UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C., 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarter ended June 30, 2004
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period to
Commission file number: 000-30448
5G WIRELESS COMMUNICATIONS, INC.
(Name of small business issuer in its charter)
NEVADA 20-0420885
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
4136 DEL REY AVENUE 90292
MARINA DEL REY, CALIFORNIA (Zip Code)
(Address of principal executive offices)
Issuer's telephone number: (310) 448-8022
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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. YES [X]
NO [ ]
Number of shares of Common Stock outstanding as of August 16, 2004: 435,282,283
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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5G WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARY
TABLE OF CONTENTS
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Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet as of June 30,
2004......................................................3
Condensed Consolidated Statements of Operations
for the six months ended June 30, 2004 and June 30,
2003......................................................4
Condensed Consolidated Statements of Operations
for the three months ended June 30, 2004 and June 30,
2003......................................................5
Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 2004 and June 30,
2003......................................................6
Notes to Condensed Consolidated Financial Statements......7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................12
Item 3. Controls and Procedures..................................20
PART II OTHER INFORMATION....................................................21
Item 1. Legal Proceedings........................................21
Item 2. Changes in Securities and Use of Proceeds................21
Item 3. Defaults Upon Senior Securities..........................21
Item 4. Submission of Matters to a Vote of Security Holders......21
Item 5. Other Information........................................21
Item 6. Exhibits and Reports on Form 8-K.........................21
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5G WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2004
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(UNAUDITED)
ASSETS
Current Assets
Cash $ 89,372
Accounts receivable, net 37,445
Inventory 43,284
Prepaid expenses and other current assets 39,520
Total current assets 209,621
Property and Equipment, net 84,272
------------
Total Assets $ 293,893
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 303,616
Accrued expenses 37,232
Notes payable 81,203
Convertible notes payable, net of
discount, current portion 135,000
------------
Total current liabilities 557,051
Long-Term Liabilities
Convertible notes payable, net of discount,
long-term portion 762,377
Commitments and Contingencies
Stockholders' Deficit
Preferred stock, $0.001 par value,
10,000,000 shares authorized;
no shares issued and outstanding --
Common stock, $0.001 par value, 800,000,000
shares authorized;
416,055,010 shares issued and outstanding as of June 30, 2004 416,055
Additional paid in capital 14,209,244
Accumulated Deficit (15,650,834)
------------
Total stockholders' deficit (1,025,535)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 293,893
============
See accompanying notes to these financial statements
3
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5G WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2004 AND 2003
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(UNAUDITED)
2004 2003
------------- -------------
REVENUES $ 183,795 $ 71,639
COST OF REVENUES 54,729 57,256
------------- -------------
GROSS PROFIT 129,066 14,383
------------- -------------
OPERATING EXPENSES
General and administrative 1,129,022 433,284
Salaries and related 762,520 391,807
Depreciation 42,190 32,545
------------- -------------
TOTAL OPERATING EXPENSES 1,933,732 857,636
------------- -------------
OPERATING LOSS (1,804,666) (843,253)
Interest expense, net 75,713 2,468
------------- -------------
NET LOSS $ (1,880,379) $ (845,721)
============= =============
BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.01) $ (0.00)
============= =============
BASIC AND DILUTED WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING 334,203,336 212,114,509
============= =============
See accompanying notes to these financial statements
4
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5G WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED JUNE 30, 2004 AND 2003
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(UNAUDITED)
2004 2003
------------- -------------
REVENUES $ 117,246 $ 53,180
COST OF REVENUES 25,289 57,256
------------- -------------
GROSS PROFIT 91,957 (4,076)
------------- -------------
OPERATING EXPENSES
General and administrative 275,873 209,368
Salaries and related 227,547 394,495
Depreciation 21,868 16,427
------------- -------------
TOTAL OPERATING EXPENSES 525,288 620,290
------------- -------------
OPERATING LOSS (433,331) (624,366)
Interest expense, net 60,095 2,468
------------- -------------
NET LOSS $ (493,426) $ (626,834)
============= =============
BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.00) $ (0.00)
============= =============
BASIC AND DILUTED WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING 374,589,830 232,515,786
============= =============
See accompanying notes to these financial statements
5
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5G WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2004 AND 2003
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(UNAUDITED)
2004 2003
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,880,379) $ (845,721)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET
CASH USED IN OPERATING ACTIVITIES
Amortization of discount on
convertible notes payable 47,975 --
Issuance of common stock for services 1,484,342 692,179
Depreciation and amortization 42,190 32,545
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Accounts receivable (30,340) (5,378)
Inventory (38,784) --
Prepaid expenses and other current assets 38,670 (124,140)
Accounts payable and accrued expenses (635,952) (129,381)
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (972,278) (121,134)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (32,356) (23,575)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (32,356) (23,575)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of notes payable (8,164) 155,460
Issuance of common stock for cash -- 0
Proceeds from issuance of convertible
debt, net of issuance costs 890,500 --
Principal repayments on convertible debt -- 0
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 882,336 155,460
----------- -----------
NET DECREASE IN CASH (122,298) 10,751
CASH AT BEGINNING OF PERIOD 211,670 5,258
----------- -----------
CASH AT END OF PERIOD $ 89,372 $ 16,009
=========== ===========
See accompanying notes to the financial statements for additional information
relating to non-cash investing and financing activities during the period ended
June 30, 2004.
6
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5G WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARY
NOTES FOR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
(UNAUDITED)
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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND NATURE OF OPERATIONS
5G Wireless Communications, Inc., a Nevada corporation ("Company"), was
incorporated in September 1979. In March 2001, the Company merged with 5G
Partners, a private Canadian partnership, resulting in a name change to the
current name. In April 2002, the Company acquired 100% of Wireless Think Tank, a
privately held entity. The accompanying consolidated statements include results
of Wireless Think Tank operations from the date of acquisition.
The Company provides patent pending, innovative wireless technology. It designs,
builds, markets and services Wi-Fi compatible wireless broadband systems. The
Company had built a Wireless Internet Service network in the New York State area
for research and development. In July 2003, the Company discontinued serving
this area and has moved all research and development to its facilities in Marina
Del Rey, California. In conjunction with this move, it changed its focus from a
service provider to a manufacturer of integrated wireless solutions to create
large and efficient wireless local area networks and wide area networks with far
less equipment and expense than competitors. Equipment sales in the first
quarter 2004 result principally from the sale and installation of wireless
equipment to customers in Southern California. Revenues in the first quarter
2003 are the result of the delivery of broadband access to residential and
business subscribers, web hosting and design, and engineering consulting
services.
PRINCIPLES OF CONSOLIDATION
The condensed consolidated financial statements include the accounts of 5G
Wireless Communications, Inc. and its wholly owned subsidiary (collectively, the
"Company"). All significant intercompany accounts and transactions have been
eliminated in consolidation.
GOING CONCERN
The accompanying condensed consolidated financial statements have been prepared
assuming the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the
normal course of business. As of June 30, 2004, the Company has negative working
capital of approximately $347,000, an accumulated deficit of approximately
$15,651,000 and recurring losses from operations. These factors, among others,
raise substantial doubt about the Company's ability to continue as a going
concern. The Company intends to fund operations through increased sales and
existing debt and equity financing arrangements which management believes may be
insufficient to fund its capital expenditures, working capital and other cash
requirements for the fiscal year ending December 31, 2004. Therefore, the
Company will be required to seek additional funds to finance its working capital
and long-term operations. The successful outcome of future activities cannot be
determined at this time and there is no assurance that if achieved, the Company
will have sufficient funds to execute its intended business plan or generate
positive operating results.
7
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5G WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARY
NOTES FOR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
(UNAUDITED)
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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
GOING CONCERN (CONTINUED)
In response to these problems, management has taken the following actions:
o Actively pursuing various forms of additional financing, including
convertible notes payable and a private placement of the Company's
common stock.
o Aggressively marketing the Company's products.
o Performing a thorough evaluation of its' operations in order to
implement cost saving strategies.
The condensed consolidated financial statements do not include any adjustments
related to recoverability and classification of assets carrying amounts or the
amount and classification of liabilities that might result should the Company be
unable to continue as a going concern.
INVENTORY
Inventory is valued at the lower of cost or market value. It is comprised solely
of parts used in the assembly of wireless radio systems. Cost is determined
using the FIFO method. The Company has determined that no valuation reserve is
necessary at June 30, 2004.
REVENUE RECOGNITION
Equipment sales are recognized when products are delivered without any further
services required. Subscription Internet revenues are partially received as an
up front activation fee and monthly recurring revenues that vary. Revenues are
recognized as earned on a pro rata basis. Additional revenues come by way of
licensing. All licensing revenues are recognized when the earnings process has
been completed.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin 101 ("SAB 101"), "Revenue Recognition," as updated by SAB 104, which
outlines the basic criteria that must be met to recognize revenue and provides
guidance for presentation of revenue and for disclosure related to revenue
recognition policies in financial statements filed with the Securities and
Exchange Commission. Management believes that the Company's revenue recognition
policy for services and product sales conforms to SAB 101.
BASIC AND DILUTED LOSS PER COMMON SHARE
Under Statement of Financial Standards ("SFAS") No. 128, "Earnings Per Share,"
basic earnings per common share is computed by dividing income available to
common stockholders by the weighted-average number of common shares assumed to
be outstanding during the period of computation. Diluted earnings per share is
computed similar to basic earnings per share except that the denominator is
increased to include the number of additional common shares that would have been
outstanding if the potential common shares had been issued and if the additional
common shares were dilutive. Because the Company has incurred net losses, basic
and diluted loss per share is the same as additional potential common shares
would be anti-dilutive.
8
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5G WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARY
NOTES FOR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
(UNAUDITED)
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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
STOCK BASED COMPENSATION
At June 30, 2004, the Company does not have a stock-based employee compensation
plan and has one stock-based non-employee compensation plan (the "2004 Plan").
In June 2004, the Company increased the number of options issuable under the
2004 Plan from 75,000,000 options to 150,000,000 options.
RESEARCH AND DEVELOPMENT
In accordance with SFAS No. 2, "Accounting for Research and Development Costs,"
all research and development costs must be charged to expense as incurred.
Accordingly, internal research and development costs are expensed as incurred.
Third-party research and developments costs are expensed when the contracted
work has been performed or as milestone results have been achieved.
Company-sponsored research and development costs related to both present and
future products are expensed in the period incurred. Research and development
costs in the second quarters of 2003 and 2004 were minor and are included in
general and administrative expenses.
NEW ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements discussed in the notes to the December 31, 2003
and 2002 financial statements filed previously with the Securities and Exchange
Commission in Form 10-KSB that were required to be adopted during the year ended
December 31, 2004 are not expected to have a significant impact on the Company's
financial statements.
RECLASSIFICATIONS
Certain reclassifications have been made to the 2003 condensed consolidated
financial statements to conform to the 2004 presentation.
9
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5G WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARY
NOTES FOR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
(UNAUDITED)
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2. CONVERTIBLE NOTES PAYABLE
$250,000 CONVERTIBLE NOTES
In March 2004, the Company borrowed $250,000 under convertible notes payable
("$250,000 Convertible Notes"), of which $100,000 came from management or those
related to certain management personnel. All borrowings are due in March 2006,
with monthly interest payments on the outstanding balance. The $250,000
Convertible Notes may be converted into common stock of the Company at the
lesser of: (a) in accordance with the terms of a subsequent financing, at the
option of the holder, (b) 125% of the closing bid price on the closing date, or
(c) 60% of the average of the three (3) lowest closing bid prices during the
twenty (20) trading days immediately prior to the conversion date.
In connection with the $250,000 Convertible Notes, the Company granted warrants
to purchase 666,667 shares of the Company's restricted common stock at an
exercise price of the lesser of: (a) the 5 day average closing bid price prior
to closing or (b) the 15 day average closing bid price prior to exercise. The
warrants vested upon grant and expire in March 2006. Proceeds from this
financing have been allocated between the notes and warrants based upon their
relative fair values.
The convertible feature of the $250,000 Convertible Notes provides for a rate of
conversion that is below market value. Such feature is normally characterized as
a "beneficial conversion feature" ("BCF"). Pursuant to Emerging Issues Task
Force Issue No. 98-5 ("EITF 98-5"), "Accounting For Convertible Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion Ratio" and
Emerging Issues Task Force Issue No. 00-27,"Application of EITF Issue No. 98-5
To Certain Convertible Instruments," the Company has estimated the fair value of
such BCF to be approximately $176,000 related to these notes and recorded such
amount as a debt discount. Such discount will be amortized to interest expense
over the term of the notes. Amortization expense during the six months ended
June 30, 2004 approximated $29,000, which is included in interest expense.
$715,000 CONVERTIBLE NOTES
In March 2004, the Company borrowed $715,000 under convertible notes payable
("$715,000 Convertible Notes"). All borrowings are due in March 2006, with
monthly interest payments on the outstanding balance and accrue interest at 9%
per annum. The $715,000 Convertible Notes may be converted into common stock of
the Company at the lesser of: (a) in accordance with the terms of a subsequent
financing, at the option of the holder, (b) 125% of the closing bid price on the
closing date, or (c) 100% of the closing bid price during the sixty (60) trading
days immediately prior to the conversion date.
In connection with the $715,000 Convertible Notes, the Company netted proceeds
of $640,500 and such difference has been recorded as a debt discount and is
being amortized over the life of notes. During the six months ended June 30,
2004, the Company amortized approximately $18,600 of such amount to interest
expense.
10
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5G WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARY
NOTES FOR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
(UNAUDITED)
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3. EQUITY TRANSACTIONS
COMMON STOCK
During the six months ended June 30, 2004, the Company issued 95,781,000 shares
of common stock for services, which were valued at approximately $1,484,000
(based on the closing market price on the dates of grant). Included in such
issuances, were approximately 79,866,000 shares issued to certain officers,
directors and employees of the Company valued at approximately $1,005,000 (based
on the closing market price on the dates of grant) in accordance with the
related employment agreements. Approximately, 68,908,000 shares (valued at
approximately $661,000) of the shares issued to certain officers, directors and
employees during the six month period ended June 30, 2004 were earned and
expensed in prior years.
During the six months ended June 30, 2004, in accordance with the terms of the
applicable convertible notes payable agreements, the Company issued
approximately 23,433,000 shares of common stock in connection with the
conversion of notes payable approximating $213,000, including approximately
$59,000 of accrued interest.
4. COMMITMENTS AND CONTINGENCIES
LITIGATION
Other than as set forth below, the Company is not a party to any material
pending legal proceedings, claims or assessments and, to the best of its
knowledge, no such action by or against the Company has been threatened.
On July 30th, 2004, the Company received notice from a former employee who
claims that he is entitled to additional compensations which the Company
believes is without merit.
5. SUBSEQUENT EVENTS
In July 2004, the Company borrowed an additional $90,000 under terms identical
to those of the $715,000 Convertible Notes (see Note 2).
Subsequent to June 30, 2004, the Company has issued 19,227,273 to various
consultants for services to be provided for terms ranging from one month to two
years valued at approximately $480,000 (based on the closing market prices on
the dates of grant).
11
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
AND RESULTS OF OPERATIONS
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The following discussion and analysis of our financial condition and results of
operations should be read with the condensed consolidated financial statements
and related notes included elsewhere in this Report.
When used in this Report, the words "expects," "anticipates," "believes,"
"plans," "will" and similar expressions are intended to identify forward-looking
statements. These are statements that relate to future periods and include, but
are not limited to, statements regarding our critical accounting policies,
adequacy of cash, expectations regarding net losses and cash flow, statements
regarding our growth and profitability, our need for future financing, our
dependence on personnel, our operating expenses, our ability to respond to rapid
technological change and statements regarding the issuance of common stock to
our executive officers. Forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
those projected. These risks and uncertainties include, but are not limited to,
those discussed below, as well as risks related to our ability to develop and
timely introduce products that address market demand, the impact of alternative
technological advances and competitive products, market fluctuations, our
ability to obtain future financing, and the risks set forth below under "Factors
That May Affect Our Results." These forward-looking statements speak only as of
the date hereof. 5G Wireless expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the our expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based.
OVERVIEW
5G Wireless designs, builds, markets and services innovative Wi-Fi compatible
wireless broadband systems. We believe our integrated hardware and software
solutions offer significant improvements in distance, performance, throughputs
and security while servicing both line of sight and non-line of sight
applications. We are focused on manufacturing products and developing solutions
to create large and efficient wireless LAN and WAN with far less equipment and
expense than our competitors. Our customers include universities, businesses,
governments, municipalities and wireless Internet service providers.
We market and sell both outdoor and indoor Wi-Fi wireless radio systems that,
because of their distance and user capacity, can be used in both wireless LAN
and WAN applications. The outdoor products can be configured in point-to-point
or point-to-multipoint networks that can reach distances of eight miles or more
in fixed wireless configurations or up to one mile in roaming scenarios using
laptops with off-the-shelf Wi-Fi cards. We believe our antenna design and
wireless packet switching allows our systems to more readily penetrate buildings
and trees than competitors, and to accommodate up to 1000 user associations. Our
indoor product shares many of the same strengths as our outdoor product,
including user capacity and penetration of objects, but is designed to utilize
less power, at a lower cost and for indoor distances up to 1,000 feet depending
upon the structure.
Both our outdoor and indoor products provide strong security at both the
hardware and software levels, can transmit voice, data, and video at
multi-megabit speeds, and can work together seamlessly in wireless networks with
each other or with other common wireless network equipment. Because of these
advantages, we believe our products enable customers to combine wireless
networks with fewer components that cost less, perform better and potentially
provide a faster return on invested capital.
We have devoted substantial resources to the build out of our networks and
product research and development with limited resources applied to our marketing
programs. As a result, we have historically experienced operating losses and
negative cash flow. We expect that these operating losses and negative cash
flows may continue through additional periods. In addition, we only have a
limited record of revenue-producing operations and there is only a limited
operating history upon which to base an assumption that we will be able to
achieve our business plans.
12
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
AND RESULTS OF OPERATIONS
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RESULTS OF OPERATIONS
The results of operations reflected in this discussion include the operations of
5G Wireless for the six and three-months ended June 30, 2004 and June 30, 2003.
SIX MONTHS ENDED JUNE 30, 2004 AND 2003
REVENUE
Revenue from continuing operations increased by $112,156 or 157% from $71,639
for the six-months ended June 30, 2003 to $183,795 for the six-months ended June
30, 2004. These increases in revenue were primarily due to increased equipment
sales to University customers due to a more focused effort on the campus market
place; this trend is expected to continue through December 2004.
COST OF REVENUE
Total cost of revenue decreased by $2,527 or 4% from $57,256 for the six-months
ended June 30, 2003 to $54,729 for the six-months ended June 30, 2004. This was
due to lower manufacture cost of wireless equipment, a trend expected to
continue for the near future (6 months) as the Company continues to streamline
it's manufacturing.
OPERATING EXPENSES
Total operating expenses increased by $1,076,096 (or 125%) from $857,636 for the
six-months ended June 30, 2003 to 1,933,732 for the six-months ended June 30,
2004. These increases were primarily attributable to additional staff to support
the orders required to build/ship the equipment. These general and
administration expenses are expected to increase during the next quarter.
OTHER EXPENSES
Interest expense increased by $73,245 from $2,468 for the six-months ended June
30, 2003 to $75,713 for the six-months ended June 30, 2004. The increase was
attributable to the issuance of additional convertible debentures and other
interest bearing securities.
NET LOSS
Net loss decreased by ($1,034,658) from ($845,721) for the six-months ended June
30, 2003 to ($1,880,379) for the six-months ended June 30, 2004 an increase of
122%.
THREE MONTHS ENDED JUNE 30, 2004 AND 2003
REVENUE
Revenue from continuing operations increased by $64,066 or 120% from $53,180 for
the three-months ended June 30, 2003 to $117,246 for the three-months ended June
30, 2004. These increases in revenue were primarily due to a more focus effort
on the campus market place; this trend is expected to continue for the following
period.
COST OF REVENUE
Total cost of revenue decreased by ($31,976) or -56% from $57,256 for the
three-months ended June 30, 2003 to $25,289 for the three-months ended June 30,
2004. This was due to lower manufacture cost of wireless equipment, a trend
expected to continue during the next three months as the Company continues to
streamline it's manufacturing.
OPERATING EXPENSES
Total operating expenses decreased by ($95,002) or -15% from $620,290 for the
three-months ended June 30, 2003 to $525,288 for the three-months ended June 30,
2004. These increases were primarily attributable to additional staff to support
the orders required to build/ship the equipment. These general and
administration expenses are expected to increase during the next quarter.
13
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
AND RESULTS OF OPERATIONS
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OTHER EXPENSES
Interest expense increased by $57,627 from $2,468 for the three-months ended
June 30, 2003 to $60,095 for the three-months ended June 30, 2004. The increase
was attributable to the issuance of additional convertible debentures and other
interest bearing securities.
NET LOSS
Net loss decreased by $133,408 from ($626,834) for the six-months ended June 30,
2003 to ($493,426) for the six-months ended June 30, 2004 an increase of 122%.
LIQUIDITY AND CAPITAL RESOURCES
CASH AND CASH EQUIVALENTS
We have incurred significant losses and negative cash flows from operations for
the last two years. The Company has obtained our required cash resources through
private placements, convertible debentures and notes payable and may not operate
profitably in the future which may require the company to raise additional
capital to finance our operations.
Cash used for operating activities was ($972,278) during the six months ended
June 30, 2004 compared to ($121,134) for the six months ended June 30, 2003.
This difference can be attributed to the increase grants of stock for services.
CASH USED FOR INVESTING ACTIVITIES
Cash used for investing activities of ($32,356) during the six months ended June
30, 2004, consisted of computer, network and research and development equipment
that was purchased during the period.
CASH PROVIDED BY FINANCING ACTIVITIES
Financing activities provided cash of $882,336 during the six months ended June
30, 2004 compared to $155,460 for the same period ending June 30, 2003.
We recognize the need for the infusion of cash during fiscal 2004 and 2005 and
are actively pursuing various financing alternatives. However, there can be no
assurance that we will be able to raise additional funds on favorable terms or
at all.
In addition, we may wish to pursue possible acquisitions of, or investments in
businesses, technologies or products complementary to ours in order to expand
our geographic presence, broaden our product offerings and achieve operating
efficiencies. We may not have sufficient liquidity, or we may be unable to
obtain additional financing on favorable terms or at all, in order to finance
such an acquisition or investment.
We believe we currently have adequate cash to fund anticipated cash needs for
approximately the next two months with current financing. An adverse business or
legal development may also require us to raise additional financing sooner than
anticipated. We recognize that we may be required to raise such additional
capital, at times and in amounts, which are uncertain, especially under the
current capital market conditions. If we are unable to acquire additional
capital or are required to raise it on terms that are less satisfactory than we
desire, it may have a material adverse effect on our financial condition. If
necessary, we may be required to consider curtailing our operations
significantly or to seek arrangements with strategic partners or other parties
that may require us to relinquish significant rights to products, technologies
or markets. In the event we raise additional equity financings, these financings
may result in dilution to existing shareholders.
14
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
GOING CONCERN
These conditions raise substantial doubt about our ability to continue as a
going concern. As disclosed in the financial statements for the year ended
December 31, 2003, the opinion of our independent auditors includes an
explanatory fourth paragraph stating that there is substantial doubt about our
ability to continue as a going concern.
OFF BALANCE SHEET
We have not entered into any off balance sheet arrangements that have or
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, result of operations,
liquidity, capital expenditure, or capital resources and would be considered
material to investors.
FACTORS THAT MAY AFFECT OUR RESULTS
WE HAVE A LIMITED OPERATING HISTORY AND A HISTORY OF LOSSES. WE CANNOT ASSURE
YOU THAT WE WILL OPERATE PROFITABLY IN THE FUTURE.
We have a limited record of revenue-producing operations under our current plan
of business. We have incurred losses for the last two fiscal years and expect
that our net losses and negative cash flow will continue for the foreseeable
future. As of June 30, 2004, our accumulated deficit was $15,650,834. Our
auditors included an explanatory paragraph in their Independent Auditors' Report
included in our audited financial statements, for the years ended December 31,
2003 and 2002, to the effect that our loss from operations for the year ended
December 31, 2003, and the accumulated deficit at December 31, 2003 raise
substantial doubt about our ability to continue as a going concern. As a result
of the fixed nature of many of our expenses, we may not able to adjust spending
in a timely manner to compensate for any unexpected delays in the development
and marketing of our products or any capital raising or revenue shortfall. Any
such delays or shortfalls will have an immediate adverse impact on our
operations and financial condition. We believe that our planned growth and
profitability will depend in large part on our ability to promote our brand name
and gain and expand our customer base. Accordingly, we intend to invest heavily
in marketing, strategic relationships, development of our customer base and
development of our marketing technology. If we are not successful in promoting
our brand name and expanding our customer base, it will have a material adverse
effect on our financial condition and our ability to continue to operate our
business.
IF WE ARE UNSUCCESSFUL IN RAISING ADDITIONAL CAPITAL IN THE FUTURE, WE MAY BE
UNABLE TO CONTINUE TO OPERATE.
We believe we currently have adequate cash to fund anticipated cash needs for
approximately the next two months. Our independent auditors have advised us
regarding uncertainty as to our ability to continue as a going concern. We will
need to raise additional capital in the future and are actively pursuing various
financing options. Any equity financing may be dilutive to shareholders, and
debt financing, if available, will increase expenses and may involve restrictive
covenants. We may be required to raise additional capital, at times and in
amounts, which are uncertain, especially under the current capital market
conditions.
In addition, if our cash assets are inadequate to meet our operational needs, we
may compensate providers for services rendered by issuing shares of our common
stock in lieu of cash, which will dilute existing shareholders. Under these
circumstances, if we are unable to obtain additional capital or are required to
raise it on undesirable terms, it may have a material adverse effect on our
financial condition, which could require us to:
o curtail our operations significantly;
o sell significant assets;
o seek arrangements with strategic partners or other parties that may
require us to relinquish significant rights to products,
technologies or markets; or
o explore other strategic alternatives including a merger or sale of
5G Wireless.
15
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
Because our technology is deployed in license-free frequency bands, our products
may cause harmful interference to other equipment manufacturers' products and
other equipment manufacturers' products may cause harmful interference to our
products. If this should occur we or our customers could be required to
discontinue service.
Our technology is deployed in license-free frequency bands and are not subject
to any wireless or transmission licensing in most jurisdictions, including the
United States. Continued license-free operation is dependent upon the
continuation of existing government policy. While we are not aware of any policy
changes planned or expected, there can be no assurances that government policy
will not change. License-free operation of our products in the 2.4 GHz bands are
subordinate to certain licensed and unlicensed uses of the bands and our
products must not cause harmful interference to other equipment operating in the
bands and must accept interference from any of them. If we are unable to
eliminate any such harmful interference, or should our products be unable to
accept interference caused by others, we or our customers could be required to
cease operations in the bands in the locations affected by the harmful
interference. Additionally, in the event the 2.4 GHz band becomes unacceptably
crowded, and no additional frequencies are allocated, our business could be
adversely affected.
WE OPERATE IN A MARKET THAT IS INTENSELY AND INCREASINGLY COMPETITIVE, AND IF WE
ARE UNABLE TO COMPETE SUCCESSFULLY, OUR REVENUE COULD DECLINE AND WE MAY BE OR
BE UNABLE TO GAIN MARKET SHARE.
The market for wireless products and services is highly competitive. Our future
success will depend on our ability to adapt to rapidly changing technologies,
evolving industry standards, product offerings and evolving demands of the
marketplace. Some of our competitors have:
o longer operating histories;
o larger customer bases;
o greater name recognition and longer relationships with clients; and
o significantly greater financial, technical, marketing, public
relations and managerial resources than we do.
Our competitors may also be better positioned to address technological and
market developments or may react more favorably to technological changes. We
compete on the basis of a number of factors, including:
o range;
o non-line of sight capabilities;
o data rate;
o security scheme;
o simultaneous users;
o implementation cost; and
o a total solutions provider.
Competitors may develop or offer services that provide significant
technological, creative, performance, price or other advantages over the
services offered by 5G Wireless. If we fail to gain market share or lose
existing market share, our financial condition, operating results and business
could be adversely affected and the value of an investment in us could be
reduced significantly. We may not have the financial resources, technical
expertise or marketing, distribution or support capabilities to compete
successfully.
OUR OPERATING RESULTS ARE SUBJECT TO FLUCTUATIONS CAUSED BY MANY FACTORS WHICH
COULD CAUSE US TO FAIL TO ACHIEVE OUR REVENUE OR PROFITABILITY EXPECTATIONS,
WHICH IN TURN COULD CAUSE OUR STOCK PRICE TO DECLINE.
Our operating results can vary significantly depending upon a number of factors,
many of which are outside our control. Factors that may affect our quarterly
operating results include:
o market acceptance of and changes in demand for our products and
services;
16
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
o gain or loss of clients or strategic relationships;
o announcement or introduction of new services and products by us or
by our competitors;
o our ability to build brand recognition;
o timing of sales to customers;
o price competition;
o our ability to upgrade and develop systems and infrastructure to
accommodate growth;
o our ability to attract and integrate new personnel in a timely and
effective manner;
o our ability to introduce and market products and services in
accordance with market demand;
o changes in governmental regulation;
o reduction in or delay of capital spending by our clients due to the
effects of terrorism, war and political instability; and
o general economic conditions.
Most of our operating expenses are relatively fixed in the short-term. We may be
unable to adjust spending rapidly to compensate for any unexpected sales
shortfall, which could harm our quarterly operating results. Because of the
emerging nature of the markets in which we compete, we do not have the ability
to predict future operating results with any certainty. Because of the above
factors, you should not rely on period-to-period comparisons of results of
operations as an indication of future performance.
BECAUSE A SMALL NUMBER OF CUSTOMERS ACCOUNT FOR AND MAY IN FUTURE PERIODS
ACCOUNT FOR SUBSTANTIAL PORTIONS OF OUR REVENUE, OUR REVENUE COULD DECLINE
BECAUSE OF DELAYS OF CUSTOMER ORDERS OR THE FAILURE TO RETAIN CUSTOMERS.
We have a small number of customers that account for, and may in future periods
account for, a significant portion of our revenue. Our revenue could decline
because of a delay in customer orders or the failure to retain an existing
customer. We may not obtain additional customers. The failure to obtain
additional customers and the failure to retain existing customers will harm our
operating results.
IF WE ARE UNABLE TO DEVELOP PRODUCTS AND SERVICES THAT KEEP PACE WITH
TECHNOLOGICAL ADVANCES, WE MAY LOSE OUR MARKET SHARE WHICH WOULD ADVERSELY
AFFECT OUR FINANCIAL AND RESULTS OF OPERATIONS.
The market for data access and communications services is characterized by
rapidly changing technology and evolving industry standards in both the wireless
and wire line industries. Our success will depend on our ability to develop and
introduce, in a timely and cost-effective manner, enhancements to our high-speed
service and new products that meet our customer requirements and evolving
industry standards. Our technology or systems may become obsolete upon the
introduction of alternative technologies. If we do not develop and introduce new
products and services in a timely manner, we may lose customers to competing
service providers, which would adversely affect our business and results of
operations.
IF WE DO NOT ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY, OUR BUSINESS MAY
SUFFER, WE MAY LOSE REVENUE AND WE MAY BE REQUIRED TO SPEND SIGNIFICANT TIME AND
RESOURCES TO DEFEND OUR INTELLECTUAL PROPERTY RIGHTS.
We rely on a combination of patent, trademark, trade secrets, confidentiality
procedures and contractual procedures to protect our intellectual property
rights. If we are unable to adequately protect our intellectual property, our
business may suffer from the piracy of our technology and the associated loss in
revenue. Any patents that we may obtain may not sufficiently protect our
intellectual property and may be challenged by third parties. Our effort to
protect our intellectual property rights may not prevent the misappropriation of
our intellectual property. Other parties may also independently develop similar
or competing products that do not infringe upon our intellectual property
rights. Any infringement claims could cause us to spend significant time and
17
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
money to defend our products, redesign our products or develop or license a
substitute technology. We may be unsuccessful in acquiring or developing
substitute technology and any required license may be unavailable on
commercially reasonable terms, if at all. In the event of litigation to
determine the validity of any third party claims or claims by us against such
third party, such litigation, whether or not determined in our favor could
result in significant expense and divert the efforts of our technical and
management personnel, regardless of the outcome of such litigation.
WE MAY NOT BE ABLE TO ATTRACT, RETAIN OR INTEGRATE KEY PERSONNEL, WHICH MAY
PREVENT US FROM SUCCESSFULLY OPERATING OUR BUSINESS.
We may not be able to retain our key personnel or attract other qualified
personnel in the future. Our success will depend upon the continued service and
the abilities of key personnel. We have employment agreements with only four of
our officers. There can be no assurance that other personnel will remain
employed by us, or that the four officers will remain after the termination of
their agreements. The loss of services of any of the key members of our
management team or our failure to attract and retain other key personnel could
disrupt operations and have a negative effect on employee productivity and
morale and harm our financial results.
18
- --------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
ANY CONFLICTS OF INTEREST WITH OUR EXECUTIVE OFFICERS OR DIRECTORS COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our executive officers and directors have interests outside of 5G Wirelesses to
which they devote time, either individually or through partnerships and
corporations in which they have an interest, hold an office, or serve on boards
of directors. As a result, certain conflicts of interest may arise between 5G
Wireless and its executive officers or directors. Any potential conflicts of
interest will be resolved by our board of directors in a manner consistent with
their fiduciary duties. To minimize any potential conflicts of interest, it is
the intention of management to present to our board of directors any proposed
investments for its evaluation. If a conflict of interest were to arise, it
could have a material adverse effect on our financial condition and results of
operations.
OUR EXECUTIVE OFFICERS AND DIRECTORS HAVE SIGNIFICANT VOTING POWER AND MAY TAKE
ACTIONS THAT MAY BE DIFFERENT THAN ACTIONS SOUGHT BY OUR OTHER SHAREHOLDERS.
Our executive officers and directors beneficially own approximately 19% of the
outstanding shares of our common stock as of June 30, 2004 including those
accrued that are now eligible to convert to common shares. These stockholders,
if they act together, will be able to exercise influence over all matters
requiring stockholder approval. This influence over our affairs might be adverse
to the interest of our other stockholders. In addition, this concentration of
ownership may delay or prevent a change in control and might have an adverse
effect on the market price of our common stock.
OUR COMMON STOCK IS A LOW PRICED SECURITY AND THIS MAY AFFECT THE MARKET VALUE
OF OUR COMMON STOCK. HISTORICALLY, THERE HAS BEEN A LIMITED PUBLIC MARKET FOR
OUR COMMON STOCK.
Our common stock is currently quoted on the Over the Counter Bulletin Board and
our stockholders may find it difficult to dispose of, or to obtain accurate
quotations as to the market value of our common stock. In addition, our common
stock is subject to the low-priced security or so called "penny stock" rules
that impose additional sales practice requirements on broker-dealers who sell
our common stock.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure in connection with any trades involving a stock defined as
a penny stock, including the delivery, prior to any penny stock transaction, of
a disclosure schedule explaining the penny stock market and the risks associated
therewith. The regulations governing low-priced or penny stocks sometimes limit
the ability of broker-dealers to sell our common stock and the ability of our
stockholders to sell their securities in the secondary market.
IF WE FAIL TO MAINTAIN MARKET MAKERS, OUR COMMON STOCK PRICE COULD DECLINE.
Our common stock is traded on the Over the Counter Bulletin Board. If
broker-dealers fail to act as market makers in our common stock, the liquidity
of our common stock could be impaired by the number of shares of common stock
that can be bought and sold and through delays in the timing of transactions. As
a result, the price of our common stock could decline. In addition, the lack of
market makers could result in stockholders being unable to buy or sell shares of
our common stock on any secondary market. There can be no assurance we will be
able to maintain such market makers.
FUTURE SALES OF OUR COMMON STOCK MAY CAUSE THE MARKET PRICE OF OUR COMMON STOCK
TO DECLINE.
As of June 30, 2004, there were approximately 416,055,010 shares of common stock
outstanding, of which at least 143,435,372 shares are restricted securities
under the Securities Act, a minority of which are held by related parties of 5G
Wireless. These restricted securities will be eligible for sale from time to
time upon expiration of applicable holding periods under Rule 144 under the
Securities Act. The restriction on a substantial portion of the restricted stock
at December 31, 2003 lapsed in February 2004. If these holders sell in the
public market, these sales could cause the market price of our common stock to
decline. This also could make it more difficult for us to raise funds through
future offerings of our common stock.
19
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ITEM 3. CONTROLS AND PROCEDURES
- --------------------------------------------------------------------------------
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.
We maintain "disclosure controls and procedures," as such term is defined in
Rule 13a-14(c) under the Securities Exchange Act of 1934, or the Exchange Act,
that are designed to ensure that information required to be disclosed by us in
reports that we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in Securities and
Exchange Commission rules and forms, and that such information is accumulated
and communicated to our management, including our Chief Executive Officer and
Treasurer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating our disclosure controls and procedures,
management recognized that disclosure controls and procedures, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the disclosure controls and procedures are met.
Additionally, in designing disclosure controls and procedures, our management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible disclosure controls and procedures. The design of any
disclosure controls and procedures also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its' stated goals under all potential
future conditions.
The evaluation revealed certain weaknesses in disclosure controls and
procedures. Based on their evaluation as of the period covered by this quarterly
report, our Chief Executive Officer and Treasurer have concluded that, subject
to the limitations noted above, and except for these weaknesses, our disclosure
controls and procedures were effective to ensure that material information
relating to us, including our consolidated subsidiary, is made known to them by
others within those entities, particularly during the period in which this
Report was being prepared.
CHANGES IN INTERNAL CONTROLS.
We plan to institute greater controls by adding additional staff to allow for
increased oversight, review and verification of all transactions thereby
enhancing the accuracy of all records. We are also looking to implement many of
the new requirements required under the Sarbanes-Oxley Act of 2002 during the
coming year. However, we believe that there are no significant changes in our
internal controls or, to our knowledge, in other factors that could
significantly affect these controls subsequent to the date of our evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
20
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PART II. OTHER INFORMATION
- --------------------------------------------------------------------------------
ITEM 1. LEGAL PROCEEDINGS
Other than as set forth below, the Company is not a party to any material
pending legal proceedings, claims or assessments and, to the best of its
knowledge, no such action by or against the Company has been threatened.
On July 30th, 2004, the Company received notice from a former employee who
claims that he is entitled to additional compensations which the Company
believes is without merit.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During May 2004, the Company issued 69,608,879 shares of common stock to six
employees for services valuing $675,900. This transaction was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933.
In May 2004, the Company converted promissory notes in the aggregate of amount
of $109,750 including accrued interest held by five accredited investors into
18,620,832 shares of common stock. This transaction was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933.
In May 2004, the Company converted a promissory note in the amount of $98,855.50
including accrued interest and penalties held by one accredited investor into
4,661,792 shares of common stock. This transaction was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933.
During May 2004, the Company issued a total of 867,750 shares of common stock to
consultants for services valuing $32,812. This transaction was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933.
During June 2004, the Company issued 9,822,590 shares of common stock to
fourteen employees for services valuing $301,649. This transaction was exempt
from registration pursuant to Section 4(2) of the Securities Act of 1933.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None during the quarter.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits are included in this report or incorporated by
reference into this report:
2.1 Agreement and Plan of Reorganization and Merger between
Tesmark, Inc., an Idaho corporation, and the Registrant
(formerly known as Tesmark, Inc.), a Nevada corporation, dated
November 10, 1998 (incorporated by reference to Exhibit 2 of
the Form 10-SB filed on December 15, 1999).
2.2 Acquisition Agreement between the Registrant, and Richard
Lejeunesse, Curtis Mearns, and Don Boudewyn, a partnership
(known as 5G Partners), dated December 15, 2000, as amended
(incorporated by reference to Exhibit 10 of the Form 8-K filed
on February 14, 2001).
21
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PART II. OTHER INFORMATION
- --------------------------------------------------------------------------------
2.3 Share Purchase Agreement between the Registrant, and Sea Union
Industries Pte. Ltd., Richard Lajeunesse, Rita Chou, Peter
Chen, Yeo Lai Ann, Tan Lam Im, Choa So Chin, Tan Ching Khoon,
Tan Sek Toh, and 5G Wireless Communication Pte. Inc. (formerly
known as Peteson Investment Pte Ltd.), dated May 5, 2001
(incorporated by reference to Exhibit 2 of the Form 8-K filed
on June 5, 2001).
2.4 Purchase Agreement between the Registrant and Skyhub Asia
Holdings Limited, eVision USA.com, and eBanker USA.com, dated
May 19, 2001 (incorporated by reference to Exhibit 2.4 of the
Form 10-KSB filed on April 18, 2002).
2.5 Definitive Acquisition Agreement between the Registrant and
Wireless Think Tank, dated April 30, 2002 (incorporated by
reference to Exhibit 2 of the Form 8-K filed on August 13,
2002).
3(i).1 Articles of Incorporation of Tesmark, Inc. (incorporated by
reference to Exhibit 3 to the Registrant's Form 10).
3(i).2 Articles of Incorporation of Tesmark, Inc. (incorporated by
reference to Exhibit 3 to the Registrant's Form 10).
3(i).3 Certificate of Amendment to Articles of Incorporation of
Tesmark, Inc. (incorporated by reference to Exhibit 3.(i) to
the Registrant's Current Report on Form 8-K filed on February
14, 2001).
3(i).4 Certificate of Amendment to Articles of Incorporation of 5G
Wireless Communications, Inc. (incorporated by reference to
Exhibit 3.4 to the Registrant's Annual Report on Form 10-KSB
for the year ended December 31, 2002).
3(ii) Bylaws. (incorporated by reference to Exhibit 3.5 to the
Registrant's Annual Report on Form 10-KSB for the year ended
December 31, 2002).
4.1 Form of Promissory Note dated March 4, 2004 issued to
accredited investors on March 4, 2004.
4.2 Form of Note Purchase Agreement dated March 4, 2004 issued to
accredited investors on March 4, 2004.
4.3 Form of Warrant dated March 4, 2004 issued to accredited
investors on March 4, 2004.
4.4 2004 Non-Employee Directors and Consultants Retainer Stock
Plan (incorporated by reference to Exhibit 4 to the
Registrant's Registration Statement on Form S-8 filed on June
6, 2004).
31.1 Certification of Chief Executive Officer Pursuant to Rule
13a-14(a) and 15d-14(a) (2).
31.2 Certification of Principal Financial Officer Pursuant to Rule
13a-14(a) and 15d-14(a) (2).
32 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (2).
(b) The following reports on Form 8-K were filed during the quarter ended June
30, 2004:
None.
22
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PART II. OTHER INFORMATION
- --------------------------------------------------------------------------------
SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
5G WIRELESS COMMUNICATIONS, INC.
By: /s/ Jerry Dix
------------------------------
Jerry Dix
Chief Executive Officer
Date: August 15, 2004
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Jerry Dix and Don Boudewyn, and each of them, his true
and lawful attorneys-in-fact, each with full power of substitution, for him or
her in any and all capacities, to sign any amendments to this report on Form
10-QSB and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact or their
substitute or substitutes may do or cause to be done by virtue hereof.
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Name Title Date
- ---------------------- ---------------------------- ---------------------
/s/ Jerry Dix Chief Executive Officer August 15, 2004
- ---------------------- (Principal Executive Officer)
Jerry Dix and Director
/s/ Jerry Dix Treasurer August 15, 2004
- ---------------------- (Principal Accounting and
Don Boudewyn Financial Officer)
23