U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
Commission File No. 000-32033
SKYWAY COMMUNICATIONS HOLDING CORP.
(Exact name of small business issuer as specified in its charter)
Florida 65-0881662
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1680 Michigan Avenue, Suite 1000, Miami Beach, Florida 33139
(Address of Principal Executive Offices)
(305)538-7840
(Issuer's telephone number)
i-Teleco.com, Inc.
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has 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 issuer was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [ X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of May 15, 2003: 44,691,057 shares of common stock outstanding,
$0.0001 par value.
SKYWAY COMMUNICATIONS HOLDING CORP.
(FORMERLY I-TELECO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF MARCH 31, 2003 AND
DECEMBER 31, 2002 AND FOR THE PERIOD
DECEMBER 16, 1998 (DATE OF INCEPTION)
THROUGH MARCH 31, 2003
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SKYWAY COMMUNICATIONS HOLDING CORP.
(FORMERLY I-TELECO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
MARCH 31, DECEMBER 31,
2003 2002
-------------------------- --------------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 0 $ 27
--------- ---------
Total current assets 0 27
--------- ---------
TOTAL ASSETS $ 0 $ 27
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 47,249 $ 46,853
Accrued payroll tax liabilities 68,525 67,250
Loan payable - ECI Communications 25,000 25,000
Notes payable-related parties 9,600 9,600
Loans and advances payable-related party 10,254 4,304
--------- ---------
Total current liabilities 160,628 153,007
--------- ---------
STOCKHOLDERS' DEFICIT:
Preferred stock, par value $.0001 per share; 10,000,000
shares authorized; none issued and outstanding at
March 31, 2003 and December 31, 2002, respectively 0 0
Common stock, par value $.0001 per share; 2,500,000,000
shares authorized; 40,398,148 shares issued
and outstanding at March 31, 2003 and
December 31, 2002, respectively 4,040 4,040
Additional paid-in capital 200,445 200,445
Deficit accumulated during the development stage (365,113) (357,465)
--------- ---------
Total stockholders' deficit (160,628) (152,980)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 0 $ 27
========= =========
The accompanying notes are an integral part of these financial statements.
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SKYWAY COMMUNICATIONS HOLDING CORP.
(FORMERLY I-TELECO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE PERIOD
THREE MONTHS ENDED DECEMBER 16, 1998
MARCH 31, (DATE OF INCEPTION) TO
2003 2002 MARCH 31, 2003
--------------------- ----------------------- ----------------------------
(Unaudited) (Unaudited) (Unaudited)
DEVELOPMENT STAGE REVENUES $ 0 $ 0 $ 0
--------------------- ----------------------- ----------------------------
DEVELOPMENT STAGE EXPENSES:
Accounting 2,500 9,660 51,311
Bank charges 45 55 939
Consulting fees (as restated) 199 0 2,352
Equpiment rental 0 0 1,599
On-line services 75 75 800
Dues and subscriptions 0 0 175
Insurance expense 0 0 7,782
Legal fees 250 1,130 25,001
Corporate fees 3,208 2,072 26,304
Office general 0 1,451 871
Wages 0 0 179,739
Seminars and conferences 0 0 2,115
Payroll taxes 0 0 12,153
Telephone 0 0 4,790
Travel 0 0 8,954
Website development 0 0 18,538
Printing 0 0 315
--------------------- ----------------------- ----------------------------
TOTAL DEVELOPMENT STAGE EXPENSES 6,277 14,443 343,738
--------------------- ----------------------- ----------------------------
LOSS FROM OPERATIONS (6,277) (14,443) (343,738)
--------------------- ----------------------- ----------------------------
OTHER EXPENSE:
Interest expense (1,371) (3,368) (21,375)
--------------------- ----------------------- ----------------------------
(1,371) (3,368) (21,375)
--------------------- ----------------------- ----------------------------
NET LOSS $ (7,648) $ (17,811) $ (365,113)
===================== ======================= ============================
LOSS PER COMMON SHARE
Basic & diluted $ (0.00) $ (0.00)
===================== =======================
Weighted-average number of common
shares outstanding 40,398,148 23,864,399
===================== =======================
The accompanying notes are an integral part of these financial statements.
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SKYWAY COMMUNICATIONS HOLDING CORP.
(FORMERLY I-TELECO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
- ----------------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD
THREE MONTHS ENDED DECEMBER 16, 1998
MARCH 31, (DATE OF INCEPTION)
2003 2002 TO MARCH 31, 2003
(as restated)
--------------------- --------------------- --------------------------
(Unaudited) (Unaudited) (Unaudited)
OPERATING ACTIVITIES:
Loss accumulated during the development stage $ (7,648) $ (17,811) $ (365,113)
Adjustments to reconcile net loss to net cash used in
operations:
Stock issued for management services 0 100 200
Changes in assets and liabilities:
Increase in accounts payable and accrued
expenses 1,671 6,839 125,195
--------------------- --------------------- --------------------------
Net cash used in operating activities (5,977) (10,872) (239,718)
--------------------- --------------------- --------------------------
FINANCING ACTIVITIES:
Net advances from related party 5,950 1,557 10,254
Proceeds from loan payable 0 0 25,000
Notes payable - related party 0 9,420 204,464
--------------------- --------------------- --------------------------
Net cash provided by financing activities 5,950 10,977 239,718
--------------------- --------------------- --------------------------
Increase (Decrease) in cash (27) 105 0
CASH, beginning of year 27 (120) 0
--------------------- --------------------- --------------------------
CASH, end of year $ 0 $ (15) $ 0
===================== ===================== ==========================
The accompanying notes are an integral part of these financial statements.
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SKYWAY COMMUNICATIONS HOLDING CORP.
(FORMERLY I-TELECO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD
QUARTER ENDED DECEMBER 16, 1998
MARCH 31, (DATE OF INCEPTION)
2003 2002 TO MARCH 31, 2003
(As restated)
------------ ------------- ----------------------------
(Unaudited) (Unaudited) (Unaudited)
SUPPLEMENTAL OF CASH FLOW INFORMATION:
Interest paid $ 0 $ 0 $ 0
Income taxes paid 0 0 0
NON-CASH INVESTING AND FINANCING ACTIVITIES
Conversion of debt into common stock $92,500 $ 0 $ 92,500
Conversion of debt into contributed capital 0 102,364 102,364
Conversion of accrued interest into common stock 9,421 0 9,421
The accompanying notes are an integral part of these financial statements.
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SKYWAY COMMUNICATIONS HOLDING CORP.
(FORMERLY I-TELECO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
In the opinion of management, the accompanying consolidated financial statements
of Skyway Communications Holding Corp., formerly I-Teleco.com, Inc. contains all
adjustments necessary to present fairly the Company's financial position as of
March 31, 2003 and December 31, 2002, the statements of operations and cash
flows for the three months ended March 31, 2003 and 2002.
The results of operations for the three months ended March 31, 2003 and 2002 are
not necessarily indicative of the results to be expected for the full year.
The accounting policies followed by the Company are set forth in Notes 1 and 2
to the Company's financial statements included in its Annual Report on Form
10-KSB for the year ended December 31, 2002.
2. ACCRUED PAYROLL TAX LIABILITIES
During 2000 and 2001, the Company incurred liabilities for payroll taxes. As of
March 31, 2003, approximately $68,525, including interest and penalties, remains
unpaid. Included in this amount is a notice of federal tax lien filed against
the Company by the Internal Revenue Service ("IRS") totaling approximately
$46,000. The Company is currently attempting to negotiate a settlement with the
IRS.
3. LOAN PAYABLE - ECI COMMUNICATIONS
Pursuant to the provisions of a proposed acquisition of ECI Communications, Inc.
("ECI") which was later aborted, the Company received a loan from ECI for
$25,000. The loan as amended was due January 20, 2002 and bears interest at the
rate of one and a half percent (1.5%) per month.
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SKYWAY COMMUNICATIONS HOLDING CORP.
(FORMERLY I-TELECO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
4. NOTES PAYABLE - RELATED PARTIES
At December 31, 2001, the Company had notes to three related parties outstanding
aggregating $96,100. The notes incurred interest at rates ranging from 10% to
11%. In March 2002, the notes to two of the related parties aggregating $92,500
were converted into 20,384,028 shares of the Company's common stock.
During 2002, the Company obtained notes from a stockholder totaling $6,000. The
note incurs interest at the rate of 10% per annum and was due August 13, 2002.
5. SUBSEQUENT EVENTS
Subsequent to March 31, 2003, on April 17, 2003, the Company issued 4,079,148
shares common stock to Michael D. Farkas at $0.005 per share for the conversion
of promissory notes in the amounts of $20,396 including accrued interest of
$406. In addition, Atlas Equity Group, Inc. converted $711 of expenses it was
owed into 142,170 shares of common stock. In addition Michael D. Farkas or any
of his affiliated parties shall have, for a period of three months, the right to
invest an amount not to exceed $100,000 at $0.005 per share. In May 8, 2003, the
purchase price of the additional shares was amended from $0.005 per share to 50%
of the average closing price of the Company's common stock as reported on the
OTC:BB or other exchange during the 20 days preceding the investment.
On April 16, 2003, Sky Way Communications Holding Corp. signed a letter of
intent to merge with Sky Way Aircraft, Inc. The letter of intent is non-binding
and is subject to various conditions including the execution of a definitive
merger agreement. Accordingly, there is no assurance that the merger will be
consummated on favorable terms or at all.
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Item 2. Management's Discussion and Analysis
- --------------------------------------------
The following plan of operation provides information which management believes
is relevant to an assessment and understanding of our results of operations and
financial condition. The discussion should be read along with our financial
statements and notes thereto. SkyWay Communications Holding Corp. (formerly
i-teleco.com, Inc.), is a development - stage company. Because the Company has
not generated any revenue, it intends to report its plan of operation below.
The following discussion and analysis contains forward-looking statements, which
involve risks and uncertainties. The Company's actual results may differ
significantly from the results, expectations and plans discussed in these
forward-looking statements.
The Company's operations have been devoted primarily to developing a business
plan and raising capital for future operations and administrative functions. The
Company intends to grow through internal development, strategic alliances, and
acquisitions of existing businesses. Because of uncertainties surrounding its
development, the Company anticipates incurring development stage losses in the
foreseeable future. The ability of the Company to achieve its business
objectives is contingent upon its success in raising additional capital until
adequate revenues are realized from operations.
THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
Development stage loss during the three months ended March 31, 2003 was ($6,373)
as compared to development stage loss during the three months ended March 31,
2002 was ($17,811).
Expenses for the three months ended March 31, 2003 were primarily accounting
($2,500), legal ($250), and corporate fees ($1,934). These fees are related
primarily to the Company's regulatory filings.
Expenses for the three months ended March 31, 2002 were primarily accounting
($9,660), legal ($1,130), office general ($1,451) and corporate fees ($2,072).
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Liquidity and Capital Resources
- -------------------------------
Despite capital contributions and both related party and third party loan
commitments, the company from time to time experienced, and continues to
experience, cash flow shortages that have slowed the Company's growth and
development.
The Company has primarily financed its activities from sales of capital stock of
the Company and from loans from related and third parties. A significant portion
of the funds raised from the sale of capital stock has been used to cover
working capital needs such as salaries and professional fees.
For the three months ended March 31, 2003, we had a net loss of $7,648. Our
accumulated deficit since inception is $365,113. Such accumulated losses have
resulted primarily from costs incurred in the development of web site, salary
and various professional fees.
During 2000 and 2001, the Company incurred liabilities for payroll taxes. As of
March 31, 2003, approximately $69,000, including interest and penalties, remains
unpaid. Included in this amount is a notice of federal tax lien filed against
the Company by the Internal Revenue Service ("IRS") totaling approximately
$46,000. The Company is currently attempting to negotiate a settlement with the
IRS.
Pursuant to the provisions of a proposed acquisition of ECI Communications, Inc.
("ECI") which was later aborted, the Company received a loan from ECI for
$25,000. The loan as amended was due January 20, 2002 and bears interest at the
rate of one and a half percent (1.5%) per month.
At December 31, 2001, the Company had notes to three related parties outstanding
aggregating $96,100. The notes incurred interest at rates ranging from 10% to
11%. In March 2002, the notes to two of the related parties aggregating $92,500
were converted into 20,384,028 shares of the Company's common stock.
During 2002, the Company obtained notes from a stockholder totaling $6,000. The
note incurs interest at the rate of 10% per annum and was due August 13, 2002.
Subsequent to March 31, 2003, on April 17, 2003, the Company issued 4,079,148
shares common stock to Michael D. Farkas at $0.005 per share for the conversion
of promissory notes in the amounts of $20,396 including accrued interest of
$406. In addition, Atlas Equity Group, Inc. converted $711 of expenses it was
owed into 142,170 shares of common stock. In addition Michael D. Farkas or any
of his affiliated parties shall have, for a period of three months, the right to
invest an amount not to exceed $100,000 at $0.005 per share. In May 8, 2003 the
purchase price of the additional shares was amended from $0.005 per share to 50%
of the average closing price of the Company's common stock as reported on the
OTC:BB or other exchange during the 20 days preceding the investment.
The Company continues to experience cash flow shortages, and anticipates this
continuing through the foreseeable future. Management believes that additional
funding will be necessary in order for it to continue as a going concern. The
Company is investigating several forms of private debt and/or equity financing,
although there can be no assurances that the Company will be successful in
procuring such financing or that it will be available on terms acceptable to the
Company.
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Item 3. Controls and Procedures
- --------------------------------
(a) Evaluation of disclosure controls and procedures.
Our Chief Executive Officer and Chief Financial Officer (collectively the
"Certifying Officers") maintain a system of disclosure controls and procedures
that is designed to provide reasonable assurance that information, which is
required to be disclosed, is accumulated and communicated to management timely.
Under the supervision and with the participation of management, the Certifying
Officers evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule [13a-14(c)/15d-14(c)]
under the Exchange Act) within 90 days prior to the filing date of this report.
Based upon that evaluation, the Certifying Officers concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information relative to our company required to be disclosed in our
periodic filings with the SEC.
(b) Changes in internal controls.
Our Certifying Officers have indicated that there were no significant changes in
our internal controls or other factors that could significantly affect such
controls subsequent to the date of their evaluation, and there were no such
control actions with regard to significant deficiencies and material weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. Not Applicable
Item 2. Changes in Securities. None
Item 3. Defaults Upon Senior Securities. Not Applicable
Item 4. Submission of Matters to a Vote of Security None
Holders.
Item 5. Other Information. None
Item 6. Exhibits and Reports of Form 8-K. On April 1, 2003 we
filed an 8K with
the SEC based on a
change in
accountant.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed in its
behalf by the undersigned, thereunto duly authorized, on May 15, 2003.
SKYWAY COMMUNICATIONS HOLDING CORP.
Date: May 15, 2003 By: /s/ Jamee Kalimi
------------------------------------------------
Jamee Kalimi
Chief Executive Officer, Chief Financial Officer
and President
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CERTIFICATION OF
CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
I, Jamee Kalimi certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Skyway
Communications Holdings Corp.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in the quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in the
quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, if any, is made known to us by others
within those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about effectiveness
of the disclosure controls and procedures based on our evaluation as
of the Evaluation Date;
5. I have disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weakness in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. I have indicated in the quarterly report whether there were significant
changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
Dated: May 15, 2003
/s/ Jamee Kalimi
- ----------------------------------------
Jamee Kalimi
Chief Executive Officer, Chief Financial
Officer and President
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