UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8K-A
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Event Requiring Report: December 10, 2003
--------------------
INTERNATIONAL WIRELESS, INC.
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(Exact name of Registrant as Specified in Its Charter)
Maryland 000-27045 36-4286069
---------------------------- ------------------------ ------------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
25 Mound Park Drive
Springboro, OH 45036
------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (937) 748-2937
------------------
-----------------------------------------------------------
(Former name or former address, if changes since last report)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On or about December 11, 2003 the Registrant submitted Form 8K describing
an Acquisition Agreement that the Registrant entered on December 10, 2003 to
acquire one hundred percent of Mound Technologies, Inc. a Nevada corporation
with its corporate headquarters located in Springboro, Ohio (hereinafter
"Mound").
1
The closing under the Acquisition Agreement consisted of a stock for stock
exchange in which the Registrant acquired all of the issued and outstanding
common stock of Mound in exchange for the issuance of 1,256,000 shares of its
common stock. As a result of this transaction, Mound became a wholly-owned
subsidiary of the Registrant.
The Agreement was approved after completion of its due-diligence by the
unanimous consent of the Board of Directors of Mound and International Wireless.
Prior to the Agreement, the Registrant had 11,755,603 shares of common stock
issued and outstanding. Following the closing, the Registrant has 13,011,603
shares of common stock outstanding. The 1,256,000 shares of common stock have
been issued to five different shareholders. Thomas C. Miller the new President
and Chief Executive Officer owns 800,000 shares directly and is attributable to
owning a total of 1,200,000 through relations and shares under his control.
Mound was incorporated in the state of Nevada in November of 2002. Its
corporate offices are located in Springboro, Ohio. Mound is actively involved in
the fabricated metals industry as well as property management. This business
includes two divisions and one wholly owned subsidiary.
The Steel Fabrication Division is located in Springboro, Ohio. This
division is a full service structural and miscellaneous steel fabricator. It
also manufactures steel stairs and railings, both industrial and architectural
quality. The present capacity of the facility is 6000 tons per year of
structural and miscellaneous steel. This division had been previously known as
Mound Steel Corporation which was started at the same location in 1964.
The Property Management Division is also located in Springboro, Ohio.
Presently five properties are owned and managed. This includes 145,000 square
feet of light and heavy manufacturing buildings on approximately 22 acres. An
additional 33 acres of industrial property is managed but not owned.
Freedom Products of Ohio is a wholly owned subsidiary of Mound. Freedom
manufactures products for the heavy machinery industry and has the ability to do
complete assembly and testing if required. This includes machine bases,
breeching, pollution control abatement fabrications and material handling
fabrications. Freedom has the capacity to fabricate weldments and assemblies up
to 50 tons total weight. Freedom Products of Ohio is located in Middletown,
Ohio.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFIYING ACCOUNTANTS.
Not applicable.
ITEM 5. OTHER EVENTS.
Not applicable.
2
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a. Financial Statements of business Acquired.
On or about December 11, 2003 the Registrant submitted Form 8K describing
an Acquisition Agreement that the Registrant entered on December 10, 2003 to
acquire one hundred percent of Mound.
The audited financials statements were not available at the time of the
initial filing on Form 8K are provided in this Form 8K-A.
3
MOUND TECHNOLOGIES, INC.
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2003
4
CONTENTS
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Independent Auditors' Report Page 1
Consolidated Balance Sheet 2
Consolidated Statement of Stockholders' Deficit 3
Consolidated Statement of Operations 4
Consolidated Statement of Cash Flows 5
Notes to Consolidated Financial Statements 6
5
MEYLER & COMPANY, LLC
CERTIFIED PUBLIC ACCOUNTANTS
ONE ARIN PARK
1715 HIGHWAY 35
MIDDLETOWN, NJ 07748
Independent Auditors' Report
To the Board of Directors
Mound Technologies, Inc.
Springboro, Ohio
We have audited the accompanying consolidated balance sheet of Mound
Technologies, Inc. and subsidiaries as of December 31, 2003 and the related
consolidated statements of operations, stockholders' deficit and cash flows for
the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about 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. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Mound
Technologies, Inc. and subsidiaries as of December 31, 2003 and the consolidated
results of its operations and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note C to the
consolidated financial statements, the Company incurred a net loss of $2,631,303
for the year ended December 31, 2003 and has a net working capital deficit of
$595,070. There are existing uncertain conditions the Company faces relative to
its ability to acquire capital and conduct sales activities. These conditions
raise substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in Note C. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Meyler & Company, LLC
Middletown, NJ
February 18, 2004
6
MOUND TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
For the Year Ended December 31, 2003
CURRENT ASSETS
Cash $ 4,923
Marketable securities 3,020
Accounts receivable, net of allowance for doubtful
accounts of $631,867 1,120,182
Inventory 619,192
----------
Total Current Assets 1,747,317
PROPERTY, PLANT and EQUIPMENT, net of accumulated
depreciation of $510,219 982,502
OTHER ASSETS
Deposits 1,000
----------
$2,730,819
==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Notes payable to vendors $ 325,000
Current portion of long term debt 29,450
Accounts payable 1,115,070
Payroll taxes 527,355
Accrued salary and wages 38,400
Billings in excess of cost 156,507
Accrued expenses 150,605
----------
Total Current Liabilities 2,342,387
LONG-TERM DEBT 961,928
STOCKHOLDERS' DEFICIT
Common stock $0.001 par value, 30,000,000
authorized, 1,000 issued and outstanding at
December 31, 2003 1
Paid-in-capital 5,031,389
Accumulated deficit (5,604,886)
----------
(573,496)
----------
$2,730,819
==========
See accompanying notes to consolidated financial statements.
7
MOUND TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
December 31, 2003
Paid
Common Common in Accumulated
Shares Stock Capital Deficit Total
----------------------------------------------------------------------------
Issuance of 1,000 shares of
common stock at $0.001
par value per share 1,000 $1 $3,686,599 $3,686,600
Merger of Miller Investments
into the Company 349,000 349,000
Merger of Mound Steel, Inc.
into the Company 995,790 (2,973,583) (1,977,793)
Net loss for year ended
December 31, 2003 (2,631,303) (2,631,303)
----- -- ---------- ----------- -----------
Balance December 31, 2003 1,000 $1 $5,031,389 (5,604,886) $ (573,496)
===== == ========== =========== ===========
See accompanying notes to consolidated financial
statements.
8
MOUND TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2003
NET SALES $4,428,836
COSTS AND EXPENSES
Cost of goods sold 4,055,404
Selling, general and administrative 1,281,975
Depreciation and amortization 64,400
----------
Total Costs and Expenses 5,401,779
----------
NET OPERATING LOSS (972,943)
OTHER INCOME (EXPENSE)
Dividend and other income 4,480
Interest expense (351,801)
Realized loss on sale of marketable securities (150,949)
Loss on sale of building (39,237)
----------
Total Other Expenses (537,507)
----------
NET LOSS FROM CONTINUING OPERATIONS (1,510,450)
DISCONTINUED OPERATIONS
Income from operations of discontinued subsidiary (457,853)
Loss on disposal of operating assets (663,000)
----------
(1,120,853)
----------
NET LOSS $2,631,303
==========
See accompanying notes to consolidated financial statements.
9
MOUND TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(2,631,304)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 64,600
Sale of building 625,000
Discontinued operating assets 663,000
Changes in operating assets and liabilities:
Accounts receivable 943,771
Inventory (255,956)
Other current assets 76,310
Accounts payable (262,414)
Billings in excess of cost 17,611
Accrued payroll taxes 413,165
Notes payable to vendors 175,000
Accrued salaries and wages 38,400
Accrued expenses 150,605
-----------
Net Cash Provided by Operating Activities 17,788
-----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of marketable securities (3,020)
-----------
Net Cash Used in Investing Activities (3,020)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash acquired in acquisition 2,385
Debt repayment (4,142,291)
Notes payable to related party 441,292
Additional capital investment 3,686,600
-----------
Net Cash Used in Financing Activities (12,014)
-----------
NET INCREASE IN CASH 2,754
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR 2,169
-----------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 4,923
===========
Supplemental Schedule of Non-Cash Operating and
Financing Activities:
Miller Investments Acquisition:
Fair market value of land and buildings acquired $ 1,461,000
Cash 2,385
Mortgages assumed (1,114,145)
Equity (349,240)
Adimo Manufacturing Company Acquisition:
Fair market value of assets acquired
Equipment 783,374
Inventory 199,196
Accounts receivable 64,907
Debt assumed
Bank loans 897,477
Vendor notes payable 150,000
Interest paid 351,801
See accompanying notes to consolidated financial statements.
10
MOUND TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
NOTE A - BUSINESS
Mound Technologies, Inc. (the "Company'), a Nevada corporation, was
incorporated in November 2002. The assets and liabilities of Mound
Steel, Inc. were transferred to the Company on January 1, 2003. The
Company is a fabricator of structural steel for commercial buildings
meeting industrial and architectural standards.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
Cash and Cash Equivalents
The company considers all highly-liquid investments, with a maturity
of three months or less when purchased, to be cash equivalents.
Consolidated Financial Statements
The consolidated financial statements include the Company and its
wholly owned subsidiaries. All significant intercompany transactions
and balances have been eliminated in consolidation.
Property and Equipment and Depreciation
Property and equipment is stated at cost and is depreciated using the
straight line method over the estimated useful lives of the respective
assets. Routine maintenance, repairs and replacement costs are
expensed as incurred and improvements that extend the useful life of
the assets are capitalized. When property and equipment is sold or
otherwise disposed of, the cost and related accumulated depreciation
are eliminated from the accounts and any resulting gain or loss is
recognized in operations.
Marketable Securities
The Company accounts for marketable securities in accordance with
Statement of Financial Accounting Standards No. 115, Accounting for
Certain Investments in Debt and Equity Securities. This statement
requires securities which are available for sale to be carried at fair
value, with changes in fair value recognized as a separate component
of stockholders' equity. At December 31, 2003, cost approximated
market.
Allowance for Doubtful Accounts
It is the company's policy to provide an allowance for doubtful
accounts when it believes there is a potential for non-collectibility
based upon careful review and analysis.
Inventories
Inventories are stated at the lower of cost or market value. Cost is
determined using the first-in, first-out (FIFO) method.
11
MOUND TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2003
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue and Cost Recognition
The Company recognizes revenues from certain long-term construction
contracts, on the percentage-of - completion method. Under this
method, the completion percentage is measured by the percentage that
costs incurred to date bears to total estimated final costs for each
contract. For financial statement purposes, income is determined by
applying the percentage of completion, determined at the financial
statement date, to the estimated final gross profit for each contract.
Business Combinations and Goodwill
In July 2001, the Financial Accounting Standards Board ("FSAB") issued
SFAS NO. 141, "Business Combinations". SFAS No. 141 requires the
purchase method of accounting for business combinations initiated
after June 30, 2001 and eliminates the pooling-of-interests method.
In July 2001, the FASB issued SFAS NO. 142, "Goodwill and Other
Intangible Assets", which the company adopted during 2003. SFAS No.
142 requires, among other things, the discontinuance of goodwill
amortization. In addition, the standard includes provisions for the
reclassification of certain existing recognized intangibles as
goodwill, reassessment of the useful lives of existing recognized
intangibles, reclassification of certain intangibles out of previously
reported goodwill and the identification of reporting units for
purposes of assessing potential future impairment of goodwill.
In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS No. 144 changes the
accounting for long-lived assets to be held and used by eliminating
the requirement to allocate goodwill to long-lived assets to be tested
for impairment, by providing a probability weighted cash flow
estimation approach to deal with situations in which alternative
courses of action to recover the carrying amount of possible future
cash flows and by establishing a primary-asset approach to determine
the cash flow estimation period for a group of assets and liabilities
that represents the unit of accounting for long-lived assets to be
held and used. SFAS No. 144 changes the accounting for long-lived
assets to be disposed of other than by sale by requiring that the
depreciable life of a long-lived asset to be abandoned be revised to
reflect a shortened useful life and by requiring the impairment loss
to be recognized at the date a long-lived asset is exchanged for a
similar productive asset or distributed to owners in a spin-off if the
carrying amount of the asset exceeds its fair value. SFAS No 144
changes the accounting for long-lived assets to be disposed of by sale
by requiring that discontinued operations no longer be recognized in a
net realizable value basis (but at the lower of carrying amount or
fair value less costs to sell), by eliminating the recognition of
future operating losses of discontinued components before they occur
and by broadening the presentation of discontinued operations in the
income statement to include a component of an entity rather than a
segment of a business. A component of an entity comprises operations
and cash flows that can be clearly distinguished, operationally, and
for financial reporting purposes, from the rest of the entity.
NOTE C - GOING CONCERN
As shown in the accompanying financial statements, the Company had a
net operating loss of $2,631,303 for the year ended December 31, 2003,
and a negative working capital of $595,070 and a negative
stockholders' equity of $573,496.
On December 10, 2003, the company was acquired by International
Wireless, Inc. a public corporation. Management's plans to improve its
financial condition are as follows: (1) to seek additional equity
capital
12
MOUND TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2003
NOTE C - GOING CONCERN (CONTINUED)
in the financial markets, (2) improve its position in the construction
industry by bidding on more projects (the Company for the first
quarter 2004 has approximately $3,300,000 in order backlog), (3)
implementing profit improvement and cost cutting measures and (4)
seeking low interest economic development loans. Failure to improve
its financial condition could result in the Company having to curtail
or cease operations. Additionally, even if the Company meets its
objectives as outlined above, there can be no assurances that these
measures will be sufficient to enable it to develop business to a
level where it will generate profits and cash flows to elevate the
negative working capital. These financial statements do not include
any adjustments relating to the recovery of the recorded assets or the
classification of the liabilities that might be incurred should the
Company be unable to continue as a going concern.
NOTE D - ACQUISITIONS
On January 1, 2003, the company acquired the assets of Miller
Investments, a real estate partnership controlled by the stockholders
of the Company, and assumed its debt. An analysis of the acquisition
is as follows:
Fair market value of Land and Buildings acquired $1,461,000
Checking account 2,385
----------
Total assets 1,463,385
Less debt assumed 1,114,145
----------
Mound Technologies equity issued $ 349,240
==========
On May 1, 2003, the Company acquired Adimo Manufacturing Company (50%
of which was controlled by a major stockholder of the company) and
merged it into Freedom Products of Ohio, a newly formed subsidiary of
the Company. An analysis of the acquisition is as follows:
Fair market value of assets acquired:
Equipment $ 783,374
Inventory 199,196
Accounts receivable 64,907
----------
Total assets $1,047,477
==========
Debt assumed:
Bank loans $ 897,477
Vendor note payable 150,000
Total debt $1,047,477
==========
13
MOUND TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2003
NOTE E - INVENTORY
Inventory consists of the following at December 31, 2003:
Finished units $ 594,133
Component parts 113,540
Reserve for obsolescence (88,481)
----------
$ 619,192
==========
NOTE F - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following at December 31,
2003 :
Land $ 73,400
Buildings 762,600
Office equipment 120,388
Machinery and equipment 397,580
Transportation equipment 105,699
Leasehold improvements 33,134
----------
1,492,801
Less accumulated depreciation 510,219
----------
$ 982,582
==========
NOTE G - NOTES PAYABLE TO VENDORS
The Company has notes payable to vendors who supply raw materials. The
note agreements were executed March 2002. The Company has not met its
obligations under the notes and, as a result, 15% interest has been
accrued under the terms of the notes. The balance of the notes
including interest at December 31, 2003 is $325,000. Subsequent to the
balance sheet date, the vendor, O'Neil Steel, Inc. has secured a
judgment against the Company in the amount of $140,000. The Company
recently renegotiated the notes reducing the balance due to $235,000
and has paid $60,000 against this amount. The balance is due in three
subsequent payments by July 12, 2004.
NOTE H - LONG-TERM DEBT
Long-term debt of the Company at December 31, 2003 is as follows:
Installment loan $ 16,386
Building mortgages 508,700
Stockholder loans 466,292
---------
991,378
Less current portion 29,450
---------
$ 961,928
=========
14
MOUND TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2003
NOTE H - LONG-TERM DEBT (CONTINUED)
The installment loan is for the purchase of a company vehicle. The
original loan dated April 9, 2001 was for $30,724 and was interest
free. The loan is secured by the vehicle and requires monthly payments
of $512 per month for 60 months.
The building mortgages consist of two individual mortgages:
One dated March 15, 2002 for $243,750 at a rate of 7.5% for 15
years requiring monthly payments including interest of $2,260.
The mortgage is secured by a building in Ohio.
One dated April 29, 2002 for $300,000 at a rate of 7.25% for 15
years requiring monthly payments including interest of $2,739.
The mortgage is secured by a building in Ohio.
The stockholder loans in the aggregate of $466,292, have no repayment
provisions or stated interest rates. The stockholders have agreed to
convert the loans into equity of the parent company, International
Wireless, Inc. Had interest been accrued on the loans, the annual
interest expense at 6% would approximate $27,980.
Required annual principal payments over the next five years are as
follows:
Year Amount
---- -------
2004 $29,450
2005 31,225
2006 31,086
2007 29,045
2008 31,257
Thereafter -
NOTE I - INCOME TAXES
The Company has adopted Financial Accounting Statement No. 109 (SFAS
No. 109). Under this method, the Company recognizes a deferred tax
liability or asset for temporary differences between the tax basis of
an asset or liability and the related amount reported on the financial
statements. The principal types of differences, which are measured at
the current tax rates, are net operating loss carry forwards. At
December 31, 2003, these differences resulted in a deferred tax asset
of approximately $1,500,000. SFAS No. 109 requires the establishment
of a valuation allowance to reflect the likelihood of realization of
deferred tax assets. Since realization is not assured, the Company has
recorded a valuation allowance for the entire deferred tax asset, and
the accompanying financial statements do not reflect any net asset for
deferred taxes at December 31, 2003.
The Company's net operating loss carry forwards amounted to
approximately $5,600,000 at December 31, 2003 which will expire by
2018.
NOTE J - RELATED PARTY TRANSACTIONS
During the year, the stockholders advanced the Company additional
working capital of $441,292 to operate the business. The total
cumulative amount of advances is $466,290. The advances have no
repayment
15
MOUND TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2003
NOTE J - RELATED PARTY TRANSACTIONS (CONTINUED)
dates. The stockholders have agreed to convert the advances to
preferred or common stock of the parent company, International
Wireless, Inc.
NOTE K - STOCKHOLDERS' DEFICIT
On January 1, 2003, the company acquired the assets of Miller
Investments, a real estate partnership controlled by the stockholders
of the company and assumed its debt. Additional paid-in capital was
issued in the amount of $349,200.
On January 1, 2003, the assets, liabilities and equity of Mound Steel,
Inc. were merged into Mound Technologies, Inc., a newly incorporated
company.
During the year, the stockholders contributed $3,686,600 in cash and
marketable securities in return for 1,000 shares of Mound
Technologies, Inc. stock.
NOTE L - RENT EXPENSE
The Company has an informal agreement with a leasing company, owned by
the Company's president, to pay $15,000 per month for warehouse and
office space. The lease is month to month and not covered by a written
agreement.
NOTE M - DISCONTINUED OPERATIONS
The Company acquired on May 1, 2003, Adimo Manufacturing Company, a
company in which a major shareholder of the Company owned a 50%
interest, and merged it into Freedom Products of Ohio, a newly formed
subsidiary of the Company (See note D of the Financial Statements.) At
December 31, 2003, the Company decided to discontinue the operations
of this subsidiary and sell the operating assets due to a lack of
sales and the high operating costs necessary to continue the
operations at the facility for the products manufactured. The Company
is seeking to sell the equipment and has made a provision to reduce
the asset costs (machinery and equipment) to their approximate
liquidation value.
NOTE N - COMPANY BACKLOG
At the date of the report, the Company has orders in process for
approximately $3,300,000.
NOTE O - LEGAL MATTERS
The Company is in negotiation on several matters relating to payments
for goods and services. The total amount of the litigation
approximates $25,000. See note G to the financial statements for
judgment and renegotiation of note payable to O'Neil Steel, Inc.
16
b. Pro Forma Financial Information.
INTERNATIONAL WIRELESS, INC.
December 31, 2003
The below pro-forma statement combines the balance sheets of International
Wireless, Inc. at December 31, 2003 and Mound Technologies, Inc. which was
acquired on December 15, 2003.
PRO-FORMA BALANCE SHEET
Pro-Forma
International Mound Pro-Forma Balance
Wireless, Inc. Technologies, Inc. Adjustments Sheet
-------------- ------------------ ----------- ---------
ASSETS
CURRENT ASSETS
Cash $ 4,923 $ 4,923
Marketable securities 3,020 3,020
Accounts receivable, net of allowance 1,120,182 1,120,182
Inventory 619,192 619,192
---------- ----------
Total Current Assets 1,747,317 1,747,317
PROPERTY, PLANT AND EQUIPMENT, net of
accumulated depreciation 982,502 982,502
OTHER ASSETS
Deposits 1,000 1,000
Investment in Mound Technologies, Inc. $ 12,560 $ (12,560)(A)
Goodwill 586,056 586,056
--------- ---------- ---------- ----------
Total Assets $ 12,560 $2,730,819 $ 573,496 $3,316,875
========= ========== ========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Bank overdraft $ 4,625 $ 4,625
Notes payable to vendors 15,000 $325,000 340,000
Current portion of long-term debt 29,450 29,450
Accounts payable 427,228 1,115,070 1,542,298
Payroll taxes 71,103 527,355 598,458
Accrued salary and wages 73,242 38,400 111,642
Billings in excess of cost 156,507 156,507
Accrued expenses 150,605 150,605
Accrued income taxes 36,126 36,126
Notes payable to related parties 77,188 77,188
--------- ---------- ---------- ----------
Total Current Liabilities 704,512 2,342,387 3,046,899
LONG-TERM DEBT 961,928 961,928
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value
5,000,000 shares authorized,
none issued and outstanding
Common stock, $0.001 par value
100,000,000 shares authorized;
13,077,758 issued and outstanding 13,077 1 $ (1)(A) 13,077
Paid-in-capital 11,304 5,031,389 (5,031,389)(A) 11,304
Accumulated deficit (716,333) (5,604,886) 5,604,886 (A) (716,333)
--------- ---------- ---------- ----------
Total Shareholders' Deficit (691,952) (573,496) (691,952)
--------- ---------- ---------- ----------
Total Liabilities and Stockholders' Deficit $ 12,560 $2,730,819 $ 573,496 $3,316,875
========= ========== ========== ==========
(A) To eliminate acquisition equity of Mound Technologies, Inc. and record
acquired good will.
See accompanying notes to pro-forma financial statement.
17
INTERNATIONAL WIRELESS, INC.
December 31, 2003
NOTES TO PRO-FORMA FINANCIAL STATEMENT
NOTE A - ACQUISITION OF MOUND TECHNOLOGIES
On December 15, 2003, the Company acquired 100% of the issued and
outstanding stock of Mound Technologies, Inc. ("Mound") for an
aggregate purchase price of 1,256,000 shares of the Company's common
stock to be issued to the stockholders of Mound. Mound, a Nevada
corporation, is a steel fabricator meeting industrial and
architectural standards for commercial buildings. The acquisition is
being accounted for as a purchase under SFAS No. 141, Business
Combinations. Since the acquisition occurred on December 15, 2003, it
was not included in the accompanying financial statements since the
period of inclusion was not deemed significant.
The allocation of the purchase price was as follows:
Value of 1,256,000 shares of common stock at $0.01 per share $ 12,560
===========
Fair value of net assets allowed as follows:
Cash $ 4,923
Marketable securities 3,020
Accounts receivable 1,120,182
Inventory 619,192
Equipment 982,502
Deposits 1,000
Liabilities assumed (3,304,315)
Goodwill 586,056
-----------
$ 12,560
===========
Condensed results of operations for the year ended December 31, 2003
of Mound are as follows:
Net sales $ 4,428,836
Cost and expenses
Cost of good sold 4,055,404
Selling, general and administrative expenses 1,281,975
Depreciation and amortization 64,400
-----------
Total Cash and Expenses 5,401,779
-----------
Operating loss (972,943)
Non-operating expenses (537,507)
-----------
Net Loss $(1,510,450)
===========
Pro forma:
Earnings per share (basic and diluted) $(0.80)
-----------
Average shares outstanding, after reverse split 1,891,367
===========
18
Exhibits:
Not Applicable.
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
ITEM 9. REGULATION FD DISCLOSRE
Not applicable
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: June 1, 2004 International Wireless, Inc.
------------------- ----------------------------
(Registrant)
/s/ Trent Sommerville
----------------------------
Trent Sommerville, CEO
/s/ Jerry Gruenbaum
----------------------------
Jerry Gruenbaum
Corporate Secretary
19