UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934. March 31,2005
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the Transaction Period from ____ to _____
Commission File number 333-47395
WIRELESS DATA SOLUTIONS, INC.
(Name of small business issuer as specified in its charter)
Utah 93-0734888
(State of Incorporation) (IRS Employer Identification No.)
2233 Roosevelt Road
Suite #5
St. Cloud, MN 56301
(Address of principal executive offices)
(320)-203-7477
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes__ No__X__
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Not Applicable
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as the practicable date:
There were 15,142,434 shares of the Issuer's common stock outstanding as of
March 31, 2005.
Table of Contents
Part I
Item I Financial Statements
Item II Management's Discussion and Analysis or plan of Operation.
Part II
Item I Legal Proceedings
Item II Changes in Securities
Item III Defaults upon Senior Securities
Item IV Submission of Matters to a vote of security holders
Item V Other Information
Item VI Exhibits on Reports on Form 8K
Item VII Subsequent Events
WIRELESS DATA SOLUTIONS, INC. AND SUBSIDIARY
Consolidated Financial Statements
For the Six Months Ended March 31,2005
(Not Reviewed)
ITEM I
WIRELESS DATA SOLUTIONS, INC. AND SUBSIDIARY
Consolidated Balance Sheet
March 31, 2005
Assets 03/31/05 03/31/04
(Not Reviewed)(Not Reviewed)
Current Assets
Cash and Cash Equivalents $2,961 $12,582
Trade Accounts Receivable, net of
Estimated Allowance for doubtful
Accounts of $54,053 32,277 68,147
Inventory 70,300 72,044
Prepaid Expenses 286 286
Due from Amanda Hupila 175 -
Due from Amanda Merrick 570 -
--------- ---------
Total Current Assets $107,569 $153,059
--------- ---------
Property and Equipment
Office Fixtures and Equipment 59,155 59,155
Leasehold Improvements 12,894 12,894
--------- ---------
72,049 72,049
Less: Accumulated Depreciation 70,682 67,594
--------- ---------
Net Property and Equipment 1,366 4,455
--------- ---------
Other Assets
Security Deposits 4,978 4,978
--------- ---------
Total Assets $113,913 $162,492
========= =========
Liabilities and Stockholder's Equity (Deficiency)
Current Liabilities:
Note Payable to Stockholder $50,000 $50,000
Accounts Payable and Accrued Expenses 50,167 72,194
Advance from customers - -
Other Current Liabilities 30,958 34,839
--------- ---------
Total Current Liabilities 131,125 157,033
Other Liabilities:
Due to officers 57,981 37,027
Other Liabilities 35,280 -
--------- ---------
Total Liabilities 224,386 194,060
--------- ---------
Minority Interests in consolidated subsidiaries 20,000 20,000
--------- ---------
Commitment and Contingencies
Stockholders Equity
Preferred Stock, $.002 par value; 3,000,000 shares
Authorized; no shares issued or outstanding - -
Common Stock, $.001 par value; 25,000,000 shares
Authorized; 15,142,434 issued 15,142 15,142
Common Stock to be issued 410,126 410,126
Additional Paid in Capital 2,373,962 2,373,962
Accumulated Deficit (2,992,554) (2,851,538)
---------- ---------
Total Stockholder's Deficiency (51,568) (52,308)
---------- ----------
Total Liabilities and Stockholder Deficiency $113,913 $206,826
========== ==========
WIRELESS DATA SOLUTIONS, INC. AND SUBSIDIARY
Consolidated Statements of Operations
For the Six Months Ended March 31, 2005
03/31/05 03/31/04
(Not Reviewed)(Not Reviewed)
Revenue
Net Product Sales $169,483 $371,499
Repairs and Maintenance 16,965 24,625
Engineering Services 3,250 26,871
---------- ---------
Total Revenue $189,698 $422,995
Cost of Sales $87,630 $155,171
---------- ---------
Gross Profit 102,069 267,824
Operating Expenses 139,231 218,232
---------- ---------
Operating Income (loss) (37,162) 49,592
---------- ---------
Other Income (Expense):
Miscellaneous Income - 5,550
Dividend Income - 1
Interest Expense 2,500 (2,671)
Interest Income - 3
---------- ---------
Total Other Income (Expense) - (2,883)
Provision for Income Tax - -
---------- ---------
Net Gain or Loss $(39,662) $52,475
========== =========
Basic and diluted earnings (loss)
per common share $.004 $.003
---------- ---------
Weighted Average Common Shares Outstanding 15,142,434 15,142,434
========== ==========
WIRELESS DATA SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Six Months Ended March 31, 2005 and 2004
2005 2004
(Not Reviewed)(Not Reviewed)
Cash Provided by (used in)
Operating Activities:
Net Income (loss) (39,662) 52,475
Adjustments to reconcile net loss to net cash
Provided by (used in) operating activities:
Depreciation 70,682 1,978
Issuance of common stock for services - -
(Increase) Decrease in Assets:
Security Deposits 4,978 95
Accounts Receivable 33,277 (47,845)
Inventory 70,300 (943)
Prepaid expenses and other assets 1,031 2,422
Increase (decrease) in liabilities:
Accounts Payable and Accrued Expenses 115,964 (23,852)
Due to Officers (57,981) 4,858
Advances from Customers - -
Other Current liabilities 441 -
Net Cash provided by (used in) --------- ---------
Operating activities: (3,045) (10,812)
--------- ---------
Cash Flows from Financing Activities:
Advance to Officers - -
--------- ---------
Net Cash provided by financing activities - -
--------- ---------
Net increase (decrease) in
Cash and Cash Equivalents (3,046) (10,812)
Cash and Cash equivalents, beginning of period 6,007 23,395
--------- ---------
Cash and Cash equivalents, end of period $2,961 $12,583
========= =========
WIRELESS DATA SOLUTIONS
Consolidated Statement of Changes in Stockholders Equity
For the Six Months Ended March 31, 2005
Common Stock
------------
Number Additional Common
Of Paid-In Accumulated Stock To
Shares Amount Capital Deficit be Issued Total
------------------------------------------------------------------
Balance Sept 30,2003 15,142,434 $15,142 $2,373,962 ($2,903,272) $410,126 $(104,042)
(Unaudited) ------------------------------------------------------------------
Net Profit 9/30/04 $ 13,233
Balance Sept 30, 2004 15,142,434 $15,142 $2,373,962 ($2,890,039) $410,126 $ (90,809)
Net Loss 03/31/05 $ (39,663) $ (39,663)
Balance Mar 31, 2005 ------------------------------------------------------------------
(Not Reviewed) 15,142,434 $15,142 $2,373,962 ($2,992,554) $410,126 $(193,324)
===========================================================================================
</TABLE
Item II Management's Discussion and Analysis of Financial Conditions
and Results of Operations
This discussion may include certain "forward looking" statements
that reflect our current views with respect to future events and
financial performance. Investors should be aware that actual
results may differ materially from our expressed expectations
because of risks and uncertainties inherent in future events;
particularly those risks identified and set forth below. Factors
that could cause or contribute to such differences include, but are
not limited to those discussed in this section. Investors should not
unduly rely on these forward-looking statements. We undertake no
duty to update the information in this discussion if any forward
looking statement later turns out to be inaccurate.
BUSINESS OVERVIEW
Wireless Data Solutions (the company) develops and markets digital
mobile data terminals and associated software for vehicle management
and location in the United States, South America, Mexico, and
Canada. The equipment is designed, assembled, marketed and sold by
Distributed Networks, Inc. (DINET) a wholly owned subsidiary of
Wireless Data Solutions.
The foundation of the company's vehicle tracking and GPS location
system is its adaptable, intelligent and programmable Mobile Data
Terminal called "Data Mate". The MDTs are integrated with the
customer's existing two-way radios providing valuable vehicle status
information and solving a wide variety of vehicle fleet management
issues. The company's intelligent MDTs contain a microprocessor and
are very cost effective and affordable for those companies desiring
to lower operating costs and maximize profitability through more
efficient vehicle fleet accountability.
Data Mate mobile data terminals from Wireless Data Solutions
relieves wireless spectrum congestion shared by voice communications
by searching out an opening in the spectrum and digitally
transmitting a wireless message of up to 244 alpha numeric
characters in less than a second, thus allowing dramatic increases
in vehicle status and location information to be sent back to the
customer's central office. The mobile data terminals also provide
stored proof of dates and times during operation, silent emergency
alarms, and RS232 connection to mobile printers, credit card swipes
and bar code scanners.
Coupled with the company's mobile data terminals, DINET has designed
and sold proprietary software called FleetVantage GOLD which resides
on the customer's central office Windows based PC. The software
translates the digital data received from vehicle fleets and acts as
a sophisticated message-handling center. FleetVantage GOLD provides
specific mapping detail as the vehicle's location "real time". All
data sent and received by FleetVantage GOLD is archived in the PC,
which can be accessed anytime for documentation purposes. The
company has recently completed FleetVantage GOLD upgrades to include
Client/Server operation, interface to other third party software,
and more functional GPS vehicle management schemes adding to the
overall functionality.
Wireless Data Solutions occupies on office in St. Cloud, Minnesota,
and DINET occupies office space in Oceanside, California the
principal location for all design, marketing and distribution of the
company's products and services. The company's transfer agent is
Computer Share Investor Services, 350 Indiana St. Suite 800, Golden,
Colorado.
BUSINESS DISCUSSION
The 2nd Quarter results for fiscal year 2005 netted a gain of
$23,189, resulting in a loss for the first half of $39,663. Revenue
for the first half of 2005 was $189,698, declining from $422,995 in
the comparable period the previous year. This was due principally
to competitive products gaining more of a foothold within the ready
mix concrete delivery industry shared by Dinet. Moreover, the
products and software providing new automated applications designed
to reduce or eliminate driver required push button inputs inside the
vehicle.
WDS remains committed to raising capital to fund the merger with IDA
Corp. previously reported in December 2004. Also, it would enable
WDS to acquire new technology. These events are critical to
reclaiming the company's market position and reshaping the future of
the company. Discussion of the merger with IDA was presented in an
8K dated 12/10/04 and under other information in Part II of this
report.
LIQUIDITY AND CAPITAL RESOURCES
The company's cash position at 3/31/05 decreased by approximately
$10,604, $1,979 vs. $12,583 compared to the same period of the prior
year. The cash decrease was primarily due to the decrease in sales.
Current liabilities at 03/31/05 were $131,125 compared to $157,033
at 03/31/04.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Robert Chase
Since 2000, Mr. Chase has served as President of DINET, board member
and is currently protempore President of Wireless Data Solutions.
Mr. Chase has over 25 years of experience in the wireless industry,
and has served as business development consultant to a number of
high technology industries. His clients included Cubic Defense
Systems, Qualcomm, Inc., SAIC, SpaceCom Systems, ADC
Telecommunications, Teledyne Ryan Electronics and Pacific
Communications Sciences, Inc. He has been instrumental in
formulating early plans for companies engaged in wireless data and
personally managed early sales and distribution for high tech start
ups. He has also assisted companies exit chapter 11 reorganization
status. Mr. Chase has worked for Motorola, General Electric and
PacTel and was inducted into General Electric's Winners Circle. Mr.
Chase attended Oregon State University ('71).
Patrick Makovec, Chairman and CEO
Mr. Makovec is currently the Chairman and CEO of Wireless Data
Solutions and has been a board member since 1987. Mr. Makovec found
and completed the M & A with Distributed Networks, Inc. (DINET). Mr.
Makovec has been instrumental in the strategic planning process of
Wireless Data Solutions and DINET by providing direction for capital
funding and providing direction and counsel for completing an M & A.
Mr. Makovec was President of Tel Corp., a leasing company in
Minnesota, and holds an MS degree in Accounting from the University
of Wisconsin. Mr. Makovec holds 8% of the stock in Wireless Data
Solutions.
Part II
Item I LEGAL PROCEEDINGS
(None)
Item II CHANGES IN SECURITIES
There were no securities issued or repurchased during the
second quarter of fiscal 2005.
Item III DEFAULTS UPON SENIOR SECURITIES
(None)
Item IV SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(None)
Item V OTHER INFORMATION
An agreement has been signed by the boards of Wireless Data
Solutions (traded OTC: WDSO), and IDA Corporation, a privately held
company in Fargo, North Dakota, whereby the two companies would
merge. The merger is conditioned upon WDS providing capital. The
minimum required would be $700,000 and a maximum of 1,500,000.
The agreement caps joint discussions directed at combining the two
companies to make them both stronger within the industries they
serve. It is also anticipated the combination will enable them to
increase market share while providing a competitive advantage in the
various fields of high technology products such as: VoIP (Voice over
Internet Protocol) equipment, Digital Remote Control devices, and
Fleet Mobile Data Terminal products. Products that employ GPS
technology and proprietary software and that are oriented toward
fleet vehicle tracking and other fleet related vehicle status
reporting operation. The company's Mobile Data Terminals (MDTs)
report and announce vehicle information to a dispatch location or
central office using real-time wireless networks, they have the
capacity to record and store all vehicle activity during the course
of a workday. Management reports are then available to maximize the
efficiency factor in vehicle operations and productivity, thereby
providing customers with a compelling competitive advantage in the
area served.
IDA Corp. has a long-standing, twenty-seven year reputation of
designing and building electronic products and equipment. IDA's on
site design engineering, and contract manufacturing have provided a
wide variety of wireless applications used by the federal
government, State/Local governments, and business entities
worldwide. The company has also provided communication solutions to
such companies as M/A-COM formally General Electric Radio System
products, US Navy, Federal Express, NASA and Lockheed. IDA has also
developed a Global Tracking Data Center, which provides information
relating to automatic GPS tracking. The system is called "TRAKIT"
which utilizes various wireless networks to transport asset location
information. The Global Tracking Data Center, using the TRAKIT
system, is also capable of providing information to various
customers' control centers simultaneously via Internet based
technology or a Local Area Network. This technology provides "hands
on" monitoring of the desired collateral or equipment. Globally,
IDA Corp. is one of only a few companies providing this service.
The company just recently finished the development of a VoIP (Voice
over Internet Protocol) product, which will be marketed globally.
The final combination of the companies is contingent on WDSO
shareholder approval and raising a limited amount of equity funds on
or before April 30, 2005. Combined, the WDSO and IDA Corporation
would expect revenues to exceed $3 million the first year.
Item VI EXHIBITS ON REPORTS ON FORM 8-K
Notice of an agreement to merge with IDA Corporation of Fargo,
dependent upon meeting certain conditions was filed on December 10,
2004.
Item VII SUBSEQUENT EVENTS
Subsequent to March 31, the agreement between Wireless Data and IDA
of Fargo expired. At the time of this filing the parties are
engaging in talks to renew the arrangement.
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.
February 25, 2004 WIRELESS DATA SOLUTIONS INC.
/S/ Patrick Makovec
Patrick Makovec
Chairman of the Board