U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1999
Commission File No. 33-55254-39
SKYNET TELEMATICS INC.
(Exact name of Small Business Issuer as specified in its charter)
NEVADA 87-0485315
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Link House, 259 City Road London, England EC1V 1JE (Address of principal
executive offices)
Issuer's telephone number, including area code: 44 (171)490-7900
Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 23,609,379 shares of $.001 par value
class A common stock outstanding as of June 30, 1999.
Transitional Small Business Disclosure Format (check one): Yes No X
1
<PAGE>
SKYNET TELEMATICS INC.
FORM 10-QSB FOR QUARTER ENDED
June 30, 1999
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1 Financial Statements
Balance Sheets as of June 30, 1999 and December 31, 1998 4
Statements of Operations for the three and six month periods ended
June 30, 1999 and 1998 5
Statements of Cash Flows for the six month periods ended
June 30, 1999 and 1998 6
Selected Notes to Unaudited Financial Statements 7
Item 2 Management's Discussion and Analysis
and Plan of Operations 8
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 10
Item 2 Changes in Securities 10
Item 3 Defaults Upon Senior Securities 11
Item 4 Submission of Matters to a Vote of Security Holders 11
Item 5 Other Information 11
Item 6 Exhibits and Reports on Form 8-K 11
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
In the opinion of the management of Skynet Telematics Inc. (the
Company) the accompanying unaudited financial statements contain all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
the financial position as of June 30, 1999, the results of operations for the
three and six month periods ended June 30, 1999 and 1998, and the cash flows for
the six month periods ended June 30, 1999 and 1998.
While the Company believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the notes included in the Company's latest annual report on Form 10-KSB.
The statements of operations include the activities of the Company, its
United Kingdom subsidiary Netking Limited ("Netking") and Netking's subsidiary
Skynet 2001 Limited, and Skynet Satellite Communication Corporation ("SSCC")
which is owned by the Company's U.S. subsidiary Peripheral Canada, Inc. which is
currently inactive. The accounting records for Netking and Skynet 2001 are
denominated in British pounds and translated to U.S. dollars for the financial
statements.
3
<PAGE>
SKYNET TELEMATICS INC. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
(Unaudited) (Audited)
------------------ ------------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash in bank $ 139,827 $ 20
Accounts receivable 32,019 23,473
Inventory 129,405 830
Prepaid expenses 84,212 37,453
------------------ ------------------
TOTAL CURRENT ASSETS 385,463 61,776
OTHER ASSETS
Furniture and equipment 378,994 75,984
Vehicles 71,936 0
Software and intellectual property rights 6,432,347 6,810,446
------------------ ------------------
6,883,277 6,886,430
------------------ ------------------
$ 7,268,740 $ 6,948,206
================== ==================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Bank overdraft $ 0 $ 41,742
Accounts payable 150,196 249,765
Accrued expenses 76,725 161,423
Current portion of loans 1,159,293 886,652
Interest payable 69,767 23,500
------------------ ------------------
TOTAL CURRENT LIABILITIES 1,455,981 1,363,082
Long-term portion of loans 338,375 282,709
------------------ ------------------
TOTAL LIABILITIES 1,794,356 1,645,791
STOCKHOLDERS' EQUITY
Preferred Stock $.001 par value:
Authorized 20,000,000 shares
Issued 0 shares 0 0
Common Stock $.001 par value:
Authorized - 75,000,000 shares
Issued and outstanding 23,609,379 shares (21,944,416 in 1998) 23,609 21,944
Additional paid-in capital 10,061,453 8,092,172
Deficit accumulated during the development stage (4,678,266) (2,902,565)
Accumulated other comprehensive income 67,588 90,864
------------------ ------------------
TOTAL STOCKHOLDERS' EQUITY 5,474,384 5,302,415
------------------ ------------------
$ 7,268,740 $ 6,948,206
================== ==================
</TABLE>
4
<PAGE>
SKYNET TELEMATICS INC. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Unaudited)
<TABLE>
<CAPTION>
3/14/90
For the three months For the six months (Date of
ended June 30, ended June 30, inception) to
1999 1998 1999 1998 6/30/99
-------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Net sales $ 50,886 $ 60,327 $ 63,936 $ 79,183 $ 218,587
Cost of sales 131,693 192,221 228,549 254,928 698,784
-------------- ------------- ------------- -------------- -------------
GROSS LOSS (80,807) (131,894) (164,613) (175,745) (480,197)
Bad debt - related party 0 0 0 0 171,417
Depreciation and amortization 205,642 159,268 400,244 214,103 1,031,197
Research & development 4,127 0 12,820 0 134,949
Net interest expense 144,095 1,157 166,510 1,052 209,701
General & administrative expenses 652,193 298,542 1,031,514 343,299 2,400,265
-------------- ------------- ------------- -------------- -------------
1,006,057 458,967 1,611,088 558,454 3,947,529
-------------- ------------- ------------- -------------- -------------
NET LOSS BEFORE OTHER (1,086,864) (590,861) (1,775,701) (734,199) (4,427,726)
OTHER (EXPENSE)
Finder's fee related to subsidiary acquisition 0 (150,000) 0 (150,000) (250,540)
-------------- ------------- ------------- -------------- -------------
NET LOSS (1,086,864) (740,861) (1,775,701) (884,199) (4,678,266)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustments (24,222) 0 (23,276) 0 67,588
-------------- ------------- ------------- -------------- -------------
TOTAL COMPREHENSIVE LOSS $ (1,111,086) $ (740,861) $ (1,798,977) $ (884,199) $ (4,610,678)
============== ============= ============= ============== =============
Net (loss) per weighted average share $ (.05) $ (.05) $ (.08) $ (.10)
============== ============= ============= ==============
Weighted average number of common shares used
to compute net (loss) per weighted average share 22,949,911 14,600,000 22,508,581 9,225,000
============== ============= ============= ==============
</TABLE>
5
<PAGE>
SKYNET TELEMATICS INC. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
3/14/90
For the six months (Date of
ended June 30, inception) to
OPERATING ACTIVITIES 1999 1998 6/30/99
----------------- ------------------ ------------------
<S> <C> <C> <C>
Net (loss) $ (1,775,701) $ (884,199) $ (4,678,266)
Adjustments to reconcile net (loss) to cash
used by operating activities
Stock issued for expenses 314,545 150,000 855,832
Depreciation and amortization 400,244 214,103 1,031,197
Foreign currency adjustments (23,276) (5,740) 67,588
Changes in assets and liabilities:
Accounts receivable (8,546) (52,314) (32,019)
Inventory (128,575) 29,102 (129,405)
Prepaid expenses (46,759) (34,629) (84,212)
Bank overdraft (41,742) 0 0
Accounts payable (99,569) 121,644 150,196
Accrued expenses (84,698) 125,488 76,725
Accrued interest payable 46,267 0 69,767
----------------- ------------------ ------------------
NET CASH USED BY OPERATING ACTIVITIES (1,447,810) (336,545) (2,672,597)
INVESTING ACTIVITIES
Purchase fixed assets (220,474) (375,922) (629,474)
----------------- ------------------ ------------------
NET CASH (USED)
BY INVESTING ACTIVITIES (220,474) (375,922) (629,474)
FINANCING ACTIVITIES
Proceeds from sale of common stock 1,607,515 0 2,368,153
Proceeds from convertible debentures 0 0 400,000
Loans 0 675,804 434,134
Loan repayments (68,559) 0 (513,485)
Loans - shareholders 269,135 0 950,460
Cash from subsidiaries 0 0 445
Paid-in capital of subsidiary 0 0 2,191
Debenture repayments 0 0 (200,000)
----------------- ------------------ ------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,808,091 675,804 3,441,898
----------------- ------------------ ------------------
INCREASE (DECREASE)
IN CASH & CASH EQUIVALENTS 139,807 (36,663) 139,827
Cash & cash equivalents at beginning of year 20 10,965 0
----------------- ------------------ ------------------
CASH & CASH EQUIVALENTS AT END OF PERIOD $ 139,827 $ (25,698) $ 139,827
================= ================== ==================
Cash paid for interest $ 4,597 $ 0 $ 8,455
================= ================== ==================
</TABLE>
SUPPLEMENTAL ACTIVITIES
During 1997, 550,000 shares of restricted common stock were issued for services
of $55,000 and 2,300,000 shares of restricted stock were issued to cancel debt
of $200,000 and accrued interest of $30,000.
During 1998, the Company issued 10,000,000 shares of Regulation S stock to
acquire a subsidiary, Netking. The Company also issued 750,000 shares of
Regulation S stock as a finder's fee valued at $150,000. The Company's
subsidiary acquired assets of $6,720,000 during the period by incurring a loan
payable in the same amount. The loan was converted into equity of $6,600,000.
The Company through a subsidiary purchased a subsidiary (SSCC) with net assets
of $424,063 by incurring a liability in the same amount. The liability will be
satisfied by issuing 500,000 shares of the Company's Regulation S stock on
December 31,1999, 2000, and 2001 (1,500,000 shares total). 172,920 shares were
issued in April, 1999 to reduce the debt by $48,886.
The Company will pay to the former owners of SSCC 10% of the consolidated gross
sales made in Canada and Hong Kong and 1% of the gross U.S. sales related to
SSCC's product from the closing date through December 31,1999 with payments due
within 30 days of December 31, 1999. For sales in the year 2000, the percent is
6 2/3% of the sales in Canada and Hong Kong and .66% of sales in the U.S. For
sales in the year 2001, the percent is 3 1/3% of sales in Canada and Hong Kong
and .33% of sales in the U.S.
During 1999, fixed assets of $176,617 were acquired by incurring loans of the
same amount.
6
<PAGE>
SKYNET TELEMATICS INC. AND SUBSIDIARIES
(A Development Stage Company)
SELECTED NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 1: PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
Net
Accumulated Book Value
Cost Depreciation 6/30/99
-------------- ----------------- --------------
<S> <C> <C> <C>
Furniture and equipment $ 407,529 $ 28,535 $ 378,994
Vehicles 74,617 2,681 71,936
Software and intellectual property rights 7,432,328 999,981 6,432,347
-------------- ----------------- --------------
$ 7,914,474 $ 1,031,197 $ 6,883,277
============== ================= ==============
</TABLE>
NOTE 2: LOANS PAYABLE
<TABLE>
<CAPTION>
Current Long-term
------------------ ------------------
<S> <C> <C>
Payable to acquire SSCC (1) $ 125,059 $ 250,118
Payable - shareholder 12% 771,310 0
Payable - shareholder 12% 138,150 0
Payable - shareholder 15% 41,000 0
Payable - directors 1,734 0
Payable - equipment loans 82,040 88,257
------------------ ------------------
$ 1,159,293 $ 338,375
================== ==================
</TABLE>
(1) Will be paid by issuing 442,360 shares of the Company's
Regulation S common stock on December 31, 1999, and 442,360
shares on December 31, 2000 and 2001 (1,327,080 shares total).
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
This quarterly report on Form 10-QSB contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, particularly statements regarding opportunities for expansion, growth of
sales, new product sales, revenues from monitoring services, customer acceptance
of new products, and selling, general and administrative expenses. These
forward-looking statements involve risks and uncertainties, and the cautionary
statement set forth below, identifies important risk factors that could cause
actual results to differ materially from those predicted in any such
forward-looking statements. Such factors include, but are not limited to,
adverse changes in general economic conditions, including adverse changes in the
specific markets for the Company's products, adverse business conditions,
decrease or lack of growth in the automotive industry, adverse changes in
customer order patterns, increased competition, lack of acceptance of new
products, pricing pressures, lack of success in technological advancements,
risks associated with foreign operations, risks associated with the Company's
efforts to comply with the Year 2000 requirements, and other factors.
The Company has a short operating history. All risks inherent in a new
and inexperienced enterprise are inherent in the Company's business. The Company
is continuing the operations of a subsidiary which was acquired on April 9,
1998.
On April 9, 1998, the Company beneficially acquired all of the stock of
Netking Limited, an English private limited company ("Netking") from Tomas
George Wilmot ("Seller"), who beneficially owned all of the stock of Netking.
The title holders of Netking were Local Protectors Limited and SNH Cooper, who
held the shares as nominees for Seller. The purchase price paid for the
purchased stock was 10,000,000 newly issued shares of the common stock of the
Company, which is approximately 68.5% of all of the outstanding stock of the
Company after such issuance. Tomas George Wilmot, individually, is the title
holder of all of the 10,000,000 newly issued shares of the Company. There are no
arrangements or understandings among members of both the former and new control
person or their associates with respect to election of directors or other
matters.
On April 9, 1998, the Company beneficially acquired all of the stock of
Netking from Seller, who beneficially owned all of the stock of Netking. There
are two shares of Netking outstanding. Because English law requires two
shareholders, the Company holds title to one share of stock of Netking and the
Company and Tomas Wilmot, as nominee for the Company, jointly hold title to the
other share. Netking is the beneficial owner of Skynet 2001 Limited (formerly
Keymore Limited), an English private limited company ("Skynet"). Skynet owns
intellectual property pertaining to all aspects of the Skynet 2000 in-vehicle
system. The Skynet 2000 system uses communications and security technology
coupled with proprietary software that provides in-vehicle protection, security
and information services using mobile cellular telecommunications. The Skynet
2000 system provides 24 hour monitoring of vehicle security, personal distress
alarm, and impact sensor and information services, as well as normal cellular
telephone capability. The purchase price paid for the purchased stock was
10,000,000 shares of newly issued common stock of the Company, which is
approximately 68.5% of all of the outstanding stock of the Company after such
issuance. The consideration was determined by arm's length negotiations between
the Company and Seller. Prior to the acquisition, there was no material
relationship between the Seller and the Company or any of its affiliates, any
director or officer of the Company, or any associate of any such director or
officer.
A portion of the business of Skynet and Netking acquired by the Company
constitutes equipment and other physical property previously used in the
business of the Seller. The Company intends to continue to use such equipment
and physical property for the same purposes.
The discussions below highlight certain of the more material changes in
results of operations and changes in financial condition for the fiscal six
month period ended June 30, 1999.
Results of Operations.
The Company has generated revenues from operations since March 1998. The six
months ended June 30, 1999 therefore incorporates the results for six months of
operations compared to only four months for the six months ended June 30, 1998.
The Company's consolidated sales for the quarter ended June 30, 1999 were
$50,886 compared to $60,327 in 1998. This decrease is the result of the sales of
the Skynet 2001 unit being reduced in order to focus the Company's resources on
developing the new Skamp range of products. The Skamp product range is being
modified to suit the Company's precise requirements and has undergone extensive
testing. Volume sales of the product are expected to commence at the end of
August 1999. Skynet has orders for 87,000 Skamp units that it anticipates will
be provided to customers over the next 18 months. Revenue from related services
such as monitoring fees, airtime connections, airtime usage, and information
services should also add significantly to the Company's revenues.
8
<PAGE>
The Company's consolidated total cost of sales for the quarter ended June 30,
1999 was $131,693 compared to $192,221 in 1998. The largest component of the
total cost of sales was wages, including social security, for Skynet monitoring
personnel, representing 59% of the total. In 1998, the comparative figure was
only 34% although payments to subcontractors for technical support for the
product, of which there are none in the quarter ended June 30, 1999, made up
another 26%. The actual increase in monthly monitoring personnel costs is below
10%. Skynet has created a full scale operational monitoring facility in order to
expand that portion of its business and the current facility has the capability
of handling a six fold increase in its current monitoring business. Skynet
anticipates that revenue from monitoring services will provide a substantial
portion of the Company's future consolidated revenues.
The Company's consolidated overhead expenses, including selling and
administrative costs for the quarter ended June 30, 1999 were $1,006,057. The
comparative figure for 1998 was $458,967 which was significantly lower due to
very little interest expense and no costs associated with expanding operations.
The Company's infrastructure costs were higher in 1999 than 1998. Comparison of
individual figures is therefore not meaningful. Depreciation of $205,642 was
charged for the quarter to June 30, 1999, a non-cash item that represents 20% of
total overhead. The largest element of this was the depreciation of Skynet's
intellectual property rights in the amount of $166,414. The depreciation amount
for 1998 was $159,268. Research and development expenditure of $4,127 was
incurred during the quarter representing costs associated with developing and
testing the new Skamp range of products. Interest charges were incurred of
$144,095, of which $24,251 was payable to shareholders in respect to loans made
to the Company after March 31, 1998. Interest expense included $113,659 paid
with common stock to the former shareholders of SSCC in connection with the
purchase of SSCC. General and administrative expenses, totaling $652,193 for the
quarter ended June 30, 1999, includes the largest single component of overhead
expenses, which are wages and salaries, including social security. This amounts
to $176,656, or 18% of total overhead, and represents the wages and salaries of
all of Skynet's personnel, excluding monitoring personnel. The Company and its
subsidiaries have created a management team and other personnel that they
believe to be necessary for the expected growth of the business. Other
significant components of the Company and its subsidiaries' overhead expenses
were marketing costs, professional fees, and facility costs such as rent and
utilities. General and administrative expenses for 1998 were $298,542, of which
$108,931 related to wages and salaries, including social security. This amounts
to 24% of total overhead.
The Company's consolidated net loss for the quarter ended June 30, 1999 was
$(1,086,864) and after foreign currency translation losses of $24,222, the total
comprehensive loss for the quarter was $(1,111,086). For the June 1998 quarter,
the consolidated net loss was $(740,861) and there was no foreign currency
translation gain or loss. The loss in 1999 is higher mainly because of more
costs associated with expanding operations.
The consolidated net loss consisted of that of the Company $(368,948), Netking
$(696,497), and SSCC $(21,419) for a total consolidated net loss of
$(1,086,864).
The Company's consolidated sales for the six months ended June 30, 1999 were
$63,936 compared to $79,183 in 1998. This decrease is the result of the sales of
the Skynet 2001 unit being reduced in order to focus the Company's resources on
developing the new Skamp range of products. The Skamp product range is being
modified to suit the Company's precise requirements and has undergone extensive
testing. Volume sales of the product are expected to commence at the end of
August 1999. Skynet has orders for 87,000 Skamp units that it anticipates will
be provided to customers over the next 18 months. Revenue from related services
such as monitoring fees, airtime connections, airtime usage, and information
services should also add significantly to the Company's revenues.
The Company's consolidated total cost of sales for the six months ended June 30,
1999 was $228,549 compared to $254,928 in 1998. The largest component of the
total cost of sales was wages, including social security, for Skynet monitoring
personnel, representing 34% of the total. In 1998, the comparative figure was
only 34% although payments to subcontractors for technical support for the
product, of which there are none in the six months ended June 30, 1999, made up
another 25%. The increase in the cost of personnel is exaggerated in this
comparison as six months of operations and related costs are included this year
compared to four months of operations and related costs in 1998 amounts. The
actual increase in monthly monitoring personnel costs is below 10%. Skynet has
created a full scale operational monitoring facility in order to expand that
portion of its business and the current facility has the capability of handling
a six fold increase in its current monitoring business. Skynet anticipates that
revenue from monitoring services will provide a substantial portion of the
Company's future consolidated revenues.
The Company's consolidated overhead expenses, including selling and
administrative costs for the six months ended June 30, 1999 were $1,611,088. The
comparative figure for 1998 was $558,454 which was significantly lower as it
only represented four month's costs. Comparison of individual figures is
therefore not meaningful. Depreciation of $400,244 was charged for the six
months to June 30, 1999, a non-cash item that represents 25% of total overhead.
The largest element of this was the depreciation of Skynet's intellectual
property rights in the amount of $335,261. The depreciation amount for 1998 was
$214,103. Research and development expenditure of $12,820 was incurred during
the six months representing costs associated with developing and testing the new
Skamp range of products.
9
<PAGE>
Interest charges were incurred of $166,510, of which $45,748 was payable to
shareholders in respect to loans made to the Company after March 31, 1998.
Interest expense included $113,659 paid with common stock to the former
shareholders of SSCC in connection with the purchase of SSCC. General and
administrative expenses, totaling $1,031,514 for the six months ended June 30,
1999, includes the largest single component of overhead expenses, which are
wages and salaries, including social security. This amounts to $359,223, or 22%
of total overhead, and represents the wages and salaries of all of Skynet's
personnel, excluding monitoring personnel. The Company and its subsidiaries have
created a management team and other personnel that they believe to be necessary
for the expected growth of the business. Other significant components of the
Company and its subsidiaries' overhead expenses were marketing costs,
professional fees, and facility costs such as rent and utilities. General and
administrative expense for 1998 were $343,299, of which $136,517 related to
wages and salaries which were 24% of total overhead.
The Company's consolidated net loss for the six months ended June 30, 1999 was
$(1,775,701) and after foreign currency translation losses of $23,276, the total
comprehensive loss for the six months was $(1,798,977). For the 1998 six month
period, the consolidated net loss was $(884,199) and there was no foreign
currency translation gain or loss. The loss in 1999 is higher mainly because of
more costs associated with expanding operations.
The consolidated net loss consisted of that of the Company $(394,424), Netking
$(1,335,382), and SSCC $(45,895) for a total consolidated net loss of
$(1,775,701).
Financial Condition.
There were no significant changes to the net financial condition of the Company
in the six month period ended June 30, 1999. The working capital deficit
decreased by about $230,000 mainly as a result of an increase in cash and
inventory. The Company continues to believe it has the support of its major
stockholders and that financing is available to meet all requirements. In 1999,
the Company raised $1,600,000 by issuing Regulation S shares. This extra working
capital will allow the Company to fully exploit the market potential for the new
Skamp range of products, and expand its business in a controlled but aggressive
manner.
Readiness for Year 2000
The Company has analyzed its Year 2000 risk and, although it is confident of
Year 2000 compliance, a process of checks is ongoing. The monitoring equipment
for the Skynet 2001 system has been upgraded to meet Year 2000 compliance.
ComROAD has confirmed that its products provided to Skynet are Year 2000
compliant including all equipment purchased from ComROAD to monitor the Skamp
products. The Company does not expect any Year 2000 problems to have a material
impact on the Company's business.
PART II
Other Information
Item 1. Legal proceedings: None
Item 2. Changes in Securities: Sale of Regulation S stock to offshore investors
In January 1999, the Company sold 65,000 shares at $2.00 per share for $130,000.
In January, 39,250 shares were sold at $1.50 per share for $58,875. In January,
75,000 shares were sold at $1.00 per share for $75,000. In February, 10,000
shares were sold at $2.00 per share for $20,000. In March, 375,000 shares were
sold at $.33 per share for $123,750. In March, 4,000 shares were sold at $3.50
per share for $14,000. In April, 3,500 shares were sold at $1.50 per share for
$5,250 and 2,860 shares were sold at $3.50 per share for $10,010. In May, 12,580
shares were sold at $1.50 per share for $18,870, 600,000 shares were sold at
$2.00 per share for $1,200,000 and 63,024 shares were sold at $3.50 per share
for $220,584. In June, 50,000 shares were sold at $.82 per share for $41,000,
22,087 shares were sold at $1.50 per share for $33,131, 4,000 shares were sold
at $2.50 per share for $10,000, 3,636 shares were sold at $2.75 per share for
$9,999, 4,578 shares were sold at $3.50 per share for $16,023, 3,750 shares were
sold at $3.62 per share for $13,575, 1,000 shares were sold at $3.75 per share
for $3,750, 6,000 shares were sold at $3.87 per share for $23,220, and 1,500
shares were sold at $4.00 per share for $6,000. There were capital raising
costs, including commissions, of $425,522 associated with the transactions which
were paid in cash.
10
<PAGE>
Issuance of Regulation S and 144 Stock
Regulation S:
During April 1999, the Company issued 172,920 shares of stock at $.94 per share
to pay principal of $48,886 and interest expense of $113,659 related to the SSCC
purchase. Also in April, the Company issued 7,500 shares of stock at $.82 per
share for interest expense of $6,150 and 3,750 shares at $3.52 per share for
expenses of $13,200. In June, the Company issued 97,536 shares at $1.00 per
share for expenses of $97,536 and 7,000 shares at $2.00 per share for expenses
of $14,000.
Regulation 144:
In April, the Company issued 35,000 shares of stock at $2.00 per share for
expenses of $70,000.
Summary of 1999 stock transactions:
<TABLE>
<CAPTION>
<S> <C>
1,346,765 shares of Regulation S stock were sold for cash $ 2,033,037
Less capital raising costs including commissions (425,522)
---------------
Net proceeds to Company $ 1,607,515
===============
</TABLE>
288,706 shares of Regulation S stock were issued for principal
reduction of $48,886 and expenses of $244,545.
35,000 shares of Regulation 144 stock were issued for expenses of
$70,000.
Item 3. Defaults Upon Senior Securities: None
Item 4. Submission of Matters to a Vote of Security Holders: None
Item 5. Other Information: None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: An 8-K
was filed on April 14, 1999
to report the 1998 sale of
Regulation S stock and the
1998 issuance of Regulation
S stock for services.
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act,
the registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Skynet Telematics, Inc.
Dated: August 6, 1999
Tomas George Wilmot, President
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from Skynet Telematics, Inc. June 30, 1999 financial statements
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000894557
<NAME> Skynet Telematics, Inc.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 139,827
<SECURITIES> 0
<RECEIVABLES> 32,019
<ALLOWANCES> 0
<INVENTORY> 129,405
<CURRENT-ASSETS> 385,463
<PP&E> 7,914,474
<DEPRECIATION> (1,031,197)
<TOTAL-ASSETS> 7,268,740
<CURRENT-LIABILITIES> 1,455,981
<BONDS> 0
0
0
<COMMON> 23,609
<OTHER-SE> 5,450,775
<TOTAL-LIABILITY-AND-EQUITY> 7,268,740
<SALES> 63,936
<TOTAL-REVENUES> 63,936
<CGS> 228,549
<TOTAL-COSTS> 228,549
<OTHER-EXPENSES> 1,444,578
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 166,510
<INCOME-PRETAX> (1,775,701)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,775,701)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,775,701)
<EPS-BASIC> (.08)
<EPS-DILUTED> (.08)
</TABLE>
