UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECRUITIES EXCHANGE
ACT OF 1934. December 31,2003
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the Transaction Period from ____ to _____
Commission File number 333-47395
WIRELESS DATA SOLUTIONS, INC.
(Name of small business issuer as specified in its charter)
Utah 93-0734888
(State of Incorporation) (I.R.S. Employer Identification No.)
2233 Roosevelt Road
Suite #5
St. Cloud, MN 56301
(Address of principal executive offices)
(320)-203-7477
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes__ No__X__
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Not Applicable
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as the practicable date:
There were 15,142,434 shares of the Issuer's common stock outstanding as of
December 31, 2003.
Table of Contents
Part I
Item I Financial Statements
Item II Management's Discussion and Analysis or plan of Operation.
Part II
Item I Legal Proceedings
Item II Changes in Securities
Item III Defaults upon Senior Securities
Item IV Submission of Matters to a vote of security holders
Item V Other Information
Item VI Exhibits on Reports on Form 8K
Item VII Subsequent Events
WIRELESS DATA SOLUTIONS, INC. AND SUBSIDIARY
Consolidated Financial Statements
For the Quarter Ended December 31,2003
(Not Reviewed)
ITEM I
WIRELESS DATA SOLUTIONS, INC. AND SUBSIDIARY
Consolidated Balance Sheet
December 31, 2003
Assets
Current Assets 12/31/03 12/31/02
(Not Reviewed) (Not Reviewed)
Cash and Cash Equivalents $25,814 $54,147
Trade Accounts receivable, net of
Estimated Allowance for doubtful
Accounts of $54,053 100,907 87,022
Inventory 69,180 81,703
Prepaid Expenses 286 - _
Total Current Assets $196,187 $222,872
Property and Equipment
Office Fixtures and Equipment 59,155 59,155
Leasehold Improvements 12,894 12,894
72,049 72,049
Less: Accumulated Depreciation 66,388 56,857
Net Property and Equipment 5,661 15,192
Other Assets
Security Deposits 4,978 5,636
Total Assets $206,826 $243,699
Liabilities and Stockholder's Equity (Deficiency)
Current Liabilities:
Note Payable to Stockholder $50,000 $50,000
Accounts Payable and Accrued Expenses 114,098 173,220
Other Current Liabilities 34,839 11,564
Total Current Liabilities 198,937 234,784
Other Liabilities:
Due to officers 40,197 21,486
Total Liabilities 239,134 256,270
Minority Interests in consolidated subsidiaries 20,000 20,000
Commitment and Contingencies
Stockholders Equity
Preferred Stock, $.002 par value;3,000,000 shares
Authorized; no shares issued or outstanding - -
Common Stock, $.001 par value; 25,000,000 shares
Authorized; 15,142,434 issued 15,142 15,142
Common Stock to be issued 410,126 410,126
Additional Paid in Capital 2,373,962 2,373,962
Accumulated Deficit (2,851,538) (2,831,801)
Total Stockholder's Deficiency (52,308) (32,571)
Total Liabilities and Stockholder Deficiency $206,826 $243,699
WIRELESS DATA SOLUTIONS, INC. AND SUBSIDIARY
Consolidated Statements of Operations
For the Quarter Ended December 31, 2003
12/31/2003 12/31/2002
(Not Reviewed) (Not Reviewed)
Revenue
Net Product Sales $214,099 $224,494
Repairs and Maintenance 10,900 12,124
Engineering Services 16,261 2,650
Total Revenue $241,260 $239,268
Cost of Sales $85,758 $72,101
Gross Profit 155,502 167,167
Operating Expenses 102,479 150,317
Operating Income (loss) 53,023 16,850
Other Income(Expense):
Interest Expense (1,292) (1,306)
Interest Income 3 -___
Total Other Income (Expense) (1,289) (1,306)
Provision For Income Tax 0 0___
Net Gain or Loss $51,734 $15,544
Basic and diluted earnings(loss)
per common share $.003 $.001
Weighted Average Common Shares Outstanding 15,142,434 15,142,434
WIRELESS DATA SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the three months Ended December 31, 2003 and 2002
2003 2002
(Not Reviewed) (Not Reviewed)
Cash Provided by (used in)
Operating Activities:
Net Income (loss) 51,734 15,544
Adjustments to reconcile net loss to net cash
Provided by (used in) operating activities:
Depreciation 772 4,050
Issuance of common stock for services - -
(Increase)Decrease in Assets:
Security Deposits 95 -
Accounts Receivable (80,605) 9,091
Inventory 1,920 (2,086)
Prepaid expenses and other assets 2,422 -
Increase (decrease) in liabilities:
Accounts Payable and Accrued Expenses 18,052 (50,620)
Due to Officers 8,028 150
Advances from Customers - -
Other Current liabilities - 2,897
Net Cash provided by (used in)
operating activities: 2,418 (20,974)
Cash Flows from Financing Activities:
Advance to Officers 0 0
Net Cash provided by financing activities 0 0
Net increase (decrease) in
Cash and Cash Equivalents 2,420 (20,974)
Cash and Cash equivalents, beginning of period 23,394 75,121
Cash and Cash equivalents, end of period $25,814 $54,147
WIRELESS DATA SOLUTIONS
Consolidated Statement of Changes in Stockholders Equity
For the quarter ended December 31,2003
Common Stock
Number Additional
Of Paid-In Accumulated
Shares Amount Capital Deficit
Balance Sept 30,2001 10,967,124 10,967 2,026,534 (2,727,873)
(Audited)
Issuance of common stock
For services at
$.04 per share 450,000 450 17,550 -
Issuance of common stock
For debt reduction
At $.41 per share 182,296 182 74,818 -
Issuance for common stock
For debt reduction
At $.20 per share 543,014 543 108,060 -
Issuance of common stock
For working capital
At $.05 per share 3,000,000 3,000 147,000 -
Balance Sept 30, 2002 - - - (119,472)
(Unaudited) 15,142,434 $15,142 $2,373,962 ($2,847,345)
Net Loss 9/30/03 (55,927)
Balance Sept 30, 2003
(Unaudited) 15,142,434 $15,142 $2,373,962 ($2,903,272)
Net Profit 12/31/03 51,734
Balance Dec 31, 2003
(Not Reviewed) 15,142,434 $15,142 $2,373,962 ($2,851,538)
WIRELESS DATA SOLUTIONS
Consolidated Statement of Changes in Stockholders Equity
For the quarter ended December 31,2003
Common Stock
To be Issued Total
Balance Sept 30,2001 593,729 (96,643)
(Audited)
Issuance of common stock
For services at
$.04 per share - 18,000
Issuance of common stock
For debt reduction
At $.41 per share (75,000) -
Issuance for common stock
For debt reduction
At $.20 per share (108,603) -
Issuance of common stock
For working capital
At $.05 per share - 150,000
Net loss for fiscal year end - (119,472)
Balance Sept 30, 2002
(Unaudited) $410,126 $(48,115)
Net Loss 9/30/03 (55,927)
Balance Sept 30, 2003
(Unaudited) $410,126 ($104,042)
Net Profit 12/31/03 51,734
Balance Dec 31, 2003
(Not Reviewed) $410,126 ($52,308)
Item II Management's Discussion and Analysis of Financial Conditions
and Results of Operations
This discussion may include certain "forward looking" statements
that reflect our current views with respect to future events and
financial performance. Investors should be aware that actual
results may differ materially from our expressed expectations
because of risks and uncertainties inherent in future events;
particularly those risks identified and set forth below. Factors
that could cause or contribute to such differences include, but are
not limited to those discussed in this section. Investors should not
unduly rely on these forward-looking statements. We undertake no
duty to update the information in this discussion if any forward
looking statement later turns out to be inaccurate.
BUSINESS OVERVIEW
Wireless Data Solutions (the company) develops and markets digital
mobile data terminals and associated software for vehicle management
and location in the United States, South America, Mexico, and
Canada. The equipment is designed, assembled, marketed and sold by
Distributed Networks, Inc. (DINET) a wholly owned subsidiary of
Wireless Data Solutions.
The foundation of the company's vehicle tracking and GPS location
system is its adaptable, intelligent and programmable Mobile Data
Terminal called "Data Mate". The MDTs are integrated with the
customer's existing two-way radios providing valuable vehicle status
information and solving a wide variety of vehicle fleet management
issues. The company's intelligent MDTs contain a microprocessor and
are very cost effective and affordable for those companies desiring
to lower operating costs and maximize profitability through more
efficient vehicle fleet accountability.
Data Mate mobile data terminals from Wireless Data Solutions
relieves wireless spectrum congestion shared by voice communications
by searching out an opening in the spectrum and digitally
transmitting a wireless message of up to 244 alpha numeric
characters in less than a second, thus allowing dramatic increases
in vehicle status and location information to be sent back to the
customer's central office. The mobile data terminals also provide
stored proof of dates and times during operation, silent emergency
alarms, and RS232 connection to mobile printers, credit card swipes
and bar code scanners.
Coupled with the company's mobile data terminals, DINET has designed
and sold proprietary software called FleetVantage GOLD which resides
on the customer's central office Windows based PC. The software
translates the digital data received from vehicle fleets and acts as
a sophisticated message-handling center. FleetVantage GOLD provides
specific mapping detail as the vehicle's location "real time". All
data sent and received by FleetVantage GOLD is archived in the PC,
which can be accessed anytime for documentation purposes. The
company has recently completed FleetVantage GOLD upgrades to include
Client/Server operation, interface to other third party software,
and more functional GPS vehicle management schemes adding to the
overall functionality.
The company's mission will principally focus on building a high
growth and profitable public corporation by manufacturing rugged and
dependable wireless communications equipment and software targeting
specific niche markets that have been determined to have high demand
and few competitors. Essentially our goal is to provide state of the
art vehicle location and status reporting products and software that
exceeds expectations of our customers; and after the sale and
installation, continue relationships with preeminent support and
product improvements that we know our customers will come to rely
on.
Wireless Data Solutions occupies on office in St. Cloud, Minnesota,
and DINET occupies office space in Oceanside, California the
principal location for all design, marketing and distribution of the
company's products and services. The company's transfer agent is
Computer Share Investor Services, 350 Indiana St. Suite 800, Golden,
Colorado.
RESULTS OF OPERATIONS (1st QUARTER FY2004)
Total revenues for the first quarter of Fiscal 2004 were $241,260,
compared to the First quarter of 2003 when sales totaled $239,268.
The resulting operating income for the first quarter of 2004 was a
gain of $51,734 versus a profit of $15,544 in the first quarter of
2003. Basically the primary reason for increasing net profit
compared to last fiscal year was the reduction in expenses by
approximately $48,000. Recognizing that cost cutting is not a total
solution to profitability, WDS remains committed to the need and
continuing effort to raise capital for next generation products and
software which are critical to maintaining the company's market
position and an instrument to increasing revenue and competitive
advantage in the years to come. The Company is currently engaging in
discussions with viable entities to bring forth the necessary
elements either for the infusion of capital or a Merger and
Acquisition to add value and for the future success of the company.
Capital Funding would be used for the development of the company's
"next generation" products and software essentially adding
automation to the vehicle reporting scheme when it passes GPS
location and status information from the vehicle to the customer's
central office. The ready mix/construction industry recognized the
need to incorporate automatic status reporting and GPS location
information to their operations, which they acknowledge improves
efficiency, increases profitability and provides a greater
competitive advantage. Since WDS has nearly 400 existing customers,
it is management's belief that at such time as capital is raised and
the next generation products and software are introduced, revenue
expectations would be realized.
LIQUIDITY AND CAPITAL RESOURCES
The company's 1st Qtr cash position decreased by approximately
$28,333, $25,814 vs. $54,147 compared to the same period of the
prior year. The cash decrease was primarily due to the increase in
accounts receivable. Current liabilities at 12/31/03 were $198,937
compared to $234,784 at 12/31/02. The decrease was primarily due to
the decrease in accounts payable.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Robert Chase
Since 2000, Mr. Chase has served as President of DINET, board member
and is currently protempore President of Wireless Data Solutions.
Mr. Chase has over 25 years of experience in the wireless industry,
and has served as business development consultant to a number of
high technology industries. His clients included Cubic Defense
Systems, Qualcomm, Inc., SAIC, SpaceCom Systems, ADC
Telecommunications, Teledyne Ryan Electronics and Pacific
Communications Sciences, Inc. He has been instrumental in
formulating early plans for companies engaged in wireless data and
personally managed early sales and distribution for high tech start
ups. He has also assisted companies exit chapter 11 reorganization
status. Mr. Chase has worked for Motorola, General Electric and
PacTel and was inducted into General Electric's Winners Circle. Mr.
Chase attended Oregon State University ('71).
Patrick Makovec, Chairman and CEO
Mr. Makovec is currently the Chairman and CEO of Wireless Data
Solutions and has been a board member since 1987. Mr. Makovec found
and completed the M & A with Distributed Networks, Inc. (DINET). Mr.
Makovec has been instrumental in the strategic planning process of
Wireless Data Solutions and DINET by providing direction for capital
funding and providing direction and counsel for completing an M & A.
Mr. Makovec was President of Tel Corp a leasing company in Minnesota
and holds an MS degree in Accounting from the University of
Wisconsin. Mr. Makovec holds 8% of the stock in Wireless Data
Solutions.
Part II
Item I LEGAL PROCEEDINGS
(None)
Item II CHANGES IN SECURITIES
There were no securities issued or repurchased during the
first quarter of fiscal 2004.
Item III DEFAULTS UPON SENIOR SECURITIES
(None)
Item IV SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(None)
Item V OTHER INFORMATION
(None)
Item VI EXHIBITS ON REPORTS ON FORM 8-K
(None)
Item VII SUBSEQUENT EVENTS
(None)
SIGNATURES
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.
August 18, 2003 WIRELESS DATA SOLUTIONS INC.
/S/ Patrick Makovec
Patrick Makovec
Chairman of the Board