FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For Quarter Ended
JUNE 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
--------- --------
Commission file number
1-11916
WIRELESS TELECOM GROUP, INC.
------------------------------
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2582295
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
East 64 Midland Avenue
PARAMUS, NEW JERSEY 07652
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(201) 261-8797
--------------------------------------------------
Registrant's telephone number, including area code
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required 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 X NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the most recent practicable date.
COMMON STOCK - PAR VALUE $.01 19,193,377
------------------------------ ------------------
Class Outstanding Shares
At August 9, 2000
<PAGE>
WIRELESS TELECOM GROUP, INC.
Table of Contents
PART I. FINANCIAL INFORMATION Page(s)
Item 1 -- Consolidated Financial Statements:
Condensed Balance Sheets as of June 30, 2000
(unaudited) and December 31, 1999 3
Condensed Statements of Operations for the Three and Six
Months Ended June 30, 2000 and 1999 (unaudited) 4
Condensed Statements of Cash Flows for the Six
Months Ended June 30, 2000 and 1999 (unaudited) 5
Notes to Interim Condensed Financial Statements (unaudited) 6 - 8
Item 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 11
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings 12
Item 2 -- Changes in Securities 12
Item 3 -- Defaults upon Senior Securities 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 12
Signatures 13
Exhibit 11.1 14
Exhibit 27 15
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
- ASSETS -
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------ ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 22,324,337 $ 22,139,504
Accounts receivable -- net of allowance for
doubtful accounts of $55,637 and $44,681
respectively 1,437,494 919,404
Inventories 1,809,435 1,389,887
Prepaid expenses and other current assets 811,577 1,636,245
------------ ------------
TOTAL CURRENT ASSETS 26,382,843 26,085,040
------------ ------------
PROPERTY, PLANT AND EQUIPMENT - NET 674,121 609,854
------------ ------------
OTHER ASSETS:
Goodwill - net 2,282,051 2,365,385
Investment property - net 4,235,013 4,247,711
Other 561,331 57,385
------------ ------------
TOTAL OTHER ASSETS 7,078,395 6,670,481
------------ ------------
$ 34,135,359 $ 33,365,375
============ ============
- LIABILITIES AND SHAREHOLDERS' EQUITY -
CURRENT LIABILITIES:
Accounts payable $ 412,778 $ 228,857
Accrued expenses and other current liabilities 422,505 830,642
Mortgage payable - current 28,501 31,509
Income tax payable -- 218,391
------------ ------------
TOTAL CURRENT LIABILITIES 863,784 1,309,399
------------ ------------
DEFERRED INCOME TAXES 206,610 206,610
------------ ------------
OTHER L/T LIABILITIES:
Covenant not to compete 111,104 144,440
Mortgage payable - long term 3,220,160 3,229,976
------------ ------------
TOTAL OTHER L/T LIABILITIES 3,331,264 3,374,416
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value,
2,000,000 shares authorized, none issued -- --
Common stock, $.01 par value,
30,000,000 shares authorized, 17,840,907
and 17,702,298 shares issued, respectively 178,409 177,023
Additional paid-in-capital 7,030,938 6,631,061
Retained earnings 23,795,189 22,937,701
Treasury stock at cost, - 588,900 shares (1,270,835) (1,270,835)
------------ ------------
29,733,701 28,474,950
------------ ------------
$ 34,135,359 $ 33,365,375
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 2,295,551 $ 1,765,695 $ 4,436,886 $ 3,309,419
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Cost of sales 667,252 564,516 1,340,101 953,716
Operating expenses 998,842 546,795 1,779,905 1,043,776
Interest, dividend and other income (347,867) (304,135) (755,108) (517,715)
Settlement of litigation 664,958 -- 664,958 --
----------- ----------- ----------- -----------
TOTAL COSTS AND EXPENSES 1,983,185 807,176 3,029,856 1,479,777
----------- ----------- ----------- -----------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAX 312,366 958,519 1,407,030 1,829,642
PROVISION FOR INCOME TAXES 117,556 323,424 549,542 651,270
----------- ----------- ----------- -----------
INCOME FROM CONTINUING
OPERATIONS 194,810 635,095 857,488 1,178,372
----------- ----------- ----------- -----------
DISCONTINUED OPERATIONS (NOTE 1):
Income from discontinued
operations - net of income taxes -- 26,002 -- 8,020
Gain on sale of test equipment
business - net of income taxes -- 8,817 -- 3,587,651
----------- ----------- ----------- -----------
TOTAL DISCONTINUED OPERATIONS -- 34,819 -- 3,595,671
----------- ----------- ----------- -----------
NET INCOME $ 194,810 $ 669,914 $ 857,488 $ 4,774,043
=========== =========== =========== ===========
NET INCOME PER COMMON
SHARE (NOTE 2):
BASIC
Continuing Operations $ .01 $ .04 $ .05 $ .07
Discontinued Operations -- -- -- .20
----------- ----------- ----------- -----------
$ .01 $ .04 $ .05 $ .27
=========== =========== =========== ===========
DILUTED
Continuing Operations $ .01 $ .04 $ .05 $ .07
Discontinued Operations -- -- -- .20
----------- ----------- ----------- -----------
$ .01 $ .04 $ .05 $ .27
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
----------------------------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 857,488 $ 4,774,043
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 200,696 233,944
Other Income (33,336) (22,224)
Provision for losses on accounts receivable 10,956 389,693
Gain on sale of discontinued division -- (5,595,451)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (529,046) 1,026,455
(Increase) in inventories (419,548) (116,467)
Decrease in prepaid expenses and other assets 824,668 968,763
(Decrease) in accounts payable and accrued expenses (224,216) (182,909)
(Decrease) increase in income taxes payable (218,391) 972,609
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 469,271 2,448,456
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment (500,000) --
Capital expenditures (168,931) (170,823)
Officer's life insurance -- 24,159
Proceeds from sale of discontinued division -- 17,230,730
Proceeds from covenant not to compete -- 200,000
Purchase of Noise Product line -- (2,500,000)
Expenses related to disposal -- (1,826,182)
Increase in real estate escrow (3,946) --
------------ ------------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (672,877) 12,957,884
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on mortgage (12,823) --
Acquisition of treasury stock -- (530,188)
Proceeds from exercise of stock options\warrants 401,262 --
------------ ------------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 388,439 (530,188)
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 184,833 14,876,152
Cash and cash equivalents, at beginning of year 22,139,504 9,031,724
------------ ------------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 22,324,337 $ 23,907,876
============ ============
SUPPLEMENTAL INFORMATION:
Cash paid during the period for:
Taxes $ 1,237,900 $ 1,438,500
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES
The condensed consolidated balance sheet as of June 30, 2000 and the
condensed consolidated statements of operations for the three and six
month periods ended June 30, 2000 and 1999 and the condensed consolidated
statements of cash flows for the six month periods ended June 30, 2000
and 1999 have been prepared by the Company without audit. The
consolidated financial statements include the accounts of Wireless
Telecom Group, Inc. and its wholly-owned subsidiaries WTG Foreign Sales
Corporation and NC Mahwah, Inc. WTG Foreign Sales Corporation began
operations as a subsidiary of the Company in February 1996.
On March 11, 1999 the Company consummated the sale of all of its Wireless
Test Equipment Business to Telecom Analysis Systems, Inc., a New Jersey
corporation ("TAS"), for a purchase price of approximately $19 million
pursuant to an Asset Purchase Agreement, dated January 7, 1999, between
the Company and TAS (the "Asset Purchase Agreement"). Also, pursuant to
the Asset Purchase Agreement, the Company purchased TAS' products
relating to single-function noise generation (the "Noise Assets") for a
purchase price of approximately $2.5 million, and the Company and TAS
entered into non-competition agreements with the business associated with
the respective products purchased by each.
In the opinion of management, the accompanying condensed consolidated
financial statements referred to above contain all necessary adjustments,
consisting of normal accruals and recurring entries only, which are
necessary to present fairly the Company's results for the interim periods
being presented.
The accounting policies followed by the Company are set forth in Note 1
to the Company's financial statements included in its annual report on
Form 10-K for the year ended December 31, 1999, which is incorporated
herein by reference. Specific reference is made to this report for a
description of the Company's securities and the notes to financial
statements included therein, since certain information and footnote
disclosures normally included in financial statements in accordance with
generally accepted accounting principles have been condensed or omitted
from this report.
The results of operations for the three and six month periods ended June
30, 2000 and 1999 are not necessarily indicative of the results to be
expected for the full year.
NOTE 2 - INCOME PER COMMON SHARE
Income per common share is computed by dividing the net income by the
weighted average number of common shares and common equivalent shares
outstanding during each period. The Company has adopted SFAS 128
"Earnings Per Share" ("SFAS 128"), which has changed the method for
calculating earnings per share. SFAS 128 requires the presentation of
"basic" and "diluted" earnings per share on the face of the income
statement.
NOTE 3 - INVESTMENT PROPERTY
The Company has reclassified the land and building it owns in Mahwah, New
Jersey. This property is not being utilized for operations and is
currently available for sale.
6
<PAGE>
NOTE 4 - SUBSEQUENT EVENT
On July 7, 2000, subsequent to the balance sheet date, the Company and
Boonton Electronics Corp. closed on a merger under an agreement dated
March 2, 2000 and as amended on April 28, 2000. A newly formed,
wholly-owned subsidiary of the Company, WTT Acquisition Corp., merged
with and into Boonton, a public entity. Each share of Boonton common
stock was converted into .79 shares of the Company's common stock with
aggregated consideration totaling 1,927,470 shares of Wireless common
stock. The merger is being accounted for as a pooling of interests and
accordingly, all periods prior to the merger will be restated to include
the results of operations, financial position and cash flows of Boonton.
The following unaudited pro forma information reflects this merger as if
the transaction was consummated as of January 1, 1999, the beginning of
the earliest period presented.
CONDENSED BALANCE SHEETS:
June 30, December 31,
2000 1999
----------- -----------
ASSETS:
Current assets $29,972,070 $28,943,656
Property, plant and equipment - net 985,677 963,897
Other assets 7,470,951 7,063,037
----------- -----------
$38,428,698 $36,970,590
=========== ===========
LIABILITY AND SHAREHOLDERS' EQUITY:
Current liabilities $ 3,115,226 $ 2,838,055
Deferred income taxes 206,610 206,610
Long-term liabilities 3,734,491 3,809,318
Shareholders' equity 31,372,371 30,116,607
----------- -----------
$38,428,698 $36,970,590
=========== ===========
CONDENSED STATEMENTS OF OPERATIONS:
For the Six Months Ended June 30,
2000 1999
----------- -----------
Net sales $ 9,209,411 $ 7,036,152
Net income from continuing operations 854,501 1,261,098
Net income per common share $ .05 $ .10
The unaudited pro forma sales and earnings information is not necessarily
indicative of the combined results that would have occurred had the
acquisition taken place on January 1, 1999, nor are they necessarily
indicative of the results that may occur in the future.
7
<PAGE>
NOTE 5 - SETTLEMENT OF LITIGATION
On March 15, 1999, a complaint was filed in the Superior Court of the
State of California for the County of Orange. The action was brought by
Mr. David Day, an individual; David Day d/b/a Day Test & Measurements and
Day Test & Measurements, as plaintiffs against Noise Com, Inc., a New
Jersey corporation; Wireless Telecom Group, Inc., a New Jersey
corporation; Telecom Analysis Systems, Inc., Bowthorpe PLC and Does 1
through 100, inclusive as defendants. The action set forth several causes
of action, including breach of contract and fraud relating to an alleged
failure of the defendants to pay full commissions allegedly owed to the
plaintiff.
On April 23, 1999, Wireless Telecom Group, Inc. d/b/a Noise Com commenced
an arbitration proceeding against Day Test and Measurements ("Day Test"),
a plaintiff in the aforementioned California action. In the arbitration,
venued in New Jersey and brought under the rules of the American
Arbitration Association, Noise Com alleged that Day Test, a former sales
representative for Noise Com, failed to act with diligence and loyalty in
performing its duties as Noise Com's agent. Also, the arbitration sought
to resolve the dispute concerning the commissions allegedly due Day Test.
On June 7, 2000, Wireless Telecom Group, Inc. d/b/a Noise Com settled
both the California action and the New Jersey action. The terms of the
settlement included, among other things, a payment from Noise Com to
David Day of $1,250,000. The Company has previously accrued approximately
$585,000 in connection with this matter and has recorded an additional
cost of approximately $665,000 during the current period.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION
Wireless Telecom Group, Inc., a New Jersey corporation (the "Company"),
develops, manufactures and markets a wide variety of electronic noise sources,
and in addition, until March 11, 1999, test instruments for the wireless
telecommunication industry. The Company's products have historically been
primarily used to test the performance and capability of cellular/ PCS and
satellite communications systems. Other applications include radio, radar,
wireless local area network (WLAN) and digital television. On March 11, 1999,
the Company consummated the sale of all its Wireless Test Equipment Business to
Telecom Analysis Systems, Inc., a New Jersey corporation ("TAS"), for a purchase
price of approximately $19 million pursuant to an Asset Purchase Agreement,
dated January 7, 1999, between the Company and TAS (the "Asset Purchase
Agreement"). Also, pursuant to the Asset Purchase Agreement, the Company
purchased TAS' products relating to the single-function noise generation (the
"Noise Assets") for a purchase price of approximately $2.5 million, and the
Company and TAS entered into non-competition agreements with the businesses
associated with the respective products purchased by each.
The financial information as regards continuing operations presented herein
includes:
(i) Condensed consolidated balance sheets as of June 30, 2000 and as of December
31, 1999 (ii) Condensed consolidated statements of operations for the three and
six month periods ended June 30, 2000 and 1999 and (iii) Condensed consolidated
statements of cash flows for the six month periods ended June 30, 2000 and 1999.
8
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
OPERATIONS
For the six months ended June 30, 2000 as compared to the corresponding period
of the previous year, net sales increased to $4,436,886 from $3,309,419, an
increase of $1,127,467 or 34.1%. For the quarter ended June 30, 2000 as compared
to the corresponding period of the previous year, net sales increased to
$2,295,551 from $1,765,695 an increase of $529,856 or 30%. This increase is
primarily due to an increase in application of the Company's products as
built-in testers in wireless networks and an overall increase in the market for
the Company's noise-based communication products.
The Company's gross profit on net sales from continuing operations for the six
months ended June 30, 2000 was $3,096,785 or 69.8% as compared to $2,355,703 or
71.2% for the six months ended June 30, 1999. Gross profit on net sales from
continuing operations for the quarter ended June 30, 2000 was $1,628,299 or
70.9% as compared to $1,201,179 or 68.0% for the three months ended June 30,
1999. The Company can experience variations in gross profit based upon the mix
of product sales as well as variations due to revenue volume and economies of
scale. The Company continues to rigidly monitor costs associated with material
acquisition, manufacturing and production.
Operating expenses for the six months ended June 30, 2000 were $1,779,905 or
40.1% of net sales as compared to $1,043,776 or 31.5% of net sales for the six
months ended June 30, 1999. Operating expenses for the quarter ended June 30,
2000 were $998,842 or 43.5% of net sales as compared to $546,795 or 31.0% of net
sales for the quarter ended June 30, 1999.
For the three and six months ended June 30, 2000 as compared to the same periods
of the prior year, operating expenses increased in dollars by $452,047 and
$736,129, respectively. This increase is primarily due to increased professional
fees and related expenses in connection with the Boonton acquisition (see
below). Additionally, the Company had increased spending for research and
development, advertising and costs associated with the Mahwah, New Jersey
facility.
Interest, dividend and other income increased by $237,393 for the six months
ended June 30, 2000 and by $43,732 for the quarter ended June 30, 2000. This
increase was due to a higher average investment balance during 2000 as a result
of the increase in cash from the sale of assets described above.
On March 15, 1999, a complaint was filed in the Superior Court of the State of
California for the County of Orange. The action was brought by Mr. David Day, an
individual; David Day d/b/a Day Test & Measurements and Day Test & Measurements,
as plaintiffs against Noise Com, Inc., a New Jersey corporation; Wireless
Telecom Group, Inc., a New Jersey corporation; Telecom Analysis Systems, Inc.,
Bowthorpe PLC and Does 1 through 100, inclusive as defendants. The action set
forth several causes of action, including breach of contract and fraud relating
to an alleged failure of the defendants to pay full commissions allegedly owed
to the plaintiff.
On April 23, 1999, Wireless Telecom Group, Inc. d/b/a Noise Com commenced an
arbitration proceeding against Day Test and Measurements ("Day Test"), a
plaintiff in the aforementioned California action. In the arbitration, venued in
New Jersey and brought under the rules of the American Arbitration Association,
Noise Com alleged that Day Test, a former sales representative for Noise Com,
failed to act with diligence and loyalty in performing its duties as Noise Com's
agent. Also, the arbitration sought to resolve the dispute concerning the
commissions allegedly due Day Test.
9
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
On June 7, 2000, Wireless Telecom Group, Inc. d/b/a Noise Com settled both the
California action and the New Jersey action. The terms of the settlement
included, among other things, a payment from Noise Com to David Day of
$1,250,000. The Company has previously accrued approximately $585,000 in
connection with this matter and has recorded an additional cost of approximately
$665,000 during the current period.
Net income from continuing operations decreased to $857,488, or $.05 per share,
for the six months ended June 30, 2000 as compared to $1,178,372, or $.07 per
share for the six months ended June 30, 1999. The Company realized net income
from continuing operations for the quarter ended June 30, 2000 of $194,810 or
$.01 per share as compared to net income from continuing operations of $635,095
or $.04 per share for the three months ended June 30, 1999. The explanation of
these changes can be derived from the analysis given above of operations for the
three and six month periods ending June 30, 2000 and 1999, respectively.
LIQUIDITY AND CAPITAL RESOURCES:
The Company's working capital has increased by $743,418 to $25,519,059 at June
30, 2000, from $24,775,641 at December 31, 1999. At June 30, 2000 the Company
had a current ratio of 30.5 to 1, and a ratio of debt to net worth of less than
.2 to 1. At December 31, 1999 the Company had a current ratio of 19.9 to 1, and
a ratio of debt to net worth of .17 to 1.
The Company realized cash provided by operations of $469,271 for the six month
period ending June 30, 2000. This increase was primarily due to cash provided by
net income of $857,488, a reduction of prepaid expenses and other assets of
$824,668, offset by an increase in accounts receivable of $529,046.
The Company has historically been able to turn over its accounts receivable
approximately every two months. This average collection period has been
sufficient to provide the working capital and liquidity necessary to operate the
Company. The Company continues to monitor production requirements and delivery
times while maintaining manageable levels of goods on hand.
Operating activities provided $2,448,456 in cash flow for the comparable six
month period in 1999. Cash provided by net income of $4,774,043, a reduction of
outstanding receivables of $1,026,455 a reduction in prepaid expenses of
$968,763 and an increase in income taxes payable of $972,609 was offset by a
gain in the sale of discontinued operations of $5,595,451.
Net cash used in investing activities for the six months ended June 30, 2000 was
$672,877. The primary use of these funds was the purchase of a $500,000
investment in equity securities of an unrelated entity. For the six months ended
June 30, 1999, net cash provided by investing activities was $12,957,884. In
1999, the Company realized proceeds of $17,230,730 from the sale of its Wireless
Test Equipment Business partially offset by $2,500,000 for the purchase of the
Noise Product Line from Telecom Analysis Systems, and $1,826,182 for expenses
relating to the disposal of the Wireless Test Equipment Business.
Net cash provided by financing activities for the six month period ending June
30, 2000 was $388,439. The primary source of these funds was the proceeds from
the exercise of stock options and warrants. Net cash used for financing
activities in the same period of 1999 was $530,188. The Company reacquired
shares of its common stock in the open market during the second quarter of 1999.
10
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
On July 7, 2000, subsequent to the balance sheet date, the Company and Boonton
Electronics Corp. closed on a merger under an agreement dated March 2, 2000 and
as amended on April 28, 2000. A newly formed, wholly-owned subsidiary of the
Company, WTT Acquisition Corp., merged with and into Boonton, a public entity.
Each share of Boonton common stock was converted into .79 shares of the
Company's common stock with aggregated consideration totaling 1,927,470 shares
of Wireless common stock. The merger is being accounted for as a pooling of
interests and accordingly, all periods prior to the merger will be restated to
include the results of operations, financial position and cash flows of Boonton.
The Company believes that its financial resources from working capital provided
by operations are adequate to meet current requirements.
INFLATION AND SEASONALITY
The Company does not anticipate that inflation will significantly impact its
business nor does it believe that its business is seasonal.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On March 15, 1999, a complaint was filed in the Superior Court of the State
of California for the County of Orange. The action was brought by Mr. David
Day, an individual; David Day d/b/a Day Test & Measurements and Day Test &
Measurements, as plaintiffs against Noise Com, Inc., a New Jersey
corporation; Wireless Telecom Group, Inc., a New Jersey corporation;
Telecom Analysis Systems, Inc., Bowthorpe PLC and Does 1 through 100,
inclusive as defendants. The action set forth several causes of action,
including breach of contract and fraud relating to an alleged failure of
the defendants to pay full commissions allegedly owed to the plaintiff.
On April 23, 1999, Wireless Telecom Group, Inc. d/b/a Noise Com commenced
an arbitration proceeding against Day Test and Measurements ("Day Test"), a
plaintiff in the aforementioned California action. In the arbitration,
venued in New Jersey and brought under the rules of the American
Arbitration Association, Noise Com alleged that Day Test, a former sales
representative for Noise Com, failed to act with diligence and loyalty in
performing its duties as Noise Com's agent. Also, the arbitration sought to
resolve the dispute concerning the commissions allegedly due Day Test.
On June 7, 2000, Wireless Telecom Group, Inc. d/b/a Noise Com settled both
the California action and the New Jersey action. The terms of the
settlement included, among other things, a payment from Noise Com to David
Day of $1,250,000.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
11.1 Computation of per share earnings
27 Financial Data Schedule
(b) Reports on Form 8-K:
1. Form 8-K, dated June 7, 2000, reporting on Item 5, the
settlement by the Company of the litigation with David Day.
2. Form 8-K, dated April 28, 2000, reporting on Item 5, the
execution of an amendment to the agreement with Boonton
Electronics Corp.
12
<PAGE>
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.
WIRELESS TELECOM GROUP, INC.
----------------------------
(Registrant)
Date: August 11, 2000 /s/ EDWARD GARCIA
-------------------------------------
Edward Garcia
Chairman and Chief Executive Officer
Date: August 11, 2000 /s/ DEMIR RICHARD EDEN
-------------------------------------
Demir Richard Eden
Acting Chief Financial Officer
13
