As Filed with the Securities and Exchange Commission on ___________________
Registration No.______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
PRE-EFFECTIVE AMENDMENT NO. 4 TO
FORM SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
WORLD WIDE WIRELESS COMMUNICATIONS, INC.
(Name of small business issuer in its charter)
-----------------
Nevada 860887822
(State or jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Identification No.) Classification Code No.)
DOUGLAS P. HAFFER
520 Third Street, Suite 101
Oakland, CA 94607
(510) 839-6100
(Name, Address and Telephone Number of Agent for Service)
-----------------------
Copies to:
WILLIAM D. EVERS, ESQ.
Evers & Hendrickson, LLP
155 Montgomery, 12th Floor
San Francisco, CA 94104
Phone No.: (415) 772-8129 Fax No.: (415) 772-8101
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462 (b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462 (c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462 (d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434
check the following box. / /
CALCULATION OF REGISTRATION FEE
- ---------------------------- ------------------- --------------------------- ---------------------- ----------------
Title of each class of Amount to be Proposed maximum offering Proposed maximum Amount of
securities to be registered registered(1) price per unit aggregate offering registration
price(2) fee
- ---------------------------- ------------------- --------------------------- ---------------------- ----------------
Common, $ .001 par per 9,680,916 $4.50 $18,000,000 $4,752
share
- ---------------------------- ------------------- --------------------------- ---------------------- ----------------
<FN>
(1) Includes 5,680,916 shares sold pursuant to certain registration rights.
World Wide Wireless Communications, Inc., will not receive any of the proceeds
of such sales.
(2) Estimated pursuant to Rule 457(a) under the Securities Act of 1933, as
amended (the "Securities Act"), solely for purposes of calculating the
registration fee.
</FN>
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is prohibited.
Initial Public Offering Prospectus
Subject to Completion, Dated ______________
World Wide Wireless
Communications, Inc.
9,680,916 shares of common stock
This is our initial public offering. We expect that the price for our
shares will be between $4.00 and $5.00 per share. This price may not reflect the
market price of our shares after this offering. This is a direct distribution by
World Wide Wireless Communications, Inc. There are no escrow arrangements, and
there are no minimum purchase requirements. Our shares are not listed on Nasdaq
or any exchange. Some of our shares are traded on the OTC Bulletin Board under
the trading symbol WLGS.
______________________
Investing in our common stock involves risks.
See "Risk Factors" beginning on page 5.
______________________
Per Share Total
--------- -----
Public Offering Price.............................. ______ _______
Underwriting Discounts and Commissions............. ______ _______
Proceeds to company before expenses................ ______ _______
The Proceeds before expenses, above, are calculated before deducting estimated
expenses of $60,000, including registration fees and other offering costs, in
addition to legal and accounting fees.
We are registering and selling 4,000,000 shares of common stock on behalf of our
company. We will also register another 5,680,916 shares of common stock for
existing shareholders with "piggy-back" rights. We will not sell the 5,680,916
shares owned by the existing shareholders with piggy-backed rights.
Our shares will initially be sold through our executive officers who will not
receive commissions and who will be registered as sales representativee where
required. We currently do not have a broker-dealer involved with the sale of our
shares; however, we may obtain a broker-dealer to sell our shares on a best
efforts basis. If we retain a broker-dealer we anticipate paying a commission of
up to 12%. See "Summary of Offering" and "Plan of Distribution."
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is _________, 2000
1
TABLE OF CONTENTS
Page Page
---- ----
Reference Data..............................2 Management...........................................17
Prospectus Summary..........................3 Executive Compensation...............................19
Summary of Financial Data...................4 Principal Shareholders...............................22
Risk Factors................................5 Certain Transactions.................................23
Forward-Looking Statements..................7 Description of Common Stock..........................23
Dividend Policy.............................8 Plan of Distribution.................................24
Use of Proceeds.............................8 Legal Matters........................................24
Dilution....................................9 Experts..............................................26
Management's Discussion and Analysis........10 Additional Information...............................26
Business....................................10 Financial Statements.................................27-50
Until 90 days after the effective date of this prospectus all dealers
effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
REFERENCE DATA
We have filed with the Securities and Exchange Commission a
registration statement on Form SB-2 under the Securities Act with respect to
this offering. This prospectus does not contain all the information set forth in
the registration statement and the exhibits and schedules thereto, as permitted
by the rules and regulations of the Commission. We will be subject to the
informational filing requirements of the Securities Exchange Act of 1934, as
amended ("Exchange Act") upon the filing of the SB-2 and the Form 8-A. We
Company intends to furnish our shareholders with annual reports containing
financial statements audited by our independent public accountants and quarterly
reports containing unaudited financial information for the first three quarters
of each fiscal year. Our fiscal year ends on September 30.
2
PROSPECTUS SUMMARY
World Wide Wireless Communications, Inc.
We provide high-speed wireless Internet service in the United States
and internationally. We are also developing a new generation of chipset
technology, named VDMA (Virtual Division Multiple Access) which may
significantly enhance wireless communications in the future. The Company may
license this technology to a third party.
We are incorporated under the laws of the State of Nevada. Our offices
are located at 520 Third Street, Suite 101, Oakland, CA 94607. Our telephone
number is (510) 839-6100.
Summary of the offering
Type of security.....................................Common stock
Common stock registered by company...................We are registering and selling 4,000,000 shares of common
stock on behalf of our company. We will also register
another 5,680,916 shares of common stock for existing
shareholders with "piggy-back" rights. We will not sell the
5,680,916 shares owned by the existing shareholders with
piggy-backed rights.
Common stock outstanding as of
January 31, 2000................................76,818,445 shares
Common stock offered for sale
by our company in this offering.................4,000,000 shares
Common stock to be outstanding after
this offering...................................80,818,445 shares
Use of proceeds......................................For expansion of our sales force, marketing and distribution
activities, expansion of both our domestic and international
business operations, for acquiring spectrum, and for general
corporate purposes. See "Use of Proceeds" for more
information.
Our common stock is being offered as a direct placement or
distribution. There is no minimum number of shares that must be sold. There can
be no assurance that all of the shares offered will be sold. Accordingly,
investors will bear the risk that we will accept subscriptions for less than
4,000,000 shares and then be unable to successfully complete all of the
anticipated uses of the proceeds of this offering as expected. If fewer than
4,000,000 shares are sold, our business, financial condition and results of
operations could be adversely affected. No officer, director, or employee has
agreed to loan us funds in the event we sell less than 4,000,000 shares.
Funds from this offering will not be placed in an escrow or trust
account and will be available for use as the funds are received. The minimum
investment per shareholder is $4,500.00 (1,000 shares). There is no maximum
investment per shareholder.
Our shares will initially be sold through our executive officers who
will not receive commissions and who will be registered as sales representatives
where required. We currently do not have a broker-dealer involved with the sale
of our shares; however, we may obtain a broker-dealer to sell our shares on a
best efforts basis. If obtained, we anticipate paying a broker-dealer a
commission of up to 12%.
3
This offering will begin as of the effective date of this prospectus
and continue for twelve (12) months or such earlier date as we may terminate the
offering. If this offering terminates, all subscription payments received after
termination will be promptly returned.
SUMMARY OF FINANCIAL DATA
The summary financial data for the years ended September 30, 1998 and
1999 have been derived from the Financial Statements and Notes to Financial
Statements, audited by Reuben E. Price & Co., San Francisco independent
auditors. The selected financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements and Notes thereto included elsewhere in
this prospectus.
Statements of Income Data:
Cumulative
from inception
Year ended Year ended on Sept 1, 1994 Qtr. Ended Qtr. Ended
Sept. 30, 1998 Sept. 30, 1999 to Sept. 30 1999 Dec. 31, 1999 Dec. 31, 1998
-------------- -------------- ---------------- ------------- -------------
Audited Audited Audited Unaudited Unaudited
Prepared by Prepared by
Management Management
Revenue $ -- $ -- $ -- $ -- $ --
Gen. & Adm. Expenses (353,075) (2,383,330) (6,765,842) (829,189) (358,615)
Total Operating Expenses (353,075) (2,383,330) (6,765,842) (829,189) (358,615)
Operating loss (353,075) (2,383,330) (6,765,842) (829,189) (358,615)
Other income 6,701 0 6,701 0 0
Net loss (346,374) (2,383,330) (6,759,141) (829,189) (358,615)
Sept. 30, 1999 Dec. 31, 1999
Audited Unaudited
Prepared by
Management
Balance Sheet Data:
Working capital (153,646) (19,888)
Total assets 1,180,777 2,474,835
Long-term debt,
less current portion 328,000 740,000
Shareowners' equity 361,309 1,375,394
4
RISK FACTORS
You should carefully consider the following risks before you decide to
buy our common stock.
We have a history of losses and there is significant doubt about our ability to
continue as a going concern
We are a development stage company and our revenues for the foreseeable
future will not be sufficient to attain profitability. Our auditors have stated
in their report for the period ended September 30, 1999 that WWW Communications'
ability to meet its future financing requirements, and the success of future
operations, cannot be determined at this time. Our losses are attributable to
the lack of a sufficient subscriber base to enable us to cover our ongoing
programming, licensing, development and other costs. We expect to continue to
experience losses from operations while we develop and expand our wireless
Internet service system and other technologies.
We may not have enough capital to remain a going concern, especially if we do
not sell a significant amount of securities offered by this prospectus.
Our ability to continue as a going concern, and the growth of our
business, will require substantial investment on a continuing basis to finance
capital expenditures and related expenses. Although we believe that the proceeds
from this offering, together with nominal funds expected to be generated from
operations, will be sufficient to finance our working capital requirements for
at least twelve months following completion of this offering, there can be no
assurances that we will generate sufficient funds from this offering to fund our
operations. We do not have a bank line of credit and there can be no assurance
that any required or desired financing will be available through bank
borrowings, debt, or equity offerings, or otherwise, on acceptable terms. To the
extent that future financing requirements are satisfied through the issuance of
equity securities, investors may experience significant dilution in the net book
value per share of common stock.
We do not know how many of the shares offered will be sold. Therefore,
investors will bear the risk that we will accept subscriptions for a nominal
number of shares and then be unable to exist as a going concern or accomplish
our plans as discussed in the Use of Proceeds section below. If no shares, or a
nominal number of shares are sold, our financial condition and our ability to
continue as a going concern could suffer.
As a new investor you will experience immediate and substantial dilution
If you purchase our common stock in this offering, you will experience
immediate and substantial dilution. Even if all the shares in this offering are
sold, for each share you purchase for $4.50, the book value of your shares will
be 4.288 per share, a substantial dilution. If less that the entire offering is
sold, your dilution will be even greater.
We arbitrarily determined the purchase price of our shares for this offering.
The trading price of our shares on the Over-the-Counter Bulletin Board may
decline below the price at which you are purchasing shares in this offering.
5
We arbitrarily determined the purchase price of our shares in this
offering. The price of the shares offered herein bears no relationship to the
assets, book value, or net worth of WWW Communications. This is our initial
public offering. Currently, some of our shares that we originally sold as
restricted securities in private placement offerings are now trading on the
Over-the-Counter Bulletin Board under the symbol WLGS. The price of the
securities offered herein may bear no relationship to trading price of our
shares traded on the Over-the-Counter Bulletin Board.
Our stock may not meet the requirements to continue to be listed on the
Over-the-Counter Bulletin Board
This is our initial public offering. Some of our shares that we
initially sold as restricted securities are now freely trading on the
Over-the-Counter Bulletin Board under the symbol WLGS. The Securities and
Exchange Commission ("SEC") now requires that any company whose stock is trading
on the Over-the-Counter Bulletin Board apply to be registered as a reporting
company and file annual and quarterly reports on a regular basis. We have
applied to be registered as a reporting company; however, the Securities and
Exchange Commission has not yet approved our application. If our SB-2 filing is
not effective by May 17, 2000, our shares may not be tradable until the SEC
approves our filing.
Technological change may render our spectrum or services obsolete
We are in an emerging industry that is dependent on government licenses covering
certain bandwidths and on technology designed to exploit this new communications
device. The technology can change in a manner that would make our system
obsolete. Although this risk is true for more technological companies, it
appears to apply to our industry, telecommunications, with increasing frequency.
International -- Inexperience
We intend to expand our international sales efforts in the future. We
have very limited experience in marketing, selling and supporting our products
and services abroad. There is a risk that we will not be able to expand due to
this inexperience. If we are unable to grow our international
6
operations successfully and in a timely manner, our business and operating
results could be seriously harmed. This could be reflected in a loss in your
investment.
International -- Particular Risks
Even if our efforts to expand in the international market are
successful, that market has some risks not normally present. These include:
o unexpected changes in regulatory requirements, taxes, trade laws and tariffs;
o differing intellectual property rights;
o differing labor regulations;
o unexpected changes in regulatory requirements;
o changes in a specific country's or region's political or economic conditions;
o greater difficulty in staffing and managing foreign operations; and
o fluctuating exchange rates.
We plan to expand our international operations in the near future, and
this will require a significant amount of attention from our management and
substantial financial resources.
Governmental regulation and legal uncertainties could impair the growth of the
Internet and decrease demand for our services or increase our cost of doing
business
It is possible that Internet laws and regulations in the United States
and foreign countries may be changed in the future. Any changes in the existing
laws may have a material affect on our ability to operate at a profit. The range
of such governmental changes cannot be predicted, but may possibly include:
o changes that directly or indirectly affect the regulatory status of Internet
services;
o changes that affect telecommunications costs, including the application of
access charges to Internet services; and
o changes that increase the likelihood or scope of competition from regional
telephone companies.
Certain other legislative initiatives including the taxation of
Internet services could also substantially harm our business. We cannot predict
the impact that future laws and regulations may have on our business.
We may have liability for Internet content
The imposition upon Internet access providers of potential liability
for information carried on or disseminated through their systems could require
us to implement measures to reduce our exposure to such liability, which may
require the expenditure of substantial resources. The increased attention
focused upon liability issues as a result of these lawsuits and legislative
actions and proposals could impact the growth of Internet services. Moreover,
any costs not covered by our general insurance policy could have a material
adverse effect on our business.
7
We are dependent on the services of key individuals and the loss of any of these
individuals could significantly affect our ability to operate our business
Our development and success is significantly dependent upon Douglas P.
Haffer, Chairman, President and Chief Executive Officer; Wayne Caldwell, Vice
President and General Counsel; and Dana Miller, Vice President of Licensing and
Systems Expansion. We do not currently have key man insurance any of these
officers.
Our U.S. frequency licenses must be renewed every 10 years by the government,
and the government could decide not to renew our licenses if we violate FCC
rules or policies
Our Federal Communications Commission (FCC) licenses must be renewed
every 10 years and there is no automatic renewal for such licenses. Moreover,
our licenses are subject to cancellation for violations of the Communications
Act of 1934, as amended, or the FCC's rules and policies. Cancellation of our
licenses would have a material adverse effect on our operations.
Other companies may have rights to use our name
A company in New Hampshire named World Wide Wireless Systems, Inc., a
company in Delaware named World Wide Wireless Web Corp., and a company in Nevada
named Worldwide Wireless Networks, Inc. which trades on the Over the Counter
Bulletin Board under the symbol WWNBE are currently using names similar to our
name. They could challenge our rights to use our name or possibly claim
infringement. We have not registered our name as a Servicemark with the United
States Patent and Trademark Office. If we are forced to defend our rights to use
the name, we could incur substantial litigation costs. Moreover, if our
Servicemark is denied or litigation were to result in an unfavorable outcome,
then we could lose a substantial part of the goodwill that we have developed by
using our name.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. We intend to
identify forward-looking statements in this prospectus using words such as
"believes," "intends," "expects," "may," "will," "should," "plan," "projected,"
"contemplates," "anticipates," or similar statements. These statements are based
on our beliefs as well as assumptions we made using information currently
available to us. Because these statements reflect our current views concerning
future events, these statements involve risks, uncertainties and assumptions.
Actual future results may differ significantly from the results discussed in the
forward-looking statements. Some, but not all, of the factors that may cause
these differences include those discussed in the Risk Factors section beginning
on page 5 of this prospectus. You should not place undue reliance on these
forward-looking statements, which apply only as of the date of this prospectus.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our capital stock
and do not intend to pay dividends in the foreseeable future. We intend to
invest our future earnings, if any, to fund our growth. Therefore, you will not
receive any funds without selling your shares. We further cannot assure you that
you will receive a return on your investment when you sell your shares or that
you will not lose the entire amount of your investment.
8
USE OF PROCEEDS
If the entire offering is sold, the net proceeds from the sale of the
common stock, after deducting underwriting discounts and other expenses, are
estimated to be approximately $15,780,000. The net proceeds have been calculated
using an initial public offering price of $4.50. As there is no guarantee that
we will receive any proceeds, the following table presents how we intend to use
the proceeds of 25%, 50%, 75% and 100% of the offering. We expect to use the net
proceeds over a 12-month period in approximately the following amounts and
percentages:
Percentage of Offering Raised
---------------------------------------------------------------
25% 50% 75% 100%
---------------------------------------------------------------
Expansion of Mt. Diablo, Ukiah, South Bend,
Grand Rapids and San Marcos $ 394,500 $1,183,500 $ 2,367,000 $ 3,945,000
(10%) (15%) (20%) (25%)
Initiate Internet Access $ 78,900 $ 236,700 $ 591,750 $ 946,800
(2%) (3%) (5%) (6%)
Argentina Operations $1,775,250 $3,313,800 $ 4,734,000 $ 5,523,000
(45%) (42%) (40%) (35%)
Peru Operations $ 986,250 $1,972,500 $ 2,603,700 $ 3,156,000
(25%) (25%) (22%) (20%)
Working Capital $ 710,100 $1,183,500 $ 1,538,550 $ 2,209,200
(18%) (15%) (13%) (14%)
Total $3,945,000 $7,890,000 $11,835,000 $15,780,000
(100%) (100%) (100%) (100%)
--------------------------------------------------------------
We intend to expand the Mount Diablo, Ukiah, South Bend, Grand Rapids
and San Marcos systems through the purchase of digital compression equipment in
order to digitize the system and to add additional subscribers through marketing
and advertising and the upgrading of available services. The amounts allocated
to the expansion include the hiring of additional installers and repair
personnel as well as anticipated installation costs.
We intend to initiate and expand Internet access services through the
acquisition of Internet backbone connections, the purchase of telecommunications
equipment and outsource services, for marketing, advertising and promotion and
for the hiring of technical support personnel.
The amounts allocated to the Argentina operation include acquiring
spectrum, purchasing equipment, the hiring of additional installers and repair
personnel as well as anticipated installation costs and general working capital.
The amounts allocated to the Brazilian expansion include acquiring
spectrum, purchasing equipment, the hiring of additional installers and repair
personnel as well as anticipated installation costs and general working capital.
Proceeds allocated to working capital will be used to fund general
operations of the WWW Communications.
The above listed use of proceeds represents our best estimate of the
allocation of the net proceeds of this offering based upon the current status of
our business operations, our current plans and current economic conditions.
Future events, including the problems, delays, expenses and complications
frequently encountered by early stage companies as well as changes in
regulatory, political and competitive conditions affecting our business and the
success or lack thereof of our marketing efforts, may make shifts in the
allocation of funds necessary or desirable. Prior to expenditure, the net
proceeds will be invested in short-term interest bearing investment grade
securities or money market funds. Management believes that the funds received
from this offering will exceed the our cash flow requirements for more than
twelve months.
9
No proceeds from this offering will be used to acquire assets or
finance other businesses. However, We hope to continue to acquire spectrum both
nationally and internationally consistent with its corporate objectives and
mission statement.
DILUTION
Unrealized Gain to Insiders
Our present common stockholders acquired their shares at a cost
substantially below the price at which the shares are being offered in this
offering. Investors purchasing the shares in this offering will, therefore,
incur an immediate and substantial dilution of their investment insofar as it
relates to the resulting net tangible book value of WWW Communications after
completion of the offering.
The net tangible book value of WWW Communications as of September 1999
was $.0051 per share. "Net tangible book value" per share represents the total
tangible assets of WWW Communications less total liabilities divided by the
number of shares outstanding of common stock. Under the above assumptions, on a
pro forma basis the net tangible book value of WWW Communications after the
offering will be $0.2120 per share. This represents an immediate dilution in net
tangible book value per share of $4.2880 if the entire offering is sold to new
investors purchasing shares at $4.50 per share.
The following table illustrates the per share dilution that you will
experience on a pro forma basis as if all 4,000,000 shares offered herein were
outstanding as of September 30, 1999. As there is no guarantee that we will
receive any proceeds, the table presents per share dilution assuming receipt of
25%, 50%, and 100% of the offering
10
Percentage of Offering Received 25% 50% 100%
------------------------------- ------- ------- -------
Offering price per share $4.5000 $4.5000 $4.5000
Net tangible book value after sales of common shares $0.0590 $0.1128 $0.2147
------- ------- -------
Dilution to purchasers of shares $4.4441 $4.3877 $4.2853
This information is based on pro forma shares outstanding on September
30, 1999 (See, "Principal Shareholders") and excludes 3,000,000 shares of common
stock that we currently have reserved for issuance pursuant to our 1998 Stock
Incentive Plan.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following should be read in conjunction with the "Risk Factors"
starting on page 5 of this prospectus and the "Financial Statements" and the
Notes thereto.
We did not generate any subscription revenues by providing wireless
cable services during fiscal 1998 and 1999 respectively. We did not have enough
subscribers in either period to generate revenues sufficient to cover our
operating expenses which totaled $353,075 and $2,383,330, respectively, in
fiscal 1998 and 1999. Our operating expenses included service costs, programming
and license fees, general and administrative expenses, and certain acquisition
expenses resulting from acquiring spectrum.
During 1998 and 1999, we experienced continuing cash shortages due to
an insufficient subscriber base. The resulting cash shortages rendered us unable
to advertise and aggressively promote our services. Management believes,
however, that the funds received from this offering will exceed WWW
Communications' cash flow requirements for the next full year.
WWW Communications currently has 11 full-time employees and anticipates
hiring more employees as we enter new markets. We believe that our future
success will depend on our continued ability to attract, hire and retain
qualified personnel. Competition for such personnel is intense, and we may be
unable to identify, attract and retain such personnel in the future.
Management does not anticipate performing any additional product
research and development for the term of the plan. Management is not planning to
purchase or sell any plants or material equipment other than the small equipment
that is needed to expand the operation of its various licenses.
During fiscal 1998 and 1999, we issued and agreed to issue options
exercisable to purchase an aggregate of 3 million shares of common stock of
which none were exercised. We also issued 19,303,950 common shares in exchange
for $2,614,074 and 4,538,000 common shares for services valued at $615,996.
We believe that all of the above transactions were in our best
interests because without the various loans and sales of restricted shares, we
would not have been able to fund our operations.
BUSINESS
Introduction
In February of 1997, Worldwide Wireless, Inc. (WWW), a Nevada
corporation, was formed to coordinate the operations of TSI Technologies, Inc.
(TSI), a Nevada corporation, and National Micro Vision Systems, Inc. (NMVS), a
Nevada corporation. Its purpose was to complete the development of its patented
advanced digital wireless telephone and network designs and to finance,
manufacture, and market these units and systems. TSI was the research and
development company formed for the purpose of creating and developing the VDMA
microchip set. NMVS was formed to operate a network of wireless Internet sites.
In April of 1998, Upland Properties Inc. (UPPI), a Nevada corporation, was
acquired for stock by WWW, TSI and NMVS and, in a reverse merger, these
companies transferred their assets to Upland Properties, Inc. Upland (then
trading under the symbol of "UPPI") then changed its name to World Wide Wireless
Communications, Inc. and is trading OTC under the symbol WLGS. Both WWW and TSI
remain significant shareholders in our company, but neither play a role in our
current operations. NMVS and WWW Communications are now completely seperate and
unrelated entities.
We have purchased and currently lease a substantial number of
high-speed wireless Internet frequencies in the United States, Argentina, and
Ghana, Africa. We are now attempting to market to our wireless Internet
frequencies directly to consumers. Furthermore, we are considering the
possibility of entering into strategic
12
alliances with other companies to market access to our high-speed wireless
Internet frequencies. We plan to purchase or lease additional wireless Internet
frequencies in the United States and abroad.
In addition to developing wireless Internet frequencies, we are also
attempting to develop a new generation of wireless cellular telephone technology
that we have labeled Virtual Division Multiple Access ("VDMA"). VDMA technology
may significantly enhance wireless communications in the future by dramatically
increasing cellular telephone network capacity.
Our high-speed wireless Internet service uses MMDS technology
The industry is moving to high-speed, broadband Internet service. In
the United States, Direct Subscriber Line ("DSL") service (i.e., wired service)
is available from many telephone companies, and most cable television companies
are, or soon will be, offering high speed Internet services as well. But the
majority of residences are not close enough to major trunk telephone lines to
receive reliable and high-speed DSL service, and most businesses cannot access
cable-television service. Internationally, options are even more limited with
much slower "standard" telephone-line service being the rule and many fewer
"high-speed" options are available.
In recent years, the industry has come to the realization that for a
large number of end-users the most cost-efficient and technically reliable
source of high-speed broadband Internet connection is from wireless service.
Holt Media Group, "Market Valuation Report", April 30, 1999. The two major forms
of wireless service are Local Multipoint Distribution Service ("LMDS") and
Multi-Channel Multipoint Distribution Service ("MMDS"). LMDS operates in a
relatively high frequency range from 28GHz and above. MMDS operates, in the
United States, over what were formerly called wireless cable television licenses
in the 2.5 to 3.0 GHz range. Internationally, these frequencies vary slightly,
with the MMDS-type service being proposed for frequencies from 2.5 to 4.0 GHz
while LMDS-type service is offered on frequencies similar to the United States.
In recent months, LMDS has attracted more attention from the public
than MMDS. This is despite the fact that in April 1999 Sprint and MCI WorldCom
began an aggressive acquisition of MMDS licenses for the provision of last-mile
services. In certain specific circumstances, LMDS is a very attractive
alternative to wired services. Its major benefit is its incredible bandwidth -
enough to transmit huge amounts of data at once. On the other hand, LMDS has
severe limitations as well including high costs of build out, very short range
(under 5 kilometers) and severe problems with interference from such things as
rain, smog, etc. With these limitations in mind, LMDS would appear to have its
major potential in wireless local loops, internal wireless networks, intranets,
etc.
MMDS, while still considered a broadband service, has less bandwidth
than LMDS. Nonetheless, it has more than enough bandwidth for the great majority
of potential business and residential users. On the other hand, in the United
States, which allows 10 watts of power in transmitting data, the range of MMDS
is at least 50 kilometers and it is much less affected, if at all, by
atmospheric and meteorological phenomena. It is also much less expensive to
build-out than LMDS, in addition to the fact that, because of its greater range,
fewer transmitters are required.
Both LMDS and MMDS are transmitted over a limited number of licensed
frequencies that protect data from interference by other forms of radio or
microwave transmitters. It is critical, therefore, that any company operating or
attempting to develop a system of wireless Internet over either LMDS or MMDS
frequencies acquire these limited frequencies as quickly and as inexpensively as
possible and for as many locations and as many channels/bands as possible in
each location.
Because of the limitations of LMDS' propagation properties, and because
we believe that the more viable market for wireless high-speed services is in
the small to medium size business and residential market, we have decided to
concentrate exclusively on the MMDS and other lower-frequency services. In that
context, we have been actively engaged in the acquisition of wireless Internet
frequencies in the United States and especially abroad.
13
We believe that international markets offer enormous potential for
growth. Throughout the world, the Internet has become the new buzzword. But in
many countries - even countries considered to be developed and especially in
developing countries - the combination of obsolete equipment and newly
privatized systems provide us with great opportunity. The technology we employ
allows countries such as Ghana and Argentina to establish an up-to-date, high
speed, broadband wireless Internet system equal to any on the most developed
nations with very little infra-structural costs. The same will be true in the
many other countries throughout Asia, Latin America, Africa, the Middle East and
Europe in which we are actively seeking wireless frequencies.
Our approach to providing high speed, broadband, fixed wireless
Internet service will make our service available to a broader customer base than
is possible with certain other fixed wireless services. By concentrating on the
acquisition of relatively low-frequency spectrum, we can provide service over a
substantially larger market of customers, with enhanced propagation properties,
and for substantially lower cost than can be offered by higher-frequency
LMDS-type fixed wireless services. It is our belief that the bandwidth and speed
of our service will meet the requirements of at least 90% of the potential
high-speed wireless Internet customer base, and we hope to be able to provide
this service more economically and with greater reliability than our
competition. In the international market, we should be able to provide a quantum
leap in the quality of Internet service beyond that which currently exists and
at a price point similar to that being charged by providers of the current
service.
Our strategy
Our activities are currently divided into three divisions:
1. Acquisition of Wireless Internet Frequencies (Spectrum);
2. Development of Wireless Frequencies (Build Out); and
3. Development and Licensing of VDMA Chipset Technology.
1. Acquisition of Wireless Internet Frequencies ("Spectrum")
We have determined that our primary target for acquisition of wireless
frequencies ("Spectrum") will be in the MMDS frequency range within the United
States (2.5GHz to 3.0GHz approximately) and in similar frequency ranges up to
around 5.0GHz internationally. With these frequency ranges we believe that we
will be able to provide the highest quality, broadest band, and fastest service
and the most reasonable costs to the largest number of potential customers. By
positioning ourselves to provide enhanced connectivity to the largest number of
people WWW Communications believes that it will play a significant role in the
expansion of this remarkable technological development in both the short and
long term.
Prior to 1999, we controlled MMDS and Institutional Television Fixer
Service (ITFS) licenses in only three locations - the East Bay region of San
Francisco, California, northern San Diego County, California, and South Bend,
Indiana. Since the beginning of 1999, we have acquired rights - either through
long-term leases with options to purchase or outright purchases - to additional
spectrum both in the United States and elsewhere. As of the date of this
Offering, we lease, own or possess reversionary rights to licensed frequencies
in the following additional locations:
14
Location State/Country
-------- -------------
Grand Rapids Michigan
Vail Colorado
Aspen Colorado
Key West Florida
Ukiah California
La Grande Oregon
Pierre South Dakota
Casper Wyoming
Entire nation of Ghana, West Africa Ghana, West Africa
Buenos Aires Argentina, South America
Rosario Argentina, South America
Santa Fe Argentina, South America
Corrientes Argentina, South America
Mendoza Argentina, South America
Neuquen Argentina, South America
Cordoba Argentina, South America
Bahia Blanca Argentina, South America
In addition, we have acquired reversionary rights to frequency spectrum
leases expiring in an additional 32 United States cities over the next several
years that will permit us to lease or acquire those licenses for our own use. In
addition, we are currently negotiating for the acquisition of additional
spectrum in at least fifteen other countries throughout the world.
The industry is moving to high-speed, broadband Internet service. In
the United States, DSL service is available from many telephone companies and
most cable television companies are, or soon will be, offering high-speed
Internet services as well. But the majority of residences are not close enough
to major trunk telephone lines to receive reliable and high speed DSL service
and most businesses cannot access cable-television service. Internationally, the
options are even more limited with much slower "standard" telephone-line service
being the rule and many fewer "high-speed" options available. In order to
participate in the expected explosive growth of this new and enhanced Internet
connectivity, we have determined that we must join this highly competitive "Race
for Spectrum" and aggressively pursue this finite and increasingly valuable raw
material of the industry.
2. Development of Wireless Frequencies (Build Out)
As spectrum is acquired, we plan to join with local partners and other
entities in the industry to form strategic alliances in connection with the use
and implementation of high-speed wireless services.
We are currently operating a single system off of Mt. Diablo in
Concord, California, an area some thirty miles east of San Francisco. The
license at Diablo is one of only two one-channel licenses that we control, with
all the remaining ones being at least four channels. Revenue generating service
commenced in this location in December 1999. Because the high-speed wireless
component of the Diablo operations is only available in downlink mode, we have
been aware from the outset that the operations in the Concord area would not be
typical for the more conventional two-way systems. However, because the Federal
Communications Commission has yet to issue its final rules regarding two-way
data transmission over MMDS/ITFS frequencies and because of the specific
demographics within the potential Diablo footprint we determined to commence the
limited-type of service close to our headquarters in Oakland. WWW Communications
intends to use this one-way wireless system in only one additional location -
San Diego, California. The Concord and San Diego operations will use high-speed
wireless transmissions to download information from the internet and similar
data sources, but will use telephone lines, either "normal" or high-speed, for
the uplink. While this one-way service will provide users with enhanced Internet
connections, it will not offer full-time always on, high-speed two-way wireless
service that our other locations will provide.
We will build-out our next domestic system in the small town of Ukiah,
California, some ninety miles north of San Francisco. Digital authorization has
already been granted by the FCC for the Ukiah license and the remaining
locations. The proximity of Ukiah to the corporate headquarters and the
relatively compact demography and geography will provide us with a convenient
platform to commence full bi-directional wireless service. After Ukiah, the
domestic build-out program will include northern San Diego County, South Bend,
15
Indiana, Grand Rapids, Michigan, Vail and Aspen, Colorado, Key West, Florida,
Pierre, South Dakota and Casper, Wyoming.
We intend to commence operations in Buenos Aires, Argentina in South
America during the first four months of 2000. Preparations have commenced to
secure the necessary backbone connections and transmitter locations in the
Greater Buenos Aires metropolitan area, which contains more than 12 million
people. Pursuant to the provisions of licenses signed by the Comision Nacional
de Comunicaciones in Buenos Aires, WWW Communications will commence transmitting
in Buenos Aires by May 27, 2000. Now that WWW Communications has acquired a
location for our Network Operations Center and has executed a tower lease, full
service should commence in July, 2000. Shortly thereafter, commencement of
service is planned in Cordoba and Mendoza, both cities with around 2 million
inhabitants. As an initial marketing approach, we expect to establish, jointly
with a current retail establishment, an Internet Cafe in Buenos Aires where the
significantly superior nature of the service we will provide will be most
quickly exposed to a large number of potential customers. In Argentina, we will
operate through our majority-owned subsidiary, Infotel Argentina, S.A. We expect
to be in operation in all eight cities in which we have obtained licenses within
eighteen months and hope to expand the number of licenses currently owned. With
the current licenses, our footprint in Argentina will cover approximately 50% of
the country's 33 million inhabitants.
This year we will commence service in Ghana, West Africa. A much
smaller economy than Argentina, with fewer people and less computer penetration,
Ghana nonetheless, along with neighboring West African nations, provides us with
significant revenue potential. Like Argentina, such public locations for service
such as Internet cafes and the country's Post Office Department are likely
starting places for revenue service. In addition, the stable political situation
in Ghana and the continuing relatively fast-pace of economic growth bodes well
for an ever-increasing demand for Internet service.
We have applied for licenses in the 3.5 GHz range in Germany and the
Czech Republic. We are awaiting a definitive response on those applications. In
addition, we are exploring additional markets in Europe - including Portugal as
well as much of Eastern Europe - for expansion of our services.
We are currently in negotiations with respect to frequencies in several
other countries in Latin America, Asia, Africa and Europe. We expect that, in
the case of any future acquisition of licensed frequencies, we will operate the
systems alone, do so in joint ventures with local entities, or transfer the
licenses to third parties for significant consideration.
3. Development and Licensing of VDMA Chipset Technology
Our patent claim on our proprietary VDMA chipset technology has been
allowed and once formally granted we intend to license the further development
and manufacture of the chip to a third party.
We are completing the development of our "VDMA" - Virtual Division
Multiple Access - communications chipsets, which eliminates the need for
repeater-infrastructure costs. Even in "sleep" mode, every VDMA telephone
handset itself serves as a mobile, low-power repeater site, and each unit in the
"field" facilitates the operation of the entire local network within a radius of
10-20 miles. A whole continent populated with our PCS units would theoretically
have no need for infrastructural support of any kind. In practice, WWW
Communications will build widely scattered (SMSA-based) "Gateway" sites that
will serve to introduce local signals into long lines, international and
satellite service providers and introduce data signals into destination networks
while providing a medium for our generation of an ongoing revenue stream.
It is expected that there will be a dramatic increase in total network
capacity and in individual and traffic-form capacities resulting from the use of
VDMA transmission technology. This transmission technique, implemented in the
chipsets that are the core of the new technology, embodies very low power
transmissions along multiple routes between two mobile or stationary points on
the network. The result is a "fabric" of transmission paths blanketing the
entire "cell" compared to the "hub and spoke" transmissions between the central
node and the multiple users of a traditional cellular system. The multiplicity
of routes between any two points that is possible with this "fabric" generates
an aggregate capacity for the network that far exceeds a hub and spoke
16
system, where multiple transmission paths converge on a single hub, quickly
consuming the available radio frequency in the cell.
The low transmission powers needed for the VDMA transmission method
have the further potential to allow this new network technology to be overlaid
on existing wireless cellular installations without interfering with existing
signals in the same PCS frequency. As a result, the new technology has the
potential to provide "overbuild" capacity, incremental returns on investments in
frequency, and introduction of new, high-value data and non-voice services on
cellular franchises already in place.
This new technology is currently being engineered to operate in, among
other frequencies, the PCS frequency bands and in so-called "free" or unlicensed
frequency bands in the United States. It is readily adapted to other frequencies
- - military frequencies and frequencies that may be allocated by foreign
governments.
By licensing or otherwise transferring this technology to third parties
and retaining a substantial royalty interest in it, we will be able to
concentrate on our core business while retaining the potential for a significant
revenue stream.
Investors should be aware that this system is largely untested and is
not widely used, and WWW Communications cannot ensure that an increase in usage
will actually result.
Business Locations
WWW Communications' business headquarters is located at 520 Third
Street, Oakland, California, 94607. We also has offices located in Concord,
California and Buenos Aires, Argentina. WWW Communications' office space at One
Post Street, San Francisco, was leased on a month-to-month basis. We vacated
these offices on August 31, 1999. The actual rent paid, for the fiscal year
ended September 30, 1999, was $22,341.
In April 1999, We entered into a 5-year lease for approximately 6,000
square feet of office space in Jack London Square, Oakland, California. The
lease commenced on June 5, 1999. The triple net rental agreement is for $10,038
per month during the first year. The lease provides for an annual increase based
on the indexed cost of living adjustments. Additionally, the lease provides for
the landlord's participation in partial reimbursement over the terms of the
lease to WWW Communications for leasehold improvements paid by WWW
Communications. WWW Communications commenced its occupation of this space on
September 1, 1999. The minimum annual rent is $120,456 for the fiscal years
ended September 30, 2000, 2001, 2002 and 2003, and $81,642 for the period
October 1, 2003 to June 4, 2004.
We also entered into a lease for office space to operate its network
operation center (NOC) at 2962 Treat Boulevard, Suite C, in Concord California,
94518. The triple net rental agreement is for $1890 per month. The lease
provides for an annual increase based on the indexed cost of living adjustments.
Additionally, the lease provides for the landlord's participation in partial
reimbursement over the terms of the lease to WWW Communications for leasehold
improvements paid by WWW Communications. WWW Communications commenced its
occupation of this 1680 square foot space on May 1, 1997. The lease expires on
April 30, 2000.
WWW Communications has lease space by virtue of its acquisition of
Infotel Argentina. The lease is for approximately 1500 square feet and is leased
on a month-to-month basis. The monthly rent is approximately $2,000 per month.
The lease started on January 1, 1999 and expires on December 31, 2003.
Regulatory Situation
We intend to offer our services exclusively over licensed frequencies
in each of the countries in which we operate. In the United States, for example,
our frequencies are licensed by the Federal Communications Commission, in
Argentina, by the Comision Nacional de Comunicaciones, and in Ghana, by the
Ghana Frequency Registration and Control Board. We are either applying directly
for licenses in some countries or applying jointly with local partners in
others. Some countries require, for example, domestic control of any entity
licensed to use
17
radio frequency within their territory.
Within the United States, WWW Communications operates under MMDS and
ITFS licenses issued by the FCC. These licenses are issued in the 2.5Ghz
frequency range and can be revoked if the licensee or its assignee is in
violation of any of the operation provisions under the license. The licenses are
issued in the United States for a fixed time period and can be renewed. Yearly
reports are required to be filed with the FCC to establish that the licensee or
its assignee is complying with the requirements of the license.
Outside the United States, rules and regulations are quite varied.
However, in each of the countries in which WWW Communications is or intends to
operate, an agency of the national government issues licenses for use of
specific frequency, and for a specific time period. Licenses are usually at
least ten years and up to twenty years, which may or may not be extended. As in
the United States, licenses may be revoked if the licensee violates any of the
license provisions. In each country in which we intend to operate, the national
government specifically permits the operation of two-way fixed broadband
wireless systems of Internet and data transmission.
In countries outside the United States, there is a possibility that
changes in government may result in abrupt revisions in rules and regulations
relating to these licenses. WWW Communications is attempting to limit its
involvement to countries in which, historically, such changes in administration
have not created disruptions for license holders.
Acquisitions
On December 1, 1999, we signed an agreement to acquire 51% of Infotel
Argentina, S.A., the owner of MMDS licenses in eight of the largest cities in
Argentina, including Buenos Aires. Under the agreement, WWW Communications will
appoint the majority of Infotel's directors and will be in charge of the
management of WWW Communications.
Additionally on February 10, 2000, we signed an agreement to purchase
Digital Way, S.A., a Peruvian telecommunications company. Digital Way currently
owns licenses for MMDS spectrum in the 2.3 to 2.5 GHz range, has national and
international long-distance concessions as well as value added licenses for
services in Peru. This acquisition requires the approval of the relevant
agencies of the Peruvian government.
18
MANAGEMENT
Our executive officers and directors and their ages as of February 9,
2000 are as follows:
Name Age Position Period of Service
- ---- --- --------- -----------------
Douglas P. Haffer................52 Chairman of the board, April 1998 to present
CEO and CFO
Wayne Caldwell...................48 Director, vice president November 1999 to present
and secretary
Dana Miller......................40 Vice president May 1998 to present
Ramsey Sweis.....................34 Director May 1998 to present
Robert Klein.....................51 Director May 1998 to present
Douglas P. Haffer has practiced law in San Francisco, Beverly Hills,
and Washington D.C. for twenty-five years. During that time he has served as
general counsel and/or vice president, and on the Board of Directors, of several
corporations, including Commercial Bank of San Francisco, Aca Joe Inc., Finet
Holdings Corporation, Worldwide Wireless Inc. and Uniprise Systems,
Incorporated. His legal practice concentrated primarily on providing legal
counseling to small or start-up businesses. In addition, a significant part of
his practice contained an international aspect involving foreign investors
seeking investment platforms in the United States. Mr. Haffer attended the
University of Wisconsin, Madison from 1965 to 1969 where he received his
Bachelor of Arts degree with honors with a major in Latin American history, and
was elected to Phi Beta Kappa. He then attended the Harvard Law School from
which he graduated in 1972 with a Juris Doctor degree. Mr. Haffer lived in Peru
for seven years and reads, writes and speaks Spanish fluently. He has been a
lecturer and adjunct professor of law at the University of San Francisco Law
School and at the Law School at the University of California at Davis.
Wayne Caldwell has served as Vice President and General Counsel since
November 1999. Mr. Caldwell is responsible for legal, governmental and
regulatory matters. Prior to joining World Wide Wireless Communications, Inc.,
Mr. Caldwell was in private practice for two decades specializing in business
and regulatory law. Mr. Caldwell is a graduate of Stanford University in
economics and received his law degree from the University of San Francisco.
Dana Miller was Director of Licensing and Acquisition for National
Micro-Vision Systems, Inc. from 1994 to 1996. He worked extensively with the
Federal Communications Commission and FCC legal counsel and was responsible for
compliance with all FCC regulations. Mr. Miller also coordinated acquisitions of
microwave television licenses throughout the United States. He has negotiated
FCC lease agreements with educational institutions and nonprofit organizations.
From 1996 to 1998 Mr. Miller was a self-employed telecommunications consultant.
He is an expert in FCC license application, FCC petition, and license
acquisition and maintenance. His accomplishments include resolution of a recent
long-term, complex conflict between WWW Communications and a second national
wireless firm, freeing up WWW Communications to implement high-speed wireless
Internet operations in the San Francisco metropolitan area.
Ramsey Sweis has had extensive experience in management and in the
product design industry. He has been a leader and developer of high performance
teams by enabling, training and motivating team members. In the recent past he
has provided computer and engineering services to General Motors and Chrysler
Corporation. In connection with those activities Mr. Sweis has developed designs
between engineering, prototype models, tooling and vendor sources. Mr. Sweis
resides in Roseville, Michigan. He has extensive experience in the product
design industry. He currently serves as a Program Manager for Hanke Training &
Design of Clawson Michigan. From 1997 to 1999 Mr. Sweis served as a designer for
Computer and Engineering Services of Auburn Hills, Michigan From 1991 to 1997,
Mr. Sweis was a design leader for Megatech Engineering of Warren Michigan.
19
Robert Klein's experience includes an active twenty-year career in the
securities industry handling a wide range of duties including management roles
and institutional trading. For the past fifteen years a major emphasis has been
placed on packaging complex transactions on behalf of corporate clients
resulting in the creation and sale of marketable securities. The past five years
has been spent on public company development. Since 1992, Mr. Klein has been
self-employed through Weissgeld Capital Group, Ltd., a company he founded in the
past, he has served as a director for three brokerage firms, including Yorkton
Securities. He is currently a director of Spectrum Oil Corp. Mr. Klein has a
degree in Applied Mathematics from the University of Waterloo, and an FCSI
designation from the Canadian Securities Institute.
Director Compensation
Directors receive no compensation for serving as directors of World
Wide Wireless Communications, Inc., except that:
o Mr. Sweis received options to purchase 250,000 shares of common stock on
October 22, 1998, at an exercise price of $0.095 per share. All of Mr. Sweis'
options vested immediately upon the date of grant. The expiration date for
Mr. Sweis to exercise the options is October 21, 2003. To date, Mr. Sweis has
not exercised any options for shares of common stock.
o Mr. Klein received options to purchase 250,000 shares of common stock on
October 22, 1998, at an exercise price of $0.095 per share. All of Mr.
Klein's options vested immediately upon the date of grant. The expiration
date for Mr. Klein to exercise the options is October 21, 2003. To date, Mr.
Klein has not exercised any options for shares of common stock.
Employment Contracts
We have entered into an employment agreement with Mr. Haffer, which
provides for an initial term of three years commencing February 1, 2000 at an
initial annual base salary of $230,000 plus an annual performance bonus of not
less than $34,000. Any bonus in excess of $34,000 will be at the sole discretion
of our Board and will not be tied to a fixed set of objective criteria. Mr.
Haffer's employment agreement also contains a termination provision that
requires us to pay him his annual compensation and minimum bonus amounts
remaining on his three-year contract if he is terminated without cause.
In October of 1999, we entered into a three-year employment agreement
with Mr. Caldwell under which he will receive an annual salary of $48,000. Under
the terms of the agreement, on May 8, 2000, Mr. Caldwell's base salary will be
increased to $72,000 per year, and on November 8, 2000, Mr. Caldwell's salary
will be increased to $96,000 per year. The agreement also provides for an annual
performance bonus of not less than 5% of his base salary and not more than 100%
of his base salary. The decision to grant the bonus and the amount of the bonus
can be decided by management without the consent of our Board of Directors. We
have not established a fixed set of performance criteria on which to base Mr.
Caldwell's bonus amounts. Mr. Caldwell's employment agreement also contains a
termination provision that requires us to pay him his annual compensation and
minimum bonus amounts remaining on his three-year contract if he is terminated
without cause.
In May of 1999, we entered into a two-year employment agreement with
Mr. Miller under which he will receive an annual salary of $96,000. Mr. Miller
is not entitled to receive any bonuses. Under the terms of the employment
agreement, we issued Mr. Miller 179,000 shares of common stock in lieu of
payment of $17,000 towards a past obligation of $37,000 and the company
acknowledged that we owe Mr. Miller $20,000 for the balance of past due fees.
Mr. Miller's employment agreement does not address the issue of stock options.
If Mr. Miller is terminated without cause, he will be entitled to receive his
salary for a period of three months after termination.
20
EXECUTIVE COMPENSATION
The following table contains summary information for the fiscal year
ended September 30, 1999 regarding the compensation earned by each of our
officers.
Summary Compensation Table
Securities
Restricted stock Underlying
Name and Principal Position Salary Bonus awards Options/SAR
- --------------------------- ------ ----- ------ -----------
Douglas P. Haffer................................... $230,000/yr 10% base 800,000
Chairman, CEO and CFO minimum 800,000
Wayne Caldwell...................................... $48,000/yr 5% base 800,000
Director, V.P. and Secretary minimum
Dana Miller......................................... $96,000/yr $0 179,000 shares 800,000
Vice President 250,000 shares
On May 2, 1999, Mr. Miller received 179,000 restricted shares in lieu
of payment of $17,000 that WWW Communications owed to him for services. Mr.
Miller also received 250,000 restricted shares from Michael Lynch for services
rendered to WWW Communications.
On May 8, 2000, Mr. Caldwell's base salary will be increased to $72,000
per year and on November 8, 2000, Mr. Caldwell's base salary will be increased
to $96,000 per year.
21
Option Grants
The following table sets forth information concerning grants of stock
options to each of the executive officers and directors named in the table above
for the fiscal year ending September 30, 1999. All options were granted under
the 1998 Stock Option Plan. Shareholders never approved WWW Communications' 1998
Stock Option Plan, and therefore, all incentive stock options granted under the
1998 Stock Option Plan are classified and taxed as non-statutory stock options.
Individual Grants
-----------------
Percent of
Number of Total
Securities options/SARs
Fiscal Year Underlying granted to Exercise Options
Options Options employees from Price Exercised as Expiration
Granted Granted 8/22/98 ($/Share) of 2/9/00 Date
------- ------- ------- --------- --------- ----
Douglas P. Haffer....................... 1998 800,000 43% $0.095 0 10/22/03
Chairman, CEO & CFO 2000 800,000 1.62 0 2/1/05
Wayne Caldwell.......................... 1999 800,000 21% $0.63 0 10/27/05
Vice Pres. & Secretary
Dana Miller............................. 1998 800,000 21% $0.095 0 8/22/03
Vice President
Ramsey Sweis............................ 1998 250,000 7% $0.095 0 10/22/03
Director
Robert Klein............................ 1998 250,000 7% $0.095 0 10/22/03
Director
In October of 1998, Mr. Haffer received an option to purchase 800,000
shares of our common stock at an exercise price of 9 1/2 cents per share. All
800,000 shares vested immediately. The expiration date is 5 years from the date
of grant. The grant of shares was intended to be an incentive stock option, but
WWW Communications' 1998 Stock Option Plan was never approved by our
shareholders; therefore, the options are being classified as non-statutory stock
options. On February 1, 2000, Mr. Haffer received another option to purchase
800,000 shares of our common stock at an exercise price "at the lowest price
permitted under our 1998 Stock Option Plan such that the grant or exercise of
the options will not create a taxable event." All 800,000 shares vested
immediately. The expiration date of the option is 5 years from the date of
grant. The option will be treated as non-statutory stock options.
On October 27, 1999, Mr. Caldwell was granted an option for 800,000
shares of our common stock at an exercise price of $0.66 per share. All 800,000
shares vested immediately. The expiration date is 5 years from the date of
grant. The shares will be classified as non-statutory because WWW
Communications' 1998 Stock Option Plan was never approved by our shareholders.
In August of 1998, Mr. Miller received an option to purchase 800,000
shares of our common stock at an exercise price of 9 1/2 cents per share. All
800,000 shares vested immediately. The expiration date is 5 years from the date
of grant. The grant of shares was intended to be an incentive stock option, but
WWW Communications' 1998 Stock Option Plan was never approved by our
shareholders; therefore, the options are being classified as non-statutory stock
options.
In October 1998, Mr. Sweis received an option to purchase 250,000
shares of our common stock at an exercise price of 9 1/2 cents per share. All
250,000 shares vested immediately. The expiration date is 5 years from the date
of grant. The options are being classified as non-statutory stock options.
In October 1998, Mr. Klein received an option to purchase 250,000
shares of our common stock at an exercise price of 9 1/2 cents per share. All
250,000 shares vested immediately. The expiration date is 5 years from the date
of grant. The options are being classified as non-statutory stock options.
22
1998 Stock Option Plan
WWW Communications' Board adopted a 1998 Stock Incentive Plan in August
1998 reserving 3,000,000 shares for issuance. The Plan provides for the grant of
incentive stock options, as defined in Section 422 of the Internal Revenue Code,
to officers and employees of WWW Communications, and nonstatutory stock options
to employees, directors and consultants. It may be administered by the Board or
delegated to a Committee. Stockholders never approved WWW Communications' 1998
Stock Option Plan, and therefore, all incentive stock options granted under the
1998 Stock Option Plan are classified and taxed as non-statutory stock options.
The exercise price of incentive stock options granted under the 1998
Stock Option Plan must be at least equal to the fair market value of our common
stock on the date of grant. However, for any employee holding more than 10% of
the voting power of all classes of our stock, the exercise price will be no less
than 110% of the fair market value on the date of grant. Nonstatutory stock
options granted to a person who at the time the option is granted does not hold
more than 10% of the voting power of all classes of our stock will have an
exercise price of no less than 85% of the fair market value of the stock on the
date of grant.
Options granted to employees of WWW Communications will become
exercisable over a period of no longer than 5 years, and no less than 20% of the
shares covered will become exercisable annually. No options will be exercisable
prior to one year from the date it is granted unless the Board specifically
determines otherwise. In no event will any option be exercisable after the
expiration of 10 years from the date it is granted, and no Incentive Stock
Option granted to a holder of more than 10% of the voting power of all classes
of our stock will be exercisable after the expiration of 5 years from the date
it is granted.
If an optionee's status as an employee terminates with us for any
reason, other than death or disability, then the optionee may exercise Incentive
Stock Options in the three-month period following such cessation. The
three-month period is extended to 12-months for termination due to death or
disability. In the event of a merger or consolidation in which WWW
Communications is not the surviving entity, or a sale of all or substantially
all of the assets or capital stock of WWW Communications, if the surviving
entity does not tender to the optionees stock options or capital stock of
substantially the same economic benefit as optionees unexercised options, then
the Board may grant to optionees the right to exercise any unexpired options for
a period of thirty days.
The 1998 Stock Option Plan will terminate in July 2008, unless sooner
terminated by the Board of Directors.
Piggy-Back Registration Rights
The following table sets forth information concerning grants of
piggyback registration rights. WWW Communications is registering 5,680,916
shares of common stock for existing shareholders with "piggy-back" rights. We
will not sell the 5,680,916 shares owned by the existing shareholders with
piggy-backed rights.
Patrick McCleary 350,000
Darryl Pohl 1,400,000
Ridge Capital 1,818,182
Behrooz Sarafraz 1,000,000
Bud Jenkins 400,000
Hubbard 20,000
Continental Capital 210,000
Credit Bancorp 482,734
23
PRINCIPAL SHAREHOLDERS
The following table sets forth the beneficial ownership of our common
stock as of February 9, 2000 and as adjusted to reflect the sale of the shares
of common stock offered hereby:
o the chief executive officer, each of the executive officers named in the
summary compensation table and each of our directors;
o all executive officers and directors as a group; and
o each person or entity who is known by World Wide Wireless Communications,
Inc. to own beneficially more than 5% of World Wide Wireless Communications,
Inc.'s outstanding common stock.
Unless otherwise indicated, the address for each of the named
individuals and entities is c/o World Wide Wireless Communications, Inc., 520
Third Street, Suite 101, Oakland, CA 94607. Except as otherwise indicated, and
subject to applicable community property laws, the persons named in the table
have sole voting and investment power with respect to all shares of common stock
held by them.
Applicable ownership is based on 76,818,445 shares of common stock
outstanding as of January 31, 2000 and 80,818,445 shares outstanding immediately
following the completion of this offering. Beneficial ownership is determined in
accordance with the rules of the SEC. Shares of common stock subject to options
or warrants that are presently exercisable or exercisable within 60 days of
February 9, 2000 are deemed outstanding for the purpose of computing the
percentage ownership of the person or entity holding options or warrants, but
are not treated as outstanding for the purpose of computing the percentage
ownership of any other person or entity. If any shares are issued upon exercise
of options, warrants or other rights to acquire our capital stock that are
presently outstanding or granted in the future or reserved for future issuance
under our stock plan, there will be further dilution to new public investors.
Percentage of
Shares Outstanding
Number of Shares Prior to After
Named Executive Officers and Directors Beneficially Owned Offering Offering
- -------------------------------------- ------------------ -------- --------
Douglas P. Haffer............................................... 6,831,034 8.9% 8.4%
Wayne Caldwell.................................................. 800,000 1.0% *
Dana Miller..................................................... 1,229,000 1.6% 1.5%
Ramsey Sweis.................................................... 250,000 * *
Robert Klein.................................................... 250,000 * *
Executive Officers and Directors as a Group..................... 9,360,034 12.1% 11.5%
Name of Beneficial Owners
World Wide Wireless, Inc........................................ 16,120,679 20.9% 19.9%
Kenn Olson...................................................... 7,969,633 10.3% 9.8%
TSI Technologies, Inc........................................... 6,042,020 7.8% 7.4%
Albert and Francis Kutcher...................................... 3,955,000 5.1% 4.9%
<FN>
* Less than 1%.
</FN>
24
CERTAIN RELATED PARTY TRANSACTIONS
As of September 1999, other than employment agreements and stock option
plans, there have been no transactions to which we were a party involving
$60,000 or more and in which any director executive officer or holder of more
than five percent of our capital stock had a material interest.
DESCRIPTION OF COMMON STOCK
WWW Communications has authorized 100,000,000 shares of common stock,
$0.001 par value. Immediately prior to this Offering, there were 77,148,445
shares of common stock outstanding. Owners of common stock are entitled to one
vote for each share held of record on all matters to be voted on by
shareholders, except that, upon giving the legally required notice, shareholders
may cumulate their votes in the election of directors. The owners of common
stock are entitled to receive dividends when, as and if declared by the Board of
Directors out of funds legally available therefore. In the event of liquidation,
dissolution or winding up of WWW Communications, the common stock shareholders
are entitled to share ratably in all assets remaining which are available for
distribution to them after payment of liabilities. common stock shareholders
have no conversion, preemptive or other subscription rights, and there are no
redemption provisions applicable to the common stock. All of the outstanding
shares of common stock are, and the shares of common stock offered by this
Offering Circular, when issued for the consideration set forth in this Offering
Circular, will be fully paid and non-assessable.
WWW Communications has 3,000,000 shares of common stock that have been
reserved for issuance under our 1998 Stock Option Plan.
Common stock is the only class of stock issued and outstanding. Our
Articles of Incorporation do not authorize us to issue shares of preferred
stock. No shares of preferred stock have been issued.
PRICE RANGE OF COMMON STOCK
WWW Communications' common stock has been traded on the
Over-the-Counter Bulletin Board and listed in the "pink sheets" listing of stock
quotations published by the National Quotation Bureau reflecting inter-deal
prices without retail mark-up, mark-down or commission from January 1998 to
present. The security traded under the symbol UPPI from October 1997 through
July 1998. However, there were no inside quotes reported for 1997. The market
for our common stock has often been sporadic and limited.
The following table sets forth in the periods indicated the range of
high and low bid prices per share of our Common Stock traded as reported by the
National Quotation Bureau.
- -------------------------- ----------------------- ------------------------
Quarter End Low Bid High Bid
----------- ------- --------
- -------------------------- ----------------------- ------------------------
3/31/98 0.25 0.3125
- -------------------------- ----------------------- ------------------------
6/30/98 0.25 2.05
- -------------------------- ----------------------- ------------------------
9/30/98 0.11 0.6
- -------------------------- ----------------------- ------------------------
12/31/98 0.09 0.51
- -------------------------- ----------------------- ------------------------
3/31/99 0.12 0.515
- -------------------------- ----------------------- ------------------------
6/30/99 0.25 3.9688
- -------------------------- ----------------------- ------------------------
9/30/99 1.00 1.12
- -------------------------- ----------------------- ------------------------
12/31/99 1.04 1.15
- -------------------------- ----------------------- ------------------------
25
PLAN OF DISTRIBUTION
Type of security................................. Common stock
Common stock registered by company............... We are registering and selling 4,000,000 shares of common
stock on behalf of our company. We will also register
another 5,680,916 shares of common stock for existing
shareholders with "piggy-back" rights. We will not sell the
5,680,916 shares owned by the existing shareholders with
piggy-backed rights.
Common stock outstanding before
this offering as of January 31, 2000........ 76,818,445 shares
Common stock offered for sale
by our company in this offering............. 4,000,000 shares
Common stock to be outstanding after
this offering............................... 80,818,445 shares
Use of proceeds.................................. For expansion of our sales force, marketing and distribution
activities, expansion of both our domestic and international
business operations, for acquiring spectrum, and for general
corporate purposes. See "Use of Proceeds" for more
information.
Our common stock is being offered as a direct placement or
distribution. There is no minimum number of shares that must be sold. There can
be no assurance that all of the shares offered will be sold. Accordingly,
investors will bear the risk that we will accept subscriptions for less than
4,000,000 shares and then be unable to successfully complete all of the
anticipated uses of the proceeds of this offering. If fewer than 4,000,000
shares are sold, our business, financial condition, and results of operations
could be adversely affected. No officer, director, or employee has agreed to
loan us funds in the event we sell less than 4,000,000 shares.
Funds from this offering will not be placed in an escrow or trust
account and will be available for use as the funds are received. The minimum
investment per shareholder is $4,500 (1,000 shares). There is no maximum
investment per shareholder.
The shares will initially be sold through our executive officers who
will not receive commissions and who will be registered as sales representatives
where required. We currently do not have a broker-dealer involved with the sale
of our shares; however, we anticipate obtaining a broker-dealer to sell our
shares on a best efforts basis. We anticipate paying a broker-dealer a
commission of 12%. This offering will begin as of the effective date of this
prospectus and continue for twelve (12) months or such earlier date as we may
terminate the offering. If this offering terminates, all subscription payments
that we have not accepted will be promptly returned.
LEGAL MATTERS
WWW Communications currently engages two law firms to provide legal
services to the Company. The principal firm, providing WWW Communications
general legal counsel as well as securities advice and litigation assistance, is
the San Francisco-based firm of Evers & Hendrickson, LLP. In addition, WWW
Communications engages the services of both the San Diego and Los Angeles
offices of Luce, Forward, Hamilton & Scripps LLP for Southern California based
litigation and other matters.
26
On April 12, 1999, WWW Communications, under terms of a Settlement and
General Release, issued 825,000 shares of common stock to a former director and
a former employee for compensation, approximating $81,000.
On May 25, 1999, WWW Communications, under terms of a Compromise and
Settlement Agreement, issued 750,000 shares of common stock to cover
approximately $310,000 of various outstanding obligations of the Company to
Corporate Solutions, LLC for services rendered.
In November 1998, WWW Communications and its predecessor affiliates
filed an action against the lessor of its leases for the Concord and San Marcos,
California multipoint distribution service (MDS) channels. The complaint alleged
breach of contract as well as intentional and negligent interference with
prospective economic advantage. WWW Communications also sought a preliminary
injunction as a result of the lessor's assertion that the predecessor companies
and the Company were in default on said leases. The Superior Court of California
for the County of Los Angeles issued a preliminary injunction against the lessor
to restrain it from taking any further action against WWW Communications and its
predecessors. Thereafter, the lessor cross-complained against WWW Communications
and its predecessors alleging breach of contract. The preliminary injunction of
WWW Communications against the lessor remained in effect until December 9, 1999,
when a settlement agreement was signed.
The settlement provided for WWW Communications to pay $27,375 to the
lessor, relating to lease obligations. WWW Communications further agreed to sign
a consulting agreement with the lessor for one year, whereby WWW Communications
will issue the equivalent of $20,000 of its restricted common stock, the value
of which is to be computed at 80% of the market value of WWW Communications'
unrestricted shares. Additionally, under this consulting agreement, WWW
Communications agreed to execute a promissory note in favor of the lessor in the
amount of $40,000, payable at $1,000 per month, commencing December 1, 1999,
with a final payment of $28,000 on December 1, 2000.
WWW Communications borrowed from Credit Bancorp $328,000 in August 1999
and $412,000 in October 1999. On August 26, 1999, WWW Communications filed suit
against Credit Bancorp, in U.S. District Court in San Francisco, regarding
improprieties on the part of Credit Bancorp relating to the August loan granted
to WWW Communications by Credit Bancorp. The case was settled on October 11,
1999. As part of the settlement agreement, Credit Bancorp agreed to convert the
original loans granted to WWW Communications to a convertible debenture in the
amount of $740,000. On October 11, 1999, WWW Communications issued a convertible
unsecured debenture for $740,000 to Credit Bancorp in settlement of this
obligation. The terms of this convertible unsecured debenture are 7% interest
per annum payable, semiannually on the last day of February and September, with
the principal due September 30, 2002. All amounts of unpaid principal and
accrued interest of this debenture are convertible at any time at the conversion
price of $1.60 per share of unregistered, restricted shares of WWW
Communications' stock, adjusted for any stock splits. As of the date of this
filing, Credit Bancorp has agreed to convert the $740,000 convertible debenture,
along with any accrued interest due and owing on the debenture, into 482,734
shares of WWW Communications common stock. This common stock has piggy-back
rights, and will be registered in this registration. WWW communications will not
sell the 482,734 shares owned by Credit Bancorp.
In November 1999, the Securities and Exchange Commission (SEC) filed
suit against Credit Bancorp alleging violations of various securities laws in
connection with its actions in relation to WWW Communications (and others), and
seeking various forms of relief including disgorgement of its illegal gains. At
this time, management believes that if the suit is successful, certain benefits
may accrue to WWW Communications, including monetary remuneration.
EXPERTS
The summary financial data for the years ended September 30, 1998 and
1999 have been derived from the Financial Statements and Notes to Financial
Statements, audited by Reuben E. Price & Co., San Francisco, independent
auditors.
ADDITIONAL INFORMATION
A registration statement on Form SB-2, including amendments, relating
to the shares offered has been filed with the Securities and Exchange
Commission, Office of Small Business Policy, Washington, D.C. This prospectus
does not contain all of the information set forth in the registration statement
and the exhibits and schedules to the registration statement. Statements made in
this prospectus as to the contents of any contract or other document are not
necessarily complete and, in each instance, we refer you to the copy of the
contract or other document filed as an exhibit to the registration statement.
Each statement about those contracts and other documents is qualified in all
respects by that reference.
27
Following the offering, we will become subject to the reporting
requirements of the Securities Exchange Act Of 1934. In accordance with that
law, we will be required to file reports and other information with the SEC. The
registration statement and exhibits and schedules, as well as those other
reports and other information when so filed, can be inspection without charge
and copies, at proscribed rates, at the public reference facilities maintained
by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
information the on operation of the Public Reference Room by calling the
Securities and Exchange Commission at L-800-SEC-0300. In addition the Commission
maintains a World Wide Web site on the Internet at http://www.sec.gov that
contains reports, proxy and information. statements and other documents filed
electronically with the Commission, including the registration statement.
We intend to furnish our shareholders with annual reports containing
financial statements audited by our independent public accountants and quarterly
reports containing unaudited financial information for the first three quarters
of each fiscal year.
28
REUBEN E. PRICE & CO.
REUBEN E. PRICE, C.P.A. (1904-1986) PUBLIC ACCOUNTANCY CORPORATION MEMBERS
________ FOUNDED 1942 AMERICAN INSTITUTE OF
RICHARD A. PRICE CERTIFIED PUBLIC ACCOUNTANTS
703 MARKET STREET _______
SAN FRANCISCO, CA 94103 SECURITIES AND EXCHANGE
________ COMMISSION PRACTICE SECTION
(415) 982-3556 OF THE AMERICAN INSTITUTE OF
FAX (415) 957-1178 CERTIFIED PUBLIC ACCOUNTANTS
_______
CALIFORNA SOCIETY OF
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
Board of Directors
World Wide Wireless Communications, Inc.
We have audited the accompanying balance sheet of World Wide Wireless
Communications Inc. (A Development Stage Company), as of September 30, 1999, and
the related statements of operations, statements of cash flows, and statements
of stockholders' equity for the years September 30, 1999 and 1998, and from
inception on September 1, 1994 through September 30, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of World Wide Wireless
Communications, Inc. as of September 30, 1999, and the results of its
operations, cash flows, and stockholders' equity for the years September 30,
1999 and 1998, and from inception on September 1, 1994 through September 30,
1999 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2, the
Company has been in the development stage since its inception on September 1,
1994, and has suffered recurring losses and has a net capital deficiency that
raise substantial doubt about its ability to continue as a going concern.
Realization of a major portion of the assets is dependent upon the Company's
ability to meet its future financing requirements, and the success of future
operations, the outcome of which cannot be determined at this time. Management's
plans in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Reuben E. Price & Co.
January 24, 2000,
Except for Note 9 SUBSEQUENT EVENTS, Affiliations in new locations, Other, as to
which the date is February 11, 2000
29
World Wide Wireless Communications Inc.
(A Development Stage Company)
Balance Sheet
Assets
September 30,
1999
-----------
Current Assets:
Cash and cash equivalents $ 275,082
Prepaid and other 62,740
-----------
Total Current Assets 337,822
-----------
Fixed Assets:
Furniture, fixtures and equipment 74,906
Leasehold improvements 261,478
Accumulated depreciation and amortization (13,506)
-----------
Total Fixed Assets 322,878
-----------
Other Assets:
Prepaid lease expense 500,000
Rental deposit 20,077
-----------
Total Other Assets 520,077
-----------
Total Assets $ 1,180,777
===========
Liabilities and Stockholders' Equity
Current Liabilities:
Accrued expenses $ 491,468
-----------
Total Current Liabilities 491,468
-----------
Long-Term Liabilities:
Loan payable 328,000
-----------
Total Long-Term Liabilities 328,000
-----------
Total Liabilities 819,468
-----------
Commitments and Contigencies --
Stockholders' Equity:
Common stock, par value $ .001 per share,
100,000,000 shares authorized, 71,183,943 issued
and outstanding at September 30, 1999
71,184
Additional paid-in capital 7,049,266
Deficit accumulated during development stage (6,759,141)
-----------
Total Stockholders' Equity 361,309
-----------
Total Liabilities and Stockholders' Equity $ 1,180,777
===========
The accompanying notes are an integral part of these financial statements.
30
World Wide Wireless Communications Inc.
(A Development Stage Company)
Statements of Operations
Cumulative
from
Inception on
For the Year For the Year September 1, 1994
Ended Ended through
September 30, September 30, September 30,
1999 1998 1999
------------ ------------ ------------
Revenues $ -- $ -- $ --
------------ ------------ ------------
General & Administrative Expenses (2,383,330) (353,075) (6,765,842)
------------ ------------ ------------
Total Operating Expenses (2,383,330) (353,075) (6,765,842)
------------ ------------ ------------
Operating Loss (2,383,330) (353,075) (6,765,842)
Other Income 0 6,701 6,701
------------ ------------ ------------
Net Loss $ (2,383,330) $ (346,374) $ (6,759,141)
============ ============ ============
Basic Loss Per Share $ (0.04) $ (0.01)
============ ============
Basic Weighted Average Shares Outstanding 56,113,645 39,330,520
============ ============
Diluted Loss Per Share $ (0.04) $ (0.01)
============ ============
Diluted Weighted Average Shares Outstanding 56,411,173 39,330,520
============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
31
World Wide Wireless Communications, Inc.
(A Development Stage Company)
Statements of Cash Flows
Cumulative
from
For the Year For the Year Inception on
Ended Ended September 1, 1994
September 30, September 30, through
1999 1998 September 30, 1999
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(2,383,330) $ (346,374) $(6,759,141)
Adjustments to reconcile net loss from operations
to net cash used by operating activities:
Common stock issued for services 615,996 30,400 646,396
Depreciation and amortization expense 13,506 0 13,506
Changes in operating assets and liabilities:
(Increase) in prepaid and other (62,740) 0 (62,740)
(Increase) in prepaid lease expense (500,000) 0 (500,000)
(Increase) in other assets (20,077) 0 (20,077)
Increase in accrued expenses 4,321 1,194 491,468
----------- ----------- -----------
Net Cash (Used) by Operating Activities (2,332,324) (314,780) (6,190,588)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES: 0 0 0
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Increase) in fixed assets (336,384) 0 (336,384)
Proceeds from loan 328,000 0 328,000
Proceeds from issuance of common stock 2,614,074 316,451 6,474,054
----------- ----------- -----------
Net Cash Provided by Financing Activities 2,605,690 316,451 6,465,670
----------- ----------- -----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 273,366 1,671 275,082
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,716 45 0
----------- ----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 275,082 $ 1,716 $ 275,082
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Interest paid $ -- $ -- $ --
Income taxes paid $ -- $ -- $ --
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
32
World Wide Wireless Communications, Inc.
(A Development Stage Company)
Statements of Stockholders' Equity
Common Stock (1)
------------------------------------------- Deficit
Accumulated
Additional during
Paid-in Development Total
Shares Amount Capital Stage Equity
---------- ----------- ----------- ---------- -----------
Inception, September 1, 1994 -- $ -- $ -- $ -- $ --
Common stock issued to founders 9,127,600 9,128 9,128
Net loss for the fiscal year
ended September 30, 1995 (5,721) (5,721)
---------- ----------- ----------- ---------- -----------
Balance September 30, 1995 9,127,600 9,128 0 (5,721) 3,407
Common stock issued for cash
at $2.65 a share 268,800 268 712,932 713,200
Net loss for the fiscal year
ended September 30, 1996 (773,097) (773,097)
---------- ----------- ----------- ---------- -----------
Balance September 30, 1996 9,396,400 9,396 712,932 (778,818) (56,490)
Common stock issued for cash:
at $2.65 a share 16,650 17 44,183 44,200
at $4.69 a share 586,160 586 2,749,414 2,750,000
Common stock issued to above shareholders
as anti-dilutive in recognization of
market price devaluation 27,000,783 27,001 27,001
Net loss for the fiscal year
ended September 30, 1997 (3,250,619) (3,250,619)
---------- ----------- ----------- ---------- -----------
Balance September 30, 1997 36,999,993 37,000 3,506,529 (4,029,437) (485,908)
Issuance of common stock in reorganization 8,024,000 8,024 13,427 21,451
Common stock issued in private placement
between $ .0667 and $.25 per share 2,100,000 2,100 292,900 295,000
Common stock issued for services 218,000 218 30,182 30,400
Net loss for the fiscal year
ended September 30, 1997 (346,374) (346,374)
---------- ----------- ----------- ---------- -----------
Balance September 30, 1998 47,341,993 47,342 3,843,038 (4,375,811) (485,431)
Common stock issued in private placement
between $ .05 and $.435 per share 19,303,950 19,304 2,594,770 2,614,074
Common stock issued for services 4,538,000 4,538 611,458 615,996
Net loss for the fiscal year ended
September 30, 1999 (2,383,330) (2,383,330)
---------- ----------- ----------- ---------- -----------
Balance, September 30, 1999 71,183,943 $ 71,184 $ 7,049,266 (6,759,141) $ 361,309
========== =========== =========== ========== ===========
<FN>
(1) The common stock information has been retroactively restated to give effect to the reorganization of May 7, 1998 (See Note 2 to
the financial statements).
The accompanying notes are an integral part of these financial statements.
</FN>
33
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The financial statements presented are those of World Wide Wireless
Communications, Inc., (the Company) (a development stage company). The
Company is engaged in activities related to advanced wireless
communications, including the acquisition of radio-frequency spectrum
both in the United States and internationally. The Company also plans
to license its Virtual Division Multiple Access "VDMA" chipset
technology.
Basic and Diluted Net Loss Per Share
The calculation of basic and diluted net loss per share is in
accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share".
The following data show the amounts used in computing loss per share
and the effect on loss and the weighted average number of shares of
dilutive potential common stock.
Loss from continuing operations $(2,383,330)
------------
Weighted average number of common
shares used in basic loss per share 56,113,645
Effect of dilutive securities:
Stock options 297,528
------------
Weighted average number of common
shares and dilutive potential
common stock used in diluted
loss per share 54,411,173
==========
The following transactions occurred after fiscal years ended September
30, 1999 and 1998, which, had they taken place during fiscal 1999 and
1998, would have changed the number of shares used in the computations
of loss per share:
1999 1998
---- ----
Common shares issued in
private placement 5,964,502 19,303,950
Common shares issued
for services 4,438,000
Debenture convertible into shares
issued in exchange for a
loan payable 462,250
Options 3,200,000
Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid investments with an original maturity of three months or
less to be cash equivalents. Balances in bank accounts may, from time
to time, exceed federal insured limits. The Company has never
experienced any loss, and believes its credit risk to be limited.
34
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Comprehensive Income, Statement of Financial Accounting Standards No.
130
The Company has no material components of other comprehensive income.
Income Taxes
The Company accounts for income taxes using Statement of Financial
Accounting Standards No.109, "Accounting for Income Taxes". Under this
statement, the liability method is used in accounting for income taxes.
Fixed Assets
Furniture, fixtures and equipment are depreciated over their useful
lives of 5 to 10 years, using the straight-line method of depreciation.
Leasehold improvements are amortized over a 5-year period that
coincides with the initial period of the lease, using the straight-line
method of amortization.
Long-Lived Assets
The Company reviews its long-lived assets on an annual basis to
determine any impairment in accordance with Statement of Financial
Accounting Standards No. 121.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Fair Value of Financial Instruments
For cash and cash equivalents and accrued expenses, the carrying
amounts in the Balance Sheet represent their fair market value. The
carrying amount of the loan payable approximates fair value because of
similar current rates at which the Company could borrow funds with
consistent remaining maturities.
NOTE 2 - REORGANIZATION
On May 7, 1998, the Company entered into a reverse merger transaction,
whereby it acquired control of a public shell. The reorganization
resulted in the issuance of 36,999,993 shares of common stock,
representing 82.2% of the total shares outstanding. The value of
$21,451 assigned to the 8,024,000 shares, or 17.8% retained by the
public shell shareholders, represents the net assets acquired from the
public shell. The reorganization was accounted for as a reverse merger
under the purchase method.
The Company has been in the development stage since its formation on
September 1, 1994. It is primarily engaged in activities related to
advanced wireless communications, including the acquisition of
radio-frequency spectrum both in the United States and internationally.
The Company also plans to license its Virtual Division Multiple Access
"VDMA" chipset technology.
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business.
35
NOTE 2 - REORGANIZATION (CONTINUED)
The Company has experienced losses since inception, and had an
accumulated deficit of $6,759,141 at September 30, 1999. Net losses are
expected for the foreseeable future. Management plans to continue the
implementation of its business plan to place the company's assets in
service to generate related revenue. Simultaneously, the Company is
continuing to secure the additional required capital through sales of
common stock through the current operating cycle.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
Litigation
On April 12, 1999, the Company, under terms of a Settlement and General
Release, issued 825,000 shares of common stock to a former director and
a former employee for compensation, approximating $81,000, at a per
share price of $0.098. This per share price is in line with the sale of
common stock for cash at this period of time.
On May 25, 1999, the Company, under terms of a Compromise and
Settlement Agreement, issued 750,000 shares of common stock to cover
approximately $310,000 of various outstanding obligations of the
Company to Corporate Solutions, LLC for services rendered, at a per
share price of $0.40. This per share price is in line with the sale of
common stock for cash at this period of time.
In November 1998, the Company and its predecessor affiliates filed an
action against the lessor of its leases for the Concord and San Marcos,
California multipoint distribution service (MDS) channels. The
complaint alleged breach of contract as well as intentional and
negligent interference with prospective economic advantage. The Company
also sought a preliminary injunction as a result of the lessor's
assertion that the predecessor companies and the Company were in
default on said leases. The Superior Court of California for the County
of Los Angeles issued a preliminary injunction against the lessor to
restrain it from taking any further action against the Company and its
predecessors. Thereafter, the lessor cross-complained against the
Company and its predecessors alleging breach of contract. The
preliminary injunction of the Company against the lessor remained in
effect until December 9, 1999, when a settlement agreement was signed.
The settlement provided for the Company to pay $27,375 to the lessor,
relating to lease obligations. This amount is recorded as an expense in
the financial statements for the fiscal years ended September 30 1998
and 1999. The Company further agreed to sign a consulting agreement
with the lessor for one year, whereby the Company will issue the
equivalent of $20,000 of its restricted common stock, the value of
which is to be computed at 80% of the market value of the Company's
unrestricted shares. Additionally, under this consulting agreement, the
Company agreed to execute a promissory note in favor of the lessor in
the amount of $40,000, payable at $1,000 per month, commencing December
1, 1999, with a final payment of $28,000 on December 1, 2000.
The Company borrowed from Credit Bancorp $328,000 in August 1999 and
$412,000 in October 1999. The terms of this loan are 7% interest per
annum payable, semiannually on the last day of February and September,
with the principal due September 30, 2002. On August 26, 1999, the
Company filed suit against Credit Bancorp, in U.S. District Court in
San Francisco, regarding improprieties on the part of Credit Bancorp
relating to the August 1999 loan. The case was settled on October 11,
1999. As part of the settlement agreement, Credit Bancorp agreed to
convert the original loans granted to the Company to a convertible
debenture in the amount of $740,000. On October 11, 1999, the Company
issued a convertible unsecured debenture for $740,000 to Credit Bancorp
in settlement of this obligation. The terms of this convertible
unsecured debenture are 7% interest per annum payable semiannually on
the last day of February and September, with the principal due
September 30, 2002. All amounts of unpaid principal and accrued
interest of this debenture are convertible at any time at the
conversion price of $1.60 per share of unregistered, restricted shares
of the Company's stock, adjusted for any stock splits.
36
NOTE 3 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
Litigation (Continued)
In November 1999, the Securities and Exchange Commission (SEC) filed
suit against Credit Bancorp alleging violations of various securities
laws in connection with its actions in relation to the Company (and
others), and seeking various forms of relief including disgorgement of
its illegal gains. At this time, management believes that if the suit
is successful, certain benefits may accrue to the Company, including
the cancellation of the $740,000 convertible debenture.
Operating Leases
The Company's office space at One Post Street, San Francisco, was
leased on a month to month basis. The Company vacated these offices on
August 31, 1999. The actual rent paid, for the fiscal year ended
September 30, 1999, was $22,341.
In April 1999, the Company entered into a 5-year lease for
approximately 6,000 square feet of office space in Jack London Square,
Oakland, California. The lease commenced on June 5, 1999. The triple
net rental agreement is for $10,038 per month during the first year,
with a rental deposit of $20,077 shown as an Other Asset on the
financial statements. The lease provides for an annual increase based
on the indexed cost of living adjustments. Additionally, the lease
provides for the landlord's participation in partial reimbursement over
the terms of the lease to the Company for leasehold improvements paid
by the Company. The Company commenced its occupancy of this space on
September 1, 1999. The minimum annual rent is $120,456 for the fiscal
years ended September 30, 2000, 2001, 2002 and 2003, and $81,642 for
the period October 1, 2003 to June 4, 2004.
The Company leases (under assignment) all of the channel capacity for
certain multipoint distribution service (MDS) and multi-channel
multipoint distribution service (MMDS) channels from three carriers
that are licensed by the FCC as specified in 47 C.F.R. Paragraph
21.901(b). These MDS/MMDS leases provide for a monthly lease fee of 2%
of gross subscriber revenue or a minimum monthly rental aggregating
approximately $1,150. The minimum aggregate annual rent is $13,800 for
1999, $67,160 for 2000, and $9,500 for 2001, adjusted annually by
changes in the Consumer Price Index. Each of the leases contain three
ten-year renewal options, and an option to purchase each license for
$225,000, adjusted upon changes in the Consumer Price Index since lease
inception.
In conjunction with the MDS/MMDS licenses, the Company has acquired
(under assignment) transmission sites in the geographical areas covered
by the licenses. These site leases have varying terms and conditions,
and at September 30, 1999, the minimum annual rental is $42,000 per
fiscal year ending September 30, 2000 through 2004.
Rents paid for fiscal years ended September 30, 1999 and 1998 are as
follows:
1999 1998
-------- --------
Former office location, San Francisco $ 22,341 $ 10,163
Current office location, Oakland 38,814 0
Distribution service channel leases 21,300 2,859
Transmission sites 42,000 10,406
-------- --------
Total $124,455 $ 23,428
======== ========
The minimum annual rentals under current lease obligations for future
fiscal years ended September 30 are as follows:
2000 2001 2002 2003 2004 Remainder
---- ---- ---- ---- ---- ---------
Current office location, Oakland $120,456 $120,456 $120,456 $120,456 $ 81,842 None
Distribution service channel leases 67,160 9,500 0 0 0 None
Transmission sites 42,000 42,000 42,000 42,000 42,000 None
-------- -------- -------- -------- -------- ----
Total $229,616 $171,956 $164,456 $164,456 $123,842 None
======== ======== ======== ======== ======== ====
37
NOTE 4- STOCKHOLDERS EQUITY
During the fiscal year ended September 30, 1999, the Company sold
19,303,950 shares of its common stock for net cash proceeds of
$2,614,074 and issued 4,538,000 shares of its common stock for services
at an aggregate value of $615,996. Stock issued for services was at the
cash price for the shares at the time of issuance.
During the fiscal year ended September 30, 1998, the Company sold
2,100,000 shares of its common stock for net cash proceeds of $295,000
and issued 218,000 shares of its common stock for services at an
aggregate value of $30,400. Stock issued for services was at the cash
price for the shares at the time of issuance.
NOTE 5- PREPAID LEASE EXPENSE
On November 25, 1998, the Company entered into an option agreement with
Shekinah Network to pay $500,000 to lease eight Instructional
Television Fixed Service (ITFS) channels for the Company's high-speed
wireless internet connections, as authorized by the Federal
Communication Commission (FCC). This agreement also provides the
Company an exclusive option to lease excess capacity on Shekinah's
remaining thirty-two ITFS channels, as they become available. The
monthly minimum transmission fee to be paid to Shekinah for each
license or application optioned, will be five percent (5%) of the gross
system receipts or five hundred dollars, whichever is greater.
Amortization of the licenses will begin when the available channels are
placed in service, which management expects to begin in approximately
April 2000.
ITFS licenses can only be owned by FCC approved educational, religious
or non-profit entities. In the event FCC rules and regulations change
to allow commercial companies to own these licenses or the Company
establishes an educational, religious or non-profit affiliate, the
agreement also provides the Company an option to pay Shekinah $150,000
per-market or channel group on an individual basis or $3,500,000 for
all forty channels. The option period extends for ten years, with three
additional ten-year term renewals.
NOTE 6- INCOME TAXES
A reconciliation between the actual income tax benefit and the federal
statutory rate follows:
Fiscal years ended September 30,
--------------------------------
1999 1998
---- ----
Amount % Amount %
------ - ------ -
Computed income tax benefit at
statutory rate 810,332 34% 117,767 34%
Operating loss with no current
tax benefit -810,332 -34% -117,767 -34%
-------------------------------
Income tax benefit None None
----- ----
At September 30 1999, the Company had a net operating loss carryforward
for federal tax purposes of approximately $6,760,000 which if unused to
offset future taxable income, will expire between the years 2010 to
2019, and approximately $2,154,000 for state tax purposes, which will
expire if unused in 2004 and 2005. A valuation allowance has been
recognized to offset the related deferred tax assets due to the
uncertainty of realizing any benefit therefrom. During 1999 and 1998,
no changes occurred in the conclusions regarding the need for a 100%
valuation allowance in all tax jurisdictions.
Under section 382 of the Internal Revenue Code, the utilization of net
operating loss carryforwards is limited after an ownership change, as
defined, to an annual amount equal to the market value of the loss
corporation's outstanding stock immediately before the date of the
ownership change multiplied by the highest Federal long-term tax exempt
rate in effect for any month in the 3 calendar month period ending in
the calendar month in which the ownership change occurred. Due to the
ownership changes as a result of the May 1998 reorganization and
subsequent stock issuances, any future realization of the Company's net
operating losses will be severely limited.
38
NOTE 6- INCOME TAXES (CONTINUED)
Significant components of the Company's deferred tax assets are as
follows:
Fiscal years ended September 30,
1999 1998
---- ----
Net operating loss carryforwards $2,383,330 $346.374
Valuation allowance (2,383,330) (346,374)
----------------------------
Net deferred tax assets 0 0
----------------------------
NOTE 7 - ACCRUED EXPENSES
Accrued expenses consist of the following:
Professional fees $191,601
Payroll and related payroll taxes $104,986
Leasehold Improvements $ 55,288
Other $139,593
--------
Total $491,468
========
NOTE 8 - STOCK OPTION PLANS
Nonstatutory Stock Options
The Company has issued stock options under nonstatutory stock option
agreements. The options are granted at the fair market value of the
shares at the date the option is granted. The options are granted for a
period of 5 years, and are fully exercisable during the term of the
option period or within thirty (30) days of the participant's
resignation or termination.
Combined transactions in non-employee options for the fiscal years
ended September 30, 1999 and 1998 are as follows:
1999 1998
-----------------------------------
Number Average Number Average
of Exercise of Exercise
Shares Price Shares Price
------ ----- ------ -----
Options outstanding October 1 - - - -
Granted 500,000 0.095 - -
Cancelled - - - -
Exercised - - - -
--------------------------------
Options outstanding September 30 500,000 0.095 - -
======= ===== ======= =====
Combined transactions in employee options for the fiscal years ended
September 30, 1999 and 1998 are as follows:
1999 1998
------------------------------------
Number Average Number Average
of Exercise of Exercise
Shares Price Shares Price
------ ----- ------ -----
Options outstanding October 1 - - - -
Granted 2,700,000 0.095 - -
Cancelled - - - -
Exercised - - - -
--------------------------------
Options outstanding September 30 2,700,000 0.095 - -
========= ===== ======= =====
39
NOTE 8 - STOCK OPTION PLANS (CONTINUED)
Incentive Stock Plan
The Company adopted an incentive stock plan on August 5, 1998, which
has not yet been approved by the shareholders. The options are granted
at the fair market value of the shares at the date that the option is
granted. The options are granted for a period of 10 years, and are
exercisable after one year from the date of grant, at a vested rate of
20% per year during the term of the option period or within thirty (30)
days of the participant's resignation or termination. The Company has
limited the number of shares under this plan to 3,000,000 shares of its
capital stock for this plan. The number of shares of stock covered by
each outstanding option, and the exercise price per share thereof set
forth in each such option, shall be proportionately adjusted for any
stock split, and or, stock dividend. As of September 30, 1999, the
Company did not issue any options under this plan; however, subsequent
to the date of this financial statement, options, for 800,000 shares of
common stock, were granted under the incentive stock plan to an
employee within his employment agreement, but are being treated as
nonstatutory stock options until the incentive stock plan is approved
by the shareholders.
Compensation Costs
The Company applies APB Opinion 25 in accounting for its stock
compensation plans discussed above. Accordingly, no compensation costs
have recognized for these plans in 1999 or 1998. Had compensation costs
been determined on the basis of fair value pursuant to FASB Statement
No. 123, net loss and loss per share would have been increased as
follows:
1999 1998
---- ----
Net loss:
As reported $2,383,330 $346,374
========== ========
Pro forma $2,441,575 $346,374
========== ========
Basic loss per share:
As reported $(0.04) $(0.01)
======= =======
Pro forma $(0.04) $(0.01)
======= =======
Diluted loss per share:
As reported $(0.04) $(0.01)
======= =======
Pro forma $(0.04) $(0.01)
======= =======
The fair value of each option granted is estimated on the grant date
using the Black-Scholls model. The following assumptions were made in
estimating fair value.
Assumption Plans
Dividend yield 0%
Risk-free interest rate 7%
Expected life 5 years
Expected volatility 97%
40
NOTE 9 - SUBSEQUENT EVENTS
Affiliations in new locations
Argentina
On November 30, 1999, the Company entered into an agreement to acquire
a controlling interest in Infotel Argentina S.A., a Buenos Aires based
company which owns MMDS licenses in eight of the largest Argentine
cities including Buenos Aires. The purchase price was $1,500,000, of
which $900,000 was paid in cash and $600,000 is to be paid in shares of
restricted stock of the Company.
Peru
On February 10, 2000, the Company signed letters of intent to purchase
a Peruvian telecommunications company, Digital Way S.A. This
acquisition is contingent upon the execution of final agreements, as
well as the approval of the relevant foreign government agencies.
41
INTERIM FINANCIAL STATEMENTS
World Wide Wireless Communications Inc.
(A Development Stage Company)
Balance Sheet
UNAUDITED
Prepared by Management
Assets
December 31, 1999
-----------------
Current Assets:
Cash and cash equivalents $ 337,103
Prepaid and other 2,160
-----------
Total Current Assets 339,263
-----------
Fixed Assets:
Furniture, fixtures and equipment 172,355
Leasehold improvements 278,549
Accumulated depreciation and amortization (35,409)
-----------
Total Fixed Assets 415,495
-----------
Other Assets:
Prepaid lease expense 500,000
Investment 1,200,000
Other 20,077
-----------
Total Other Assets 1,720,077
-----------
Total Assets $ 2,474,835
===========
Liabilities and Stockholders' Equity
Current Liabilities:
Accrued expenses $ 359,151
-----------
Total Current Liabilities 359,151
-----------
Long-Term Liabilities:
CLoanrpayableebenture 740,000
-----------
Total Long-Term Liabilities 740,000
-----------
Total Liabilities 1,099,151
-----------
Commitments and Contigencies --
Stockholders' Equity:
Common stock, par value $.001 per share 73,889
100,000,000 shares authorized, 73,888,973 issued
and outstanding at December 31, 1999
Additional paid-in capita 8,890,125
Deficit accumulated during development stage (7,588,330)
-----------
Total Stockholders' Equity 1,375,684
-----------
Total Liabilities and Stockholders' Equity $ 2,474,835
===========
The accompanying notes are an integral part of these financial statements.
42
World Wide Wireless Communications Inc.
(A Development Stage Company)
Statement of Operations
UNAUDITED
Prepared by Management
Cumulative
from
For the Quarter For the Quarter Inception on
Ended Ended September 1, 1994
December 31, December 31, through
1999 1998 December 31, 1999
------------ ------------ ------------
Revenues $ -- $ -- $ --
------------ ------------ ------------
General & Administrative Expenses (829,189) (358,615) (7,595,031)
------------ ------------ ------------
Total Operating Expenses (829,189) (358,615) (7,595,031)
------------ ------------ ------------
Operating Loss (829,189) (358,615) (7,595,031)
Other Income 0 6,701 6,701
------------ ------------ ------------
Net Loss $ (829,189) $ (351,914) $ (7,588,330)
============ ============ ============
Basic Loss Per Share $ (0.01) $ (0.01)
============ ============
Basic Weighted Average Shares Outstanding 71,791,046 52,723,058
============ ============
Diluted Loss Per Share $ (0.01) $ (0.01)
============ ============
Diluted Weighted Average Shares Outstanding 74,991,046 55,098,058
============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
43
World Wide Wireless Communications, Inc.
(A Development Stage Company)
Statements of Cash Flows
UNAUDITED
Prepared by Management
Cumulative
from
For the Quarter For the Quarter Inception on
Ended Ended September 1, 1994
December 31, December 31, through
1999 1998 December 31, 1999
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (829,189) $ (358,615) $(7,588,330)
Adjustments to reconcile net loss from operations
to net cash used by operating activities:
Common stock issued for services 15,910 0 662,306
Common stock issued for investment 600,000 600,000
Depreciation and amortization expense 21,903 0 35,409
Changes in operating assets and liabilities:
(Increase)/ decrease in prepaid and other 60,580 0 (2,160)
(Increase) in prepaid lease expense 0 (500,000) (500,000)
(Increase) in other assets 0 0 (20,077)
Increase/ (decrease) in accrued expenses (132,317) 424,546 359,151
----------- ----------- -----------
Net Cash (Used) by Operating Activities (263,113) (434,069) (6,453,701)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) in investments (1,200,000) 0 (1,200,000)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Increase) in fixed assets (114,520) 0 (450,904)
Proceeds from loan 412,000 0 740,000
Proceeds from issuance of common stock 1,227,654 602,273 7,701,708
----------- ----------- -----------
Net Cash Provided by Financing Activities 1,525,134 602,273 7,990,804
----------- ----------- -----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 62,021 168,204 337,103
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 275,082 1,716 0
----------- ----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 337,103 $ 169,920 $ 337,103
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Interest paid $ -- $ -- $ --
Income taxes paid $ -- $ -- $ --
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
44
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The financial statements presented are those of World Wide Wireless
Communications, Inc., (the Company) (a development stage company). The
Company is engaged in activities related to advanced wireless
communications, including the acquisition of radio-frequency spectrum
both in the United States and internationally. The Company also plans
to license its Virtual Division Multiple Access "VDMA" chipset
technology.
Basic and Diluted Net Loss Per Share
The calculation of basic and diluted net loss per share is in
accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share".
The following data show the amounts used in computing loss per share
and the effect on loss and the weighted average number of shares of
dilutive potential common stock.
Loss from continuing operations $(829,189)
----------
Weighted average number of common
shares used in basic loss per share 71,791,046
Effect of dilutive securities:
Stock options 3,200,000
-----------
Weighted average number of common
shares and dilutive potential
common stock used in diluted
loss per share 74,991,046
==========
The following transactions occurred after quarters ended December 31,
1999 and 1998, which, had they taken place during the quarters ended
December 31, 1999 and 1998, would have changed the number of shares
used in the computations of loss per share:
1999 1998
---- ----
Common shares issued in
private placement 3,259,742 17,958,072
Common shares issued
for services 4,538,000
Debenture convertible into shares
issued in exchange for a
loan payable 462,250 462,250
Options 3,200,000
Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid investments with an original maturity of three months or
less to be cash equivalents. Balances in bank accounts may, from time
to time, exceed federal insured limits. The Company has never
experienced any loss, and believes its credit risk to be limited.
Comprehensive Income, Statement of Financial Accounting Standards No.
130
The Company has no material components of other comprehensive income.
45
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
The Company accounts for income taxes using Statement of Financial
Accounting Standards No.109, "Accounting for Income Taxes". Under this
statement, the liability method is used in accounting for income taxes.
Fixed Assets
Furniture, fixtures and equipment are depreciated over their useful
lives of 5 to 10 years, using the straight-line method of depreciation.
Leasehold improvements are amortized over a 5-year period that
coincides with the initial period of the lease, using the straight-line
method of amortization.
Long-Lived Assets
The Company reviews its long-lived assets on an annual basis to
determine any impairment in accordance with Statement of Financial
Accounting Standards No. 121.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Fair Value of Financial Instruments
For cash and cash equivalents and accrued expenses, the carrying
amounts in the Balance Sheet represent their fair market value. The
carrying amount of the loan payable approximates fair value because of
similar current rates at which the Company could borrow funds with
consistent remaining maturities.
NOTE 2 - REORGANIZATION
On May 7, 1998, the Company entered into a reverse merger transaction,
whereby it acquired control of a public shell. The reorganization
resulted in the issuance of 36,999,993 shares of common stock,
representing 82.2% of the total shares outstanding. The value of
$21,451 assigned to the 8,024,000 shares, or 17.8% retained by the
public shell shareholders, represents the net assets acquired from the
public shell. The reorganization was accounted for as a reverse merger
under the purchase method.
The Company has been in the development stage since its formation on
September 1, 1994. It is primarily engaged in activities related to
advanced wireless communications, including the acquisition of
radio-frequency spectrum both in the United States and internationally.
The Company also plans to license its Virtual Division Multiple Access
"VDMA" chipset technology.
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business.
The Company has experienced losses since inception, and had an
accumulated deficit of $7,588,330 at December 31, 1999. Net losses are
expected for the foreseeable future. Management plans to continue the
implementation of its business plan to place the company's assets in
service to generate related revenue. Simultaneously, the Company is
continuing to secure the additional required capital through sales of
common stock through the current operating cycle.
46
NOTE 3 - COMMITMENTS AND CONTIGENCIES
Litigation
In November 1998, the Company and its predecessor affiliates filed an
action against the lessor of its leases for the Concord and San Marcos,
California multipoint distribution service (MDS) channels. The
complaint alleged breach of contract as well as intentional and
negligent interference with prospective economic advantage. The Company
also sought a preliminary injunction as a result of the lessor's
assertion that the predecessor companies and the Company were in
default on said leases. The Superior Court of California for the County
of Los Angeles issued a preliminary injunction against the lessor to
restrain it from taking any further action against the Company and its
predecessors. Thereafter, the lessor cross-complained against the
Company and its predecessors alleging breach of contract. The
preliminary injunction of the Company against the lessor remained in
effect until December 9, 1999, when a settlement agreement was signed.
The settlement provided for the Company to pay $27,375 to the lessor,
relating to lease obligations. This amount is recorded as an expense in
the financial statements for the fiscal years ended September 30 1998
and 1999. The Company further agreed to sign a consulting agreement
with the lessor for one year, whereby the Company will issue the
equivalent of $20,000 of its restricted common stock, the value of
which is to be computed at 80% of the market value of the Company's
unrestricted shares. Additionally, under this consulting agreement, the
Company agreed to execute a promissory note in favor of the lessor in
the amount of $40,000, payable at $1,000 per month, commencing December
1, 1999, with a final payment of $28,000 on December 1, 2000.
The Company borrowed from Credit Bancorp $328,000 in August 1999 and
$412,000 in October 1999. The terms of this loan are 7% interest per
annum payable, semiannually on the last day of February and September,
with the principal due September 30, 2002. On August 26, 1999, the
Company filed suit against Credit Bancorp, in U.S. District Court in
San Francisco, regarding improprieties on the part of Credit Bancorp
relating to the August 1999 loan. The case was settled on October 11,
1999. As part of the settlement agreement, Credit Bancorp agreed to
convert the original loans granted to the Company to a convertible
debenture in the amount of $740,000. On October 11, 1999, the Company
issued a convertible unsecured debenture for $740,000 to Credit Bancorp
in settlement of this obligation. The terms of this convertible
unsecured debenture are 7% interest per annum payable semiannually on
the last day of February and September, with the principal due
September 30, 2002. All amounts of unpaid principal and accrued
interest of this debenture are convertible at any time at the
conversion price of $1.60 per share of unregistered, restricted shares
of the Company's stock, adjusted for any stock splits.
In November 1999, the Securities and Exchange Commission (SEC) filed
suit against Credit Bancorp alleging violations of various securities
laws in connection with its actions in relation to the Company (and
others), and seeking various forms of relief including disgorgement of
its illegal gains. At this time, management believes that if the suit
is successful, certain benefits may accrue to the Company, including
the cancellation of the $740,000 convertible debenture.
Operating Leases
The Company's office space at One Post Street, San Francisco, was
leased on a month to month basis. The Company vacated these offices on
August 31, 1999. The actual rent paid, for the fiscal year ended
September 30, 1999, was $22,341.
In April 1999, the Company entered into a 5-year lease for
approximately 6,000 square feet of office space in Jack London Square,
Oakland, California. The lease commenced on June 5, 1999. The triple
net rental agreement is for $10,038 per month during the first year.
The lease provides for an annual increase based on the indexed cost of
living adjustments. Additionally, the lease provides for the landlord's
participation in partial reimbursement over the terms of the lease to
the Company for leasehold improvements paid by the Company. The Company
commenced its occupancy of this space on September 1, 1999. The minimum
annual rent is $120,456 for the fiscal years ended September 30, 2000,
2001, 2002 and 2003, and $81,642 for the period October 1, 2003 to June
4, 2004.
47
NOTE 3 - COMMITMENTS AND CONTIGENCIES (CONTINUED)
The Company leases (under assignment) all of the channel capacity for
certain multipoint distribution service (MDS) and multi-channel
multipoint distribution service (MMDS) channels from three carriers
that are licensed by the FCC as specified in 47 C.F.R. Paragraph
21.901(b). These MDS/MMDS leases provide for a monthly lease fee of 2%
of gross subscriber revenue or a minimum monthly rental aggregating
approximately $1,150. The minimum aggregate annual rent is $13,800 for
1999, $67,160 for 2000, and $9,500 for 2001, adjusted annually by
changes in the Consumer Price Index. Each of the leases contain three
ten-year renewal options, and an option to purchase each license for
$225,000, adjusted upon changes in the Consumer Price Index since lease
inception.
In conjunction with the MDS/MMDS licenses, the Company has acquired
(under assignment) transmission sites in the geographical areas covered
by the licenses. These site leases have varying terms and conditions,
and at September 30, 1999, the minimum annual rental is $42,000 per
fiscal year ending September 30, 2000 through 2004.
Rents paid for quarters ended December 31, 1999 and 1998 are as
follows:
1999 1998
-------- --------
Former office location, San Francisco $ 0 $ 5,540
Current office location, Oakland 32,115 0
Distribution service channel leases 26,643 0
Transmission sites 50,500 2,625
-------- --------
Total $109,258 $ 8,165
======== ========
The minimum annual rentals under current lease obligations for future
fiscal years ended September 30 are as follows:
2000 2001 2002 2003 2004 Remainder
---- ---- ---- ---- ---- ---------
Current office location, Oakland $120,456 $120,456 $120,456 $120,456 $ 81,842 None
Distribution service channel leases 67,160 9,500 0 0 0 None
Transmission sites 42,000 42,000 42,000 42,000 42,000 None
-------- -------- -------- -------- --------
Total $229,616 $171,956 $164,456 $164,456 $123,842 None
======== ======== ======== ======== ========
NOTE 4- STOCKHOLDERS EQUITY
During the quarter ended December 31, 1999, the Company sold 2,150,485
shares of its common stock for net cash proceeds of $1,227,654. The
Company also issued 454,545 shares of its common stock for an aggregate
value of $600,000 as a partial payment for an investment in a
telecommunications company. The Company issued 100,000 shares of its
common stock for services at an aggregate value of $15,910. Stock
issued for the investment was at the market price on the day of
issuance. Stock issued for services was at the cash price for the
shares at the time of issuance.
During the quarter ended December 31, 1998, the Company sold 7,310,650
shares of its common stock for net cash proceeds of $602,273.
NOTE 5- PREPAID LEASE EXPENSE
On November 25, 1998, the Company entered into an option agreement with
Shekinah Network to pay $500,000 to lease eight Instructional
Television Fixed Service (ITFS) channels for the Company's high-speed
wireless internet connections, as authorized by the Federal
Communication Commission (FCC). This agreement also provides the
Company an exclusive option to lease excess capacity on Shekinah's
remaining thirty-two ITFS channels, as they become available. The
monthly minimum transmission fee to be paid to Shekinah for each
license or application optioned, will be five percent (5%) of the gross
system receipts or five hundred dollars, whichever is greater.
Amortization of the licenses will begin when the available channels are
placed in service, which management expects to begin in approximately
April 2000.
48
NOTE 5- PREPAID LEASE EXPENSE (CONTINUED)
ITFS licenses can only be owned by FCC approved educational, religious
or non-profit entities. In the event FCC rules and regulations change
to allow commercial companies to own these licenses or the Company
establishes an educational, religious or non-profit affiliate, the
agreement also provides the Company an option to pay Shekinah $150,000
per-market or channel group on an individual basis or $3,500,000 for
all forty channels. The option period extends for ten years, with three
additional ten-year term renewals.
NOTE 6- INCOME TAXES
A reconciliation between the actual income tax benefit and the federal
statutory rate follows:
Quarters ended December 31,
---------------------------
1999 1998
Amount % Amount %
Computed income tax benefit at
statutory rate 281,924 34% 121,929 34%
Operating loss with no current
tax benefit -281,924 -34% -121,929 -34%
--------------------------------
Income tax benefit None None
----- ----
At December 31 1999, the Company had a net operating loss carryforward
for federal tax purposes of approximately $7,500,000 which if unused to
offset future taxable income, will expire between the years 2010 to
2019, and approximately $2,154,000 for state tax purposes, which will
expire if unused in 2004 and 2005. A valuation allowance has been
recognized to offset the related deferred tax assets due to the
uncertainty of realizing any benefit therefrom. During 1999 and 1998,
no changes occurred in the conclusions regarding the need for a 100%
valuation allowance in all tax jurisdictions.
Under section 382 of the Internal Revenue Code, the utilization of net
operating loss carryforwards is limited after an ownership change, as
defined, to an annual amount equal to the market value of the loss
corporation's outstanding stock immediately before the date of the
ownership change multiplied by the highest Federal long-term tax exempt
rate in effect for any month in the 3 calendar month period ending in
the calendar month in which the ownership change occurred. Due to the
ownership changes as a result of the May 1998 reorganization and
subsequent stock issuances, any future realization of the Company's net
operating losses will be severely limited.
Significant components of the Company's deferred tax assets are as
follows:
Quarters ended December 31,
1999 1998
---- ----
Net operating loss carryforwards $ 829,189 $ 358,615
Valuation allowance (829,189) (358,615)
--------- ---------
Net deferred tax assets 0 0
--------- ---------
NOTE 7 - ACCRUED EXPENSES
Accrued expenses consist of the following:
Professional fees $196,352
Payroll and related payroll taxes $ 45,000
Other $117,799
--------
Total $359,151
========
49
NOTE 8 - STOCK OPTION PLANS
Nonstatutory Stock Options
The Company has issued stock options under nonstatutory stock option
agreements. The options are granted at the fair market value of the
shares at the date the option is granted. The options are granted for a
period of 5 years, and are fully exercisable during the term of the
option period or within thirty (30) days of the participant's
resignation or termination.
Combined transactions in non-employee options for the quarters ended
December 30, 1999 and 1998 are as follows:
1999 1998
-------------------------------------------
Number Average Number Average
of Exercise of Exercise
Shares Price Shares Price
------ ----- ------ -----
Options outstanding October 1 500,000 0.095 - -
Granted - - 500,000 0.095
Cancelled - - - -
Exercised - - - -
------------------------------------------
Options outstanding September 30 500,000 0.095 500,000 0.095
======= ========= ======= =====
Combined transactions in employee options for the quarters ended
December 30, 1999 and 1998 are as follows:
1999 1998
---------------------------------------
Number Average Number Average
of Exercise of Exercise
Shares Price Shares Price
------ ----- ------ -----
Options outstanding October 1 2,700,000 0.095 - -
Granted - - 1,875,000 0.095
Cancelled - - - -
Exercised - - - -
------------------------------------------
Options outstanding September 30 2,700,000 0.095 1,875,000 0.095
========= ===== ========= =====
Incentive Stock Plan
The Company adopted an incentive stock plan on August 5, 1998, which
has not yet been approved by the shareholders. The options are granted
at the fair market value of the shares at the date that the option is
granted. The options are granted for a period of 10 years, and are
exercisable after one year from the date of grant, at a vested rate of
20% per year during the term of the option period or within thirty (30)
days of the participant's resignation or termination. The Company has
limited the number of shares under this plan to 3,000,000 shares of its
capital stock for this plan. The number of shares of stock covered by
each outstanding option, and the exercise price per share thereof set
forth in each such option, shall be proportionately adjusted for any
stock split, and or, stock dividend. As of December 31, 1999, the
Company did not issue any options under this plan; however, subsequent
to the date of this financial statement, options, for 800,000 shares of
common stock, were granted under the incentive stock plan to an
employee within his employment agreement, but are being treated as
nonstatutory stock options until the incentive stock plan is approved
by the shareholders.
50
NOTE 8 - STOCK OPTION PLANS (CONTINUED)
Compensation Costs
The Company applies APB Opinion 25 in accounting for its stock
compensation plans discussed above. Accordingly, no compensation costs
have recognized for these plans in 1999 or 1998. Had compensation costs
been determined on the basis of fair value pursuant to FASB Statement
No. 123, net loss and loss per share would have been increased for the
quarters ended December 31, 1999 and 1998 as follows:
1999 1998
---- ----
Net loss:
As reported $ 829,189 $351,914
========== ========
Pro forma $1,043,296 $422,091
========== ========
Basic loss per share:
As reported $(0.01) $(0.01)
======= =======
Pro forma $(0.01) $(0.01)
======= =======
Diluted loss per share:
As reported $(0.01) $(0.01)
======= =======
Pro forma $(0.01) $(0.01)
======= =======
The fair value of each option granted is estimated on the grant date
using the Black-Scholls model. The following assumptions were made in
estimating fair value for the quarters ended December 31, 1999 and
1998.
Assumption Plans
1999 1998
---- ----
Dividend yield 0% 0%
Risk-free interest rate 7% 7%
Expected life 5 years 5 years
Expected volatility 280% 76%
NOTE 9 - INVESTMENT
Argentina
On November 30, 1999, the Company entered into an agreement to acquire
a controlling interest in Infotel Argentina S.A., a Buenos Aires based
company which owns MMDS licenses in eight of the largest Argentine
cities including Buenos Aires. The purchase price was $1,500,000, of
which $600,000 was paid in cash and $600,000 was paid in shares of
restricted stock of the Company. The final $300,000 was paid subsequent
to December 31, 1999.
51
NOTE 10 - SUBSEQUENT EVENTS
Affiliations in new locations
Peru
The Company is in the process of purchasing a Peruvian
telecommunications company, Digital Way S.A. This acquisition, in
progress, is contingent upon the approval of the relevant foreign
government agencies.
52
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Our Bylaws provide that we may indemnify any director, officer, agent or
employee against all expenses and liabilities, including counsel fees,
reasonably incurred by or imposed upon them in connection with any proceeding to
which they may become involved by reason of their being or having been a
director, officer, employee or agent of our Company. Moreover, our Bylaws
provide that we shall have the right to purchase and maintain insurance on
behalf of any such persons whether or not we would have the power to indemnify
such person against the liability insured against. Insofar as indemnification
for liabilities arising under the Securities Act, we have been informed that, in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
Item 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Expenses of the Registrant in connection with the issuance and distribution of
the securities being registered are estimated as follows, assuming the Maximum
offering amount is sold:
Securities and Exchange Commission filing fee $ 4,752
Accountant's fees and expenses $10,000
Legal fees and expenses $25,000
Printing $ 5,000
Marketing expenses $10,000
Postage $ 5,000
Miscellaneous $ 1,000
-------
Total $60,752
The Registrant will bear all expenses shown above.
Item 26. RECENT SALES OF UNREGISTERED SECURITIES
a) The following information is given for all securities that we sold
within the past three years without registering the securities
under the Securities Act.
Shares
Offering Exemption Dates Issued Par Value Paid-In-Capital
- ------------------ ----- ------ --------- ---------------
Rule 504 01/13/98- 16,285,000 $16,285 $ 736,380
12/08/98
Rule 506 12/28/98- 19,164,452 $19,164 $4,310,505
12/31/99
Officers/Directors 07/21/98- 36,774,993 $36,775 $3,462,990
Employees/Reorg. 05/14/99
Corporate Solutions 05/28/99 750,000 $ 750 $ 299,250
Settlement
Employee Settlement 04/12/99 825,000 $ 825 $ 81,000
---------- ------- ----------
Issuances through 12/31/99 73,799,445 $73,799 $8,890,125
========== ======= ==========
Rule 504 01/19/00- 3,349,000
01/28/00 ==========
<FN>
53
b) No underwriters were used in connection with the issuances any shares or options. The class of persons
to whom we issued shares were:
1. Accredited;
2. Employees, Directors, and Private Investors.
c) Sales commissions and finders fees were paid to various entities
that were not registered broker-dealers. The transactions and the
types and amounts of consideration received by the Company were:
1. Cash
2. Services
d) The Company is claiming an exemption under Rule 506 of the
Securities Act of 1933, as amended.
</FN>
54
Item 27. EXHIBITS
ITEM (601) DOCUMENT PAGE
3.1 Articles of Incorporation,
3.2 Amendment to Articles of Incorporation filed
3.3 Amendment to Articles of Incorporation filed
3.4 By-laws
4.1 Form of certificate evidencing shares of Common Stock of World Wide
Wireless Communications, Inc.
5. Opinion of Evers & Hendrickson, LLP with respect to the legality of the
shares being registered
10.1 Lease Agreement Between World Wide Wireless Communications, Inc. and
Shekinah Network
10.2 South Bend Mmds Lease Agreement
10.3 Lease Agreement Between World Wide Wireless Communications, Inc. And
Shekinah Network Vail, Colorado
10.4 Lease Agreement Between World Wide Wireless Communications, Inc. And
Shekinah Network Aspen, Colorado
10.5 Lease Agreement Between World Wide Wireless Communications, Inc. And
Shekinah Network Casper, Wyoming
10.6 Lease Agreement Between World Wide Wireless Communications, Inc. And
Shekinah Network Grand Rapids, Michigan
10.7 Lease Agreement Between World Wide Wireless Communications, Inc. And
Shekinah Network La Grande, Oregon
10.8 Lease Agreement Between World Wide Wireless Communications, Inc. And
Shekinah Network Pierre, South Dakota
10.9 Lease Agreement Between World Wide Wireless Communications, Inc. And
Shekinah Network Ukiah, California
23.1 Consent of Evers & Hendrickson, LLP
23.2 Consent of Reuben E. Price & Co.
Item 28. UNDERTAKINGS
a) The Registrant hereby undertakes that it will:
1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
55
(i) Include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental
change in the information in the registration
statement; and
(iii) Include any additional or changed material
information on the plan of distribution.
2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the bona fide
offering.
3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the Offering.
e) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe the registrant
meets all of the requirements of filing on Form SB-2 and authorized this
registration statement (pre-effective amendment no. 4) to be signed on its
behalf by the undersigned on April 25, 2000.
World Wide Wireless Communications, Inc.
By:/s/ Wayne Caldwell By:/s/ Douglas P. Haffer
------------------------ ---------------------------------
Wayne Caldwell Douglas P. Haffer
Vice President President and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement (pre-effective amendment no. 4) has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
________________________ President & CEO & Chairman April 25, 2000
Douglas P. Haffer
________________________ Vice President and Director April 25, 2000
Wayne Caldwell
56