UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment to Amendment to Form 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report: 01/09/02
Date of Earliest Event Reported: 12/31/01
WIRELESS DATA SOLUTIONS, INC.
(Name of small business issuer as specified in its charter)
Commission file number 333-47395
Utah 93-0734888
(State of Incorporation) (I.R.S. Employer Identification No.)
2233 Roosevelt Road
Suite #5
St. Cloud, MN 56301
(Address of principal executive offices)
(320)203-7477
(Issuer's telephone number)
WIRELESS DATA SOLUTIONS, INC.
Changes to FORM 8K
This amendment to Form 8K was filed to correct the following item:
Wireless Data Solutions Statement of Earnings for fiscal 2001 contained
an error, which was corrected. The brackets indicating a net loss were
inadvertently left out on the last line on the Consolidated Statement
of Earnings.
ITEM 5. OTHER EVENTS
The company has determined that it will be unable to secure an audited
financial statement for the fiscal year ended September 30, 2001, and
thus will be unable to comply with Securities and Exchange Commission
rules applicable to the annual report on form 10-KSB. This difficulty
arises because the company is experiencing cash flow problems and is
unable to allocate the funds necessary to pay the professional fees
required by its independent auditors. The audited report will be filed
as soon as cash flow permits, however there can be no assurances that
such an event will transpire. In lieu of filing the annual report on
Form 10-KSB, the company herewith furnishes the information required by
rule 15c2-11 adopted under the Securities and Exchange Act of 1935.
PART I
Except for the historical information contained herein, the following
discussion contains forward looking statements that involve risks and
uncertainties. The Company's actual results could differ materially
from those discussed here. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed in
this section.
BUSINESS OVERVIEW
Wireless Data Solutions, Inc. (the Company") develops and markets
Digital wireless communications equipment for mobile fleet management
in the U.S. foreign countries. The equipment is designed, assembled,
and sold by Dinet, a wholly owned subsidiary of the Company. It has
sold units to a number of different industries, including ready-mix
concrete suppliers, taxi-cab companies, parcel delivery, vehicle
towing, and public transportation. The large majority of its sales
have been to the ready-mix segment. It transmits data using two-way
radio, cellular, and CDPD (cellular digital packet data).
An enhancement to the Mobile Data terminals messaging capacity is its
automatic vehicle location (AVL) feature. Automatic vehicle location
is used to track vehicles; it can also be used to track other assets
such as cargo containers. The unit to be tracked is fitted with a
terminal that has a Global positioning system (GPS) receiver. The
receiver gathers positioning information from the satellite system
which in turn sends the information to a base station. At the base
station the location is then super imposed on a map of the country.
Wireless Data's mapping system has a zoom feature which enables the
people at the base station to look at the precise location of the asset
be it a few miles or one thousand miles distant. Vehicle location or
asset tracking is an emerging technology which the Company believes has
almost unlimited applications.
The Company's principal office occupies 330 square feet and is located
at 2233 Roosevelt Road Suite # 5 St. Cloud, MN 56301. Its wholly owned
subsidiary, Dinet, which occupies 4,800 square feet, is located in
Oceanside, California, where it maintains a production and sales
facility. It also has a small sales office in Severna Park, Maryland.
The company's transfer agent is Computer Share Investor Services, 12039
West Alameda Parkway, Suite Z, Lakewood, CO 80228.
BUSINESS ISSUES
In fiscal 2001 the company continued to maintain its focus on the
readi mix market and expanding its product line to that industry.
Dinet spent in excess of $300,000 developing an auto status product
i.e., which is viewed as a necessity to maintain a competitive edge
in a market, which becomes increasing competitive. The auto status
product automatically relays changes in status of the vehicle
leaving home base, arriving at job site, etc.; without any
interaction from the driver. The company believes this technology
also has a number of applications in other industries.
Fiscal 2001 was a dramatic disappointment. Wireless Data Solutions
sustained losses of approximately $612,000. In addition to the funds
expend for product development there were substantial unplanned
expenditure in legal and accounting in excess of $180,000.
Considering the company's disappointing financial results and the
subsequent drain on its resources Management understands that to
move ahead it will have to explore all avenues. The company is
exploring several possible business combinations along with several
strategic partnerships.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The management team presently consists of three members.
Brian B. Blankenburg
Mr. Blankenburg was elected as a director of the Company in June 1997
and was named President of Dinet in September 1998. In March of 1999 he
became President and Chief Executive Officer of Wireless Data
Solutions. Mr. Blankenburg provides expertise in the areas of strategic
planning, sales and marketing, mergers and acquisitions, funding and
market research. Prior to joining the Company Mr. Blankenburg served as
Executive Vice President, and later President of Hudson Industries, Mr.
Blankenburg led the strategic repositioning of Hudson's business, and
doubled its sales in four years. Prior to that time, Mr. Blankenburg
held various management positions with International Multifoods,
Beatrice, Green Giant and Hormel Company. He is a 1971 graduate of the
University of Minnesota, where he received a B.A. in advertising. His
continuing education has included the Beatrice Executive Marketing
School at the J.L. Kellogg Graduate School of Business, Northwestern
University, as well as studies at The University of Pennsylvania's
Wharton School of Business. He owns approximately 3% of the shares
outstanding.
Robert Chase
Robert Chase succeeded Brian Blankenburg as President of Dinet, The
Company's wholly owned subsidiary. Mr. Chase has 25 years of experience
In operations and start-up marketing and sales programs with wireless-
related companies. For the past seven years he has consulted to Fortune
1000 ranked companies within the wireless industry as a partner with
Severin Chase. Prior to his consulting role, he held various executive
management positions with Digital Mobile Communications, Pacific
Telesis, General Electric, and Motorola.
Patrick L. Makovec
Secretary and Treasurer of the Company, Mr. Makovec has been an
officer and board member of the Company since December 1987. He was
instrumental in discovering Dinet, and evaluating it prior to its
acquisition by the Company. He was also involved in the restructuring
of Dinet to strengthen the base from which to move it forward. He is
the Board Chairman and Secretary/Treasurer of Dinet. He was formerly
the President of Tel Corp. Leasing in St. Cloud, MN, and holds an M.S.
Degree in Accounting from the University of Wisconsin. He owns
approximately 8% of the shares outstanding.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULT OF OPERATIONS
Liquidity and Capital Resources
The Company's current assets totaled approximately $298,000 compared to
$552,000 at the end of fiscal 2000. The current liabilities totaled
$494,000 compared to $198,000 in fiscal 2000. Cash and cash equivalents
totaled $17,000 compared to $262,000 in the prior year. Accounts
Receivable increased approximately $20,000, which was primarily a
timing issue rather than any trend. Inventory was down approximately
$55,000 as the Company has arranged to have it's vendors hold a
significant portion of the fast moving items in their inventories.
Management understands that to maintain operations sales will have to
increase or there will have to be an injection of Capital. Management
is diligently working to bring about some sort of new business
combination or some new strategic relationship. The caveat, however, is
that there can be no assurances that such events will transpire.
Results of Operations
Revenues from product sales declined approximately $441,000 compared to
the prior year while total revenues declined approximately $641,000.
The company's cash position declined by approximately $245,000, which
was directly related to the decline in revenues. Management believes
the general economic conditions contributed significantly to decline in
revenues. In response to the dismal year experienced by the company
management has trimmed its operating budget considerably.
The payable in stock increased by approximately $110,000 which was the
stock bonus which was part of Robert Chase's employment contract 50,000
shares of common stock was paid to Sheryl Chases in Connection with
certain creature production and public relations work.
In addition to those shares owed to Robert Chase 41,250 shares of
common stock were issued to Bob Chase as part of his employment
contract Brian Blankenburg was issued 191,000 shares of common stock
for work done prior to fiscal 2001.
Subsequent Events
Subsequent to the year end 2001, 182,296 shares of common stock were
issued to Sanact in settlement of $75,000 of $175,000 owed as a result
of previously mentioned action. John Doubek was issued 450,000 shares
of stock in connection with legal services performed over the last 24
months.
MARKET PRICE OF COMMON EQUITY
The price of the Company's common stock at the end of each quarter for
the past two fiscal years is as follows:
Quarter Ending High Bid Low Bid
12/31/99 3/8 11/32
3/31/00 1 3/8 1 3/16
6/30/00 13/32 3/8
09/30/00 7/16 13/32
12/31/00 1/8 10/100
3/31/01 7/16 15/32
06/30/01 5/16 5/16
09/30/01 1/8 1/8
WIRELESS DATA SOLUTIONS, INC. AND SUBSIDIARY
Consolidated Financial Statements
For the Year Ended September 30, 2001
(UNAUDITED)
Wireless Data Solutions, Inc. And Subsidiaries
Consolidated Statement of Earnings
For the Years Ended, September 30, 2001, and 2000
09/30/01 09/30/00
(Unaudited) (Audited)
REVENUES
Net product sales $1,234,238 $1,660,352
Repairs and maintenance 49,660 63,055
Product development sales 0 200,000
------------------------------
Total Revenues 1,283,898 1,923,407
COST OF SALES
Products 402,822 725,529
------------------------------
Total Cost of Sales 402,822 725,529
--------------------------------
Gross Profit 881,076 1,197,878
Operating Expenses 1,491,368 1,136,186
Operation income (loss) (610,292) 61,692
__________________________________
Other income (Expense)
Interest expense, net
of interest income (1,733) 10,940
Lawsuit settlement 0 (175,000)
Other expenses 0 (64,586)
----------------------------------
Total Other Income (Expenses) (1,733) (228,646)
Loss before provision
for income taxes 0 949
----------------------------------
NET EARNINGS ($612,025) ($166,954)
Wireless Data Solutions, Inc. And Subsidiaries
Consolidated Balance Sheet
September 30, 2001, and 2000
ASSETS
09/30/01 09/30/00
(Unaudited) (Audited)
Current Assets:
Cash and cash equivalents $17,869 $262,746
Trade accounts receivable,
net of $50,913/$53,000
estimated allowance
for doubtful accounts 151,242 97,487
Inventory 124,570 180,080
Prepaid Expenses 4,849 12,371
----------------------------
Total Current Assets 298,501 552,684
Property and Equipment:
Office fixtures and equipment 72,049 52,620
Leasehold Improvements 0 12,894
------------------------------
Subtotal 72,049 52,620
Less: Accumulated Depreciation
and Amortization 36,063 20,499
Net Fixed Assets 35,986 45,015
Other Assets:
Security deposits 5,635 5,635
--------------------------------
Total Other Assets 5,635 5,635
--------------------------------
TOTAL ASSETS $340,093 $603,335
LIABILITIES 09/30/01 09/30/00
(Unaudited) (Audited)
Current Liabilities:
Accounts payable and
accrued expenses $290,168 $140,273
Accrued salaries payable 0 12,540
Service Contract payable
in stock 138,924 29,545
Notes Payable 53,403 0
Advance from Customers 5,828 15,255
Other accrued liabilities 262 601
Total Current Liabilities 488,585 198,214
Other Liabilities:
Due to officer 294,461 290,318
Accrued lawsuit
Settlement 175,000 175,000
-----------------------------------
Total Other Liabilities 469,461 465,318
TOTAL LIABILITIES 958,046 663,532
Minority interests in
consolidated subsidiaries 20,000 20,000
STOCKHOLDERS' DEFICIENCY:
Preferred Stock, $.002 par value;
3,000,000 shares authorized;
no shares issued or outstanding 0 0
Common Stock, $.001 par value;
25,000,000 shares authorized;
10,917,124 shares issued and
outstanding at 9/30/00,
11,199,374 at 9/30/01 11,199 10,917
Additional paid-in-capital 2,061,850 2,007,834
Deficit (2,711,001) (2,098,948)
---------------------------------
Total Stockholders' Equity (617,952) (80,197)
----------------------------------
TOTAL LIAB. &
STOCKHOLDERS' EQUITY $340,093 $603,335
Wireless Data Solutions, Inc. And Subsidiaries
Consolidated Statement of Cash Flows
For The Years Ended September 30, 2001, and 2000
09/30/01 9/30/00
(Unaudited) (Audited)
Operating Activities:
Net Loss ($612,025) ($167,903)
Adjustments to reconcile
net income to net cash provided
by (used in) operating
activities:
Depreciation 0 5,466
Issuance of common
Stock for services 0 58,100
Write down of advance due
From affiliate 0 64,586
Provision for doubtful accounts 0 47,000
Changes in Operating Assets and
Liabilities:
Decrease (Increase) in
accounts receivable (53,755) 119,461
Decrease (Increase) in inventory 55,539 51,430
Decrease (Increase) in prepaid
expenses 7,522 586
Decrease (Increase)in deposits 0 (2,521)
(Decrease) Increase in
accounts payable 137,355 (557)
(Decrease) Increase in advances
from customers (9,427) (92,533)
(Decrease) Increase in Notes
payable 53,403 0
(Decrease) Increase in service
Contract payable in stock 109,379 0
(Decrease) Increase in other
current liabilities 0 (1,366)
(Decrease) Increase in other
liabilities (339) (59,932)
Decrease in deferred service
contract 0 (41,255)
Accrued lawsuit settlement 0 175,000
----------------------------------
Net cash provided by
operating activities (312,348) 155,562
Investing Activities:
Purchase of property and equipment 9,030 (50,481)
Financing Activities:
(Decrease) Increase in due to
related parties 4,143 0
Proceeds of issuance of
common stock 54,298 7,500
Net cash provided by
financing activities 58,441 7,500
-----------------------------------
Net increase in cash (244,877) 112,581
Cash at beginning of period 262,746 150,165
-------------------------------------
Cash at end of period $17,868 $262,746
Wireless Data Solutions, Inc. And Subsidiaries
Consolidated Statement of Stockholders' Equity
For The Years Ended September 30, 2001, and 2000
Common Stock
Number of Add'l pd Accumulated
Shares Amount Capital
(Unaudited)
Balance at September 30, 2000 10,917,124 $10,917
$2,007,834
Issuance of common stock for
Employment services 41,250.00 41.25 15,220.75
Issuance of common stock for
Services 191,000.00 191.00 20,609.00
Issuance of common stock for
Services 50,000.00 50.00 18,186.00
------------------------------------------
Balance, September 30, 2001 11,199,374 11,199 2,061,850
-------------------------------------------
Common Stock
Deficit Options Total
Balance at September 30, 2000 ($2,098,948) $0 ($80,197)
Issuance of common stock for
Employment services $15,262
Issuance of common stock for
Employment services $20,800
Issuance of common stock for
Employment services $18,236
Net Loss (612,025) (612,025)
Balance, September 30, 2001 (2,711,001) 0 (637,924)
Common Stock
Number of Add'l pd Accumulated
Shares Amount Capital
(Audited)
Balance at September 30, 1999 10,182,124 $10,182 $1,927,969
Common stock options exercised at
$0.05/share 225,000 225 22,275
Issuance of common stock for
Services at $0.10/share 500,000 500 49,500
Issuance of common stock for
Services at $0.81/share 10,000 10 8,090
Balance, September 30, 2000 10,917,124 10,917 2,007,834
Common Stock
Deficit Options Total
(Audited)
Balance at September 30, 1999 ($1,931,045) $11,250 $18,356
Common stock options exercised at
$0.05/share 0 (11,250) 11,250
Issuance of common stock for
Services at $0.10/share 0 0 50,000
Issuance of common stock for
Services at $0.81/share 0 0 8,100
Net Loss (167,903) (167,903)
Balance, September 30, 2000 (2,098,948) 0 (80,197)