-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VZxRWmlYe1Iwp1Nb5PPKOUI88kswcI4pjMbjRARNhpBbWmR8ahcm1RDk+1suchT5 dma2IbF/LU6MzwbC/NJFAg== 0000898430-96-005442.txt : 19961121 0000898430-96-005442.hdr.sgml : 19961121 ACCESSION NUMBER: 0000898430-96-005442 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961119 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PORTACOM WIRELESS INC/ CENTRAL INDEX KEY: 0000907166 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-23228 FILM NUMBER: 96669222 BUSINESS ADDRESS: STREET 1: 8055 W MANCHESTER AVE STREET 2: SUITE 730 CITY: PLAYA DEL REY STATE: CA ZIP: 90293 BUSINESS PHONE: 3104484410 MAIL ADDRESS: STREET 1: 8055 W MANCHESTER AVE STREET 2: SUITE 730 CITY: PLAYA DEL REY STATE: CA ZIP: 90293 FORMER COMPANY: FORMER CONFORMED NAME: EXTREME TECHNOLOGIES INC DATE OF NAME CHANGE: 19950127 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL PCBX SYSTEMS INC DATE OF NAME CHANGE: 19940119 10QSB 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (MARK ONE) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO ______ 0-23228 (COMMISSION FILE NO.) PORTACOM WIRELESS, INC. (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER) BRITISH COLUMBIA, CANADA N/A (State or other Jurisdiction of (IRS Employer Identification No.) Incorporation or Organization) 8055 W. MANCHESTER AVENUE, SUITE 730 PLAYA DEL REY, CALIFORNIA 90293 (Address of principal executive offices) ISSUER'S TELEPHONE NUMBER: (310) 448-4140 Check whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12 months and (2) has been subject to such filing requirements for the past 90 days. 1.YES X NO --- --- 2.YES X NO --- --- AS OF SEPTEMBER 30, 1996, THERE WERE 11,956,010 SHARES OF COMMON STOCK ISSUED AND OUTSTANDING. Transitional Small Business Disclosure Format (Check One): 1.YES NO X --- ---
INDEX PART I. FINANCIAL INFORMATION PAGE NO. ITEM 1. Statement Regarding Financial Information F-1 Report on Audit by Independent Chartered Accountants F-2 Condensed Consolidated Balance Sheet at September 30, 1996 and December 31, 1995 F-3 Condensed Consolidated Statements of Operations for the three months ended September 30, 1996 and 1995 (Unaudited) and for the nine months ended September 30, 1996 and December 31, 1995 F-4 Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 1996 and 1995 (Unaudited) and for the nine months ended September 30, 1996 and December 31, 1995 F-5 Notes to Condensed Consolidated Financial F-6 Statements (Unaudited) ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 1 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings 8 ITEM 2. Changes in Securities 8 ITEM 3. Defaults Upon Senior Securities 8 ITEM 4. Submission of Matters to a Vote of Security Holders 8 ITEM 5. Other Information 8 ITEM 6. Exhibits and Reports on Form 8-K 8
PORTACOM WIRELESS, INC. AND SUBSIDIARIES QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1996 PART I. FINANCIAL INFORMATION The financial statements included herein have been prepared by PortaCom Wireless, Inc. (formerly known as "Extreme Technologies, Inc." and defined herein in the alternative as the "Company" or the "Registrant"), both without audit, in the case of the results for the fiscal quarters ended September 30, 1996 and 1995, and audited, in the case of the results for the nine months ended September 30, 1996 and December 31, 1995, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). As contemplated by the SEC under Rule 10-01 of Regulation S-X (as amended by Regulation S-B), the accompanying financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles. However, the Company believes that the disclosures are adequate to make the information presented not misleading. Except where otherwise specified, all dollar amounts referenced in this document are denominated in United States dollars. It is suggested that the financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Form 10-KSB for the nine month transition period ended December 31, 1995 as filed with the SEC (file number 0-23228). F-1 [LETTERHEAD OF KPMG] AUDITORS' REPORT To the Board of Directors Portacom Wireless, Inc. We have audited the consolidated balance sheets of PortaCom Wireless, Inc. as at September 30, 1996 and December 31, 1995 and the consolidated statements of operations and deficit and cash flows for the nine month periods ended September 30, 1996 and December 31, 1995 and the year ended March 31, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at September 30, 1996 and December 31, 1995 and the results of its operations and the changes in its financial position for the nine month periods ended September 30, 1996 and December 31, 1995 and the year ended March 31, 1995 in accordance with generally accepted accounting principles. /s/ KPMG Chartered Accountants Vancouver, Canada October 11, 1996 F-2 PORTACOM WIRELESS, INC. Consolidated Balance Sheets (expressed in U.S. dollars)
- ------------------------------------------------------------------------------------- September 30, December 31, 1996 1995 - ------------------------------------------------------------------------------------- Assets Current assets: Cash and short-term deposits $ 751,863 $ 165,665 Accounts receivable 10,000 7,093 ------------------------------------------------------------------------------------ 761,863 172,758 Promissory notes receivable (note 4) 436,411 815,400 Investments (note 5) 8,025,000 -- Equipment, net 12,959 -- - ------------------------------------------------------------------------------------- $ 9,236,233 $ 988,158 - ------------------------------------------------------------------------------------- Liabilities and Shareholders' Equity (Deficiency) Current liabilities: Accounts payable and accrued liabilities (note 6) $ 404,994 $ 1,107,426 Loans payable (note 7) 2,405,000 971,000 ---------------------------------------------------------------------------------- 2,809,994 2,078,426 Shareholders' equity (deficiency): Share capital (note 8) 14,910,396 13,829,621 Deficit (8,484,157) (14,919,889) ---------------------------------------------------------------------------------- 6,426,239 (1,090,268) Future operations (note 1) Contingent liability (note 5(a)) - ------------------------------------------------------------------------------------- $ 9,236,233 $ 988,158 - -------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements. On behalf of the Board: /s/ Stephen Leahy Director - ------------------------ /s/ Douglas MacLellan Director - ------------------------ F-3 WIRELESS, INCPORTACOM WIRELESS, INC. Consolidated Statements of Operations and Deficit (expressed in U.S. dollars)
- ---------------------------------------------------------------------------------------------------------------------------------- Three months ended Nine months ended Year ended September 30, September 30, September 30, December 31, March 31, 1996 1995 1996 1995 1995 - ---------------------------------------------------------------------------------------------------------------------------------- UNAUDITED UNAUDITED Income: Sales $ 10,000 $ 72,664 $ 10,000 $ 143,652 $ 780,839 Cost of sales - - - 87,391 992,807 - ---------------------------------------------------------------------------------------------------------------------------------- 10,000 72,664 10,000 56,261 (211,968) Other income 9,000,179 - 9,003,906 - - - ---------------------------------------------------------------------------------------------------------------------------------- 9,010,179 72,664 9,013,906 56,261 (211,968) Expenses: Advertising and promotion - 45,060 3,500 60,820 281,649 Bad debt - - 2,513 80,628 571,003 Consulting fees (note 10) 72,436 274,657 537,688 327,132 1,470,000 Depreciation 1,595 - 1,595 143,786 210,052 General and administrative 80,930 78,374 222,712 114,526 499,165 Interest and bank charges (note 7) 139,670 43,755 431,731 73,394 134,198 Legal and accounting 141,360 47,328 459,178 273,665 469,922 Management fees (note 10) 22,633 11,780 62,876 49,436 360,505 Placement fees - - 106,000 - - Rent 9,232 14,526 34,904 141,568 267,165 Research and development - 10,050 - 60,437 570,441 Travel 72,179 47,479 208,276 97,948 439,748 Wages and benefits 167,235 47,957 343,345 513,325 1,658,765 - ---------------------------------------------------------------------------------------------------------------------------------- 707,270 620,966 2,414,318 1,936,665 6,932,613 - ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) before debt settlement 8,302,909 (548,302) 6,599,588 (1,880,404) (7,144,581) Gain (loss) on settlement of debt (notes 8 and 10(f)) 210,750 - (163,856) 545,924 - - ---------------------------------------------------------------------------------------------------------------------------------- Net income (loss) for the period 8,513,659 (548,302) 6,435,732 (1,334,480) (7,144,581) Deficit, beginning of period 16,738,628 14,448,461 14,919,889 13,585,409 6,440,828 - ---------------------------------------------------------------------------------------------------------------------------------- Deficit, end of period $ 8,224,969 $14,996,763 $ 8,484,157 $14,919,889 $13,585,409 ================================================================================================================================== Net income (loss) per share (note 3(f)) $0.72 $(0.03) $0.47 $(0.09) $(0.49) ================================================================================================================================== Weighted average number of common shares outstanding (note 3(f)) 11,903,947 16,229,963 13,642,462 15,549,863 14,524,845 ==================================================================================================================================
See accompanying notes to consolidated financial statements. F-4 PORTACOM WIRELESS, INC. Consolidated Statements of Cash Flows (expressed in U.S. dollars)
================================================================================================================================= Three months ended Nine months ended Year ended September 30, September 30, September 30, December 31, March 31, 1996 1995 1996 1995 1995 - --------------------------------------------------------------------------------------------------------------------------------- UNAUDITED UNAUDITED Operations: Net income (loss) for the period $ 8,513,659 $ (548,302) $ 6,435,732 $(1,334,480) $(7,144,581) Items not involving cash Depreciation 1,595 - 1,595 143,786 210,052 Fair value of investments received on settlement (note 5(a)) - - (8,000,000) - - Income from AAT transaction (8,000,000) Net changes in non-cash working capital relating to operations: Accounts and notes receivable 1,806,337 (197,855) 376,082 (782,060) 24,314 Inventory - - - 58,852 327,995 Prepaid expenses - - - 6,680 62,260 Employee loans (note 10(c)) - (2,636) - - 147,209 Accounts payable and accrued liabilities (503,355) 229,863 (702,432) (1,107,232) 1,657,069 -------------------------------------------------------------------------------------------------------------------------------- Net cash used by operating activities 1,818,236 (518,930) (1,889,023) (3,014,454) (4,715,682) Financing: Issue of and to be issued for common shares: For cash 133,250 1,141,130 553,145 1,230,830 3,109,209 On settlement of debt and as non-cash consideration - - 277,630 2,513,121 - Value assigned to warrants - - 250,000 - - Note payable - - - - (150,000) Promissory note payable - - - (37,500) (50,000) Loans payable (1,229,000) (177,008) 1,434,000 (613,508) 584,508 -------------------------------------------------------------------------------------------------------------------------------- Net cash generated by financing activities (1,095,750) 964,122 2,514,775 3,092,943 3,493,717 Investments: Equipment, net (1,027) - (14,554) 13,792 (92,379) Patents, trademarks and other assets - - - - (80,855) Investment (note 5) - - (25,000) - - Acquisition of additional shares in TAI (note 3) (25,000) - - - - - --------------------------------------------------------------------------------------------------------------------------------- Net cash used by investing activities (26,027) - (39,554) 13,792 (173,234) - --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents 696,459 445,192 586,198 92,281 (1,395,199) Cash and cash equivalents, beginning of period 55,404 79,055 165,665 73,384 1,468,583 - --------------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 751,863 $ 524,247 $ 751,863 $ 165,665 $ 73,384 =================================================================================================================================
See accompanying notes to consolidated financial statements. F-5 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 1. FUTURE OPERATIONS: PortaCom Wireless Inc. (the "Company") was incorporated on July 7, 1989 under the Company Act (British Columbia) and was inactive until April 1990. The Company is currently pursuing business ventures as a developer, financier and operator of companies providing cellular, wireless and PSTN telecommunications services in selected developing world markets. The Company intends to make investments primarily in wireless, cellular, PSTN and long distance networks in order to provide coverage and high-quality service in selected emerging markets. The Company's principal interests are focused on these technologies in Vietnam, Cambodia and other emerging markets. At September 30, 1996 the Company had a working capital deficiency of $2,048,131. At the date of these financial statements, the Company has not generated cash flow from recurring operating activities and it is uncertain when it will commence to generate such a cash flow. In addition, the Company's major recorded asset is restricted until January 1, 1999 (note 5(a)). Accordingly, there can be considered to be doubt as to the nature and extent of the Company's future operations. The accompanying consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern which requires the realization of assets and settlement of liabilities in the ordinary course of business. The Company's viability as a going concern is dependent upon the continued restructuring of its asset base, the financial support of shareholders and creditors and, ultimately, the generation of profitable operations. Although it is management's intention to pursue these options, there can be no assurance that these events will or can occur. 2. CHANGE IN FISCAL YEAR: In 1995, the Company changed the date on which its fiscal year ends from March 31 to December 31, 1995. Accordingly, results of operations for the transition period which ended December 31, 1995 cover a nine-month period. 3. SIGNIFICANT ACCOUNTING POLICIES: (a) Basis of presentation: These consolidated financial statements are prepared in accordance with generally accepted accounting principles in Canada. Except as indicated in Note 11, they also comply in all material respects with generally accepted accounting principles in the United States. (b) Basis of consolidation: These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, PortaCom International, Ltd., PCBX Systems, Inc., Extreme Laboratories, Inc. and Extreme TeleCom, Inc. All material intercompany accounts and transactions have been eliminated. All subsidiaries other than PortaCom International, Ltd. are inactive. F-6 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements, page 2 (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): (b) Basis of consolidation (continued): Investments are accounted for at cost. (c) 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 of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. With respect to the Company's operations, these estimates primarily relate to the underlying value of investments which will only be determinable based upon future events. Management has applied its judgment to the information available at the date of these consolidated financial statements in making such judgment. Actual results could differ from estimates made in preparing these consolidated financial statements. (d) Cash and cash equivalents: Cash equivalents are highly liquid investments, such as term deposits, having original maturities of three months or less, that are readily convertible to contracted amounts of cash. (e) Equipment: Equipment is recorded at cost. Depreciation is provided at rates which are calculated to amortize the cost of these assets over their estimated useful lives. (f) Net income (loss) per share: Net income (loss) per share is computed based on the weighted average number of shares outstanding during the year, which number of shares includes performance shares that are contingently returnable to the Company's treasury. Fully diluted net income (loss) per share has not been presented as the effect of issued performance shares and outstanding warrants and options are either not materially dilutive or are anti-dilutive. (g) Currency: As the majority of the Company's activities are in U.S. dollars, these consolidated financial statements are stated in U.S. dollars, except where otherwise indicated. Translation of Canadian dollar transactions has taken place at the exchange rate in effect at the transaction date. There have been no material foreign exchange gains or losses through the date of these consolidated financial statements. F-7 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements, page 3 (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 4. PROMISSORY NOTES RECEIVABLE: (a) Promissory notes receivable bear interest at 10% per annum, are unsecured and without specific dates of repayment. The promissory notes receivable are due from entities which are related to the Company through common directors and management. (b) Interim financial statements: The accompanying statements of operations and deficit and cash flows for the three months ended September 30, 1996 and 1996 are unaudited; however, in the opinion of management, these statements have been prepared on the same basis as the audited financial statements and include all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of the results of the periods presented. 5. INVESTMENTS:
- ---------------------------------------------------------------------------------- September 30, December 31, 1996 1995 - ---------------------------------------------------------------------------------- Asian American Telecommunications Corporation, 17% interest $ 8,000,000 $ - Telecommunications American International, 41% interest 25,000 - - ---------------------------------------------------------------------------------- $ 8,025,000 $ - - ----------------------------------------------------------------------------------
(a) On May 28, 1996, the Company announced that it had entered into a contract to acquire all of the outstanding shares of Asian American Telecommunications Corporation ("AAT"), an unrelated Los Angeles- based telecommunications services developer. By an agreement made as of September 11, 1996, AAT and the Company agreed to terminate all rights and obligations of either party under the proposed business combination. As consideration for this termination, AAT agreed to issue to the Company 2,000,000 common shares and warrants to acquire 4,000,000 common shares of AAT for a period of three years at a price of $4.00 per share. The Company's investment is recorded at the estimated fair value of the consideration received. In addition, AAT paid the Company cash consideration of $1,000,000 as part of this termination agreement. The 2,000,000 common shares have been pledged by the Company to AAT until January 1, 1999 pursuant to the Company's indemnification obligations under the termination agreement. These indemnification obligations provide that the Company grants to AAT a first priority lien on the common shares against any costs or losses arising to AAT, or specified related parties, arising from claims or potential claims related to the original proposed acquisition or the termination agreement. At the date of these financial statements, no claims under this indemnification agreement have arisen. The receipt of cash and common stock pursuant to the termination agreement has been recorded as income in the Statement of Operations. F-8 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements, page 4 (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 5. INVESTMENTS (CONTINUED): (b) On August 5, 1996, the Company agreed to purchase 250 shares of the common stock of Telecommunications American International ("TAI") from a shareholder for the sum of $25,000. Subsequent to September 30, 1996, the Company's subsidiary, PortaCom International, Ltd., subscribed to a shareholder rights offering in which it purchased 2,900 Units, each Unit consisting of one promissory note of $49 and one share of common stock, for $145,000. 6. ACCRUED LIABILITIES: Management fees due to a director (formerly an officer) of the Company previously included in accrued liabilities ceased to accrue as at October 31, 1995. Liability settled for common shares in the nine month period ended December 31, 1995. 7. LOANS PAYABLE:
- ------------------------------------------------------------------------------------------------------ September 30, December 31, 1996 1995 - ------------------------------------------------------------------------------------------------------ Convertible promissory notes (a) $ 2,405,000 $ 600,000 Note payable to former officer due December 31, 1996 - 200,000 Note payable to former services vendor, due as to $100,000 on or before April 5, 1996 (paid) and $71,000 on or before June 28, 1996 (paid) - 171,000 - ------------------------------------------------------------------------------------------------------ $ 2,405,000 $ 971,000 - ------------------------------------------------------------------------------------------------------
(a) Convertible promissory notes: Between December 19, 1995 and May 7, 1996, the Company arranged, subject to regulatory approval, private placements of convertible promissory notes having an aggregate principal amount of $2,405,000. Of this amount, $1,805,000 was received in the nine months ended September 30, 1996 and $600,000 was received in the period ended December 31, 1995. The promissory notes are due and payable after two years which ranges to May 1998, or after six months upon demand of the holder, and bear interest at 10% per annum, with interest payable upon maturity or conversion. The promissory notes are convertible at the holders' option into shares of common stock of the Company at conversion prices ranging from $1.49 to $3.25 per share. Pursuant to the debt subscription agreements, the Company has also agreed to issue to the investors non- transferable warrants to purchase up to an aggregate of 459,021 shares of common stock of the Company for a period of two years at a price equal to the conversion price of the notes. The conversion and warrant exercise prices are based on the market price of the Company's common shares at the date of their offering. F-9 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements, page 5 (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 7. LOANS PAYABLE (CONTINUED): (b) Bridge Financing: During the year the Company completed a Bridge Financing to raise $2,500,000 to provide interim financing pending the completion of a private placement of the convertible promissory notes described in (a). The Bridge Financing was due on demand after 30 days and bore interest at 12% per annum. In addition, 166,667 warrants are issuable to the lenders (note 8(e)). For accounting purposes, the warrants have been recorded at their estimated fair value of $250,000 with a corresponding reduction in the recorded value of the Notes. This resulted in deemed interest expense of $250,000 in the period. This deemed interest is included in interest expense in the consolidated statement of operations. The Bridge Financing notes were repaid prior to September 30, 1996. 8. SHARE CAPITAL: (a) Authorized: Authorized share capital is as follows: 94,050,000 common shares without par value 100,000,000 class "A" preference shares with a par value of C$10 each 100,000,000 class "B" preference shares with a par value of C$50 each F-10 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements, page 6 (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 8. SHARE CAPITAL (CONTINUED): (b) Issued common shares:
------------------------------------------------------------------------------------------------------------- Number Per share Total of shares consideration consideration ------------------------------------------------------------------------------------------------------------- Balance issued, March 31, 1994 13,584,872 $ 5,737,665 Cash received in advance of issuance of common shares 250,000 4.95 1,238,796 ------------------------------------------------------------------------------------------------------------- 13,834,872 6,976,461 Issued for cash: Free-trading shares, net of share issuance costs of $354,047 (f) 656,457 3.38 2,220,353 On exercise of stock options 266,000 1.61 427,325 On exercise of warrants 373,747 1.23 461,531 Issued as a finders fee 83,742 - - ------------------------------------------------------------------------------------------------------------- Balance issued and subscribed, March 31, 1995 15,214,818 10,085,670 Issued for cash: Free-trading shares 204,878 1.36 277,490 On exercise of stock options 820,267 1.16 953,340 ------------------------------------------------------------------------------------------------------------- Balance issued, December 31, 1995 16,239,963 11,316,500 To be issued on settlement of debt (g) 1,256,559 2.00 2,513,121 ------------------------------------------------------------------------------------------------------------- Balance issued and to be issued, December 31, 1995 17,496,522 13,829,621 Cancelled (c) (5,950,000) - Issued for cash: Free-trading shares 97,500 1.11 108,225 On exercise of warrants 97,878 2.98 291,500 On exercise of stock options 103,050 1.49 153,420 Issued as consideration for: Loans payable (h) 14,500 3.41 49,500 Settlement of debt 96,560 1.25 120,780 ------------------------------------------------------------------------------------------------------------- Balance issued, September 30, 1996 11,956,010 14,553,046 To be issued on settlement of debt (g) 53,675 2.00 107,350 ------------------------------------------------------------------------------------------------------------- 12,009,685 14,660,396 Fair value of warrants issuable in consideration for Bridge Financing (e) -- 250,000 ------------------------------------------------------------------------------------------------------------- Balance issued and to be issued, September 30, 1996 12,009,685 $ 14,910,396 -------------------------------------------------------------------------------------------------------------
F-11 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements, page 7 (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 8. SHARE CAPITAL (CONTINUED): (c) Performance shares: Included in the issued and outstanding common shares are 600,000 common performance shares which are subject to an escrow agreement. These shares are releasable from escrow on satisfaction of certain predetermined tests set out by regulatory authorities related to the generation of positive cash flow from operations. Shares not released from escrow by September 9, 2002 will be cancelled. Pursuant to the escrow agreement, holders of the performance shares may exercise all voting rights attached thereto except on a resolution to cancel any of the shares, and have waived their rights to receive dividends or to participate in the assets and property of the Company on a winding-up or dissolution of the Company. In October 1995, certain shareholders agreed to surrender their 5,950,000 performance shares which were then held under an escrow arrangement. In consideration therefor, the Company agreed to issue 314,762 common shares at a deemed price of $2.00 per share. Although the performance shares have been irreversibly cancelled by the Company in the period ended September 30, 1996, as of September 30, 1996 the issuance of the 314,762 shares continues to be subject to the removal of the Company from the jurisdiction of both the Vancouver Stock Exchange and the British Columbia Securities Commission. (d) Stock options: Option changes for the period April 1, 1993 to September 30, 1996 were as follows:
Outstanding and exercisable as at March 31, 1994 1,235,200 Granted at C$5.68 per share 274,800 Exercised at C$4.45 per share (80,000) Exercised at C$1.25 per share (186,000) ---------------------------------------------------------------- Outstanding and exercisable as at March 31, 1995 1,244,000 Granted at C$1.90 per share 75,000 Granted at C$2.09 per share 400,000 Granted at C$2.41 per share 150,000 Exercised at C$1.25 per share (461,767) Exercised at C$2.09 per share (358,500) Cancelled (431,300) ---------------------------------------------------------------- Outstanding and exercisable as at December 31, 1995 617,433 Granted at U$3.80 90,000 Granted at U$3.00 472,899 Exercised at C$1.25 (16,800) Exercised at C$1.90 (75,000) Exercised at U$3.00 (11,250) Cancelled (133,200) ---------------------------------------------------------------- Outstanding and exercisable at September 30, 1996 944,082 ----------------------------------------------------------------
Stock options are issued at the average market price per share for the ten trading days prior to the date of issuance. F-12 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements, page 8 (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 8. SHARE CAPITAL (CONTINUED): (e) Warrants: During the year ended March 31, 1995, the Company, in connection with private placements of common shares, issued warrants to purchase 483,457 common shares at U$3.50 per share if exercised by October 1995 and at U$4.03 per share if exercised thereafter to October 1996. Of these warrants, 60,000 were exercised during the current period and the balance expired. During the nine months ended December 31, 1995, the Company, in connection with a private placement, issued warrants to purchase 211,500 common shares at U$5.10 per share if exercised by June 1995 and U$5.87 if exercised thereafter to June 1996. These warrants expired during the period. In addition, the Company, in connection with a number of private placements of common shares, issued warrants to purchase up to 204,878 common shares at prices of between U$1.28 and U$1.47 per share if exercised by August 1996 and U$1.47 and U$1.69 if exercised thereafter to August 1997. 37,878 of these warrants have been exercised. During the nine months ended September 30, 1996, the Company, issued warrants to purchase 97,500 common shares at U$1.11 per share if exercised by November 1996 and U$1.28 if exercised thereafter to November 1997. None of these warrants have been exercised. In addition, pursuant to the Bridge Financing (note 7), 166,667 share purchase warrants exercisable at $3.30 per share to May 31, 1997 are issuable. The warrants have been recorded at their estimated fair value of $ 250,000. (f) Issuance costs: During the year ended March 31, 1995, the Company recorded $214,865 of costs related to the settlement of a legal dispute arising from a prior placement of common stock. Accordingly, these costs have been recorded as a reduction in the equity previously raised. (g) Shares to be issued on settlement of debt: During the period ended December 31, 1995, the Company entered into agreements to issue 1,256,561 common shares at their estimated fair value of $2.00 per share to settle outstanding liabilities aggregating $2,513,121. Filings to obtain regulatory approval were made prior to December 31, 1995 and regulatory approval was received on May 16, 1996. As the agreements were entered into prior to December 31, 1995, these settlements have been recorded in that period. The Company has further agreed to issue an additional 53,675 common shares at their estimated fair value of $2.00 per share to settle additional outstanding liabilities aggregating $107,349. These issuances are subject to regulatory approval. F-13 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements, page 9 (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 8. SHARE CAPITAL (CONTINUED): (h) Shares to be issued for loans: In connection with the issuance of certain short-term debt by the Company in January 1995 and May 1996, the Company agreed to issue, subject to regulatory approval, 85,590 shares of common stock and 166,667 share purchase warrants, exercisable at $3.30 per share until May 31, 1997. During the current period, regulatory approval was received for the issuance of 14,500 of these shares which were then issued by the Company. At September 30, 1996, the issuance of the remaining 71,090 shares and 166,667 warrants continued to be subject to regulatory approval. 9. INCOME TAXES: As at September 30, 1996, the Company has income tax losses in Canada and the United States in excess of $8,000,000 available to reduce future income taxes payable the benefit of which has not been recorded in the accounts. These loss carry forwards expire at various times through the year 2005. 10. RELATED PARTY TRANSACTIONS: Related party transactions not disclosed elsewhere in these consolidated financial statements include: (a) Included in accounts payable at September 30, 1996 is approximately $11,500 (December 31, 1995 - $25,000) owing to related parties. (b) Management and consulting fees have predominantly been charged by related parties. (c) Included in bad debts expense for the nine months ended September 30, 1996 is $ nil (nine months ended December 31, 1995 - $21,386; year ended March 31, 1995 - $227,000) recorded as provisions against employee loans. (d) The Company has reimbursed expenses incurred by directors and officers on its behalf during the periods presented. (e) In addition to amounts included in consulting paid to a director, expenses of approximately $50,000 are included in various accounts for the nine months ended September 30, 1996 (nine months ended December 31, 1995 - $ nil). (f) Included in loss on settlement of debt for the nine months ended September 30, 1996 is $465,000, representing a write-down of notes receivable due from a related party. F-14 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements, page 10 (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 11. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES: These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada and also comply, in all material respects, with accounting principles generally accepted in the United States and practices prescribed by the Securities and Exchange Commission. Material differences to these statements are as follows: (a) The gain ( loss ) on forgiveness of debt would be disclosed as an extraordinary item on the consolidated statement of operations. (b) Loss per share would be computed based on the weighted average number of shares outstanding during the year, which number of shares excludes performance shares that are contingently returnable to the Company's treasury. The performance shares are excluded in this calculation as the specified levels of cash flow for their release from escrow are not currently being attained and failure to obtain their release will result in the shares' cancellation. If these shares become issuable, loss per share will be retroactively restated. Fully diluted loss per share has not been presented as the effect of issued performance shares and outstanding warrants and options are anti-dilutive. The effect of these differences on reported net income ( loss ) per share would be as follows:
- ---------------------------------------------------------------------------------------------------------------------------- Three months ended Nine months ended Year ended September 30, September 30, September 30, December 31, March 31, 1996 1995 1996 1995 1995 - ---------------------------------------------------------------------------------------------------------------------------- Net income (loss) per share: Before extraordinary item $ 0.72 $ (0.06) $ 0.51 $ (0.21) $ (0.90) Gain on settlement of debt 0.02 - (0.01) 0.06 - - ---------------------------------------------------------------------------------------------------------------------------- After extraordinary item $ 0.74 $ (0.06) $ 0.50 $ (0.15) $ (0.90) - ---------------------------------------------------------------------------------------------------------------------------- Weighted average number of shares outstanding 11,303,947 9,679,963 13,042,462 8,999,863 7,974,845 - ----------------------------------------------------------------------------------------------------------------------------
(c) Taxes: For U.S. accounting purposes the Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("Statement 109"). Statement 109, deferred tax assets and liabilities are recognized based on the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The application of Statement 109 results in no material differences to these consolidated financial statements as deferred tax assets are fully offset by a valuation allowance on the realization of the benefits of the loss carryforward can not be considered to be more likely then not. F-15 PORTACOM WIRELESS, INC. Notes to Consolidated Financial Statements, page 11 (expressed in U.S. dollars) - -------------------------------------------------------------------------------- 11. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED: (d) Concentrations of credit risk: Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash equivalents and accounts receivable. The Company maintains cash equivalents with various financial institutions. These financial institutions are located in Canada and the United States. The Company's policy is to limit the exposure at any one financial institution and to invest solely in highly liquid investments that are readily convertible to contracted amounts of cash. The Company sells its products to various customers primarily located in the south-western United States. The Company performs ongoing credit evaluations of its customers' financial condition, and generally requires no collateral as security against accounts receivable. At September 30, 1996 and December 31, 1995, no single customer accounts for a significant portion of the accounts receivable balance. F-16 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- BACKGROUND The Company conducts business operations primarily through its wholly owned U.S. subsidiary, PortaCom International, Ltd. ("PIL"). The Company also has four inactive wholly owned U.S. subsidiaries; PCBX Systems, Inc. ("PCBX"), Extreme Telecom, Inc. ("Telecom"), Extreme Laboratories, Inc. (formerly known as Spheric Audio Laboratories, Inc.) ("Laboratories"), all of which ceased operations in August 1995, and presently have no active business operations, and PortaCom Wireless, Inc., a Delaware corporation, which is an inactive holding company for the other subsidiaries. Since 1994, through its PIL subsidiary, the Company has engaged in initial stage efforts to evaluate the feasibility of, and attempt to secure, licensing and joint venture arrangements for the operation of wireless telephone networks, mobile radio communication systems and other telecommunications technologies. In September 1995, the Company announced that it intended to focus all of its future activities on the development of its prospective emerging market cellular and wireless interests. Although the establishment and operation of wireless telephone networks and other advanced communications systems will be investigated by the Company wherever strategic opportunities arise, its principal efforts are presently focused on Southeast Asia. The Company's wireless telecommunications operations are in the development stage, have produced no revenues to date and remain limited in scope. On May 28, 1996, the Company announced an agreement to acquire all of the outstanding shares of Asian American Telecommunications Corporation ("AAT"), a Cayman Islands corporation and a Los Angeles-based telecommunications services developer. AAT has focused its business activities on developing PSTN and wireless telecommunications services in China. AAT is the managing joint venture partner of China Huaneng American Telecom Co. Ltd. ("HAT"), which has entered into a joint venture agreement with China Huaneng Technology Development Corporation to develop wireless and wireline telecommunications services in Sichuan Province, China, in partnership with China Unicom Corporation. On July 18, 1996, the Company announced that the terms of the acquisition had been adjusted to take into account a $25,000,000 financing by AAT. The Company has agreed, subject to certain approvals and conditions, to issue a total of 50.5 million common shares to the shareholders of AAT (including the new investors), which would result in the Company having approximately 62.6 million primary shares outstanding. On September 18, 1996, the Company announced that, due to significant tax and regulatory considerations, it had elected to receive a direct ownership position in AAT consisting of 2,000,000 common shares and three-year warrants to acquire 4,000,000 common shares of AAT at a price of $4.00 per share, plus an immediate payment of $1,000,000 in cash from AAT to the Company. The 2,000,000 common shares of AAT will be held in escrow until January 1, 1999 to cover any claims or potential claims related to the original proposed acquisition or the termination agreement. -1- The Company is a 41% shareholder of Telecommunications American International ("TAI"), which is currently seeking to complete a joint venture agreement and the operating license issuance process for a telecommunications venture in Vietnam. As of October 31, 1995, the Company entered into a stock purchase agreement with certain minority stockholders of TAI which provided for the acquisition of an additional 13.1% of the outstanding shares of TAI. This acquisition, which was subject to the receipt of a professional valuation and the approval of the Vancouver Stock Exchange ("VSE"), would have resulted result in the Company owning a majority interest of 53.1% of TAI. On July 18, 1996, the Company announced that it had terminated the acquisition as the transaction had not yet received regulatory approval. On August 5, 1996, the Company, through its subsidiary PIL, agreed to purchase 250 shares of the common stock TAI from a shareholder for the sum of $25,000. Subsequent to September 30, 1996, PIL subscribed to a shareholder rights offering in which it purchased 2,900 Units consisting of one promissory note of $49.00 and one share of common stock for an aggregate purchase price of $145,000. The Company would require substantial additional capital investment should an operating license be issued by any of the countries in which the Company is presently pursuing approvals, such as Vietnam or Cambodia. Failure to generate sufficient funds from the issuance of additional debt or equity on favorable terms and conditions, would have a material adverse effect on the financial condition of the Company. As of November 3, 1995, the Company entered into a stock purchase agreement to acquire PortaCom Wireless Communications, Inc., a Delaware corporation ("PWC"), which had been developing new business opportunities in wireless telecommunications services in China, Burma, Laos, Cambodia, Bulgaria, Macedonia and certain other countries. The acquisition was approved by the shareholders on November 20, 1995 and remained subject to the approval of the VSE and the receipt of an acceptable valuation of PWC. Upon closing, the Company was obligated to issue a total of 1,568,600 shares of common stock to the PWC shareholders. On July 18, 1996, the Company announced that it had terminated the acquisition as the transaction had not yet received regulatory approval. In connection with the termination of the acquisition, the Company forgave loans aggregating $465,000 which had been made to PWC in exchange for the rights to pursue wireless business opportunities in various countries where PWC had been actively seeking acquisitions. PCBX developed and was engaged in marketing a personal computer branch exchange which permitted the operation of a full-featured telephone network control system from a centrally-located personal computer. Telecom was engaged in distributing a line of telecommunications products manufactured by Nitsuko America Corporation. Laboratories developed and was engaged in marketing a line of audio speakers, as well as a proprietary audio recording and playback technology known as"SphericSound." PCBX, Telecom and Laboratories ceased operations in August 1995 and presently have no active business operations. -2- Since the commencement of operations, the Company's revenues were principally derived from the sale of its PCBX systems and to a substantially lesser degree from sales of Telecom and Laboratories products until the recent transaction with AAT (described above). Due to significant ongoing losses and the Company's inability to successfully develop and carry out marketing and sales strategies, the operations of PCBX, Telecom and Laboratories were closed in August 1995. The Company also attempted to secure licensing arrangements or other means of commercial exploitation of its SphericSound technologies; however, to date, only limited sales revenues were realized from these efforts. Funding of the Company's operations since inception has been provided by: (i) revenues from the sale of PCBX systems; (ii) proceeds from the sale of securities undertaken in a series of private placement transactions; (iii) completion of an initial public offering on the Vancouver Stock Exchange during October 1992; and (iv) revenues generated as a result of the recent AAT transaction. RESULTS OF OPERATIONS Quarter Ended September 30, 1996 and Nine Months Ended September 30, 1996 as - ---------------------------------------------------------------------------- Compared with the Quarter Ended September 30, 1996 and Nine Months Ended - ------------------------------------------------------------------------ December 31, 1995. - ------------------ For the quarter and nine months ended September 30, 1996, the Company reported net income of $8,513,659 and $6,435,732, respectively, with sales of $10,000 occurring. This compares to losses of $548,301 and $1,330,480 on sales of $72,664 and $56,261 for the respective comparable prior year periods. The recent improvement in the Company's financial condition is directly and solely attributable to an agreement between the Company and Asian American Telecommunications Corporation ("AAT") pursuant to which the Company received $1,000,000 in cash in addition to escrowed common stock valued at $8,000,000. The reported decrease in net sales was due to the fact that the Company's revenue-producing subsidiaries (which were also generating significant net losses) remained closed throughout the current fiscal year. Additionally, the Company's revenue-producing activities from ongoing operations throughout the current fiscal year have been limited. Revenues are expected to be limited throughout the remainder of the 1996 fiscal year. Virtually all of the Company's sales in the 1995 period were attributable to the Company's PCBX systems and related products, with a small percentage of such sales being attributable to Laboratories and Telecom. No sales have been realized by PIL. The Company's results for the quarter and nine months ended September 30, 1996 represent earnings of $0.72 and $0.47 per common share, respectively, as compared to losses per common share of $0.03 and $0.09 for the respective comparable prior year periods, again as a result of the AAT transaction. Cost of sales in the quarter and nine months ended September 30, 1996 was (nil), compared with $52,702 (or 42% of sales) and $87,391 (or 61% of sales) in the respective prior year periods. The Company's cost of sales as a percentage of sales in the quarter and nine months ended -3- September 30, 1996 are not comparable to the prior periods due to (i) the closure of the Company's revenue-producing subsidiaries in August 1995, and (ii) the Company's current business development activities not generating significant revenue. Operating expenses rose in the quarter ended September 30, 1996 to $707,270 from $620,966 in the year-earlier quarter, an increase of $86,304, or 14%. Of this increase, the most significant factors were increases in interest expense, legal and accounting, wages combined with consulting fees, and travel expenses. These increases were partially offset by decreases in rent, advertising and promotion, and research and development expenses. The Company's operating expenses as a percentage of sales in the nine months ended September 30, 1996 are not comparable to the prior period due to the closure of the Company's revenue-producing subsidiaries in August 1995. Operating expenses rose in the nine months ended September 30, 1996 to $2,414,318 from $1,936,665 in the comparable year-earlier period, an increase of $477,653. These increases were primarily related to the increase in activities of the Company with respect to the proposed acquisition of wireless telecommunications interests in China. The Company's operating expenses as a percentage of sales in the nine months ended September 30, 1996 are not comparable to the prior period due to the closure of the Company's revenue- producing subsidiaries in August 1995. During the quarter ended September 30, 1996, interest and bank charges rose to $139,670 from $43,755. This increase was primarily related to interest accrued but not paid on the $2,405,000 in convertible promissory notes. Legal and accounting expenses increased to $141,360 in the current quarter from $47,328 recorded in the comparable prior year quarter. Travel and entertainment expenses increased to $72,179 from $47,479 recorded in the comparable prior year quarter. These increases were primarily related to the increase in activities of the Company with respect to the proposed acquisition of wireless telecommunications interests in China and Southeast Asia. During the nine months ended September 30, 1996, interest and bank charges rose to $431,731 from $73,394. This increase was primarily related to interest accrued but not paid on the $2,405,000 in convertible promissory notes. Legal and accounting expenses increased to $459,178 in the current quarter from $273.665 recorded in the comparable prior year quarter. Travel and entertainment expenses increased to $208,276 from $97,958 recorded in the comparable prior year quarter. These increases were primarily related to the increase in activities of the Company with respect to the proposed acquisition of wireless telecommunications interests in China and Southeast Asia. The Company's operations have become dependent on its wireless telecommunications business development activities. The Company expects that it will continue to expend significant funds in order to obtain the licenses and form the joint ventures necessary for the Company or PIL to provide wireless communications services in developing international markets, although no revenue will be generated until such licenses are obtained and such joint ventures are operational. This may necessitate a material increase in general office overhead and other general and administrative costs. -4- LIQUIDITY AND CAPITAL RESOURCES In the quarter ended September 30, 1996, the Company realized net proceeds of $133,250 from the issuance of shares of common stock in consideration for certain loans, and from the exercise of warrants and stock options. These activities contributed to a net working capital (deficit) position as of September 30, 1996 of ($2,048,131), which is a reduction of $1,641,131 in the working capital deficit which was ($3,689,262) at September 30, 1995. The Company has incurred cumulative losses from inception through September 30, 1996 of $8,484,157 and has not yet achieved revenues from ongoing operations sufficient to offset direct expenses and corporate overhead. Since inception, a substantial portion of the Company's operating capital has been provided through financing activities. Operations have provided gross revenues to the Company of $11,232,829 whereas financing has yielded the Company net proceeds of $17,065,397. The Company's financing has been provided by an initial public offering and a series of private placements of shares. The Company anticipates that it may seek additional financing through the private placement of equity or debt securities, although there can be no assurances as to the success of such anticipated placement. Between March 31 and May 7, 1996, the Company arranged, subject to regulatory approval, private placements of convertible promissory notes having an aggregate principal amount of $1,025,000 (for a total amount of $2,405,000 of such securities placed between December 19,1995 and May 7, 1996). The promissory notes are due and payable after two years, or after six months upon demand of the holder. The promissory notes placed during the current period are convertible into shares of common stock of the Company at conversion prices ranging from $2.50 to $3.25 per share. The Company will also issue to the investors non-transferable warrants to purchase an aggregate of up to 142,958 shares of common stock of the Company for a period of two years at a price equal to the conversion price of the notes. As of September, 30 1996, the issuance of such securities continued to be subject to regulatory approval. As of September 30, 1996, the Company had 944,082 options and 890,188 warrants outstanding or issuable which, upon exercise, would yield to the Company additional proceeds in excess of $2 million. The exercise of warrants is impossible to predict with any certainty, accordingly, management can render no assurances that any material funds will be realized upon the exercise of such warrants, or whether such will be exercised at all. The Company has been able to secure financing in the past through loans from certain stockholders. Management has no reason to believe that similar arrangements will be available in the future. The Company's net working capital position increased approximately $2,426,073 from June 30, 1996. Working capital levels have only been able to increase by virtue of the Company's -5- continued offerings of securities, its ability to secure short term loans, and its receipt of cash and securities pursuant to its agreement with AAT. With the exception of fixed rental and certain personnel expenses, the Company anticipates no significant capital expenditures within the short term. Rental expense accounts for approximately $3,750 of fixed expenses on a monthly basis. Personnel costs, which are expected to remain relatively stable within the short term, are likely to account for approximately $45,000 of fixed expenses on a monthly basis. Additional variable expenses, such as consulting fees, legal and accounting, travel and entertainment, utilities and miscellaneous equipment purchases (or rentals) are expected to account for approximately $100,000 per month. Management does not believe that in the near term the Company's operations will generate revenue or cash flow to finance its working capital or any capital expenditure requirements and the Company's operations will remain dependent on the Company's ability to obtain additional debt and equity financing (including from the exercise of existing warrants), as to which no assurance can be given. In the past, the Company has been able to secure financing through loans from certain stockholders. While the Company will continue to seek both debt and equity financing, there can be no assurance that any such financing will be available on terms acceptable to the Company or at all. Without such additional sources of financing, the Company will not be able to continue as a going concern. Debt Settlements - ---------------- In October 1995, the Company began to enter into written agreements to settle indebtedness in the aggregate amount of approximately $2,809,000 for cash or share consideration. These agreements were subject to regulatory approval. In May 1996, the Company received regulatory approval and completed the settlement of $2,513,121 of such debt through the issuance of a total of 1,256,561 shares of Common Stock. As of September 30, 1996, an aggregate of 53,675 shares continue to be reserved for issuance when permissible. In December 1995, the Company agreed to the restructuring and settlement of claims of two parties related to each other. The amount of the settlement was subsequently reduced and fully paid by the Company as of September 30, 1996. As of September 30, 1996, the outstanding accounts payable of the Company's closed subsidiaries accounts for approximately $90,000 of total accounts payable. The Company is continuing to attempt to settle the outstanding debt on terms favorable to the Company, although no assurances about such settlement terms can be given. Cancellation of Performance Shares - ---------------------------------- In October 1995, certain shareholders agreed to surrender their 5,950,000 performance shares which were then held under an escrow arrangement. In consideration therefor, the Company agreed -6- to issue 314,762 common shares at a deemed price of $2.00 per share. Although the performance shares have been irreversably canceled by the Company, as of September 30, 1996, the issuance of the 314,762 shares continues to be subject to the removal of the Company from the jurisdiction of both the Vancouver Stock Exchange and the British Columbia Securities Commission. Bonus Shares and Warrants - ------------------------- In connection with the issuance of certain short-term debt by the Company in January 1995 and May 1996, the Company has agreed to issue, subject to regulatory approval, 85,590 "bonus" shares of common stock and 166,667 share purchase warrants, exercisable at $3.30 per share, expiring on May 31, 1997. During the current period, regulatory approval was received for the issuance of 14,500 of these shares which were then issued by the Company. As of September 30, 1996, the issuance of the remaining 71,090 shares and 166,667 warrants continued to be subject to regulatory approval. EFFECTS OF INFLATION The Company does not expect inflation to materially affect its results of operations, however, it is expected that operating cost and the cost of capital equipment to be acquired in the future may be subject to general economic and inflationary pressures. -7- PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ----------------- None ITEM 2. CHANGES IN SECURITIES --------------------- None ITEM 3. DEFAULTS UPON SENIOR SECURITIES ------------------------------- None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --------------------------------------------------- None. ITEM 5. OTHER EVENTS ------------ None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits 10.01 Form of Second Amendment to Acquisition Agreement and Plan of Reorganization between the Registrant and Asian American Telecommunications Corporation. * 10.02 Form of Termination Agreement between the Registrant and Asian American Telecommunications Corporation. * 10.03 Employment Agreement between the Registrant and Douglas C. MacLellan. A verbal agreement was entered into in November 1995 between the Registrant and Douglas C. MacLellan whereby the Registrant agreed to pay Mr. MacLellan a salary of $14,000 per month on a month-to- month basis, plus reimbursement of reasonable expenses, terminable mutually at will, to serve as the Registrant's Chief Executive Officer. 27 Financial Data Schedule. * -8- (b) Reports on Form 8-K None * Filed herewith -9- SIGNATURE In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PORTACOM WIRELESS, INC. Date: November 19, 1996 By: /s/ Douglas C. MacLellan ----------------------------- Douglas C. MacLellan President and Chief Executive Officer By: /s/ Michael A. Richard ----------------------------- Michael A. Richard Vice President, Accounting (principal financial officer) -10- EX-10.01 2 2ND AMENDMENT TO AQUISITION AGREEMENT EXHIBIT 10.01 SECOND AMENDMENT TO ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION BETWEEN PORTACOM WIRELESS, INC. AND ASIAN AMERICAN TELECOMMUNICATIONS CORPORATION AND ITS SHAREHOLDERS That certain Acquisition Agreement and Plan of Reorganization (the "Agreement") dated as of April 26, 1996, as amended on May 20, 1996 ("First Amendment"), between PortaCom Wireless, Inc. ("Company"), Asian American Telecommunications Corporation ("AAT") and each of the holders of shares or rights to receive shares in the capital of AAT (collectively, the "AAT Shareholders") as reflected in Exhibit "1" attached thereto is hereby amended this _____ day of July, 1996 by making the following changes: 1. Section 1.1 of the Agreement is hereby amended to read as follows: 1.1 Shares Being Exchanged. Subject to the terms and conditions ---------------------- of this Agreement, at the closing provided for in Section 2 hereof (the "Closing") each of the AAT Shareholders as reflected on Amended Exhibit "1" attached hereto who join in this Agreement shall sell, assign, transfer and deliver to the Company all of the AAT shares or warrants to receive AAT shares which each of them respectively own, hold in trust, have a right to receive or will have a right to receive. 2. Section 1.2 of the Agreement is hereby amended to read as follows: 1.2 Consideration. Subject to the terms and conditions of this ------------- Agreement and in consideration of the sale, assignment, transfer and delivery of the AAT shares and warrants to purchase shares in AAT to the Company, at the Closing the Company shall issue and deliver to the AAT Shareholders a total of two shares of Common Stock of the Company for each share of AAT that is issued and outstanding, and warrants that entitle each holder of warrants to purchase AAT shares to thereafter purchase, for the same total consideration, two shares of Common Stock of the Company for each share in AAT the holder was entitled to purchase. The purchase price of each share of the Company's Common Stock purchased under the warrants shall be one-half of the purchase price of each AAT share that could have been purchased under the AAT warrants. 3. Section 1.3 is hereby deleted from the Agreement. 4. Section 2.1 of the Agreement is hereby amended to read as follows: 2.1 Time and Place. The closing of the transactions -------------- contemplated by this Agreement (the "Closing") shall be held at the offices of Day, Campbell & McGill, 3070 Bristol Street, Suite 650, Costa Mesa, California 92626, at 10:00 a.m. on the earliest practicable date following satisfaction of all conditions to Closing stated herein (the "Closing Date"), or at such other time and place as the parties may agree upon in writing. 5. Section 2.2 of the Agreement is hereby amended to read as follows: 2.2 Deliveries by the AAT Shareholders. At the Closing, each ---------------------------------- AAT Shareholder shall deliver to the Company the following: (a) share certificates or warrants representing the number of AAT shares set forth opposite the name of such AAT Shareholder on Exhibit "1" hereto, duly endorsed or accompanied by transfer powers duly executed in blank and otherwise in form acceptable for transfer; (b) a letter in the form attached hereto as Exhibit "2" executed by such AAT Shareholders or other appropriate letter and (c) such other written statements or forms as the Company deems necessary or desirable to perfect the transfers. 6. Section 2.4 of the Agreement is hereby amended to read as follows: 2.4 Deliveries by the Company. At the Closing, in addition to ------------------------- the documents referred to in Section 9.3 hereof, the Company shall deliver to the AAT Shareholders the following: (a) a stock certificate (and warrant for those AAT Shareholders holding warrants to purchase AAT Shares) issued in the name of each AAT Shareholder representing the number of Company Shares each such AAT Shareholder is entitled to receive; (b) certified resolutions of the Company's Board of Directors authorizing the execution and delivery of this Agreement and the performance by the Company of its obligations hereunder; and (c) a certificate of good standing of the Company from the Registrar of Companies of British Columbia dated as of the most recent practicable date. 7. Section 3.1 of the Agreement is hereby amended to read as follows: 3.1 Title. Such AAT Shareholder owns, has the right to receive ----- or on the Closing Date will have the right to receive the number of AAT shares or warrants set forth opposite such AAT Shareholder's name on Exhibit "1" hereto, or any amendment to Exhibit "1" hereto approved by the Company, and shall transfer to the Company at Closing good and valid title to said number of AAT shares or warrants, free and clear of all liens, claims, options, charges, and encumbrances of every kind, character or description. 8. The following Section 4.3(c) is hereby added to the Agreement: (c) Notwithstanding the foregoing, AAT has or will perfect an amendment to its Memorandum of Association that authorizes the issuance of up to 40,000,000 2 shares, which amendment will enable it to issue additional shares and grant warrants entitling the holders to purchase additional shares in the total amounts reflected on Exhibit "1", 9. Section 4.5 of the Agreement is hereby amended to change the date of the AAT Financial Statements from March 31, 1996 to June 30, 1996. 10. Section 4.7(f) of the Agreement is hereby amended to delete subsections (4) and (5) and to renumber subsection (6) as subsection (4). 11. Section 4.7(g) of the Agreement is hereby amended to read as follows: (g) AAT has not effected or committed itself to effect any amendment or modification to its Memorandum of Association or Articles of Association except as stated in Section 4.3(c). 12. Section 4.12 of the Agreement is hereby amended to read as follows: 4.12 Contracts and Undertakings. Section 4.7(f), as amended, -------------------------- contains a complete list of all contracts, instruments, leases, licenses, agreements, commitments and other undertakings to which AAT is or contemplates being a party or by which it or its properties or assets are or will be bound, copies of which have been furnished to the Company or will be furnished to the Company when available, the receipt of which is hereby acknowledged. AAT is not in default, or alleged to be in default, under any of the contracts, instruments, leases, licenses, agreements, commitments or undertakings listed in Section 4.7(f) and, to the knowledge of AAT, no other party to any of said contracts, instruments, leases, licenses, agreements, commitments or undertakings is in default thereunder nor, to the knowledge of AAT, does there exist any condition or event which, after notice or lapse of time or both, would constitute a default by any party to any of said contracts, instruments, leases, licenses, agreements, commitments or undertakings. AAT has not entered into and is not subject to any contract or agreement containing covenants limiting the right of AAT to compete in any business or with any person. Notwithstanding the above, each of the contracts referenced above in Section 4.7(f) are subject to approval by the Sichuan Commission of Foreign Trade and Economic Cooperation ("COFTEC") and HAT receiving a Business License from the State Administration of Industry and Commerce of PRC. 13. Section 5.3 of the Agreement is hereby amended to read as follows: 3 5.3 Capitalization. -------------- (a) The authorized capital stock of the Company consists of: (i) 100,000,000 shares of Common Stock, no par value, of which approximately 12,096,154 shares were issued and outstanding on the date hereof, and (ii) 100,000,000 Class "A" Preference shares and 100,000,000 Class "B" Preference shares, none of which are outstanding. All of the issued and outstanding shares of Common Stock of the Company were issued in compliance with applicable state and federal securities laws, are duly authorized, validly issued, fully paid and non-assessable, and are not subject to preemptive rights created by statute, the Company's Articles of Incorporation or Bylaws or any agreement to which the Company is a party or is bound. (b) Except as set forth on Amended Schedule 5.3(b), attached hereto, there are no options, warrants, calls, rights, commitments or agreements of any character to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or any bond, note, or other security of the Company or obligating the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. 14. Section 5.5 of the Agreement is hereby amended to include within the definition of the Company Financial Statements delivered to AAT the Company's balance sheets and statements of operations, stockholders equity and cash flows for the periods ended December 31, 1995 (audited) and June 30, 1996 (unaudited). 15. The first sentence of Section 5.12 of the Agreement is hereby amended to limit its application to contracts having an annual dollar value of $25,000.00 or more. 16. Section 6.3 of the Agreement is hereby amended to read as follows: 6.3 Governing Documents. AAT shall not amend its Memorandum of ------------------- Association except as disclosed elsewhere in this Agreement. 17. The following Section 6.8 is hereby made a part of this Agreement: 6.8 Private Placement. As of the date of this Agreement AAT is ----------------- offering for sale through a private placement ("Private Placement") up to 7,500,000 shares at a purchase price of $4.00 per share plus accompanying warrants that allow the subscribers to purchase up to 3,750,000 shares at a purchase price of $6.00 per share within three years of the date of purchase of Private Placement shares. At the time of sale of Private Placement shares each purchaser will be requested to become a party to this Agreement and upon doing so shall become an AAT Shareholder 4 owning the number of Private Placement shares and warrants subscribed for and shall be entitled to all obligations and benefits of AAT Shareholders under this Agreement, all as if such AAT Shareholder were listed on Exhibit "1" as of the date hereof. 18. Section 9.1(f) of the Agreement is hereby amended to read as follows: (f) NASDAQ Listing. The Company shall have taken all steps -------------- necessary and received all authorizations necessary for the Company's Common Stock to become listed for trading on the NASDAQ System by no later than immediately after the Closing. 19. The following Section 9.1(g) is hereby made a part of the Agreement: (g) Vancouver Stock Exchange. The Company's Common Stock shall ------------------------ have been withdrawn from listing and shall no longer be listed or traded on the Vancouver Stock Exchange. 20. Sections 9.2(h) and (i) of the Agreement are hereby amended to read as follows: (h) Sichuan Province Public Switched Telephone Network ("PSTN") ----------------------------------------------------------- Project. AAT and the other parties referenced above in Sections ------- 4.7(f)(1), (2), and (3) shall have entered into the contracts specified therein. Such contracts shall have become binding and effective and shall have received the approval of COFTEC. HAT shall have received a Business License from the State Administration of Industry and Commerce of PRC. (i) Legal Opinion Regarding Sichuan Province PSTN Project. The ----------------------------------------------------- Company shall have obtained a satisfactory legal opinion from Cha & Pan satisfactory to the Company to the effect that (i) the contracts described above in Sections 4.7(f)(1), (2), and (3) are legally binding contracts enforceable in accordance with their terms, (ii) that the contracts have been approved by all governmental agencies whose approval is required for such contracts to become effective and (iii) HAT has received from the State Administration of Industry and Commerce of PRC such business license as is required for HAT to fulfill its obligations under the contracts. 21. Section 11 of the Agreement is hereby deleted from the Agreement effective as of the date hereof. 22. The following Section 12.1(h) is hereby added to the Agreement. (h) by AAT if current negotiations with Metromedia International Telecommunications, Inc. ("MIT") that would provide, subsequent to or concurrently with the Closing under this Agreement, for the merger or acquisition of the Company 5 with or by MIT do not result in terms satisfactory to the Company and the Company elects not to proceed with the merger or acquisition. 23. The Interim Operating Agreement, Exhibit "5" to the Agreement, is hereby terminated and superseded by this Second Amendment and all obligations of either party thereunder are terminated as of the date hereof. IN WITNESS WHEREOF, this Second Amendment has been duly executed and delivered by the parties hereto as of the date first above written. Except as amended herein the Agreement and First Amendment remain in full force and effect. By executing this Second Amendment each AAT Shareholder who was not previously a party to the Agreement shall become a party to the Agreement and be entitled to all benefits and subject to all obligations hereof as if such AAT Shareholder had been a party to the Agreement on the date it was first executed. ASIAN AMERICAN TELECOMMUNICATIONS CORPORATION a Cayman Islands corporation By: _______________________________________ Max E. Bobbitt, President and Chief Executive Officer PORTACOM WIRELESS, INC. A British Columbia corporation By: ____________________________________ Douglas C. MacLellan, President and Chief Executive Officer Address: 8055 West Manchester Avenue Suite 730 Playa del Rey, California 90293 6 EX-10.02 3 TEMINATION AGREEMENT EXHIBIT 10.02 TERMINATION AGREEMENT --------------------- This Termination Agreement (the "Termination Agreement") is made and entered into this 11th day of September, 1996 by and among PortaCom Wireless, Inc., a British Columbia corporation ("PWI"), Asian American Telecommunications Corporation, a Cayman Islands corporation ("AAT") and Max E. Bobbitt, as Agent of and on behalf of the holders of shares in the capital of AAT who are parties to the Acquisition Agreement (as defined below) (the "AAT Shareholders"). RECITAL ------- WHEREAS, the parties have concluded that it is in their mutual best interests and the best interests of their respective shareholders to terminate on the terms provided herein that certain Acquisition Agreement and Plan of Reorganization dated April 29, 1996, as amended by the First and Second Amendments dated May 20, 1996 and July 18, 1996, respectively, by and among PWI, AAT and the AAT Shareholders ("the Acquisition Agreement"). Now, therefore, the parties hereto agree as follows: AGREEMENT --------- 1. Termination. The Acquisition Agreement and all rights and ----------- obligations arising thereunder are hereby terminated, released and shall be of no further force and effect. 2. Consideration. As consideration for this termination and the ------------- release set forth below, AAT shall, subject to the conditions provided below, issue to PWI two million (2,000,000) shares in the capital of AAT (the "Shares") and warrants to acquire four million (4,000,000) shares 2 in the capital of AAT exercisable for a period of three years from the date hereof at an exercise price of four dollars ($4.00) per share (the "Warrants") in the form of the Warrant attached hereto as Exhibit A. The Shares and the Warrants shall be issued to PWI upon execution of this Termination Agreement; provided, that, the Shares shall not be delivered to PWI upon issuance but shall - -------- ---- instead be pledged by PWI to AAT as collateral security for PWI's indemnification obligations pursuant to Section 3 below, to be held on the terms described below. Additionally, AAT shall pay to PWI One Million Dollars ($1,000,000.00) cash upon execution of this Termination Agreement. The Shares and Warrants issued to PWI upon execution of this Termination Agreement and shares issued upon exercise of any of the Warrants shall be restricted and shall bear the restrictive legend contained in Exhibit A hereto. The Shares, the Warrants and any shares issuable upon exercise of the Warrants shall be entitled to such demand or piggyback registration rights as may be provided to any AAT shareholders from time to time. 3. Indemnification. PWI hereby agrees to indemnify and hold --------------- harmless AAT and its successors and assigns and any affiliate, officer, director, shareholder or agent of AAT and its successors and assigns and their affiliates, officers, directors, shareholders and agents (the "Indemnified Parties") against any claims, accounts, damages, losses, expenses, liabilities, actions, causes of action, demands, suits and proceedings of any nature whatsoever, known or unknown, that may be awarded, assessed or incurred as a result of any litigation, claims or threats of litigation that arise from or in any way relate to the (i) Acquisition Agreement, (ii) this Termination Agreement, (iii) actions of any party or any affiliate, officer, director, shareholder or agent of any party to the Acquisition Agreement or this Termination Agreement, or (iv) that arise from the relationship between AAT and PWI, including without limitation, reasonable attorneys fees and costs of 3 settlement of any such asserted claim or litigation. PWI hereby appoints AAT as its true and lawful attorney in fact and agent to enter into on behalf of or to vote with respect to and in the name of PWI any agreement or amendment to any agreement by and among AAT and any corporation whereby AAT enters into a business combination agreement or other similar agreement that provides for another corporation to acquire all or a majority of the shares of AAT and assume the obligations of AAT under its outstanding warrants, provided that such agreement to be executed on behalf of PWI provides for the exchange of the Shares and the Warrants for securities of another corporation on the same basis as all other AAT Shareholders and warrant holders. This Section 3 shall survive any termination of this Termination Agreement. 4. Third Party Beneficiaries. The Indemnified Parties shall be and ------------------------- are express third party beneficiaries of the Termination Agreement and shall be entitled to enforce in their own names all rights granted to them hereunder. 5. Release and Settlement. All parties hereto hereby forever ---------------------- release and discharge all other parties and any affiliate, officer, director, shareholder or agent of any party to the Acquisition Agreement from any claims, accounts, liabilities, losses, damages, actions, causes of action, demands, suits and proceedings of any nature whatsoever, known or unknown, arising from or related in any manner to (i) the Acquisition Agreement, (ii) this Termination Agreement, (iii) the actions of any party or any affiliate, officer, director, shareholder or agent of any party to the Acquisition Agreement or this Termination Agreement or (iv) the relationship between AAT and PWI. 6. Disposition of Pledged Shares. PWI hereby pledges, assigns, ----------------------------- transfers and delivers unto AAT and grants a first priority lien and security interest to AAT in (i) the Shares and 4 (ii) all proceeds of the Shares, all securities entitlements and all other securities or other property at any time and from time to time receivable or otherwise distributed in respect of or in exchange for any or all of the Shares referred to in clause (i) of this Section 6 (the "Collateral"), as collateral security for the prompt and complete payment of the indemnification obligations described in Section 3 above. PWI shall be entitled to exercise any and all voting and/or consensual rights and powers accruing to the owner of the Collateral or any part thereof for any purpose not inconsistent with the terms hereof. Any dividends or distributions of any kind whatsoever received or receivable by PWI, whether resulting from a subdivision, combination, or reclassification of the outstanding capital shares of AAT or received in exchange for the Collateral or any part thereof or as a result of any merger, consolidation, acquisition, or other exchange of assets involving or related to the Collateral, or otherwise, shall be and become part of the Collateral pledged hereunder and shall immediately be delivered to AAT to be held subject to the terms of this Termination Agreement. PWI hereby appoints AAT or its successor and assigns as its true and lawful attorney in fact and agent and hereby grants such agent the right and power to sell or otherwise dispose of with all rights as a secured party under the Delaware Uniform Commercial Code (the "Delaware- UCC") in any commercially reasonable manner permitted under the Delaware-UCC the Collateral to the extent such sale or other disposition is necessary to satisfy an Indemnified Party's right to indemnification hereunder. The determination as to the validity of any claim for indemnification shall be made by the agent appointed under this Section in said agent's sole discretion. In addition to the delivery of Stock Powers pursuant to Section 8 hereof, PWI agrees, upon the request of AAT, to promptly execute and deliver to AAT any and all additional documents, notices, or other written instruments which AAT deems in its sole discretion to be necessary to maintain or obtain a first priority perfected 5 security interest in the Collateral including, but not limited to, financing statements, instructions to issuers of the Collateral, brokers or other financial intermediaries, or agreements between AAT, PWI, and any broker or financial intermediary involved in a transfer of the Collateral. 7. Delivery of Pledged Shares. The Collateral shall be delivered to -------------------------- PWI by January 1, 1999 and shall thereupon be released from the terms of the security interest provided herein; provided, however, that if any asserted claim or litigation for which any Indemnified Party is entitled to indemnification hereunder has not been finally resolved and terminated on such date, then the Collateral shall not be released from the terms of the security interest provided herein and shall not be delivered until all such litigation has been finally resolved and all statutes of limitations relevant to any claim asserted or threatened have expired. 8. Stock Power. Upon execution of this Termination Agreement and ----------- upon further request of AAT or any successor corporation, PWI shall provide such stock powers or assignments executed in blank that pertain to the Collateral as are requested. Such stock powers or assignments may be utilized in conjunction with any disposition of the Collateral pursuant to Section 6. 9. Board Approvals. The Boards of Directors of AAT and PWI have --------------- approved this Termination Agreement and authorized its execution by their respective officers. 10. Assignment. This Termination Agreement shall inure to the ---------- benefit of the successors and assigns of the parties hereto. 11. Transfers. PWI may not transfer, sell, assign or otherwise --------- dispose of any of the Collateral while it is subject to the terms of this Termination Agreement. Any attempted transfer, 6 sale, assignment or other disposition shall be invalid and unenforceable and shall not be recognized by AAT or its successors and assigns. 12. Governing Law. This Termination Agreement shall be governed by ------------- the laws of the State of Delaware, without regard to conflict of law principles. IN WITNESS WHEREOF, this Termination Agreement has been entered into as of the date first written above. Asian American Telecommunication Shareholders of Asian American Corporation, Telecommunications Corporation a Cayman Islands corporation By: * By: * ------------------------------- --------------------------------- Max E. Bobbitt, President and Max E. Bobbitt, Agent Chief Executive Officer * By: Hermann Ivester, Attorney in Fact PortaCom Wireless, Inc., a British Columbia Corporation By: _______________________________ Douglas C. MacLellan, President EX-27 4 FINANCIAL DATA SCHEDULE
5 3-MOS 9-MOS DEC-31-1996 DEC-31-1996 JUL-01-1996 JAN-01-1996 SEP-30-1996 SEP-30-1996 751,863 751,863 0 0 10,000 10,000 0 0 0 0 761,863 761,863 14,554 14,554 1,595 1,595 9,236,233 9,236,233 2,809,994 2,809,994 0 0 0 0 0 0 14,910,396 14,910,396 (8,484,157) (8,484,157) 9,236,233 9,236,233 10,000 10,000 9,010,179 9,013,906 0 0 0 0 707,270 2,414,318 0 0 139,670 431,731 8,513,659 8,435,732 0 0 8,302,909 8,599,588 210,750 (163,856) 0 0 0 0 8,513,659 8,435,732 .72 .47 0 0
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