UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
| x | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended March 31, 2006
| o | Transition report under Section 13 or 15(d) of the Exchange Act |
Commission file number: 0-32749
TRIMAX CORPORATION
(Formerly KIWI Network Solutions Inc.)
(Exact name of small business issuer as specified in its charter)
| | | |
Nevada | | 76-0616468 |
(State of incorporation) | | (I.R.S. Employer Identification No.) |
2 Lombard St, Suite 204
Toronto, Ontario, M5C-1M1
(Address of principal executive offices)
| | | |
(416) 368-4060 | | - |
(Issuer’s telephone number) | | (Issuer’s website) |
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 25,999,971 shares of common stock, as of May 22, 2006.
Transitional Small Business Disclosure Format (check one): Yes o No x
| 3 |
| Item1. | | 4-12 |
| Item 2. | | 13-14 |
| Item 3. | | 15 |
| 16 |
| Item 1. | | 16 |
| Item 2. | | 16 |
| Item 3. | | 16 |
| Item 4. | | 16 |
| Item 5. | | 16 |
| Item 6. | | 17 |
The unaudited consolidated financial statements of the quarterly shareholders’ report for the quarter ended March 31, 2006, are incorporated herein by reference.
The consolidated financial statements incorporated by reference from the quarterly shareholders’ report have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B. 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 of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month and three-month periods ended March 31, 2006 and for the period August 25, 2000 (inception) to March 31, 2006 are not necessarily indicative of the results that may be expected for the year ended September 30, 2006. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-KSB for the year ended September 30, 2005.
TRIMAX CORPORATION
Formerly KIWI Network Solutions Inc.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
| | | March 31, | | September 30, | |
| | | 2006 | | 2005 | |
| | | | | | |
| | | (Unaudited) | | (Audited) | |
| ASSETS | | | | | |
| | | | | | |
| CURRENT ASSETS | | | | | |
| Cash | | $ | 15,039 | | $ | 19,855 | |
| Stock subscriptions receivable | | | - | | | 21,900 | |
| Prepaid expenses | | | 7,633 | | | 6,366 | |
| Prepaid license fees | | | - | | | 67,599 | |
| | | | | | | | |
| Total Current Assets | | | 22,672 | | | 115,720 | |
| | | | | | | | |
| EQUIPMENT, net of depreciation | | | 25,212 | | | 6,607 | |
| | | | | | | | |
| | | $ | 47,884 | | $ | 122,327 | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
| | | | | | | | |
| CURRENT LIABILITIES | | | | | | | |
| Accounts payable | | | 240,280 | | $ | 215,832 | |
| Advances from related parties | | | 50,295 | | | 55,046 | |
| | | | | | | | |
| Total Current Liabilities | | | 290,575 | | | 270,878 | |
| | | | | | | | |
| STOCKHOLDERS’ DEFICIT | | | | | | | |
| Common stock | | | 26,000 | | | 41,234 | |
| Additional paid-in-capital | | | 9,701,469 | | | 9,235,124 | |
| Accumulated other comprehensive income loss | | | (1,406 | ) | | (5,359 | ) |
| Stock issuable | | | - | | | 217,314 | |
| Deficit accumulated during the development stage | | | (9,968,756 | ) | | (9,636,864 | ) |
| | | | | | | | |
| | | | | | | | |
| | | | (242,691 | ) | | (148,551 | ) |
| | | | | | | | |
| | | $ | 47,884 | | $ | 122,327 | |
See accompanying notes to consolidated financial statements.
TRIMAX CORPORATION
Formerly KIWI Network Solutions Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
| | | Three Months Ended March 31, | |
| | | 2006 | | 2005 | |
| | | (Unaudited) | | (Unaudited) | |
| | | | | | |
| EXPENSES | | | | | |
| License fees | | $ | 49,481 | | | - | |
| Financial | | | 391 | | | - | |
| Depreciation | | | 1,977 | | | 958 | |
| General and Administrative | | | 161,143 | | | 60,892 | |
| | | | | | | | |
| | | | 212,992 | | | (61,850 | ) |
| | | | | | | | |
| | | | | | | | |
| NET LOSS | | $ | (212,992 | ) | $ | (61,850 | ) |
| | | | | | | | |
| NET LOSS PER COMMON SHARE - (Basic and diluted) | | $ | (0.00 | ) | $ | (0.01 | ) |
| | | | | | | | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | | | 39,510,248 | | | 5,555,531 | |
See accompanying notes to consolidated financial statements.
TRIMAX CORPORATION
Formerly KIWI Network Solutions Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
| | | Six Months Ended March 31, | | Period August 25, 2000 | |
| | | 2006 | | 2005 | | ( Date of Inception) to March 31, 2006 | |
| | | (Unaudited) | | (Unaudited) | | (Unaudited) | |
| | | | | | | | |
| EXPENSES | | | | | | | |
| License fees | | $ | 70,965 | | | - | | $ | 85,395 | |
| Financial | | | 555 | | | - | | | 87,568 | |
| Depreciation | | | 3,567 | | | 1,916 | | | 30,770 | |
| General and administrative | | | 256,805 | | | 93,574 | | | 9,765,023 | |
| | | | | | | | | | | |
| | | | 331,892 | | | (95,490 | ) | | (9,968,756 | ) |
| | | | | | | | | | | |
| | | | | | | | | | | |
| NET LOSS | | $ | (331,892 | ) | $ | (95,490 | ) | $ | (9,968,756 | ) |
| | | | | | | | | | | |
| NET LOSS PER COMMON SHARE - (Basic and diluted) | | $ | (0.00 | ) | $ | (0.02 | ) | | | |
| | | | | | | | | | | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | | | 40,202,547 | | | 4,091,209 | | | | |
See accompanying notes to consolidated financial statements.
TRIMAX CORPORATION
Formerly KIWI Network Solutions Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | Three Months Ended March 31, | | Period August 25, 2000 | |
| | | 2006 | | 2005 | | (Date of Inception) to March 31, 2006 | |
| | | (Unaudited) | | (Unaudited) | | (Unaudited) | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | |
| Net loss | | $ | (212,992 | ) | $ | (61,850 | ) | $ | (9,968,756 | ) |
| Adjustments to reconcile net loss to net cash from operating activities: | | | | | | | | | | |
| Depreciation and amortization | | | 1,977 | | | 958 | | | 30,770 | |
| Salaries paid by share issuance | | | - | | | - | | | 986,500 | |
| Accounts payable forgiven | | | - | | | - | | | (10,171 | ) |
| Write-off of salaries payable | | | - | | | - | | | (111,355 | ) |
| Consulting paid by share issuance | | | - | | | - | | | 3,869,654 | |
| Director’s paid by share issuance | | | - | | | - | | | 950,000 | |
| Write-off of director’s compensation | | | - | | | - | | | (200,000 | ) |
| | | | | | | | | | | |
| Consulting, services, technology, and travel paid by share issuance | | | 1,664,456 | | | | | | | |
| Prepaid expenses | | | (948 | ) | | - | | | (7,633 | ) |
| Prepaid license fees | | | 49,365 | | | - | | | - | |
| Stock subscription receivable | | | 21,900 | | | - | | | - | |
| Accounts payable | | | 34,276 | | | - | | | 62,812 | |
| Other operating assets and liabilities | | | - | | | - | | | 1,299,069 | |
| Changes in operating assets and liabilities: | | | 106,570 | | | 958 | | | 8,534,102 | |
| Net Cash Used in Operating Activities | | | (106,422 | ) | | 60,892 | | | (1,434,654 | ) |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | |
| Purchases of property and equipment | | | - | | | - | | | (68,103 | ) |
| Net Cash Used in Investing Activities | | | - | | | - | | | (68,103 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | |
| Due to related parties | | | 17,373 | | | - | | | 118,000 | |
| Loans payable | | | - | | | - | | | 626,123 | |
| Issuance of common stock to be issued | | | - | | | - | | | 268,515 | |
| Cancellation of common stock | | | (16,000 | ) | | - | | | (16,000 | ) |
| Issuance of common for debt | | | 59,332 | | | - | | | 248,332 | |
| Issuance of stock for cash | | | 58,793 | | | - | | | 275,819 | |
| Net Cash Provided by Financing Activities | | | 119,498 | | | - | | | 1,520,789 | |
| EFFECT OF FOREIGN CURRENCY TRANSLATION | | | (3,772 | ) | | (2,993 | ) | | | |
| NET INCREASE (DECREASE) IN CASH | | | 9,304 | | | - | | | 15,039 | |
| CASH BEGINNING OF PERIOD | | | 5,735 | | | - | | | - | |
| CASH END OF PERIOD | | $ | 15,039 | | $ | - | | $ | 15,039 | |
See accompanying notes to consolidated financial statements.
TRIMAX CORPORATION
Formerly KIWI Network Solutions Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
| | | Three Months Ended March 31, | | Period August 25, 2000 | |
| | | 2006 | | 2005 | | (Date of Inception) to March 31, 2006 | |
| | | (Unaudited) | | | | (Unaudited) | |
| Supplemental Disclosure of Cash Flows Information: | | | | | | | |
| Interest paid | | $ | 391 | | $ | | | $ | 34,539 | |
See accompanying notes to consolidated financial statements.
TRIMAX CORPORATION
Formerly KIWI Network Solutions Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2006
Nature of Operations
Urbanesq.com Inc. (“Urbanesq”) was incorporated August 25, 2000 under the laws of the Province of Canada.
Effective October 18, 2001, Urbanesq completed a merger with Koala International Wireless Inc. (“Koala”), a public company incorporated in the State of Nevada on August 18, 1999. This merger constituted a reverse takeover of Urbanesq by Koala resulting in the period of operations being reported from the commencement of operations of Urbanesq.
The Company changed its name to KIWI Network Solutions Inc. (“The Company”) on December 23, 2003.
On November 4, 2004 the Company announced a reverse stock split of one of the Corporation’s common stock for each one hundred shares outstanding in the name of such shareholder; and authorized any fractional shares to be rounded to one share.
On February 11, 2005, the Company approved its Amended and Restated Articles of Incorporation, changed the name of the Company to Trimax Corporation (“Trimax”), and increased the number of its authorized stock by 95,000,000 shares of common stock and 19,000,000 shares of preferred stock, both with a par value of $0.01 per share.
On August 17, 2005, pursuant to a reorganization agreement by and among PLC Network Solutions Inc. (“PLC”), a private company incorporated in the Province of Ontario under the Ontario Business Corporations Act and Trimax, Trimax acquired all of the outstanding common stock of PLC.
On July 29, 2005, the Company entered into an Exclusive Supply agreement with a technology partner (the "Partner"), a privately-held corporation based in Toronto, Ontario. This agreement provides the Company with the exclusive right to sell Switzerland based Ascom broadband over power line communication access products ("Products") in Canada and non-exclusive rights world wide, which the “Partner” represented that it had secured itself from Ascom. In accordance with the agreement, the Partner agrees not to sell or supply Products to any other person or legal entity in Canada with the exception of any hydro organizations. In consideration for these rights the Company will pay the Partner an annual license fee of $100,000 in Canadian dollars for five years commencing on August 1, 2005.
Subsequent to the signing and the advancement of funds for the “Exclusive Supply Agreement” the company was made aware that the product supplier had no right to grant a sub-license from Ascom. Furthermore, the supplier was previously in default and was never in any position to grant any sub-license on its own license. Due to these events, Trimax has secured product from other vendors for BPL products, which it considers to be more cost effective and possessing similar performance characteristics. As well no annual license fees are required to be paid by Trimax. The company is also in the process of negotiating an equity position as well as being classified as a first tier client with exclusive rights in certain areas of the world for BPL products with a company that possesses its own proprietary BPL products.
On March 22, 2006 Trimax filed an action in The Superior Court Of Ontario against Electrolinks Corporation alleging damages of $1,250,000. Subsequently, Trimax received a settlement offer which it has accepted and is awaiting payment of $100,000 plus applicable taxes and legal fees.
Restatement of Financial Statements
The Company has restated its comparative consolidated financial statements for the year ended September 30, 2005 due to an accounting change based on new events and transactions which occurred during the current quarter.
On August 17, 2005 Trimax acquired all of the outstanding common stock of PLC Network Solutions Inc. (“PLC”) whereby each share of the 21,900,000 issued and outstanding common stock of PLC were converted into the right to receive one share of Trimax stock. Originally for accounting purposes, the acquisition had been treated as a recapitalization of PLC with PLC as the acquirer (reverse acquisition). However, on March 16, 2006 the Company effectively cancelled 16,000,000 common shares for reason of non payment and no consideration. Enough shares were cancelled, so that the remaining shareholders were not sufficient enough to take control of Trimax and therefore the original accounting treatment for the acquisition as reverse merger was no longer appropriate. Consequently, the Company has restated the comparative figures and accounted for the acquisition using the purchase method whereby Trimax acquired 100% of PLC.
As a result of the restatement of the September 30, 2005 consolidated financial statements, additional paid-in capital and accumulated deficit balances have been reclassified to include the historical financial statements of Trimax since August 25, 2000 (inception). The historical financial statements previously reported were those of PLC.
The effect on our accompanying consolidated balance sheet as of March 30, 2006 was an increase in additional paid-in capital of $9,230,593 and an increase in accumulated deficit of $9,202,808. The effect on the consolidated statements of operations for the period from inception (August 25, 2000) to March 30, 2006 was an increase in the net loss of $9,830,312. This change had no effect on the earnings subsequent to the acquisition. This change had no effect on the earnings per share for the three and six months ended March 31, 2005 and for the period August 25, 2000 (inception) to March 31, 2006.
TRIMAX CORPORATION
Formerly Kiwi Network Solutions Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2006
Going Concern
The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced losses from operations since inception that raise substantial doubt as to its ability to continue as a going concern.
The Company's ability to continue as a going concern is contingent upon its ability to obtain the financing and strategic alliances necessary to attain profitable operations.
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, PLC, and have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All significant inter-company accounts and transactions are eliminated.
The Company has not earned any revenues from limited principal operations and accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth in SFAS No. 7, Accounting and Reporting by Development Stage Enterprises. Among the disclosures required by SFAS No. 7 are that the Company's financial statements be identified as those of a development stage company, and that the statements of operation, stockholders' deficiency and cash flows disclose activity since the date of the Company's inception.
Recent Accounting Pronouncement
In November 2004, the FASB issued SFAS No. 151 “Inventory Costs — an amendment of ARB No. 43, Chapter 4”. Statement No. 151 requires that certain abnormal costs associated with the manufacturing, freight, and handling costs associated with inventory be charged to current operations in the period in which they are incurred. The adoption of SFAS 151 had no impact on the Company’s financial position, results of operations, or cash flows.
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Non-monetary Assets - an amendment of APB Opinion No. 29" (Statement 153). This Statement amends Opinion 29 to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The adoption of FAS 153 will not have a material impact on the Company's consolidated financial statements.
TRIMAX CORPORATION
Formerly KIWI Network Solutions Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2006
Recent Accounting Pronouncement (Continued)
In December 2004, the FASB issued a revision to SFAS No. 123, "Share-Based Payment" (Statement 123R). This Statement requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which the employee is required to provide service in exchange for the award requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Employee share purchase plans will not result in recognition of compensation cost if certain conditions are met; those conditions are much the same as the related conditions in Statement 123. This Statement is effective for public entities that do not file as a small business issuers as of the beginning of the first interim or annual reporting period that begins after June 15, 2005. This Statement applies to all awards granted after the required effective date and to awards modified, repurchased, or cancelled after that date. The cumulative effect of initially applying this Statement, if any, is recognized as of the required effective date and is not expected to have a material impact on the Company's consolidated financial statements.
In May 2005, the FASB issued FASB Statement No. 154, “Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, Accounting Changes and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements” (“SFAS 154”). SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. SFAS 154 also provides guidance for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable. The provisions of SFAS 154 are effective for accounting changes and corrections of errors made in fiscal periods beginning after December 15, 2005. The adoption of the provisions of SFAS 154 is not expected to have a material impact on the Company’s financial position or results of operations.
TRIMAX CORPORATION
Formerly KIWI Network Solutions Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2006
Capital Stock
On January 11, 2006 the company issued 55,300 private placement restricted common shares to various shareholders at issue prices between $0.65 and $0.80 per share.
On January 11, 2006 the company issued 164,247 private placement restricted common shares to various shareholders at issue prices between $0.65 and $0.80 per share.
On February 6, 2006 the Company issued 75,000 shares in settlement of a civil court case in which the Company was a defendant. The common shares issued have been valued at their market value of $59,407, which is the amount that would have been received if the shares had been issued for cash. Management believes that the fair market value of the services received from the former director approximates this value.
On February 10, 2006 the Company issued 11,677 private placement restricted common shares for $.50 per share.
On February 14, 2006 the Company issued 8,800 private placement restricted common shares for $0.56 per share.
On February 22, 2006 the Company issued 5,200 private placement restricted common shares for $0.57 per share.
On March 13, 2006 the Company issued 17,500 private placement restricted common shares for $0.57 per share.
On March 14, 2006 the Company issued 20,000 private placement restricted common shares for $0.50 per share.
On March 15, 2006 the Company issued 50,000 private placement restricted common shares for $0.50 per share.
On March 16, 2006 the Company’s Board of Directors approved the cancellation of 16,000,000 common shares. These shares which were originally issued in July 2005 to the former shareholders of PLC in consideration for their shares in PLC, however due to non payment and no consideration of the subscribing shares they were cancelled.
Subsequent Events
On March 22, 2006 Trimax filed an action in The Superior Court Of Ontario against Electrolinks Corporation alleging damages of $1.25 million. Subsequently, Trimax received a settlement for $100,000 plus applicable taxes and legal fees. This settlement was accepted and the Company is awaiting payment. Although this balance is a legal receivable, the Company has taken a 100% valuation allowance against this balance as at March 31, 2006.
Item 2. Management’s Discussion and Analysis
The following discussion should be read in conjunction with the information contained in our consolidated financial statements and the notes thereto appearing elsewhere in this quarterly report, and in conjunction with the Management's Discussion and Analysis set forth in (1) our annual report on Form 10-KSB for the year ended September 30, 2005.
Preliminary Note Regarding Forward-Looking Statements
This quarterly report and the documents incorporated herein by reference contain forward-looking statements within the meaning of the federal securities laws, which generally include the plans and objectives of management for future operations, including plans and objectives relating to our future economic performance and our current beliefs regarding revenues we might earn if we are successful in implementing our business strategies. The forward-looking statements and associated risks may include, relate to or be qualified by other important factors. You can identify forward-looking statements generally by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “intends,” “plans,” “should,” “could,” “seeks,” “pro forma,” “anticipates,” “estimates,” “continues,” or other variations of those terms, including their use in the negative, or by discussions of strategies, opportunities, plans or intentions. You may find these forward-looking statements in this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as throughout this quarterly report. A number of factors could cause results to differ materially from those anticipated by forward-looking statements.
These forward-looking statements necessarily depend upon assumptions and estimates that may prove to be incorrect. Although we believe that the assumptions and estimates reflected in the forward-looking statements are reasonable, we cannot guarantee that we will achieve our plans, intentions or expectations. The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ in significant ways from any future results expressed or implied by the forward-looking statements.
Any of the factors described in this quarterly report, including in this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, could cause our financial results, including our net income (loss) or growth in net income (loss) to differ materially from prior results, which in turn could, among other things, cause the price of our common stock to fluctuate substantially. We base the forward-looking statements on information currently available to us, and we assume no obligation to update them.
In addition, readers are also advised to refer to the information contained in our filings with the Commission, especially on Forms 10-KSB, 10-QSB and 8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or historic results. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors to be an exhaustive statement of all risks and uncertainties or potentially inaccurate assumptions.
Plan of Operations
Trimax Corporation is a provider of Broadband Over Powerline Solutions. The company is a high-technology systems integrator and provider of state of the art devices that supplies power-line communications (PLC) solutions for the commercial, residential, and industrial markets. Trimax Corporation provides a full spectrum of services through its FCC certified high-speed modems and devices. The services provide triple-play high-speed data communications using existing electrical wiring infrastructure such as secure high-speed 128kb encrypted Internet access, Voice Over IP services (VoIP) and high speed Internet video signals (IPTV). The electrical wiring already in place can become a backbone for a local area network. A gateway distributes data to multiple modems, which users plug into ordinary outlets to access data at speeds between 6mbps and 60mbps.
The company and its (BPL) Broadband over Powerline devices are presently FCC certified as well as having obtained certification in various parts of the world. No further research and Development is needed in order for the company to be able to sell and market its products. The company has secured various individual contracts within North America and various other parts of the world and anticipates on deploying its devices and bundled services sometime within the calendar year. The company will continue to search and secure additional contracts within 2006 for its devices and bundled services as it anticipates and foresees a trend towards the adoption of the technology.
For the three months ended March 31, 2006, the Company incurred a loss in the amount of $212,992. Most of the expenses incurred for this period were for basic monthly company expenses. Operation costs over the next year will depend on a number of factors, including the cost of manufacturing its products and devices to allow it to be more competitively priced with other present technologies as well as, the cost of conducting marketing research and preparing a marketing campaign.
Recent Developments and Discussions
On May 17, 2006, Trimax entered into an agreement with a broadband over powerline provider for the purchase of its hotel client service book. The purchase agreement calls for the acquisition of the service book for 50 Hotels, which represents recurring revenue stream from 4,600 rooms in total. The Company is projecting that a revenue stream of $400,000 will be realized within the next twelve months, commencing on June 28, 2006. As well, the acquisition allows for the potential to upgrade the services by adding applications and ISP provisioning to these Hotel sites.
Management has thus far funded its operations through various small investor private placements, but is still pursuing various sources of financing. The company has recently entered into discussions with a high net worth individual who has tentatively committed to invest between $750,000 and $1,500,000 USD. The company has also commenced searching for an investment banker with the intent of raising a secondary and much larger round of financing in order for it to fully complete its business plan objectives. The Company has entered and developed relationship’s with other hardware providers that can deliver product at a much reduced cost from its previous supplier, which will allow the company to sell broadband power line communication access products, as discussed in note 1, which management believes will produce the necessary income to attain profitability in the future
Liquidity and Capital Resources
The Company does not require any further R & D at this time in order to be able to market and sell its products. Although the Company has raised funds through various smaller investors and continues to do so, it requires further larger financings and/or a joint venture with strategic partners to allow for the fulfillment of any orders that have been procured. To date the company has raised funds to keep its business operational. This has allowed it to market its products and procure contracts. The availability of future financings will depend on market conditions.
The forecast of the period of time through which the Company's financial resources will be adequate to support operations is a forward-looking statement that involves risks and uncertainties. The actual funding requirements may differ materially from this as a result of a number of factors including plans to rapidly expand its new operations. There can be no guarantee that financing adequate to carry out the Company's business plan will be available on terms acceptable to the Company, or at all.
Item 3. Controls and Procedures
| (a) | Evaluation of disclosure controls and procedures. Based on the evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) as of the filing date of this Quarterly Report on Form 10-QSB, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are designed to ensure that the information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and are operating in an effective manner. |
| (b) | Changes in internal controls. There were no changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their most recent evaluation. |
PART II — OTHER INFORMATION
On June 27, 2005 a complaint was filed in the Circuit Court of the Seventeenth Judicial Circuit In And For Broward County, State Of Florida Civil Division. The complaint alleges that Trimax Corporation failed to tender 400,000 shares of its common stock in consideration for services provided by the Plaintiff, of which 300,000 were to be delivered no later than December 15, 2004. The Plaintiff was asking for $457,500 in damages. On February 3, 2006 both Trimax Corporation (the defendant) and the Plaintiff entered into a settlement for the claim filed on June 27, 2005 in the Circuit Court Of The Seventeenth Judicial Circuit In And For Broward County, State Of Florida Civil Division. On February 6, 2006 the Company issued 75,000 shares in settlement of this matter. The common shares issued have been valued at their market value of $59,407, which is the amount that would have been received if the shares had been issued for cash. Management believes that the fair market value of the services received from the former director approximates this value.
On March 22, 2006 Trimax filed an action in The Superior Court Of Ontario against Electrolinks Corporation alleging damages of $1.25 million. Subsequently, Trimax received a settlement for $100,000 plus applicable taxes and legal fees. This settlement has accepted and the Company is awaiting payment. Although this balance is a legal receivable, the company has taken an allowance against this balance as at March 31, 2006.
On January 11, 2006 the Company issued 164,247 private placement restricted common shares to various shareholders at issue prices between $0.65 and $0.80 per share.
On February 6, 2006 the Company issued 75,000 shares in settlement of a civil court case in which the Company was a defendant. The common shares issued have been valued at their market value of $59,407, which is the amount that would have been received if the shares had been issued for cash. Management believes that the fair market value of the services received from the former director approximates this value.
On February 10, 2006 the Company issued 11,677 private placement restricted common shares for $.50 per share.
On February 14, 2006 the Company issued 8,800 private placement restricted common shares for $0.56 per share.
On February 22, 2006 the Company issued 5,200 private placement restricted common shares for $0.57 per share.
On March 13, 2006 the Company issued 17,500 private placement restricted common shares for $0.57 per share.
On March 14, 2006 the Company issued 20,000 private placement restricted common shares for $0.50 per share.
On March 15, 2006 the Company issued 50,000 private placement restricted common shares for $0.50 per share.
On March 16, 2006 the Company’s Board of Directors approved the cancellation of 16,000,000 common shares. These shares which were originally issued in July 2005 to the former shareholders of PLC in consideration for their shares in PLC, however due to reasons of non payment and no consideration of the subscribing shares they were cancelled.
Item 3. Defaults Upon Senior Securities
Not applicable.
Not applicable.
Not applicable.
The following exhibits are being filed as part of this quarterly report:
Exhibit No. | | Description |
| | | |
| | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. |
| | | |
| | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. |
| | | |
| | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | TRIMAX CORPORATION |
| | | |
| | By: | /s/ Derek Pepler | |
| | | Name: Derek Pepler |
| | | Title: President and Director and Chief Executive Officer |
| | | |
| | Date: May 22, 2006 |
| | | |
| | | |
| | By: | /s/ Robert Vivacqua | |
| | | Name: Robert Vivacqua |
| | | Title: Chief Financial Officer |
| | | |
| | Date: May 22, 2006 |
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