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FORM 10-Q/A
AMENDMENT NO. 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 July 31, 1999
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Commission file number: 0-23598
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NATIONAL WIRELESS HOLDINGS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3735316
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)
249 ROYAL PALM WAY, SUITE 301, PALM BEACH, FLORIDA 33480
(Address of principal executive offices) (Zip Code)
(561) 822-9933
(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
--
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: 3,333,000 shares as of September 10,
1999.
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The Registrant hereby amends the disclosures contained in Part I of
the Registrant's Quarterly Report on Form 10-Q for the period ended July 31,
1999 to revise Part I Item I 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 1, as amended, is as follows:
NATIONAL WIRELESS HOLDINGS INC.
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONTENTS
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PAGE
<S> <C>
Condensed Consolidated Balance Sheets as of July 31, 1999 and
October 31, 1998 3
Condensed Consolidated Statements of Operations for the three and nine
months ended July 31, 1999 and 1998 4
Condensed Consolidated Statements of Comprehensive Income for the three
and nine months ended July 31, 1999 and 1998 5
Condensed Consolidated Statements of Cash Flows for the nine months
ended July 31, 1999 and 1998 6
Notes to Condensed Consolidated Financial Statements 7
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2
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CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
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<TABLE>
<CAPTION>
JULY 31, OCTOBER 31,
1999 1998
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<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 22,075,248 $ 27,359,353
Marketable securities 35,500,981 32,541,020
Trade and other receivables, net 996,451 751,413
Refundable income taxes 1,056,870 -
Prepaid expenses and other current assets 848,208 136,085
Due from related party 191,872 -
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TOTAL CURRENT ASSETS 60,669,630 60,787,871
Wireless frequency license and acquisition costs, net of accumulated
amortization of $172,965 and $144,336, respectively 208,746 237,375
Transmission and related equipment, net of accumulated
depreciation of $697,048 and $526,385, respectively 854,196 932,169
Leasehold improvements, office equipment and service vehicles, net
of accumulated depreciation of $889,800 and $607,921, respectively 804,035 789,033
Intangible assets, net of accumulated amortization of $912,187 and
$686,920, respectively 3,882,348 3,594,215
Investments and other assets 243,243 287,687
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TOTAL ASSETS $ 66,662,198 $ 66,628,350
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 6,426,802 $ 4,819,901
Current portion of long-term debt 90,000 88,449
Current income taxes - 3,900,000
Deferred income taxes 12,650,000 10,930,000
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TOTAL CURRENT LIABILITIES 19,166,802 19,738,350
Long-term debt 187,786 334,967
Note payable to related party 140,000 200,000
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TOTAL LIABILITIES 19,494,588 20,273,317
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Stockholders' equity:
Preferred stock, $.01 par value: 1,000,000 shares authorized;
no shares issued or outstanding - -
Common stock, $.01 par value: 20,000,000 shares authorized;
3,283,000 shares issued and outstanding 32,830 32,830
Paid-in capital 22,647,372 22,647,372
Retained earnings 14,313,215 16,115,825
Unrealized gain on marketable securities, net 10,174,193 7,559,006
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TOTAL STOCKHOLDERS' EQUITY 47,167,610 46,355,033
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 66,662,198 $ 66,628,350
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</TABLE>
See accompanying notes to unaudited condensed consolidated
financial statements.
3
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED JULY 31, ENDED JULY 31,
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1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Revenue
Services $ 1,456,135 $ 1,084,870 $ 3,682,396 $ 3,229,190
Interest income 267,269 529,181 774,380 1,437,786
Dividend income 138,518 116,452 449,852 409,723
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TOTAL REVENUE 1,861,922 1,730,503 4,906,628 5,076,699
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Expenses
Cost of services 473,892 521,204 1,193,039 1,271,716
Wireless market and technology development - 204,000 - 254,000
Professional fees 117,248 122,939 521,314 387,613
General and administrative 1,425,643 812,242 3,398,565 2,544,589
Depreciation and amortization 295,111 189,559 806,056 550,618
Interest 13,349 26,004 45,902 157,756
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TOTAL EXPENSES 2,325,243 1,875,948 5,964,876 5,166,292
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Loss from operations (463,321) (145,445) (1,058,248) (89,593)
Gain (loss) on securities transactions, net 1,024,746 674,252 (1,944,362) 1,379,034
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Income (loss) before provision for income taxes 561,425 528,807 (3,002,610) 1,289,441
Provision (benefit) for income taxes 225,000 300,000 (1,200,000) 600,000
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NET INCOME (LOSS) $ 336,425 $ 228,807 $ (1,802,610) $ 689,441
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Net income (loss) per common share
Basic $ 0.10 $ 0.07 $ (0.55) $ 0.21
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Diluted $ 0.10 $ 0.07 $ (0.55) $ 0.21
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Weighted average number of common
shares outstanding
Basic 3,283,000 3,283,000 3,283,000 3,283,000
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Diluted 3,283,000 3,283,000 3,283,000 3,283,000
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</TABLE>
See accompanying notes to unaudited condensed consolidated
financial statements.
4
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
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FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED JULY 31, ENDED JULY 31,
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1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Net income (loss) $ 336,425 $ 228,807 $ (1,802,610) $ 689,441
Other comprehensive income, net of tax:
Net holding gain on marketable securities
arising during the period 974,166 1,030,019 2,616,790 4,734,232
Reclassification adjustment for (gains) losses
recognized in net income (loss) (777,324) (2,145,094) (1,603) (3,042,916)
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196,842 (1,115,075) 2,615,187 1,691,316
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Comprehensive income $ 533,267 $ (886,268) $ 812,577 $ 2,380,757
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</TABLE>
See accompanying notes to unaudited condensed consolidated
financial statements.
5
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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FOR THE NINE MONTHS
ENDED JULY 31,
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1999 1998
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<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ (1,802,610) 689,441
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 806,056 550,618
Loss (gain) on securities transactions, net 1,944,362 (1,379,034)
Deferred income taxes (550,000) (11,800,000)
Changes in assets and liabilities
Due from related parties - 1,100,000
Trade and other receivables (245,038) 114,096
Refundable income taxes (1,056,870) -
Prepaid expenses and other current assets (712,123) (151,823)
Other assets (45,556) (158,376)
Accounts payable and accrued expenses (333,099) 2,098,785
Current income taxes payable (3,900,000) 5,600,000
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NET CASH USED IN OPERATING ACTIVITIES (5,894,878) (3,336,293)
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Cash flows from investing activities
Acquisition of transmission and related equipment (92,690) (272,866)
Acquisition of leasehold improvements, office equipment
and service vehicles (296,881) (224,191)
Acquisition of marketable securities (12,459,790) (16,901,277)
Proceeds of marketable securities 14,371,086 28,125,920
Proceeds of marketable securities - short sale - 12,132,048
Investments (513,450) (19,000)
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NET CASH PROVIDED BY INVESTING ACTIVITIES 1,008,275 22,840,634
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Cash flows from financing activities
Proceeds of long-term debt 215,813 -
Principal payments of long-term debt (361,443) (195,461)
Advances to related party (251,872) -
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NET CASH USED IN FINANCING ACTIVITIES (397,502) (195,461)
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Net increase (decrease) in cash and cash equivalents (5,284,105) 19,308,880
Cash and cash equivalents, beginning of period 27,359,353 21,256,356
Cash and cash equivalents, end of period $ 22,075,248 $ 40,565,236
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Supplemental disclosure of cash flow information
Cash paid for interest $ 45,902 157,756
Cash paid for income taxes 4,306,870 4,500,000
</TABLE>
See accompanying notes to unaudited condensed consolidated
financial statements.
6
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JULY 31, 1999
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1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
of National Wireless Holdings Inc. (the "Company") have been prepared
in accordance with generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments, consisting solely of normal recurring
accruals necessary for a fair presentation of the financial statements
for these interim periods, have been included. Operating results for
the interim period are not necessarily indicative of the results that
may be expected for a full year. For further information, refer to the
financial statements and footnotes thereto included in the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 1998
(File No. 0-23598) as filed with the Securities and Exchange
Commission.
2. EDSS
During fiscal 1999, the Company agreed to amend its loan agreement with
EDSS, a majority-owned subsidiary, to increase the limit to $1,800,000
and advanced an additional $850,000 under the loan agreement as of
July 31, 1999. The Company has outstanding loans to EDSS of $1,638,000
as of July 31, 1999.
On July 15, 1999 the Company purchased for $513,450 from a shareholder
an additional 6.4% of the fully diluted common stock of EDSS, which
when considered with its existing share ownership represents
approximately 64% of the fully diluted common stock of EDSS,
constituting approximately 84% of the voting interests.
3. COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standards No.
130 "Reporting Comprehensive Income" as of November 1, 1998 which
requires new standards for reporting and display of comprehensive
income and its components in the financial statements; however, it does
not affect net income (loss) or consolidated stockholders' equity. The
components of accumulated other comprehensive income are as follows:
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<CAPTION>
<S> <C>
Unrealized gain on marketable securities, net of deferred income
taxes of $4,130,000 at October 31, 1998 $ 7,559,006
Unrealized gain arising during the period 2,615,187
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Unrealized gain on marketable securities, net of deferred income
taxes of $6,400,000 at July 31, 1999 $ 10,174,193
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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: September 14, 1999
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
