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FORM 10-Q/A
AMENDMENT N0. 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1998
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Commission file number: 0-23598
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NATIONAL WIRELESS HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
Delaware 13-3735316
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(State or other jurisdiction of incorporation) (IRS Employer Identification No.)
249 Royal Palm Way, Suite 301, Palm Beach, Florida 33480
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(Address of principal executive offices) (Zip Code)
(954) 832-0981
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(Registrant's telephone number, including area code)
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
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $.01 par value: 3,283,000 shares as of March 12, 1998.
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The Registrant hereby amends the disclosure contained in Part I and
Part II of the Registrant's Quarterly Report on Form 10-Q for the period ended
January 31, 1998 to revise Part I Item 2, Part II Item 5 and the information
required thereunder. In accordance with Rule 12b-15 promulgated under the
Securities Exchange Act of 1934, as amended, the complete text of
Part I Item 2, as amended, and Part II Item 5, as amended is as follows:
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION
National Wireless Holdings Inc. ("NWH" or the "Company") is a holding and
strategic resource company for telecommunications and other businesses. The
Company currently operates an electronic data interchange company, providing
links between healthcare providers and third party payors. In addition, the
Company operates a satellite programming uplink facility, an educational
programming distribution company and other early stage businesses. The Company
also seeks to support, finance and acquire new businesses and technologies in
the telecommunications and other industries. The Company recently acquired an
interest in a company organized to purchase a British telecommunications
company, and may acquire or invest in other businesses. In June 1997, the
Company sold its wireless cable assets in Miami, Florida in exchange for common
stock of BellSouth Corporation.
National Wireless Holdings Inc. (the "Company") was incorporated in
Delaware on August 31, 1993. The Company's fiscal year ends on October 31.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 1998 AS COMPARED TO THREE MONTHS ENDED
JANUARY 31, 1997:
Service Revenue:
Service revenue increased from $506,004 for the three months ended January 31,
1997 to $1,071,735 for the three months ended January 31, 1998 primarily as a
result of increased revenues of EDSS (as described below), a majority owned
subsidiary acquired in December 1996, and commencement of a consulting agreement
with a subsidiary of BellSouth Corporation.
Interest and Dividend Income:
Interest income increased from $195,756 for the three months ended January 31,
1997 to $380,429 for the three months ended January 31, 1998 primarily as a
result of increased cash and treasury securities balances, and dividend income
increased from $0 for the three months ended January 31, 1997 to $171,836 for
the three months ended January 31, 1998 as a result of dividends paid on
BellSouth common stock acquired in June 1997.
Gain on Sale of Securities:
Gain on sale of securities increased from $0 for the three months ended January
31, 1997 to $248,194 for the three months ended January 31, 1998 as a result of
sales of BellSouth common
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stock acquired in June 1997.
Cost of Services:
Cost of services increased from $340,923 for the three months ended January 31,
1997 to $383,593 for the three months ended January 31, 1998 as a result of
increased operating costs and the acquisitions referred to above.
Wireless Market and Technology Development:
Wireless market and technology development expenses decreased from $157,813 for
the three months ended January 31, 1997 to $0 for the three months ended January
31, 1998 as a result of the elimination of activity in the development of the
Miami market due to the sale of its South Florida wireless cable subsidiary as
described below.
Professional Fees:
Professional fees increased from $103,334 in the three months ended January 31,
1997 to $135,404 in the three months ended January 31, 1998 as a result of
additional activity relating to subsidiaries and corporate actions.
General and Administrative:
General and administrative expense increased from $442,192 in the three months
ended January 31, 1997 to $728,918 in the three months ended January 31, 1998
primarily as a result of increased business levels resulting from TLC and EDSS.
Depreciation and Amortization:
Depreciation and amortization decreased from $185,032 in the three months ended
January 31, 1997 to $178,118 in the three months ended January 31, 1998
primarily as a result of the sale of its South Florida wireless cable subsidiary
as described below.
Interest Expense:
Interest expense increased from $13,024 in the three months ended January 31,
1997 to $53,547 in the three months ended January 31, 1998 due to charges on
hedge positions.
Income from Operations:
As a result of the foregoing events, income from operations increased from
($540,558) in the three months ended January 31, 1997 to $392,614 in the three
months ended January 31, 1998.
Net Income:
Net income increased from a loss of ($540,558) for the three months ended
January 31, 1997 to $212,614 for the three months ended January 31, 1998 as a
result of the foregoing events.
LIQUIDITY AND CAPITAL RESOURCES
The Company funds its operations with the net proceeds from its initial
public offering in 1994 of 2,000,000 shares of Common Stock aggregating, after
payment of offering costs, approximately $22,000,000 and the recent sale of its
South Florida wireless cable subsidiary for
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$48 million in BellSouth common stock. The proceeds have been used for, and are
currently reserved to fund acquisitions of, additional EDI (electronic data
interchange) investments, wireless telecommunications assets, media businesses,
development of its other businesses and development and acquisition of new
technologies and businesses in other areas. Such amount, with interest thereon,
is expected to be sufficient to implement this business plan through October
1999, or for a shorter period if the Company determines to invest a substantial
portion of its assets in major acquisitions or equity investments. Following
completion of the sale of its South Florida wireless cable assets, the Company
has allocated its capital to development of its other businesses and to
acquisitions.
As of January 31, 1998, the Company had approximately $62 million in cash
and net marketable BellSouth common stock as well as its interest in EDSS, its
full-service teleport and satellite uplink facility in Miami, its investment in
an educational video programming distributor, its investment in Landtel, and
investments in other early stage companies.
In the three months ended January 31, 1998, the Company sold portions of
its position in BellSouth common stock. While the Company continues to review
its position in BellSouth common stock and from time to time has sold and
purchased shares and options on the position, it has not yet determined whether
it will sell or hedge its remaining BellSouth securities in the near future or
how it will invest the proceeds of any such sale.
On March 4, 1998, the Company agreed to purchase by July 31, 1998, for
$1,200,000 shares of Series A Preferred Stock of Electronic Data Submission
Systems, Inc. ("EDSS"), which when combined with its existing share ownership
represents 58% of the outstanding common stock and, with additional voting
rights, 82% control of EDSS. The Company will pay for such securities with
$1,000,000 in cash and $200,000 reduction in the principal amount of a note
outstanding pursuant to a loan agreement between EDSS and the Company, dated
June 19, 1995. After such transaction the Company will have outstanding loans
to EDSS of $788,000. The outstanding balance at January 31, 1998 under this
loan agreement has been eliminated from the balance sheet in consolidation. The
Company may invest additional amounts in EDSS to finance its sales growth.
The Company may, when and if the opportunity arises, acquire or invest in
other businesses in the wireless telecommunications industry, media businesses
or in unrelated areas. If such an opportunity arises, the Company may use a
portion of its funds for that purpose. For instance, the Company has invested
$240,000 in Landtel, and may invest up to an additional $9,600,000 in Landtel to
fund a possible acquisition of a British telecommunications company. Other than
Landtel, the Company has no specific arrangements with respect to any such
acquisitions or investments at the present time and is not currently involved in
any negotiations with respect to any such acquisition. There can be no
assurance that any such acquisitions or investments will be made.
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PART II - OTHER INFORMATION
Item 5. Other Information.
On March 4, 1998, the Company agreed to purchase by July 31, 1998, for
$1,200,000 shares of Series A Preferred Stock of Electronic Data Submission
Systems, Inc. ("EDSS"), which when combined with its existing share ownership
represents 58% of the outstanding common stock and, with additional voting
rights, 82% control of EDSS. The Company will pay for such securities with
$1,000,000 in cash and $200,000 reduction in the principal amount of a note
outstanding pursuant to a loan agreement between EDSS and the Company, dated
June 19, 1995. After such transaction the Company will have outstanding loans
to EDSS of $788,000, which will be eliminated from the balance sheet in
consolidation. Joseph D. Truscelli, President of EDSS, also agreed to convert
$200,000 of indebtedness owed to him by EDSS into Series B Convertible Preferred
Stock of EDSS.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Amendment No. 1 to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: March 26, 1998
NATIONAL WIRELESS HOLDINGS INC.
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(Registrant)
By: /s/ Terrence S. Cassidy
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Terrence S. Cassidy, President and
Principal Accounting Officer
