U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 for the Quarterly
period ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 for the transition
period from _______ to _______.
Commission File No. 000-27713
LITEWAVE CORP.
-------------------------------------------------------------
(Name of Small Business Issuer in its Charter)
Nevada, U.S.A. 95-4763671
(State or other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
Suite 402, 609 West Hastings Street, Vancouver, BC V6B 4W4
(Address of Principal Executive Offices)
(604) 633-2342
Issuer's Telephone Number
Check whether the registrant (1) filed all reports required to be
filed by Section 13 or 15 (d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
As of September 30, 2000: 6,000,000 shares of common stock were
outstanding.
<PAGE>
TABLE OF CONTENTS AND INFORMATION REQUIRED IN REPORT
Part I. Financial Information
-------
Item 1. Financial Statements (unaudited)
Item 2. Management Discussion and Analysis or Plan of Operation
Part II. Other Information
--------
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security holders
Item 5. Other Information
Item 6. Exhibits and reports on form 8-K
SIGNATURES
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
LITEWAVE CORP.
(formerly Homefront Safety Services Of Nevada, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
(Unaudited Prepared by Management)
SEPTEMBER 30, 2000
<PAGE>
LITEWAVE CORP.
(formerly Homefront Safety Services Of Nevada, Inc.)
(A Development Stage Company)
BALANCE SHEETS
(Unaudited Prepared by Management)
<TABLE>
<S> <C> <C>
September 30, December 31,
2000 1999 Audited
ASSETS
Accounts receivable $ 4,988 $ 5,733
----------- ------------
$ 4,988 $ 5,733
=========== ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Bank indebtedness $ 2,412 $ 4,771
Accounts payable and
accrued liabilities 43,029 44,113
Note payable (Note 6) 46,311 1,021,614
----------- ------------
91,752 1,070,498
----------- ------------
Stockholders' deficit
Capital stock (Note 7)
Authorized
25,000,000 common shares
with a par value of $0.001
Issued
6,000,000 common shares
(December 31, 1998
2,500,000 common shares) 6,000 2,500
Additional paid in capital 1,047,340 840
Deficit accumulated during
the development stage (1,140,104) (1,068,105)
----------- ------------
(86,764) (1,064,765)
----------- ------------
$ 4,988 $ 5,733
=========== ============
History and organization of the Company (Note 1)
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
LITEWAVE CORP.
(formerly Homefront Safety Services Of Nevada, Inc.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited Prepared by Management)
<TABLE>
<S> <C> <C> <C> <C> <C>
Cumulative
Amounts From
Inception on Three Month Period Ended Nine Month Period Ended
June 30, 1989 September 30, September 30,
to Sept. 30, 2000 2000 1999 2000 1999
EXPENSES
Accounting and legal $53,027 $ 7,562 $ - $ 23,314 $ -
Consulting 302,783 13,500 96,886 38,250 198,003
General and
administrative 54,662 772 52,788 2,435 64,845
Marketing and
advertising 41,860 - 4,577 - 35,163
Rent 36,217 1,417 9,513 3,767 22,686
Salaries, Benefits 26,369 - - - -
Telephone, Utilities 38,890 384 7,298 1,990 21,377
Transfer Agent, Filing Fees 15,703 404 - 1,486 -
Travel 202,915 - 122,448 - 153,551
Website Development 13,678 - - 757 -
Write-down of capital assets 353,000 - - - -
---------- --------- --------- --------- ---------
Loss for the period $(1,139,104) $ (24,039) $(293,510) $ (71,999)$(495,625)
========== ========= ========= ========= =========
Basic and dilutive loss per share $ (0.01) $ (0.12) $ (0.02) $ (0.20)
========= ========= ========= =========
Weighted average number of
common shares outstanding 6,000,000 2,500,000 3,675,182 2,500,000
========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
LITEWAVE CORP.
(formerly Homefront Safety Services Of Nevada, Inc.)
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
(Unaudited Prepared by Management)
<TABLE>
<S> <C> <C> <C> <C> <C>
Deficit
Accumulated
Capital Stock Additional During the
--------------------- Paid-in Development
Shares Amount Capital Stage Total
Balance, December 31,
1997 2,000,000 $ 2,000 $ - $ (2,000) $ -
Shares issued for
services 500,000 500 840 - 1,340
Loss for the year - - - (2,020) (2,020)
--------- --------- ---------- ---------- ----------
Balance, December 31,
1998 2,500,000 2,500 840 (4,020) (680)
Loss for the year - - - (1,064,085) (1,064,085)
--------- --------- ---------- ---------- ----------
Balance, December 31,
1999 2,500,000 2,500 840 (1,068,105) (1,064,765)
Common stock issued for
settlement of debt 3,500,000 3,500 1,046,500 - 1,050,000
Loss for the period - - - (71,999) (71,999)
--------- --------- ---------- ---------- ----------
Balance, September 30,
2000 6,000,000 $ 6,000 $1,047,340 $ (1,140,104) $ (86,764)
========= ========= ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
LITEWAVE CORP.
(formerly Homefront Safety Services Of Nevada, Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited Prepared by Management)
<TABLE>
<S> <C> <C> <C>
Cumulative
Amounts From Nine Month
Inception on Period Ended
June 30, 1989 September 30,
to Sept. 30, 2000 2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (1,139,104) $ (71,999) $ (495,625)
Adjustment to reconcile loss to net
cash used in operating activities:
Issuance of common shares for services 1,340 - -
Write-down of capital assets 353,000 - -
Changes in non-cash working capital items
Increase in accounts receivable (4,988) 745 (1,514)
Increase (decrease)in accounts payable
and accrued liabilities 43,029 (1,084) 7,348
----------- ---------- ----------
Net cash used in operating activities (746,723) (72,338) (489,791)
----------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Bank Indebtedness 2,412 (2,359) 184,802
Issuance of Capital stock 1,000 - -
Note payable 1,096,311 74,697 685,315
---------- ---------- ----------
Net cash provided by financing
activities 1,099,723 72,338 870,117
----------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Advances receivable (27,326)
Acquisition of capital assets (353,000) - (353,000)
----------- ---------- ----------
Net cash used in investing activities (353,000) - (380,326)
----------- ---------- ----------
Increase (decrease) in cash
for the period - - -
Cash, beginning of period - - -
----------- ---------- ----------
Cash, end of period - - -
=========== ========== ==========
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes - - -
=========== ========== ==========
Supplemental disclosure for non-cash operating, financing and investing
activities (Note 9)
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
LITEWAVE CORP.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 30, 2000
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized on June 30, 1989, under the laws
of the State of Nevada, as Homefront Safety Services of Nevada,
Inc. and issued 10,000 common shares for $1,000 in cash. The
Company currently has no operations and, in accordance with
SFAS#7, is considered a development stage company. On April 26,
1999, the Company changed its name to Litewave Corp.
The accompanying financial statements have been prepared by
the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations, changes in stockholders' equity and cash flows at
September 30, 2000 and for the period then ended have been made.
These financial statements should be read in conjunction with the
audited financial statements of the Company for the year ended
December 31, 1999. The results of operations for the period
ended September 30, 2000 are not necessarily indicative of the
results to be expected for the year ending December 31, 2000.
2. GOING CONCERN
The Company's financial statements are prepared using the
generally accepted accounting principles applicable to a going
concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business.
However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the
Company to continue as a going concern. It is management's plan
to seek additional capital through equity financings.
Sept. 30, December 31,
2000 1999
Deficit accumulated during the development stage $ (1,140,104) $ (1,068,105)
Working capital (deficiency) (86,764) (1,064,765)
3. SIGNIFICANT ACCOUNTING POLICIES
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amount of
assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the year. Actual
results could differ from these estimates.
Cash and cash equivalents
Cash and cash equivalents include highly liquid investments
with original maturities of Six months or less.
Loss per share
Loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 "Earnings Per Share". Due
to the Company's simple capital structure, with only common stock
outstanding, only basic loss per share is presented. Basic loss
per share is computed by dividing losses applicable to common
stockholders by the weighted average number of common shares
outstanding during the period.
<PAGE>
LITEWAVE CORP.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 30, 2000
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd...)
Income taxes
Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109"). A deferred tax asset or liability is
recorded for all temporary differences between financial and tax
reporting and net operating loss carryforwards. Deferred tax
expenses (benefit) result from the net change during the year of
deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not
that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for
the effects of changes in tax laws and rates on the date of
enactment.
Capital assets
Capital assets are stated at cost unless the future
undiscounted cash flows expected to result from either the use of
an asset or its eventual disposition is less than its carrying
amount in which case an impairment loss is recognized based on
the fair value of the assets.
Amortization of capital assets is based on the estimated
useful lives of the assets and is computed using the
straight-line method as follows:
Computer Equipment 3 years
Accounting for derivative instruments and hedging activities
In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standard No.
133 "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133") which establishes accounting and
reporting standards for derivative instruments and for hedging
activities. SFAS 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. In June 1999, the
FASB issued SFAS 137 to defer the effective date of SFAS 133 to
fiscal quarters of fiscal years beginning after June 15, 2000.
The Company does not anticipate that the adoption of the
statement will have a significant impact on its financial
statements.
Stock-based compensation
Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," encourages, but does
not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The
Company has chosen to account for stock-based compensation using
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees." Accordingly compensation cost for stock
options is measured as the excess, if any, of the quoted market
price of the Company's stock at the date of the grant over the
amount an employee is required to pay for the stock.
Comprehensive income
In 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 ("SFAS 130"), "Reporting
Comprehensive Income". This statement establishes rules for the
reporting of comprehensive income and its components. The
adoption of SFAS 130 had no impact on total stockholders' equity
as of September 30, 2000.
<PAGE>
LITEWAVE CORP.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 30, 2000
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd...)
Financial instruments
The Company's financial instruments consist of accounts
receivable, bank indebtedness, accounts payable and note payable.
Unless otherwise noted, it is management's opinion that the
Company is not exposed to significant interest, currency or
credit risks arising from these financial instruments. The fair
value of these financial instruments, except for the note payable
whose fair value is not readily determinable, approximate their
carrying values.
4. CAPITAL ASSETS
In 1999, the Company entered into a Technology Purchase and
Assignment Agreement whereby the Company would purchase the
assets of International Communications and Equipment, Inc.
("ICE") through the issuance of common shares of the Company.
In 1999, the Company also incurred expenses towards a joint
venture project with NPO ZAO Crosna (the "Crosna Project") to
develop an internet protocol telephone network in Russia. The
Company purchased capital assets, which consisted of computer
equipment, of $353,000 in anticipation of the joint venture.
During 1999, management decided to write-off the carrying
value of the capital assets to $Nil to reflect an impairment in
value.
5. NOTE RECEIVABLE
During the period ended September 30, 2000, the Technology
Purchase and Assignment Agreement with ICE was cancelled and the
Company's rights, titles and interest in the Crosna Project
including capital assets (Note 4) were assigned to ICE in
exchange for a note receivable of $1,100,000. The note
receivable is unsecured, non-interest bearing and is to be repaid
from a portion of the profits of the Crosna Project assigned to
ICE.
Due to the uncertainty of collecting the $1,100,000 note
receivable, management has taken a full provision of $1,100,000
against the note receivable.
6. NOTE PAYABLE
The note payable is unsecured, non-interest bearing with no
fixed terms of repayment. The fair value of the note payable is
not determinable as it has no repayment terms and is non-interest
bearing.
7. CAPITAL STOCK
On June 30, 1989, the Company issued 10,000 shares of common
stock for proceeds of $1,000.
On November 10, 1998, the Company issued 500,000 shares of
common stock at a deemed value of $1,340 for services rendered,
of which 340,000 common shares were issued at a deemed value of
$340 to former officers and directors of the Company.
On June 29, 2000, the Company issued 3,500,000 shares of
common stock at a deemed value of $1,050,000 for the settlement
of a note payable.
<PAGE>
LITEWAVE CORP.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
SEPTEMBER 30, 2000
7. CAPITAL STOCK (cont'd.....)
Authorized share capital
On July 16, 1998, the State of Nevada approved the Company's
restated Articles of Incorporation, which increased its
authorized capital from 10,000 common shares to 25,000,000 common
shares. The par value was unchanged at $0.001 per share.
Additional paid-in capital
The excess of proceeds received for common shares over their
par value of $0.001, less share issue costs, is credited to
additional paid-in capital.
Stock split
On July 25, 1998, the Company implemented a 200:1 stock
split. The number of outstanding common shares increased from
10,000 common shares to 2,000,000 common shares. Stockholders'
equity has been restated to give retroactive recognition to the
stock split for all periods presented by reclassifying from
additional paid-in capital to common shares the par value of the
additional shares arising from the split. In addition, all
references to number of shares and per share amounts of common
shares have been restated to reflect the stock split.
8. RELATED PARTY TRANSACTIONS
During the period ended September 30, 2000, the Company paid
$38,250 (1999 - $2,680) in consulting fees to directors, a former
director and to a company related by a common director.
9. SUPPLEMENTAL DISCLOSURE FOR NON-CASH OPERATING, FINANCING
AND INVESTING ACTIVITIES
The significant non-cash transaction for the period ended
September 30, 2000 consisted of the Company issuing 3,500,000
shares of common stock at a deemed value of $1,050,000 for the
settlement of a note payable.
The significant non-cash transaction for the period ended
September 30,, 1999 consisted of the Company acquiring capital
assets in the amount of $871,000 with vendor equipment financing.
10. INCOME TAXES
The Company's total deferred tax asset is as follows:
Sept. 30, December 31,
2000 1999
Tax benefit of net operating loss
carryforward $ 512,550 $ 405,120
Valuation Allowance $ 512,550 $ 405,120
The Company has a net operating loss carry forward of
approximately $1,139,000 which expires in 2006 and 2007. The
Company provided a full valuation allowance on the deferred tax
asset because of the uncertainty regarding realization.
ITEM 2. PLAN OF OPERATION
GENERAL
The Company is a development-stage company whose primary business is
the development and delivery of telecom network solutions, products
and services to the global marketplace, and the expansion of worldwide
digital, voice, data and image delivery services via ultra modern
fiber optic, internet circuit, satellite and Public Switched Telephone
Network (PSTN) systems. The Registrant plans to offer highly reliable,
low-cost switched and Internet driven services on a wholesale and
retail basis. The Registrant is in the process of formulating joint
venture agreements with telephone service entities in a targeted group
of up to 25 countries through a flexible network comprised of various
foreign termination relationships, international servers, leased and
owned transmission facilities and resale arrangements with long
distance providers. The planned network deployment will utilize
gateways, digital signal processors, and routers coupled to
trans-oceanic fiber optics networks with both originating and
terminating facilities installed in North America, Western Europe,
Asia, Russia, China, Indonesia, and other regions.
In addition, the Company entered into a Letter of Intent dated October
5, 2000 whereby it plans to acquire one hundred percent of the issued
and outstanding shares of AirArmor Inc. of Scottsdale, AZ ("AAI").
Whereas there is no certainty that the proposed acquisition will
actually be completed, as consideration, if the acquisition closes,
the Company will issue a total of five million common shares of its
capital stock, restricted pursuant to Rule 144, to the shareholders of
AAI.
AAI, a private Nevada Corporation, is the business of developing and
manufacturing a series of sports related patented limb protection
systems. The AirArmor thigh and knee protective devices, designed
primarily for protecting athletes both pre and post injury, provide
excellent comfort, protection and impact resistance, with no
significant reduction of forward speed and agility. The AirArmor Leg
Protection System, a Class I medical device listed with the FDA, has
received formal approval for use as standard equipment for football by
the NFL, NCAA, and National Federation of State High School Athletic
Associations. Several NFL teams, and numerous intercollegiate and
high school teams have chosen the AirArmor Leg Protection System for
their athletes. This product is light, comfortable and affords
excellent knee protection while allowing unrestricted, natural
mobility of the legs.
AAI is at the stage where it is expanding its manufacturing to meet
product demand by introducing a new automated process. This process
involves recently developed foam core carbon fibre resin injected
molding. Implementation of this process will result in lower
manufacturing costs, higher margins, and greater ability to meet
demand. Due to increased availability of product, AAI is establishing
strategic sales and distribution alliances with major outpatient and
rehabilitation services companies, and with large international
distributors of these types of sports medical devices.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has had virtually no revenues from
operations and has relied almost exclusively on shareholder loans to
raise working capital to fund operations. At September 30, 2000, the
Company had a working capital deficiency of approximately $86,764
in Notes payable and bank indebtedness, and current payables of
$43,029. Since that date, sufficient shareholder loans have been
advanced to cover the bank indebtedness and fund current operations.
It is anticipated that management will be able to fund the company's
base operations by way of shareholder loans for up to twelve months.
While management currently anticipates that a debt or equity financing
will forthcoming, sufficient to allow it to develop the Company's
initial phase VoIP network deployment in Europe, and possibly the
expansion of the production capability for AirArmour Inc., if the
proposed acquisition completes, no assurances can be given that the
Company will be able to do so. Further, the Company will need to
secure additional funds to allow it to enter into its subsequent
installations of gateways in other European and Asian countries.
No assurances can be given that the Company will be able to secure
adequate financing from any source to pursue its current plan of
operation, to meet its obligations or to expand its network
development efforts over the next 12 months. Based upon its past
history, management believes that it may be able to obtain funding in
such manner but is unable to predict with any certainty the amount and
terms thereof. If the Company is unable to obtain needed funds, it
could be forced to curtail or cease its activities.
FORWARD-LOOKING STATEMENTS
The Registrant cautions readers that certain important factors may
affect the Registrant's actual results and could cause such results to
differ materially from any forward-looking statements that may be
deemed to have been made in this document or that are otherwise made
by or on behalf of the Registrant. For this purpose, any statements
contained in the Document that are not statements of historical fact
may be deemed to be forward-looking statements. This Registration
contains statements that constitute "forward-looking statements."
These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as
"believes," "anticipates," "expects," "estimates," "plans," "may,"
"will," or similar terms. These statements appear in a number of
places in this Registration and include statements regarding the
intent, belief or current expectations of the Registrant, its
directors or its officers with respect to, among other things: (i)
trends affecting the Registrant's financial condition or results of
operations for its limited history; (ii) the Registrant's business and
growth strategies; (iii) the Internet and telecommunications commerce;
and, (iv) the Registrant's financing plans. Investors are cautioned
that any such forward-looking statements are not guarantees of future
performance and involve significant risks and uncertainties, and that
actual results may differ materially from those projected in the
forward-looking statements as a result of various factors. Factors
that could adversely affect actual results and performance include,
among others, the Registrant's limited operating history, dependence
on continued growth in the use of the Internet, the Registrant's
inexperience with the Internet, potential fluctuations in quarterly
operating results and expenses, security risks of transmitting
information over the Internet, government regulation, technological
change and competition.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5. OTHER INFORMATION
On June 10, 1999, the Registrant announced a Letter of Intent, dated
May 27, 1999, from ZAO NPO Crosna ("Crosna") of the Russian
Federation. The Crosna Group consists of four closely held joint
stock companies registered and located in the Russian Federation,
predominantly in Moscow. The core of the group is composed of
telecommunication systems design, manufacturing, research and
development, operating, and servicing companies; companies providing a
wide range of financial services including banking, depository,
registrar, broker and dealer services; electrical motors and low
voltage equipment manufacturers, and consumer goods production lines.
ZAO NPO Crosna is a telecommunications operator providing satellite
communication with remote users with access to the Moscow city
telephone network. It also provides the Crosna Group Industrial
Division with a number of security infrastructure and administrative
services, and is used as a contractual party for the Ministry of
Defense and other governmental orders which have certain tax
exemptions.
The Agreement covered the installation and operation of Voice over the
Internet Protocol technology for carrying long distance telephone
traffic to and from the Russian Federation. This initial intent
resulted in the signing of the Protocol of Intentions Agreement of
June 22, 1999, covering organization of international and inter-city
VoIP communications channels in the territory of Russia and CIS. On
September 10, 1999, an agreement entitled "Principles for Setting up
the IP Telephone Network and Providing IP Telephone Services in the
Territory of the Russian Federation" was signed in Moscow,
establishing a 50/50 joint venture between Crosna and the Registrant.
The Agreement established the set up of IP telephone networks in a
number of regions of the Russian Federation utilizing the Registrant's
provided management, equipment and technology, and Crosna's premises,
clients and its license (No. 12690) issued under the Law of the
Russian Federation to provide telematic services.
Since then, an agreement has been reached between the Registrant
("LITEWAVE") and International Communications and Equipment Inc.
("ICE") whereby LITEWAVE will assign all its right, title and interest
in its Russian Federation Joint Venture IP Telephony Project pursuant
to an agreement between LITEWAVE and NPO ZAO Crosna dated September
10, 1999 (the "Crosna Project"), in return for ICE agreeing to the
following: (1.) Paying to LITEWAVE a total of US $1,100,000 from
profits generated by the Crosna Project as reimbursement of costs
incurred by LITEWAVE to date, at the rate of 20% of ICE's share of the
Crosna Project profits earned, payable monthly. (2.) Paying to
LITEWAVE a bonus of 10% of ICE's net profits earned (not including
management bonuses) should the Crosna Project process 200,000,000
minutes of traffic in an eighteen month period commencing from the
time of full operation, either within the Russian Federation, or
originating from the Russian Federation to other countries. (3.)
Paying any proceeds of lease funds or any return credit or sale
proceeds for existing equipment toward the outstanding balance of the
amount due pursuant to paragraph 1. (4.) Accepting any financial
responsibility that LITEWAVE might have with respect to the project,
and indemnifying LITEWAVE from any further responsibility for such
claims by any or all of those parties. There is no certainty that
LITEWAVE will receive any proceeds pursuant to paragraphs (1) or (2)
above. As a result of this Agreement, LITEWAVE will not be required
to expend any further funds on the Crosna project
The Company entered into a Letter of Intent dated October 5, 2000
whereby it plans to acquire one hundred percent of the issued and
outstanding shares of AirArmor Inc. of Scottsdale, AZ ("AAI").
Whereas there is no certainty that the proposed acquisition will
actually be completed, as consideration, if the acquisition closes,
the Company will issue a total of five million common shares of its
capital stock, restricted pursuant to Rule 144, to the shareholders of
AAI.
AAI, a private Nevada Corporation, is the business of developing and
manufacturing a series of sports related patented limb protection
systems. The AirArmor thigh and knee protective devices, designed
primarily for protecting athletes both pre and post injury, provide
excellent comfort, protection and impact resistance, with no
significant reduction of forward speed and agility. The AirArmor Leg
Protection System, a Class I medical device listed with the FDA, has
received formal approval for use as standard equipment for football by
the NFL, NCAA, and National Federation of State High School Athletic
Associations. Several NFL teams, and numerous intercollegiate and
high school teams have chosen the AirArmor Leg Protection System for
their athletes. This product is light, comfortable and affords
excellent knee protection while allowing unrestricted, natural
mobility of the legs.
AAI is at the stage where it is expanding its manufacturing to meet
product demand by introducing a new automated process. This process
involves recently developed foam core carbon fibre resin injected
molding. Implementation of this process will result in lower
manufacturing costs, higher margins, and greater ability to meet
demand. Due to increased availability of product, AAI is establishing
strategic sales and distribution alliances with major outpatient and
rehabilitation services companies, and with large international
distributors of these types of sports medical devices.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
NONE
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant has caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
LITEWAVE CORP.
/s/ Ian Lambert Dated: November 14, 2000
Ian Lambert,
President, Director
/s/ Harvey Lawson Dated: November 14, 2000
Harvey Lawson,
Chief Financial Officer, Secretary, Director
