UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 quarter period ended: June 30, 1997
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the transition period from: to
Commission file number: 33-5902-NY
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 22-2774460
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
210 South Main Street, Suite 900, Salt Lake City, Utah 84111
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (801) 595-0104
Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
The number of shares outstanding of the issuer's Preferred Class A
Stock on March, 19, 1999 was 7,533,227.
1
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
The following Financial Statements of the Company and its subsidiaries
and related notes are included herein:
Balance Sheet as of June 30, 1997 and December 31, 1996;
Statements of Income for the three months ended June 30, 1997 and 1996;
Statements of Income for the six months ended June 30, 1997 and 1996;
Statements of Income for the three and six months ended June 30, 1997;
Statement of Cash Flows for the six months ended June 30, 1997 and 1996;
Notes to Financial Statements.
2
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A Development Stage Company)
Balance Sheet
June 30, 1997 and December 31, 1996
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
ASSETS 1997 1996
- ------ ----------------- -----------------
Current Assets
<S> <C> <C>
Cash $ 65 $ 1,197
Accounts Receivable & Prepaids 417 417
----------------- -----------------
Total Current Assets 482 1,614
Property, Plant, & Equipment 86,347 105,803
Other Assets
Deposits 2,825 2,825
Licenses and Other 1,202,379 1,250,263
----------------- -----------------
1,205,204 1,253,088
----------------- -----------------
TOTAL ASSETS $ 1,292,033 $ 1,360,505
================= =================
LIABILITIES & SHAREHOLDERS EQUITY
Current Liabilities
Accounts Payable $ 121,455 $ 152,419
Accrued Liabilities 993,561 814,992
Note Payable 748,500 907,800
Income Taxes Payable 800 1,800
Current Portion of Long-Term Debt 9,516 11,627
Payable - Related Parties 761,549 621,798
----------------- -----------------
Total Current Liabilities 2,635,381 2,510,436
Long-Term Debt 0 0
- ------ ----------------- -----------------
Total Liabilities 2,635,381 2,510,436
Shareholders Equity Preferred Series A, $.001 par value:
Authorized 15,000,000
Issued and Outstanding 6,004,836 at March 31, 1997
and December 31, 1996 6,005 6,005
Additional Paid-in Capital 2,110,925 2,110,925
Retained Earnings (Deficit) (3,460,278) (3,266,861)
----------------- -----------------
Total Shareholder's Equity (1,343,348) (1,149,931)
----------------- -----------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 1,292,033 $ 1,360,505
================= =================
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A Development Stage Company)
Condensed Consolidated Statements of Income
Three Months Ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
1997 1996
----------------- -----------------
<S> <C> <C>
Revenues from License Sales $ 0 $ 300,000
Cost of Licenses 0 107,394
----------------- -----------------
Gross Profit 0 192,606
Other Income 0 0
General & Administrative Expenses
Brochures & Marketing 0 223
Travel & Auto 2,767 14,926
Postage & Delivery 0 4,693
Payroll Taxes 0 6,941
Office 325 453
Outside & Professional Services 0 46,650
Rent 750 9,891
Salaries - Officers 18,000 41,250
Salaries - Others 0 57,289
Depreciation & Amortization 33,534 35,555
Bank Charges 112 2,986
Insurance 0 5,851
Equipment Rental 0 906
Seminars & Conventions 0 1,232
MMDS Lease Payments 0 8,950
Tower Lease Payments 0 2,876
FCC Filing Fees 0 360
Telephone 785 10,257
Computer 0 1,026
Other Taxes & Licenses 0 1,414
Miscellaneous 0 278
----------------- -----------------
Total General & Administrative Expenses 56,273 254,007
----------------- -----------------
Net Loss Before Taxes and Interest (56,273) (61,401)
Interest Expense 18,501 0
State Income Taxes 0 800
----------------- -----------------
Net Income (Loss) $ (74,774) $ (62,201)
================= =================
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A Development Stage Company)
Condensed Consolidated Statements of Income
Six Months Ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1996
----------------- -----------------
<S> <C> <C>
Revenues from License Sales $ 0 $ 300,000
Cost of Licenses 0 107,394
----------------- -----------------
Gross Profit 0 192,606
Other Income 3,583 600
----------------- -----------------
Total Revenues 3,583 193,206
General & Administrative Expenses
Brochures & Marketing 662 324
Travel & Auto 13,598 24,843
Postage & Delivery 1,263 7,533
Payroll Taxes 38 13,686
Office 325 2,413
Outside & Professional Services 30,085 78,600
Rent 750 17,564
Salaries - Officers 36,000 82,500
Salaries - Others 0 112,957
Depreciation & Amortization 67,339 76,392
Bank Charges 302 4,768
Insurance 0 10,478
Equipment Rental 0 2,801
Seminars & Conventions 1,904 1,308
MMDS Lease Payments 0 18,025
Tower Lease Payments 2,060 6,221
FCC Filing Fees 0 4,560
Telephone 2,518 17,162
Computer 226 1,770
Other Taxes & Licenses 0 1,539
Miscellaneous 0 293
----------------- -----------------
Total General & Administrative Expenses 157,070 485,737
----------------- -----------------
Net Loss Before Taxes and Interest (153,487) (292,531)
Interest Expense 39,130 0
State Income Taxes 800 800
----------------- -----------------
Net Income (Loss) $ (193,417) $ (293,331)
================= =================
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A Development Stage Company)
Condensed Consolidated Statements of Income
Three and Six Months Ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
June 30, 1997
Six Months Three Months
Ended Ended
----------------- -----------------
<S> <C> <C>
Revenues from License Sales $ 0 $ 0
Cost of Licenses 0 0
----------------- -----------------
Gross Profit 0 0
Other Revenues 3,583 0
General & Administrative Expenses
Brochures & Marketing 662 0
Travel & Auto 13,598 2,767
Postage & Delivery 1,263 0
Payroll Taxes 38 0
Office 325 325
Outside & Professional Services 30,085 0
Rent 750 750
Salaries - Officers 36,000 18,000
Depreciation & Amortization 67,339 33,534
Bank Charges 302 112
Seminars & Conventions 1,904 0
Tower Lease Payments 2,060 0
Telephone 2,518 785
Computer 226 0
----------------- -----------------
Total General & Administrative Expenses 157,070 56,273
----------------- -----------------
Net Loss Before Taxes and Interest (153,487) (56,273)
Interest Expense 39,130 18,501
State Income Taxes 800 0
----------------- -----------------
Net Income (Loss) $ (193,417) $ (74,774)
================= =================
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A Development Stage Company)
Statements of Cash Flow
Six Months Ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1996
----------------- -----------------
OPERATING ACTIVITIES
<S> <C> <C>
Net Income (Loss) $ (193,417) $ (293,331)
Adjustments:
Depreciation and Amortization 67,339 76,392
Changes in current accounts (12,694) (27,654)
(Increase) Decrease in Notes Receivable 0 (28,598)
----------------- -----------------
Net Cash Required by Operating Activities (138,772) (273,191)
FINANCING ACTIVITIES
Loans 139,751 178,094
Repayment of Loans (2,111) (6,186)
Liabilities Paid with Common Stock 0 (60,994)
Note Payable on Licenses Purchases 0 198,000
----------------- -----------------
Net Cash Provide (Required) by Financing Activities 137,640 308,914
----------------- -----------------
Increase (Decrease) in Cash and Cash Equivalents (1,132) 35,723
Cash and Cash Equivalents at Beginning of Period 1,197 7,019
----------------- -----------------
Cash and Cash Equivalents at End of Period $ 65 $ 42,742
================= =================
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1997 and 1996
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principals for complete
financial statements. In the opinion of the Company's management, all
adjustments (consisting of normal accruals) considered necessary for a fair
presentation of these financial statements have been included. The Company's
activities to date have been purely developmental and the Company has not yet
commenced significant commercial operations.
NOTE 2: CAPITALIZATION
The Company was incorporated in the State of Nevada on July 24, 1984 and
authorized 200,000,000 shares of $0.001 par value common stock. On March 16,
1994 the Company effected a 1 share for 30 share reverse stock split. The split
reduced the total outstanding shares from 32,272,000 to 1,075,807. On March 16,
1994 the Company issued 6,500,000 shares of post reverse-split stock to Marrco
Communications, Inc. in the conjunction with the purchase of all of Marrco's
assets and the assumption of all of Marrco's liabilities.
On October 25, 1996 the name of the Company was changed to Superior Wireless
Communications, Inc. and each of the 6,004,836 shares of then issued and
outstanding common stock of the Corporation were exchanged for one share of
preferred stock designated as Class A Convertible Cumulative Preferred Stock
(the "Class A Preferred Stock"), par value of $.001 per share. The Class A
Preferred Stock carries a ten percent (10%) dividend, which may be paid in
common stock, and is convertible into Common Stock of the Company as of October
25, 1998 (the "Conversion Date"). The rate of this conversion is dependent on
the price of the Company's Common Stock prior to the Conversion Date. Currently,
the Company has no common stock outstanding, therefore the conversion price will
most likely be based upon a price of $1.25 per share.
NOTE 3: RELATED PARTY TRANSACTIONS
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their business
interests. The Company has not formulated a policy for the resolution of such
conflicts.
At June 30, 1997 the Company owed $761,549 to related parties for accrued
compensation, loans and sales to and payments made on behalf of the Company.
This balance was equal to $621,798 as of December 31, 1996.
NOTE 4: INCOME TAXES
The Company has available at June 30, 1997, net operating loss carryforwards of
approximately $3.8 million which may provide future tax benefits expiring in
June of 2008.
8
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
NOTE 5: STOCK OPTION PLAN AND WARRANTS
Since the purchase of Marrco Communications, Inc., the Company has set aside
2,500,000 shares of its common stock for an incentive stock option plan that was
previously in place and fully-vested with certain employees of Marrco
Communications that continued their service in working for the Company. The
exercise is $.88 per share. All of the options are fully vested. None of the
stock options have been exercised. The options expired December 28, 1998. At
March 31, 1996, there are outstanding 66,667 warrants to purchase 66,667 shares
of common stock at $4.50 per share. The warrants expired on July 16, 1997. There
are also 300,000 redeemable Class "B" common stock purchase warrants to purchase
common stock at a price of $2.00 per share and 25,000 redeemable Class "C"
common stock purchase warrants with a price of $4.00 per share. These warrants
expire March 31, 1999 and couldn't be exercised prior to June 16, 1994.
NOTE 6: SUBSEQUENT EVENTS
See "PART II - Item 5. Other Information".
9
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Company's loss for the three months ended June 30, 1997 was equal
to $74,774 compared to a loss of $62,201 for the three months ended June 30,
1996. The loss for the current quarter was attributable to the Company's
continuing general and administrative expenses, interest, depreciation, and
amortization. Of total expenses of $74,774, depreciation and amortization
totaled $33,534 and interest expense for the quarter equaled $18,501. None of
the interest was paid during the quarter, and the interest is attributable to
the convertible notes payable which the Company has entered into over the past
year. Expenses have decreased dramatically in the three month period ended June
30, 1997, compared to the same quarter last year. Total expenses declined from
$254,007 to $74,774. This is a result of the Company's lack of funding to
continue as a wireless cable entity. The Company entered into a period of
virtual inactivity during 1997 and is planning on entering a new industry. See
Item 5 - Other Information. Losses are expected to continue throughout the
development stage of the Company.
The Company had no revenues in the quarter ended June 30, 1997, and
posted revenues of $300,000 in the same quarter a year ago. The prior year
revenues were the only revenues generated in the year ended December 31, 1996
and represented a sale of some of the Company's MMDS licenses.
The Company has continued to operate with a working capital deficit
through the second quarter of 1997. As of June 30, 1997, the Company's current
liabilities of $2,635,381 exceeded its current assets of $482 by $2,634,899. Of
this negative working capital, $761,549 represents amounts owed to related
parties. In the first quarter of 1999, the Company successfully completed a plan
whereby certain assets were sold to a third party in exchange for that company's
stock. This third party's stock in addition to the issuance of Series A
Preferred stock in the Company were used to satisfy the majority of the
Company's non-related party debt. See Part II - Other Information.
The Company believes that as a result of the satisfaction of most of
its note holders, it can successfully move forward in a new business enterprise.
The Company is currently seeking opportunities within the Internet industry that
would be less capital intensive than the wireless cable industry in which the
Company was never able to adequately finance development.
Should the Company be unable to satisfy its note holders and other
creditors through the issuance of stock, its ability to continue as a going
concern will be in doubt.
PART II - OTHER INFORMATION
ITEM 5. Other Information.
In 1998, the Company issued approximately 530,000 shares of its Series A
Preferred stock to satisfy debts and liabilities in the amount of $385,000.
In the first quarter of 1999, the Company sold certain wireless cable licenses
in exchange for stock in another company. This stock along with 804,061 shares
of the Company's Series A Preferred stock were used to satisfy notes which
totaled $491,112 and had accrued interest of nearly $150,000. The Company is in
negotiation with other note holders and believes that it can continue to satisfy
these obligations with the issuance of additional stock.
Should it be successful in continuing to satisfy its delinquent obligations
through the issuance of its stock, the Company anticipates moving forward with
plans in the Internet industry. Currently, the Company is in negotiations to
acquire a web hosting business that will bring immediate revenues to the
Company.
10
<PAGE>
Additionally, the Company is planning a launch of its own e-commerce site
through which certain merchandise will be sold and auctioned over the Internet.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: March 19, 1999
SUPERIOR WIRELESS COMMUNICATIONS, INC.
Jon Richard Marple,
Acting President and Chairman,
Chief Executive Officer and
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE>
5
<LEGEND>
This schedule contains summary financial information extracted from
Superior Wireless Communications, Inc. June 30, 1997 financial
statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000793986
<NAME> Superior Wireless Communications, Inc.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 65
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 482
<PP&E> 230,040
<DEPRECIATION> (143,693)
<TOTAL-ASSETS> 1,292,033
<CURRENT-LIABILITIES> 2,635,381
<BONDS> 0
6,005
0
<COMMON> 0
<OTHER-SE> (1,349,353)
<TOTAL-LIABILITY-AND-EQUITY> 1,292,033
<SALES> 0
<TOTAL-REVENUES> 3,583
<CGS> 0
<TOTAL-COSTS> 157,070
<OTHER-EXPENSES> 56,273
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39,130
<INCOME-PRETAX> (192,617)
<INCOME-TAX> 800
<INCOME-CONTINUING> (193,417)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (193,417)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
