10-Q 1 d81944e10-q.txt FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 2000 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q --------- QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED SEPTEMBER 30, 2000 Commission file number 333-38567 -------------------------------- WORLD WIRELESS COMMUNICATIONS, INC. ------------------------------------------------------ (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Nevada 87-0549700 ------------------------------------ ----------------------- (State of other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 5670 Greenwood Plaza Blvd. Suite 340 Englewood, CO 80111 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number (303) 221-1944 -------------- Indicate by check mark whether registrant (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 . --- --- As of October 31, 2000 there were 31,208,847 shares of the Registrant's Common Stock, par value $0.001, issued and outstanding. 2 TABLE OF CONTENTS PART I. Financial Information Item 1. Financial Statements: Statement Regarding Forward-Looking Disclosure..............................................1 Condensed Consolidated Balance Sheets (Unaudited) - as of September 30, 2000 and December 31, 1999....................................................2 Condensed Consolidated Statements of Operations - (Unaudited) for the Three Months Ended September 30, 2000 and September 30, 1999 and for the Nine Months Ended September 30, 2000 and September 30, 1999.....................4 Condensed Consolidated Statements of Cash Flow (Unaudited) - for the Nine Months Ended September 30, 2000 and September 30, 1999.........................5 Notes to Condensed Consolidated Financial Statements (Unaudited)............................7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................................................................12 PART II. Other Information Item 1. Legal Proceedings................................................................................17 Item 2. Changes in Securities............................................................................17 Item 6. Exhibits and Reports on Form 8-K.................................................................17 Signatures.......................................................................................21
3 PART I - FINANCIAL INFORMATION STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE This report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the expectations or beliefs of World Wireless Communications, Inc. and its subsidiaries (collectively the "Company")concerning future events that involve risks and uncertainties, including those associated with the ability of the Company to obtain financing for its current and future operations, to manufacture (or arrange for the manufacturing of) its products, to market and sell its products, and the ability of the Company to establish and maintain its sales of X-traWeb(TM) products. All statements other than statements of historical facts included in this Report including, without limitation, the statements under "Management's Discussion and Analysis of Results of Operations and Financial Condition" and elsewhere herein, are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations ("Cautionary Statements") are disclosed in this Report, including without limitation, in connection with the forward-looking statements included in this report. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. -1- 4 ITEM 1. FINANCIAL STATEMENTS WORLD WIRELESS COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS
SEPTEMBER 30, DECEMBER 31, 2000 1999 ------------- ------------ CURRENT ASSETS Cash and cash equivalents $ 5,279,317 $ 893,849 Investment in securities available-for-sale 78,025 130,403 Trade receivables, net of allowance for doubtful accounts 376,333 723,355 Other receivables 174,564 584 Inventory 289,516 201,815 Prepaid expenses 38,343 10,924 ------------- ------------ TOTAL CURRENT ASSETS 6,236,098 1,960,930 ------------- ------------ EQUIPMENT, NET OF ACCUMULATED DEPRECIATION AND IMPAIRMENTS 306,763 192,252 ------------- ------------ GOODWILL, NET OF ACCUMULATED AMORTIZATION 257,144 385,718 ------------- ------------ OTHER ASSETS, NET OF ACCUMULATED AMORTIZATION 21,659 39,314 ------------- ------------ TOTAL ASSETS $ 6,821,664 $ 2,578,214 ============= ============
(CONTINUED) The accompanying notes are an integral part of these condensed consolidated financial statements. -2- 5 WORLD WIRELESS COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY
SEPTEMBER 30, DECEMBER 31, 2000 1999 ------------- ------------ CURRENT LIABILITIES Trade accounts payable $ 128,377 $ 547,978 Accrued liabilities 322,242 338,112 Accrued lease obligation on abandoned office and manufacturing facility -- 1,756,924 Notes payable 11,166 3,324,827 Obligation under capital leases - current portion 73,489 119,226 ------------- ------------ TOTAL CURRENT LIABILITIES 535,274 6,087,067 ------------- ------------ LONG-TERM OBLIGATION UNDER CAPITAL LEASES -- 21,459 ------------- ------------ MANDATORILY REDEEMABLE 10% PREFERRED STOCK, $0.001 par value; 1,000,000 shares authorized; 950 shares designated mandatorily redeemable; 0 and 950 shares issued and outstanding; liquidation preference of $1,000,658 -- 950,000 ------------- ------------ STOCKHOLDERS' EQUITY (DEFICIT) Common stock - $0.001 par value; 50,000,000 shares authorized; issued and outstanding: 31,208,847 shares at September 30, 2000 and 21,250,015 shares at December 31, 1999 31,192 21,250 Additional paid-in capital 48,714,562 35,242,864 Unrealized gain on marketable equity securities 19,091 55,403 Unearned compensation (24,128) (48,294) Receivable from shareholder -- (66,828) Accumulated deficit (42,454,327) (39,684,707) ------------- ------------ TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 6,286,390 (4,480,312) ------------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,821,664 $ 2,578,214 ============= ============
The accompanying notes are an integral part of these condensed consolidated financial statements. -3- 6 WORLD WIRELESS COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPT. 30, ENDED SEPT. 30, 2000 1999 2000 1999 ------------ ------------ ------------ ------------ SALES $ 376,885 $ 1,044,511 $ 1,343,124 $ 2,717,510 COST OF SALES 259,110 891,433 962,022 2,270,806 ------------ ------------ ------------ ------------ GROSS PROFIT 117,775 153,078 381,102 446,704 ------------ ------------ ------------ ------------ EXPENSES Research and development expense 455,456 322,920 1,060,760 994,694 General and administrative expenses 1,285,258 1,148,110 3,807,824 3,730,130 Manufacturing activity exit costs -- -- (1,677,668) -- Amortization of goodwill 42,858 50,102 128,574 150,300 ------------ ------------ ------------ ------------ TOTAL EXPENSES 1,783,572 1,521,132 3,319,490 4,875,124 ------------ ------------ ------------ ------------ LOSS FROM OPERATIONS (1,665,797) (1,368,054) (2,938,388) (4,428,420) OTHER INCOME/(EXPENSE): Interest income 90,553 4,630 278,677 15,236 Interest expense (4,388) (746,641) (117,119) (1,578,727) Other income 825 -- 13,610 7,716 ------------ ------------ ------------ ------------ NET INCOME/(LOSS) $ (1,578,807) $ (2,110,065) $ (2,763,220) $ (5,999,627) Preferred Stock Dividend -- 170,000 -- 820,000 ------------ ------------ ------------ ------------ NET INCOME/(LOSS) APPLICABLE TO COMMON STOCKHOLDERS $ (1,578,807) $ (2,280,065) $ (2,763,220) $ (6,819,627) ============ ============ ============ ============ Basic and Diluted Income/(Loss) Per Common Share $ (0.05) $ (0.13) $ (.10) $ (0.41) ------------ ------------ ------------ ------------ WEIGHTED AVERAGE NUMBER OF COMMON SHARES USED IN PER SHARE CALCULATION 31,208,847 17,522,981 28,856,083 16,835,391 ============ ============ ============ ============
The accompanying notes are an integral part of these condensed consolidated financial statements. -4- 7 WORLD WIRELESS COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, ---------------------------- 2000 1999 ------------ ------------ CASH FLOW FROM OPERATING ACTIVITIES Net Loss $ (2,763,220) $ (5,999,627) Adjustments to reconcile net loss to net cash used by operating activities: Amortization of goodwill 128,574 150,298 Depreciation 101,794 748,258 Amortization of debt discount -- 325,448 Amortization of unearned compensation 24,166 57,936 Compensation for stock options -- 27,829 Stock issued for interest -- 1,151,034 Stock issued for services -- 231,616 Valuation allowance on inventory (72,624) -- Provision for doubtful accounts receivable 93,304 -- Changes in operating assets and liabilities: Accounts receivable 79,738 (376,560) Inventory (15,077) (47,637) Prepaid expenses/other assets 38,986 322 Accounts payable (419,280) (347,208) Accrued liabilities (1,639,243) (353,975) ------------ ------------ NET CASH AND CASH EQUIVALENTS USED BY OPERATING ACTIVITIES (4,442,882) (4,432,266) ------------ ------------ CASH FLOW FROM INVESTING ACTIVITIES Payments for the purchase of property and equipment (235,218) (94,042) Proceeds from sale of property and equipment 18,913 -- ------------ ------------ NET CASH AND CASH EQUIVALENTS USED BY INVESTING ACTIVITIES (216,305) (94,042) ------------ ------------
(CONTINUED) The accompanying notes are an integral part of these condensed consolidated financial statements. -5- 8 WORLD WIRELESS COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, ---------------------------- 2000 1999 ------------ ------------ CASH FLOW FROM FINANCING ACTIVITIES Net proceeds from issuance of common stock $ 12,133,217 $ 3,060,083 Proceeds from exercise of warrants 1,348,423 23,377 Proceeds from the issuance of preferred stock -- 570,000 Redemption of preferred stock (950,000) -- Proceeds from borrowings, net of discounts -- 2,280,000 Principal payments on notes payable (3,362,411) (1,459,857) Principal payments on obligation under capital lease (67,196) (108,933) Payment of preferred dividends (57,378) -- ------------ ------------ NET CASH AND CASH EQUIVALENTS PROVIDED BY FINANCING ACTIVITIES 9,044,655 4,364,670 ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,385,468 (161,638) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 893,849 614,897 ------------ ------------ CASH AND CASH EQUIVALENTS - END OF PERIOD $ 5,279,317 $ 453,259 ============ ============ SUPPLEMENTAL CASH FLOW INFORMATION - Cash paid for interest was $193,719 and $60,607. NON-CASH INVESTING AND FINANCING ACTIVITIES - NOTES 3 AND 5
The accompanying notes are an integral part of these condensed consolidated financial statements. -6- 9 WORLD WIRELESS COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - The accompanying condensed consolidated financial statements are unaudited. In the opinion of management, all necessary adjustments (which include only normal recurring adjustments) have been made to present fairly the financial position, results of operations and cash flows for the periods presented. Certain information and note disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the December 31, 1999 annual report on Form 10-K. The results of operations for the nine month period ended September 30, 2000 are not necessarily indicative of the operating results to be expected for the full year. PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the accounts of World Wireless Communications, Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in these financial statements and accompanying notes. Actual results could differ from those estimates. CONCENTRATION OF RISK AND SEGMENT INFORMATION -The Company operates solely in the electronics industry and has assets primarily within the United States. The Company opened a new office in Milan, Italy during June, 2000. The concentration of business in one industry subjects the Company to a concentration of credit risk relating to trade accounts receivable. The Company generally does not require collateral from its customers with respect to trade receivables. FINANCIAL INSTRUMENTS - The Company has a concentration of risk from cash in banks in excess of insured limits. The amounts reported as cash, investments in securities available-for-sale, other receivables, trade accounts payable, accrued liabilities, notes payable and obligations under capital lease are considered to be reasonable approximations of their fair values. The fair value estimates presented herein were based on market information available to management at the time of the preparation of the financial statements. TRADE ACCOUNTS RECEIVABLE AND MAJOR CUSTOMERS -Sales to major customers are defined as sales to any one customer which exceeded 10% of total sales in any of the two reporting periods. Sales to the major customers during each of the three months ended September 30, 2000 and 1999 are as follows: Customer "A" represented 9.5% and 25.18% of sales, respectively; Customer "B" represented 0% and 27.0% of sales respectively; Customer "C" represented 0% and 13.1%, respectively; and Customer "D" represented 25.8% an 0%, respectively. For the nine months ended September 30, 2000 and 1999 sales to major customers were: Customer "A" represented 33.6% and 17.0% of sales, respectively; Customer "B" represented 0% and 26.8% of sales respectively; Customer "C" represented 0% and 15.1% of sales, respectively; and Customer -7- 10 WORLD WIRELESS COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) "D" represented 9.1% and 0% of sales, respectively. Sales to major customers subject the Company to the risk that the Company may not be able to continue the current level of sales if there were a loss of a major customer. At September 30, 2000 and December 31, 1999, an allowance for doubtful accounts of $16,086 and $190,328, respectively, was provided against trade and other receivables. The Company recorded net charge offs of $267,546 for the nine months ended September 30, 2000. The charge offs were in settlement of outstanding issues that had been evaluated in determining the allowance for doubtful accounts as of December 31, 1999. The Company made no provision for doubtful accounts charged to expense for the three month period ended September 30, 2000. For the nine months ended September 30, 2000 and 1999, provisions for doubtful accounts charged to expense totaled $93,304 and $40,058, respectively. Trade receivables and the allowance for doubtful accounts are reviewed periodically and adjusted, accordingly. INVENTORY - Inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out method. In connection with the exit from contract and in-house manufacturing, the Company recognized a write-down of inventory of $405,466 to its liquidation value that was charged to operations as of December 31, 1999. Reserves for inventory valuation are periodically reviewed for adequacy and adjusted, accordingly. RESEARCH AND DEVELOPMENT EXPENSE - Current operations are charged with all research, engineering and product development expenses. GOODWILL AND LONG-LIVED ASSETS -Goodwill and other long-lived assets are evaluated periodically for impairment when indicators of impairment are present and undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. Goodwill is included along with other assets acquired as a group when evaluating their recoverability. Impairment losses are recognized to the extent estimated discounted net future cash flows expected to be generated from those assets are less than their carrying amounts. Goodwill is further evaluated separately and impairment losses are recognized for the excess of the carrying amount of goodwill over management's estimation of the value and future benefits expected to be realized from the goodwill. The Company evaluated the recoverability of the long-lived assets and goodwill for all acquisition during the fourth quarter of 1999, and determined that circumstances indicate an inability to recover their carrying amount. Accordingly, an impairment loss of $641,679 was recognized during 1999 to adjust the carrying amount of the long-lived assets and goodwill to their estimated expected discounted net future cash flows. The remaining balance of goodwill is being amortized over a 5-year period from the original acquisition dates, on a straight-line basis. EQUIPMENT - Equipment is stated at cost. Depreciation, including amortization of leased assets, is computed using the straight-line method over the estimated useful lives of the equipment, which are three to seven years. Leased equipment is amortized over the shorter of the useful life of the equipment or the term of the lease. Depreciation expense was $36,939 and $291,914 for the three months ended September 30, 2000 and 1999, respectively and $101,794 and $748,258 for the nine -8- 11 WORLD WIRELESS COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) months ended September 30, 2000 and 1999, respectively. Maintenance and repair of equipment are charged to operations and major improvements are capitalized. The cost of equipment was reduced, as of December 31, 1999, by a $359,822 write-down reserve attributable to the exit from manufacturing activities. INVESTMENTS -At September 30, 2000, investment in securities consisted of common stock of customers classified as available-for-sale and stated at quoted fair value of $78,025. The cost of the securities was $58,935. The unrealized gain as of September 30, 2000 was $19,091 which is shown as a separate component of stockholders' deficit. The change in net unrealized gains on securities during the three months ended September 30, 2000 and 1999 was a decrease in the holding gain of $29,722 and $0, respectively. For the nine months ended September 30, 2000 and 1999, the unrealized holding loss totaled $36,312 and $0, respectively. SALES RECOGNITION - Sales are recognized upon delivery of products or services and acceptance by the customer. As a result of design and technology contracts, the Company has a right to receive royalties which will be recognized upon the related sales by customers. STOCK-BASED COMPENSATION - Stock-based compensation to employees is measured by the intrinsic value method. This method recognizes compensation expense related to stock options granted to employees based on the difference between the fair value of the underlying common stock and the exercise price of the stock option on the date granted. Stock-based compensation to non-employees, including directors after 1998, is measured by the fair value of the stock options and warrants on the grant date as determined by the Black-Scholes option pricing model. LOSS PER SHARE - Basic loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects potential dilution which could occur if all potentially issuable common shares from stock purchase warrants and options or convertible notes payable and preferred stock resulted in the issuance of common stock. In the present position, diluted loss per share is the same as basic loss per share because the inclusion of potentially issuable common shares at September 30, 2000 and 1999, respectively, would have decreased the loss per share and have been excluded from the calculation. COMPREHENSIVE INCOME/(LOSS) - Comprehensive income/(loss) provides a measure of overall Company performance that includes all changes in equity resulting from transactions and events other than capital transactions. The Company's comprehensive income and loss for the three months ended September 30, 2000 and 1999 and the comprehensive loss for the nine months ended September 30, 2000 and 1999, respectively, are as follows:
For the Three Months For the Nine Months Ended September 30, Ended September 30, ---------------------------- ---------------------------- 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Net Income/(Loss) $ (1,578,807) $ (2,280,065) $ (2,763,220) $ (6,819,627) Unrealized Gain/(Loss) on Marketable Equity Securities (29,722) -- (36,312) -- ------------ ------------ ------------ ------------ Comprehensive Income/(Loss) for the Period $ (1,608,529) $ (2,280,065) $ (2,799,532) $ (6,819,627) ============ ============ ============ ============
-9- 12 WORLD WIRELESS COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS The Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements on December 3, 1999. This bulletin requires the application of specific criteria in determination of the timing of revenue recognition in financial statements and is effective for all fiscal years beginning after December 16, 1999. The Company has not determined the effect, if any, that this bulletin may have on its financial statements for the current fiscal year ending December 31, 2000. The Financial Accounting Standards Board issued FASB No. 133-Accounting for Derivative Instruments and Hedging Activities in June, 1998 to be effective for all fiscal years beginning after June 15, 1999. The statement establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. The implementation of this pronouncement has been deferred to all fiscal quarters of fiscal years beginning after June 15, 2000. Management does not believe the adoption of FASB No. 133 will have a material impact on the Company's operations. NOTE 2--EXIT FROM MANUFACTURING ACTIVITIES During the fourth quarter of 1999, the Company executed a plan to focus its efforts primarily on enhancing and marketing its X-traWeb(TM) products whereby all contract manufacturing was discontinued, all in-house production would be outsourced and the Company would move its executive offices to the Denver, Colorado area. The plan also involved liquidating the Company's raw materials and work in process inventory and selling all equipment used in production and contract manufacturing. The Company recognized as exit costs the related non-cancelable obligation under a lease agreement for office and manufacturing facilities in Salt Lake City, Utah through 2005. Future minimum lease payments of $1,756,924 under the lease were charged to operations during the year ended December 31, 1999. The Company completed its relocation to the Denver, Colorado area in March, 2000. Pursuant to a Lease Termination Agreement, dated May 1, 2000, the Company paid a $75,000 settlement payment and transferred its security deposit in the amount of $27,742 to the benefit of a new tenant in the Salt Lake City Utah manufacturing and office facilities and the lease agreement was terminated as of the May 1, 2000 date. Incident to the lease termination, the settlement funds described above were charged to the outstanding lease liability on the Company's balance sheet resulting in a remaining liability balance of $1,598,342. This balance was reversed and credited to operations as manufacturing exit recoveries income during the six months ended June 30, 2000. -10- 13 WORLD WIRELESS COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 3 - STOCKHOLDERS' EQUITY During the first quarter of 2000, the Company issued 4,548,557 common shares for gross cash proceeds of $13,646,000 received from 45 accredited investors in a private placement offering, at $3.00 per share. These securities are exempt from registration under the Act. In connection with the offering, a total of $1,476,783 was incurred as placement costs. During March, 2000, the Company issued a total 5,393,690 common shares related to the exercise of warrants to purchase common stock at $.25 per share. The Company received $401,218 in cash and recorded $947,204 related to the cashless exercise of warrants as a deemed payment of the principal of the 1999 Notes, as defined in Note 5 - Notes Payable. The warrants exercised totaled $1,348,422. In March, 2000, the Company issued 16,474 shares of common stock upon the cashless exercise of 18,333 stock options. NOTE 4 - MANDATORILY REDEEMABLE PREFERRED STOCK On May 14, 1999 the Company authorized 950 shares of senior liquidating mandatorily redeemable 10% preferred stock with a liquidation preference of $1,000 per share and detachable five-year warrants to purchase 4,750,000 common shares at $0.25 per share, and issued such 950 shares of preferred stock and the related warrants between May 15, 1999 and October 5, 1999. By their terms, the preferred shares had to be redeemed within one year at their par value plus accrued dividends. The preferred stock cash dividend requirement was $95,000 annually. The preferred stock was issued for proceeds of $950,000 consisting of $700,000 cash and the deemed payment of $250,000 principal amount of 1998 bridge loan notes. On February 25, 2000, the Company redeemed the mandatorily redeemable preferred stock for cash of $950,000 for the principal balance and $57,378 for the accrued preferred dividends accrued to date. NOTE 5 - NOTES PAYABLE On May 14, 1999 the Company issued $2,600,000 of senior secured 16% notes payable ("the 1999 Notes") which were to mature in one year and bore interest at the rate of 16% annually and payable quarterly. The notes were issued for $2,600,000 consisting of $1,600,000 in cash and the deemed payment of $1,000,000 principal amount of the 1998 bridge loan notes. The 1999 Notes were secured by substantially all the Company's assets. -11- 14 In March, 2000, the Company paid off the 1999 Notes outstanding with cash in the amount of $2,377,623 and with the deemed proceeds from the exercise of warrants to purchase 3,788,813 common shares at $.25 per share. The portion of the 1999 Notes paid by the exercise of warrants was $947,204. The warrants exercised are included in the total warrants issued during the three months ended March 31, 2000 as discussed in Note 3. The Company also paid $35,059 in accrued interest related to the 1999 Notes. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS When used in this discussion, the words "expect(s)", "feel(s)", "believe(s)", "will", "may", "anticipate(s)" and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, and are urged to carefully review and consider the various disclosures elsewhere in this Form 10-Q. THREE MONTHS ENDED SEPTEMBER 30, 2000 AND THREE MONTHS ENDED SEPTEMBER 30, 1999 Results of Operations The Company recognized a net loss of $1,578,807 for the three months ended September 30, 2000, or a $0.05 loss per share, compared to a net loss of $2,280,065 or a $.13 loss per share for the three months ended September 30, 1999. Sales in the three month period ended September 30, 2000 totaled $376,885 compared to $1,044,511 during the three month period ended September 30, 1999, or a decrease of 64%. During the comparative third quarters of 2000 and 1999, the Company derived its revenue as follows:
For the Three Months Ended September 30, ---------------------------------------- Summary of Revenue by Product: 2000 1999 ---------- ---------- Engineering Services $ -- $ 17,271 Royalties 45,172 263,041 Branded Products 176,404 78,036 Contract and Cable Manufacturing 41,211 686,163 XtraWeb 114,098 -- ---------- ---------- Total Revenue $ 376,885 $1,044,511 ========== ==========
-12- 15 During the third quarter of 2000, the Company continued to implement its plan to focus its efforts on the X-traWeb(TM) product line, since it previously abandoned its contract and in-house manufacturing activities. Accordingly, engineering service revenue was $0 in the third quarter of 2000 compared to $17,271 in the third quarter of 1999. In addition, contract and cable manufacturing revenues decreased by $644,952, or 94%, for the three months ended September 30, 2000 compared to the three months ended September 30, 1999. The Company's business strategy continues to emphasize (1) the design and sales of X-traWeb(TM) products, which contributed $114,098 in revenues during the three months ended September 30, 2000 compared to $0 for the three months ended September 30, 1999, and (2) the increased marketing of branded products, including radio and antenna sales, which totaled $176,404 in the third quarter of 2000 compared to $78,036 in the third quarter of 1999, an increase of $98,368, or 126%. Finally, royalties on products sold during the third quarter of 2000 by a major customer contributed $45,172 during the three months ended September 30, 2000 compared to $263,041 for the quarter ended September 30, 1999 which represented a decrease $217,869 or 82.8%. While the license agreement with such customer expired by its terms in September, 2000, the Company expects to receive an additional royalty payment with respect to such quarter in late 2000, although there can be no assurance of such result. Cost of sales for the three months ended September 30, 2000 totaled $259,110 compared to $891,433 for the three months ended September 30, 1999, or a decrease of $632,323 or 70.9%. The gross profits for the comparative quarters were $117,775, or 31.2% of sales, in 2000 compared to $153,078, or 14.7% of sales for 1999. The increase in gross profit percentage for the three months ended September 30, 2000 vs. 1999 was primarily due to reduced cost of sales associated with outsourced manufacturing of products sold in 2000. Gross profits resulting from ongoing sales activity benefitted from an overall reduction in costs and decreases in personnel and related expenses in the second quarter of 2000. The Company reduced total employees from 84 as of September 30, 1999 to 48 as of September 30, 2000, or a 42.9% reduction. The majority of this employee reduction was directly attributable to the exit from manufacturing activities. The Company incurred research and development costs of $455,456 for the three months ended September 30, 2000 compared to $322,920 for the three months ended September 30, 1999, or an increase of $132,536, or 41%. These costs continue to relate to the ongoing application development of the X-traWeb(TM) proprietary technology in 2000. The Company's selling, general, and administrative expenses for the three months ended September 30, 2000 totaled $1,285,258 compared to $1,148,110 for the three months ended September 30, 1999, or a increase of $137,148, or 12%. Over 45% of the September 30, 2000 expenses were incurred as part of the Company's marketing plan to promote X-traWeb(TM) products and technology solutions and expand its operations to the European marketplace. In addition, the Company substantially increased its advertising and promotional expenses by approximately $90,000 for the three months ended September 30, 2000 vs. September 30, 1999 as part of this business expansion marketing strategy in 2000. Interest income increased to $90,553 in the third quarter of 2000 from $4,630 in the third quarter of 1999 due to increased available funds invested in overnight interest bearing accounts provided by -13- 16 the $13.6 million private placement of shares of common stock issued by the Company in the first quarter of 2000. Interest expense decreased to $4,388 in the third quarter of 2000 from a total of $746,641 in the third quarter of 1999 due to the retirement of substantially all debt outstanding in the first quarter of 2000, and the non-recurrence in the third quarter of 2000 of amortization of debt discount. NINE MONTHS ENDED SEPTEMBER 30, 2000 AND NINE MONTHS ENDED SEPTEMBER 30, 1999 Results of Operations The Company incurred a net loss of $2,763,220 for the nine months ended September 30, 2000, or a $.10 loss per share, compared to a net loss of $6,819,627, or a $.41 loss per share, for the nine months ended September 30, 1999. This represents an improvement in 2000 of $4,056,407, or 59.5%, over 1999 year-to-date financial results. Sales for the nine month period ended September 30, 2000 totaled $1,343,124 compared to $2,717,510 during the nine month period ended September 30, 1999, or a decrease of $1,374,386 or 50.6%. During the comparative three quarters of 2000 and 1999, the Company derived its revenue as follows:
For the Nine Months Ended September 30, ---------------------------------------- Summary of Revenue by Product: 2000 1999 ---------- ---------- Engineering Services $ -- $ 857,534 Royalties 459,986 263,041 Branded Products 496,619 498,499 Contract and Cable Manufacturing 113,572 1,098,436 XtraWeb 272,947 -- ---------- ---------- Total Revenue $1,343,124 $2,717,510 ========== ==========
During the third quarter of 2000, the Company continued to implement its strategic plan to focus its efforts on the X-traWeb(TM) product line and abandon its contract and in-house manufacturing activities. Consequently, the engineering and contract manufacturing revenue declined from $1,955,970 to $113,572, a decrease of $1,842,398, or 94.2% during the nine months ended September 30, 2000 compared to the nine months ended September 30, 1999. Sales of branded products, included radio and antenna sales, decreased by $1,880, or .004%, during the first three quarters of 2000 vs. 1999. In addition, the Company recognized total revenues from the X-traWeb(TM) product line of $272,947 during the first nine months of 2000 and had no revenues from such source during the first three quarters of 1999. Finally, royalties contributed $459,986 in revenue during the nine months ended September 30, 2000, compared to $263,041 for the first nine months of 1999, or an increase of $196,945 or 74.9%. Since the license agreement with a customer expired by its terms in September, 2000, the Company anticipates receiving its final royalty payments during the fourth quarter of 2000, although there can be no assurance of the amount thereof (if any). -14- 17 During June, 2000, the Company formed a new operating subsidiary, X-traWeb Europe S.p.A., based in Milan, Italy. This subsidiary is responsible for the development and sale of X-traWeb(TM) products through European markets, commencing with the country of Italy. The Company had no revenues from the European operation as of September 30, 2000. In addition, the Company formed two additional operating subsidiaries, X-traWeb Services Corp. and X-traWeb Financial Corp., in June 2000, which are designed to offer various services of X-traWeb products and to provide financing capability of sales of X-traWeb products or services, respectively, although neither entity derived any revenues as of September 30, 2000. Cost of sales for the nine months ended September 30, 2000 compared to 1999 declined to $962,022 in 2000 from a total of $2,270,806 in 1999, or a reduction of $1,308,784 or 57.6%. The resulting gross profit was $381,102, or 28.4% of sales, for the nine months ended September 30, 2000 compared to $446,704, or 16.4%, for the nine months ended September 30, 1999. This represents an improvement of 12.0% in gross profit margin percentage for the comparable periods and is expected to continue to increase as the Company shifts towards higher profit margin business. Research and development expenses increased to $1,060,760 from $994,694, or by $66,066, or 6.6%, for the comparable nine month periods ended September 30, 2000 vs. September 30, 1999. Total selling, general, and administrative expenses amounted to $3,807,824 for the nine months ended September 30, 2000 compared to $3,730,130 for the nine months ended September 30, 1999, representing an increase of $77,694, or 2.1%. Selling and marketing expenses increased by $344,585, or 42.2%, during the nine months ended September 30, 2000 over 1999 and represents a significant increase in advertising, promotion, and sales related travel to market the Company's X-traWeb(TM) products as discussed above. Total general and administrative expenses for the comparable nine months periods ended September 30, 2000 and 1999 decreased by $266,891, or 9.6%, and resulted from (1) a decrease in depreciation of $590,646, or 85.3%, and (2) a savings of $167,500, or 64.4%, in facilities rent due to the termination of the Salt Lake City lease. These expense savings were offset in part by (1) an increase in corporate travel related expenses of $278,315 for promotion of X-traWeb(TM) products, the opening of the X-traWeb Europe offices, and other international business opportunities, and (2) increases of $204,780 in compensation and benefits, new stock exchange fees expense for the American Stock Exchange of $35,167, and an increase in the provision for doubtful accounts receivable of $53,246. Interest income for the nine months ended September 30, 2000 was $278,677 compared to $15,236 for the nine months ended September 30, 1999, with the increase directly attributable to increased available funds in overnight interest bearing accounts provided by the $13.6 million private placement of shares of common stock issued by the Company in the first quarter of 2000. Interest expense declined to $117,119 during the nine months ended September 30, 2000 compared to $1,578,727 for the nine months ended September 30, 1999, and represents a decrease of $1,461,608, or 92.6%. This expense reduction is directly related to retirement of substantially all debt, and related debt discount amortization, by the Company in the first quarter of 2000. LIQUIDITY AND CAPITAL RESOURCES The Company's liquidity at September 30, 2000 consisting of cash and cash equivalents was $5,279,317, which represented an increase of $4,385,468 over the Company's cash and cash equivalents of $893,849 as of December 31, 1999. The Company's current assets were $6,236,098 as of September 30, 2000, an increase of $4,275,168 from the Company's current assets of $1,960,930 as of December 31, 1999. -15- 18 During the first quarter of 2000, the Company raised $13,646,000 of new capital from the sale of shares of common stock in a private placement transaction to 45 accredited investors at $3.00 per share. The proceeds of this offering, net of $1,398,223 in placement fees, amounted to $12,247,777. The Company also paid a total of $78,560 in placement fees related to 1999 offerings during this period. The net proceeds from issuance of common stock were $12,169,217. In March, 2000, the Company also issued common stock related to the exercise of 5,393,690 warrants to purchase common stock at $.25 per share. Proceeds of $401,218 were received in cash and $947,204 was recorded as capital related to the cashless exercise of warrants by the deemed payment of principal by reduction of the 1999 notes issued by the Company. The warrants exercised totaled $1,348,423. With the proceeds of the $13,646,000 private placement, the Company, in the first quarter of 2000, redeemed the mandatorily redeemable 10% preferred stock in the amount of $950,000 plus accrued dividends of $57,378. In addition, the Company paid off the 1999 notes outstanding with cash in the amount of $2,377,623 and the cashless exercise of warrants by deemed payment of principal in the amount of $947,204, as discussed above, and accrued interest of $35,059, thereby discharging such debt in full. The Company's liquidity decreased due to changes in operating assets and liabilities during the first nine months of 2000. For the nine months ended September 30, 2000, the net change in operating assets and liabilities utilized net cash flow of $356,534 compared to a net decrease of cash for the nine months ended September 30, 1999 of $1,125,058. The primary reasons for the net decrease in cash flow during the first three quarters of 2000 were decreases in accounts receivable levels of $79,738, which were offset in part by cash flow used to reduce accounts payable of $419,280 and other accrued liabilities (net of accrued lease obligation terminated during the nine months ended September 30, 2000) of $40,901. For the nine months ended September 30, 1999, accounts receivable increased and accounts payable decreased by $376,560 and $347,208, respectively, resulting in total net cash flow used of $723,768. SUMMARY During the first nine months of 2000, the Company has implemented its redirection efforts to focus on the growth of its X-traWeb(TM) business segment and proprietary radio products. Management has raised $13,646,000 million in new equity capital, paid off substantially all outstanding debt, redeemed all mandatorily redeemable preferred stock outstanding, relocated its corporate headquarters to the Denver, Colorado area, and exited from all in-house manufacturing activities, including termination of its lease obligation for facilities in Utah. While the Company has recently hired additional engineering and marketing personnel, management believes that the potential growth of current products will require additional engineering and marketing personnel for the X-traWeb(TM) business in advance of the receipt of substantial revenues from such source. As a result, the Company will continue to recruit such personnel actively. In addition, the Company realized revenues from the sales of its X-traWeb products for the first time during the first nine months of 2000. In addition, management is evaluating the need and availability of additional capital to support its further business expansion in Europe and internationally. While the Company believes that such additional financing can be obtained, there can be no assurance that such financing will be achieved or, if made available, on terms acceptable to the Company. -16- 19 In summary, while management is optimistic about the Company's future, it is fully aware that anticipated revenue increases from sales of X-traWeb(TM) products and its proprietary radios are by no means assured. New capital and financing sources and availability may be limited. As a result, there can be no assurance that management's efforts will be successful. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None pending ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None reported ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K The following documents are filed as part of this report: Financial Statements of the Company (unaudited), including Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operation, Condensed Consolidated Statements of Cash Flow and Notes to Financial Statements as at and for the three months and nine months ended September 30, 2000 and the Exhibits which are listed on the Exhibit Index attached hereto. EXHIBIT INDEX No. Description 3.1 Articles of Incorporation of the Company and all amendment thereto* 3.2 Bylaws of the Company* 4.1 Form of Common Stock Certificate* 4.2 Form of Subscription Agreement used in private financing providing for registration rights* 5. Opinion of Connolly Epstein Chicco Foxman Engelmyer & Ewing regarding the legality of securities being registered* 10.1 1997 Stock Option Plan* 10.2 DRCC Omnibus Stock Option Plan* 10.3 Development and License Agreement dated April 4, 1997, between DRCC and Kyushu Matsushita Electric Co., Ltd.* -17- 20 10.4 Amended and restated Technical Development and Marketing Alliance Agreement dated September 15, 1997, between the Company and Williams Telemetry Services, Inc.* 10.5 Lease Agreement dated May 17, 1995, between DRCC and Pracvest Partnership relating to the Company's American Fork City offices and facility* 10.6 Lease Agreement dated February 12, 1996, between the Company the Green/Praver, et al., relating to the Company's Salt Lake City offices* 10.7 Shareholders Agreement dated May 21, 1997 between the Company, DRCC,Philip A. Bunker and William E. Chipman, Sr.* 10.8 Asset Purchase Agreement dated October 31, 1997, between the Company and Austin Antenna, Ltd.* 10.9 Stock Exchange Agreement dated October 31, 1997, between the Company, TWC, Ltd. and the shareholders of TWC, Ltd.* 10.10 Settlement Agreement, Mutual Waiver and Release of All Claims dated November 11, 1997 between Digital Radio Communications Corp. and Digital Scientific, Inc.* 10.11 Agreement (undated) between the Company, Xarc Corporation and Donald J. Wallace relating to the Company's acquisition of Xarc Corporation* 10.12 Promissory Note dated December 4, 1997, by the Company, payable to William E. Chipman, Sr. in the principal amount of $125,000* 10.13 Promissory Note dated November 13, 1997, by the Company, payable to T. Kent Rainey in the principal amount of $200,000* 10.14 Investment Banking Services Agreement dated November 19, 1997, between The Company and PaineWebber Incorporated* 10.15 $400,000 Promissory Note dated December 24, 1997, payable to Electronic Assembly Corporation* 10.16 $400,000 Promissory Note dated January 8, 1998, payable to Tiverton Holdings Ltd.* 10.17 Loan Agreement by and among the Registrant and the Bridge Noteholders dated as of May 15, 1998* 10.18 Amendment and Waiver Agreement by and among the Registrant and the Bridge Noteholders dated August 7, 1998* 10.19 Amendment and Waiver Agreement by and among the Registrant and the Bridge Noteholders dated September 11, 1998* 10.20 Loan Agreement by and among the Registrant and the Bridge Noteholders dated as of May 15, 1998 (Previously filed), together with the Notes, Pledge/Security Agreement, Pledgee/Representative Agreement, Subordination, and Registration Rights Agreement* 10.21 Separation and Mutual Release Agreement between the Registrant and William E. Chipman, Sr. dated as of May 26, 1998*+ -18- 21 10.22 Registration Rights Agreement by and among the Registrant and the purchasers of common stock issued pursuant to the Registrant's Confidential Private Placement Memorandum dated September 9, 1998, as amended* 10.23 Employment Agreement between the Registrant and James O' Callaghan dated May 20, 1998*+ 10.24 Lease agreement between the Registrant and NP#2 dated as of July 29, 1998 relating to the premises at 2441 South 3850 West, West Valley City, Utah 84120* 10.25 Agreement between KME and the Registrant dated October 19, 1998 relating to the Registrant's providing of technical assistance and development relating to the Giarange telephone* 10.26 Agreement between KME and the Registrant dated as of March 1, 1998 relating to the Panasonic MicroCast System* 10.27 General and Mutual Release Agreement between the Registrant and Phil Acton dated November 2, 1998*+ 10.28 Agreement and Waiver Agreement by and among the Registrant and the Bridge Noteholders dated November 25, 1998* 10.29 1998 Employee Incentive Stock Option Plan*+ 10.30 1998 Non-qualified Stock Option Plan*+ 10.31 Amendment of Agreement by and among the Registrant and the Bridge Noteholders dated as of March 26, 1999* 10.32 Loan Agreement by and among the Registrant and the Senior Secured Noteholders dated as of May 14, 1999, together with the Notes, Pledge/Security Agreement, Pledgee Representative Agreement, Subordination and Registration Rights Agreement* 10.33 Two separate Agreements by and among the Registrant and the 1999 Bridge Noteholders dated August 19, 1999* 10.34 Waiver Agreement by and among the Registrant and the Bridge Noteholders dated as of December 7, 1999* 10.35 Registration Rights Agreement by and among the Registrant and the purchasers of common stock issued pursuant to the Registrant's Confidential Private Placement Memorandum dated January 12, 2000 as amended.* 10.36 Settlement Agreement and Mutual Release between Internet Telemetry Corp. and the Registrant, dated as of August 7, 2000.* 27 Financial Data Schedules** -19- 22 ---------- ** Filed herewith * Filed previously + Management contract or compensatory plan or arrangement filed previously (b) The following reports on Form 8-K were filed by the Registrant during the quarter ended September 30, 2000: None -20- 23 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DATE: November 13, 2000 WORLD WIRELESS COMMUNICATIONS, INC. By: /s/ David D. Singer --------------------------------------- David D. Singer President, Chief Executive Officer By: /s/ Roger D. Leclerc --------------------------------------- Roger D. Leclerc Vice President of Finance Principal Financial Officer -21- 24 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION ------- ----------- 3.1 Articles of Incorporation of the Company and all amendment thereto* 3.2 Bylaws of the Company* 4.1 Form of Common Stock Certificate* 4.2 Form of Subscription Agreement used in private financing providing for registration rights* 5. Opinion of Connolly Epstein Chicco Foxman Engelmyer & Ewing regarding the legality of securities being registered* 10.1 1997 Stock Option Plan* 10.2 DRCC Omnibus Stock Option Plan* 10.3 Development and License Agreement dated April 4, 1997, between DRCC and Kyushu Matsushita Electric Co., Ltd.*
25 10.4 Amended and restated Technical Development and Marketing Alliance Agreement dated September 15, 1997, between the Company and Williams Telemetry Services, Inc.* 10.5 Lease Agreement dated May 17, 1995, between DRCC and Pracvest Partnership relating to the Company's American Fork City offices and facility* 10.6 Lease Agreement dated February 12, 1996, between the Company the Green/Praver, et al., relating to the Company's Salt Lake City offices* 10.7 Shareholders Agreement dated May 21, 1997 between the Company, DRCC,Philip A. Bunker and William E. Chipman, Sr.* 10.8 Asset Purchase Agreement dated October 31, 1997, between the Company and Austin Antenna, Ltd.* 10.9 Stock Exchange Agreement dated October 31, 1997, between the Company, TWC, Ltd. and the shareholders of TWC, Ltd.* 10.10 Settlement Agreement, Mutual Waiver and Release of All Claims dated November 11, 1997 between Digital Radio Communications Corp. and Digital Scientific, Inc.* 10.11 Agreement (undated) between the Company, Xarc Corporation and Donald J. Wallace relating to the Company's acquisition of Xarc Corporation* 10.12 Promissory Note dated December 4, 1997, by the Company, payable to William E. Chipman, Sr. in the principal amount of $125,000* 10.13 Promissory Note dated November 13, 1997, by the Company, payable to T. Kent Rainey in the principal amount of $200,000* 10.14 Investment Banking Services Agreement dated November 19, 1997, between The Company and PaineWebber Incorporated* 10.15 $400,000 Promissory Note dated December 24, 1997, payable to Electronic Assembly Corporation* 10.16 $400,000 Promissory Note dated January 8, 1998, payable to Tiverton Holdings Ltd.* 10.17 Loan Agreement by and among the Registrant and the Bridge Noteholders dated as of May 15, 1998* 10.18 Amendment and Waiver Agreement by and among the Registrant and the Bridge Noteholders dated August 7, 1998* 10.19 Amendment and Waiver Agreement by and among the Registrant and the Bridge Noteholders dated September 11, 1998* 10.20 Loan Agreement by and among the Registrant and the Bridge Noteholders dated as of May 15, 1998 (Previously filed), together with the Notes, Pledge/Security Agreement, Pledgee/Representative Agreement, Subordination, and Registration Rights Agreement* 10.21 Separation and Mutual Release Agreement between the Registrant and William E. Chipman, Sr. dated as of May 26, 1998*+
26 10.22 Registration Rights Agreement by and among the Registrant and the purchasers of common stock issued pursuant to the Registrant's Confidential Private Placement Memorandum dated September 9, 1998, as amended* 10.23 Employment Agreement between the Registrant and James O' Callaghan dated May 20, 1998*+ 10.24 Lease agreement between the Registrant and NP#2 dated as of July 29, 1998 relating to the premises at 2441 South 3850 West, West Valley City, Utah 84120* 10.25 Agreement between KME and the Registrant dated October 19, 1998 relating to the Registrant's providing of technical assistance and development relating to the Giarange telephone* 10.26 Agreement between KME and the Registrant dated as of March 1, 1998 relating to the Panasonic MicroCast System* 10.27 General and Mutual Release Agreement between the Registrant and Phil Acton dated November 2, 1998*+ 10.28 Agreement and Waiver Agreement by and among the Registrant and the Bridge Noteholders dated November 25, 1998* 10.29 1998 Employee Incentive Stock Option Plan*+ 10.30 1998 Non-qualified Stock Option Plan*+ 10.31 Amendment of Agreement by and among the Registrant and the Bridge Noteholders dated as of March 26, 1999* 10.32 Loan Agreement by and among the Registrant and the Senior Secured Noteholders dated as of May 14, 1999, together with the Notes, Pledge/Security Agreement, Pledgee Representative Agreement, Subordination and Registration Rights Agreement* 10.33 Two separate Agreements by and among the Registrant and the 1999 Bridge Noteholders dated August 19, 1999* 10.34 Waiver Agreement by and among the Registrant and the Bridge Noteholders dated as of December 7, 1999* 10.35 Registration Rights Agreement by and among the Registrant and the purchasers of common stock issued pursuant to the Registrant's Confidential Private Placement Memorandum dated January 12, 2000 as amended.* 10.36 Settlement Agreement and Mutual Release between Internet Telemetry Corp. and the Registrant, dated as of August 7, 2000.* 27 Financial Data Schedules**
27 ---------- ** Filed herewith * Filed previously + Management contract or compensatory plan or arrangement filed previously