================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
Form 10-QSB
QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
-----------------------------
For the quarterly period ended June 30, 2000
WORLD WIDE WIRELESS COMMUNICATIONS, INC.
(Name of small business issuer in its charter)
NEVADA 860887822
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
520 Third Street, Suite 101
Oakland, CA 95607
(510) 839-6100
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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 [ ] No [X]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
83,459,031 shares of common stock as of June 30, 2000.
Transitional Small Business Disclosure Format Yes[ ] No[x]
================================================================================
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<TABLE>
World Wide Wireless Communications, Inc. &
Subsidiaries
(A Development Stage Company)
Consolidated Balance Sheet
June 30, 2000
UNAUDITED
<CAPTION>
Assets
June 30, September 30,
2000 1999
---- ----
<S> <C> <C>
Current Assets:
Cash & cash equivalents $ 3,066,586 $ 275,082
Trade and other accounts receivable 252,816 --
Prepaid and other 193,522 62,740
------------ ------------
Total Current Assets 3,512,924 337,822
------------ ------------
Fixed Assets:
Furniture, fixtures & equipment 1,509,764 74,906
Leasehold improvements 334,300 261,478
Accumulated depreciation and
amortization (89,994) (13,506)
------------ ------------
Total Fixed Assets 1,754,070 322,878
------------ ------------
Other Assets:
Deposit in acquisition 1,146,662 --
Option on frequency licenses 500,000 500,000
Frequency licenses 2,680,739 --
Rental deposit 20,727 20,077
------------ ------------
Total Other Assets 4,348,128 520,077
------------ ------------
Total Assets $ 9,615,122 $ 1,180,777
============ ============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 106,729 $ --
Accrued expenses 298,842 491,468
------------ ------------
Total Current Liabilities 405,571 491,468
------------ ------------
Long-Term Liabilities:
Debentures payable 3,280,000 328,000
------------ ------------
Total Long-Term Liabilities 3,280,000 328,000
------------ ------------
Total Liabilities 3,685,571 819,468
------------ ------------
Stockholders' Equity:
Minority interest 155,660 --
Common stock, par value $.001 per share,
100,000,000 shares authorized, 83,459,031 issued
and outstanding at June 30, 2000 83,459 71,184
Additional paid-in capital 16,061,639 7,049,266
Deficit accumulated during development stage (10,371,207) (6,759,141)
------------ ------------
Total Stockholders Equity 5,929,551 361,309
------------ ------------
Total Liabilities and Stockholders' Equity $ 9,615,122 $ 1,180,777
============ ============
</TABLE>
2
<PAGE>
<TABLE>
World Wide Wireless Communications, Inc. &
Subsidiaries
(A Development Stage Company)
Consolidated Statement of Operations
June 30, 2000
UNAUDITED
<CAPTION>
Period from
inception
(Sept 1, 1994)
Three months ended June. 30, Nine months ended June 30, through
2000 1999 2000 1999 June 30,2000
------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Revenue $ 166,998 -- $ 664,037 -- $ 664,037
Cost of Goods Sold 62,964 -- 284,964 -- 284,964
------------ ------------ ------------ ------------- ------------
Gross Profit 104,034 -- 379,073 -- 379,073
Operating Expenses 1,513,490 902,233 3,954,764 1,496,883 10,713,905
------------ ------------ ------------ ------------- ------------
Operating Income (Loss) (1,409,456) (902,233) (3,575,691) (1,496,883) (10,334,832)
Interest Income 30,885 71 31,059 71 31,059
Tax Expense -- -- (26,924) -- (26,924)
Minority Interest (16,010) -- (40,510) -- (40,510)
------------ ------------ ------------ ------------- ------------
Net Profit (Loss) $(1,394,581) $ (902,162) $(3,612,066) $ (1,496,812) $(10,371,207)
============ ============ ============ ============= ============
Basic Loss Per Share $ (0.02) $ (0.01) $ (0.05) $ (0.03) (0.20)
============ ============ ============ ============= ============
Basic Weighted Average
Shares Outstanding 83,450,022 66,379,309 78,306,567 58,520,021 51,254,860
============ ============ ============ ============= ============
Diluted Loss Per Share $ (0.02) $ (0.01) $ (0.04) $ (0.02) $ (0.19)
============ ============ ============ ============= ============
Diluted Weighted Average
Shares Outstanding 87,000,022 69,929,309 81,856,567 62,070,021 54,804,860
============ ============ ============ ============= ============
</TABLE>
3
<PAGE>
<TABLE>
World Wide Wireless Communications, Inc. &
Subsidiaries
(A Development Stage Company)
Consolidated Statement of Cash
Flows June 30,
2000
UNAUDITED
<CAPTION>
Period
For the For the from
Nine Months Nine Months Inception on
Ended Ended (September 1,1994)
June 30, June 30, through
2000 1999 June 30, 2000
----------------- ----------------- --------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (3,612,066) $ (1,496,812) $ (10,371,207)
Adjustments to reconcile net loss from operations
to net cash used by operating activities:
Minority interest in combined net income 40,510 - 40,510
Common stock issued for services 15,910 - 662,306
Depreciation and amortization expense 83,068 51,639 89,994
Changes in operating assets and liabilities:
Prepaid and other 38,465 4,604 (193,522)
Other assets and accounts receivable (400,128) - (1,920,205)
Accrued expenses and accounts payable (264,622) (616,977) 405,571
----------------- ----------------- --------------------
Net Cash (Used) by Operating Activities (4,098,863) (2,057,546) (11,286,553)
----------------- ----------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Fixed assets (1,327,326) (292,626) (1,844,064)
Frequency licenses (2,279,699) - (2,565,589)
----------------- ----------------- --------------------
Net Cash (Used) by Investing Activities (3,607,025) (292,626) (4,409,653)
----------------- ----------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debentures 3,280,000 - 3,280,000
Proceeds from issuance of common stock 6,540,992 2,748,641 14,806,392
Proceeds from issuance of warrants 676,400 - 676,400
----------------- ----------------- --------------------
Net Cash Provided by Financing Activities 10,497,392 2,748,641 18,762,792
----------------- ----------------- --------------------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 2,791,504 398,469 3,066,586
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 275,082 1,716 -
----------------- ----------------- --------------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 3,066,586 $ 400,185 $ 3,066,586
================= ================= ====================
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
</TABLE>
4
<PAGE>
WORLD WIDE WIRELESS COMMUNICATIONS, INC & SUBSIDIARIES
NOTES TO THE INTERIM UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with instructions to Form 10-QSB.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
consolidated financial statements included in this Form 10-QSB. The
results of operations for any interim period are not necessarily
indicative of results for the full year. These statements should be
read in conjunction with the audited financial statements and
accompanying notes for the year ended September 30, 1999.
Organization
The financial statements presented are those of World Wide Wireless
Communications, Inc., (the Company) (A Development Stage Company) and
its subsidiaries. The Company is engaged in activities related to
advanced wireless communications, including the acquisition of
radio-frequency spectrum both in the United States and internationally.
The Company also plans to license its Distributed Wireless Call
Processing System technology.
On December 31, 1999, The Company acquired a 51% interest in Infotel
Argentina S.A., a Buenos Aires based company which owns Multi-channel
Multipoint Distribution Service (MMDS) licenses in eight of the largest
Argentine cities including Buenos Aires. Infotel also engages in
telephone system integration and engineering projects.
On February 29, 2000, the Company purchased 100% of Digital Way S.A. a
Peruvian telecommunications company. Digital Way holds MMDS licenses in
the Lima-Callao area. It holds local and international long distance
telephone licenses.
Basic and Diluted Net Loss Per Share
The calculation of basic and diluted net loss per share is in
accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share".
Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid investments with an original maturity of three months or
less to be cash equivalents. Balances in bank accounts may, from time
to time, exceed federal insured limits. The Company has never
experienced any loss, and believes its credit risk to be limited.
Comprehensive Income
The Company has no material components of other comprehensive income.
Fixed Assets
Furniture, fixtures and equipment are depreciated over their useful
lives of 5 to 10 years, using the straight-line method of depreciation.
Leasehold improvements are amortized over a 5-year period that
coincides with the initial period of the lease, using the straight-line
method of amortization.
5
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
Long-Lived Assets
The Company reviews its long-lived assets on an annual basis to
determine any impairment in accordance with Statement of Financial
Accounting Standards No. 121.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Fair Value of Financial Instruments
For cash and cash equivalents and accrued expenses, the carrying
amounts in the Balance Sheet represent their fair market value. The
carrying amount of the debentures payable approximates fair value
because of similar current rates at which the Company could borrow
funds with consistent remaining maturities.
Segment Information
The Company adopted Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related
information" (SFAS No. 131) in 1999. This statement establishes
standards for the reporting of information about operating segments in
annual and interim financial statements and requires restatement of
prior year information. The company has three geographic reportable
operating segments: United States, Peru, and Argentina. Operating
segments are defined as components of an enterprise for which separate
financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources
and in assessing performance.
Consolidated Financial Statements
The accounts of the Company and its consolidated subsidiaries are
included in the consolidated financial statements after elimination of
significant intercompany accounts and transactions.
Foreign Currency Transaction
The financial statements of the Company's foreign subsidiaries are
measured using the local currency as the functional currency. Assets
and liabilities of these subsidiaries are translated at exchange rates
as of the balance sheet date. Revenues and expenses are translated at
average rates of exchange in effect during the year. The resulting
cumulative translation adjustments have been recorded as a separate
component of stockholder's equity. Foreign currency transaction gains
and losses are included in consolidated net income (loss).
6
<PAGE>
<TABLE>
NOTE 2 - BASIC AND DILUTED NET LOSS PER SHARE CALCULATION
The following data table shows the amounts used in computing loss per
share and the effect on loss and the weighted average number of shares
of dilutive potential common stock:
<CAPTION>
Three Months Three Months Nine Months. Nine Months From
Ended Ended Ended Ended Inception
June 30, June 30, June 30, June 30, To
2000 1999 2000 1999 June 30,2000
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Profit (Loss) $(1,394,581) $(902,162) $(3,612,066) $(1,496,812) $(10,371,207)
=======================================================================================
Weighted Avg. Number of Common Shares 83,450,022 66,379,309 78,306,567 58,520,021 51,254,860
Effect of Dilutive Securities on
Shares Outstanding:
Stock Options 3,200,000 3,200,000 3,200,000 3,200,000 3,200,000
Convertible Warrants 350,000 350,000 350,000 350,000 350,000
---------------------------------------------------------------------------------------
Diluted Weighted Avg. Number of Common
Shares 87,000,022 69,929,309 81,856,567 62,070,021 54,804,860
=======================================================================================
</TABLE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Special Note Regarding Forward-Looking Statements
Certain statements in this Form 10-QSB, including information set forth under
this Item 2 "Management's Discussion and Analysis of Financial Condition and
Results of Operations", constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Act").
WORLD WIDE WIRELESS COMMUNICATIONS, INC. (the "Company") desires to avail itself
of certain "safe harbor" provisions of the Act and is therefore including this
special note to enable the Company to do so. Forward-looking statements included
in this Form 10-QSB or hereafter included in other publicly available documents
filed with the Securities and Exchange Commission, reports to the Company's
stockholders and other publicly available statements issued or released by the
Company involve known and unknown risks, uncertainties, and other factors which
could cause the Company's actual results, performance (financial or operating)
or achievements to differ from the future results, performance (financial or
operating) or achievements expressed or implied by such forward looking
statements. Such future results are based upon management's best estimates based
upon current conditions and the most recent results of operations. We cannot
assure that any of our expectations will be realized, and actual results and
occurrences may differ materially from our expectations as stated in this
document. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Overview
We provide high-speed broadband fixed wireless Internet and data transmission
service in the United States and internationally using transmitting frequencies
within the Multi-channel Multipoint Distribution
7
<PAGE>
Service, commonly known as MMDS. We are also developing a new technology, for
which we have received a U.S. Patent, for technology we have named Distributed
Wireless Call Processing System, or DWCP, which we believe may significantly
enhance wireless communications by dramatically increasing cellular telephone
network capacity. We intend to license this technology to third parties in the
future. The cost of developing this technology may be substantial. There can be
no assurances that we will raise sufficient funds to complete its development
nor can we assure that the technology will be successful.
We have purchased and currently lease a substantial number of high-speed
wireless Internet frequencies within the MMDS spectrum in the United States,
Argentina, Peru, and Thailand. We are applying for licenses as well in India. We
are now attempting to market to our wireless Internet service directly to
consumers for use in accessing the Internet and are considering the possibility
of entering into strategic alliances with other companies to market access to
our high-speed wireless Internet service. We plan to purchase or lease
additional wireless Internet MMDS and related frequencies in the United States
and abroad.
For the first three quarters of our fiscal year 2000, we experienced continuing
cash shortages due to an insufficient subscriber base as the result, among other
things, of governmental regulatory delays and equipment shortages. Because our
revenues have been minimal from operations and because we do not anticipate
receiving significant revenues for the remainder of this fiscal year from
operations, we have depended and will likely continue to depend upon equity and
debt financing to provide necessary working capital for the foreseeable future.
During the next 18 months we intend to expand our existing domestic licensed
operations in: Concord, San Marcos, and Ukiah California; South Bend, Indiana;
Grand Rapids, Michigan; Aspen and Vail, Colorado; Hilo, Hawaii; Hot Springs,
Arkansas; and Key West, Florida. We have initiated and expanded our Internet
service and expanded our overseas operations, primarily in Argentina, Peru,
India, and Thailand. We do not anticipate performing any significant product
research and development during the next 12 months, except for analysis related
to the technical and economic viability of our DWCP patented technology. We are
not planning to purchase or sell any plants or material equipment other than the
small equipment that is needed to expand the operation of our various licenses.
We currently have 20 full-time employees and anticipate hiring more employees as
we enter new markets. Based on our current plans, we anticipate that the number
of our employees will increase substantially during the next 12 months.
As of June 30, 2000, our total working capital was $3,107,353. Based on our
current cash projections, we anticipate that we will be able to fund our
operations at least through the second quarter of 2001 with available cash, and
cash we receive from our registered offering.
In connection with the FCC's rules on MMDS two-way communications services, the
FCC announced a one-week "filing window" for applications for two-way
authorizations from August 14, 2000, to August 18, 2000. We have filed our first
round of applications for a number of our markets in this filing window. All
such applications must meet FCC interference protection rules or contain the
consent of co-channel and adjacent channel licensees in our markets and
neighboring markets. All complete applications that have not been opposed within
120 days after the close of the filing window will be granted. Although we
believe we will be able to file for and receive two-way authorizations in each
of the markets where we have licenses, there can be no assurance that we will
receive such authorizations in these or other markets. We cannot be certain
that: (a) we will be able to complete the necessary processes to enable us to
complete and file two-way applications for each of our markets; (b) that we will
be able to obtain any necessary cooperation and consents from licensees in our
markets or adjacent markets to enable us to use our spectrum for two-way
communication services; and, or (c) that the FCC will approve our applications.
8
<PAGE>
We are Subject to International Regulatory Approvals and other International
Business Risks
We are subject to requirements that we receive regulatory approvals from those
countries in which we do business, the delay or denial of which will reduce our
revenues and adversely affect our foreign operations.
We anticipate that a substantial percentage of our revenues will be derived from
operations outside of the United States. Our international operations relay on
our ability to obtain consents of local regulatory authorities, some of which
may significantly delay or deny permitting us to operate in those jurisdictions.
An investment in our securities is riskier than an investment in many other
companies because we have begun to expand in overseas markets such as in Asia
and Latin America, areas that have experienced significant economic turmoil in
recent years. Continued turmoil could adversely affect our plans to increase
sales in these regions. Economic recession could also affect our ability to
maintain or increase sales in these or other regions in the future. Because we
operate internationally, our operations are subject to increased risks, such as
unexpected political changes, change in legal requirements and fluctuations in
exchange rates, all of which may substantially increase our operating and
capital expenses, and otherwise materially affect our ability to conduct
business. These include:
(a) unexpected changes in regulatory requirements, taxes, trade laws
and tariffs, which can substantially increase the costs of doing
business in other jurisdictions;
(b) changes in a specific country's or region's political or economic
conditions which may make it difficult or impossible to conduct
business there;
(c) lack of clear rules and regulations governing the issuance of
licenses and standards for their operations; and,
(d) fluctuating exchange rates.
In addition, we intend to expand our international sales efforts. We have very
limited experience in marketing, selling, and supporting our products and
services abroad. There is a risk that we will not be able to expand due to this
inexperience. If we are unable to grow our international operations successfully
and in a timely manner, our business and operating results could be seriously
harmed.
The broadband wireless access industry is rapidly evolving and is subject to
technological change and innovation. These changes are requiring that providers
of broadband services adopt new technologies quickly or modify existing
technologies to maintain service and market products. Compliance with these
changes may cause us to incur unexpected expenses or lose revenues. If we are
unable to comply with diverse new or varying governmental regulations, or
industry standards in each of the many worldwide markets in which we compete, we
may not be able to respond to customers in a timely manner or market our
products, which could seriously harm our business.
We may not be able to Attract and Retain Key Personnel
If we are not able to attract key personnel and advisors, or if our current
management and technical personnel leave the company, it may adversely affect
our ability to obtain financing or to develop and market our services. Our
success will depend in large part upon our ability to attract and retain
qualified management, administrative, and technical personnel, as well as the
continued contributions of our such existing management, administrative, and
technical personnel. We face strong competition for these workers, and we cannot
give any assurance that we will be able to attract or retain such individuals.
There is no assurance that we will be able to offer competitive compensation
packages to enable the company to attract and retain such employees. We do not
currently have key man insurance for any of our management personnel. Any loss
of the services of these individuals could seriously harm our business.
9
<PAGE>
Stock Price Fluctuation
In the past year, the price of our common stock has been highly volatile. Our
stock price could continue to be volatile, and any investment could suffer a
decline in value, adversely affecting our ability to raise additional capital,
which in turn could delay the build-out of locations in which we hold spectrum,
and in which we plan to offer our internet and data transmission service.
Future sales of our securities in the public market could lower our stock price
and impair our ability to raise funds through our proposed stock offering. The
market price of our securities could drop due to sales of a large number of our
securities or the perception that these sales could occur. Such sales also might
make it more difficult for us to sell equity securities in the future at a price
that we deem appropriate.
In addition, a decline in our stock price would permit the holders of the
Convertible Debentures described in Part II, Item 2, (3) below, to convert their
debentures to a higher number of shares in the Company, which would result in
increased dilution of value to existing shareholders.
Future Cash Requirements
The cost of implementing our business plan will be substantial. Our ability to
continue as a going concern, and to grow our business, will require substantial
investment on a continuing basis to finance capital expenditures and related
expenses. We do not expect to generate sufficient cash flow to fully implement
our long-term business strategy without additional capital or financing. We
currently expect that cash on hand and cash generated from our offering will be
sufficient to fund operations and capital requirements through at least the
second quarter of 2001.
We are currently seeking substantial additional financing and anticipate
continuing to seek additional financing in 2001. Options include entering into
the sale of debt or equity securities, borrowings under secured or unsecured
loan arrangements, including vendor equipment financing and sales of certain
assets. We cannot provide assurance that such financing will be available in any
form, in a timely manner, or on satisfactory terms. We do not have a bank line
of credit and there can be no assurance that any required or desired financing
will be available through bank borrowings, other acquisitions of debt, or equity
offerings, or otherwise, on acceptable terms. It is not certain that we will be
able to sell all, or any part of the 4,000,000 shares currently registered in
our public offering. To the extent that future financing requirements are
satisfied through the issuance of equity securities, investors may experience
significant dilution in the net book value per share of Common Stock.
Our current exposure to foreign currency transactions is limited because our
foreign currency transactions are limited to Argentina and Peru, the location of
our subsidiaries.
We are a development stage company, and our revenues for the foreseeable future
will not be sufficient to attain profitability. Our audited financial statements
for the period ended September 30, 1999, state that the Company's ability to
meet its future financing requirements, and the success of future operations,
cannot be determined at this time. Our losses are attributable to the lack of a
sufficient subscriber base to enable us to cover our ongoing development costs.
We expect to continue to experience losses from operations while we develop and
expand our wireless Internet service system and other technologies. These
factors are discussed in our SB-2-A Registration Statement filed June 30, 2000
with the Securities and Exchange Commission.
10
<PAGE>
Results of Operations
Quarter Ended June 30, 2000 Compared to Quarter Ended June 30, 1999
Revenue for the three and nine months ended June 30, 2000 was $166,998 and
$664,037, as compared with no revenue for the quarter ended and nine months
ended June 30, 1999. For the period from inception (September 1, 1994) through
June 30, 2000, revenue was $664,037. The increase in revenue for the three and
nine months ended June 30, 2000 over the same period in 1999 was due to the
Argentina subsidiary through the sale of telephone system integration and
engineering.
Cost of goods sold for the three months and nine ended June 30, 2000 was $62,964
and $284,964, as compared with none for the three and nine months ended June 30,
1999. For the period from inception (September 1, 1994) through June 30, 2000,
cost of goods sold was $284,964. The increase in cost of goods sold is
attributable to labor and material costs associated with the sale of telephone
system integration and engineering by the Argentina subsidiary.
Operating losses, including income attributable to a minority interest, for the
three months and nine months ended June 30, 2000 were $1,409,456 and $3,575,691
as compared to $902,233 and $1,496,883 for the three and nine months ended June
30, 1999. For the period from inception (September 1, 1994) through June 30,
2000, the operating loss was $10,334,832. The income attributable to the
minority interest for the three and nine months ended June 30, 2000 was $16,010
and $40,510. For the period from inception (September 1, 1994) through June 30,
2000, the income attributable to the minority interest was $40,510. The minority
interest represents a 49% non-controlling interest in the Argentina subsidiary.
Net losses for the three and nine months ended June 30, 2000 were $1,394,581 and
$3,612,066, as compared with $902,162 and $1,496,812 for the three and nine
months ended June 30, 1999. For the period from inception (September 1, 1994)
through June 30, 2000, the net loss was $10,371,207.
Liquidity and Capital Resources
During the nine months ended June 30, 2000, the Company used $4,098,863 for
operating activities. The net loss for the period of $3,612,066 includes
non-cash transactions of $139,488. This amount, when deducted from the net loss,
results in the cash used in operations. Additionally, the use of cash for the
net change in operating assets and liabilities in the amount of $626,285,
results in the net cash used in operating activities of $4,098,863. The Company
also used $3,607,025 for investment activities. The Company acquired fixed
assets of $1,327,326 and frequency licenses of $2,279,699. Financing activities
generated cash in the amount of $10,497,392 through the issuance of debentures
for $3,280,000, warrants for $676,400, and common stock for $6,540,992. The net
effect of these cash flows is an increase in cash and cash equivalents of
$2,791,504, providing a balance of cash and cash equivalents as of June 30, 2000
of $3,066,586.
During the nine months ended June 30, 1999, the Company used $2,057,546 for
operating activities. The net loss for the period of $1,496,812 includes a
non-cash transaction of $51,639 for the provision for depreciation and
amortization. This amount when deducted from the net loss results in the cash
used in operations. Additionally, the use of cash for the net change in
operating assets and liabilities in the amount of $612,373 results in the net
cash used in operating activities of $2,057,546. The Company also used $292,626
for investment activities for the acquisition of fixed assets. Financing
activities generated cash in the amount of $2,748,641, through the issuance of
common stock in that amount. The net effect of these cash flows is an increase
in cash and cash equivalents of $398,469, providing a balance of cash and cash
equivalents as of June 30, 1999 of $400,185.
The Company's primary capital needs are to fund the completion of its business
plan to develop broadband wireless and other telecommunications services.
11
<PAGE>
Seasonality and Quarterly Results
The Company's business is in a development stage.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There were no legal proceedings.
Item 2. Changes in Securities
On August 15, 2000 the Company entered into an agreement to amend the Securities
Purchase Agreement and related documents dated April 14, 2000 (See SB-2 dated
June 30, 2000 Transaction Documents) by and between World Wide Wireless
Communications, Inc. ("the Company") and Esquire Trading & Finance, Inc., Amro
International, S.A., Celeste Trust Reg., The Endeavor Capital Fund, S.A.,
Nesher, Ltd., The Keshet Fund, L.P. and Keshet, L.P., ("the Purchasers").
The Company desired to acquire additional financing, obtain certain concessions
in respect of their rights and the Company's obligations under the transaction
documents, and amend certain provisions of the Securities Purchase Agreement
dated April 14, 2000.
The Purchasers desired to increase their investment in the Company and grant the
concessions requested by the Company. On August 15, 2000 the Transaction
Documents were amended as follows:
1. The total number of shares of Common Stock to be issued and delivered
by the Company to the Purchasers pursuant to the Purchase Agreement
shall be 2,128,000, of which 760,000 were the Initial Shares issued and
delivered on the Initial Closing Date, 760,000 shall be shares issued
and delivered by the Company on the Amendment Closing Date in
consideration of the Purchasers' forbearance of their rights under the
Transaction Documents (the "Consideration Shares"), and 608,000 shall
be Additional Shares issued and delivered by the Company on the
Amendment Closing Date. The number of Consideration Shares, Additional
Shares, Convertible Securities and Additional Warrants to be issued and
delivered to the Purchasers and the Additional Purchase Price payable
therefore is 760,000; 608,000; $1,312,000; 1,440,000; and $1,920,000
respectively.
2. The Effectiveness Date in the Registration Rights Agreement was
extended to September 8, 2000 and the next meeting of the Company's
shareholders required under Section 3.13 of the Agreement, was changed
from August 15, 2000 to November 19, 2000.
3. The Conversion Price (including those issued on the Initial Closing
Date and those to be issued on the Amendment Closing Date) shall be
amended and restated as follows:
"The conversion price for the Debentures (the "Conversion Price")
in effect on any Conversion Date shall be the lesser of (A) an
amount equal to 110% of the average Per Share Market Value for the
five (5) consecutive Trading Days immediately preceding the
Original Issue Date (the "Fixed Conversion Price") and (B) an
amount equal to 85% of the average Per Share Market Value for the
five (5) consecutive Trading Days immediately prior to the
Conversion Date; provided, however, that, in any Conversion Notice,
a Holder may specify a Conversion Price higher than the Conversion
Price then in effect; provided further that, if during any period
(a "Black-out Period"), a Holder is unable to trade any Common
Stock issued or issuable upon conversion of Debentures immediately
due to the postponement of filing or delay or suspension of
effectiveness of a registration statement or because the Company
has otherwise informed such Holder that an existing prospectus
cannot be used at that time in the sale or transfer of such Common
Stock, such Holder shall have the option but not the obligation on
any Conversion Date within ten Trading Days following the
expiration of the Black-out Period of using the Conversion Price
applicable on such Conversion Date or any Conversion Price selected
by such Holder that would have been applicable had such Conversion
Date been at any earlier time during the Black-out Period or within
the ten Trading Days
12
<PAGE>
thereafter; provided further, that in no event shall the Conversion
Price be below the Floor Price. "Floor Price" shall mean $1.00 for
the period beginning on August 15, 2000 and ending on October 14,
2000, $0.64 from the period beginning on October 14, 2000 and
ending on April 14, 2001, and zero thereafter. Notwithstanding the
foregoing, if the Company's revenues for the fiscal year as shown
in the Company's Annual Report on Form 10-K are less than $13.5
million (such revenues shall be presumed to be less than 13.5
million in the event the Company does not file a Form 10-K by March
31, 2001), then from and after April 1, 2001 the Floor Price shall
be zero."
4. The Warrant Price in the Warrants issued by the Company on the Initial
Closing Date shall mean a price equal to $2.00, as such price may be
adjusted from time to time.
Item 3. Defaults Upon Senior Securities
There were no defaults upon senior securities.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to the vote of security holders.
Item 5. Other Information
On May 7, 2000, the Company signed a joint venture agreement with World
Thai Star Company Limited ("WTSCO") of Bangkok, to take a 49% interest in a new
limited liability company to be established in Thailand ("the joint venture
company"). WTSCO will contribute frequencies, transmission sites, and local
market expertise, while the Company is to initially contribute: (a) a $125,000
contribution for use in transferring the initial MMDS frequencies, (b) the
initial working capital of the new joint venture company, and (c) build-out and
operation of the system. The initial $125,000 contribution has been made, and
the initial MMDS frequencies have been assigned to the joint venture company. No
working capital has yet been transferred, and the joint venture company is not
yet operating pending acquisition of an Internet Service Provider License.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
World Wide Wireless Communications, Inc.
--------------------------------------------------
(Registrant)
Date August 21, 2000 /s/ Douglas P. Haffer-President & CEO
--------------- -------------------------------------------------------
Douglas P. Haffer - President & Chief Executive Officer
14
