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 30 June 2001
[ ] 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 27 July 2001 WideBand Corporation had 13,122,345 shares of Common
Stock outstanding.
Transitional Small Business Disclosure Format: 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 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 4
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-QSB, 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 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 is focused on sales to the education market but also plans to
market to government and private industry. In generating sales and licensing
leads, WideBand exhibits its technology and offers its network training courses
at several large international and a number of smaller regional computer shows
throughout the year. The Company also participates in special educational
programs such as NEAP (National Education Acceleration Program) to promote its
products within the education community.
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 JUNE 30, 2001 TO THE THREE MONTHS ENDED
JUNE 30, 2000, AND THE NINE MONTHS ENDED JUNE 30, 2001 TO THE NINE MONTHS
ENDED JUNE 30, 2000
Research and development costs increased for the three-month and the
nine-month periods ending June 30, 2001, compared with the three and nine-month
periods ending June 30, 2000 as part of the continuing commitment of the
3
Company to stay on the cutting edge of product development and enhancement.
Selling and general and administrative expenses decreased for the three-month
period ending June 30, 2001 compared with the same three-month period for 2000,
and for the nine-month period ending June 30, 2001, as compared with the nine
months ending June 30, 2000, reflecting fluctuations in marketing costs
associated with trade show exhibits and the periodic printing of new
literature.
SOURCES AND USES OF CASH
The Company generates cash primarily through the sale of its networking
products.
The Company has no financing through borrowings and as such has no
long-term debt or associated interest expense.
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. The Company also uses
cash to fund production of its networking products. Cash was also used to
increase inventory as of June 30, 2001 compared with September 30, 2000 as the
Company prepared to boost production.
Property and Equipment increased as a result of the purchase in March 2001
of new manufacturing equipment that will increase the production capacity of
the WideBand manufacturing plant. The equipment was purchased to expand the
capability of the Company to support new marketing programs.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(b) Reports on Form 8-K.
There were no Form 8-K reports filed this quarter.
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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: 9 August 2001 __________/s/ Roger E. Billings________________
Dr. Roger E. Billings, President, CEO, Director
5
WideBand Corporation
Condensed Financial Statements
Table of Contents
Condensed Balance Sheets - June 30, 2001 and
September 30, 2000 (Unaudited). . . . . . . . . . . . . . . . . . . F-1
Condensed Statements of Operations for the Three and Nine Months
ended June 30, 2001 and 2000 (Unaudited) . . . . . . . . . . . . . . F-2
Condensed Statements of Cash Flows for the Three and Nine Months
ended June 30, 2001 and 2000 (Unaudited) . . . . . . . . . . . . . . F-3
Notes to Condensed Financial Statements . . . . . . . . . . . . . . . . . F-4
WIDEBAND CORPORATION
CONDENSED BALANCE SHEETS
(UNAUDITED)
June 30, September 30,
2001 2000
-------------- --------------
ASSETS
<s> <c> <c>
Current Assets
Cash and cash equivalents $ 584,774 $ 988,310
Trade accounts receivable 23,759 1,373
Inventory 220,391 169,267
Prepaid expenses 23,477 66,865
------------ ------------
Total Current Assets 852,401 1,225,815
Property and Equipment 621,044 488,388
Less: accumulated depreciation (113,580) (88,350)
------------ ------------
Net Property and Equipment 507,464 400,038
Patents, Net of Amortization 70,952 69,758
------------ ------------
Total Assets $ 1,430,817 $ 1,695,611
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 20,025 $ 11,670
Accrued liabilities 1,868 11,229
------------ ------------
Total Current Liabilities 21,893 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 4,399,265 4,399,265
Accumulated deficit (3,121,564) (2,857,776)
------------ ------------
Total Stockholders' Equity 1,408,924 1,672,712
------------ ------------
Total Liabilities and Stockholders' Equity $ 1,430,817 $ 1,695,611
============ ============
See the accompanying notes to condensed financial statements.
F-1
WIDEBAND CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months For the Nine Months
Ended June 30, Ended June 30,
--------------------------- ---------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
<s> <c> <c> <c> <c>
Sales $ 35,831 $ 108,408 $ 225,587 $ 295,225
Cost of Sales 25,225 87,387 144,382 182,227
----------- ----------- ----------- -----------
Gross Profit 10,606 21,021 81,205 112,998
Expenses
Research and development 32,641 28,535 133,080 90,832
Selling and general and administrative 34,228 55,648 237,439 249,207
----------- ----------- ----------- -----------
Total Expenses 66,869 84,183 370,519 340,039
----------- ----------- ----------- -----------
Loss From Operations (56,263) (63,162) (289,314) (227,041)
Other income 14,067 4,909 25,525 5,988
----------- ----------- ----------- -----------
Net Loss $ (42,196) $ (58,253) (263,789) (221,053)
=========== =========== =========== ===========
Basic and Diluted Loss Per Share $ (0.00) $ (0.00) $ (0.02) $ (0.02)
=========== =========== =========== ===========
Weighted Average Number of Common
Shares Used in Per Share Calculation 13,122,345 13,122,345 13,122,345 12,934,568
=========== =========== =========== ===========
See the accompanying notes to condensed financial statements.
F-2
WIDEBAND CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the nine For the nine
months ended months ended
June 30, June 30,
2001 2000
-------------- --------------
<s> <c> <c>
Cash Flows From Operating Activities
Net loss $ (263,788) $ (221,053)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization 27,152 12,226
Common stock issued for services - 77,000
Common stock received as reimbursement for legal expense - (9,000)
Services contributed by employees - 45,686
Changes in operating assets and liabilities:
Trade receivables (22,386) (56,176)
Prepaid expenses 43,388 -
Inventory (51,124) (96,497)
Accounts payable and accrued liabilities (1,006) 60,837
------------ ------------
Net Cash and Cash Equivalents Used in Operating Activities (267,764) (186,977)
------------ ------------
Cash Flows From Investing Activities
Sale of securities - 5,088
Payments for patents (3,116) (9,260)
Purchase of equipment (132,656) (5,719)
------------ ------------
Net Cash and Cash Equivalents Used In Investing Activities (135,772) (9,891)
------------ ------------
Cash Flows From Financing Activities
Common stock issued - 1,000,000
Collections on notes receivable from related party - 8,430
Payments on related party note payable - (8,873)
Net cash received in Vis Viva acquisition - 226,118
------------ ------------
Cash and Cash Equivalents Provided By Financing Activities - 1,225,675
------------ ------------
Net Increase (Decrease) in Cash (403,536) 1,028,807
Cash and Cash Equivalents At Beginning of Period 988,310 83,902
------------ ------------
Cash and Cash Equivalents At End of Period $ 584,774 $ 1,112,709
============ ============
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