UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED APRIL 30, 2000.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT FOR THE
TRANSITION PERIOD FROM __________________ to
Commission file number 0-25614
GLOBUS WIRELESS, LTD.
(Exact name of Small Business Company in its charter)
NEVADA 88-0228274
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1955 Moss Court, Kelowna, British Columbia,
Canada , V1Y 9L3 (Address of principal
executive offices, including zip code)
Company's Telephone number, including area code:
(604) 860-3130
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 and Exchange Act of 1934
during the preceding twelve months (or such shorter period that the Registrant
was required to file such reports), and (2) has been subject to file such filing
requirements for the past thirty days.
Yes x No
As of the end of the period covered by this report, the Company had 11,933,635
outstanding shares of Common Stock, par value $.001.
Transitional Small Business Disclosure Format (check one):
Yes No x
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
Consolidated Financial Statements of
GLOBUS WIRELESS LTD.
Six month period ended, April 30, 2000
(Unaudited - Prepared by Management)
Consolidated Balance Sheets
$ United States
April 30, 2000 and October 31, 1999
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
April 30, October 31,
2000 1999
(Unaudited - Prepared
by Management)
-----------------------------------------------------------------------------------------------------------------------------
Assets
Current Assets
<S> <C> <C>
Cash $ 168,253 $ 487,562
Accounts receivable 88,998 35,197
-----------------------------------------------------------------------------------------------------------------------------
Stock subscriptions receivable 155,449 -
Loans and other advances 254,771 -
Inventories 17,563 -
Prepaid expenses 32,592 62,432
-----------------------------------------------------------------------------------------------------------------------------
717,626 585,191
Property and equipment, net of accumulated depreciation 384,951 290,351
Other assets 14,085 16,111
-----------------------------------------------------------------------------------------------------------------------------
$ 1,116,662 $ 891,653
-----------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 7,154 $ 88,262
Note payable 1,121 1,121
Due to shareholder 51,843 51,843
-----------------------------------------------------------------------------------------------------------------------------
60,118 141,226
Subscriptions for common stock 113,361 382,627
Stockholders' equity
Common stock 11,934 11,080
Additional paid in capital 5,913,102 4,714,212
Accumulated other comprehensive income (17,621) (12,601)
-----------------------------------------------------------------------------------------------------------------------------
Deficit (4,964,232) (4,344,891)
-----------------------------------------------------------------------------------------------------------------------------
943,183 367,800
-----------------------------------------------------------------------------------------------------------------------------
$ 1,116,662 $ 891,653
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
GLOBUS WIRELESS LTD.
Consolidated Statements of Operations
$ United States
Three month periods ended April 30, 2000 and 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
2000 1999
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Engineering revenue $ 39,563 $ -
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
Sale of accessories 10,712 -
Cost of sales 5,972 -
4,740 -
-----------------------------------------------------------------------------------------------------------------------------
44,303 -
Expenses
Research and development 63,847 11,676
-----------------------------------------------------------------------------------------------------------------------------
General and administrative 396,345 327,641
460,192 339,317
-----------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations, before income taxes (415,889) (339,317)
Income taxes - 6,162
-----------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations (415,889) (333,155)
Income from discontinued operation, net of income taxes - 11,961
-----------------------------------------------------------------------------------------------------------------------------
Loss $ (415,889) $ (321,194)
-----------------------------------------------------------------------------------------------------------------------------
Weighted average number of shares 11,832,907 7,877,747
Basic loss per share $ (0.04) $ (0.04)
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive loss
Loss $ (415,889) $ (321,194)
Foreign currency translation adjustment 2,520 15,897
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive loss $ (413,369) $ (305,297)
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
GLOBUS WIRELESS LTD.
Consolidated Statements of Operations
$ United States
Six month periods ended April 30, 2000 and 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
2000 1999
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Engineering revenue $ 39,563 $ -
Sale of accessories 10,712 -
-----------------------------------------------------------------------------------------------------------------------------
Cost of sales 5,972 -
4,740 -
-----------------------------------------------------------------------------------------------------------------------------
44,303 -
Expenses
Research and development 93,859 21,741
-----------------------------------------------------------------------------------------------------------------------------
General and administrative 569,785 479,667
663,644 501,408
-----------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations, before income taxes (619,341) (501,408)
Income taxes - 9,180
-----------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations (619,341) (492,228)
Income from discontinued operation, net of income taxes - 17,820
-----------------------------------------------------------------------------------------------------------------------------
Loss $ (619,341) $ (474,408)
-----------------------------------------------------------------------------------------------------------------------------
Weighted average number of shares 11,684,999 7,344,342
Basic loss per share $ (0.05) $ (0.06)
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive loss
Loss $ (619,341) $ (474,408)
Foreign currency translation adjustment 5,020 43,615
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive loss $ (614,321) $ (430,793)
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
GLOBUS WIRELESS LTD.
Consolidated Statements of Cash Flows
$ United States
Six month periods ended April 30, 2000 and 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
2000 1999
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net cash flows used in operating activities $ (715,341) $ (127,516)
Cash flows from investing activities:
Purchase of equipment (119,206) (52,370)
Loans and other advances (254,771) -
-----------------------------------------------------------------------------------------------------------------------------
(373,977) (52,370)
Cash flows from financing activities:
Common stock issued for cash 670,389 386,033
Subscriptions for common stock 104,640 117,790
Repayment of note payable - (469)
Increase in due to shareholder - 7,412
775,029 510,766
Foreign currency translation adjustment (5,020) 43,615
-----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash (319,309) 374,495
Cash, beginning of period 487,562 31,673
-----------------------------------------------------------------------------------------------------------------------------
Cash, end of period $ 168,253 $ 406,168
-----------------------------------------------------------------------------------------------------------------------------
Supplementary information
Interest paid $ - $ -
Income taxes paid - -
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Non-cash financing activities (note 2)
See accompanying notes to consolidated financial statements.
<PAGE>
GLOBUS WIRELESS LTD.
Notes to Consolidated Financial Statements
$ United States
Six month period ended April 30, 2000
(Unaudited - Prepared by Management)
1. Significant accounting policies:
a) In the opinion of management, all adjustments (consisting of normal
recurring items) necessary for the fair presentation of these unaudited
financial statements in conformity with generally accepted accounting principles
have been made.
b) The Company's subsidiary Celltech Research Inc., operates in Canada and
its operations are conducted in Canadian currency. However, the functional
currency has been determined to be United States dollars. The method of
translation applied is as follows:
i) Monetary assets and liabilities are translated at the rate of
exchange in effect at the balance sheet date, being US $1.00 per Cdn $1.480
at April 30, 2000;
ii) Non-monetary assets and liabilities are translated at the exchange
rate in effect at the transaction date;
iii) Revenues and expenses are translated at the exchange rate in
effect at the transaction date; and
iv) The net adjustment arising from the translation is recorded as a
separate component of stockholders' equity called
"Accumulated other comprehensive income."
c) Basic loss per share
Basic loss per share has been calculated using the weighted average number of
common shares outstanding during the period. The effect of stock options
outstanding during the period have not been included in the computation
because to do so would be anti-dilutive.
2. Issuance of common stock:
During the six month period ended April 30, 2000, the Company issued the
following common stock:
380,305 shares for cash proceeds of $670,389;
431,500 shares for $373,906 in share subscriptions received prior to October
31, 1999; and 41,900 shares for cash proceeds of $155,449 received subsequent
to April 30, 2000.
Subsequent to April 30, 2000, the Company issued 61,070 shares for cash
subscriptions received prior to April 30, 2000.
As both the 431,500 and 41,900 shares referred to above were non-cash
transactions for the period ended April 30, 2000, they are not reflected in the
statement of cash flows.
<PAGE>
GLOBUS WIRELESS LTD.
Notes to Consolidated Financial Statements
$ United States
Six month period ended April 30, 2000
(Unaudited - Prepared by Management)
3. Contingencies:
a) Pursuant to a technology licensing agreement, the Company is required to
make periodic payments to an individual who is the Company's founder, major
stockholder and former President. Technology license payments owing under the
agreement amounted to approximately $240,000 at October 31, 1999 and $300,000 at
April 30, 2000.
During 1999, the Company launched a lawsuit against its former President
for breach of his fiduciary duties. As part of its claims against its former
President, the Company contends that its obligations under the agreement have
been eliminated. Consequently, no accrual for technology license payments has
been made as at October 31, 1999 and April 30, 2000.
b) On April 27, 2000, the Company signed a letter of agreement with Coleman
and Company Securities Inc. to secure investors for the Company. In
consideration for these services, the Company is required to:
i) pay a monthly fee of $5,000;
ii) issue, within 30 days, 100,000 share purchase warrants with an
exercise price of $4.00 per share, exerciseable for a period of 5 years;
and
iii) issue, within 30 days, an additional 100,000 share purchase
warrants with an exercise price of $5.00 per share, exerciseable for a
period of 5 years, vesting 20,000 warrants every 30 days from the execution
of the letter.
4. Depreciation:
Depreciation for the six month period ended April 30, 2000 was $26,632.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations:
Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a safe-harbor" for
forward-looking statements. This report includes both historical and
forward-looking statements. Any forward-looking statements contained herein are
based on Globus Wireless, Ltd's (the "Company) current expectations and
projections about future events. All forward-looking statements are subject to
risks, uncertainties, and assumptions about the Company, including anticipated
growth strategies, anticipated trends in the business, including trends in
technology and growth of the wireless communication industry, and future
business directions for the Company and associated financial commitments. Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, the Company's actual results may differ materially
from those described in this report as anticipated, believed, estimated or
expected.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the accompanying condensed
financial statements and notes thereto attached and the Company's consolidated
financial statements and notes thereto attached in the Company's Annual Report
on Form 10-K as of and for the year ended October 31, 1999.
Overview
Globus Wireless, Ltd., originally Daytona-Pacific Corporation, was incorporated
in June 1987, under the laws of the State of Nevada. In October 1994 the Company
acquired all of the assets of Globus Cellular & User Protection Ltd. (B.C.),
putting the Company in the position of starting a new business in the wireless
technology industry. In September 1995, the Company became a publicly traded
corporation, trading on the NASD Over-the-Counter (OTC) Bulletin Board. Since
early 1995 the Company, has been engaged in the research and development of new
antennae technologies for wireless phones and through until mid-1999 was a
development company.
In June 1999 there was a change in the management of the Company following the
resignation of the President and CEO.
In July 1999 the Company entered in to an exclusive wireless accessories
distribution agreement with 2001 Technology Incorporated, giving the Company 35
core products and 400 models for the Globus Accessory Line.
In September 1999 the Company announced the appointment of Mr. Shawn McMillen,
an industry leading SAR specialist, as Director of Research for the Company's
wireless phone testing and engineering services division, Celltech Research Inc.
("Celltech"), and opened a state-of-the-art research lab facility for wireless
applications in Kelowna, B.C.
At the AGM in December 1999, the Company announced a contract manufacturing
agreement with Auden Technology Mfg. Co. Ltd., for Globus/Celltech designed
antenna products. As well the Company announced a partnership with Auden to
develop and market ceramic embedded antenna technology for wireless devices.
With the re-election of the Board of Directors at the AGM, the management group
was directed to continue to move forward the business of the Company, to an
operational concern with proven product, manufacturing capabilities, marketing
and sales revenue and profitability. The Officers for the Company are Mr.
Bernard Penner, President, CEO and Chairman; Mr. Nick Wizinsky, Chief Operations
Officer and Secretary Treasurer; Mr. Cary Tremblay, Vice President Marketing &
Sales (now Vice President Corporate Development); and as of April 2000 Mr. Gord
Walsh has been appointed Vice President Marketing & Sales Wireless Devices.
<PAGE>
Also in December 1999 the Company name was changed to Globus Wireless, Ltd., the
name being more indicative of the Company's expertise, technologies and new
product lines, which are applicable to all industry protocols as well as
applications outside the wireless industry.
Today, Globus Wireless, Ltd., with its wholly owned subsidiary Celltech, is
engaged in the research, design, manufacture, marketing and distribution of
wireless communication products. The Company has three primary objectives:
o To become a leading provider of wireless antenna products and to
provide solutions to achieve lower SAR (Specific Absorption Rate - a
measurement of RF exposure absorbed by human tissue), for wireless
communications Original Equipment Manufacturers ("OEMs"), without
affecting desired performance of their respective wireless phone
models;
o To become a major supplier of quality wireless phone accessories in
North America, South America, Latin American and South Korean markets,
through sales to industry dealer organizations, buyer groups, major
retail networks and service providers; and
o To secure new marketing, manufacturing and technology opportunities in
the wireless communication industry, which are synonymous with the
Company's commitment to market products that enhance performance,
reduce operating costs and/or improve efficiency, and which will
provide significant earnings to the Company.
Results of Operations
Three months ended April 30, 2000 and 1999
Consolidated and first revenues for the Company since 1997 were $50,275 for the
second quarter of fiscal 2000, compared to nominal sales of $117 (non-wireless
product) for the same period ending April 30, 1999.
Engineering and testing services at Celltech provided $39,563 in revenue. OEM
research programs undertaken at the direction of the Company will limit revenue
generated by Celltech. As such, testing & service revenues earned at Celltech
are considered ancillary and will fluctuate with increasing demands for lab time
from the Company in support of its OEM antenna technology sales. In the second
quarter Celltech expanded its capabilities to provide testing for Family Radio
Service (FRS) devices, a relatively new limited range wireless communications
product.
The balance of $10,712 in revenues in the second quarter was generated by test
market sales for the Company's newly launched wireless accessory line. The
Globus Accessory Line was officially launched at the January 2000 Consumer
Electronics Show (CES) and February 2000 Cellular Telephone Industry Association
(CTIA) Show, and the Company launched it's business-to-business (B2B) e-commerce
site for accessories in the second quarter. Efforts for this division are now
focused on expansion of sales via the B2B site and establishing product
distribution channels. Costs for accessories products sold amounted to $5972 for
the three months ended April 30, 2000, with an average gross margin of 44% on
accessory product sales.
The Company had research and development costs of $63,487 for the three months
ended April 30, 2000, compared to $11,676 for the same period ending April 30,
1999.
Operating and other expenses were $396,345 for the three months ended April 30,
2000, an increase of $68,704, or 21%, from the prior year. This increase in SG&A
expenses was primarily due to expanded marketing efforts, including increased
staffing, increased travel relating directly to marketing and promotion of the
Company's proprietary antennae technologies and Celltech expertise to the OEMs;
costs for building and promoting the accessories B2B e-commerce site and
establishing distribution channels; higher legal fees relating to several
corporate, marketing and securities matters; and is offset by a decrease in
license fees paid under prior management in 1999.
<PAGE>
During the second quarter of fiscal 2000 the Company advanced $225,000 to an
unrelated third party, as a deposit in advance of negotiations concerning the
Company making an investment in the third party. Pursuant to confidentiality
agreements signed by both companies the Company cannot disclose the details of
the investment opportunity, the company nor its location. $125,000 of the
receivable is due July 1, 2000, or sooner should negotiations end. The remaining
$100,000 is due and payable in a lump sum on or before the February 15, 2001,
again assuming negotiations are unsuccessful. Both advances may later be
accounted for as deposits should the companies conclude an agreement.
Net losses were $415,889, or $(0.04) per share, for the second quarter of fiscal
2000 compared to $321,194, or $(0.04) per share for the same quarter last year.
Six months ended April 30, 2000 and 1999
Consolidated revenues were $50,275 for the first six months of fiscal 2000, all
generated in the second quarter, compared to nominal sales of $265 (non-wireless
product) for the same period in 1999, were a consequence of the June 1999 change
in management and direction of the Company, with a focus shift from research to
marketing and sales of proprietary wireless solution technologies and accessory
products.
The Company had research and development costs of $93,859 for the six months
ended April 30, 2000, compared to $21,741 for the same period ending April 30,
1999.
Operating and other expenses were $569,785 for the six months ended April 30,
2000, an increase of $90,118, or 18.8% from the prior year. Again the increase
in SG&A expenses was primarily attributable to the shift in business strategy
from research and development to the marketing of the Company's wireless
proprietary technologies, products and testing services, and offset by the
cancellation of license fees paid under prior management in 1999.
For the six months ended April 30, 2000, the Company had amortization of
$24,606.
Net losses were $619,341, or $(0.05) per share, for the first six months of
fiscal 2000 compared to $474,408, or $(0.06) per share for the same period last
year.
Capital Resources and Liquidity
During the three months ended April 30, 2000, the Company purchased equipment
valued at $2861 and loaned or advanced $254,771. As a result, net cash used in
investing activities was $257,632 for the three months ending April 30, 2000.
During the same quarter in fiscal 1999 the Company had purchased equipment
valued at $52,370, resulting in net cash provided used in investment activities
of $52,370.
During the three months ended April 30, 2000 the Company sold common stock for
cash of $587,989 and sold stock subscriptions for cash of $104,640. As a result,
the Company had net cash sourced from financing activities of $692,629.
Commitments & Contingencies
Following the change in management in June 1999, the Company entered into
employment contracts with the officers for the Company. Two of the agreements
are for a three-year term and the third agreement was renewed, for a three-year
term, in the second quarter of 2000. A fourth officer employment agreement was
entered in to late in the second quarter of 2000, also for a three-year term.
The agreements provided for monthly payments aggregating $24,000 in total for
the four officers. Each of the agreements call for increases in the Company's
monthly commitment, subject to certain performance criteria being achieved. The
agreements are expected to continue in force until terminated by either party.
<PAGE>
During the second quarter of fiscal 2000 the Company made three additional
significant commitments, including:
o Appointment of KPMG LLP as the Company's new independent auditors
o Appointment of Sichenzia Ross & Friedman, of New York, NY, as the
Company's US Securities Counsel
o Appointment of Coleman & Company Securities Inc., of New York,
NY, as the Company's investment banker and financial advisors
Subject to performance and duration of its agreement with the Company, Coleman &
Company will receive up to 300,000 in warrants to purchase an equivalent amount
of Company common stock at purchase prices of $4.00, $5.00 & $6.00 per share.
Plan of Operation
Since the commencement of fiscal 2000 the Company has initiated the following
actions and strategies with regards to the on-going advancement of its business
opportunities:
1. In April 2000 the Company secured the services of Gord Walsh, as Vice
President Marketing & Sales Wireless Devices (Accessories), bringing over 20
years wireless industry sales experience to the Company. Jonathan Hughes also
joined the organization as Project Manager for Celltech Research, providing an
extensive knowledge of US and Canadian government agency standards, procedures,
requirements and regulations for Electro Magnetic Compatibility and Radio
Frequency exposure compliance and equipment approval of wireless devices.
2. From February through April 2000 the Company, through its subsidiary
Celltech, undertook and completed two OEM prototype antenna design programs;
also in the second quarter of fiscal 2000 Celltech earned testing service
revenues from other cellular telephone OEMs as well as completed its first
compliance testing program for a FRS OEM.
3. In February 2000 the Company launched its B2B e-commerce site for Globus
Accessories
4. In January and February 2000 launched the Globus Accessory Line at the
CES and CTIA trade shows;
5. In December 1999 secured a manufacturing agreement with Auden
Technologies Mfg. Co. Ltd. of Taiwan for the contract manufacturing of Globus
designed OEM antennae product; the Company also announced a research partnership
with Auden concerning ceramic embedded antenna technology.
6. In December 1999 the Company filed a Statement of Claim in British
Columbia Supreme Court to confirm rightful ownership of its antenna technology
and a declaration that license and other agreements related to that antenna
technology under which Dr. Paul Bickert was paid monies, are void. The Company
asserted that Dr. Paul Bickert breached fiduciary duties as a director and
president of the Company when license and other agreements were improperly
executed with him in his personal capacity. In addition to confirmation of
ownership of patent rights, the Company seeks unspecified damages including a
full accounting of all monies paid by the Company to Dr. Paul Bickert and for an
order that he repay to the Company all monies received in breach of his
fiduciary duties and all monies received without proper authorization of the
Company. On the advice of counsel, the Company believes its claims to be
meritorious. In connection with the lawsuit the Company had ceased all accruals
of technology lease payments for that particular technology, retroactive to
fiscal year end 1997. The Company does not anticipate a resolution in the matter
until at least fiscal 2001.
<PAGE>
Subsequent to the end of the second quarter, in May of 2000 the Company
announced the appointment of Coleman & Company Securities Ltd., of New York, NY,
as the Company's investment bank and financial advisor, and to raise the
investment profile of the Company through their networks in the United States
and abroad, to have a key role in efforts to secure additional capital to
support growth in the marketing of the Company's proprietary technologies and
wireless communication products, and to provide expertise in strategic planning
and in evaluation of potential business acquisitions within the Company's
industry.
For the balance of its present fiscal year, the Company's efforts will be
directed toward the following:
1. Securing OEM antenna sales contracts utilizing proprietary antenna
designs and the Company's expertise in providing SAR solutions;
2. Expanding the B2B e-commerce sales program, and increased sales of
wireless devices in general, via securing of new distributors and dealers for
the Globus Accessories Line, focusing primarily on markets in the USA, Canada
and South America;
3. Expanding the engineering and testing services of Celltech to include
full FCC and IC testing and electronic filing;
4. Examining potential business opportunities for the Company within the
wireless industry, securing the necessary capital for growth through a series of
finance related activities.
Marketing of the Company's expertise in providing antenna design and SAR
solutions for wireless phone manufacturers is the Company's foremost priority.
To the extent that the Company's resources permit, they will be focused
primarily on OEM sales and then on expansion of marketing efforts for the
accessories and new business opportunities. The Company currently employs
fourteen employees and officers. The Company's current monthly salary costs are
approximately $48,000. For three months ended April 30, 2000 the Company's
average monthly cash expenses, inclusive of salary costs, were approximately
$127,000. A significant amount of the monthly expenses are for corporate
development, including marketing, travel and professional fees.
The Company anticipates having to secure additional capital to meet its on-going
requirements and to meet its stated objectives before fiscal year end October
31, 2000. The Company is in the process of identifying potential investors in
conjunction with efforts by its investment banker. Based on the Company's
success in raising private placement financing in the past, the Company expects
that it will be able to complete financings as required for growth and
operations. The Company is also in the process of reviewing opportunities for
debt financing of certain activities of the business. To date the Company has
not utilized debt financing. The Company is not presently planning to incur
significant expenses or to increase its salary or other operating costs
significantly during the balance of the fiscal year. Any significant capital
expenses or increases in operating costs will be dependent on the Company
raising additional capital or generating revenue from sales of its products or
services.
The Company to date has not generated sufficient revenue from sales of its
products or services to sustain operations, and has only recently had the
availability to market to OEMs its antenna design solutions and products.
Furthermore, the Company only recently in the current fiscal year commenced a
plan to establish various distribution channels for its wireless accessory
product line. The Company's plans call for the generating of significant sales
revenue by fiscal year end.
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceeding that could have a
material adverse effect on the results of operations or the financial condition
of the Company. From time to time, the Company may become a party to litigation
incidental to its business. There can be no assurance that any future legal
proceedings will not have a material adverse affect on the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
On April 26, 2000, the Company dismissed its former independent auditor, James
E. Scheifley & Associates, P.C. ("Scheifley & Associates"), based on their
agreement that such action was in the best interests of both firms. Effective as
of that date, the Company has engaged KPMG LLP ("KPMG") as its new independent
auditor. The decision to end the Company's relationship with Scheifley &
Associates and to engage KPMG was recommended by the Company's independent Audit
Committee and unanimously approved by the Company's Board of Directors on March
26, 2000.
Over the course of Scheifley & Associates' engagement, the Company and Scheifley
& Associates had no disagreements on any matter of accounting principles or
practices, financial statement disclosure, auditing scope or procedure, which
disagreement, if not resolved to the satisfaction of Scheifley & Associates,
would have caused it to make reference to the subject matter of the disagreement
in connection with any report or opinion it might have issued. Furthermore,
neither of Scheifley & Associates' reports on the Company's financial statements
for the past two years contained an adverse opinion, disclaimer of opinion, or
modification or qualification of opinion.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
May 1, 2000 Change in Registrant's Certifying Accountant and U.S.
Securities Counsel.
<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.
GLOBUS WIRELESS, INC.
Date: June 14, 2000 By: /s/ Bernard D. Penner
-------------------------------
Bernard D. Penner, President
