UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended 31 December 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________________ to _________________
Commission file number 0-28002
WideBand Corporation
(Exact name of small business issuer as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
87-0363656
(IRS Employer Identification No.)
401 West Grand, Gallatin, Mo 64640
(Address of principal executive offices)
(660) 663-3000
(Issuer's telephone number)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
As of 30 January 2001, WideBand Corporation had 13,122,345 shares of
Common Stock outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 3
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 4
Item 6. Exhibits and Reports on Form 8-K 5
2
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
See the Company's financial statements attached to this 10-QSB report.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
THE FOLLOWING DISCUSSION OF THE COMPANY'S FINANCIAL CONDITION AND RESULTS
OF OPERATIONS INCLUDES CERTAIN FORWARD-LOOKING STATEMENTS. WHEN USED IN THIS
FORM 10-K, THE WORDS "ESTIMATE," "PROJECTION," "INTEND," "ANTICIPATES" AND
SIMILAR TERMS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS THAT RELATE
TO THE COMPANY'S FUTURE PERFORMANCE. SUCH STATEMENTS ARE SUBJECT TO
SUBSTANTIAL UNCERTAINTY. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON
THE FORWARD-LOOKING STATEMENTS SET FORTH BELOW. THE COMPANY UNDERTAKES NO
OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY OF THE FORWARD-LOOKING STATEMENTS
CONTAINED HEREIN.
OVERVIEW
WideBand Corporation was formed in 1994 as a manufacturer and marketer of
high-performance networking products. These products are based on the WideBand
and eEthernet (pronounced Enhanced Ethernet) networking technologies, whose
features are designed to support demand for an affordable way to send multiple
feeds of high-quality video over computer networks. The company generates
revenue primarily through the sale of these products to educational
institutions. The company has also started to license its patented technology
to generate royalty income.
The Company recognizes revenues upon delivery and acceptance of the
products or services by the customer. Costs associated with the manufacture of
products are included in inventory and expensed to cost of goods sold as the
respective revenue is recognized.
COMPARISON OF THE THREE MONTHS ENDED DECEMBER 31, 2000 TO THE THREE MONTHS
ENDED DECEMBER 31, 1999
Sales increased modestly during the period, in part due to payments
received from partners participating in the Comdex launch of new products in
November.
The increase in selling and general and administrative expenses are due to
an increased focus on sales and marketing of the Company's products. As the
Company continues to enter the marketplace, these expenses are expected to
increase in order to generate sales revenue. Increases in sales supplies,
literature, and trade shows accounted for $63,978 of selling and general and
administrative expenses for the three months ended December 31, 2000.
3
SOURCES OF CASH
The Company generates cash primarily through the sale of its
high-performance networking products. The Company is focused on sales to
educational institutions. The Company also plans to market to government and
private industry. In support of generating sales and licensing leads, WideBand
displays its technology each year at several computer shows including COMDEX.
The Company does not have any financing through borrowings and as such
does not have any long-term debt or associated interest expense.
USES OF CASH
Costs as a percentage of sales are expected to decrease as the Company's
manufacturing facility is used to a greater capacity.
The Company requires funds for continuing research and development. This
requirement will continue as the Company is committed to the research and
development of new products to keep the Company vital.
Selling and general and administration costs have increased due to
increased expenses for professional services that are required as a result of
the reorganization and change to a publicly held company. Additional payroll
expenses of $24,232 for the three months ended December 31, 2000, were
experienced due to a ramp up in manufacturing. The increases experienced in
selling and general and administration are also partly due to an increased
focus on sales and marketing, leading to increased expenses in this area.
PART II -- OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
WideBand Corporation held its Annual Shareholders Meeting on 15 November
2000 in which it elected the following members of the board of directors:
Dr. Roger E. Billings, Chairman, Donald N. Fenn, Director, and Dr. Maria
Sanchez, Director.
Shareholders also voted to ratify the appointment of Hansen, Barnett, and
Maxwell of Salt Lake City, Utah, to continue as independent auditors for
WideBand Corporation. There was no other business conducted at the meeting.
All voting was unanimous in the affirmative, for each director as well as
for the ratification of the appointment of the independent auditors, as follows:
Total votes cast in person or by proxy: 11,871,796
Votes approving each director: 11,871,796
Votes disapproving each director: 0
Abstentions: 0
4
Votes approving ratification of auditors: 11,871,796
Votes disapproving ratification: 0
Abstentions: 0
Item 6. Exhibits and Reports on Form 8-K.
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed during this quarter.
___________________________________________________________________
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
WideBand Corporation
(Registrant)
Date ____2/14/01_____ __________/s/ Roger E. Billings__________________
Dr. Roger E. Billings, President, CEO, Director
5
WideBand Corporation
Condensed Financial Statements
Table of Contents
Condensed Balance Sheets - December 31, 2000 and September 30,
2000 (Unaudited) F-1
Condensed Statements of Operations for the three months ended
December 31, 2000 and 1999 (Unaudited) F-2
Condensed Statements of Cash Flows for the three months ended
December 31, 2000 and 1999 (Unaudited) F-3
Notes to Condensed Financial Statements F-4
WIDEBAND CORPORATION
CONDENSED BALANCE SHEETS
(UNAUDITED)
December 31, September 30,
2000 2000
-------------- --------------
ASSETS
Current Assets
Cash and cash equivalents $ 901,680 $ 988,310
Trade accounts receivable 7,819 1,373
Inventory 180,759 169,267
Prepaid expenses 23,807 66,865
------------ ------------
Total Current Assets 1,114,065 1,225,815
Property and Equipment 488,388 488,388
Less: accumulated depreciation (97,343) (88,350)
------------ ------------
Net Property and Equipment 391,045 400,038
Patents, Net of Amortization 69,232 69,758
------------ ------------
Total Assets $ 1,574,342 $ 1,695,611
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 30,190 $ 11,670
Accrued liabilities 9,194 11,229
------------ ------------
Total Current Liabilities 39,384 22,899
------------ ------------
Stockholders' Equity
Common Stock - $0.01 par value;
20,000,000 shares authorized;
13,122,345 shares outstanding 131,223 131,223
Additional paid-in capital 4,399,264 4,399,264
Accumulated deficit (2,995,529) (2,857,775)
------------ ------------
Total Stockholders' Equity 1,534,958 1,672,712
------------ ------------
Total Liabilities and Stockholders' Equity $ 1,574,342 $ 1,695,611
============ ============
See the accompanying notes to condensed financial statements.
F-1
WIDEBAND CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three For the three
months ended months ended
December 31, December 31,
2000 1999
-------------- --------------
Sales $ 151,565 $ 89,425
Cost of Sales 93,912 53,285
----------- -----------
Gross Profit 57,653 36,140
Expenses
Research and development 47,644 32,851
Selling and general and administrative 153,498 57,939
----------- -----------
Total Expenses 201,142 90,790
Loss From Operations (143,489) (54,650)
Interest income 5,735 327
----------- -----------
Net Loss $ (137,754) $ (54,323)
=========== ===========
Basic and Diluted Loss Per Share $ (0.01) $ (0.00)
=========== ===========
Weighted Average Number of Common Shares
Used in Per Share Calculation 13,122,345 12,801,819
=========== ===========
See the accompanying notes to condensed financial statements.
F-2
WIDEBAND CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the three For the three
months ended months ended
December 31, December 31,
2000 1999
-------------- --------------
Cash Flows From Operating Activities
Net loss $ (137,754) $ (54,323)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Depreciation and amortization 9,629 5,150
Services contributed by employees - 31,409
Changes in operating assets and
liabilities:
Trade receivables (6,446) (3,124)
Prepaid assets 43,058 (121)
Inventory (11,492) (6,822)
Accounts payable 18,520 (22,202)
Accrued liabilities (2,035) 2,619
----------- -----------
Net Cash and Cash Equivalents Used
in Operating Activities (86,520) (47,414)
----------- -----------
Cash Flows From Investing Activities
Payments for patents (110) (7,012)
Purchase of equipment - (12,323)
Collections on notes receivable
from related party - 8,430
----------- -----------
Net Cash and Cash Equivalents Used
in Investing Activities (110) (10,905)
----------- -----------
Cash Flows From Financing Activities
Payments on payable to related party - (8,873)
----------- -----------
Cash and Cash Equivalents Used in
Financing Activities - (8,873)
----------- -----------
Net Decrease in Cash (86,630) (67,192)
Cash and Cash Equivalents At Beginning of Period 988,310 83,902
----------- -----------
Cash and Cash Equivalents At End of Period $ 901,680 $ 16,710
=========== ===========
See the accompanying notes to condensed financial statements.
F-3
WIDEBAND CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1- INTERIM FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by WideBand
Corporation (the Company) and are unaudited. In the opinion of management, the
accompanying unaudited financial statements contain all necessary adjustments
for fair presentation, consisting of normal recurring adjustments except as
disclosed herein.
The accompanying unaudited interim financial statements have been
condensed pursuant to the rules and regulations of the Securities and Exchange
Commission; therefore, certain information and disclosures generally included
in financial statements have been condensed or omitted. These financial
statements should be read in connection with the Company's annual financial
statements included in the Company's annual report on Form 10-KSB as of
September 30, 2000. The financial position and results of operations of the
interim periods presented are not necessarily indicative of the results to be
expected for the year ended September 30, 2001.
F-4