UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10 - QSB/A
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from n/a to n/a
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000-32749
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Commission file number
KOALA INTERNATIONAL WIRELESS INC.
n/k/a KIWI NETWORK SOLUTIONS INC.
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(Exact name of small business issuer as specified in its charter)
Nevada #76-0616468
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(State or other jurisdiction (I.R.S. Employer
of organization) Identification No.)
2929 E. Commercial Blvd. Suite 610
Fort Lauderdale, FL 33308
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(Address of principal executive offices)
(954) 771-5500
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(Issuer's telephone number)
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 issuer was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. (1) Yes [X] No (2) Yes [X] No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer's classes
of common equity, as of the latest practicable date: As of August 18,
2003, the Issuer had 28,160,556 shares of common stock, par value
$0.001, issued and outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [] No [X]
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS......................................... 2
Consolidated Balance Sheets.................................. 3
Consolidated Statements of Operations........................ 4
Consolidated Statements of Cash Flows........................ 5
Notes to Consolidated Financial Statements................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.... 6
Plan of Operations........................................... 6
Liquidity and Capital Resources.............................. 7
Special Note Regarding Forward Looking Statements............ 7
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS............................................ 7
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.................... 7
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.............................. 8
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......... 8
ITEM 5. OTHER INFORMATION............................................ 8
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................. 8
SIGNATURES
PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements.
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The accompanying consolidated balance sheets of Koala International
Wireless Inc. (a development stage company) at June 30, 2003 and
September 30, 2002, and the related consolidated statements of
operations and the consolidated statements of cash flows for the nine
months ended June 30, 2003 and June 30, 2002 and for the period August
18, 1999 (date of inception) to June 30, 2003 have been prepared by
Koala International Wireless Inc.'s management and do not include all
information and notes to consolidated financial statements necessary
for a complete presentation of the consolidated financial position,
results of operations and cash flows in conformity with accounting
principles generally accepted in the United States of America. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the consolidated results of operations and consolidated
financial position have been included and all such adjustments are of a
normal recurring nature.
Consolidated operating results for the period ended June 30, 2003 are
not necessarily indicative of the results that can be expected for the
year ending September 30, 2003.
2
Koala International Wireless Inc.
(a Development Stage Company)
Consolidated BALANCE SHEETS
(Unaudited)
As at June 30, 2003 and September 30, 2002
U.S. Dollars
June 30 September 30
2003 2002
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ASSETS
Current
Cash $ 150 $ -
Fixed assets - net of accumulated
depreciation of $19,151
(September $15,556) 20,357 23,952
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Total Assets $ 20,507 $ 23,952
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LIABILITIES
Current
Accounts payable and accrued liabilities $ 955,847 $ 841,583
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STOCKHOLDERS' EQUITY
Common Stock
Authorized
100,000,000 shares of common stock
with a par value of $0.001 each
20,000,000 shares of preferred stock
with a par value of $0.001 each
Issued and outstanding
14,181,000 shares of common stock 14,181 13,696
(13,696,000 at September 31, 2002)
Additional paid in capital 2,502,391 2,403,306
Other comprehensive income 5,013 5,013
Deficit accumulated during development
stage of operations (3,456,925) (3,239,646)
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Total Stockholders' Equity (Deficit) (935,340) (817,631)
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Total Liabilities and Stockholders' Equity $ 20,507 $ 23,952
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The accompanying notes are an integral part of these consolidated
financial statements.
3
Koala International Wireless Inc.
(a Development Stage Company)
Consolidated STATEMENTS OF OPERATIONS
(Unaudited)
For the Three and Nine Months Ended June 30, 2003 and 2002 and
for the Period August 18, 1999 (Date of Inception) to June 30, 2003
U.S. Dollars
Nine Nine Three Three August 18, 1999
Months Months Months Months (Inception) to
2003 2002 2003 2002 June 30, 2003
----------- ----------- ----------- ----------- ---------------
Revenue $ - $ - $ - $ - $ -
Expenses
Product development - 53,750 - 53,750 129,040
Website - 3,100 - - 74,499
Professional fees 3,205 85,715 (4,454) 53,829 160,361
Investor relations - 38,412 - 38,412 27,112
Depreciation 3,595 7,101 1,200 2,367 19,151
Rent, office and administration 91,132 60,025 36,697 44,681 149,742
Consulting 33,000 12,836 - - 2,432,550
Financing and due diligence - 12,000 - 12,000 73,450
Marketing - 13,800 - 13,800 193,410
Salaries - - - - 145,719
Travel and business development - 10,000 1,327 10,000 51,891
----------- ----------- ----------- ----------- -----------
130,932 298,543 34,770 229,334 3,456,925
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Net income (loss) for period $ (130,932) $ (298,543) $ (34,770) $ (229,334) $(3,456,925)
Net income (loss) per share $ (0.01) $ (0.03) $ (0.00) $ (0.02)
Weighted average number of shares
outstanding 14,059,750 10,500,000 14,090,090 12,500,000
The accompanying notes are an integral part of these consolidated
financial statements.
3
Koala International Wireless Inc.
(a Development Stage Company)
Consolidated STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three and Nine Months Ended June 30, 2003 and 2002 and
for the Period August 18, 1999 (Date of Inception) to June 30, 2003
U.S. Dollars
August 18, 1999
Nine Months Three Months (Inception) to
2003 2002 2003 2002 June 30, 2003
----------- ----------- ----------- ----------- ---------------
Operating Activities
Net income (loss) $ (130,932) $ (298,543) $ (34,770) $ (229,334) $ (3,494,938)
Adjustments to reconcile net income
(loss) to net cash used by
operating activities 3,595 7,101 1,200 2,367 19,151
Services acquired for issuance of stock - 27,500 - 27,500 27,500
Stock option benefit - - - - 2,399,550
Changes in operating assets and liabilities 112,937 263,394 33,570 199,322 947,781
----------- ----------- ----------- ----------- -----------
Net cash provided by (used by) operating
activities (14,400) (548) - (145) (100,956)
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Investing Activities
Fixed assets - - - - (48,090)
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Financing Activities
Common stock issued for cash 14,550 - - - 149,196
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Inflow (outflow) of cash 150 (548) - (145) 150
Cash, beginning of period - 558 150 155 -
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Cash, end of period $ 150 $ 10 $ 150 $ 10 $ 150
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Supplemental information
Interest paid $ 0 $ 0 $ 0 $ 0 $ 0
Value of shares issued for salaries,
consulting and debt - - - - $ 116,569
Corporate income taxes paid $ 0 $ 0 $ 0 $ 0 $ 0
The accompanying notes are an integral part of these consolidated
financial statements.
5
Koala International Wireless Inc.
(a Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Nine Months Ended June 30, 2003
1. ORGANIZATION AND BASIS OF PRESENTATION
Koala International Wireless Inc. (the "Company" or "Koala" and
formerly Kettle River Group Inc.) was incorporated August 18, 1999 in
the State of Nevada and is in the development stage. The balance sheets
include the accounts of Urbanesq.com, Inc., giving retroactive effect
to its acquisition as a wholly owned subsidiary.
2. DEVELOPMENT STAGE COMPANY
In a development stage company, management devotes most of its
activities to preparing the business for operations. Planned principal
activities have not yet begun. The ability of the Company to emerge
from the development stage with respect to any planned principal
business activity is dependent upon its successful efforts to raise
additional equity financing and/or attain profitable operations. There
is no guarantee that the Company will be able to raise any equity
financing or sell any of its products at a profit. There is,
therefore, doubt regarding the Company's ability to continue as a going
concern.
3. BASIS OF ACCOUNTING PRESENTATION
These unaudited financial statements have been prepared by management
in accordance with accounting principles generally accepted in the
United States of America for interim financial information, are
condensed and do not include all disclosures required for annual
financial statements. The organization and business of the Company,
accounting policies followed by the Company and other information are
contained in the notes to the Company's audited financial statements
filed as part of the Company's Form 10-SB and Form 10K-SB for the year
ended September 30, 2002.
In the opinion of the Company's management, these financial statements
reflect all adjustments necessary to present fairly the Company's
financial position at June 30, 2003 and the results of its operations
for the nine months then ended. The results of operations for the nine
months ended June 30, 2003 are not necessarily indicative of the
results to be expected for the entire fiscal year.
4. COMMON CAPITAL STOCK
Pursuant to a voluntary share exchange agreement effective October 18,
2001, the Company issued 6,500,000 shares of common stock to acquire
100% of the outstanding share capital of Urbanesq.com, Inc., a private
Ontario, Canada company. Certain shareholders of the Company in turn
surrendered 7,500,000 shares of the Company's common stock to the
Company, resulting in 12,500,000 shares of common stock of the Company
issued and outstanding as of October 18, 2001. On completion of the
acquisition, Urbanesq.com, Inc. became a wholly-owned subsidiary of the
Company. Urbanesq was incorporated August 25, 2000, which became the
effective date of inception of Koala after the reverse takeover of
Urbanesq.
5. SUBSEQUENT EVENT
Subsequent to June 30, 2003, the Company issued 7,212,646 shares for
technology development, 6,310,000 shares for consulting services and
456,910 shares for cash of $46,156 for a total issuance of 13,979,556
shares of common stock. Technology development includes initial design
and prototype of Professional Digital Assistant (PDA) device.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
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The following discussion should be read in conjunction with the
accompanying unaudited interim consolidated financial statements.
Plan of Operations.
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The Company has not generated any revenues from operations since
inception. The Company's business following its acquisition of
Urbanesq was to produce and market a product called the Hipster
and the subscription services associated with that product. The
Company has ceased to pursue this business and has extended its
business model to launch a Windows based communication device and
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associated services. The new device is being designed to access
information from the Internet, provide email service and other
communication functionality such as text messaging. The plan is to
deliver multiple services, some on a subscription basis, in a manner
similar to the way a consumer currently pays for a cellular
telephone. The first market for the device and services will be
Europe followed by other GPRS markets.
The Company estimates that it needs $150,000.00 to downsize its
prototype and ready the device for manufacture. The Company is working
towards filling a purchase order for 10,000 units of the device at an
anticipated profit margin sufficient to pay out its accounts payable
and accrued liabilities.
No revenue was recorded for the nine month period ended June 30, 2003
and no revenue has been generated since inception.
Net loss for the three month period ended June 30, 2003 was $(34,770)
compared to a loss of $(229,334) for the three months ended June 30,
2002. The expenditures reflected in the loss represent the Company's
administrative expenses, including maintenance of an office.
Liquidity and Capital Resources
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The Company has been able to pay its expenses and costs through the
increase in its accounts payable and payments made by others for
the Company. As of June 30, 2003, the Company had a working capital
deficiency of $955,697. The Company needs to raise additional funds
through the sale of stock or borrowing just to maintain the corporate
existence of the Company and to maintain the quotation of the Company's
common stock on the OTC Bulletin Board. The Company may not be
successful in its efforts to raise equity financing and /or attain
profitable operations. There is doubt regarding the Company's ability
to continue as a going concern. The Company is actively seeking an
investment into the Company of $300,000.00 by way of a private
placement.
Special Note Regarding Forward Looking Statements
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Certain statements in this report and elsewhere (such as in other
filings by the company with the Securities and Exchange Commission
("SEC"), press releases, presentations by the Company of its management
and oral statements) may constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," and "should," and variations of these words and
similar expressions, are intended to identify these forward-looking
statements. Actual results may materially differ from any forward-
looking statements. Factors that might cause or contribute to such
differences include, among others, competitive pressures and constantly
changing technology and market acceptance of the Company's products and
services. The Company undertakes no obligation to publicly release the
result of any revisions to these forward-looking statements, which may
be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
PART II - OTHER INFORMATION
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Item 1. Legal Proceedings.
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To the Company's knowledge, there are no lawsuits nor were any lawsuits
commenced against the Company during the quarter ended June 30, 2003,
nor did the Company commence any lawsuits during the same period.
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Item 2. Changes in Securities and Use of Proceeds.
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Changes in Securities
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During the three months ended June 30, 2003 the Company issued nil
common shares.
Subsequent to June 30, 2003 the Company issued 13,979,556 common
shares. The Company relied on Rule 901 of Regulation S for an
exemption from registration of these share issuances.
7
Use of Proceeds
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Not applicable.
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Item 3. Defaults Upon Senior Securities.
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Not applicable.
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Item 4. Submission of Matters to a Vote of Security Holders.
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No matters were put forward to a vote of the security holders of the
Company this quarter.
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Item 5. Other Information.
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None.
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Item 6. Exhibits and Reports on form 8-K.
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Exhibits
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none
Reports on Form 8-K
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Form 8-K filed October 15, 2002: Form 8-K filed December 5, 2002: Form
8-K/A filed December 13, 2002: Form 8-K filed May 15, 2003.
SIGNATURES
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.
Koala International Wireless Inc.
Date: June 14, 2004 By: /s/ Bradley Wilson
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Bradley Wilson, President,
Chief Executive Officer
and Director
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