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 JULY 31, 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 12,223,788
outstanding shares of Common Stock, par value $.001.
Transitional Small Business Disclosure Format (check one):
Yes No x
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<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
Consolidated Financial Statements of
GLOBUS WIRELESS LTD.
Nine month period ended, July 31, 2000
(Unaudited - Prepared by Management)
<PAGE>
GLOBUS WIRELESS LTD.
Consolidated Balance Sheets
$ United States
July 31, 2000 and October 31, 1999
<TABLE>
<CAPTION>
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July 31, October 31,
2000 1999
(Unaudited - Prepared
by Management)
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Assets
Current Assets
<S> <C> <C>
Cash $ 429,739 $ 487,562
Marketable Security 199,012 -
Accounts receivable 54,291 35,197
Loans and other advances 26,725 -
Inventories 34,868 -
Prepaid expenses 6,966 62,432
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751,601 585,191
Property and equipment, net of accumulated depreciation 397,705 290,351
Other assets 14,847 16,111
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$ 1,164,153 $ 891,653
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Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 28,499 $ 88,262
Note payable - 1,121
Due to shareholder 51,843 51,843
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80,342 141,226
Subscriptions for common stock - 382,627
Stockholders' equity
Common stock 12,224 11,080
Additional paid in capital 6,490,465 4,714,212
Accumulated other comprehensive income (20,063) (12,601)
Deficit (5,398,815) (4,344,891)
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1,083,811 367,800
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$ 1,164,153 $ 891,653
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</TABLE>
See accompanying notes to consolidated financial statements.
On behalf of the Board:
_______________________ Director
_______________________ Director
<PAGE>
GLOBUS WIRELESS LTD.
Consolidated Statements of Operations
$ United States
<TABLE>
<CAPTION>
Three month periods ended July 31, 2000 and 1999 (Unaudited - Prepared by
Management)
------------------------------------------------------------------------------------------------------------------------------------
2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Engineering revenue $ 19,684 $ -
Sale of accessories 9,473 -
Cost of sales 5,684 -
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3,789 -
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23,473 -
Expenses
Research and development 60,273 15,191
General and administrative 397,783 138,101
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458,056 153,292
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Loss from continuing operations, before income taxes (434,583) (153,292)
Income taxes - 2,099
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Loss from continuing operations (434,583) (151,193)
Income from discontinued operation, net of income taxes - 4,075
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Loss $ (434,583) $ (147,118)
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Weighted average number of shares 12,071,066 7,877,747
Basic loss per share $ (0.04) $ (0.02)
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Comprehensive loss
Loss $ (434,583) $ (147,118)
Foreign Currency translation adjustment (2,442) (24,325)
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive loss $ (437,025) $ (171,443)
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</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
GLOBUS WIRELESS LTD.
Consolidated Statements of Operations
$ United States
<TABLE>
<CAPTION>
Nine month periods ended July 31, 2000 and 1999 (Unaudited - Prepared by
Management)
------------------------------------------------------------------------------------------------------------------------------------
2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Engineering revenue $ 59,247 $ -
Sale of accessories 20,185 -
Cost of sales 11,656 -
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8,529 -
------------------------------------------------------------------------------------------------------------------------------------
67,776 -
Expenses
Research and development 154,132 36,932
General and administrative 967,568 617,728
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1,121,700 654,700
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Loss from continuing operations, before income taxes (1,053,924) (654,700)
Income taxes - 11,279
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Loss from continuing operations (1,053,924) (643,700)
Income from discontinued operation, net of income taxes - 21,895
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Loss $ (1,053,924) $ (621,526)
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Weighted average number of shares 11,815,206 7,344,342
Basic loss per share $ (0.09) $ (0.09)
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Comprehensive loss
Loss $ (1,053,924) $ (621,526)
Foreign currency translation adjustment (7,462) 19,290
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Comprehensive loss $ (1,061,386) $ (602,236)
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</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
GLOBUS WIRELESS LTD.
Consolidated Statement of Stockholders' Equity
$ United States
<TABLE>
<CAPTION>
Nine month period ended July 31, 2000
(Unaudited - Prepared by Management)
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Accumulated
Additional Other Total
Capital Stock Paid in Comprehensive Stockholders
Shares Amount Capital Deficit Income Equity
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, October 31, 1999 11,079,930 $ 11,080 $ 4,714,212 $(4,344,891) $ (12,601) $ 367,800
Issued for cash
(note 2) 712,358 712 1,325,905 -- -- 1,326,617
Issued for subscriptions
for common stock (note 2) 431,500 432 382,195 -- -- 382,627
Compensation cost of
options issued to
employees (note 3) -- -- 29,153 -- -- 29,153
Compensation cost of
warrants issued to non-
employees (note 4) -- -- 39,000 -- -- 39,000
Loss for the nine month
period ended July 31, 2000 -- -- -- (1,053,924) -- (1,053,924)
Foreign currency translation
adjustment -- -- -- -- (7,462) (7,462)
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Balance, July 31, 2000
(Unaudited) 12,223,788 $ 12,224 $ 6,490,465 $(5,398,815) $ (20,063) $ 1,083,811
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</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
GLOBUS WIRELESS LTD.
Consolidated Statements of Cash Flows
$ United States
<TABLE>
<CAPTION>
Nine month periods ended July 31, 2000 and 1999 (Unaudited - Prepared by
Management)
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2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net cash flows used in operating activities $ (992,888) $ (303,405)
Cash flows from investing activities:
Purchase of equipment (157,232) (156,742)
Loans and other advances (26,725) -
Purchase of marketable security (199,012) -
------------------------------------------------------------------------------------------------------------------------------------
(382,969) (156,742)
Cash flows from financing activities:
Common stock issued for cash 1,326,617 872,955
Repayment of note payable (1,121) (833)
Increase in due to shareholder - (143,830)
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1,325,496 728,292
Effect of exchange rate changes on cash balances (7,462) 19,290
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Increase (decrease) in cash (57,823) 287,435
Cash, beginning of period 487,562 31,673
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Cash, end of period $ 429,739 $ 319,108
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Supplementary information
Interest paid $ - $ -
Income taxes paid - -
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</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
Nine month period ended July 31, 2000
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------
1. Significant accounting policies:
a) The accompanying financial statements as at July 31, 2000 and for
the three and nine month periods ended July 31, 2000 are unaudited;
however, 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
$1.477 at July 31, 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 nine month period ended July 31, 2000, the Company issued the
following common stock:
712,358 shares for cash proceeds of $1,326,647.
431,500 shares for $382,627 in share subscriptions received prior to October
31, 1999.
As both the 431,500 shares referred to above, the stock options referred to in
note 3 and the notes referred to in note 4 b) were non-cash transactions for the
period ended July 31, 2000, they are not reflected in the statement of cash
flows.
<PAGE>
GLOBUS WIRELESS LTD.
Notes to Consolidated Financial Statements
$ United States
Nine month period ended July 31, 2000
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------
3. Stock options:
The Company applies APB Opinion No. 25 in accounting for employee stock options
whereby compensation cost is recorded only to the extent that the market price
exceeds the exercise price at the date of grant. Options granted to
non-employees are accounted for at their fair value at the date of grant.
During the nine month period ended July 31, 2000, the Company granted 119,000
common share options with exercise prices fixed at 85% of the market value of
the Company's common shares at the grant date. Accordingly, compensation cost of
$29,153, representing the excess of the market price over the exercise price of
the options granted, has been included in the determination of the loss for the
period.
4. Contingencies:
a) Pursuant to a technology licensing agreement, the Company was 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 have amounted to approximately $240,000
at October 31, 1999 and $330,000 at July 31, 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 July 31, 2000.
b) On May 8, 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 cash fee of $5,000;
ii) issue, within 30 days, 100,000 share purchase warrants with an
exercise price of $4.00 per share, exercisable 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, exercisable
for a period of 5 years, vesting 20,000 warrants every 30 days
from the execution of the letter.
The fair value of $39,000 of these warrants has been determined using the
Black Scholes Method using an expected life of six months, volatility factor of
25%, risk free rate of 5.5% and no assumed dividend rate and has been included
in the determination of the loss for the period.
<PAGE>
GLOBUS WIRELESS LTD.
Notes to Consolidated Financial Statements
$ United States
Nine month period ended July 31, 2000
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------
5. Depreciation:
Depreciation for the nine month period ended July 31, 2000 was $51,142.
6. Subsequent Events:
a) Subsequent to July 31, 2000, the Company issued 40,000 common shares for
investor relations consulting services. The shares vest in increments of
10,000 on August 1, 2000, November 1, 2000, February 1, 2001 and May 1,
2001. The fair value of the services to be received, aggregating $120,000
is equivalent to the fair market value of the shares issued.
b) Subsequent to July 31, 2000, the Company issued 93,833 common shares for
notes receivable, aggregating $184,854 from the exercise of employee stock
options. The notes receivable do not bear interest, are due within 364 days
and are secured by the common shares issued.
<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. 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.
The Executive group has a mandate from the Board of Directors 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 Corporate Development, and Mr. Gord
Walsh, Vice President Marketing & Sales Wireless Devices.
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:
<PAGE>
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, South Korean and other
world 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 July 31, 2000 and 1999
Consolidated revenues for the Company were $29,157 for the third quarter of
fiscal 2000, compared to nominal sales of $1,338 (non-wireless product) for the
same period ending July 31, 1999.
Engineering and testing services at Celltech provided $19,684 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
third quarter Celltech expanded its capabilities to provide testing for all
types of RF emitting devices including regular and rugged laptop computers,
personal organizers, traditional two-way and marine radio products and Family
Radio Service (FRS) devices.
The balance of $9,473 in revenues in the third quarter was generated by
on-going test market sales for the Company's recently 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, primarily to US dealers and distributors, and on solidifying product
distribution channels. The Company is on schedule to open its first US
distribution & sales center in Sparks, Nevada, in September 2000, with an
initial inventory placement of approximately $250,000. From this location
product will be shipped throughout the US, while Canadian dealers and
distributors will be derived by a similar operation in Kelowna, B.C. A revamped
B2B e-commerce website will be on-line with the opening of the US distribution
center. Costs for accessories products sold amounted to $5,684 for the three
months ended July 31, 2000, with an average gross margin of 40% on accessory
product sales.
The Company had research and development costs of $60,273 for the three
months ended July 31, 2000, compared to $15,191 for the same period ending July
31, 1999.
Operating and other expenses were $397,783 for the three months ended July
31, 2000, an increase of $259,682 from the prior year. The increase in these
expenses was primarily due to expanded marketing efforts, including increased
staffing, increased travel relating directly to marketing and promotion of the
Company's proprietary solutions technologies to the OEMs; costs for building and
promoting the accessories B2B e-commerce site, redesigning the site based on
test marketing results, 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
negotiations, except for the fact that the Company has undertaken both a product
research and testing program, and OEM marketing studies, in the area of polymer
lithium ion battery technology. On July 24, 2000, the unrelated third party
returned the full deposit to the Company while continuing with negotiations on
several marketing, manufacturing and new product initiatives between the two
companies.
Net losses were $434,583, or $0.04 per share, for the third quarter of
fiscal 2000 compared to $147,118, or $0.02 per share for the same quarter in
1999.
Nine months ended July 31, 2000 and 1999
Consolidated revenues were $79,432 for the first nine months of fiscal
2000, all generated in the second and third quarters, compared to nominal sales
of $1,603 (non-wireless product) for the same period in 1999, and 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 $154,132 for the nine
months ended July 31, 2000, compared to $36,932 for the same period ending July
31, 1999.
Operating and other expenses were $967,568 for the nine months ended July
31, 2000, an increase of $349,840, or 56% from the prior year. The increase in
these expenses, was directly 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 nine months ended July 31, 2000, the Company had amortization of
$51,142.
Net losses were $1,053,924 or $0.09 per share, for the first nine months of
fiscal 2000 compared to $621,526, or $0.09 per share for the same period fiscal
1999.
Capital Resources and Liquidity
During the nine months ended July 31 2000, the Company purchased equipment
valued at $157,232 , invested $199,012 in a marketable security and loaned or
advanced $26,725. As a result, net cash used in investing activities was
$382,969 for the nine months ending July 31, 2000. During the same period in
fiscal 1999 the Company had purchased equipment valued at $156,742, resulting in
net cash provided used in investment activities of $156,472.
During the nine months ended July 31, 2000 the Company sold common stock
for cash of $1,326,647 and repaid a note payable for $1,121. As a result, the
Company had net cash sourced from financing activities of $1,325,526.
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 first quarter of 2000. A fourth officer employment agreement was
entered in to 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 current fiscal year 2000 the Company has made additional
significant commitments, including:
o Appointment of KPMG LLP as the Company's new independent auditors, and
approved by the Stockholder at the 1999 AGM on August 17, 2000
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 warrants to purchase an equivalent
amount of Company common stock at purchase prices of $4.00, $5.00 &
$6.00 per share.
o Appointment of Hayden Communications Inc. (South Carolina) and Market
Pathways Financial Relations (California) to assist in implementing a
national investor relations program.
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 July 2000 the Company received its first analyst report
recommendation by Christopher Moore, CFA, Senior Vice President,
Director of Research, Coleman Investment Banking, New York, with a
Speculative-Buy rating and 12-month price target of $11.
2. In June 2000 the Company announced it had signed a milestone agreement
with Hyundai Electronics Company, with the Globus to supply Hyundai
with a custom engineered SAR solution for Hyundai's latest state-of
the-art single band dual mode wireless cell phone. The open-ended
agreement guarantees a minimum order size of 500,000 units.
3. In June 2000 the Company secured the services of Ben Hewson, CA, to
serve as Financial Controller, bringing over 13 years experience in
both public and private accounting, including 7 years as an auditor for
BDO Dunwoody and Ernst & Young.
4. Also in June, the Company commenced testing and compliance programs for
several manufacturers of non-cellular phone devices as the issue of SAR
became a major engineering factor for all RF emitting devices in both
the US and Canada.
5. 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.
6. Also in May 2000 the Company announced that Jonathan Hughes had 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.
7. 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.
8. 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.
<PAGE>
9. In February 2000 the Company launched its B2B e-commerce site for
Globus Accessories
10. In January and February 2000 the Company launched the Globus Accessory
Line at the CES and CTIA trade shows;
11. In December 1999 the Company also announced a research partnership with
Auden concerning ceramic embedded antenna technology.
12. Also 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.
For the balance of its present fiscal year, the Company's efforts will be
directed toward the following:
1. Securing OEM SAR solution sales contracts utilizing proprietary designs
and the Company's in-house expertise in solving SAR;
2. Launching of a revamped corporate website and now proven B2B e-commerce
sales program, following a six-month period of test marketing for the
product line and the distribution systems.
3. Increased sales of wireless devices in general, via securing of new
distributors and dealers for the Globus Accessories Line, under the B2B
value-added dealer program, focused primarily on markets in the USA,
Canada. Additionally the Company will look to secure both new wireless
product and new distribution channel opportunities.
4. Continued expansion of the engineering and testing services of Celltech
to include full FCC and IC testing and electronic filing as well as
solutions for OEMs and resulting in growing ancilliary revenues derived
from testing and compliance filing on a growing range of RF emitting
devices;
5. Examining and securing 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 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 SAR
solution sales and on expansion of marketing efforts for a growing range of
wireless products, including new business opportunities in this area. The
Company is also undertaking to make commitments for product and market research
in to polymer lithium ion battery technology.
The Company currently employs fifteen employees and officers. The Company's
current monthly salary costs are approximately $48,800. For three months ended
July 31, 2000 the Company's average monthly cash expenses, inclusive of salary
costs, were approximately $77,380. 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 both longer term equity programs as well as debt financing of
certain activities of the business. To date the Company has not utilized debt
financing. 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.
<PAGE>
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, and both accessory sales and Celltech Research
should be in a position to self-finance their expansion plans as well as
contribute to the Company bottom line as of the final quarter of fiscal 2000.
<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
On August 17, 2000, an Annual Meeting of Stockholders (the "Annual
Meeting") of the Company, was held at The Grand Okanagan Hotel at 1310 Water
Street, Kelowna, B.C., Canada, V1Y 9P3, for the following purposes:
a. To re-elect four directors to the Company's Board of Directors,
each to hold office until his successor is elected and qualified or until
his earlier resignation or removal; and
b. To consider and act upon a proposal to ratify the Board of
Directors' selection of KPMG LLP, as Independent Certified Accountants for
fiscal year ended October 31, 2000.
At the Annual Meeting, the Company's shareholders re-elected the Company's
four directors, Bernard Penner, Jerome Cwiertnia, Anthony Dyck and Hans Schroth,
to the Company's Board of Directors. In addition, the Company's shareholders
unanimously voted in favor of ratifying the Board of Directors' selection of
KPMG LLP, as Independent Certified Accountants for fiscal year ended October 31,
2000.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
None
<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: September 14, 2000 By: /s/ Bernard D. Penner
Bernard D. Penner, President
Date: September 14, 2000 By: /s/ Benjamin Hewson
Benjamin Hewson, Controller
