporation, with its principal place of business
located at 770 The City Drive South, Suite 3400, Orange, California 92868
(hereinafter known collectively as the "employer"), and Charles C. Bream, an
individual.
ARTICLE 1. TERM OF EMPLOYMENT
Specified Period
Section 1.01 Employer hereby employs employee and employee hereby accepts
employment with employer for a period of five (5) years, beginning on January
1, 2000, and terminating on December 31, 2004.
Automatic Renewal
Section 1.02 This agreement shall be renewed automatically for Four (4)
additional consecutive terms of One (1) year each, unless either party gives
notice to the other at least Ninety (90) days prior to the expiration of any
term of its intention not to renew.
"Employment Term" Defined
Section 1.03 As used herein, the phrase "employment term" refers to the
entire period of employment of employee by employer hereunder, whether for the
periods provided above, or whether terminated earlier, renewed, or otherwise
extended by mutual agreement of the parties.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
General Duties
Section 2.01 Employee shall serve as President and COO (Chief Operating
Officer) for an interim period of sixty (60) days from the initiation date of
this contract. After such time, employee shall transition to the position of
CEO (Chief Executive Officer) and remain in that position until termination of
this contract by lapse of time or other provisions provided for
hereunder. Employee shall also become a member of the Board of Directors as
of the date of this agreement. In his capacity as President and COO, employee
shall use his best efforts and do and preform all services, acts, or things
necessary or advisable to manage and conduct the business of employer, subject
at all times to the policies set by Employer's Board of Directors and subject
to the consent of the Board of Directors when required by the terms of this
agreement. During this interim period, employee and the company through its
officers, managers and Board of Directors, shall develop and agree upon a
"point sheet," to be signed by the parties hereto and attached to this
agreement as Exhibit "A" prior to employee taking his position as CEO, said
"point sheet" to contain an outline, listing and description of the duties,
authorities, obligations, rights and responsibilities (relative to other
officers, managers and directors) of the CEO position assumed by employee.
<PAGE>
Devotion to Employer's Business
Section 2.02 Unless agreed to in writing by employer, (a) employee shall
devote his entire productive time, ability, energies, and attention to the
business of employer during the term of this contract.(b) Employee shall not
engage in any other business duties or pursuits whatsoever, or directly or
indirectly render any services of a business, commercial or other professional
nature to any other person or organization, for compensation in wages, equity
or otherwise, for any period of time longer than two calendar weeks, without
the prior written consent of employer's Board of Directors. (c) This
agreement shall not be interpreted to prohibit employee from making passive
personal investments or conducting private business affairs if those
activities do not materially interfere with the services required under this
agreement. However, employee shall not directly or indirectly acquire, hold
or retain any interest in excess of five (5%) per cent in any business
directly competing with the business of employer.
Indemnification for Negligence or Misconduct
Section 2.03 Employee and employer agree to mutually indemnify the other
and to hold the other harmless from liability for loss, damage, or injury to
persons or property resulting from any breach of this agreement by the other,
the definition of said breach to include but not be limited to negligence,
gross negligence, or other misconduct
Trade Secrets
Section 2.04 (a) The parties acknowledge and agree that during the term of
this agreement and in the course of the discharge of the duties hereunder,
Employee shall have access to and become acquainted with information
concerning the operation and process of Employer, including without
limitation, financial, personnel, sales, scientific, and other information
that is owned by or proprietary to Employer and regularly used in the
operation of Employer's business, and that such information constitutes trade
secretes.
(b) Employee specifically agrees that he shall not misuse,
misappropriate, or disclose any such trade secrets, directly or indirectly, to
any other person or use them in any way, either during the term of the
agreement or at any other time thereafter, except as is required in the course
of his employment hereunder.
(c) Employee acknowledges and agrees that the sale or
unauthorized use or disclosure of any of Employer's trade secrets obtained by
Employee during the course of his employment under this agreement, including
information concerning Employer's current or any future and proposed work,
services, or products, the fact that any such work, services, or products are
planned, under consideration, or in production, as well as any descriptions
thereof (Proprietary Information), constitute unfair competition. Employee
promises and agrees not to engage in any unfair competition utilizing
Employer's Proprietary Information.
(d) Employee further agrees that all files, records,
documents, drawings, specifications, equipment, and similar items relating to
Employer's business are and shall remain exclusively the property of Employer.
<PAGE>
ARTICLE 3. OBLIGATIONS OF EMPLOYER
Section 3.01 Employer shall provide Employee with office facilities,
parking privileges, office equipment, supplies and other facilities and
services, suitable to Employee's position and adequate for the performance of
his duties.
Indemnification of Losses of Employee
Section 3.02 Employer shall indemnify Employee for all loses sustained by
Employee in direct consequence of the discharge of his duties on Employer's
behalf.
ARTICLE 4. COMPENSATION OF EMPLOYEE
Annual Salary
Section 4.01 (a) As compensation for the services to be performed
hereunder, Employee shall receive a guaranteed salary at the rate of One
Hundred Twenty Thousand ($120,000.00) dollars per year during the employment
term, to be paid pro rata two times per month. Said salary shall be reviewed
and renegotiated every three (3) months with the Directors of Employer. In
the event Employer's financial condition is such that it does not have the
funds necessary to pay Employee and the salaries of the two other top paid
executives for a period of two (2) consecutive months, Employer may, by action
of its board of directors, reduce Employee's salary by 50%, until such time as
Employer's financial condition improves. However, any such reduction shall be
on par with and at an equal pro rata reduction with, the other two top paid
executives of Employer. In such event, Employer shall, at the request of
Employee, provide Employee with financial data in support of such action. All
funds not paid during this period shall be repaid to Employee by Employer on
a "best efforts" basis. However, if such repayment does not occur within 6
months, Employee may elect to take the lost income in the form of a stock
grant under the same pricing, terms and conditions set forth in Section 5.01
of this agreement.
Tax Withholding
Section 4.02 Employer shall have the right to deduct or withhold from the
compensation due to Employee hereunder any and all sums required for federal
income and Social Security taxes and all state and local taxes now applicable
or that may be enacted and become applicable in the future.
<PAGE>
ARTICLE 5. EMPLOYEE INCENTIVES
Restricted Stock Options
Section 5.01 Employee shall receive Five Hundred Eighty Thousand (580,000)
restricted cashless options at a strike price of Three Dollars ($3.00) drawn
from the company's Employment Stock Option Program. The stock will vest as
follows:
a) One Hundred Thousand (100,000) shares will vest in full upon the
date of this agreement.
b) Twenty Thousand (20,000) shares will vest each month, with the
basis being the average of the last five (5) trading days of the
month, for the first twenty four (24) months of employment,
totaling Four Hundred Eighty Thousand (480,000)options.
The option/exercise period shall be from the date of vesting through the date
seven (7) years from the date of vesting. However, the date of vesting shall
accelerate, and all stock options contemplated pursuant to this clause shall
vest immediately, at the strike price in effect on the date of acceleration,
upon the occurrence of any of the following:
Termination for cause pursuant to this contract;
Termination without cause pursuant to this contract;
Any event that could jeopardize the above referenced vesting schedule of
remaining options, including but not limited to any change in the
material terms of, or rights and obligations contained in, this
employment agreement, or any sale, merger, takeover or change in control
of the stock of company such that any single shareholder or group of
shareholders in concert and acting together shall gain control of 51% or
more of the outstanding shares of company.
Incentive Stock Option Program
Section 5.02 If the Board of Directors of Employer elects to institute an
Incentive Stock Option program, or other stock program not currently in
effect, Employee shall be eligible to participate in said program under the
guidelines set forth, and continue to participate in the Employment Stock
Option Program, the Board may elect to reduce Employee's participation in any
such incentive stock option program by 25% vis a vis other officers or
directors during the first two years of employee's employment. However, this
reduction can only apply to one stock option program if multiple programs are
in place.
Performance Bonus Eligibility
Section 5.03 Employer does not now maintain, but agrees to assemble and
propose to its Board of Directors, during and covering the calendar year 2000,
an Annual Performance Bonus Plan to include Employee and such other top
executives of Employer as the Board shall deem appropriate, subject to the
limitations set forth in Section 5.02, above.
<PAGE>
ARTICLE 6. EMPLOYEE BENEFITS
Annual Vacation
Section 6.01. Employee shall be entitled to three (3) weeks vacation each
year, and those business days that fall between Christmas and New Year's day,
without loss of compensation. Employee may be absent from his employment for
vacation only at such times as Employer's Board of Directors shall determine
form time to time. In the event that Employee is unable for any reason to
take the total amount of vacation days authorized therein during the year, he
shall be entitled to use such un-taken vacation days in the next year of
employment.
ARTICLE 7. BUSINESS EXPENSES
Reimbursement of Business Expenses
Section 7.01 (a) Employer shall promptly reimburse Employee for all
reasonable business expenses incurred by Employee in connection with the
business of Employer.
(b) Each such expenditure shall be reimbursable only if it is
of a nature qualifying it as proper deduction on the federal and state income
tax return of Employer.
(c) Each such expenditure shall be reimbursable only if
Employee furnishes to Employer adequate records and other documentary evidence
required by federal and state statutes and regulations issued by the
appropriate taxing authorities for the substantiation of each such expenditure
as an income tax deduction. Notwithstanding the forgoing, Employee shall not
incur expenses in excess of Five Hundred ($500.00) dollars, excluding expenses
incurred in connection with travel outside of the metropolitan Los Angeles
area, without obtaining the prior consent of Employer, which consent shall not
be unreasonably withheld or delayed.
(d) Employee shall be reimbursed for the use of his privately
owned vehicle at $500 per month. If business mileage exceeds this, he will
also be reimbursed for the difference at standard government rates.
Repayment of Disallowed Expenses
Section 7.02. In the event that any expenses paid for Employee or any
reimbursement of expenses paid to Employee shall, on audit or other
examination of employer's income tax returns, be determined not to be
allowable deductions from Employer's gross income because of Employee's
misrepresentation or characterization of such expenses, and in the further
event that this determination shall be acceded to by the Employer or made
final by the appropriate federal or state taxing authority or a final judgment
of a court of competent jurisdiction, and no appeal is taken from the judgment
or the applicable period for filing notice of appeal has expired, Employee
shall repay to Employer the full amount of the disallowed expenses.
<PAGE>
ARTICLE 8. RELOCATION OF EMPLOYEE
Section 8.01. Employee shall be reimbursed Five Hundred Dollars ($500.00) per
month for temporary lodging while relocating, up to a maximum period of six
months from the effective date of this agreement.
Section 8.02 Employee shall be reimbursed for one trip to Virginia every
three weeks while relocating, with roundtrip airfares of no more than $450.00,
for a maximum period of six months. Employee's Spouse may take one or more of
these trips in the place of Employee, under the same conditions of this
Section.
Section 8.03 Employee will be reimbursed for realtor fees, up to 3 % of the
sale price, on the sale of his home in Virginia. If realtor fees exceed 3% of
the sale price, the difference will be reimbursed to Employee by a stock grant
under the same terms and conditions set forth herein under Section 5.01.
Section 8.04 Employee will be reimbursed for moving and shipping costs
related to relocation up to a maximum of Twelve Thousand Five Hundred Dollars
($12,500.00).
ARTICLE 9. TERMINATION OF EMPLOYMENT
Termination for Cause
Section 9.01. (a) Employer reserves the right to terminate this agreement if
Employee 1) willfully breaches any of the terms of this agreement; 2)
habitually neglects the duties which he is required to perform under the terms
of this agreement, including those set forth in Exhibit "A," to be attached
hereto after agreement of the parties but prior to assumption of the CEO
position; 3) or commits such acts of dishonesty, fraud, misrepresentation or
other acts of moral turpitude as would prevent the effective performance of
his duties.
(b) Employer may at its option terminate this agreement for the
reasons stated in this section by giving written notice of termination to
Employee without prejudice to any other remedy to which employer maybe
entitled either at law, in equity, or under this agreement. Notwithstanding
the foregoing, as a condition precedent to such termination, Employer shall
have provided Employee with written notice of his breach, setting forth in
detail the cause thereof, and providing Employee with an opportunity to
respond to such claim and be heard upon his response by a meeting of the Board
of Directors. In terminating Employee for cause, Employer shall further
follow and adhere to any procedures and guidelines set forth in Employer's
"Employee Handbook" in addition to the termination requirements set forth
herein. If there are any conflicting terms or conditions regarding termination
between the Handbook and this agreement, the agreement shall prevail, whether
termination is for cause or without cause.
(c) The notice of termination required by this section shall
specify the ground for the termination and shall be supported by a statement
of relevant facts.
<PAGE>
(d) Termination under this section shall be considered "for cause"
for the purposes of this agreement.
Termination Without Cause
Section 9.02 Notwithstanding any other termination clause hereunder, and
unfettered by any requirements or procedures set forth in Employer's "Employee
Handbook," Employer may terminate Employee without cause, upon thirty (30)
days notice, but shall at that time become obligated to pay to Employee a
severance payment equal to six (6) months of salary at the rate applicable on
the date of notice of termination. In such event, Employer shall also be
required to continue to furnish, under the Employee's existing health plan,
health insurance, for a period of one year from the date of termination, or
until such time as Employee is offered or eligible for health insurance from
any other employer.
Termination by Employee
Section 9.03. Employee may terminate his obligations under this agreement by
giving the Employer at least Thirty (30) days notice in advance. In the event
Employee shall terminate his obligations hereunder, Employee shall not be
entitled to any payment of unpaid annual salary from Employer, any other
severance, or continuation of health benefits as provided in Section 9.02,
above.
ARTICLE 10. GENERAL PROVISIONS
Notices
Section 10.01. Any notices to be given hereunder by either party to the other
shall be in writing and may be transmitted by personal delivery or by mail,
registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses appearing in
the introductory paragraph of this agreement, but each party may change that
address by written notice in accordance with this section. Notices delivered
personally shall be deemed communicated as of the date of actual receipt;
mailed notice shall be deemed communicated as of the date of mailing.
Attorney's Fees and Costs
Section 10.02. If any action at law or in equity is necessary to enforce or
interpret the terms of this agreement, the prevailing party shall be entitled
to reasonable attorney's fees, costs, and necessary disbursements in addition
to any other relief to which that party may be entitled. This provision shall
be construed as applicable to the entire agreement. The parties hereto agree
that the Superior Court of Orange County shall have and retain exclusive
jurisdiction over any dispute under this agreement, and California law shall
govern in any controversy arising.
Consents
Section 10.03. Employer agrees that all consents required of it hereunder
shall neither be unreasonably withheld nor delayed.
Entire Agreement
Section 10.04. This agreement supersedes any and all other agreements, either
oral or in writing, between the parties hereto with respect to the employment
of Employee by Employer and contains all of the covenants and agreements
between the parties with respect to that employment in any manner whatsoever.
Each party to this agreement acknowledges that no representation, inducements,
promises, or agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein, and that
no other agreement, statement, or promise not contained in this agreement
shall be valid or binding on either party.
Modifications
Section 10.05. Any modification of this agreement will be effective only if
it is in writing and signed by the party to be charged.
Effect of Waiver
Section 10.06. The failure of either party to insist on strict compliance
with any of the terms, covenants, or conditions of this agreement by the other
party shall not be deemed a waiver of that term, covenant, or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or
any other times.
Partial Invalidity
Section 10.07. If any provision in this agreement is held by court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provision shall nevertheless continue in full force without being impaired or
invalidated in any way.
Facsimile Signatures
Section 10.08 Any signed copy of this agreement or of any other document or
agreement referred to herein, or copy or counterpart thereof, delivered by
facsimile transmission, shall for all purposes be treated as if it were
delivered containing an original manual signature of the party whose signature
appears in the facsimile, and shall be binding upon such party in the same
matter as though an originally signed copy had been delivered.
Executed on Jan 1 , 2000, at Orange, California.
Employer: /s/ Charles C. Bream
Worldwide Wireless Networks, Inc., a Nevada Corporation
Pacific Link Internet, Inc., a California corporation d.b.a. Global Pacific
Internet
by:/s/ Charles C. Brown
its: President & COO
Executed on January 1, 2000, at Orange, California.
Employee :
Charles C. Bream
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> SEP-30-1999 DEC-31-1998
<CASH> 82,309 0
<SECURITIES> 0 0
<RECEIVABLES> 193,085 31,540
<ALLOWANCES> (10,000) (2,200)
<INVENTORY> 34,459 0
<CURRENT-ASSETS> 328,440 29,340
<PP&E> 1,257,463 465,462
<DEPRECIATION> (365,603) (158,602)
<TOTAL-ASSETS> 1,323,537 361,812
<CURRENT-LIABILITIES> 1,364,605 750,959
<BONDS> 0 0
0 0
0 0
<COMMON> 11,600 500
<OTHER-SE> (57,935) (433,845)
<TOTAL-LIABILITY-AND-EQUITY> 1,323,537 361,812
<SALES> 1,228,457 841,841
<TOTAL-REVENUES> 1,245,123 861,251
<CGS> 517,073 430,600
<TOTAL-COSTS> 1,418,556 708,579
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 26,484 51,455
<INCOME-PRETAX> (712,990) (329,383)
<INCOME-TAX> 0 800
<INCOME-CONTINUING> (712,990) (330,183)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (712,990) (330,183)
<EPS-BASIC> (.07) (.05)
<EPS-DILUTED> (.07) (.05)
</TABLE>
