UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10K
Annual Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
20/20 WIRELESS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-4054666
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
343 Railway Street - Suite 401
Vancouver, British Columbia V6A 1A4
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number (604) 408-2220
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As of March 31, 2001, the following shares of the Registrant's
common stock were issued and outstanding:
Voting Common Stock 10,765,514 shares
PART I
Item 1. DESCRIPTION OF THE BUSINESS
20/20 Wireless Inc., formerly known as Eurokiosk, Inc., was
organized in October 1998 under the laws of the State of
Delaware, having the stated purpose of engaging in any lawful act
or activity for which corporations may be organized.
On December 20, 2000, Eurokiosk acquired all of the outstanding
shares of common stock of Global Wireless Ltd., a company
incorporated under the laws of province British Columbia, Canada.
Under the terms of the Acquisition Agreement entered into between
the parties, Eurokiosk issued 5,490,514 shares of common stock to
the shareholders of Global Wireless in consideration of
Eurokiosk's acquisition of all of the outstanding shares of
common stock in Global Wireless. As a result of the acquisition
of Global Wireless, control of Eurokiosk passed to the
shareholders of Global Wireless. Subsequently, on January 5,
2001, the shareholders of Eurokiosk voted to adopt the business
plan of Global Wireless and to change the name of the company to
20/20 Wireless Inc. A Form 8-K was filed by the company on
January 5, 2001 disclosing the transaction.
ABOUT 20/20 WIRELESS
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Unless specified otherwise, references herein to "20/20" or the
"Company" refer to 20/20 Wireless Inc. and its subsidiaries. The
Company's executive offices are located at 343 Railway St., Suite
401, Vancouver, British Columbia, Canada V4A 1A6, and its
telephone number at that location is (604) 408-2220. The
Company's web site is located at www.2020wirelessinc.com.
20/20's wireless technology seeks to connect organizations in the
cable television and electronic vending industries to their
remote, revenue critical equipment. 20/20's technology strives
to improve operational efficiency by giving companies a real-time
link to their remote assets, allowing them to dispatch personnel
and materials on a just-in-time basis. 20/20's solutions consist
of wireless telemetry devices, management software, and handheld
wireless devices for mobile workers assigned to service the
equipment. Founded in 1996, 20/20 is focused on bringing its
technologies to customers throughout North America.
20/20 Wireless, a development stage company, designs, develops,
manufactures, and markets, wireless telemetry technologies for
use by a wide variety of companies that have remote equipment,
such as electronic vending, cable television, and utilities
(electric, gas and water). 20/20's technology utilizes wireless
data networks to transmit mission critical information. The
Company's products provide a cost-effective method for companies
with remote equipment to utilize wireless technology to
immediately connect equipment to the operations center, and with
mobile workers.
20/20 seeks to market its products through distribution
arrangements with firms providing material products to the cable
and vending machine markets. These firms have extensive
knowledge of their respective industries and have large customer
bases.
20/20 has entered into an exclusive Canadian Distribution
Arrangement with the Winfield Entertainment Group (hereinafter
"Winfield Entertainment"), which is the largest electronic
vending operator in Canada. Under the terms of the Distribution
Agreement, Winfield Entertainment Group has received from 20/20
an exclusive license to distribute 20/20's products and services
to any sub-distributor in the vending machine industry throughout
Canada. These products include 20/20's wireless remote unit and
monitoring station as well as supporting software. Winfield
Entertainment shall promote, at its own expense, the sale of
20/20's products and services throughout Canada. The terms of
this agreement is for five (5) years commencing on February 28,
2001. Winfield Entertainment has agreed to purchase a minimum of
1,000 wireless units in the first year of the Agreement, 3,500
units in the second year of the Agreement, 10,000 units in the
third year of the Agreement, 15,000 units in the fourth year of
the Agreement and 20,000 units in the fifth year of the
Agreement. In addition to marketing and deploying 20/20's
products and services, Winfield Entertainment shall also assist
20/20 in establishing exclusive distribution arrangements
throughout the United States. 20/20 shall also provide a limited
manufacturer's warranty for one (1) year for the hardware and
software distributed and sold through Winfield Entertainment. A
copy of the Distribution Agreement is included as an Exhibit
10.1.
20/20 on March 6, 2001 entered into an Agency Agreement with GRF
Comm Provisions, Inc., (hereinafter "GRF"), a distributor,
representative, and manufacturer of state-of-the-art
telecommunications equipment based in California. Under the
Agreement, GRF will represent 20/20 and undertake to sell and
maintain 20/20 products and services to end-users in the cable
television industry. GRF has agreed to arrange for a certain
level of business activity for 20/20 over the term of the
Agreement. Specifically, GRF shall secure three (3) beta test
agreements and one (1) customer order during the first year of
the Agreement, five (5) beta test agreements and two (2) customer
orders during the second year of the Agreement and seven (7) beta
test agreements and three (3) customer orders during the third
year of the Agreement. A beta test agreement is defined as an
agreement between GRF and an end-user customer which is drawn up
by 20/20. The products and services to be sold and maintained by
GRF include 20/20's wireless remote unit, the monitoring station
and related supporting software. GRF shall represent 20/20
throughout the West Coast of the United States, including Hawaii
and Alaska. GRF shall also be entitled to represent 20/20 in the
Central United States and Eastern United States through another
prospective agent or distributor. A copy of the Agency Agreement
is included as an Exhibit 10.2.
20/20 on March 15, 2001 also entered into an exclusive
Distribution Agreement with George H. Baker, (hereinafter
"Baker") a distributor in the business of selling and supporting
locating devices primarily to emergency services departments, to
distribute 20/20's wireless remote unit, monitoring station and
supporting software for use in emergency services vehicles, such
as ambulances and fire rescue vehicles throughout Canada and the
United States. The term of the Agreement is five (5) years.
Baker has agreed to purchase and distribute a minimum of 1,000
wireless units in the first year of the Agreement, 3,500 units in
the second year of the Agreement, 10,000 units in the third year
of the Agreement, 15,000 units in the fourth year of the
Agreement and 20,000 units in the fifth year of the Agreement.
Baker has also undertaken to promote, at its own expense, the
sale of 20/20's products and to provide maintenance for products
leased or sold. 20/20 shall also provide a limited
manufacturer's warranty for one (1) year for the hardware and
software distributed and sold through Baker. A copy of the
Distribution Agreement between 20/20 and Baker is included as an
Exhibit 10.3.
BACKGROUND
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Organizations within the cable television (CATV) and electronic
vending industries are highly dependent upon their remote
equipment to maintain service reliability and corporate revenue.
In the CATV industry, power supplies provide continuity of power
to the CATV signal when local electricity service fails, making
them a critical part of the network. Electronic vending
operators have only limited knowledge of their machine status,
servicing them on a fixed schedule as opposed to an as-need
basis. Historically, these industries have managed their remote
equipment by servicing them either on an inefficient fixed
schedule or when the equipment experiences catastrophic failure.
Wireless telemetry networks first became available with the
construction of first-generation analog cellular systems. The
first applications were for vehicle fleet management and remote
security systems. Wireless telemetry systems failed to achieve
widespread adoption due to the high cost of telemetry devices and
associated air-time.
The Company believes that the continuing decline in both wireless
telemetry hardware costs and network air-time costs, along with
the installed base of handheld wireless device users will effect
a rapid growth in wireless telemetry services. Organizations
stand to receive the benefits of reduced costs, improved
operations, efficient allocation of resources, and increased
quality of service. With the concurrent development of the
internet, developing a comprehensive telemetry solution is much
easier. Finally, wireless networks, such as those operated by
AT&T and Bell South are now widely available in North America,
covering nearly 95% of the population.
20/20'S SOLUTIONS
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20/20 seeks to combine its background in wireless engineering and
software development with its understanding of the CATV and
electronic vending industries. 20/20's products seek to enable
these sectors to instantly know the operational status of remote
equipment and receive immediate alarms if the equipment
experiences malfunction. 20/20's devices may be installed in
host equipment and transmit critical information over the
wireless network.
20/20's devices can be configured for a variety of applications
and can operate on most wireless networks after simple firmware
upgrades. 20/20's management software is custom designed for the
application and can be operated on a stand alone PC, existing
corporate platforms, or the internet.
20/20 combines its service with wireless handheld devices, giving
mobile workers in each industry, access to the same telemetry
information flowing to the operation center. For the CATV and
vending applications, enterprises implementing 20/20's system
will generate a payback in less than one year.
20/20'S WIRELESS TECHNOLOGY
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20/20's wireless technology and systems seek to provide cable
television operator and vending machine operators with a means of
early identification of malfunctions, detailed operational
information, rapid response time to technical problems and more
efficient use of personnel.
20/20's wireless products are based on proprietary hardware and
software designs. 20/20's devices distinguish themselves by
their programmability for a variety of potential applications,
and their ability to operate on most wireless networks
(cellemetry, CDPD, satellite, digital cellular) after simple
firmware upgrades. 20/20's management software is specifically
tailored to the application, providing functions that maximize
the usefulness of incoming data. The software can be operated in
a web-based environment, a stand alone PC or integrated with
existing corporate platforms.
20/20's wireless devices contain two basic components: a wireless
modem, which transmits data over the wireless network, and a
programmable controller which governs which data is to be sent
and when. The devices are programmed prior to installation and
directly interface with remote equipment, transmitting data
according to customer requirements. Data flows over wireless
network and back to the customer's central office, where it is
filtered and presented in a software environment created
specifically by 20/20 for the application.
This "machine to machine" communication is known as telemetry.
Wireless telemetry offers companies with assets situated in
remote areas a real time link to their critical equipment for the
purpose of monitoring and analyzing that equipment. The result
is early identification of equipment problems, drastic
improvements in response time and more efficient use of
personnel.
The telemetry process can be separated into four distinct stages:
1) collection of data 2) transmission of data 3) assessment of
data 4) response. The first three stages are dependent on the
provider of the solution, and it is in these stages that 20/20
distinguishes itself. In the collection of data, 20/20's devices
have data ports which permit direct interfacing with equipment.
20/20's proprietary controller is fully programmable and gives
incredible flexibility in determining when data is sent. An
application may call for a single reading once per day or require
communication only when a specific event, alarm, or malfunction
occurs. In the transmission of data, 20/20's devices can operate
on most wireless networks such as Cellemetry (our preferred low-
bandwidth network), CDPD/Mobitex/ARDIS for higher bandwidth
applications, and satellite for applications outside the coverage
of terrestrial based networks. 20/20's proprietary controller is
compatible with most after-market wireless modems, so the
company's devices can switch networks with simple firmware
upgrades. In the assessment of data, 20/20 provides a custom
software environment designed specifically for the application,
which organizes and presents the data in a format designed to
maximize its efficient use. Some features are alarms, reports,
polling, and depiction of assets on a digital map. The software
can be operated in a web-based environment, a stand-alone PC, or
integrated with existing corporate platforms.
20/20 SERVING THE CABLE TELEVISION INDUSTRY
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20/20 seeks to assist companies in the cable television industry
by providing them with a real time link to their power supplies
utilizing the cellular network as an independent communication
path to the operations center. The benefit to these companies by
using 20/20's systems are reduced frequency and duration of power
outages; reduced use of technicians assigned to maintaining power
supplies; knowledge of exact location and cause of power outages;
improved customer satisfaction.
The solution offered by 20/20 is transmitted using the Cellemetry
network, operated by Numerex Technologies, to link geographically
dispersed power supply units to an operations center. Cellemetry
is one of the original wireless data services to use the cellular
network. Using the existing cellular analog network, Cellemetry
offers the most ubiquitous coverage of any wireless network in
North America. Additionally, Cellemetry offers North American
wide roaming for no additional charge; for example, a device
activated in Toronto, Canada, will work seamlessly in Houston,
Texas. The Cellemetry network provides an independent and secure
path to the operations center when the electricity grid goes
down. Cellemetry also offers the greatest coverage of any radio
data network, an important feature given that a significant
portion of the power supplies to be monitored reside in suburban
or rural areas where competing data networks like PCS, Mobitex or
ARDIS (Motient) have no coverage. From one location, CATV
providers are able to monitor and control variables critical to
network integrity. 20/20 uses Cellemetry components provided by
Ericsson. No reseller agreements are required to purchase these
components.
Prior to outright malfunction, power supply variables often
experience fluctuation outside of normal parameters. 20/20's
device will instantly detect these variations and communicate
them to the operations center, which will dispatch a service crew
to correct the problem before a catastrophic failure. In the
event of outright failure, the operations center will know
precisely what the problem is and where it is occurring. The
result is drastically reduced downtime and associated customer
complaints.
The system will also permit routine maintenance checks from the
operations center. From 20/20's management software, personnel
will be able to test battery power levels and dispatch crews
directly to degraded units. This flexibility will eliminate the
routine (and costly) maintenance procedures now in place.
The MIN (Mobile Identification Number) associated with each
Cellemetry component will be sufficient to identify its location
on the pre-designated grid. 20/20 has developed a companion
software management system that will display power supply units,
and their status, in a graphical environment. To complete the
package, the device will be shipped with a simple "plug and play"
transformer that will eliminate the need for complicated
rewiring; regular CATV crews will be able to perform installation
without the aid of certified electricians.
20/20 SERVICING VENDING MACHINE OPERATORS
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20/20 will also seek to provide its services and products to
vending machine operators to assist them with the monitoring and
maintenance of their vending machines which are often situated in
dispersed areas. Companies utilizing 20/20's technology will
realize the following benefits: Reduced number of driver trips
to service and repair vending machines as drivers will only
service machines in need, reduction in lost revenue as the
central office will be notified immediately when a product is
depleted, or the vending machine has malfunctioned; elimination
of cash losses as the central office will know the exact cash
level of each machine and will be able to verify collected
amounts.
Specific to vending machine operators, 20/20's hardware
installation will employ an innovative combination of radio data
networks (e.g. CDPD/Mobitex/ARDIS) and unlicensed RF spectrum.
20/20's device will be installed in one machine (node) in
proximity to other machines. Peripheral machines (satellites)
will contain two-way RF modules, which will transmit their
data back to the node. From the node, data from all machines in
the cluster will be sent to the home office over the appropriate
radio data network. It is expected that one node will
have about five machines in its array. If machines are
immediately adjacent to each other, technicians will be able to
connect peripheral machines by directly wiring them to
the node, negating the need for RF modules.
20/20 will also provide a Cellemetry based device for deployment
in a single machine. It is expected that 10-15% of vending
machines will fall into this category. Generally, they will be
situated in suburban or rural areas where the cost of servicing
machines is quite high due to the travel distances involved.
Cellemetry will provide near complete coverage for these outlying
areas. 20/20 will provide management software with the following
functions: data retrieval, databasing, event alarms, daily
inventory and cash reports, service schedules.
CABLE TELEVISION (CATV) MARKETS
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CATV power supplies are distributed throughout the network to
provide continuous power to the CATV signal in the event of local
electricity service failure. Power supplies contain a bank of
batteries which require extensive maintenance to keep
operational. If local electricity service fails and the back-up
batteries do not perform, CATV subscribers in the area will lose
service. The result is a flurry of calls to the customer service
line. Surprisingly, CATV providers utilize no, or very
inadequate power supply monitoring systems. Outages due to power
supply failure often take several hours to correct as service
crews can only estimate where the exact problem is - usually
interpolated by the geographic area of complaint calls.
The solution offered by 20/20 gives CATV providers a real-time
link to power supplies using the cellular network as an
independent communication path to the operations center. The
benefits of deploying 20/20's system are:
1. reduced frequency and duration of outages.
2. reduced use of technicians assigned to maintaining power
supplies.
3. knowledge of exact location and cause of outages.
4. improved customer satisfaction.
20/20 will seek to install its devices in existing power
supplies, which number over 3 million in North America, with
200,000 replaced annually. 20/20 believes there are no
significant deployments of wireless monitoring systems to date.
The potential value of this application exceeds $900 million.
ELECTRONIC VENDING MARKET
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The majority of vending operators run their business blind --
meaning without first hand observation of the operation at work.
They have only limited knowledge of the current status of their
machines. Service technicians set out in the morning with only
an estimate of what they might actually need in the field with
respect to product. Instead of malfunctions or sold-out product
being immediately addressed, these revenue-killers are usually
remedied only on routine visits.
20/20's wireless monitoring systems will give vending operators a
real-time link to their widely dispersed. The benefits of this
service are:
* Reduced number of driver trips. Drivers will only
service machines in need.
* Reduction in lost revenue. The central office will be
notified immediately when a product is depleted, or the
vending machine has malfunctioned.
* Eliminate cash losses. The central office will know the
exact cash level of each machine and will be able to
verify collected amounts.
20/20 will seek to install its devices in game, beverage, and
snack vending machines, which number over 6 million in the United
States, with 200,000 replaced annually. The only volume
placement of wireless monitoring devices has been confined to
corporately owned beverage machines. The majority of the vending
industry is controlled by 25 privately-held distributors, which
serve over 5,000 independent operators. Having the right
business contacts is key to penetrating this market. The
potential value of this application exceeds $1.5 billion.
SALES AND MARKETING
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20/20 seeks to market its products through distribution
arrangements with firms providing material products to vertical
markets. These firms have extensive knowledge of their
respective industries, and have large customer bases.
20/20 has entered into an exclusive Canadian Distribution
Arrangement with the Winfield Entertainment Group (hereinafter
"Winfield Entertainment"), which is the largest electronic
vending operator in Canada. Under the terms of the Distribution
Agreement, Winfield Entertainment Group has received from 20/20
an exclusive license to distribute 20/20's products and services
to any sub-distributor in the vending machine industry throughout
Canada. These products include 20/20's wireless remote unit and
monitoring station as well as the supporting software. Winfield
Entertainment shall promote, at its own expense, the sale of
20/20's products and services throughout Canada. The terms of
this agreement is for five (5) years commencing on February 28,
2001. Winfield Entertainment has agreed to purchase a minimum of
1,000 wireless units in the first year of the Agreement, 3,500
units in the second year of the Agreement, 10,000 units in the
third year of the Agreement, 15,000 units in the fourth year of
the Agreement and 20,000 units in the fifth year of the
Agreement. In addition to marketing and deploying 20/20's
products and services, Winfield Entertainment shall also assist
20/20 in establishing exclusive distribution arrangements
throughout the United States. 20/20 shall also provide a limited
manufacturer's warranty for one (1) year for the hardware and
software distributed and sold through Winfield Entertainment. A
copy of the Distribution Agreement is included as an Exhibit
10.1.
20/20 on March 6, 2001 entered into an Agency Agreement with GRF
Comm Provisions, Inc., (hereinafter "GRF"), a distributor,
representative, and manufacturer of state-of-the-art
telecommunications equipment based in California. Under the
Agreement GRF will represent 20/20 and undertake to sell and
maintain 20/20 products and services to end-users in the cable
television industry. GRF has agreed to arrange for a certain
level of business activity for 20/20 over the term of the
Agreement. Specifically, GRF shall secure three (3) beta test
agreements and one (1) customer order during the first year of
the Agreement, five (5) beta test agreements and two (2) customer
orders during the second year of the Agreement and seven (7) beta
test agreements and three (3) customer orders during the third
year of the Agreement. A beta test agreement is defined as an
agreement between GRF and an end-user customer which is drawn up
by 20/20. The products and services to be sold and maintained by
GRF include 20/20's wireless remote unit, the monitoring station
and related supporting software. GRF shall represent 20/20
throughout the West Coast of the United States, including Hawaii
and Alaska. GRF shall also be entitled to represent 20/20 in the
Central United States and Eastern United States through another
prospective agent or distributor. A copy of the Agency Agreement
is attached as an Exhibit 10.2.
20/20 on March 15, 2001 also entered into an exclusive
Distribution Agreement with George H. Baker, (hereinafter
"Baker") a distributor in the business of selling and supporting
locating devices primarily to emergency departments, to
distribute 20/20's wireless remote unit, monitoring station and
supporting software for use in emergency services vehicles, such
as ambulances and fire rescue vehicles throughout Canada and the
United States. The term of the Agreement is five (5) years.
Baker has agreed to purchase a distribute a minimum of 1,000
wireless units in the first year of the Agreement, 3,500 units in
the second year of the Agreement, 10,000 units in the third year
of the Agreement, 15,000 units in the fourth year of the
Agreement and 20,000 units in the fifth year of the Agreement.
Baker has also undertaken to promote, at its own expense, the
sale of 20/20's products and to provide maintenance for products
leased or sold. 20/20 shall also provide a limited
manufacturer's warranty for one (1) year for the hardware and
software distributed and sold through Baker. A copy of the
Distribution Agreement between 20/20 and Baker is included as an
Exhibit 10.3.
20/20 will also be approaching manufacturers of equipment that
host our telemetry devices. Manufacturers of CATV power supplies
and vending machines will be able to offer 20/20's wireless
monitoring technology to customers purchasing new equipment.
20/20 is also seeking joint marketing activities with wireless
carriers. For these carriers, 20/20's products represent content
that could increase their customers' usage of their wireless
networks, and make customers less likely to switch to another
wireless service provider. 20/20 intends to bundle the carrier's
air time and resell it to customers as part of a total solution.
PRODUCTION AND DELIVERY
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The manufacture of 20/20's systems requires the assembly of parts
and permanently loaded software followed by a suite of tests to
verify operation. 20/20 follows a manufacturing migration
process, whereby in-house manufacturing is superceded by
outsourcing. For small volumes, below 25 units per month, all
assembly, testing, and packaging will be done in-house, reducing
initial unit manufacturing costs to below $30.
High-volume manufacturing is expected to be conducted through
outsourcing to Astroflex Inc., or other manufacturers. There are
a large number of reliable, quality component manufacturers
available in North American. Manufacturing is monitored through
20/20's Statistical Process Control program. Self-testing after
both manufacturing and field-installation ensures the quality of
all wireless units. 20/20 will also seek financing which will be
used to design and build molds to house the commercial products.
The product components are expected to be snap assembled within
housings bulk-manufactured from these molds specifically
engineered and constructed for 20/20.
All critical components used in the vending and cable television
products come from the United States and Canada. The delivery of
any of these components is dependent on volume ordered. In most
cases, orders are filled immediately but for higher volumes the
filling of these orders could take longer.
Critical components are sourced from the following companies:
Radio: Ericsson, Standard, CSI
Controller: Parralax, High Tech Direct
Antennae: Larson, Sinclair
GPS: Rockwell, Magellan; Sirf
Solid State Relays: Jameco, Digikey
In each case 20/20 has identified one primary supplier and at
least one backup supplier.
The production of software packages will remain in-house
regardless of sales levels. The cost of producing deliverable
software products is largely dependent on manpower and requires
only a small investment in raw materials and packaging. Even
more important is the dynamic nature of software, which limits
the effectiveness of outside production.
SERVICE AND SUPPORT
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As new products, services, or geographic service areas are
introduced, the direct responsibility for customer service will
remain with 20/20. As partners become familiar with effecting
installations, stabilizing and operating trouble free for a
period of time, the service component will be transferred to the
partner. In some cases the service component may be contracted
to trained technicians in the market area.
Client satisfaction and loyalty will seek to be maintained by
continual improvement of 20/20 products, services, and
operations, with an ISO 9001 compliant quality system targeted 18
months after financing. Hands-on client training programs will
introduce basic concepts in wireless telecommunications; system
overview, including 20/20 hardware and software architectures; as
well as maintenance and trouble-shooting.
PROFESSIONAL AND CUSTOMER SUPPORT SERVICES
- ------------------------------------------
20/20 will seek to provide customer support services to assist
its clients in implementing and using 20/20's products
effectively. The Company's distributors will be extensively
trained in the installation and maintenance procedures for our
wireless telemetry devices. Typically, contracts for the sale of
20/20's devices and software include project management, software
configuration, software customization, installation, education
and training, technical support, and ongoing maintenance. 20/20
believes that providing high quality, cost-effective professional
services facilitates effective implementation of its products and
fosters a strong relationship with the customer.
PRODUCT IMPLEMENTATION
- ----------------------
20/20 will begin the placement process by installing a small
number of devices in a potential customer's remote equipment.
Any costs associated with installation, customization, and
engineering will be borne by 20/20. During the trial period
(which may span 60 days), 20/20 staff will carefully follow the
progress of the test and give the customer regular reports.
During the final phase of implementation, 20/20 personnel will
work with the client to develop and test custom features and
various interfaces to corporate networks, wireless networks and
other corporate information systems.
At the end of the trial, the customer may elect to purchase a
volume quantity, or request some minor customization. All costs
associated with removing trial equipment will be assumed by
20/20.
CUSTOMER SUPPORT
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20/20 believes that its ability to offer a high level of customer
support is critical to its success. Most 20/20 customers will
enter into separate customer support agreements, typically on an
annual basis, that take effect on the expiration of the product
warranty. Generally, customer support will be provided by
20/20's distribution partners.
PRODUCT DEVELOPMENT
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The wireless telemetry industry is characterized by rapid
technological change and increasing user requirements.
Accordingly, 20/20 believes that it must be able to provide new
products and modify and enhance existing products on a timely and
continuing basis in order to be competitive. To accomplish this
objective, 20/20's strategy will be to utilize proven technology
to further enhance its existing products and to create new
products. Where appropriate, 20/20 may acquire or license
complementary technology developed by third parties for
integration into 20/20 products.
20/20 believes that its wireless engineering and software
personnel provide 20/20 with a competitive advantage. 20/20
personnel have considerable experience and expertise in the
development of wireless telemetry applications as well as in the
integration of these applications with a customer's corporate
information system. 20/20's software product development
personnel employ modular software architecture, object-oriented
software development and graphical user interface design
technologies to develop scaleable, modular, configurable
products. 20/20 personnel have expertise in software technology,
wireless and wireline communications technologies, computer
environments, and corporate information systems integration.
20/20 believes that this combination of expertise in multiple
disciplines has allowed and will continue to allow 20/20 to
design and develop mobile wireless telemetry solutions which can
be implemented in a timely and cost-effective manner.
SECONDARY APPLICATIONS
- ----------------------
20/20 is currently testing a number of products and services
which are designed to provide seamless communications between
industry standard handheld devices that permit communication
between such handheld devices and the customer's operations
center, making data available to field workers. 20/20 will seek
to enter into reseller agreements with manufacturers and
distributors of handheld devices and network carriers.
FUTURE CATV PRODUCT DEVELOPMENTS
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At the specific request of our beta-test partners, 20/20 will be
developing a second-generation product that will directly monitor
the CATV RF signal quality. This feature will require additional
engineering development but will further completely distinguish
our product, and give 20/20 a considerable advantage over any
potential competitors.
COMPETITION
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The markets for wireless telemetry applications are highly
competitive. Numerous factors affect 20/20's competitive
position, including price, product features, product performance
and reliability, ease of use, product scalability, product
availability on multiple platforms, ability to implement wireless
telemetry solutions while meeting customer schedules, integration
of products with other enterprise solutions, availability of
project engineering services and timely ongoing customer service
and support.
Within 20/20's chosen markets of CATV and vending, there are a
small number of new ventures, either small companies attempting
to establish a business in this market or large companies
attempting to diversify their product offerings. 20/20 expects
such competition to intensify as acceptance and awareness of
wireless telemetry continues.
Certain of 20/20's competitors have substantially greater
financial, technical, marketing and distribution resources than
20/20. As a result, they may be able to respond more quickly to
new or emerging technologies and changing customer requirements,
or to devote greater resources to the development and
distribution of existing products. There can be no assurance
that 20/20 will be able to compete successfully against current
or future competitors or alliances of such competitors, or that
competitive pressures faced by 20/20 will not have a material
adverse effect on its business, financial condition, operating
results and cash flows.
20/20 believes that in the CATV and vending industries, the most
important competitive factors are the reputation of the supplier
and their proven record in implementing wireless data solutions.
20/20 primarily competes in the vending market with Isochron of
Austin, TX, and Marconi of London, England. 20/20's competitors
in the CATV industry is limited to companies such as Cheetah
Technologies which offer a similar power supply monitoring
product, that uses part of the CATV bandwidth to connect power
supplies to the operations center. This product differs from
20/20's by the fact that it does not use wireless technology.
20/20 believes that the principal competitive factors in the
wireless telemetry market are the ability to improve the customer
service aspects of an organization's business and increase the
productivity of service representatives.
EMPLOYEES
- ---------
As of December 31, 2000, the Company had 15 full-time employees
and contractors in the areas of engineering, marketing,
management, finance, and administration. None of the Company's
employees are represented by a labor union.
Item 2. Description of Property
The Issuers principal place of business and corporate office is
located at 401-343 Railway street-suite 403, Vancouver, British
Columbia V6A 1A4. The office consists of 2,500 square feet and
is subject to a five (5) year lease at a cost of $23,841.00 per
year. There are currently five (5) employees who utilize the
Issuers facilities for general and administrative purposes,
development of the Issuers services and products, liaising with
distributors for the engagement of beta test trials and marketing
the Issuers services and products. The Issuer plans to open a
U.S. office for sales and marketing in the next quarter.
Item 3. Legal Proceedings
There are no legal proceedings pending at this time.
Item 4. Submission of Matters to a Vote of Security Holders
On January 3, 2001, a special meeting of the company's
shareholders was held to vote on the acceptance and approval of
the Acquisition of Global Wireless Services Inc., pursuant to the
Acquisition Agreement executed by the officers of the company on
December 20, 2000 and to vote on the changing of the name of the
company to "20/20 Wireless Inc.", accompanied by the Amendment to
the Certificate of Incorporation of the company to reflect such
change. The shareholders present at the meeting unanimously
voted to approve both the Acquisition of Global Wireless and the
changing of the name of the company to 20/20 Wireless.
PART II
Item 5. Market for Common Equity and Related Stockholder
Matters
The Company is not aware of any quotations for its common stock,
now or at any time within the past two years. As of March 31,
2001, there were approximately 260 holders of record of the
issued and outstanding shares of Issuer's common stock. The
Company currently has no established public trading market for
its common stock.
Item 6. SELECTED FINANCIAL DATA
20/20 WIRELESS INC.
ELECTED FINANCIAL DATA SCHEDULE
FOR THE YEARS ENDED MARCH 31, 2001 AND 2000
Mar 31 Mar 31
2001 2000
---------------------------
Cash and cash items $ 8 $ 0
Marketable securities 0 0
Notes and accounts receivable 0 0
Inventory 0 0
Other current assets 0 0
Total current assets 8 0
Property, Plant and equipment 2,318 0
Accumulated depreciation (628) 0
Intangibles 388,978 0
Accumulated amortization 0 0
Total assets 390,676 0
Total current liabilities 689 2,823
Bonds, mortgages and debt 0 0
Net of current portion 166,297 68,209
Common stock 362,257 1,065
Other stockholders' equity (138,567) (72,097)
Total liabilities and
stockholders equity 390,676 72,097
Net sales of tangible products 0 0
Total revenues 0 0
Cost of tangible goods sold 0 0
Total costs and expenses applicable
to sales and revenue 0 0
Other costs and expenses 66,470 53,407
Income before taxes and other items (66,470) (53,407)
Net income or loss (66,470) (53,407)
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General Statement - Factors that may affect future results
With the exception of historical information, the matters
discussed in Management's Discussion and Analysis of Financial
Condition and Results of Operations contain forward looking
statements under the 1995 Private Securities Litigation Reform
Act (the "Reform" Act) that involve various risks and
uncertainties. Typically, these statements are indicated by
words such as "anticipates", "expects", "believes", "plans",
"could", and similar words and phrases. Factors that could cause
the Company's actual results to differ materially from
management's projections, forecasts, estimates and expectations
include but are not limited to the following:
- Ability of the Company to raise additional capital
- Ability of the Company to secure sales of its products
and services through its distributors
- Unexpected economic changes in Canada and/or the United
States
To the extent possible, the following discussion will highlight
the relative needs of the Company with respect to its business
activities.
20/20 is a development stage company which has minimal operating
history. As a result, investors are alerted that any investment
in the company entails a high degree of risk. The company has
not yet generated any revenue from its products or services. The
Company will seeks to derive revenue from (i) wireless telemetry
devices (ii) associated wireless network air time (iii) third
party products and services, consisting of the provision of
non-20/20 products and services as part of the total contract.
20/20 seeks to design, develop, manufacture and market, wireless
telemetry technologies for use by a wide variety of companies
that have remote equipment, such as electronic vending, cable
television, and utilities (electric, gas and water). 20/20's
technology will utilize both public and private wireless data
networks to transmit mission critical information. The Company
seeks to provide products that feature a cost-effective method
for companies with remote equipment to utilize wireless data to
immediately connect equipment to the operations center and with
mobile workers.
The Company believes that recent economic developments and trends
may adversely affect levels of capital spending by companies in a
variety of industries, including companies in the vertical
markets that the Company serves. The Company anticipates that
such economic conditions and regulatory trends may affect demand
in 2001 for the products and services offered by 20/20. A
decline in demand for 20/20's products in these markets as a
result of economic conditions, or otherwise, may have a material
adverse effect on 20/20's business, financial condition,
operating results and cash flows.
20/20's customers will enter into ongoing maintenance agreements
that provide for maintenance and technical support services for a
period commencing after expiration of the initial warranty
period. Maintenance agreements will have a term of twelve months
and are invoiced either annually or monthly. Revenue for these
services is recognized ratably over the term of the contract.
The Company expects to be periodically required to provide, in
addition to 20/20 products and services, certain third party
products, such as host computer hardware and operating system
software, and mobile computing. The Company recognizes revenue
of the supply on third party hardware upon transfer of title to
the customer. The Company expects to recognize revenue on the
supply on third party services using a percentage of completion
method based on the costs incurred over the total estimated cost
to complete the third party services contract.
The Company expects to supply some portion of third party
products and services to customers where it is successful in
selling its own products and services. There can be no
assurance, however, that any contracts entered into by the
Company to supply third party software and products in the future
will represent a substantial portion of revenue in any future
period. Since the revenue generated from the supply of third
party products and services may represent a significant portion
of certain contracts and the installation and rollout of third
party products is generally at the discretion of the customer,
the Company may, depending on the level of third party products
and services provided during a period, experience large quarterly
fluctuations in revenue.
The Company's revenue is dependent, in large part, on significant
contracts from a limited number of customers. As a result, any
substantial delay in the Company's completion of a contract, the
inability of the Company to obtain new contracts or the
cancellation of an existing contract by a customer could have a
material adverse effect on the Company's results of operations.
Some of the Company's contracts are cancelable upon notice by the
customer. The loss of certain contracts could have a material
adverse effect on the Company's business, financial condition,
operating results and cash flows. As a result of these and other
factors, the Company's results of operations have fluctuated in
the past and may continue to fluctuate from period-to-period.
The future success of the Company's business development strategy
will depend on the Company's ability to develop and implement the
technology related to its wireless telemetry solutions; the
Company's ability to enter into contracts with end-users and
distributors; raising additional capital to finance growth in the
company and development of new products. Growth in the Company's
business revenue is anticipated to be derived primarily from the
sale of wireless telemetry devices and monthly wireless network
air time.
RISK FACTORS
- ------------
20/20's believes that its operations and the overall success of
its business may be subject to the following risks.
Liquidity
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with the
development of its products. It is not anticipated that the
Company will be able to meet its financial obligations through
internal net revenue in the foreseeable future. The Company does
not have a working capital line of credit with any financial
institution. Therefore, future sources of liquidity will be
limited to the Company's ability to obtain additional debt or
equity funding.
Potential Fluctuations in Quarterly Operating Results
Once 20/20 begins to generate revenues and secures firm contract
orders, its results of operations may fluctuate from period to
period depending on a number of factors, including the timing and
receipt of significant orders, the timing of completion of
contracts, increased competition, changes in the demand for
20/20's products and services, the cancellation of contracts, the
timing of new product announcements and introductions, changes in
pricing policies by 20/20 and its competitors, delays in the
introduction of products or enhancements by 20/20, expenses
associated with the acquisition of products or technology from
third parties, the mix of sales of 20/20's products and services
and third party products, seasonality of customer purchases,
personnel changes, and general economic conditions.
20/20 will rely upon its ability to implement and integrate
wireless telemetry solutions on schedule and to the satisfaction
of its customers. 20/20 from time to time may experience certain
implementation and other problems that may delay the completion
of certain projects, including the failure of third parties to
deliver products or services on a timely basis and delays caused
by customers. There can be no assurance that 20/20 will be able
to complete projects on a timely and cost effective basis or that
delays will not result in cancellations of contracts or result in
the imposition of substantial penalties. Any such material
delay, cancellation or penalty could have a material adverse
effect upon 20/20's business, financial condition, operating
results and cash flows.
Because 20/20 is unable to forecast with certainty the receipt of
orders for its products and services and 20/20's expense levels
are relatively fixed and are based, in part, upon its expectation
of future revenue, if revenue levels do not meet expectations as
a result of a delay in completing a contract, the inability to
obtain new contracts, the cancellation of an existing contract or
otherwise, operating results are likely to be adversely effected.
As a result, net income may be disproportionately affected
because a relatively small amount of 20/20's expenses vary with
its revenue. In particular, 20/20 plans to increase its
operating expenses to expand its sales and marketing operations,
expand its distribution channels, fund greater levels of research
and development, enhance distributor training and increase its
administrative resources. There can be no assurance that 20/20
will effectively compete in this market or receive sufficient
revenues to offset such costs. Additionally, as 20/20 is a
development stage company, there is no guarantee that it will be
able to secure firm orders for its products or services or to
generate significant revenue to become self sufficient in its
need for capital.
Based upon all of the foregoing factors, 20/20 believes that its
quarterly revenue, direct expenses and operating results are
likely to vary significantly in the future, that period-to-period
comparisons of the results of operations are not necessarily
meaningful and that such comparisons should not be relied upon as
an indication of future performance. 20/20 may also choose to
reduce prices or increase spending in response to competition, or
to pursue new market opportunities. If new competitors,
technological advances by existing competitors or other
competitive factors require 20/20 to reduce its prices or invest
significantly greater resources in research and development
efforts, 20/20's operating results in the future may be adversely
affected. There can be no assurance that 20/20 will be able to
grow in future periods or that it will be able to sustain its
level of total revenue or its rate of revenue growth on a
quarterly or annual basis. It is likely that in some future
quarter 20/20's operating results will be below the expectations
of public market analysts and investors. In such event, the price
of 20/20's Common Shares would likely be materially adversely
affected.
Because the revenue generated from the supply of third party
products and services may represent a significant portion of
certain contracts and the installation and rollout of third party
products is generally at the discretion of the customer, 20/20
may, depending on the level of third party products and services
provided during a period, experience large quarterly fluctuations
in revenue.
Lengthy Sales Cycles for 20/20's Products
The purchase of a wireless telemetry solution is often an
enterprise-wide decision for prospective customers and will
require 20/20 and its distribution partners to engage in sales
efforts over an extended period of time and to provide a
significant level of education to prospective customers regarding
the use and benefits of such systems. Due in part to the
significant impact that the application of wireless telemetry
solutions has on the operations of a business and the commitment
of capital required by such a system, potential customers tend to
be cautious in making acquisition decisions. As a result, 20/20
believes that its products will generally have a lengthy sales
cycle of several months. Consequently, if sales forecasted from
a specific customer for a particular quarter are not realized in
that quarter, 20/20 may not be able to generate revenue from
alternative sources in time to compensate for the shortfall. The
loss or delay of a large contract could have a material adverse
effect on 20/20's quarterly financial condition, operating
results and cash flows, which may cause such results to be less
than analysts' expectations. Moreover, to the extent that
significant contracts are entered into and required to be
performed earlier than expected, operating results for subsequent
quarters may be adversely affected.
Dependence on Large Contracts and Concentration of Customers
20/20's ability to generate revenue is dependent, in large part,
on significant contracts from a limited number of customers. The
inability of 20/20 to secure and maintain a sufficient number of
large contracts will have a material adverse effect on 20/20's
business, financial condition, operating results and cash flows.
Moreover, 20/20's success will depend in part upon its ability to
obtain orders from new customers, as well as the financial
condition and success of its customers and general economic
conditions.
The size of a contract for a particular customer can vary
substantially depending on whether 20/20 provides its own
products and services or is also responsible for supplying third
party products and services. Any significant increase in the
costs required to complete a project, or any significant delay in
a project schedule, could have a material adverse effect on that
contract's profitability and because of the size of each
contract, on 20/20's overall results of operations. Any
significant failure by 20/20 to accurately estimate the scope of
work involved, plan and formulate a contract proposal,
effectively negotiate a favorable contract price, properly manage
a project or efficiently allocate resources among several
projects could have a material adverse effect on 20/20's
business, financial condition, operating results and cash flows.
Potential Fluctuations in Backlog
Due to the long, complex sales process and the mix of sales of
20/20's products and services and third party products and
services, 20/20's backlog may fluctuate significantly from
period-to-period. Contracts for software maintenance and support
are generally renewable every year and are subject to
renegotiation upon renewal. There can be no assurance that any
customer of 20/20 will renew its maintenance contracts or that
renewal terms will be favorable to 20/20.
Limited Operating History; History of Losses; Increased Expenses
20/20 has only a limited operating history upon which an
evaluation of its business and prospects can be based. As of
March 31, 2001, 20/20 had an accumulated deficit of $138,567.
There can be no assurance of sustained profitability or that,
20/20 will realize revenue growth or be profitable on a quarterly
or annual basis. In addition, 20/20 plans to increase its
operating expenses to expand its sales and marketing operations,
fund greater levels of research and development, enhance
distributor training, and increase its administration resources.
A relatively high percentage of 20/20's expenses will be
typically fixed in the short term as 20/20's expense levels are
based, in part, on its expectations of future revenue. To the
extent that such expenses precede or are not subsequently
followed by increased revenue, 20/20's business, financial
condition, operating results and cash flows would be materially
adversely affected. 20/20 believes that period-to-period
comparisons of financial results are not necessarily meaningful
and should not be relied upon as an indication of future
performance.
Integration of Acquisitions
20/20 may, when and if the opportunity arises, acquire other
products, technologies or businesses involved in activities, or
having product lines, that are complementary to 20/20's business.
Acquisitions involve numerous risks, including difficulties in
the assimilation of the operations, technologies and products of
the acquired companies, the diversion of management's attention
from other business concerns, risks associated with entering
markets or conducting operations with which 20/20 has no or
limited direct prior experience and the potential loss of key
employees of the acquired company. Moreover, there can be no
assurance that any anticipated benefits of an acquisition will be
realized. Future acquisitions by 20/20 could result in
potentially dilutive issuance's of equity securities, the
incurrence of debt and contingent liabilities, amortization of
expenses related to goodwill and other intangible assets and
write-off of restructuring costs and acquired research and
development costs, all of which could materially and adversely
affect 20/20's financial condition, results of operations and
cash flows.
New Product Development
20/20 expects that a significant portion of its future revenue
will be derived from the sale of newly introduced products and
from enhancement of any existing products. 20/20's success will
depend in part upon its ability to enhance its current products
on a timely and cost-effective basis and to develop new products
that meet changing market conditions, including changing customer
needs, new competitive product offerings and enhanced technology.
There can be no assurance that 20/20 will be successful in
developing and marketing on a timely and cost-effective basis new
products and enhancements that respond to such changing market
conditions. If 20/20 is unable to anticipate or adequately
respond on a timely or cost-effective basis to changing market
conditions, to develop new software products and enhancements to
existing products, to correct errors on a timely basis or to
complete products currently under development, or if such new
products or enhancements do not achieve market acceptance,
20/20's business, financial condition, operating results and cash
flows could be materially adversely affected.
In light of the difficulties inherent in software development,
20/20 may experience delays in the completion and introduction of
new wireless telemetry products. The increased time required for
the initial implementation and field testing of a new product may
result in delays in commencement of additional installations.
e-Business Development
Management of Growth
20/20 believes that continued growth in the number and complexity
of products and in the number of personnel will be required to
establish and maintain 20/20's competitive position. 20/20's
growth, coupled with the rapid evolution of 20/20's markets, is
likely to place significant strains on its management,
administrative, operational and financial resources, as well as
increased demands on its internal systems, procedures and
controls. 20/20's ability to manage future growth will require
20/20 to continue to improve its financial and management
controls, reporting systems and procedures on a timely basis, to
implement new systems as necessary and to expand, train, motivate
and manage its sales and technical personnel. There can be no
assurance that 20/20 will be able to manage its growth
successfully. Failure to do so could have a material adverse
effect on 20/20's business, financial condition, operating
results and cash flows.
Dependence on Key Personnel
20/20's success and operating results are substantially dependent
on the continued service and performance of its senior management
and key technical and sales personnel. 20/20 intends to hire a
significant number of additional technical and sales personnel in
the next year. Competition for such personnel is intense, and
there can be no assurance that 20/20 can retain its key
technical, sales and managerial employees or that it will be able
to attract or retain highly-qualified technical and managerial
personnel in the future. The loss of the services of any of
20/20's senior management or other key employees or the inability
to attract and retain the necessary technical, sales and
managerial personnel could have a material adverse effect upon
20/20's business, financial condition, operating results and cash
flows.
Dependence on Selected Vertical Markets
20/20's revenue will be derived from the sale of products and
services to customers in the CATV and electronic vending
industries. 20/20 believes that 75% of its revenue will come
from the vending application, with the remaining 25% from CATV.
Adverse economic developments and trends may affect levels of
capital spending by companies in our target markets. A decline
in demand for 20/20's products in the CATV and electronic vending
industries as a result of economic conditions, regulatory trends,
competition, technological change or otherwise, would have a
material adverse effect on 20/20's business, financial condition,
operating results and cash flows. There can be no assurance that
20/20 will be able to continue to diversify its product offerings
or revenue base by entering into new vertical markets.
Dependence on Marketing Relationships
20/20's products are marketed by 20/20's distribution partner.
There can be no assurance that 20/20's distributors will continue
to provide the level of services and technical support necessary
to provide a complete solution to 20/20's customers. The loss of
these distributors, the failure of such parties to perform under
agreements with 20/20 or the inability of 20/20 to attract and
retain new distributors with the technical, industry and
application experience required to market 20/20's products
successfully could have a material adverse effect on 20/20's
business, financial condition, operating results and cash flows.
20/20 expects that it may enter into certain joint ventures in
order to facilitate its expansion into other vertical markets. To
the extent that such joint ventures are not successful, there
could be a material adverse effect on 20/20's business, financial
condition, operating results and cash flows.
Competition
The market for wireless telemetry solutions is highly
competitive. Numerous factors affect 20/20's competitive
position, including price, product features, product performance
and reliability, ease of use, product scalability, product
availability on multiple platforms (server, wireless carrier, and
mobile workstation), meeting customer schedules, integration of
products with other enterprise solutions, availability of project
consulting services and timely ongoing customer service and
support. Within these markets, there are a small number of new
ventures, either small companies attempting to establish a
business in this market or large companies attempting to
diversify their product offerings. 20/20 expects such
competition to intensify as acceptance and awareness of wireless
telemetry continues.
Current or potential competitors may establish cooperative
arrangements among themselves or with third parties to increase
the ability of their products to address customer requirements.
Certain of 20/20's competitors have substantially greater
financial, technical, marketing and distribution resources than
20/20. As a result, they may be able to respond more quickly to
new or emerging technologies and changing customer requirements,
or to devote greater resources to the development and
distribution of existing products.
There can be no assurance that 20/20 will be able to compete
successfully against current or future competitors or alliances
of such competitors, or that competitive pressures faced by 20/20
will not materially adversely affect its business, financial
condition, operating results and cash flows.
20/20 primarily competes in the vending market with Isochron of
Austin, TX, and Marconi of London, England. 20/20's competitors
in the CATV industry is limited to companies such as Cheetah
Technologies which offer a similar power supply monitoring
product, that uses part of the CATV bandwidth to connect power
supplies to the operations center.
Risk of Product Defects
Wireless telemetry products, including those offered by 20/20,
from time-to-time contain undetected errors or failures. There
can be no assurance that, despite testing by 20/20 and by current
and potential customers, errors will not be found in 20/20's
products. Such errors could result in loss of or delay in market
acceptance of 20/20's products, which could have a material
adverse effect on 20/20's business, financial condition,
operating results and cash flows.
Proprietary Technology
20/20's success is dependent on its ability to protect its
protect its proprietary technology and property rights. 20/20
intends on making appropriate applications to governmental bodies
to secure its trademark and to patent any future inventions or
developed technologies. 20/20 also utilizes non-disclosure
agreements and other contractual provisions to establish and
maintain its rights and to maintain confidentiality. As part of
its confidentiality procedures, 20/20 enters into non-disclosure
and confidentiality agreements with each of its key employees,
consultants, distributors, customers and corporate partners, to
limit access to and distribution of its software, documentation
and other proprietary information. There can be no assurance
that 20/20's efforts to protect its intellectual property rights
will be successful. Despite 20/20's efforts to protect its
proprietary technology, unauthorized third parties, including
competitors, may be able to copy or reverse engineer certain
portions of 20/20's software products, and use such copies to
create competitive products. Policing the unauthorized use of
20/20's products is difficult.
In addition, because third parties may attempt to develop similar
technologies independently, 20/20 expects that wireless telemetry
developers will be increasingly subject to infringement claims as
the number of products and competitors in 20/20's industry
segments grow and the functionality of products in different
industry segments overlaps. Although 20/20 believes that its
products do not infringe on the intellectual property rights of
third parties, there can be no assurance that third parties will
not bring infringement claims (or claims for indemnification
resulting from infringement claims) against 20/20 with respect to
copyrights, trademarks, patents and other proprietary rights.
Any such claims, whether with or without merit, could be time
consuming, result in costly litigation and diversion of
resources, cause product shipment delays or require 20/20 to
enter into royalty or licensing agreements. Such royalty or
licensing agreements, if required, may not be available on terms
acceptable to 20/20 or at all. A claim of product infringement
against 20/20 and failure or inability of 20/20 to license the
infringed or similar technology could have a material adverse
effect on 20/20's business, financial condition, operating
results and cash flows.
Dependence on Third Parties
Certain contracts may require 20/20 to supply, coordinate and
install third party products and services. 20/20 believes that
there are a number of acceptable vendors and subcontractors for
most of its required products, but in many cases, despite the
availability of multiple sources, 20/20 may select a single
source in order to maintain quality control and to develop a
strategic relationship with the supplier or may be directed by a
customer to use a particular product. The failure of a third
party supplier to provide a sufficient supply of parts and
components or products and services in a timely manner could have
a material adverse effect on 20/20's results of operations. In
addition, any increase in the price of one or more of these
products, components or services could have a material adverse
effect on 20/20's business, financial condition, operating
results and cash flows. Additionally, under certain
circumstances, 20/20 supplies products and services to a customer
through a larger company with a more established reputation
acting as a project manager or systems integrator. In such
circumstances, 20/20 has a sub-contract to supply its products
and services to the customer through the prime contractor. In
these circumstances, 20/20 is at risk that situations may arise
outside of its control that could lead to a delay, cost over-run
or cancellation of the prime contract which could also result in
a delay, cost over-run or cancellation of 20/20's sub-contract.
The failure of a prime contractor to supply its products and
services or perform its contractual obligations to the customer
in a timely manner could have a material adverse effect on
20/20's financial condition, results of operations and cash
flows.
Foreign Currency Exchange Rate Fluctuations
Because 20/20's reporting currency is the United States dollar,
its operations outside the United States face additional risks,
including fluctuating currency values and exchange rates, hard
currency shortages and controls on currency exchange. 20/20 has
operations outside the United States and is hedged, to some
extent, from foreign exchange risks because of its ability to
purchase, develop and sell in the local currency of those
jurisdictions. In addition, 20/20 does enter into foreign
currency contracts under certain circumstances to reduce 20/20's
exposure to foreign exchange risks. There can be no assurance,
however, that the attempted matching of foreign currency receipts
with disbursements or hedging activities will adequately moderate
the risk of currency or exchange rate fluctuations which could
have a material adverse effect on 20/20's business, financial
condition, operating results and cash flows. In addition, to the
extent 20/20 has operations outside the United States, 20/20 is
subject to the impact of foreign currency fluctuations and
exchange rate charges on 20/20's reporting in its financial
statements of the results from such operations outside the United
States.
Product Liability
The license and support of products by 20/20 may entail the risk
of exposure to product liability claims. A product liability
claim brought against 20/20 or a third party that 20/20 is
required to indemnify, whether with or without merit, could have
a material adverse effect on 20/20's business, financial
condition, operating results and cash flows. 20/20 carries
insurance coverage for product liability claims which it believes
to be adequate for its operations.
Item 8. Financial Statements
REPORT OF INDEPENDENT AUDITORS
To the shareholders of 20/20 WIRELESS INC.
We have audited the consolidated balance sheet of 20/20 Wireless
Inc. as at March 31, 2001, 2000 & 1999 and the consolidated
statements of operations and deficit, and cash flows for the
years then ended. 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 audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform an audit to obtain reasonable assurance 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.
In our opinion, these consolidated financial statements present
fairly, in all material respects, the financial position of the
company as at March 31, 2001, 2000 & 1999 the results of its
operations and its cash flows for the years then ended in
accordance with generally accepted accounting principles. As
required by the Company Act of British Columbia, we report that
in our opinion, these principles have been applied on a basis
consistent with that of the preceding years.
COQUITLAM, B.C. PEACH GODDARD
APRIL 15, 2001 CHARTERED ACCOUNTANTS
20/20 WIRELESS INC.
CONSOLIDATED BALANCE SHEET
AS AT MARCH 31, 2001, 2000 & 1999
(Audited)
U.S. Funds
ASSETS
Mar 31 Mar 31 Mar 31
2001 2000 1999
---------- ---------- ----------
CURRENT
Cash $ 8 $ - $ -
APPLICATIONS AND SYSTEMS SOFTWARE
UNDER DEVELOPMENT (Note 2e & 4) 27,157 - -
TECHNOLOGY LICENSE (Note 2f) 361,192 - -
CAPITAL ASSETS (Note 5) 1,690 - 8,000
INCORPORATION COSTS 629 - -
---------- ---------- ----------
$390,676 $ - $ 8,000
========== ========== ==========
LIABILITIES
CURRENT
Accounts payable $ 689 $ 2,823 $ 2,490
DUE TO SHAREHOLDERS (Note 6) 166,297 68,209 23,200
---------- ---------- ----------
166,986 71,032 25,690
========== ========== ==========
SHAREHOLDER EQUITY (DEFICIENCY)
SHARE CAPITAL (Note 7) 362,257 1,065 1,000
DEFICIT (138,567) (72,097) (18,690)
---------- ---------- ----------
223,690 (71,032) (17,690)
---------- ---------- ----------
$390,676 $ - $ 8,000
========== ========== ==========
See Accompanying Notes
20/20 WIRELESS INC.
CONSOLIDATED STATEMENT OF DEFICIT
AS AT MARCH 31, 2001, 2000 & 1999
(Audited)
U.S. Funds
Mar 31 Mar 31 Mar 31
2001 2000 1999
---------- ---------- ----------
DEFICIT, BEGINNING OF THE YEAR $ (72,097) $ (18,690) $ -
NET LOSS FOR THE YEAR (66,470) (53,407) (18,690)
---------- ---------- ----------
DEFICIT, END OF THE YEAR $(138,567) $ (72,097) $ (18,690)
========== ========== ==========
See accompanying notes
20/20 WIRELESS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
AS AT MARCH 31, 2001, 2000 & 1999
(Audited)
U.S. Funds
Mar 31 Mar 31 Mar 31
2001 2000 1999
---------- ---------- ----------
REVENUE $ - $ - $ -
---------- ---------- ----------
EXPENSES
Auto 4,723 - -
Amortization 628 - -
Consultants - 10,000 -
Insurance, licenses and fees 212 - -
Legal and Accounting 7,355 22,750 9,600
Market research and development 14,623 - -
Office 7,500 18,257 8,090
Rent 19,825 2,400 1,000
Telephone & Utilities 5,232 - -
Testing 1,154 - -
Travel 5,218 - -
---------- ---------- ----------
66,470 53,407 18,690
---------- ---------- ----------
LOSS FOR THE YEAR $ (66,470) $ (53,407) $ (18,690)
========== ========== ==========
LOSS PER SHARE - BASIC $ (.01) $ (.01) $ (.01)
========== ========== ==========
See Accompanying Notes
20/20 WIRELESS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT MARCH 31, 2001, 2000 & 1999
(Audited)
U.S. Funds
Mar 31 Mar 31 Mar 31
2001 2000 1999
---------- ---------- ----------
CASH RESOURCES PROVIDED BY(USED IN):
OPERATIONS
Cash flow provided by operations
before the undernoted $ (66,470) $ (53,407) $ (18,690)
Non-cash working capital (2,134) 332 2,490
Amortization 628 948 0
---------- ---------- ----------
(67,976) 53,074 16,200
========== ========== ==========
INVESTING
Purchase Technology License (361,192) - -
Additions to Capital Assets ( 2,318) - -
Additions to Development Costs ( 27,157) - -
Incorporation Costs (629) - -
---------- ---------- ----------
(391,296) - -
========== ========== ==========
FINANCING
Issue of Share Capital 361,192 65 1,000
Shareholder's loans 98,088 45,009 23,200
---------- ---------- ----------
459,280 45,074 24,200
========== ========== ==========
NET INCREASE (DECREASE) IN CASH - (8,000) -
CASH POSITION AT BEGINNING OF YEAR - 8,000 -
---------- ---------- ----------
CASH POSITION AT END OF YEAR $ - $ - $ -
========== ========== ==========
See Accompanying Notes
20/20 WIRELESS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001, 2000, & 1999
(Audited)
U.S. Funds
1. CONTINUED OPERATIONS
These consolidated financial statements have been prepared
on the basis of accounting principles applicable to a "going
concern", which assume that the company will continue in
operation for the foreseeable future and will be able to
realize its assets and discharge its liabilities in the
normal course of operations.
Several adverse conditions and events cast doubt upon the
validity of the assumption. The company has incurred
operating losses since its inception, has a working capital
deficiency, and is currently unable to self-finance its
operations.
The continuation of the company as a going concern is
dependent upon its ability to obtain additional financing to
meet its obligations for future development and the
attainment of successful operations. The company is
currently seeking new investors to raise the needed working
capital.
These financial statements do not reflect adjustments that
would be necessary if the "going concern" assumption were
not appropriate because management believes that the actions
already taken or planned, as described above, will mitigate
the adverse conditions and events which raise doubts about
the validity of the "going concern" assumption used in
preparing these financial statements.
If the "going concern" assumption were not appropriate for
these financial statements, then adjustments would be
necessary in the carrying values of assets and liabilities,
the reported revenues and expenses, and the balance sheet
classifications used.
2. SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements are prepared on the
historical cost basis in accordance with accounting
principles generally accepted in Canada.
a. Principles of Consolidation
These consolidated financial statements include the accounts
of the company and the wholly owned subsidiary, Global
Wireless Services Inc. The effective date of purchase was
December 20, 2000. Included in these consolidated financial
statements are the results of operations of Global Wireless
Services Inc. from May 29, 2000 (date of incorporation) to
December 31, 2000.
The subsidiary is accounted for using the pooling of
interests method.
All companies are located in British Columbia, Canada.
b. Use of Estimates
The preparation of consolidated financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial
statements and accompanying notes. These estimates are
based on management's best knowledge of current events and
actions that the company may undertake in the future.
c. Foreign Currency Transactions
The consolidated financial statements of the company are
reflected in U.S. dollars. The company uses the temporal
method of accounting for foreign currency translations,
whereby monetary items are translated at the rate of
exchange in effect at the balance sheet date, non monetary
items are translated at historical rates and revenue and
expense items are translated at the rate of exchange on the
dates they occur.
d. Capital Assets
Capital Assets are recorded at cost. Amortization is
provided using the declining balance method at the following
rates:
Computer Hardware 30%
e. Development Costs
Certain applications and systems software development costs
are capitalized once technical feasibility has been
established for the product, the company has identified a
market for the product and intends to market the product
once it is fully developed. Amortization of development
costs deferred to future periods will commence once
commercial production begins.
f. Technology License
In a related party transaction the company purchased from
its President $545,400 for a license to certain technology
relating to wireless communications systems. The company
may use the licensed technology for a period of six years at
which time it can purchase, for $100 (US), any residual
values in the technology from the President. Amortization
of the license will begin once revenues are generated.
g. Revenue Recognition
All revenue is recorded and related cost transferred to cost
of sales at the time the product is shipped or the service
provided.
h. Loss per Share
Basic loss per share computations is based on the weighted
average number of shares outstanding during the year. Fully
diluted earnings per shares have not been disclosed, as it
is anti-dilutive.
3. FAIR VALUE OF FINANCIAL INSTRUMENTS
The company's consolidated financial instruments consist of
accounts payable. Unless otherwise noted, it is
management's opinion that the company is not exposed to
significant interest, currency or credit risks arising from
the financial instruments. The fair value of these
consolidated financial instruments approximates their
carrying value due to their short-term maturity or capacity
of prompt liquidation.
4. DEVELOPMENT COSTS
2001
-----------
Balance, beginning of year $ -
Consulting 17,109
Rent 6,789
Supplies 3,259
-----------
Balance, end of year $27,157
5. CAPITAL ASSETS
2000
Accumulated Net Book
Cost Amortization Value
Computer Hardware $2,318 $ 628 $ 1,690
6. DUE TO SHAREHOLDERS
Amounts due to shareholders are non-interest bearing and
have no specific terms of repayment. The shareholders have
indicated that these amounts need not be repaid within the
next fiscal period and consequently these have been classified as
long-term.
7. SHARE CAPITAL
Authorized
The authorized capital of the company consists of 25,000,000
common shares with a par value of $.001.
Issued and outstanding
Number Amount
Balance March 31, 1999 1,000,000 $1,000
Issued for cash 65,000 65
---------- --------
Balance March 31, 2000 1,065,000 1,065
Issued for cash 50,000 50
Stock Split 4,460,000 -
Issued for purchase of technology 5,190,514 361,142
----------- --------
10,765,514 $362,257
8. BUSINESS COMBINATION
Effective December 20, 2000, 20/20 Wireless Inc. entered
into a business combination with Global Wireless Services
Inc. The details of the combination are as follows:
i. The companies in this combination have been
incorporated to develop and market a wireless
technology that provides wireless monitoring and
diagnostic systems to electrical, cable television,
telephone vending and petroleum industries.
20/20 Wireless Inc., a company formed principally to
obtain secondary financing for producing and marketing
the wireless technology.
Global Wireless Services Inc., a company formed to
principally develop wireless technology.
ii. At the date of the business combination, the book
values of the assets and liabilities of 20/20 Wireless
Inc. and Global Wireless Inc are as follows:
20/20 Wireless Global Wireless
-------------- ---------------
Assets
Current Assets $ - $ 1,856
Capital Assets - 1,691
Other Assets - 361,821
---------- ------------
- 365,368
---------- ------------
Liabilities
Current Liabilities 2,803 1,325
Other 78,571 28,699
---------- ------------
81,374 30,024
---------- ------------
Shareholders Equity(Deficit) - 335,344
---------- ------------
$ - $ 365,368
The operating results of 20/20 Wireless Inc. and Global Services
Inc. for the year ended March 31, 2000 were as follows:
20/20 Wireless Global Wireless
-------------- ---------------
Revenue $ - $ -
-------------- ---------------
Net Loss $ (67,780) $ (25,847)
-------------- ---------------
iii. The business combination was effected by the
shareholders of each of the companies exchanging 100%
of their shares in the combined entity.
iv. The number of shares received by the shareholders of
Global Wireless Services Inc. immediately after the
combination in the combined entity is 5,490,514 common
shares.
v. The method of accounting for this combination was the
pooling method. Under the pooling method, the assets
and liabilities are combined and accounted for in the
combined companies financial statements at their
carrying values. The reported loss of the combining
companies includes the results of operations of the
combining companies for the entire fiscal year in which
the combination took place.
The pooling of interest method was used for the following
reasons:
-The combination is an arrangement between shareholder
groups uniting business interests to carry on their
previous operation together in combination.
-The controlling group of shareholders controlled 100% of
the company's shares, in aggregate, prior to the
combination and 51% of the shares after the
combination.
-The directorship in each of the combining companies was
similar.
-The officers and day-to-day management in each of the
combining companies was similar.
-The combination was effected solely by to consolidate
assets and shareholdings to allow ease of acquisition
by a public company.
-No assets are brought into the combination other than
those of the parties to the combination.
9. INCOME TAX LOSSES
The company has non-capital income tax losses which may be
carried forward to reduce future year's taxable income,
these losses expire as follows:
2006 $78,097
2007 $66,470
The potential future tax benefit of these expenditures and
tax losses have not been recognized in the accounts of the
company.
10. COMMITMENTS
By agreement dated 29 May 2000, the company entered into a 5
year lease for premises. The minimum lease payments, not
including common area costs, are as follows:
2001 $23,841
2002 23,841
2003 23,841
2004 23,841
$95,364
11. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The year 2000 issue arises because many computerized systems
use two digits rather than four to identify a year. Date-
sensitive systems may recognize the year 2000 as 1900 or
some other date, resulting in errors when information using
year 2000 dates are processed. In addition, similar
problems may arise in some systems, which use certain dates
in 1999 to represent something other than a date. Although
the change in date has occurred, it is not possible to
conclude that all aspects of the year 2000 issue that may
affect the entity, including those related to customers,
suppliers, or other third parties, have been fully resolved.
12. FINANCIAL INSTRUMENTS
The company's financial instruments consist of accounts
receivable, accounts payable and amounts due from
shareholders. Unless otherwise noted, it is management's
opinion that the company is not exposed to significant
interest, currency or credit risks arising from these
financial instruments. The fair market value of these
financial instruments approximates their carrying values,
unless otherwise noted.
13. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
These financial statements have been prepared in accordance
with generally accepted accounting principles in Canada.
These financial statements also comply, in all material
respects with accounting principles accepted in the United
States and the rules and regulations of the Securities and
Exchange Commission.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
On January 26, 2001, the Board of Directors voted to retain as
its public accountants the firm of Peach Goddard, which is based
in Vancouver, British Columbia.
The decision to appoint Peach Goddard was based solely upon the
fact that Peach Goddard is geographically closer to 20/20's
operations and therefore better able to perform an audit and
review of 20/20's records. There were no disagreements or
misunderstandings with Graf Repetti & Co., the company's previous
accountants, regarding any financial disclosure or practices and
a letter from Graf Repetti confirming that no disagreements or
misunderstandings existed between the company and its former
accountants is attached as Exhibit 16.
Investors are further advised that the principal accountant's
report on the financial statements for either of the past two
years did not contain an adverse opinion or disclaimer of
opinion, or was modified as to uncertainty, audit scope, or
accounting principles. Additionally, the decision to change
accountants was approved by the board of directors of the
company.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS
Position(s) Held and
Name Age Duration of Service Family Relation
- ---------------- --- ------------------- ---------------
Eric MacKenzie 35 President and None
Chief Executive Officer
Thomas J. Manz 50 Chief Financial Officer None
Secretary / Treasurer
Daniel Mercier 43 Senior Technology Advisor None
All directors hold office until the next annual meeting of
stockholders and until their successors have been duly elected
and qualified. There are no agreements with respects to the
election of directors.
Set forth below is certain biographical information regarding the
Company's executive officers and directors:
Eric MacKenzie (B.Sc. Eng.), President & CEO, has many years
experience in sales and business development. He was director of
marketing for of Lightning Processes Ltd. (1998-2000), head of
business development for Global Wireless System (2000), and has
two years wireless telecommunications marketing and sales
experience with Telos Engineering (1997-1998). For over 10 years,
he has provided marketing consulting services to various
companies such as Rogers Cantel (1994-1996) and Ford Motor
company (1995-1997). He has been involved in several successful
sales campaigns for long-distance providers having managed and
motivated large sales forces. Mr. Mackenzie will be responsible
for executing and overseeing 20/20's business plan.
Thomas J. Manz (B.Sc.), CFO, Secretary Treasurer, Mr. Manz has 30
years of business experience in general management, sales,
manufacturing and business strategies. Currently, Mr. Manz is a
licensed real estate broker (since 1979); a Director of Western
Sierra Bankcorp (since 1999); Chairman of the Roseville First
National Bank Board of Directors (since 1991, merged in '99);
founding and current Director of Pacific Coast Bankers Bank
(PCBB) Board of Directors in San Francisco, California (since
1997); former member of the board of directors of M. L. Oates
Insurance Company (1989-1993); Director of Granite Bay
Technologies (1999-present); and President of Commercial Building
Specialists Inc. (2000-present).
Daniel Mercier (M.Sc.Eng., P.Eng.), Senior Technology Advisor.
Mr. Mercier has 10 years experience in telecommunications
software and hardware development, 5 years in electronic
manufacturing, and 5 years in technical management and business
development. He has held engineering and management positions at
Nortel, Bell Northern Research, Microcell Connexions (FIDO), and
Telos Engineering. He is the President of Global Wireless System
(2000-present); founder of Lightning Processes Ltd. (1997-2000);
and former CEO of LP Labs, Inc. (1999-2000). He is an active
member in APEGBC (Association of Professional Engineers of BC)
and OSPE (Ontario Society of Professional Engineers). Mr.
Mercier has done graduate research in systems development and has
been published in technical journals.
To the knowledge of management, during the past five years, no
present or former director or executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any
state insolvency law, nor had a receiver, fiscal agent or similar
officer appointed by a court for the business or present of such
a person, or any partnership in which he was a general partner at
or within two years before the time of such filing, or any
corporation or business association of which he was an executive
officer within two years before the time of such filing;
(2) was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations and
other minor offenses);
(3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him
form or otherwise limiting, the following activities:
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, associated person of any of the
foregoing, or as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliated person, director of any
investment company, or engaging in or continuing any conduct or
practice in connection with such activity; (ii) engaging in any
type of business practice; or (iii) engaging in any activity in
connection with the purchase or sale of any security or commodity
or in connection with any violation of federal or state
securities laws or federal commodity laws;
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or
state authority barring, suspending, or otherwise limiting for
more than 60 days the right of such person to engage in any
activity described above under this Item, or to be associated
with persons engaged in any such activity;
(5) was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have
violated any federal or state securities law, and the judgment in
subsequently reversed, suspended, or vacate;
(6) was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have
violated any federal commodities law, and the judgment in such
civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or
vacated.
The Company's Common Stock is registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and in connection therewith, directors,
officers, and beneficial owners of more than 10% of the Company's
Common Stock are required to file on a timely basis certain
reports under Section 16 of the Exchange Act as to their
beneficial ownership of the Company's Common Stock.
Item 11. EXECUTIVE COMPENSATION
SUMMARY
The Company has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or
directors. The Company provides salaries for only two of its
executives, Eric Mackenzie and Daniel Mercier, at the rate of
$25,000 per year each. It is intended that the Company's other
directors and officers will forego any compensation until such
time as the Company accumulates significant revenues and income
to warrant the payment of compensation to its directors. As of
the date hereof, no person has accrued any compensation from the
Company.
COMPENSATION TABLE:
Summary Compensation Table
(a) (b) (c) (d) (e) (f) (g) (h)
(i)
Name and Other Restricted Sec.
All
Principal Annual Stock Underly. LTIP
Other
Position Year Salary Bonus Compen. Award Options
Payouts Comp.
Eric
MacKenzie
(President) 2001 $25,000 0 0 0 0 0
0
Daniel
Mercier
Advisor 2001 $25,000 0 0 0 0 0
0
CASH COMPENSATION
The Company provides salaries for only two of its executives,
Eric Mackenzie, president and chief executive officer, and Daniel
Mercier, director and advisor, at the rate of $25,000 per year
each. This salary is paid in conjunction with their respective
positions with 20/20.
BONUSES AND DEFERRED COMPENSATION: None.
COMPENSATION PURSUANT TO PLANS: None.
PENSION TABLE: None.
OTHER COMPENSATION: None.
COMPENSATION OF DIRECTORS: None.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENT:
There are no compensatory plans or arrangements of any kind,
including payments to be received from the Company, with respect
to any person which would in any way result in payments to any
such person because of his or her resignation, retirement, or
other termination of such person's employment with the Company or
its subsidiaries, or any change in control of the Company, or a
change in the person's responsibilities following a change in
control of the Company.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth the information, to the best
knowledge of the Company as of March 31, 2001, with respect to
each person known by the Company to own beneficially more than 5%
of the Company's outstanding common stock, each director of the
Company and all directors and officers of the Company as a group.
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
- ---------------- -------------------- --------
Dan Mercier 1,915,295 17.8%
4439 West 8th Avenue
Vancouver, BC
Canada V6R 2A3
Eric MacKenzie 1,276,863 11.9%
#508-1111 Beach Avenue
Vancouver, B.C.
Canada V6E 1T9
Richard Frost 1,276,863 11.9%
#105-10621 79th Avenue
Edmonton, Alberta
Canada T6E 1S2
Anglesey Acceptance Corp. 677,564 6.3%
PO Box N-4902
Nassau Bahamas
West-Kam Estates Ltd. 800,000 7.4%
32-21960 River Road
Maple Ridge, BC
Canada
Bob Noble 817,563 7.6%
850 Paladin Terrace
Port Coquitlam BC
Canada V3C 6B2
The Company has been advised that the persons listed above have
sole voting, investment, and dispositive power over the shares
indicated above. Percent of Class (third column above) is based
on 10,765,514 shares of common stock outstanding on March 31,
2001.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS.
There is one material transaction between management and the
company. On December 1, 2000, Daniel Mercier, a director,
officer and shareholder of 20/20, entered into a License and
Option to Purchase Agreement with Global Wireless Services Ltd.,
the entity which merged with 20/20 Wireless Services then known
as Eurokiosk, Inc. Under the Agreement, Mr. Mercier granted a
license to Global Wireless of all technical information in
respect to the development, engineering, manufacture and sale of
the products and services which 20/20 is now offering, known
under the Agreement as the Licensed Technology. These products
include the wireless telemetry related products as well as the
programmable controllers, transducers , power management
circuitry and related software. The term of the Agreement is for
six (6) years. Additionally, Mr. Mercier granted Global Wireless
the option to purchase all his right, title and interest in the
Licensed Technology for the sum of One Hundred ($100.00) Dollars.
The details of the Licensed Technology are subject to a non-
disclosure and confidentiality provisions. The agreement may be
terminated at Mr. Mercier's option in the event the company has
not raised at least CDN$1,000,000.00 on or before March 31, 2001.
The time to raise such capital has been extended to September 30,
2001.
CERTAIN BUSINESS RELATIONSHIPS:
During the fiscal year ended March 31, 2001, there were no
material transactions between the Company and its management.
INDEBTEDNESS OF MANAGEMENT:
To the best of Management's knowledge, during the fiscal year
ended March 31, 2001 there were no material transactions, or
series of similar transactions, since the beginning of the
Company's last fiscal year, or any currently proposed
transactions, or series of similar transactions, to which the
Company was or is to be a party, in which the amount involved
exceeds $60,000, and in which any director or executive officer,
or any security holder who is known by the Company to own of
record or beneficially more than 5% of any class of the company's
common stock, or any member of the immediate family of any of the
foregoing persons, has an interest.
TRANSACTIONS WITH PROMOTERS:
To the best Knowledge of management, no such transactions exist.
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON
FORM 8-K
(A) FINANCIAL STATEMENTS
The Following financial statements are filed as part of this
registration statement:
Balance Sheet
Statement of Loss
Statement of Cash Flows
Statement of Shareholders' Equity (Deficit)
Selected Financial Data
(B) EXHIBITS AND INDEX OF EXHIBITS
The following exhibits are included in Item 13(c). Other
exhibits have been omitted since the required information is not
applicable to the registrant.
EXHIBIT
3 Certificate of incorporation and by-laws
10.1 Distribution Agreement with Winfield Entertainment
Group
10.2 Agency Agreement with GRF Comm Provisions, Inc.
10.3 Distribution Agreement with George H. Baker.
16 Letter from Graf Repetti & Co.
(C) REPORTS ON FORM 8-K
No Report on Form 8-K was filed during the fourth quarter of the
period for which this Annual Report is filed.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized. The undersigned is an
officer of 20/20 WIRELESS, INC., has read the statements
contained in this Registration statement and states that the
contents are true to the undersigned's own knowledge.
20/20 WIRELESS, INC.
- -----------------------
(Registrant)
Date: May 9, 2001
By: /s/ Eric Mackenzie
-------------------
President