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: March 31, 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, 17, 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 March 31, 1997 and December 31, 1996;
Statements of Income for the three months ended March 31, 1997 and 1996;
Statement of Cash Flows for the three months ended March 31, 1997 and 1996;
Notes to Financial Statements.
2
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A Development Stage Company)
Balance Sheet
March 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
(Unaudited)
March 31, December 31,
ASSETS 1997 1996
- ------ ----------------- -----------------
Current Assets
<S> <C> <C>
Cash $ (114) $ 1,197
Accounts Receivable & Prepaids 417 417
----------------- -----------------
Total Current Assets 303 1,614
Property, Plant, & Equipment 95,940 105,803
Other Assets
Deposits 2,825 2,825
Licenses and Other 1,226,321 1,250,263
----------------- -----------------
1,229,146 1,253,088
----------------- -----------------
TOTAL ASSETS $ 1,325,389 $ 1,360,505
================= =================
LIABILITIES & SHAREHOLDERS EQUITY
Current Liabilities
Accounts Payable $ 121,455 $ 152,419
Accrued Liabilities 984,970 814,992
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 728,723 621,798
----------------- -----------------
Total Current Liabilities 2,593,964 2,510,436
Long-Term Debt 0 0
----------------- -----------------
Total Liabilities 2,593,964 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) (3,385,505) (3,266,861)
----------------- -----------------
Total Shareholder's Equity (1,268,575) (1,149,931)
----------------- -----------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 1,325,389 $ 1,360,505
================= =================
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A Development Stage Company)
Statement of Income
Three Months Ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
----------------- -----------------
<S> <C> <C>
Revenues $ 0 $ 600
Forgiveness of Debt Income 3,583 0
----------------- -----------------
Total Revenues 3,583 600
General & Administrative Expenses
Interest 20,629 380
Brochures & Marketing 662 101
Travel & Auto 10,832 9,918
Postage & Delivery 1,263 2,841
Payroll Taxes 38 6,745
Office 1,904 1,756
Outside & Professional Services 30,085 32,224
Rent 0 7,673
Salaries - Officers 18,000 41,250
Salaries - Others 0 55,669
Depreciation & Amortization 33,803 40,837
Bank Charges 190 1,401
Insurance 0 4,627
Equipment Rental 0 1,896
Channel Lease Payments 2,060 12,420
FCC Filing Fees 0 4,200
Telephone 1,733 6,739
Computer 226 743
Other Taxes & Licenses 0 125
Miscellaneous 2 185
----------------- -----------------
Total General & Administrative Expenses 121,427 231,730
----------------- -----------------
Net Loss Before Taxes (117,844) (231,130)
Income Taxes 800 0
----------------- -----------------
Net Income (Loss) $ (118,644) $ (231,130)
================= =================
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A Development Stage Company)
Statements of Cash Flow
Three Months Ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
----------------- -----------------
OPERATING ACTIVITIES
<S> <C> <C>
Net Income (Loss) $ (118,644) $ (231,130)
Adjustments:
Depreciation and Amortization 33,803 40,837
Changes in current accounts 13,984 12,867
(Increase) Decrease in Notes Receivable 0 (15,000)
----------------- -----------------
Net Cash Required by Operating Activities (70,857) (192,426)
FINANCING ACTIVITIES
Loans 73,014 199,454
Repayment of Loans (3,468) 0
----------------- -----------------
Net Cash Provide (Required) by Financing Activities 69,546 199,454
----------------- -----------------
Increase (Decrease) in Cash and Cash Equivalents (1,311) 7,028
Cash and Cash Equivalents at Beginning of Period 1,197 7,019
----------------- -----------------
Cash and Cash Equivalents at End of Period $ (114) $ 14,047
================= =================
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 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 March 31, 1997 the Company owed $728,455 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 March 31, 1997, net operating loss carryforwards of
approximately $3.8 million which may provide future tax benefits expiring in
June of 2008.
6
<PAGE>
SUPERIOR WIRELESS COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 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".
7
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Company's loss for the three months ended March 31, 1997 was equal
to $118,644 compared to a loss of $231,130 for the three months ended March 31,
1996. The loss for the current quarter was attributable to the Company's
continuing general and administrative expenses, interest, depreciation, and
amortization. Total professional fees, including engineering, legal, accounting,
and financial consultants equaled $33,803 for the three months ended March 31,
1997. This equated to 17% of the total expenses for the quarter which totaled
$121,427. Interest expense for the quarter equaled $20,629. None of this
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.
Losses are expected to continue throughout the development stage of the Company.
The Company had no revenues in the quarter ended March 31, 1997, and
nominal revenues in the same quarter a year ago.
The Company has continued to operate with a working capital deficit
through the first quarter of 1997. As of March 31, 1997, the Company's current
liabilities of $2,593,964 exceeded its current assets of $303 by $2,593,601. Of
this negative working capital, $728,723 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.
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. 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.
8
<PAGE>
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 17, 1999
SUPERIOR WIRELESS COMMUNICATIONS, INC.
Jon Richard Marple,
Acting President and Chairman,
Chief Executive Officer and
Chief Financial Officer
9
<TABLE> <S> <C>
<ARTICLE>
5
<LEGEND>
This schedule contains summary financial information extracted from
Superior Wireless Communications, Inc. March 31, 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> (114)
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 303
<PP&E> 230,040
<DEPRECIATION> (134,100)
<TOTAL-ASSETS> 1,325,389
<CURRENT-LIABILITIES> 2,593,964
<BONDS> 0
6,005
0
<COMMON> 0
<OTHER-SE> (1,274,580)
<TOTAL-LIABILITY-AND-EQUITY> 1,325,389
<SALES> 0
<TOTAL-REVENUES> 3,583
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 100,798
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,629
<INCOME-PRETAX> (117,844)
<INCOME-TAX> 800
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (118,644)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
