UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20659
FORM 10-QSB/A-1
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
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Commission File Number 0-24742
U.S. WIRELESS CORPORATION
(Exact name of registrant as specified in is charter)
Delaware 13-3704059
(State or other jurisdiction of
incorporation or (I.R.S. Employer Identification No.)
organization)
2694 Bishop Drive, San Ramon, California 94583
(Address of principal executive offices) (Zip Code)
(510) 830-8801
(Registrant=s telephone number, including area code)
(Former name, former address and former fiscal year if changed from last report)
Check whether the issuer (1) has filed all documents and 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 [ ]
APPLICABLE TO CORPORATE ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan conformed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Common stock, par value $.01 per share: 7,325,245 shares outstanding as of
September 30, 1997.
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U.S. WIRELESS CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
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Page
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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Consolidated condensed balance sheets as of September 30, 1997
(unaudited) and March 31, 1997 (audited) 3
Consolidated condensed statements of operations (unaudited) for
the three and six months ended September 30, 1997 and 1996 4
Consolidated condensed statements of cash flows (unaudited) for
the six months ended September 30, 1997 and 1996 5
Notes to consolidated condensed financial statements 6
ITEM 2. MANAGEMENT=S DISCUSSION AND ANALYSES OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
PART II. OTHER INFORMATION 10
Signatures 11
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U.S. WIRELESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of September 30, 1997 and March 31, 1997
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<CAPTION>
September 30, March 31,
1997 1997
(Unaudited) Note 1
ASSETS
Current Assets:
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Cash and cash equivalents .......................................................................... $ 3,757,815 $ 5,328,781
Other current assets ............................................................................... 3,500 3,500
------------ ------------
Total current assets ....................................................................... 3,761,315 5,332,281
Equipment, improvements and fixtures, net
of accumulated depreciation and amortization ....................................................... 455,439 281,211
Other assets ........................................................................................ 4,667 4,667
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Total assets ............................................................................... $ 4,221,421 $ 5,618,159
============ ============
0
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses .............................................................. $ 39,412 $ 140,550
Obligations under capital leases, current .......................................................... 18,929 25,238
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Total current liabilities .................................................................. 58,341 165,788
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Obligations under capital leases, noncurrent ....................................................... 39,118 45,427
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Total liabilities .......................................................................... 97,549 211,215
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Minority interest in subsidiaries ................................................................... 1,502,987 1,529,534
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Stockholders' equity:
Common stock,$.01 par value, 40,000,000 shares
authorized; issued and outstanding at Sept 30, 1997,
7,325,245 shares; at March 31, 1997, 10,031,250 shares ........................................... 73,253 100,312
Additional paid-in capital ......................................................................... 18,950,838 20,493,262
Unearned compensation .............................................................................. (1,019,678) (1,277,918)
Stock subscription receivable ...................................................................... -- (1,569,483)
Accumulated deficit ................................................................................ (15,383,438) (13,868,763)
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Total stockholders' equity ................................................................. 2,620,975 3,877,410
------------ ------------
Total liabilities and stockholders' equity ................................................. $ 4,221,421 $ 5,618,159
============ ============
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See accompanying notes to consolidated condensed financial statements
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U.S. WIRELESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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<CAPTION>
Six Months Ended Three Months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Net sales ................................... $ -- $ -- $ -- $ --
Costs and expenses:
Operating expenses .......................... 1,655,724 852,628 911,843 162,432
Interest expense net of interest income ..... (114,502) 165,365 (49,508) (28,699)
Common stock issued for services ............ -- 424,000 -- 424,000
Total costs and expenses .................... 1,541,222 1,441,993 862,335 557,733
Loss before minority interest, discontinued
operations and change in accounting
principle ................................. (1,541,222) (1,441,993) (862,335) (557,733)
Minority interest in net loss of subsidiaries 26,547 633,295 13,722 258,775
Net loss before discontinued operations
and change in accounting principle ........ (1,514,675) (2,075,288) (841,994) (298,958)
Discontinued operations ..................... -- 575,677 -- --
Net loss before change in accounting
principle ................................. (1,514,675) (1,499,611) (841,994) (298,958)
Change in accounting principle .............. -- (459,435) -- --
Net loss .................................... $(1,514,675) $(1,959,046) $ (841,994) $ (298,958)
Net loss per common share ................... $ (.21) $ (.36) $ (.11) $ (.04)
Weighted average number of common
shares outstanding ........................ 7,325,245 5,377,289 7,325,245 6,739,608
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See accompanying notes to consolidated condensed financial statements
3
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U.S WIRELESS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Six Months Ended
Sept 30, Sept 30,
1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss ................................................. $(1,514,675) $(1,959,046)
Adjustments to reconcile net loss to cash (used)
for operating activities:
Cumulative effect of a change in accounting
principle .............................................. -- 459,435
Loss on discontinued operations ........................... -- 1,010,312
Depreciation .............................................. 113,167 9,240
Amortization .............................................. -- 6,542
Minority interest in net losses of subsidiaries ........... (26,547) --
Amortization of unearned compensation ................... 258,240 --
Issuance of common stock for compensation and
financing costs ........................................ -- 440,000
Increase (Decrease) from changes in assets and liabilities:
Deposits ......................................... -- (2,000)
Due from Stockholder ............................. -- 104,905
Accounts payable and accrued expenses ............ (101,138) (157,815)
Decrease in net assets of discontinued operations -- (1,404,294)
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Net cash (used) for operating activities ......... (1,270,953) (1,492,721)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment, improvements and fixtures ..... (287,395) --
Acquisition of equipment, discontinued operations ....... -- (159,193)
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Net case used for investing activities ........... (287,395) (159,193)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations ................... (12,618) --
Repayments of stockholder advances ...................... -- (494,248)
Proceeds from issuance of Common Stock .................. -- 4,406,000
Net cash provided b financing activities of discontinued
operations ............................................ -- 1,962,179
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Net cash (used) for financing activities ......... (28,778) 5,873,931
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NET INCREASE(DECREASE) IN CASH
AND CASH EQUIVALENTS .................................... (1,570,966) 4,222,017
Cash, beginning of period ............................... 5,328,781 75,181
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Cash, end of period ..................................... $ 3,757,815 $ 4,297,198
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Supplemental disclosure of cash flow information:
Interest paid .......................................... $ -- $ 91,838
Taxes paid ............................................. $ 4,800 $ 800
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See accompanying notes to consolidated condensed financial statements
4
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U.S. WIRELESS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1- BASIS OF PRESENTATION:
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions to Form
10-QSB. Accordingly, they do not include all the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, the interim financial statements
include all adjustments considered necessary for a fair presentation of the
Company's financial position and the results of its operations for the six
months ended September 30, 1997, are not necessarily indicative of the results
to be expected for the full fiscal year. For further information, refer to the
Company's Annual Report on Form 10-KSB/A-0 for the fiscal year ended March 31,
1997, as filed with the Securities and Exchange Commission.
NOTE 2- ORGANIZATION:
Labyrinth Communications Technologies Group, Inc. (Labyrinth)
On July 31,1996, the Company consummated a stock purchase
agreement and acquired 51% of the outstanding shares of common stock of
Labyrinth, whereby 20% of the shares were acquired for $2,000,000 from Labyrinth
and an additional 31% was acquired from the principle stockholder of Labyrinth
for 2,250,000 shares of the Company's common stock. Upon consummation of this
acquisition, the founding shareholder of Labyrinth, Dr. Oliver Hilsenrath, was
appointed the Company's President and Chief Executive Officer. Labyrinth is a
development stage company engaged in the research and development of wireless
communications technology.
Mantra Technologies, Inc. (Mantra)
On July 31, 1996, the Company consummated an agreement and
acquired 51% of the outstanding common stock of Mantra Technologies, Inc. and an
option to acquire the remaining 49% of the outstanding shares of common stock
for an aggregate purchase price of $500,000. Pursuant to the terms of the
agreement, the Company has the right to acquire the remaining 49% of the
outstanding shares of common stock in exchange for an aggregate 1,000,000 shares
of the Company's common stock. In order for the Company to exercise its options,
the closing bid price of its common stock must have been at least $5.00 for the
30 trading days prior to the date of exercise. Mantra is a development stage
company which is engaged in the development of an advanced user interface for
the internet and other data bases.
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NOTE 3- EQUIPMENT, IMPROVEMENTS AND FIXTURES:
Equipment, improvements and fixtures at September 30, 1997 and
March 31, 1997 consisted of the following:
September 30, March 31,
1997 1997
Equipment ................... $ 496,516 $ 256,050
Furniture and fixtures ...... 72,090 43,642
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568,606 299,692
Less: accumulated
depreciation and amortization (113,167) (18,481)
--------- ---------
$ 455,439 $ 281,211
========= =========
NOTE 4- STOCK OPTIONS:
During the year ended March 31, 1997, the Company issued Common Stock
options to its employees and to various consultants performing services for the
Company. The options granted to employees vest over three years, expire five
years from the date of the grant and have exercise prices ranging from $2 to $5
per share. Substantially all of the options granted to consultants vest
immediately or pursuant to vesting schedules, expire five years from the date of
grant and have exercise prices ranging from $2 to $4 per share.
At September 30, 1997, there remained approximately 4,191,500 options
outstanding of which all but 1,550,000 options are subject to vesting schedules.
The difference between the exercise price and the fair market value of
the options issued to employees on the dates of grant were accounted for as
unearned compensation and amortized to expense over the related vesting period.
During the fiscal year ended March 31, 1997, $1,549,453 of unearned compensation
was recorded, of which $271,535 was amortized to expense. During the six months
ended September 30, 1997, $258,240 of unearned compensation was amortized to
expense. The remaining unamortized balance of unearned compensation at September
30, 1997 was $1,019,678 as reflected in the accompanying balance sheet.
NOTE 5- STOCKHOLDERS' EQUITY:
At the Company's annual meeting scheduled for November 25, 1997, the
Company's stockholders shall vote on a proposal approved by the Corporation's
board of directors to merge Labyrinth Communication Technologies Group, Inc.
("Labyrinth"), into the Company, whereby, the Company would be the surviving
company. The Corporation is presently the parent company and 51% owner of the
outstanding shares of Labyrinth. Labyrinth is a private company, which is the
developer of the RadioCamera and the Company s geo-location technology. The
Corporation proposes to offer to issue an aggregate of 4,500,000 shares of
Common Stock to the Labyrinth stockholders, pro rata, for the remaining 49% of
shares of Labyrinth. The Corporation shall effect this transaction by offering
approximately 9.18 shares of the Corporation's Common Stock for each share of
Labyrinth's common stock outstanding. If approved, the 4,500,000 shares shall be
issued in accordance with restricted share agreements which shall include
vesting schedules bases on time and the Company's performance.
6
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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.
U.S. Wireless Corporation
(Registrant)
November 17, 1997 By: /s/ Dr.Oliver Hilsenrath
Date Dr. Oliver Hilsenrath
Chief Executive Officer
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