Securities and Exchange Commission
Washington, DC 20549
FORM 10-KSB
x Annual Report pursuant to Section 13 or 15(D) of the Securities Exchange
Act of 1934 (Fee required) For the fiscal year ended December 31, 2000 Or
Transition Report pursuant to Section 13 or 15(D) of the Securities Exchange Act
of 1934 (No Fee Required) Commission File Number: 0-30448
5 G Wireless Communications, Inc.
(Exact Name of Registrant as specified in its charter)
Nevada 88-04413322528
(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
2921 N. Tenaya Way, Suite 208
Las Vegas, NV 89128
(Address and zip code of principal executive offices)
(7028) 647-4877
(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
x YES NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of the registrants knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. x
As of December 31, 2000, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $1,127,812 based upon a $.25 per share
trading price on February 15, 2001.
Indicate the number of shares outstanding of each of the registrants classes of
common stock, as of the latest practicable date.
Common Stock 12,750,490 Shares Outstanding
$0.001 par value as of December 31, 2000
Documents Incorporated by reference
Certain information required by Part III of this Form 10-KSB is included by
reference to the Companys definitive proxy statement filed in accordance with
rule 14a-101, Schedule 14A.
Traditional Small Business Disclosure Format (check one): Yes x No
The issuers revenues for its most recent year were $ - 0 -.
5 G WIRELESS COMMUNICATIONS, INC.
TABLE OF CONTENTS
PART I Page
Item 1. Description of Business 3
Item 2. Description of Property 3
Item 3. Legal Proceedings 3
Item 4. Submission of Matter to a
Vote of Security Holders 3
PART II
Item 5. Market for Common Equity and Related Stockholder
Matters 3-4
Item 6. Managements Discussion and Analysis or Plan of
Operation 4-7
Item 7. Financial Statements 7
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 7
PART III
Item 9. Directors, Executive Officers,
Promoters and Control persons;
Compliance with Section
16(a) of the Exchange Act 7-9
Item 10. Executive Compensation 9
Item 11. Security Ownership of Certain Beneficial Owners and
Management 9-10
Item 12. Certain Relationships and Related Transactions 10-11
Item 13. Exhibits and Reports on Form 8-K 12
SIGNATURES S-1
ITEM 1. Description of Business
The issuer was originally organized as an Idaho corporation under the
name of Tesmark, Inc., on September 10, 1979. The Company, by Agreement of
Merger signed on November 10, 1998, the corporation was merged into
Tesmark, Inc., a Nevada corporation, incorporated in Nevada on October 10,
1998. The Company has not filed bankruptcy, been in receivership or any
similar proceedings.
From inception until 1997, the issuers business was in the research
and development of possible scientific formula and practical application of
cloud seeding chemical compounds that were hoped to have beneficial uses to
cause climate adjustments in limited or localized sub-climates for
agricultural purposes. From the start, the Company was badly
undercapitalized, and consequently, it could never realize its business
goals. About three years ago, management of the Company decided to abandon
any further plans to raise capital or continue with any further research
and development. All assets were written off as total losses, and the
Companys business plans were directed to and it began investigating
possible acquisitions, business combinations, or merger opportunities in
other fields or industries.
On April 20, 2000 the Company increased its authorized capital to
50,000,000 shares of $.001 par value and forward split its stock to
7,500,300 shares.
On May 16, 2000 the Company sold 1,000,000 shares of common stock for
$150,000 to two companies and two individuals pursuant to Regulation D of
the Securities Exchange Act of 1934. The investment units also included
Class A and Class B to purchase 1,000,000 shares at $.20 a share and
1,000,000 shares at $.25 per share exercisable at one year and two years
respectively.
On December 1, 2000, the Company entered into an Acquisition Agreement
whereby the Company acquired from 5 G Partners, a Canadian partnership, its
content, ideas, and business model in exchange for seventy four thousand
dollars ($74,000) US and one hundred fifty thousand (150,000) shares of
common stock. The acquisition was subject to the approval of the Companys
shareholder. At a special meeting held January 19, 2001 the shareholders
approved the acquisition and a corporate name change to: 5G Wireless
Communications, Inc.
5 G utilizes its own proprietary products, incorporates off the shelf
products and provides theer proprietary knowledge to deliver a best cost /
performance telecommunication service.
5 G will identify strategic regional backbone partners and together
they will deliver a superior telecommunication service.
The 5 G, 2.4 Ghz wireless systems have been demonstrated in Guangzhou,
China, Singapore, Jakarta Indonesia and Kuala Lumpur Malaysia during this
October 2000. Currently the 2.4 Ghz system, is installed in Singapore and
is operational for testing purposes only. This high-speed wireless Internet
access was very impressive proving out point-to-point, point to multiple
point access, penetration of the signal through structures (walls,
ceilings, Etc) and roaming capabilities.
The 2.4 Ghz system functioned very well technically, however, the
outdoor applications of the 2.4 Ghz frequency are currently being utilized
by Metropolitan Area Networks, while the indoor applications of the 2.4 Ghz
frequency are currently being utilized by the wireless home phones. In
order to accommodate this Asian market place, a different set of
frequencies and technologies are required, than those being used in North
America.
2
It is the intent of 5 G Wire less to deliver a 5.3 Ghz 5.9 Ghz
system (minimum 25 Mbps) in order to accommodate the Asian market place. 5
G Wireless is in the process of aligning itself with strategic partners and
acquisitions to provide its Customers with a one-stop, end-to-end solution
for high-speed wireless Internet access and data transport needs.
As of December 31, 2000 the 5 G acquisition was not operational and
the transaction was not complete.
As of December 31, 2000 the Company had no full time employees.
Item 2. Description of Property
As of December 31, 2000 the issue does not own any property. The
Company rents on a month to month basis a small office at 2921 N. Tenaya
way, Suite 208, Las Vegas, NV 89128.
Item 3. Legal Proceeding
The Company is not subject to any legal proceedings.
Item 4. Submission of Matters to Vote of Security Holders
During the fourth quarter of the fiscal year covered by the report, no
matters were submitted to a vote of security holders. The Company filed a
Notice of Annual Meeting to be held January 19, 2001 on December 16, 2000.
Part II
Item 5. Market for Registrants Common Equity and Related Matters
The Companies common stock is traded in the over- the counter market
and quotations are published on the NASD OTC Bulletin Board under the
symbol FGWC. Quotations on the Common Stock set forth below do not
constitute a reliable indication of the price that a holder of the Common
Stock could expect to receive upon a sale of any particular thereof.
The following table sets forth the range of high and low bid prices of
the Common Stock for each calendar 2000 as reported by NASD OTC Bulletin
Board. Prices reported represent prices between dealers, do not include
retail markups, markdowns or commissions and do not necessarily represent
actual transactions.
The high and low bid price quotations for the common stock, as
reported NASDAQ are as follows for the periods indicated:
Low High
Qtr Ended 9-30-00 $.15 $.25
Qtr Ended 12-31-00 $.25 $.35
As of December 31, 2001, the Company has issued and outstanding
12,750,490 shares of common stock outstanding to 30 shareholders of record,
which figure does not take into account those shareholders whose
certificates that are held in the name of broker-dealers.
3
The ability of an individual shareholder to trade their shares in a
particular state may be subject to various rules and regulations of that
state. A number of states require that an issuers securities be registered
in their state or approximately exempted from registration before the
securities are permitted to trade in that state. Presently, the Company has
no plans to register its securities in any particular state. Further, most
likely the Common Stock will be subject to the provisions of Section 15(g)
and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the
Exchange Act), commonly referred to as the penny stock rule. Section
15(g) sets forth-certain requirements for transactions in penny stock and
Rule 15g-9 (d)(1) incorporates the definition of penny stock as that term
is used in Rule 3a51-1 of the Exchange Act.
The Securities and Exchange Commission (the Commission) generally
defined penny stock to be any equity security that has a market price less
than $5.00 per share, subject to certain exceptions. Rile 3a51-1 provides
that an equity security is considered to be a penny stock unless that
security is: registered and traded on a national securities exchange
meeting specified criteria set by the Commission; authorization for
quotation on The NASDAQ Stock Market; issued by a registered investment
Company; excluded from the definition on the basis of price (at least $5.00
per share) or the issuers net tangible assets; or exempted from the
definition by the Commission. If the Companys shares are deemed to be
penny stock, trading in the shares will be subject to additional sales
practice requirements on broker-dealers who sell penny stocks to persons
other than established customers and accredited investors, generally
persons with assets in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must make
special suitability determination for the purchase of such securities and
must have received the purchasers written consent to the transaction prior
to the purchase. Additionally, for any transaction involving penny stock,
unless exempt, the rules require the delivery, prior to the first
transaction, of a risk disclosure document relating to the penny stock
market. A broker dealer must also disclose the commissions payable to both
the broker dealer and the registered representative, and current quotations
for the securities. Finally, monthly statements must be sent disclosing the
recent price information for the penny stock held in the account and
information on the limited market in penny stock and/or maintain a market
in the Companys Common Stock and may affect the ability of shareholders to
sell their shares.
Dividends
The Company has not declared or paid dividends or made distributions
in the past, and the Company does not anticipate that it will pay cash
dividends or make distributions in the foreseeable future.
Item 6. Managements Discussion and Analysis or Plan of Operation
The 5 G WLAN (Wireless Local Area Network) provides durable,
high-speed data transfer complaint with the IEEE 802.11 standard for
wireless LANs. The IEEE standard allows for data transfer throughout large
areas, easily penetrating building walls and floors.
This is effective in all environments such as high signal noise and
high obstruction areas. 5 G accomplish this by the usage of superior echo
path management and the one of the best RF each tolerance (Delay Spread) in
the industry. The exceptional performance and immunity to RF inference
makes our WLAN well suited for all environments including medical, health
care facilities, schools, airports, office and warehouse complexes, and the
home.
MCR (Multi Channel Roaming) is used in 5 G WLANs. This technology
automatically adjusts channel settings and tune to frequency of the nearest
AP (Access Point), enabling subscribers to maintain connectivity as they
roam throughout a multiple AP area. MCR can also increase aggregate network
capacity with the more efficient use of the available spectrum.
4
5 G wireless systems uses Direct Sequence Spread Spectrum (DSSS)
radios to provide from 25 Mbps upwards throughout. This spread-spectrum
radio intelligent frequency hopping technology enables reliable, high-speed
data communication.
The robust nature of DSSS technology allows transmission of signals
over sequential frequencies simultaneously, to minimize interference and
the echo that occur in large area with many buildings and other
obstructions. DSSS is also virtually immune to detection and interception.
In fact, data is protected with the same spread spectrum technology used in
military operations to guard their highly sensitive radio transmissions. We
can also provide even higher level of security using data encryption
resulting in the ultimate protection of data with no loss in performance.
All our systems are compliant with FCC part 15 and DOC rules. This
technology is also compliant with the European ETYS, the Japanese MKK and
the Australian DOC rules.
5 G is a cutting edge global provider of wireless solutions, which
utilizes state of the art equipment and proprietary solution elements,
delivers a dramatic improvement in performance and cost to our clients.
New bandwidth intensive applications continue to emerge, especially
for multimedia and collaborative work, resulting in a headache for most
customers as they wait to download files with traditional technologies such
as ISDN, cable modem, xDSL and even T1 or E1.
Businesses are rapidly realizing that their continued existence may be
their ability to gain a distinct competitive advantages by adapting the
e-commerce revolution.
5 Gs solution allows us to deliver data services from a single point
of presence to multiple commercial and residential buildings
simultaneously. Our services will provide tenants with secure ATM or
Ethernet Internet access ranging from 11 to 25 Mbps and beyond.
Current wireless solutions providers use 2.4 Ghz frequency in
Metropolitan Area networks however, the 2.4 Ghz is also being used indoor
by wireless home phones creating an extra ordinary amount of interference.
This particularly impact the Asia market place.
To solve the problem, 5 G intends to deliver a 5.3 Ghz 5.9 Ghz
system in order to accommodate the Asian market place. 5 G Wireless is in
the process of aligning itself with the strategic partners and acquisitions
to provide its customers with a one-stop, end-to-end solution for
high-speed wireless Internet access and data transport needs. These
relations also enable us to deliver a number of unique voice and video
services.
The 5 G, 2.4 Ghz wireless systems have been demonstrated in Guangzhou,
China, Singapore, Jakarta Indeonesia and Kuala Lumpur Malaysia in October
2000.
Currently, the 2.4 Ghz system, is installed in Singapore and is
operational for testing purposes only. This high-speed wireless Internet
access was very impressive proving out point-to-point, point to multiple
point access, penetration of the signal through structures (walls,
ceilings, etc.) and roaming capabilities.
The principal strategy guidelines include
o We plan to make application in each country for the RF license to
allow us to develop future markets quickly and easily.
5 o Establish wireless services at key buildings in the downtown core
of each major city starting with Singapore.
o We plan to formalize agreements for major POP gateways in the Q1
2001 in Malaysia, Thailand, Philippines, with implementation and sales
beginning Q2.
o We will be expand to Indonesia, Hong Kong, Taiwan, China, Korea, and
Japan by Q4 2000 and Q2 2001.
o We will also negotiated major POP location gateways in Europe and
North America by the mid 2002.
o We will negotiate with property management companies to allow access
to building riser, wiring closets and roof access.
o Marketing will begin almost immediately after the main pop
agreements have been signed with the initial focus being on
o Core downtown commercial and multi-tenanted buildings;
o Providing portable wireless services to convention facilities and
hotels in the downtown core;
o Establish key relations with new development project and existing
property management companies such as Keppel-Suntec Project.
o Exploring the possible integration of infrared data systems with our
5 G wireless solution to provide back hauling to super POP locations. These
infrared solutions provide point-to-point, full duplexes communications up
to 3.69 miles, with speeds ranging from 155 Mbps (OC3) to Gbps (OC12+).
Point of Sale (retail stores) Frequent interior changes call for
flexible networking, fast reconfiguration and redeployment;
Transportation industry
Harbor/airport containers and luggage handling, where mobility and
real time connectivity over large areas are required, and for application
with programmable road signs;
Health care industry
Doctors and nurses can access patient medical records and call in
other specialists for assistance using computer controlled medical
equipment form bedside/point of care. Mobile x-ray can be more efficient
without the time spent dragging cables or looking where to stand.
Financial services
Trading floors; flexibility of installation in bank branches;
Education Accessing university computer resources from various
locations; equipping temporary trailers away from campus;
Manufacturing
Coordinating robots and other mobile automated equipment;
Storage
Warehouse operations;
Small businesses
Product and service orientated businesses can both benefit from a
range of applications including sales presentations, design, ordering,
payment processing, inventory, and shipping status information, etc.;
6 Real Estate Agents Can now take a laptop around with them and look
up property information through the multiple listing systems while on the
go;
Universities and education facilities Creating a new environment of
information exchange from the classroom to the laboratories.
In the first half of 2001 the Company intends to raise operating
capital by either the sale of equities or debt financing. The Company has
not determined which type of financing it will seek.
As of December 31, 200 the Company has paid its expenses from existing
capital funds, that were available from the May 2000 financing by sale of
capital stock. The Company had minimal operations as of December 1, 2000
and does not expect material operation until the second quarter of 2001.
Item 7. Financial Statements and Supplementary Data
See index to financial statements included herein.
Item 8. Changes and Disagreements with Accountants on Accounting and Financial
Disclosure
None
Part III
Item 9. Directors, Executive Officers, Control Persons
The following table sets forth information, to the best of the
Companys knowledge as of December 31, 2000, with respect to each director,
officer and management as a group.
Title of Amount of
Name Position Class Shares Percentage
Don Boudewyn President Common 50,000 .03%
5555 Lackner Circle Director
Richmond, BC V7E6A5
Allen Schwabe Secretary Common 50,000 .03%
1430 Beach Grove Rd. Treasurer
Delta, BC V4I1P2 Director
Michael Tan Vice President Common 225,000 2%
4 Keng Chin Rd Director
#02-01 Singapore 258707
Curtis L. Mearns Director Common 50,000 .03%
#212, 6888 Robson Drive
Richmond, BC V7C5T6
The information set forth below as to each nominee for Director has
been furnished to the Company by the respective nominees. 7
Curtis L. Mearns, 42, is the president of Mearns and Associates, a
private investment banking and consulting business. Mr. Mearns holds a
Bachelor of Commerce degree with a major in Computer Science and Finance
from the University of Alberta. As well as, he was enrolled in the Masters
of Business Administration, International Business from the University of
British Columbia, he augmented his post graduate studies in Masters of
Management Science, Information Engineering. Mr. Mearnss professional
experience includes strategic planning, strategy, structure and
negotiations for merger and acquisitions, business and management
consulting, business plan preparation, private and public company process
documentation, bank and venture capital packaging, identifying and
negotiating joint ventures, debt/equity participation and closure with
Capital Providers. He has produced numerous systems including a fully
automated central clearing system for the B.C. Central Credit Union
providing for interprovincial and national reconciliation of accounts with
the Back of Canadas electronic settlement of accounts system. He was also
a Programmer for Alberta Research Council, Programmer and Systems Analyst
for Canadian Utilities Limited and Alberta Power Limited and has held the
position of VP Sales and Marketing for VoteX Systems, Inc., partner and
Vice President of CEO Capital Group, the President of Canadian Integrated
Project Resources, Inc. Mr. Mearns has traveled extensively throughout
Southeast Asia, the Pacific Rim, Middle East, Europe and numerous other
countries on various business imperatives. Mr. Mearns was appointed a
director of Tesmark, Inc., on November 5, 2000.
Allen Schwabe, 45, is an independent business man and has been the
President and CEO of Buellix Holdings, Ltd., for the last twenty years.
Buellix is in the automobile brokerage business throughout Canada. Mr.
Schwabe has been a director of Tesmark, Inc., since September 21, 2000.
Michael Tan, 35, is the presently the President of VOIP Telecom, Inc.,
and a consultant for Belair Enterprises, Inc. Mr. Tan worked as the Vice
President for Asia Pacific/APAC Telecommunications Corp from 1990 to 1996.
Mr. Tan was appointed to fill a vacancy on the Board of Directors of
Tesmark, Inc., on December 7, 2000.
Don F. Boudewyn, 37, is currently an Account Executive at Celterra
Vancouver Ltd. Mr. Boudewyn is responsible for managing the projects
involving rollout and launch of new networks products and enhancements to
the marketplace. He is also responsible for handling municipal access
agreements with municipalities and cities throughout Canada. From July 1986
through October 1998, Mr. Boudewyn was a real estate agent at Macdonald
Westmar Realty. Mr. Boudewyn holds a Diploma in Marketing Management from
the British Columbia Institute of Technology. Mr. Boudewyn was appointed a
director of Tesmark, Inc., on December 7, 2000.
The Companys directors serve until the next annual meeting of
stockholders and until their successors are elected and duly qualified. The
Companys officers are elected annually by the Board of Directors and
server at the discretion of the Board of Directors. There are no agreements
with respect to the election of directors.
Executive Officers of the Company
Name Age Position Period of Service
Don Boudewyn 37 President/Director December 7, 2000 to present
Allen Schwabe 47 Secretary/ Treasurer September 21, 2000 to present
Director
Michael Tan 35 Vice President December 7, 2000 to present
Director
8
Curtis L. Mearns 42 Director November 5, 2000 to present
Compliance with 16(a) of the Exchange Act
The Securities Exchange Act of 1934 requires all executive officers
and directors to report any changes in the ownership of common stock of the
Company to the Securities & Exchange Commission and the Company. Management
revising and representations indicate by date filing of holdings as of
December 31, 2000 in compliance to 16(a).
Item 10. Executive Compensation
None of the current executive officers receive any compensation from
the Company during the year ended December 31, 2000.
The Company does not currently issue a salary to its officers,
directors or employees nor does the Company have a bonus, profit sharing,
or deferred compensation plan for the benefit of its employees, officers or
directors. Once the Company acquired other business entities its
compensation policy may be amended in order to secure the services of
certain valuable executive employees.
At present the Company does not have any employment agreements in
place with any director, executive officer or employee. The Company may
enter into an agreement with certain qualified executive officers if deemed
appropriate by the industry, operating history, revenues, future prospects
or other characteristics of any such company. As of the date hereof, the
Company is not currently engaged in negotiations concerning any such
business combination.
Item 11. Security Ownership of Beneficial Owners and Management
The following table sets forth, as of January 4, 2001, based upon our
records and information obtained from the persons named below, certain
information concerning beneficial ownership of our shares of Common Stock
with respect to (I) each person known to own or more than 5% of our
understanding shares of Common Stock, (II) each of our executive officers
and directors, and (III) all of our executive officers and directors as a
group:
Amount Approximate
And Nature Percentage
Of Beneficial of Common
Identity Ownership Stock Owned
JBF Management (I) 2,050,500 16%
Gopal Sahota (I) 2,050,000 16%
Harmon J. Sangrit (I) 850,000 6%
Don Boudewyn(II) 50,000 .03%
Allen Schwabe(II) 50,000 .03%
Michael Tan(II) 225,000 1.7%
Curtis L. Mearns 50,000 .03%
All officers and directors as a Group(III) 375,000 1.79%
9
The address of the foregoing entities and persons are:
JBF Management, Inc.
1412 August Place
Cogoitlam, BC V4C3H3
Glopal Sahota
11349 75th Ave.
Delta, BC V4C3H3
Harminjit Sangha
12234 75th Ave.
Surrey, BC V5S4M8
Curtis L. Mearns
#212, 6888 Robson Drive
Richmond, BC V7C5T6
Michael Tan
4 Keng Chin Road
#02-01 Singapore, 258707
Don Boudewyn
5555 Lackner Circle
Richmond, BC V7E6A5
Allen Schwabe
1430 Beach grove Road
Delta, BC V4I1P2
The above parties acquired their stock from Floyd Robertson the former
president of the Company in May of 2000.
Item 12. Certain Relationships and Related Transactions
The shareholder, JBF Management, Inc., Gopal Sohot, and Harmanjit
Sumgrhi acquired their shares from the former president of the Company,
Floyd Robertson, in compliance with 4(1) of the Securities Act and with 13D
filings in May of 2000.
One million shares plus warrants were sold on May 2, 2000 to
full-accredited investors pursuant to Regulation D Rule 505/6.
Allen Schwabe the secretary of the company acquired 50,000 shares
service in the year 2000.
Mr. Boudewyn a director and Mr. Mearns a director received 50,000
shares each in the 5G transaction.
10
The Companys officers and directors are subject to the doctrine of
corporate opportunities pursuant to Chapter 78 Private Corporation for
the Nevada Revised Statute only insofar as it applied to business
opportunities in which the Company has indicated an express interest. If
the Company presents directors, such opportunities that may conflict with
business interest identified by the Company, such opportunities must be
disclosed to the Board of Directors and made available to the Company. In
the event that the Board shall reject an opportunity so presented and only
in that event, any of the Companys officers and directors may avail
themselves such an opportunity.
11
Item 13. Exhibits and Reports on 8-K
List of documents filed as part of this report:
(a) Exhibits
1. Acquisition Agreement 5G Wireless Communications, Inc dated December 10, .
2000.
2. Articles of Incorporation incorporated by reference to Form 10SB filed
December 15, 1999.
3. By laws incorporated by reference to Form 10SB filed December 15, 1999
4. Domicile change incorporated by reference Form 10SB filed December 15, 1999.
(b)Reports on 8K
8K regarding private placement and Corporate Amendment and forward
split filed May 16, 2000.
8K Change in Control filed June 9, 2000.
12
Part IV
Signatures
Pursuant to the Requirements of Section 13 or 15(d) of the Securities Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorize.
5 G Wireless Communications, Inc.
By:/S/ Don Boudewyn
Don Boudewyn, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the persons on behalf of the registrant and
in the capacities and on the dates indicated:
Signature Title Date
/S/ Don Boudewyn President April 10, 2001
Don Boudewyn
/S/Michael Tan Vice President April 10, 2001
Michael Tan
/S/ Allen Schwabe Secretary and CFO April 10, 2001
Allen Schwabe
Randy Simpson CPA, P.C.
11775 South Nicklaus Road
Sandy, Utah 84092
Fax & Phone (801) 572-3009
Board of Directors and Stockholders
5 G Wireless Communications, Inc.
(Formerly Tesmark, Inc.)
Las Vegas, NV
INDEPENDENT AUDITORS REPORT
We have audited the accompanying balance sheets of 5 G Wireless Communications,
Inc. (formerly Tesmark, Inc.) as of December 31, 2000 and December 31, 1999 and
the related statements of operations, shareholders equity and cash flows for
the years ended December 31, 2000 and December 31, 1999. These financial
statements are the responsibility of the Companys 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 the audit to obtain reasonable
assurance about 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.
We believe that our audit of the financial statements provides a reasonable
basis for our opinion.
In our opinion, based on our audit, the financial statements referred to above
present fairly, in all material respects, the financial position of 5 G Wireless
Communications, Inc. (formerly Tesmark, Inc.) as of December 31, 2000 and
December 31, 1999 and the results of its operations, shareholders equity and
cash flows for the years ended December 31, 2000 and December 31, 1999, in
conformity with generally accepted accounting principles.
Randy Simpson, CPA, P.C.
A Professional Corporation
March 29, 2001
Sandy, Utah
Randy Simpson CPA, P.C.
11775 South Nicklaus Road
Sandy, Utah 84092
Fax & Phone (801) 572-3009
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to (a) the inclusion in the Registration Statement of Westnet
Communications Group, Inc. on Form SB-2 of our reports dated June 25, 2000 and
May 23, 2000, relating to the financial statements of Westnet Communications
Group, Inc. as of May 31, 2000 and December 31, 1999, and for the periods from
inception, October 14, 1999 through December 31, 1999 and the five months ended
May 31, 2000 and (b) the reference to our firm in the Registration Statement
under the caption Experts.
Randy Simpson C. P. A. P. C.
Sandy, Utah
June 25, 2000
5 G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
BALANCE SHEETS
December 31, December 31,
ASSETS 2000 1999
Current Assets:
Cash $ 276 $ -
Other Current Assets:
Convertible notes receivable and accrued interest
57,829
Allowance for doubtful accounts
(57,829) -
Total Other Current Assets
276 -
Other Assets:
Advances for future acquisition
74,000 -
Total Other Assets
74,000 -
Total Assets $ 74,276 $ -
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Advances from shareholder $ 935 $ 835
Total Current Liabilities
935 835
Stockholders' Equity (Deficit):
Preferred Stock $.001 par value;
authorized 10,000,000 shares
no shares outstanding at
December 31, 2000 and
December 31, 1999.
- -
Common Stock, $.001 par value;
authorized 50,000,000 shares
issued and outstanding,
12,750,490 on December 31, 2000 and
7,500,300 shares on
December 31, 1999. (Restated for 3 for 1 split
on April 22, 2000)
12,750 2,500
Paid in Capital
142,431 2,600
Acculmulated Deficit
(81,840) (5,935)
Total Stockholders' Equity (Deficit)
73,341 (835)
Total Liabilities and Stockholders' Equity (Deficit) $ 74,276 $ -
See Accompanying Notes to the Financial Statements.
5 G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
STATEMENTS OF OPERATIONS
Year Year
Ended Ended
Dec. 31, 2000 Dec. 31, 1999
Interest Income: $ 2,829 $ -
Costs and Expenses:
Bad Debts 57,829 -
Consulting expenses 16,400 -
General and administravtive expenses 661 -
Professional fees 3,844 835
Total Expenses 78,734 835
Net Loss $ (75,905) $ (835)
Weighted Average Shares Common Stock Outstanding 8,363,341 7,500,300
Net Loss Per Common Share ($ 0.009) ($ 0.000)
See Accompanying Notes to the Financial Statements.
5 G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
STATEMENTS OF CASH FLOWS
Year Year
Ended Ended
Dec. 31, 2000 Dec. 31, 1999
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net Loss $ (75,905) $ (835)
CHANGES TO OPERATING ASSETS & LIABILITIES:
(Increase) decrease in allowance for doubtful accounts 57,829 -
Increase (decrease) in convertible note receivables (55,000) -
Increase (decrease) in accrual of interest (2,829) -
Net Cash Used In Operating Activities (75,905) (835)
CASH FLOWS USED IN INVESTMENT ACTIVITIES:
Advances for future acquisition (74,000) -
Net Cash Flows used in Investing Activities (74,000) -
CASH FLOWS FROM FINANCING ACTIVITIES:
Private placement of warrants and common stock 150,081 -
(Increase) decrease in advances from stockholders 100 835
Net Cash Flows from Financing Activities 150,181 835
Net Increase in Cash 276 -
Cash at Beginning of Period - -
Cash at End of Period $ 276 $ -
See Accompanying Notes to the Financial Statements.
5 G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
STATEMENT OF STOCKHOLDERS' EQUITY
INCEPTION TO DECEMBER 31, 2000
Common Common
Stock Stock Paid in
Shares Amount Capital
September 10, 1979 -- incorporated in Idaho
1,000 shares at par
$1.00 per share 1,000 $ 1,000 $ -
Net loss year ending December 31, 1979 - - -
September 10, 1995, common stock issued
for compensation at
$1.00 per share 1,750 1,750 -
Net loss year ending December 31, 1995 - - -
May 2, 1996 common stock issued
for compensation at
$1.00 per share 1,000 1,000
Net loss year ending December 31, 1996 - - -
January 3,1997 common stock issued
for compensation at $1.00
per share 1,250 1,250 -
Net loss year ending December 31, 1997 - - -
November 10, 1998 in connectio with merger and
establishment of Nevada Corporation a 500 for 1,
forward split of the common stock and a change in
par value from $1.00 to $.001 and 100 shares issued
for compensation. 2,495,100 (2,500) 2,600
Net loss year ending
December 31, 1998 - - -
Net loss year ending
December 31, 1999 - - -
April 22, 2000, common s
tock split 3 for 1 5,000,200 5,000 (5,000)
May 16, 2000, Common stock &
warrants sold at $.15
per share 1,000,000 1,000 149,081
December 12, 2000, common
stock split 1.5 for 1 4,250,190 4,250 (4,250)
Net loss year ending
December 31, 2000 - - -
Balances, December 31, 2000 12,750,490 $ 12,750 $ 142,431
Accumulated Total
Deficit Equity
September 10, 1979 -- incorporated in Idaho
1,000 shares at par $1.00 per share $ - $ 1,000
Net loss year ending December 31, 1979 (1,000) (1,000)
September 10, 1995, common stock issued
for compensation at $1.00 per share - 1,750
Net loss year ending December 31, 1995 (1,750) (1,750)
May 2, 1996 common stock issued
for compensation at $1.00 per share - 1,000
Net loss year ending December 31, 1996 (1,000) (1,000)
January 3,1997 common stock issued
for compensation at $1.00 per share - 1,250
Net loss year ending December 31, 1997 (1,250) (1,250)
November 10, 1998 in connection with merger and
establishment of Nevada Corporation a 500 for 1,
forward split of the common stock and a change in
par value from $1.00 to $.001 and 100 shares issued
for compensation. - 100
Net loss year ending December 31, 1998 (100) (100)
Net loss year ending December 31, 1999 (835) (835)
April 22, 2000, common stock split 3 for 1 - -
May 16, 2000, Common stock & warrants sold at $.15
per share - 150,081
December 12, 2000, common stock split 1.5 for 1 - -
Net loss year ending December 31, 2000 (75,905) (75,905)
Balances, December 31, 2000 $ (81,840) $ 73,341
See Accompanying Notes to the Financial Statements.
5 G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
Notes to Financial Statements
A. Organization and Accounting Policies
5 G Wireless Communications, Inc. (the Company) (formerly Tesmark, Inc.) was
incorporated September 10, 1979, as an Idaho corporation. The Company has viewed
various business opportunities since its formation; however, it has never
operated a business. The Company merged with Tesmark, Inc., a Nevada
corporation, on October 23, 1998; the net effect was to transfer the domicile of
the corporation from Idaho to Nevada. In connection with that merger, the stock
was forward split 500 for 1 resulting in an increase of total outstanding shares
to 2,500,100. The Company amended its articles of incorporation increasing its
authorized common shares to 50,000,000 and preferred stock to 10,000,000. The
Company incurred $1,355 in reorganizational costs in 2000, which it is expensing
in accordance with Statement of Position (SOP) 98-5, which requires that
organizational expenses be expensed at the time they are incurred rather than
amortized over a period of years.
B. Common Stock Issued for Compensation
The Company has issued shares of its common stock as compensation to its
officers, directors, shareholders and consultants in lieu of cash. The Company
has valued these services at the estimated fair market value of the services
rendered.
C. Convertible Promissory Note (Uncollectable), and Termination of Intent to
Acquire Interactive Engine, Inc.
On June 7, 2000 and June 23, 2000, the Company advanced funds for two promissory
notes of $20,000 each to Interactive Engine, Inc. On July 25, 2000 the Company
advanced another $15,000 to Interactive Engine, Inc., bringing the total loans
outstanding to $55,000. These notes were renewed for 90 additional days in
September and October of 2000. The notes bore interest at 10%, and were due in
90 days. Interactive Engine had the option of converting the entire $55,000 and
accrued interest into its common stock at terms, which were to be negotiated
prior to the 90-day renewal term of the notes. However, as of March 29, 2001,
the promissory notes remain unpaid. The Company believes the probability of
collecting on these notes to be highly unlikely, and as a result, has placed the
total amount due into an allowance for doubtful accounts.
The Company had also entered into a Letter of Intent to acquire the total
outstanding shares of Interactive Engine, Inc. for 3,000,000 shares of its
common stock and 287,508 shares which were to be issued for investment banking,
merger and acquisition fees. The terms of this transaction were to be impacted
by the convertible promissory notes issued to Interactive Engine, Inc. in June
and July of 2000. Interactive Engine, Inc. was, at that time, involved in the
travel agent business and marketed primarily through the internet and mass media
in airports and malls. This acquisition has not been completed as of March 29,
2001. Due to the inability to collect on the promissory notes previously
mentioned, the Company has elected to avoid any future activity or involvement
with Interactive Engine, Inc.
D. Private Placement of Common Stock and Warrants
In May 2000, the Company sold 20 units of common stock and warrants. Each unit
consisted of 50,000 shares of common stock and one Class A Warrant to purchase
50,000 shares of common stock at twenty cents ($.20) and one Class B Warrant to
purchase 50,000 shares of common stock at twenty-five ($.25) per share. The
Class A Warrants may be exercised upon issuance and expire 365 days from the
date of issuance, and the Class B Warrants may also be exercised upon issuance
and expire on the 730th day after issuance.
E. Rescission of Intent to Acquire Wireless Technology
On November 2, 2000, the Company entered into a memorandum of understanding
whereby the Company would have acquired 100% of the wireless technology from
Goldweb Technologies, Inc., a wholly owned subsidiary of Consolidated Gold Win
Ventures, Inc. of Canada.
Consideration for the purchase was to be cash and one million shares of the
Companys common stock. In addition, the Company was to pay CGW up to 1,500,000
shares on an earnout agreement for value added products and outside contracts
based on one share per $10.00 of income generated. Although final closing
documents were expected to be signed before the end of the year 2000, the
decision was made to rescind the acquisition and consequently, final documents
were never signed.
F. Acquisition Agreement with 5 G Partners
On December 1, 2000, the Company entered into an acquisition agreement with 5 G
Partners (a private Canadian partnership) to acquire a Canadian partnership,
content, ideas and proprietary known business and business model to a Telecom
Wireless solution. In exchange for 5 G Partners technology, the Company agreed
to pay $74,000 US dollars and 150,000 shares of common stock. Of the $74,000,
$60,000 has been advanced and is, as of March 29, 2001, being held in a Canadian
trust account until further instruction. The remaining $14,000 was advanced in
November and December of 2000 for consulting costs related to this acquisition.
In connection with the merger, the Company has changed its name from Tesmark,
Inc. to 5 G Wireless Communications, Inc..