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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED JUNE 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
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COMMISSION FILE NUMBER 0-08507
BROADBAND WIRELESS INTERNATIONAL CORPORATION
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(Exact name of registrant as specified in its charter)
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NEVADA 75-1441442
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer identification No.)
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1301 AVENUE M (P.O. BOX 31), CISCO, TEXAS 76437
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(Address of principal executive offices)
(254) 442-3968
(Issuer's telephone number)
CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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
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The number of shares outstanding of the Issuer's Common Stock, $.01 par value,
as of August 14, 2000 was 84,226,537.
Transitional Small Business Disclosure Format (check one): YES NO X
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FORM 10-QSB
TABLE OF CONTENTS
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Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - June 30, 2000 (unaudited) and
March 31, 2000.................................................................. 3
Statements of Operation - Three months ended June 30,
2000 and 1999 (unaudited)....................................................... 4
Consolidated Statement of Cash Flows - Three months ended
June 30, 2000 and 1999 (unaudited).............................................. 5
Notes to Financial Statements................................................... 6
Item 2. Management's Discussion and Analysis or Plan of Operation....................... 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................................... 11
Item 2. Changes in Securities and Use of Proceeds....................................... 12
Item 4. Submission of Matters to a Vote of Security Holders............................. 12
Item 5. Other Information............................................................... 12
Item 6. Exhibits and Reports on Form 8-K................................................ 13
Signatures.............................................................................. 14
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BROADBAND WIRELESS INTERNATIONAL CORPORATION
BALANCE SHEETS
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JUNE 30 MARCH 31
2000 2000
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(UNAUDITED) (AUDITED)
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ASSETS
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Current Assets:
Cash $ 75,488 $ 246,355
Note Receivable (Note 2) 733,750
Prepaids -- --
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Total Current Assets 809,238 246,355
Investments 597,500 497,500
Other Assets:
Net assets of discontinued operations 230,843 230,844
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Total Assets $ 1,637,581 $ 974,699
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and accrued liabilities $ 32,570 $ 32,477
Convertible Subordinated Debentures 700,000 700,000
Convertible Debt -- 50,000
Notes Payable 50,000 112,250
Advances from officer 352,250 4,925
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Total Current Liabilities 1,134,820 899,652
Commitments and Contingencies -- --
Stockholders' Equity
Preferred Stock, $.10 par value, 25,000,000 shares
authorized; none issued and outstanding -- --
Common stock, $.0125 par value, 250,000,000 shares
authorized; 84,226,537 and 68,376,537
shares issued and outstanding 1,052,832 854,707
Additional paid-in capital 2,066,787 1,346,663
Stock to be issued -- --
Accumulated deficit (2,615,458) (2,124,923)
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504,161 76,447
Less Treasury stock (14,184 and 20,700 shares) (1,400) (1,400)
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Total Stockholders' Equity 502,761 75,047
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Total Liabilities and Stockholders' Equity $ 1,637,581 $ 974,699
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See accompanying notes to Financial Statements
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BROADBAND WIRELESS INTERNATIONAL CORPORATION
STATEMENTS OF OPERATIONS
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JUNE 30 JUNE 30
1999 2000
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(UNAUDITED) (UNAUDITED)
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Revenues:
Miscellaneous Income $ 130 $ 2,404
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Total revenues 130 2,404
Operating Expenses:
Salaries -- 7,500
Advertising & Promotion -- 77,000
Bank Safe Keeping Fees -- 20,000
Professional Fees -- 233,193
Travel -- 28,611
General and Administrative 1,467 33,893
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1,467 400,197
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Loss from operations (1,337) (397,793)
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Other income (expense)
Interest expense (3,400) (13,250)
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Total other expense (3,400) (13,250)
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Loss from continuing operations (4,737) (411,043)
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Discontinued operations
Income from discontinued operations 1,815 506
Loss from discontinued operations -- (80,000)
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Total discontinued operations 1,815 (79,494)
Net Loss $ (2,922) $ (490,537)
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Loss per common share:
From continuing operations $ (0.00) $ (0.005)
From discontinued operations $ (0.00) $ (0.001)
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Net Loss $ (0.00) $ (0.006)
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Weighted average common shares outstanding 24,423,477 77,709,870
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See accompanying notes to Financial Statements
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BROADBAND WIRELESS INTERNATIONAL CORPORATION
STATEMENTS OF CASH FLOWS
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JUNE 30 JUNE 30
1999 2000
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(UNAUDITED) (UNAUDITED)
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Cash Flows from Operating Activities: $ (2,922) $ (490,537)
Net Loss
Adjustments to Reconcile net loss to net cash provided by (used in) operating
activities:
Shares issued for notes receivable -- 733,750
Shares issued for interest -- 1,250
Changes in operating assets and liabilities:
Prepaid expenses 2,500 --
Notes Receivable -- (733,750)
Accounts payable and accrued liabilities 900 93
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Net Cash provided by (used in) Operating Activities $ 478 $ (489,194)
Cash Flows from Investing Activities:
Investments -- (100,000)
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Net Cash provided by (used in) Investing Activities $ -- $ (100,000)
Cash Flows from Financing Activities:
Issuance of common stock -- 183,250
Net Cash from Financing Activities:
Advances from officer (150) 285,075
Convertible Debt -- (50,000)
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Net Cash provided by (used in) Financing Activities $ (150) $ 418,325
Net Increase (Decrease) in cash and cash equivalents $ 328 (170,869)
Cash at beginning of period $ 119 $ 246,355
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Cash at end of period $ 447 $ 75,488
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Supplemental disclosure:
Total interest paid $ -- $ 12,000
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Non-cash transactions: (See Statement of Stockholders' Equity)
Shares Issued for Notes Receivable -- 5,237,500
Shares Issued for Convertible Debt -- 4,000,000
Shares Issued for Interest -- 100,000
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See accompanying notes to Financial Statements
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BROADBAND WIRELESS INTERNATIONAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended June 30, 2000
are not necessarily indicative of the results that may be expected for the year
ended March 31, 2001. For further information, refer to the financial statements
and notes thereto for the year ended March 31, 2000, included in the Company's
Annual Report on Form 10-KSB.
NOTE 2. NOTE RECEIVABLE
In April of 2000, four individuals executed notes receivable pursuant to the S-8
filing that total $733,750. The note receivable was for a total of 5,237,500
common shares that was issued to the individuals. The notes were due 28 days
from the date of execution and have not been paid. On August 1, 2000, a demand
letter was sent by the Company for collection.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
This Report and the information incorporated by reference may include
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In particular,
we direct your attention to Part I, Item 2.-- Management's Discussion and
Analysis or Plan of Operation, and Part II, Item 1--Legal Proceedings. We intend
the forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements in these sections. All statements regarding our
expected financial position and operating results, our business strategy, our
financing plans and the outcome of any contingencies are forward-looking
statements. These statements can sometimes be identified by our use of
forward-looking words such as "may," "believe," "plan," "will," "anticipate,"
"estimate," "expect," "intend" and other phrases of similar meaning. Known and
unknown risks, uncertainties and other factors could cause the actual results to
differ materially from those contemplated by the statements. The forward-looking
information is based on various factors and was derived using numerous
assumptions.
Although we believe that our expectations that are expressed in these
forward-looking statements are reasonable, we cannot promise that our
expectations will turn out to be correct. Our actual results could be materially
different from our expectations.
GENERAL OVERVIEW
Broadband Wireless International Corporation (the "Company") was organized
under the laws of the State of Nevada under the name Black Giant Oil Company on
July 23, 1973. Although the Company was formed originally for the general
purpose of engaging in exploration for oil and gas, the Company had very limited
activity from 1986 to 1997 and, for all intents and purposes, was a dormant
"public shell," i.e., a company that is publicly traded but has no operations.
In August 1997 a group of stockholders initiated a funding campaign in an
attempt to revive operations. The Company successfully raised $95,000 through
the issuance of 4,750,000 shares of common stock, and another $100,000 through
the issuance of convertible debt.
During the fiscal year ended March 31, 1998 the Company was involved in
drilling wells, acquiring producing and non-producing leases, and completing
wells. Declining oil prices caused most of the leases acquired to become either
marginal or non-economic. As a result of the decline of oil prices in 1998 and
1999, the Company's operating revenues decreased substantially, which had a very
negative impact on the Company's attempt to generate additional financing to
continue operations. During this period, the Company began searching for other
business opportunities, and solicited merger partners who might be interested in
acquiring a "public shell."
In November 1999, the Company executed an Agreement in Principle and Letter
of Understanding ("Letter of Understanding") with Broadcom Wireless
Communications Corporation ("Broadcom"), the culmination of months of
negotiations with an individual named Donald L. Knight ("Knight"). Pursuant to
the Letter of Understanding, the Company essentially agreed to be acquired by
Broadcom, inasmuch as Broadcom would be the controlling shareholder of the
Company upon the consummation of the stock issuances described in the Letter of
Understanding. Except for the issuance of 4.4 million shares of common stock for
$55,000 cash, each of the other stock issuances described in the Letter of
Understanding, totaling an aggregate 48,000,000 shares, were made based on the
representations of Broadcom and Knight that Broadcom either had valuable assets
to exchange for such stock, or had the rights to acquire such assets. Although
15,000,000 shares of the 48,000,000 shares remained in escrow with the Company
(and were ultimately cancelled in June 2000) pending receipt of documentation
that Broadcom had in fact acquired such assets, an aggregate 33,000,000 shares
of common stock were actually delivered to Broadcom under the Letter of
Understanding, for which the Company reported, in previous filings with the
Securities and Exchange Commission (the "SEC"), the receipt of various assets
and contract rights.
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Immediately after the stock issuances, Broadcom owned of record approximately
64% of the outstanding common stock of the Company, and, until May 2000, exerted
control of the Company.
In April 2000, the Company received a subpoena from the Oklahoma Department
of Securities (the "Oklahoma Department") that requested, inter alia, the
production of all documents in the possession of the Company relating to
transactions with Broadcom, as well as the underlying transaction giving rise to
the Broadcom stock issuances. Shortly thereafter, the Company's Board of
Directors directed its outside counsel to conduct an internal investigation into
all matters surrounding the attempted acquisition of control of the Company by
Broadcom, Knight and others affiliated with them (collectively, the "Broadcom
Group"). As a result of the investigation to date, the Company believes that,
not only was it the subject of a scheme by the Broadcom Group to acquire control
of the Company, but that the Broadcom Group acted as statutory underwriters in
connection with the resale of the securities acquired by them from the Company,
all of which, if true, constitute violations of federal and state securities
laws. In June 2000, the Company received a similar subpoena from the SEC, and
was notified that the SEC was conducting an investigation of the Company. See
"PART II-Item 1. Legal Proceedings."
As of the date of this Report, the Company has no significant assets, other
than certain oil and gas properties comprising the discontinued oil and gas
operations of the Company, and significant liabilities. Additionally, the
Company currently has no cash flow from operations and, in fact, has been able
to operate since May 2000 only because of advances made by the President of the
Company.
Without immediate outside funding, the Company will be unable to implement
the shift of its business focus to telecommunications, as described in its
Quarterly Report on Form 10-QSB for the quarterly period ended December 31,
1999. Because the Company believes that many shareholders may have acquired
common stock of the Company in late 1999 and during the first calendar quarter
of 2000 based on press releases and SEC filings disclosing the change in the
Company's business from oil and gas to telecommunications, the Company has
sought to implement this shift in business focus by appointing an Advisory
Committee, engaging a telecommunications consultant and seeking business
alliances that could result in the actual implementation of the Company's stated
business mission.
RESULTS OF OPERATIONS
REVENUES
The Company reported operating revenues of $2,404 for the three months
ended June 30, 2000, compared to revenues of $130 for the three months ended
June 30, 1999. Operating revenues for both periods were attributable to stock
transfer fees collected by the Company. To date, none of the transactions
underlying the Letter of Understanding, or the other transactions brought to the
Company by the Broadcom Group, have resulted in any revenues to the Company.
Moreover, the Company has significant liabilities and no significant assets,
other than (i) its investments in certain ventures the ultimate value of which
is speculative and uncertain, and (ii) the oil and gas properties comprising the
discontinued oil and gas operations of the Company. Future revenue is directly
dependant on how successful the Company is in funding its proposed operations.
Other revenues of $506 and $1,815, respectively, were reported from the
Company's discontinued oil and gas operations during the three months ended June
2000 and June 1999.
OPERATING EXPENSES AND LOSS
The increase in operating expenses for the quarter ended June 30, 2000 in
comparison to the operating expenses for the quarter ended June 30, 1999 was due
in significant part to professional fees incurred in connection with the
Company's internal investigation and the preparation of the Company's Form
10-KSB for the year ended March 31, 2000. Also contributing to the increase in
operating expenses were advertising, promotion and travel expenses, which were
incurred by the Broadcom Group during the first part of April 2000 prior to the
initiation of the Company's internal investigation. The professional fees
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incurred during the three months ended June 30, 2000 included legal, consulting
and accounting/audit fees. Legal fees accounted for $225,406, with such fees
being distributed over five main categories: (i) representation of the Company
in connection with the investigations of the Oklahoma Department and the SEC,
including responses to the respective subpoenas of such agencies; (ii)
investigation of matters relating to the subject matters of the respective
regulatory investigations; (iii) preparation and filing of lawsuits to pursue
claims identified as a result of the internal investigation; (iv) general
corporate matters in connection with the Company's attempts to identify
potential strategic alliances; and (v) preparation of Exchange Act reports and
other securities compliance matters. The bank safe-keeping fees were paid to Sun
Trust in Florida and related to a funding effort, subsequently cancelled,
involving the potential pledge of the Company's common stock to secure a line of
credit.
In addition to the above expense items, the Company incurred interest
expense of $13,250 during the three months ended June 30, 2000, in connection
with quarterly interest payments on the Company's outstanding debentures. The
interest expense in 1999 related to interest payable on certain convertible
debt.
For the three months ended June 30, 2000, the Company incurred a net loss
of $490,537, compared to a net loss of 2,922 for the comparable period in 1999.
The increase in net loss was primarily the result of the increase in operating
expenses discussed above, as well as a write-off of certain oil and gas leases
contributing to the loss from discontinued operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal assets are four notes receivables totaling
$733,750. These notes, which were issued in connection with the exercise of
stock options, were executed by the obligors in April 2000 as 30-day notes and
are now in a delinquent status. A demand letter has been sent to each of the
obligors, and the Company plans to actively pursue the collection of these
notes. Additionally, the Company continues to investigate the investments it
made during the last quarter of its fiscal year ended March 31, 2000, to
determine the existence of any value in the investments as well as the Company's
course of action relating thereto.
As a result of the internal investigation requested by the Board of
Directors, the Company has instituted legal proceedings against various
individuals, and is exploring its options with respect to the agreements it
entered into with the Broadcom Group. However, unless immediate outside
financing is obtained by the Company, it likely will be unable to pursue any or
all of the pending or contemplated actions. The Company believes, however, that
each of its pending actions is meritorious and, if pursued to conclusion, would
result in the recovery of potentially significant judgments. However,
collectibility of any judgment obtained cannot be assured.
At June 30, 2000, the liabilities of the Company totaled $1,134,820,
consisting primarily of indebtedness relating to the Company's repayment
obligations in respect of its (i) Convertible Subordinated Debentures, totaling
$700,000; (ii) a note payable of $50,000 to an unrelated third party; and (iii)
notes payable of $352,250 to Ivan Webb, to evidence advances made by Mr. Webb to
fund ongoing operations of the Company. Subsequent to June 30, 2000, Mr. Webb
further advanced to the Company an additional $70,000.
Unless the Company obtains immediate outside funding, the Company will be
unable to implement the shift of its business focus to telecommunications, as
described in its Quarterly Report on Form 10-QSB for the quarterly period ended
December 31, 1999. Because the Company believes that many shareholders may have
acquired common stock of the Company in late 1999 and during the first calendar
quarter of 2000 based on press releases and SEC filings disclosing the change in
the Company's business from oil and gas to telecommunications, the Company has
sought to implement this shift in business focus by appointing an Advisory
Committee, engaging a telecommunications consultant and seeking business
alliances that could result in the actual implementation of the Company's stated
business mission. All of such activities have been funded through advances made
by Mr. Webb. However, Mr. Webb has advised the Company of his inability to
further fund the operations of the Company.
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On August 11, 2000, the SEC filed a complaint against the Company and Mr.
Webb and others, including Knight, Broadcom and certain other entities
affiliated with the Broadcom Group, alleging various violations of federal
securities laws and seeking preliminary and permanent injunctive relief,
disgorgement and civil monetary penalties. In connection with the filing of such
complaint, the SEC obtained an emergency, ex parte order appointing a receiver
for the Company and a temporary restraining order enjoining the defendants from
further violations of the federal securities laws and freezing their assets.
Although the temporary restraining order is a temporary remedy, until a hearing
on the SEC's motion for a preliminary injunction can be heard, the Company
considers it likely that such injunctive relief will be granted. On the same
day, the Oklahoma Department filed a similar proceeding in Oklahoma District
Court. See Part II. Item 1-Legal Proceedings. The Company currently is unable to
predict what effect these proceedings ultimately will have on its ability to
implement a business plan or maintain its existence.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
REGULATORY ACTIONS
SEC ACTION
On June 22, 2000, the SEC issued an order directing a private investigation
of the Company involving potential violations of Sections 5(a), 5(c) and 17(a)
of the Securities Act of 1933 and Sections 10(b) and 13(a) of the Securities
Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-11 and 13a-13 thereunder. The
Company, which had been producing documents in response to the SEC's subpoena
and cooperating with the investigation, was informed by the SEC on August 11,
2000 that a complaint had been filed against it, as described below.
On August 11, 2000, the SEC filed a complaint against the Company and Mr.
Webb and others, including Knight, Broadcom and certain other entities
affiliated with the Broadcom Group, alleging various violations of federal
securities laws and seeking preliminary and permanent injunctive relief,
disgorgement and civil monetary penalties. In connection with the filing of such
complaint, the SEC obtained an emergency, ex parte order appointing a receiver
for the Company and a temporary restraining order enjoining the defendants from
further violations of the federal securities laws and freezing their assets.
Although the temporary restraining order is a temporary remedy, until a hearing
on the SEC's motion for a preliminary injunction can be heard, the Company
considers it likely that such injunctive relief will be granted. The Company
currently is unable to predict what effect these proceedings ultimately will
have on its ability to implement a business plan or maintain its existence. The
complaint is styled Securities and Exchange Commission v. BroadBand Wireless
International Corporation, Broadcom Wireless Communications Corporation, Ivan W.
Webb, and Donald L. Knight, Defendants, and Black Giant Resources Corporation,
Broadband Wireless Communications Corporation, Medscan Technologies, Inc., and
Kimberly Knight, Relief Defendants (United States District Court for the Western
District of Oklahoma, CIV 00-1375)
At the direction of Mr. Webb, the Company has cooperated with the SEC since
the initiation of its investigation, and will continue to cooperate with the SEC
and the receiver.
OKLAHOMA DEPARTMENT ACTION
On April 13, 2000, the Company received an administrative subpoena from the
Oklahoma Department in connection with an ongoing investigation of the Company.
Although the Company had previously been informed by the Oklahoma Department
that the Company and Mr. Webb were not currently targets of its investigation,
in August 2000, the Oklahoma Department brought an action against, among others,
the Company and Mr. Webb, as described in further detail below.
On August 11, 2000, the Oklahoma Department filed a petition for permanent
injunction, seeking relief similar in nature to that sought in the SEC's
complaint. The petition is styled Oklahoma Department of Securities ex rel.
Irving L. Faught, Administrator, v. BroadBand Wireless International
Corporation, formerly Black Giant Oil Company, Broadband Wireless
Communications Corporation, Broadcom Wireless Communications Corporation,
Donald L. Knight, Ivan Webb, and Tommy K. Hill, Defendants, and DLK Family
Trust, Englands Tea & Coffee Exchange Ltd., Kimberly Knight, Relief Defendants
(District Court of Oklahoma County, CJ-2000-5851)
At the direction of Mr. Webb, the Company has cooperated with the Oklahoma
Department since the initiation of its investigation, and will continue to
cooperate with the Oklahoma Department in connection with the current
proceeding.
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OTHER PROCEEDINGS AGAINST THE COMPANY
On May 31, 2000, Aarow Environmental Group, Inc. ("Aarow") filed a petition
in the District Court of Oklahoma County State of Oklahoma naming the Company,
Broadband Wireless Communications, Inc., Broadcom Wireless Corporation and Cisco
Systems, Inc. as parties to an interpleader suit in which Aarow tendered certain
computer equipment in its possession to the court to make a determination of who
has the right to the equipment. Aarow seeks the recovery for its costs and fees
incurred in connection with the suit; no money damages are sought.
On June 13, 2000, Frank L. Klaus, Jr., filed a petition in the District
Court of Oklahoma County State of Oklahoma against the Company, Broadcom
Wireless Communications Corporation, Black Giant Resources Corporation, Don
Knight and Ivan Webb. The petition alleges fraud and misrepresentations, breach
of contract and various violations of the Oklahoma Securities Act. The petition
seeks damages in excess of $10,000 plus exemplary damages, attorney fees and
costs.
PROCEEDINGS BROUGHT BY THE COMPANY
As reported in the Company's Form 10-KSB for the year ended March 31, 2000,
the Company initiated its own internal investigation in May 2000. As a result of
the findings of the outside counsel retained to conduct such investigation, the
Company initiated legal proceedings against various individuals and entities,
and had identified various other claims that it intended to pursue. The Company
believes that, with the appointment of a receiver, any new proceedings will have
to be brought by or through the receiver appointed by the federal court in
connection with the SEC's complaint. The Company currently is unable to predict
whether the receiver will choose to maintain the pending legal proceedings.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
RECENT SALES OF UNREGISTERED SECURITIES
Item 5 of Part II of the Company's Annual Report on Form 10-KSB/A, filed
with the Securities and Exchange Commission on July 21, 2000, is hereby
incorporated by reference with respect to sales of the Company's securities
during the period covered by this Report that were not registered under the
Securities Act of 1933, as amended.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.
During July 2000, a stockholder of the Company made a proxy solicitation,
which subsequently was withdrawn before the scheduled meeting date of July 26,
2000. On July 14, 2000, Broadcom sent a notice of Special Meeting in Lieu of
Annual Meeting of Shareholders (the "Notice") and a proxy solicitation to the
Company's shareholders. The Notice and proxy solicitation sought voting proxies
for the election of three directors, John D. Jarvis, Albie Shaffer and James
Angstad, as well as the transaction of "any other necessary business." After
investigation, the Company determined that at least one of the named proxies, as
well as one of the named nominees, had not given their consent to be included in
such proxy solicitation. Additionally, the proxy solicitation materials had not
been filed with the SEC, as is required by the federal proxy rules, nor did it
comply with such rules requiring the disclosure of information about the proxy
proponent and the nominees for director. Accordingly, after the Company made
demand on Broadcom to withdraw the improper proxy solicitation, Broadcom sent a
notice withdrawing the Notice and proxy statement to the shareholders receiving
the original solicitation.
ITEM 5. OTHER INFORMATION.
Subsequent to June 30, 2000, the Company entered into a Letter of Intent
with Jarvis Entertainment Group, Inc. ("JEG") to form a joint venture limited
liability company for the purpose of deploying broadband wireless connectivity.
The proposed joint venture, which was subject to the execution of definitive
joint venture agreements, was to have an initial capitalization of approximately
$1.35 million,
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$450,000 of which was to be contributed by Jarvis in cash and equipment upon
execution of the definitive joint venture agreements, with the remaining
$900,000 to be contributed by the Company in two tranches upon the successful
completion of agreed joint venture milestones. On July 28, 2000, at a meeting
between Mr. Webb and John Jarvis, the president of JEG, the Company was informed
that the funding for JEG's cash portion of the initial capital requirement was
to come from sales of the Company's common stock in the hands of third parties.
At this time, the Company has determined not to pursue further any transaction
with JEG, based on concerns about any funding involving the sale of the
Company's securities.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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EXHIBIT
NUMBER NAME OF EXHIBIT
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*27.1 Financial Data Schedule
99.1 Item 5 of Part II of the Company's Annual Report on Form
10-KSB/A, filed with the Securities and Exchange Commission on
July 21, 2000, is hereby incorporated by reference.
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* Filed electronically herewith
(b) Reports on Form 8-K:
During the three months ended June 30, 2000, the Company filed the
following 8-Ks:
o 8-K dated March 3, 2000, filed on April 6, 2000, reporting under Item
2. the consummation of various acquisitions. No financial statements
were filed as a part of such report, and, as subsequently reported in
the Company's 10-KSB for the year ended March 31, 2000, none of the
reported acquisitions have been consummated, or, if consummated, have
been repudiated by the other contracting party.
o 8-K dated May 15, 2000, filed on May 17, 2000, reporting under Item 5.
the issuance of a press release announcing the commencement of an
internal investigation and other matters. No financial statements were
filed as a part of such report.
o 8-K dated May 17, filed on May 26, 2000, reporting under Item 5. the
issuance of two press releases announcing the commencement of certain
litigation and disclaiming the issuance of a news release purported to
be issued by the Company. No financial statements were filed as a part
of such report.
o 8-K dated June 21, 2000, filed on June 21, 2000, reporting under Item
5. the adoption of amended and restated bylaws of the Company. No
financial statements were filed as a part of such report.
o 8-K dated June 22, 2000, filed on June 22, 2000, reporting under Item
5. (i) the issuance of a press release announcing the resignation of
directors and termination of officer, and (ii) commencement of certain
litigation. No financial statements were filed as a part of such
report.
o 8-K dated June 29, 2000, filed on June 29, 2000, reporting under Item
4. the resignation of the Company's independent accountants and the
engagement of new independent accountants. No financial statements
were filed as a part of such report.
13
<PAGE> 14
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BROADBAND WIRELESS INTERNATIONAL CORPORATION
/s/ Ivan W. Webb
----------------------------------------------------
Date: August 14, 2000 Ivan W. Webb,
President and Chief Financial and Accounting Officer
14
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER NAME OF EXHIBIT
------ ---------------
<S> <C>
*27.1 Financial Data Schedule
99.1 Item 5 of Part II of the Company's Annual Report on Form
10-KSB/A, filed with the Securities and Exchange Commission on
July 21, 2000, is hereby incorporated by reference.
</TABLE>
* Filed electronically herewith
