UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q SB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter report ended March 31, 2001
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to ___________
Commission File number 000-28581
5G WIRELESS COMMUNICATIONS, INC.
(Exact name of small business issuer as registrant as specified in charter)
Nevada 82-0351882064
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2921 N. Tenaya Way, Suite 216,Las Vegas, NV 89128
(Address of principal executive office)
Registrants telephone no., including area code (702) 647-4877
N/A
(Former name, changed since last report)
Check 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), Yes [X] No [ ] and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the last practicable date.
Class Outstanding as of March 31, 2001
Common Stock, $0.001 13,550,490
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TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Heading Page
Item 1. Consolidated Financial Statements 1
Consolidated Balance Sheets December 31, 2000
And March 31, 2001 2
Consolidated Statements of Operations three months
Ended March 31, 2001 and March 31, 2000 3
Consolidated Statement of Stockholders Equity 4
Consolidated Statements of Cash Flows three months
Ended March 31, 2000 and 2001 5
Notes to Consolidated Financial Statements 6-9
Item 2. Managements Discussion and Analysis and
Result of Operations 10-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Security 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matter to a Vote of 11
Securities Holders
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 12
Signatures S-1
ii
PART 1 FINANCIAL INFORMATION
Item 1. Financial Statement
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
The unaudited balance sheet of the Company as of March 31, 2001, and the
related audited balance sheet of the Company as of December 31, 2000, the
unaudited statement of operations and cash flows for the three months ended
March 31, 2001 and 2000 and the audited statements of stockholders equity for
the period from September 10, 1979 through December 31, 2000 and the unaudited
stockholders equity for the period January 1, 2001 through March 31, 2001 are
attached hereto and incorporated herein by this reference.
Operating results for the quarter ended March 31, 2001 are not necessarily
indicative of the results that can be expected for the year ending December 31,
2001.
1
5G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
BALANCE SHEETS
(Unaudited) (Audited)
March 31, December 31,
ASSETS 2001 2000
Current Assets:
Cash $ 171 $ 276
Total Current Assets 171 276
Other Assets:
Convertible notes receivable
and accrued interest - 57,829
(Net of allowance for
doubtful accounts - $ 57,829
Goodwill-5G Partners 179,000 74,000
Total Other Assets 179,000 74,000
Total Assets $ 179,171 $ 74,276
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Advances from shareholder $ 9,941 $ 935
Total Current Liabilities 9,941 935
Stockholders' Equity:
Preferred Stock $.001 par value;
authorized 10,000,000 shares;
no shares outstanding at March 31,
2001 and December 31, 2000 - -
Common Stock, $.001 par value;
authorized 50,000,000 shares;
with 13,550,490 issued and
outstanding at March 31, 2001 and
12,750,490 at December 31, 2000. (Restated
for a 3 for 1 split
on April 22, 2000) 13,550 12,750
Paid-In Capital 701,631 142,431
Accumulated Deficit (545,951) (81,840)
Total Stockholders' Equity 169,230 73,341
Total Liabilities and Stockholders' Equity $ 179,171 $ 74,276
See Accompanying Notes to the Financial Statements
5G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Three Months
Ending Ending
March 31, 2001 March 31, 2000
Interest Income: $ - $ -
Expenses:
Consulting expenses 43,814 -
General and administrative expenses 122 835
Professional fees 175 -
Write-off of goodwill for acquisition
of technology from 5G Partners 420,000 -
Total Expenses 464,111 835
Net Loss $ (464,111) $ (835)
Weighted Average Shares
Common Stock Outstanding
(Restated for a 3 for 1 split
on April 22, 2000.) 12,556,035 7,500,300
Net Loss Per Common Share
basic and fully dilutive) $ (0.037) $ (0.000)
See Accompanying Notes to the Financial Statements.
5G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
STATEMENT OF STOCKHOLDERS' EQUITY
FROM INCEPTION (SEPTEMBER 10, 1979) TO MARCH 31, 2001
(UNAUDITED)
Common Common
Stock Stock
Shares Amount
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 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 2,495,100 (2,500)
Net loss year ending December 31, 1998 - -
Net loss year ending December 31, 1999 - -
April 22, 2000, common stock split 3 for 1 5,000,200 5,000
May 16, 2000, common stock & warrants sold
at $.15 per share 1,000,000 1,000
December 12, 2000, common stock split 1.5 for 1 4,250,190 4,250
Net loss year ending December 31, 2000 - -
March 20, 2001, 750,000 shares of common
stock were issued, valued at $.70 per share
(current market value) in connection 750,000 750
with the Company's recent technology with 5G Partners
March 20, 2001, 50,000 shares issued for consulting
compensation, valued at $.70 per share 50,000 50
Net loss for the three months ending March 31, 2001 - -
Balances at March 31, 2001 13,550,490 $ 13,550
Paid Accumulated Total
in capital 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 2,600 - 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 (5,000) - -
May 16, 2000, common stock & warrants sold
at $.15 per share 149,081 - 150,081
December 12, 2000, common stock split 1.5 for 1 (4,250) - -
Net loss year ending December 31, 2000 - (75,905) (75,905)
March 20, 2001, 750,000 shares of common
stock were issued, valued at $.70 per share
(current market value) in connection 524,250 - 525,000
with the Company's recent technology with 5G Partners
March 20, 2001, 50,000 shares issued for consulting
compensation, valued at $.70 per share 34,950 - 35,000
Net loss for the three months
ending March 31, 2001 - (464,111) (464,111)
Balances at March 31, 2001 $ 701,631 $ 545,951 $ 169,230
5G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
STATEMENTS OF CASH FLOWS
(UNAUDITED) March 31, March 31,
2001 2000
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net Loss $(464,111) $ (835)
EXPENSES NOT REQUIRING AND OUTLAY OF CASH:
Common stock issued in write-off
of goodwill-acquisition of
technology from 5G Partners $ 420,000 -
Common stock issued for compensation
(consulting fees) 35,000 -
Net Cash Used In Operating Activities (9,111) (835)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in advances from stockholders 9,006 835
Net Cash Flows from Financing Activities 9,006 835
Net Decrease in Cash (105) -
Cash at Beginning of Period 276 -
Cash at End of Period $ 171 $ -
SUPPLEMENTAL NON-CASH ACTIVITIES:
Common stock issued for goodwill-acquisition
of Technology 5G Partners $ 105,000 $ -
See Accompanying Notes to the Financial Statements
5G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
Notes to Financial Statements
MARCH 31, 2001
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 was expensed in
accordance with Statement of Position (SOP) 98-5. The statement requires that
organizational expenses be expensed at the time they are incurred rather than
amortized over a period of years.
B. Common Stock
From September 1995 through January 1997, the Company issued 4,000 shares of
common stock, valued at $1.00 per share (par value), as compensation to its
officers, directors, shareholders and consultants in lieu of cash. On November
10, 1998, the Company elected to change par value from $1.00 to $.001 and then
issued another 100 shares at $.001 per share (par value). On March 20, 2001, the
Company issued 50,000 shares of common stock, valued at $.70 per share (fair
market value). The shares were issued to one of Companys officers as
compensation for consulting.
C. Private Placement of Common Stock and Warrants
In May 2000, the Company sold 20 units of common stock and warrants. Each unit
consisted of 50,000 shares of common stock and one Class A Warrant to purchase
50,000 shares of common stock at twenty cents ($.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.
D. 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 to be negotiated prior to the
90-day renewal term of the notes. However, as of May 15, 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 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. However, due to the inability to collect on the
promissory notes previously mentioned, the Company elected to withdraw the
acquisition and intends to avoid any future activity or involvement with
Interactive Engine, Inc.
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 5G
Partners (a private Canadian partnership) comprised of content, ideas and
proprietary known business in relation to wireless technology systems. It is the
Companys intention to create and service the Asian marketplace with a superior
wireless technology system by creating a 5.3 Ghz 5.9 Ghz high-speed Internet
access and data transport system, (as apposed to the currently used 2.4 Ghz). In
order to successfully achieve this undertaking and stay abreast of the
ever-changing world of wireless technology, the Company continues to pursue
innovative ideas, partners and acquisitions in addition to the current
acquisition with 5G Partners.
As stated in the contract, the Company agreed to pay $74,000 US dollars and
150,000 shares of common stock in exchange for 5G Partners technology. Of the
$74,000, $60,000 was advanced and deposited into a Canadian trust account until
further instruction. The remaining $14,000 was advanced in November and December
of 2000 for consulting costs related to the acquisition. In connection with the
merger, the Company has changed its name from Tesmark, Inc. to 5G Wireless
Communications, Inc..
On March 6, 2001, the Company issued a press release reporting a Memorandum of
Understanding had been reached. In order to complete the acquisition, the
original agreement was amended, changing the total number of shares issued from
150,000 shares to 750,000 shares. Just prior to March 31, 2001, the acquisition
with 5G Partners closed with the issuance of 750,000 restricted shares of common
stock. The shares, valued at $.70 per share (fair market value), were issued to
the Companys three officers (Curtis Mearns, Richard Lajeunesse, and Don
Boudewyn each received 250,000 shares), as specified in the newly amended
agreement.
G. ACQUISITION AGREEMENT WITH PETERSON INVESTMENT,
PTE. LTD.
On March 9, 2001, the Company entered into an acquisition with Peterson
Investment, Pte Ltd., a privately held company providing wireless data solutions
in Singapore, wherein, they agreed to assume control of Peterson Investment
after verifying, through an independent attorney in Singapore, the corporate
structure and names of all of the shareholders. Additional terms include the
issuance of 1,000,000 shares of the Companys common stock for each of the 11
shares of Petersons stock (11,000,000 shares). As of the end of the first
quarter 2001, terms were still being negotiated.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Going Concern and Ability of the Company to Continue
The issuer was originally organized as a Idaho corporation under the name
of Tesmark, Inc., on September 10, 1979. The Company by Agreement of Merger,
signed on November 10, 1998, was merged into Tesmark, Inc., a Nevada
corporation. In May of 2000 the Company raised $150,000 from the sale of
1,000,000 shares of common stock at $.15 per share. In June of 2000 the Company
singed a Letter of Intent to acquire Interactive Engine, Inc., a Nevada
corporation. The Company loaned Interactive Engine $55,000. As of March 29, 2001
the notes remain unpaid and the Company believes the probability of collection
is unlikely and the total issue has been placed into an allowance for doubtful
accounts. The Company has rescinded the Letter of Intent.
On December 1, 2000 the Company entered into an Acquisition Agreement to
acquire 5 G Wireless Communications, Inc., for cash and securities. At a Special
Meeting of Shareholders held January 19, 2001, the shareholders approved the
acquisition for $74,000 cash and 150,000 shares of stock. The acquisition was
amended to 750,000 shares of common stock.
The Company has a net operating loss of $125,951 since inception through
March 31, 2001.
The Companys financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates
realization of assets and liquidation of liabilities in the normal course of
business. The Company has not established revenue sufficient to cover its
operating expenses and allow it to continue as a going concern. Management
believes that the Company will soon establish sufficient revenue to cover its
operating costs. The Company has borrowed from shareholders. On March 30, 2001
the Company sold 200,000 shares of common stock for $50,000. The funds were
deposited to the Companys account on April 2, 2001. The Corporate name was
changed to 5 G Wireless Communications, Inc., on January 24, 2001.
Liquidity and Capital Resources
As of March 31, 2001 the Company had $171 in current assets and equity of
$169,230 of which to pay its obligations. As of March 31, 2000 the Company had
no current assets and equity of $835. In addition the Company sold 200,000
shares of common stock at $.25 per share for $50,000 which funded on April 2,
2001.
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Results of Operations
For the three months ended March 31, 2001 the Company has a net operating
loss of $464,111 compared to a net operating loss of $835 in March 31, 2000. The
Company had revenues of $0 in the three months ended March 31, 2001 and $0 in
the three months ended March 31, 2000.
Sale of Common Capital Stock
As of March 31, 2001 the Company has 13,550,490 shares of common stock.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
The Company issued 50,000 shares of common stock for services to Allen
Schwabe as direct or and officer and 750,000 shares of common stock to three
individuals, pursuant to the technology purchase approved by shareholders on
January 19, 2001.
ITEM 3. DEFAULTS UPON SENIOR SECURITES
None.
ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders held January 19, 2001 the
shareholders ratified an Acquisition Agreement for $74,000 in cash and 150,000
shares of common stock, (2) Amend the Articles of Incorporation changing the
name of the corporation to: 5G Wireless Communications, Inc., and (3) elected
Curtis L. Mearns, Michael Tan, Don Boudewyn, and Allen Schwabe as directors to
serve until the next annual meeting or until their successors are duly
qualified.
ITEM 5. OTHER INFORMATION
None.
11
ITEM 6. EXHIBITS AND REPORTS ON 8-K
a. Form 10K SB filed by reference on April 17, 2001
b. Report on 8K
Filed February 14, 2001.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed in its behalf by the
undersigned hereto duly authorized.
5 G WIRELESS COMMUNICATIONS , INC.
Dated: May 18, 2001
By:/S/ Don Boudewyn
Don Boudewyn
President
By:/S/ Allen Schwabe
Allen Schwabe
Secretary
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