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: January 15, 2002
------------------
INTERNATIONAL WIRELESS, INC.
------------------------------------------------------
(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.)
120 Presidential Way
Woburn, MA 01801
------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (781) 939-7252
------------------
-----------------------------------------------------------
(Former name or former address, if changes since last report)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
On or about January 31, 2002 the Registrant submitted Form 8K
describing the Acquisition Agreement between the Registrant and Mitigo, Inc. a
Delaware corporation with its corporate headquarters located in Woburn,
Massachusetts.
The audited financial statements were not available at the time of the
initial filing on Form 8K are provided in this Form 8K-A.
(a) Financial Statements of Business Acquired
Page
----
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS OF MITIGO INC.
Balance Sheet 2
Statement of Operations 3
Statement of Stockholders' Deficit 4
Statement of Cash Flows 5
NOTES TO FINANCIAL STATEMENTS 6-10
(b) Pro Forma Financial Information.
Introduction to Unaudited Pro Forma Condensed Combined
Financial Information. 11
Unaudited Pro forma Condensed Combined Balance Sheet
as of December 31, 2001. 12-13
Unaudited Pro forma Condensed Combined Statement of Operations
for the year ended December 31, 2001 14
Notes to Unaudited Pro forma Condensed Combined Financial
Information 15-16
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors of
Mitigo Inc.
We have audited the accompanying balance sheet of Mitigo Inc. (A Development
Stage Company) as of December 31, 2001 and the related statements of operations,
changes in stockholders' deficit and cash flows for the period from August 17,
2001 (Inception) through December 31, 2001. 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 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 financial statements referred to above present fairly, in
all material respects, the financial position of Mitigo Inc. as of December 31,
2001, and the results of its operations and its cash flows for the period from
August 17, 2001 (Inception) through December 31, 2001, in conformity with
accounting principles generally accepted in the United State of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company incurred a net loss of $243,507 and there are
existing uncertain conditions that the Company faces relative to raising capital
and generating revenue. These conditions raise substantial doubt about its
ability to continue as a going concern. Management's plans regarding these
matters also are described in Note 1. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ Marcum & Kliegman LLP
February 22, 2002
New York, NY
1
MITIGO, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
December 31, 2001
--------------------------------------------------------------------------------
ASSETS
------
PROPERTY AND EQUIPMENT, Net $ 3,989
---------------------- ----------
TOTAL ASSETS 3,989
==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES
-------------------
Accrued expenses 30,405
OTHER LIABILITIES
-----------------
Loans payable, related party 216,091
----------
TOTAL LIABILITIES 246,496
----------
COMMITMENTS AND CONTINGENCIES
-----------------------------
STOCKHOLDERS' DEFICIT
---------------------
Common stock, no par value; 3,000 shares authorized; 2,998
shares issued and outstanding 1,000
Deficit accumulated during development stage (243,507)
----------
TOTAL STOCKHOLDERS' DEFICIT (242,507)
----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 3,989
==========
The accompanying notes are an integral part of these financial statements.
2
MITIGO, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
For the Period August 17, 2001 (Inception) through December 31, 2001
--------------------------------------------------------------------------------
OPERATING EXPENSES
------------------
Selling, general and administrative expenses $ 206,507
Software development costs 34,325
----------
TOTAL OPERATING EXPENSES 240,832
OTHER EXPENSE
-------------
Interest expense (2,675)
----------
NET LOSS $(243,507)
==========
The accompanying notes are an integral part of these financial statements.
3
MITIGO, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDER"S DEFECIT
For the Period August 17, 2001 (Inception) through December 31, 2001
--------------------------------------------------------------------------------
Deficit
Accumulated
Common Stock During
--------------- Development
Shares Amount Stage Total
------------------------------------------
Initial issuance of common 2,998 $ 1,000 $ -- $ 1,000
stock
Net loss -- -- (243,507) (243,507)
------ ------- ------------- ----------
BALANCE - December 31, 2001 2,998 $ 1,000 $ (243,507) $(242,507)
====== ======= ============= ==========
The accompanying notes are an integral part of these financial statements.
4
MITIGO, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
For the Period August 17, 2001 (Inception) through December 31, 2001
--------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
-------------------------------------
Net loss $(243,507)
----------
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 567
Changes in operating assets and liabilities:
Accounts payable 30,405
----------
TOTAL ADJUSTMENTS 30,972
----------
NET CASH USED IN
OPERATING ACTIVITIES (212,535)
----------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
Purchases of property and equipment (4,556)
----------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
Proceeds from issuance of common stock 1,000
Proceeds from loans payable, related party 216,091
----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 217,091
----------
NET CHANGE IN CASH AND
CASH EQUIVALENTS --
CASH AND CASH EQUIVALENTS - Beginning --
------------------------- ----------
CASH AND CASH EQUIVALENTS - Ending $ --
------------------------- ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
-------------------------------------------------
Cash paid during the period for:
Interest $ 2,675
The accompanying notes are an integral part of these financial statements.
5
MITIGO, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1 - Description of Business Going Concern Uncertainty and Managements Plans
-----------------------------------------------------------------------
The Company and Nature of Business
---------------------------------------
Mitigo Inc. (The "Company") was incorporated on August 17, 2001 in the
state of Delaware. The Company develops software solutions that allow
mobile phone, Personal Digital Assistants ("PDA's"), and other wireless
devices to read visual symbols such as barcodes and matrix codes. Since
inception the Company's efforts have been devoted to creating its business
plan and developing and selling its software. Accordingly, through the date
of these financial statements, the Company is considered to be in the
development stage and the accompanying financial statements represent those
of a development stage enterprise.
Going Concern Uncertainty and Management's Plans
-----------------------------------------------------
As shown in the accompanying financial statements, the Company incurred a
net loss of $243,507 during the period from August 17, 2001 (Inception)
though December 31, 2001 resulting in a deficit accumulated during the
development stage of $243,507. Management plans include raising capital and
generating revenue through sale of their software. On January 11, 2002, the
Company was acquired by International Wireless, Inc. ("IWIN") (See Note 6)
and became a 100% wholly owned subsidiary of IWIN. Failure of the Company
or IWIN to raise capital or generate revenue may result in depleting of
funds available to implement the Company's business plan and cause it to
curtail or cease operations. Additionally, even if the Company or IWIN does
raise sufficient capital or generate revenue, there can be no assurances
that the net proceeds or the revenue will be sufficient to enable it to
develop business to a level where it will generate profits and cash flows
from operations.
These matters raise substantial doubt about the Company's ability to
continue as a going concern. However, the accompanying financial statements
have been prepared on a going concern basis, which contemplates the
realization of assets and satisfaction of liabilities in the normal course
of business. 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 necessary should the Company be unable to
continue as a going concern.
NOTE 2 - Summary of Significant Accounting Policies
----------------------------------------------
Cash and Cash Equivalents
----------------------------
For purposes of the statement of cash flows, the Company considers all
short-term investments with an original maturity of three months or less to
be cash equivalents.
Income Taxes
-------------
The Company accounts for income taxes using the liability method, which
requires the determination of deferred tax assets and liabilities based on
the differences between the financial and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which
differences are expected to reverse. Deferred tax assets are adjusted by a
valuation allowance, if, based on the weight of available evidence, it is
more likely than not that some portion or all of the deferred tax assets
will not be realized.
See notes to unaudited pro forma combined financial information.
6
MITIGO, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 2 - Summary of Significant Accounting Policies, continued
----------------------------------------------
Income Taxes
-------------
At December 31, 2001, the Company has net operating loss carryforwards of
approximately $241,000 which would have expired through 2021. However, in
connection with the IWIN acquisition (See Note 6), pursuant to Section 382
of the Internal Revenue Code the amount of these carryforwards that will be
available are materially limited.
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.
Advertising Costs
------------------
Advertising costs are expensed as incurred. Advertising costs for the
period August 17, 2001 (Inception) through December 31, 2001 amounted to
$7,455.
Software Development Costs
----------------------------
Software development costs related to the development of software to be
sold, leased or otherwise marketed are charged to expense as incurred until
technological feasibility is established. Thereafter, all software
production costs are capitalized and amortized on a straight-line basis
over the estimated economic life of the product and reported at the lower
of unamortized cost or net realizable value.
Technological feasibility of the software was not established until
December 31, 2001. Therefore, software development costs, totaling $34,325
for the period August 17, 2001 (Inception) through December 31, 2001, were
charged to expense.
Use of Estimates in the Financial Statements
--------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent asset and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The accompanying notes are an integral part of these financial statements.
See notes to unaudited pro forma combined financial information.
7
MITIGO, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 2 - Summary of Significant Accounting Policies, continued
----------------------------------------------
Fair Value of Financial Instruments
---------------------------------------
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments"
requires that the Company disclose estimated fair values of financial
instruments. The carrying amounts reported in the accompanying balance
sheet for liabilities qualifying as financial instruments are a reasonable
estimate of fair value.
New Accounting Pronouncements
-------------------------------
In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("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 is effective for the Company in 2002. SFAS No. 142 require,
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.
The FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" in August 2001. 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 on 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. The effective date for SFAS No. 144 is for fiscal
years beginning after December 15, 2001.
See notes to unaudited pro forma combined financial information.
8
MITIGO, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 2 - Summary of Significant Accounting Policies, continued
----------------------------------------------
The Company expects that the adoption of the new statements will not have a
significant impact on its financial statements.
NOTE 3 - Property and Equipment
------------------------
Property and equipment at December 31, 2001 consist of the following:
Estimated
Useful
2001 Lives
---------------------
Furniture and fixtures $2,401 7 years
Equipment and software 1,000 5 years
Leasehold improvements 1,155 4 years
-------
4,556
Less: accumulated amortization and depreciation (567)
-------
Property and Equipment, Net $3,989
=======
Depreciation and amortization expense for the period ended December 31,
2001 was $567.
NOTE 4 - Loans Payable, Related Party
-------------------------------
On September 1, 2001, the Company entered into a revolving credit agreement
with IWIN, whereby the Company would receive advances or IWIN would incur
expenses on behalf of the Company up to $600,000. The note bears interest
at 6% and was due December 31, 2003. The balance due under this note
payable at December 31, 2001 was $216,091. On January 11, 2002, IWIN
acquired all of the issued and outstanding shares of the Company (See Note
6).
NOTE 5 - Commitments
-----------
Employment Agreements
----------------------
The Company has entered into three employment agreements with officers of
the Company whereby the Company will pay a minimum total salary of $382,200
per annum plus bonus, performance bonus based on the Company's revenue
goals, annual increases and future issuance of stock options in the sole
discretion of the Board of Directors. These employment agreements terminate
through December 2004, however they will automatically renew annually
thereafter unless terminated by the employee or the Company.
See notes to unaudited pro forma combined financial information.
9
MITIGO, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 6 - Subsequent events
-----------------
Related Party Transaction - Licensing Agreement
----------------------------------------------------
On January 10, 2002, the Company entered into a licensing agreement with
Cobblestone Software, Inc ("Cobblestone") whereby Cobblestone granted the
Company exclusive license to its intellectual property rights relating to,
among other things, decoding visibly encoded public-domain symbols for use
in mobile commerce. In consideration for the license granted, the Company
paid Cobblestone $5,000 upon execution of the agreement and an additional
$25,000 will be due September 1, 2002 and $50,000 will be due September 1,
2003 and each year thereafter. The Company may elect however at its sole
discretion to cede back certain intellectual property rights whereby the
payment due subsequent to such election and each year thereafter would
remain at $25,000. Cobblestone is owned by the Chief Technology Officer of
the Company and a relative of the Chief Technology Officer.
Acquisition Agreement
----------------------
On January 11, 2002, IWIN acquired 100% of the issued and outstanding stock
of the Company for an aggregate purchase price of 4,398,000 shares of the
IWIN's common stock to be issued to the stockholders of the Company
("Sellers"). An aggregate of 2,998,006 shares were issued to the Sellers at
closing and 1,399,994 shares will be held in escrow. These escrow shares
will be released to the Sellers pursuant to a formula based on net income
for 2002 and 2003, as defined in the agreement. Any escrow shares not
released to the Sellers based on this formula of net income at the end of
2003, as defined in the agreement, will be returned to IWIN.
See notes to unaudited pro forma combined financial information.
10
INTERNATIONAL WIRELESS, INC
INTRODUCTION TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
The following Unaudited proforma condensed combined balance sheet as of December
31, 2001 and the Unaudited pro forma condensed combined statement of operations
for the year ended December 31, 2001 are based on the historical financial
statements of International Wireless, Inc. (the "Company") and Mitigo Inc.
("Mitigo") and give effect to the proforma adjustments described herein as
though the acquisition of Mitigo dated January 11, 2002 had been consummated at
December 31, 2001 for the Unaudited condensed combined balance sheet and at
August 17, 2001 (Inception of Mitigo) for the Unaudited condensed combined
statement of operations for the year ended December 31, 2001.
The Unaudited pro forma condensed combined financial statements should be read
in conjunction with the notes thereto and with the historical financial
statements of International Wireless, Inc, as filed on March 12, 2002, on Form
8-K/A and the historical financial statements of Mitigo. included elsewhere
herein. The Unaudited pro forma combined financial statements are not
necessarily indicative of the Company's combined financial position or results
of operations that would have been achieved had the acquisition been consummated
at December 31, 2001 for the Unaudited condensed combined balance sheet, and at
August 17, 2001 for the Unaudited condensed combined statements of operations
for the year ended December 31, 2001.
Under the terms of an acquisition agreement dated January 11, 2002,
International Wireless, Inc. purchased 100% of the issued and outstanding stock
of Mitigo. The pro forma adjustments reflect the transaction using the purchase
method of accounting, and are based on available information and certain
estimates and assumptions set forth in the notes to the unaudited pro forma
condensed combined financial information. International Wireless, Inc. will
establish a new basis for Mitigo's assets and liabilities based upon an
allocation of the fair value of the acquisition. The unaudited pro forma
financial information reflects the Company's best estimates; however, the actual
amounts may differ from the pro forma amounts.
See notes to unaudited pro forma combined financial information.
11
INTERNATIONAL WIRELESS, INC
UNAUDITED PRO FORMA CONDENSED COMBINED
BALANCE SHEET
December 31, 2001
--------------------------------------------------------------------------------
Pro forma
International Pro forma Balance
Wireless, Inc Mitigo Inc Adjustments Sheet
------------------------------------------------------
ASSETS
------
CURRENT ASSETS
---------------
Cash and cash equivalents $ 54,310 $ - $ 54,310
Marketable securities, at market
value 93,279 - 93,279
Prepaid expenses 164,117 - 164,117
-------------- ----------- ---------
Total Current Assets 311,706 - 311,706
PROPERTY AND EQUIPMENT,
-----------------------
Net 74,300 3,989 78,289
---
OTHER ASSETS
------------
Loans receivable, related party 292,915 - $(216,091) [2] 76,824
Security deposit 41,856 - 41,856
Software - - 5,518,998 [1] 5,518,998
-------------- ----------- ---------
-
Total Other Assets 334,771 - 5,637,678
TOTAL ASSETS $ 720,777 $ 3,989 $6,027,673
============== =========== ==========
See notes to unaudited pro forma combined financial information.
12
INTERNATIONAL WIRELESS, INC
UNAUDITED PRO FORMA CONDENSED COMBINED
BALANCE SHEET, continued
December 31, 2001
--------------------------------------------------------------------------------
Pro forma
International Pro forma Balance
Wireless, Inc Mitigo Inc Adjustments Sheet
---------------------------------------------------------
CURRENT LIABILITIES
-------------------
Accounts payable and accrued
expenses $ 260,593 $ 30,405 $ 290,998
Loans payable 42,000 -- 42,000
Notes payable, related party 146,830 216,091 (216,091)[2] 146,830
Current portion of capital lease
obligations 7,986 - 7,986
--------------- ------------ ------------
Total Current Liabilities 457,409 246,496 487,814
OTHER LIABILITIES
-----------------
Capital lease obligations, less
current portion 20,520 - 20,520
--------------- ------------ ------------
TOTAL LIABILITIES 477,929 246,496 508,334
--------------- ------------ ------------
STOCKHOLDERS' EQUITY 26,982[1]
--------------------
Common stock 96,443 1,000 (1,000)[1] 123,425
Additional paid in capital 4,682,116 -- 5,249,509[1] 9,931,625
Stock subscription receivable (143,073) -- (143,073)
Deficit accumulated during
development stage (4,392,638) (243,507) 243,507[1] (4,392,638)
--------------- ------------ ------------
TOTAL STOCKHOLDERS'
EQUITY 242,848 (242,507) 5,519,339
--------------- ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 720,777 $ 3,989 $ 6,027,673
=============== ============ ============
See notes to unaudited pro forma combined financial information.
13
INTERNATIONAL WIRELESS, INC
UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2001
--------------------------------------------------------------------------------
Mitigo Inc
For the Period
International August 17,
Wireless, Inc 2001
For the Year (Inception)
Ended Through Pro forma
December 31, December 31, Pro forma Statement of
2001 2001 Adjustments Operations
---------------------------------------------------------------
OPERATING EXPENSES
------------------
General and administrative expenses $ 1,276,646 $ 240,832 $ 414,000[3] $ 1,931,478
--------------- ---------------- --------------
TOTAL OPERATING
EXPENSES 1,276,646 240,832 1,931,478
OTHER EXPENSE
-------------
Interest expenses, net (8,854) (2,675) --[4] (11,529)
Unrealized loss on marketable
securities (1,571,778) (1,571,778)
Loss on sale of marketable securities (1,535,360) -- (1,535,360)
--------------- ---------------- --------------
TOTAL OTHER EXPENSES (3,115,992) (2,675) (3,118,667)
NET LOSS $ (4,392,638) $ (243,507) $ (5,050,145)
=============== ================ ==============
NET LOSS PER COMMON SHARE
-------------------------
BASIC AND DILUTED $ (0.61) $ (0.61)
----------------- =============== ==============
WEIGHTED AVERAGE COMMON
-----------------------
SHARES OUTSTANDING 7,150,193 1,125,279 8,275,472
------------------ =============== ============ ==============
See notes to unaudited pro forma combined financial information.
14
INTERNATIONAL WIRELESS, INC
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
--------------------------------------------------------------------------------
DECEMBER 31, 2001 PRO FORMA CONDENSED COMBINED BALANCE SHEET ADJUSTMENTS
NO Account Description DR CR
------ ------------------------------------------ ---------------- -----------
[1] Software $ 5,518,998 $ --
Common stock, no par value 1,000 --
Deficit accumulated during development
stage -- 243,507
Common stock, $0.009 par value -- 26,982
Additional paid in capital -- 5,249,509
---------------- -----------
$ 5,519,998 $ 5,519,998
================ ===========
To record and allocate the purchase price as follows:
Fair Value Per
Shares Share Fair Value
----------------------------------------
Common stock (a) (b) 2,998,006 $ 1.76 $ 5,276,491
Total Purchase Price $ 5,276,491
===========
Fair value of net assets acquired
Property and equipment 3,989
Software 5,518,998
Liabilities assumed (246,496)
----------------
Fair value of identifiable net assets
acquired 5,276,491
Goodwill --
-----------
$ 5,276,491
===========
(a) Based upon average of five day close price from acquisition date.
(b) Does not include 1,399,994 shares held in escrow contingently issuable.
15
INTERNATIONAL WIRELESS, INC
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
--------------------------------------------------------------------------------
DECEMBER 31, 2001 PRO FORMA CONDENSED COMBINED BALANCE SHEET
ADJUSTMENTS, Continued
NO Account Description DR CR
-- ------------------- -- --
[2] Loans payable, related party $216,091 $ --
Loans receivable, related party -- 216,091
-------- --------
$216,091 $216,091
======== ========
To eliminate intercompany payables and receivables.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
ADJUSTEMENTS FOR THE YEAR ENDED DECEMBER 31, 2001
[3] Amortization of software $414,000 $ --
Software -- 414,000
-------- --------
$414,000 $414,000
======== ========
To record amortization of software on a straight
line basis over 5 years from inception of Mitigo Inc.
[4] Interest income $2,675 $ --
Interest expense -- 2,675
------- -----
$2,675 $2,675
====== ======
To eliminate intercompany interest income and interest
expense recorded net.
16
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: March 26, 2002 International Wireless, Inc.
------------------- ----------------------------
(Registrant)
/s/ Stanley A. Young
----------------------------
Stanley A. Young, CEO
/s/ Michael Dewar
----------------------------
Michael Dewar, President