MOBL Q out.I sold half position today at .041, .04, and before the close .035.To take less risk.Review the Q below.
OVERALL OPERATING RESULTS:
We had no revenues for the quarter ended September 30, 2003.
Our operating expenses for the three months ended September 30, 2003 were $366,592, a $370,734 or 50% reduction when compared to $737,326 for the period ended September 30, 2002. For the six months ended September 30, 2003 total operating expenses were $637,810. This compares with $1.998 million for the six month period ended September 30, 2002. Our primary expense for the three months and six month periods ended September 30, 2003 was for Professional fees and compensation expenses of $284,806 and $506,522 respectively. This compares to $691,213 and $1.870 million for the three and six month periods ended September 30, 2002. Of this amount, no common stock in lieu of cash was issued in connection with consulting fees and expenses for services rendered.
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As of September 30, 2003 the Company had $592,211 in cash compared to $6,715 as of September 30, 2002. The cash is a result of an equity line arrangement with Cornell Capital Partners, dated February 6, 2003. As of September 30, 2003, accounts payable and accrued liabilities were reduced by $235,238 through management's ongoing negotiation with the Company's vendors.
Operating Losses
Our net operating loss for the three month period ended September 30, 2003 was $366,592, a $319,983 or 43% reduction when compared to $737,326 for the three months ended September 30, 2002. The loss for the six month period ended September 30, 2003 was $637,810 compared to $1.998 million as of September 30, 2002. These losses were incurred primarily as a result of the aforementioned incurred expenses.
As of September 30, 2003 the Company has accumulated $7.2 million in operating losses that may, on a limited basis, be offset against future taxable income. There are limitations on the amount of net operating loss carryforwards that can be used due to the change in the control of the management of the Company. No tax benefit has been reported in the financial statements, because we believe there is a 50% or greater chance the carryforwards will expire unused. Accordingly, the potential tax benefits of the loss carryforwards is offset by a valuation allowance of the same amount.
LIQUIDITY AND CAPITAL RESOURCES:
As of September 30, 2003, we had a total Stockholders' Deficit of $1.489 million compared to $2.109 million as of September 30, 2002. The Company does not currently have any revenues, liquidity or capital resources as we move forward with our business plan and our independent auditors have issued an audit opinion as of March 31, 2003 that raises substantial doubt as to our ability to continue as a going concern. We will need additional financing in order to implement our business plan and continue business. The traditional markets for raising capital have become extremely more difficult in the last year due to a depressed economy and large well-known business failures.
The Company will need additional financing and may use a private placement offering or debt financing to raise such additional funds, to be used for the following:
o Investment in laboratory facilities including test and simulation equipment;
o Acquisition or licensing of certain intellectual property related to the development of modems and communications semiconductor and component technology;
o Pay-down certain debt, such as a convertible debenture from Cornell Capital. We intend to pay-off debt owed to Mr. Daniel Lozinsky, a Director, and Mr. Arne Dunhem, an officer and Director, during 2003; and
o General working capital purposes.
We are in the process of establishing a source for additional financing and we cannot give any assurances that we will be able to secure any financing.
On October 16, 2002, the Company entered into an equity line of credit arrangement (the "Equity Line") with Cornell Capital Partners, LP ("Cornell"). This agreement was in turn terminated on February 6, 2003 and re-entered the same day February 6, 2003. The Equity Line provides, generally, that Cornell will purchase up to $10 million of Common Stock over a two-year period, with the timing and amount of such purchases, if any, at the Company's discretion. Any shares of Common Stock sold under the Equity Line will be priced at a 9% discount to the lowest closing bid price of the Common Stock during the five-day period following the Company's notification to Cornell that it is drawing down on the Equity Line. The Company is not permitted to draw down more than $450,000 in any 30-day calendar period. In addition, there are certain other conditions applicable to the Company's ability to draw down on the Equity Line including the filing and effectiveness of a registration statement registering the resale of all shares of Common Stock that may be issued to Cornell under the Equity Line and the Company's adherence with certain covenants. At the time of each draw down, the Company is obligated to pay Cornell a fee equal to three percent of amount of each draw down.
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EMPLOYEES
We currently employ two people and five consultants. Mr. Arne Dunhem is our President, Chief Executive Officer and Chairman. We anticipate that we will need additional persons to fill administrative, sales and technical positions if we are successful in raising the capital to implement our business plan.
NEW ACCOUNTING PRONOUNCEMENTS
We have adopted FASB Statement 128. It is not expected that we will be impacted by other recently issued standards. FASB Statement 128 presents new standards for computing and presenting earnings per share (EPS). The Statement is effective for financial statements for both interim and annual periods ending after December 15, 1997.
FASB Statement 131 presents news standards for disclosures about segment reporting. We do not believe that this accounting standard applies to us as all of our operations are integrated for financial reporting and decision-making purposes.
INFLATION
The Company's results of operations have not been affected by inflation and management does not expect inflation to have a significant effect on its operations in the future.
RECENT EVENTS
On September 8, 2003, the Company announced in a press release that the company had signed a memorandum of understanding for a joint ZigBee integrated circuit development project with a major Korean research laboratory, the RF Microelectronics Laboratory (RFME Lab), which is associated with the Information and Communications University in Daejeon, South Korea. The non-binding agreement calls for a joint development effort toward developing integrated circuits for radio frequency (RF) transceivers of the ZigBee standard. The integrated circuits will be fabricated in complementary metal oxide silicon (CMOS) processes. The RFME Lab has over the years proven to be a leading design center for highly advanced and sophisticated radio technologies miniaturized on semiconductor chips.
On September 9, 2003, the Company announced in a press release that it entered into a memorandum of understanding with Constellation Networks Corporation (CNC), a telecommunications transmission and distribution company headquartered in Traverse City, Michigan, under which it intends to acquire CNC. Terms of the transaction include both stock and cash to fund expansion of CNC's existing international satellite and fiber network. The projected closing date for the transaction was announced to be September 19, 2003. On September 19, 2003 it was subsequently announced that the transaction was delayed due to the need for due diligence and the negotiation of the final detailed terms of the agreement. CNC provides end-to-end global connectivity for the transport of voice, video, Internet, voice over IP and data. CNC uses multiple technology platforms to deliver its services and allow its clients the most flexibility possible. CNC maintains point of presence in New York City, NY and Malmo, Sweden.
On September 19, 2003, the Company also announced that negotiations to acquire GBH Telecom, Inc. have been terminated due to inability of both parties to agree on substantive terms of the transaction.
On September 17, 2003, the Company announced in a press release that the company had signed a strategic cooperation agreement with Seoul-based Axstone Co., Ltd., a leading South Korean wireless technology company. The memorandum of understanding with Axstone calls for a joint development program to include marketing and sales of various wireless solutions including systems and subsystems for CDMA and W-CDMA wireless standards. This includes solutions for third generation wireless networks. |
