UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q SB/A
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter report ended June 30, 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 June 30, 2001
Common Stock, $0.001 17,357,157
i
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Heading Page
Item 1. Consolidated Financial Statements 1
Consolidated Balance Sheets December 31, 2000 and
June 30, 2001 2
Consolidated Statements of Operations three months
Ended June 30, 2001 and June 30, 2000 3
Consolidated Statement of Stockholders Equity 4-5
Consolidated Statements of Cash Flows three months
Ended June 30, 2001 and June 30 2000 6
Notes to Consolidated Financial Statements 7-12
Item 2. Managements Discussion and Analysis and
Result of Operations 13-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Security 14-15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matter to a Vote of 15
Securities Holders
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
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 June 30, 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 six months ended June
30, 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 June 30, 2001 are
attached hereto and incorporated herein by this reference.
Operating results for the quarter ended June 30, 2001 are not necessarily
indicative of the results that can be expected for the year ending December 31,
2001.
Randy Simpson, CPA. PC
11775 South Nicklaus Road
Sandy, UT 84092
Fax and Phone (801) 572-3009
August 20, 2001
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in this registration Statement of 5 G WIRELESS
COMMUNICATIONS, INC. on Form S-B, for our report relating to the financial
statements of 5 G WIRELESS COMMUNICATION, INC., dated June 30, 2001.
/S/ Randy Simpson
Randy Simpson, CPA, PC
5 G WIRELESS COMMUNICATIONS, iNC.
(Formerly Tesmark, Inc.)
FINANCIAL STATEMENTS
Balance Sheets ad of
June 30, 2001 and december 31, 2000
Statement of Operations, Cash Flows and Stockholders Equity of the Six Months
Ended
June 30, 2001 & June 30, 2000
Footnotes to Financial Statements
Randy Simpson, CPA, PC
1175 South Nicklaus Road
Sandy, Utah 84092
Fax & Phone (801) 572-3009
Board of Directors and Stockholders
5G Wirless Communicationsk, Inc.
(Formerly Tesmark)
lav Vegas, NV 89027
INDEPENDENT AUDITORS REVIEW
We have reviewed the accompanying balance sheets of 5 G Wireless Communications,
Inc., (Formerly Tesmark, Inc.) as of June 30, 2001 and December 31, 2000, and
the related statements of operations, stockholders equity and cash flos for the
six months ending June 30, 2001 and 2000, in accordance with the Statements on
Standards of Accounting and review Services issued by the American Institute of
certified Public Accountants. All information included on these financial
statements is the representation of the management of 5G Wirless Communicaitons,
Inc.
A review consist princiaplly of inquiries of company personel and analytical
procedures applied to financial data. It is sunstantially less in scope than
an audit in accordance of an opinion regarding the financail
statements takes as a whole. Accordlingly, we do not express such opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with the generally accepted accounting principles.
/S/ Randy Simpson
randy Simpson, CPA, PC
A Professional Corporatio
August 20, 2001
Sandy, Utah
5G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
BALANCE SHEETS
June 30, December 31,
ASSETS 2001 2000
(UNAUDITED) (AUDITED)
Current Assets:
Cash $ 243 $ -
Deposit 300
Accounts receivable 33,135 -
Prepaid marketing & consulting services 161,865 276
Total Current Assets 195,543 276
Fixed Assets:
Computer Equipment 1,851 -
Accumulated Depreciation (30) -
Total Fixed Assets 1,821 -
Other Assets:
Convertible notes receivable
and accrued interest 57,829 57,829
Allowance for doubtful accounts (57,829) (57,829)
Goodwill - 5G Acquisition Costs 179,000 74,000
Amortization of 5G Acquisition/Goodwill Costs (7,458) -
Total Other Assets 171,542 74,551
TOTAL ASSETS $ 3668,906 $ 74,827
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 24,502 $ -
Accrued management/consutling fees 58,000 -
Advances from officers/directors 6,718 -
Advances from shareholders 40,041 935
Total Current Liabilities 129,261 935
Stockholders' Equity:
Preferred Stock $.001 par value;
authorized 10,000,000 shares;
no shares outstanding at
June 30, 2001 and December
31, 2000. - -
Common Stock, $.001 par value;
authorized 50,000,000 shares;
with 17,357,157 issued
and outstanding at June 30, 2001 and
12,750,490 at December
31, 2000. (Restated for a
3 for 1 split
on April 22, 2000) 17,357 12,750
Paid-In Capital 1,245,390 142,431
Accumulated Deficit (976,202) (81,840)
Total Stockholders' Equity 239,645 73,341
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 368,906 $ 74,276
.
See Accompanying Notes to the Financial Statements.
5G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
STATEMENTS OF OPERATIONS
(UNAUDITED)
6 Months 6 Months
Ended Ended
June 30, 2001 June 30, 2000
Interest Income: $ - $ 164
Expenses:
Amortization & depreciation expenses 7,488 135
Consulting & marketing expenses 248,776 -
General and administrative expenses 18,549 1,217
Write-off of goodwill for acquisition of
technology from 5G Partners 420,000 -
Officer compensation & management fees 253,900 -
Professional fees 20,549 -
Total Expenses 894,362 1,352
Net Loss $ (894,362) $ (1,188)
(Restated for a 3 for 1 split on April 22, 2000.)
Weighted Average Shares
Common Stock Outstanding 14,126,721 4,688,023
Net Loss Per Common Share
(basic and fully dilutive) $ (0.063) $ (0.000)
See Accompanying Notes to the Financial Statements.
Interest Income: $ - $ 164
Expenses:
Amortization & depreciation expenses 7,488 68
Consulting & marketing expenses 204,962 -
General and administrative expenses 18,253 1,217
Write-off of goodwill for acquisition of
technology from 5G Partners - -
Officer compensation & management fees 179,000 -
Professional fees 20,549 -
Total Expenses 430,252 1,285
Net Loss $ (430,252) $ (1,121)
(Restated for a 3 for 1 split on April 22, 2000.)
Weighted Average Shares
Common Stock Outstanding 15,718,284 6,851,902
Net Loss Per Common Share
(basic and fully dilutive) $ (0.030) (0.000)
See Accompanying Notes to the Financial Statements.
5G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
Common Common
Stock Stock Paid-in
Shares Amount Capital
September 10, 1979; the Company was incorporated
in Idaho, establishing a par value of $1.00 per share;
1,000 shares were issued 1,000 $ 1,000 $ -
Net loss for the year ended
December 31, 1979 - - -
September 10, 1995; common stock issued at $1.00
per share for compensation. 1,750 1,750 -
Net loss for the year ended
December 31, 1995 - - -
May 2, 1996; common stock issued at $1.00 per share
for compensation. 1,000 1,000 -
Net loss for the year ended
December 31, 1996 - - -
January 3,1997; common stock issued for
compensation at $1.00 per share. 1,250 1,250 -
December 31, 1997 - - -
November 10, 1998; common stock forward split,
500 for 1, 100 shares issued for compensation and
a change in par value from $1.00 to $.001, all in
connection with the merger and establishment
of the Nevada Corporation. 2,495,100 (2,500) 2,600
Net loss for the year ended
December 31, 1998 - - -
Net loss for the year ended
December 31, 1999 - - -
April 22, 2000, common stock
plit 3 for 1. 5,000,200 5,000 (5,000)
May 16, 2000; 1,000,000 of common stock
and warrants sold
at $.15 per share. 1,000,000 1,000 149,080
December 12, 2000; common
atock split 1.5 for 1. 4,250,190 4,250 (4,250)
Net loss for the year ended
December 31, 2000 - - -
March 20, 2001; 750,000 shares of common
stock were issued at $.70 per share
(the current market value)
n connection 750,000 750 524,250
with the Company's recent
merger with 5G Partners.
March 20, 2001; 50,000 shares issued for consulting
compensation at $.70 per share. 50,000 50 34,950
April 1, 2001; 350,000 shares issued for consulting
contract at $.25 per share. 350,000 350 87,150
April 1, 2001; 250,000 shares issued for consulting
compensation at $.25 per share. 250,000 250 62,250
April 2, 2001; 200,000 shares issued at $.25 per share,
for cash . 200,000 200 49,800
May 1, 2001; 300,000 shares issued for consulting compensation,
valued at $.10 per share 300,000 300 29,700
May 4, 2001; 1,070,000 shares issued for officer/consulting
compensation,
valued at $.10 per share 1,070,000 1,070 105,930
June 1, 2001; 75,000 shares issued for consulting contract,
valued at $.10 per share. 75,000 75 7,425
June 12, 2001; 675,000 shares issued in connection with a
consulting contract, valued
at $.10 per share. 675,000 675 66,825
June 15, 2001; 580,000 shares issued in connection with a
consulting agreement, valued at $.10 per share; & 200,000
shares issued for marketing compensation, also valued at
$.10 per share. 780,000 780 77,220
June 26, 2001; 106,667 shares issued in connection with
a marketing agreement,
valued at $.10 per share. 106,667 107 10,560
Net Loss for the Six Months
nded June 30, 2001 - - -
Balances at the Six Months
Ended June 30, 2001 17,357,157 $ 17,357 $ 1,245,390
Accumulted Total
Deficit Equity
September 10, 1979; the Company was incorporated
in Idaho, establishing a par value of $1.00 per share;
1,000 shares were issued $ - $ 1,000
Net loss for the year ended
December 31, 1979 (1,000) (1,000)
September 10, 1995; common stock issued at $1.00
per share for compensation. - 1,750
Net loss for the year ended D
ecember 31, 1995 (1,750) (1,750)
May 2, 1996; common stock issued at $1.00 per share
for compensation. - 1,000
Net loss for the year ended
December 31, 1996 (1,000) (1,000)
January 3,1997; common stock issued for
compensation at $1.00 per share. - 1,250
Net loss for the year ended
December 31, 1997 (1,250) (1,250)
November 10, 1998; common stock forward split,
500 for 1, 100 shares issued for compensation and
a change in par value from $1.00 to $.001, all in
connection with the merger and establishment
of the Nevada Corporation. - 100
Net loss for the year ended
December 31, 1998 (100) (100)
Net loss for the year ended
December 31, 1999 (835) (835)
April 22, 2000, common
stock split 3 for 1. - -
May 16, 2000; 1,000,000 of common stock
and warrants sold
at $.15 per share. - 150,080
December 12, 2000; common
stock split 1.5 for 1. - -
Net loss for the year ended
December 31, 2000 (75,905) (75,905)
March 20, 2001; 750,000 shares of common
stock were issued at $.70 per share
(the current market value)
in connection - 525,000
with the Company's recent
merger with 5G Partners.
March 20, 2001; 50,000 shares issued for consulting
compensation at
$.70 per share. - 35,000
April 1, 2001; 350,000 shares issued for consulting
contract at $.25
per share. - 87,500
April 1, 2001; 250,000 shares issued for consulting
compensation at
$.25 per share. - 62,500
April 2, 2001; 200,000 shares issued at $.25 per share,
for cash . - 50,000
May 1, 2001; 300,000 shares issued for consulting compensation,
valued at $.10 per share - 30,000
May 4, 2001; 1,070,000 shares issued for officer/consulting
compensation, valued at $.17 per share - 107,000
June 1, 2001; 75,000 shares issued for consulting contract,
valued at $.10 per share. - 7,500
June 12, 2001; 675,000 shares issued in connection with a
consulting contract,
valued at $.10 per share. - 67,500
June 15, 2001; 580,000 shares issued in connection with a
consulting agreement, valued at $.10 per share; & 200,000
shares issued for marketing compensation, also valued at
$.10 per share. - 78,000
June 26, 2001; 106,667 shares issued in connection with
a marketing agreement,
valued at $.10 per share. - 10,667
Net Loss for the Six Months
Ended June 30, 2001 (940,386) (940,386)
Balances at the Six
Months Ended June 30, 2001 $(1,022,226) $ 240,521
5G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
6 Months 6 Months
Ended Ended
June 30, 2001 June 30, 2000
Cash Flows used in Operating Activities:
Net Loss $(894,362) $ (1,188)
Expenses Not Requiring an Outlay of Cash:
Common stock issued in write-off
of goodwill-acquisition
of technology from 5G Partners 420,000 -
Common stock issued for consulting
marketing compensation 323,802 -
Provision for depreciation
& amortization 7,488 136
Changes to Operating Assets a
nd Liabilities:
Increase in deposits (300)
Increase in accrued
management/consulting fees 58,000 -
(Increase)decrease in accounts
payable & accrued interest 24,502 (164)
Net Cash used in Operating Activities (60,871) (1,216)
Cash Flows used in Investing Activities:
Organizational costs incurred - (1,355)
Capital expenditure - computers (1,851) -
Net Cash used in Investing Activities (1,851) (1,355)
Cash Flows from Financing Activities:
Common stock issued
for cash 50,000 150,080
Increase in accounts
receivable (33,135)
Notes receivable - (40,000)
Increase in advances
from officers/directors 6,718 -
Increase in advances
from stockholders 39,106 100
Advances for acquisitions - -
Net Cash from Financing Activities 62,689 110,180
Net Increase (Decrease) in Cash
(33) 107,609
Cash at Beginning of Period 276 -
Cash at End of Period $ 243 $ -
Supplemental Non-Cash Activities:
Common stock issued for
pre-paid marketing/consulting
contracts 161,862 -
See Accompanying Notes to the Financial Statements.
5G WIRELESS COMMUNICATIONS, INC.
(Formerly Tesmark, Inc.)
Notes to Financial Statements
JUNE 30, 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. During the second quarter of 2001, shares issued
for consulting and marketing compensation were as follows: 1,420,000 shares at
$.17 per share, 250,000 at $.25 per share and 500,000 at $.10 per share. Also
during the 2nd quarter, a total of 1,436,667 shares were issued in connection
with various consulting and marketing contracts; all were issued at $.10 per
share.
C. Private Placement of Common Stock and Warrants
In May 2000, the Company sold 20 units of common stock and warrants. Each unit
consisted of 50,000 shares of common stock and one Class A Warrant to purchase
50,000 shares of common stock at twenty cents ($.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. On April 2, 2001, the Company issued
200,000 shares of common stock for cash, valued at $.25 per share
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.
The Company has recorded $179,000 as goodwill in connection with the issuance of
the stock and cash, and has written off $420,000 as an adjustment to the value
of goodwill in the quarter ended March 31, 2001. The write-off reduces the value
of the transaction to the estimated fair market value of the technology
transferred to the Company in the transaction. The Company will amortize the
goodwill over 12 years and periodically assess the marketability and value of
the technology to determine if an impairment in its value has occurred, relative
to the Companys utilization of the technology and its viability in the
marketplace.
G. ACQUISITION AGREEMENT WITH PETESON INVESTMENT,
Pte. Ltd.
On March 9, 2001, the Company entered into an acquisition with Peteson
Investment, Pte Ltd., a privately held company providing wireless data solutions
in Singapore, wherein, the Company agreed to assume control of Peteson
Investment after verifying, through an independent attorney in Singapore, the
corporate structure and names of all of the shareholders. Tentative terms of the
acquisition provide for the issuance of 12,000,000 restricted shares of the
Companys common stock for all of the outstanding shares of Peteson Investment,
Pte Ltd.
Although the Company issued an 8k announcing the intended closing of the Peteson
Investment acquisition on May 5, 2001, as of August 15, 2001, Peteson had failed
to meet all of the conditions of the agreement, resulting in the inability to
complete the acquisition as projected. Currently, the 12,000,000 shares the
Company agreed to issue at closing are being held in a trust account and will be
issued as soon as Peteson satisfactorily completes all agreed upon obligations.
Although Peteson Investment, Pte, Inc. has yet to complete these terms, the
Company is confident that closing of this acquisition will take place at some
point during the 3rd quarter of 2001.
H. PROPOSED ACQUISITION OF DATAONE COPORATION Pte Ltd.
On March 15, 2001, the Company entered into a Memorandum of Understanding with
DataOne Corporation Pte Ltd. (D1Corp) a subsidiary of Keppel Telecommunications
and Transportation Ltd. The Memorandum outlines the formation of a new business
venture with D1Corp for high- speed connectivity and value added services over
wireless local area network and wide area network systems. The Memorandum
outlines assets of DICorp, which will be transferred to the venture in return
for a combination of cash and stock at mutually agreed upon price. Definitive
terms have not yet been finalized.
I. ACQUISITION AGREEMENT WITH SKYHUB ASIA
The Company entered into an acquisition with Skyhub Asia, as well as a letter of
agreement in May of 2001. However, as of August 15, 2001, Skyhub had not
completed their terms, causing the Company to feel it necessary to renegotiate
the conditions, as well as the date set for closing the acquisition.
J. ACQUISITION AGREEMENT WITH E-NETEGRATIONS, INC.
On April 24, 2001, the Company announced a letter of intent to acquire 100% of
the capital stock of e-netegrations, Inc. In exchange, 5G will provide financing
for the completion of all existing contracts in the United States and for the
Hotel Industry. Terms are still being negotiated.
K. HIGH SPEED WIRELESS SERVICE AGREEMENTS
The Company entered into agreements with Suntec City, Singapore and Singapore
Marriott Hotel to install high-speed wireless data networks. As of August 15,
2001, terms for both agreements were still in the negotiation stages.
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 $74,000 cash and 750,000 shares of common stock.
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.
The Company had a net operating loss of $976,202 since inception through
June 30, 2001.
Liquidity and Capital Resources
As of June 30, 2001 the Company had current assets of $195,543. The current
are comprised of $243 in cash, $33,135 in accounts receivable, $161,865 in
prepaid expenses and a $300 deposit. As of June 30, 2001 the Company had
$129,261 in current liabilities. The Company sold 200,000 shares of common stock
at $.25 per share which funded on April 2, 2001 for a total of $50,000.
13
Results of Operations
For the six months ended June 30, 2001 the Company had no revenues compared
to $164 in interest income for the six months ended June 30, 2000. There was a
$248,776 increase in consulting and marketing expense as of June 30, 2001
compared to the same period of 2000. This is attributed to the companys efforts
of implementing its business plan. Depreciation and amortization also increased
by $7,353 for the same period of 2001. General and administrative costs were up
$17,332, as well as an increase in Professional fees in the amount of $20,549
for the first 6 months of 2001 compared to the same period of 2000. This can
also be attributed to the implementation of the Companys business plan. There
was the write off of $420,000 in Goodwill associated with the acquisition of 5 G
partners. For the 6 months ended June 30, 2001 there was $179,000 in officer
compensation and management fees compared to $0 for the first 6 months of 2000.
For the 6 months ended June 30, 2001 there was a net loss of $(894,362) compared
to a net loss of $(1,188) for the same period last year.
For the three months ended June 30, 2001 there were no revenues compared to
interest income of $164 for the same period last year. For the three months
ended June 30, 2001 compared to June 30, 2000 consulting and marketing expenses
were up $204,962, general and administrative expenses were up $17,036, and
professional fees increased $20,549. For the three months ended June 30, 2001
the company had a net loss of $(430,252) compared to a net loss of $(1,121) for
the same period last year. This is all due to the company implementing their
business plan. Officer and executive compensation increased $179,000, for the
three months ended June 30, 2001 compared to the same period of 2000.
Sale of Common Stock
On April 2, 2001 the company sold 200,000 shares at $.25 per share to one
individual for $50,000 cash. The shares were issued under Section 4(2) and 4(6)
of the 1933 Securities Act and bear a restrictive legend.
As of June 30, 2001 the company had 17,357,157 shares of common stock
outstanding.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
On April 1, 2001 the company issued 350,000 shares of common stock at $.25
per share to Cameron Robb per a consulting
contract valued at $87,500.
14
On April 1, 2001 the company issued 250,000 shares of common stock valued
at $.25 to Allen Schwabe for consulting valued at $62,500.
On April 2, 2001 the company issued 200,000 shares of common stock valued
at $.25 to John Friessen for cash valued at $50,000.
On May 1, 2001 the company issued 300,000 shares of common stock valued at
$.10 to Moh Tai Song for consulting valued at $30,000.
On May 4, 2001 the company issued 1,070,000 shares of common stock valued
at $.10 for consulting fee for a total of $181,900. 350,000 common shares were
issued to Cameron Robb and 720,000 common shares were issued to Michael Tan.
On June 1,2001 the company issued 75,000 shares valued t $.10 to Action
Stock for consulting valued at $7,500.
On June 12, 2001 the company issued 675,000 shares of common stock valued
at $.10 to Action Stock for consulting valued at $67,500.
On June 15, 2001 the company issued 580,000 shares of common stock valued
at $.10 to Veritas Communications for consulting valued at $58,000.
On June 15, 2001 the company issued 200,000 shares of common stock valued
at $.10 to Kevin race for marketing valued at $20,000.
On June 26, 2001 the company issued 106,667 shares of common stock valued
at $.10 for a marketing agreement to Market Force valued at $10,667.
All of the above issued shares were issued under Section 4(2) and 4(6) for
the 1933 Securities Act and bear a restrictive legend.
As of June 2001 the company had 17,357,157 shares issued and outstanding.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS
None.
15
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON 8-K
a. Form 10KQ SB filed by reference on May 21, 2001
b. Report on 8K
Filed by reference on June 6, 2001
16
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: August 20 2001
By:/S/ Michael Tan
Michael Tan
President
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