UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the
quarterly period ended
June 30, 2008
o
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF
1934
|
For
the
transition period from __________ to
__________.
Commission
File No.
000-26913
NW
TECH CAPITAL, INC
(
(Exact
Name of Registrant as Specified in its Charter)
NEVADA
|
|
86-0862532
|
(State or Other Jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
4603 NE St. Johns Road, Ste. B
Vancouver, Washington
|
|
98661
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Issuer's
Telephone Number:
(360)-635-6521
Indicate
by check mark whether the registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the
preceding 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
x
No
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
o
|
|
Accelerated
filer
o
|
|
|
|
Non-accelerated
filer
o
|
|
Smaller
reporting company
x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes
o
No
x
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING
THE PRECEDING FIVE YEARS
Indicate
by check mark whether the registrant filed all documents and reports required
to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
Yes
o
No
o
APPLICABLE
ONLY TO CORPORATE ISSUERS
State
the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date: As of August 11, 2008, there were 185,805,705
outstanding shares of the Registrant's Common Stock, $.00001 par
value.
TABLE
OF CONTENTS
|
|
Page
|
|
PART
I - FINANCIAL INFORMATION
|
|
|
|
|
Item
1.
|
Condensed
Consolidated Financial Statements
|
3
|
|
|
|
Item
2.
|
Management’s
Discussion and Analysis or Plan of Operation
|
17
|
|
|
|
Item
3.
|
Quantitative
and Qualitative Market Risk
|
21
|
|
|
|
Item
4.
|
Controls
and Procedures
|
21
|
|
|
|
|
PART
II - OTHER INFORMATION
|
|
|
|
|
Item
1.
|
Legal
Proceedings
|
22
|
|
|
|
Item 1A.
|
Risk
Factors
|
22
|
|
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
22
|
|
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
23
|
|
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
23
|
|
|
|
Item
5.
|
Other
Information
|
23
|
|
|
|
Item
6.
|
Exhibits
|
23
|
PART
I - FINANCIAL INFORMATION
ITEM
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
NW
TECH CAPITAL, INC.
|
(FORMERLY
CYBERTEL CAPITAL CORPORATION)
|
CONDENSED
CONSOLIDATED BALANCE
SHEETS
|
|
|
June 30, 2008
|
|
December 31,
2007
|
|
|
|
(UNAUDITED)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash
|
|
$
|
43,712
|
|
$
|
16,675
|
|
Accounts
receivable, net of $4,543 allowance for doubtful accounts
|
|
|
149,072
|
|
|
-
|
|
Inventory
|
|
|
52,804
|
|
|
-
|
|
Other
current assets
|
|
|
-
|
|
|
40,000
|
|
Total
current assets
|
|
|
245,588
|
|
|
56,675
|
|
Fixed
assets, net of depreciation
|
|
|
137,269
|
|
|
-
|
|
Goodwill
|
|
|
586,516
|
|
|
-
|
|
Other
Assets
|
|
|
680
|
|
|
-
|
|
TOTAL
ASSETS
|
|
$
|
970,053
|
|
$
|
56,675
|
|
See
accompanying notes to condensed consolidated financial
statements.
NW
TECH CAPITAL, INC.
(FORMERLY
CYBERTEL CAPITAL CORPORATION)
CONDENSED
CONSOLIDATED BALANCE SHEETS
(CONTINUED)
|
|
June 30, 2008
|
|
December 31, 2007
|
|
|
|
(UNAUDITED)
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
242,982
|
|
$
|
228,082
|
|
Accrued
expenses
|
|
|
16,614
|
|
|
67,806
|
|
Bank
credit line
|
|
|
71,948
|
|
|
-
|
|
Notes
payable
|
|
|
16,015
|
|
|
-
|
|
Notes
payable to shareholders, net
|
|
|
449,315
|
|
|
293,064
|
|
Derivative
liability
|
|
|
1,843,714
|
|
|
140,187
|
|
Total
current liabilities
|
|
|
2,640,588
|
|
|
729,139
|
|
Long
term notes payable
|
|
|
30,522
|
|
|
-
|
|
Long
term notes payable to shareholders
|
|
|
603,603
|
|
|
-
|
|
Total
long term liabilities
|
|
|
634,125
|
|
|
-
|
|
TOTAL
LIABILITIES
|
|
|
3,274,713
|
|
|
729,139
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
DEFICIT
|
|
|
|
|
|
|
|
Series
A convertible preferred stock, $.001 per share, 5,000 shares authorized;
84 and 164 shares issued and outstanding
|
|
|
-
|
|
|
-
|
|
Series
B super voting preferred stock, par value $.00001 per share; 100,000,000
shares authorized; 49,200,000 and 50,000,000 shares issued and
outstanding
|
|
|
492
|
|
|
500
|
|
Series
E convertible preferred stock, $1.00 per share, 10,000,000 shares
authorized; 80,000 and 0 shares issued and outstanding
|
|
|
80,000
|
|
|
-
|
|
Series
F convertible preferred stock, $1.00 per share, 10,000,000 shares
authorized; 7,500 and 0 shares issued and outstanding
|
|
|
7,500
|
|
|
-
|
|
Common
stock; $.00001 par value; 2,500,000,000 shares authorized; 140,276,335
and
550,363 issued and outstanding
|
|
|
1,403
|
|
|
6
|
|
Additional
paid-in-capital
|
|
|
24,325,038
|
|
|
23,656,194
|
|
Accumulated
deficit
|
|
|
(26,719,093
|
)
|
|
(24,329,164
|
)
|
TOTAL
STOCKHOLDERS’ DEFICIT
|
|
|
(2,304,660
|
)
|
|
(672,464
|
)
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
$
|
970,053
|
|
$
|
56,675
|
|
See
accompanying notes to condensed consolidated financial
statements.
NW
TECH CAPITAL, INC.
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
|
(UNAUDITED)
|
|
|
For
the three months
ended June 30,
|
|
For the six months ended
June 30,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$
|
62,735
|
|
$
|
-
|
|
$
|
62,735
|
|
$
|
-
|
|
Cost
of goods sold
|
|
|
30,597
|
|
|
-
|
|
|
30,597
|
|
|
-
|
|
Gross
profit
|
|
|
32,138
|
|
|
-
|
|
|
32,138
|
|
|
-
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
|
|
62,100
|
|
|
130,777
|
|
|
392,935
|
|
|
116,038
|
|
Stock
based compensation
|
|
|
299,942
|
|
|
588,348
|
|
|
174,530
|
|
|
740,255
|
|
Depreciation
and amortization
|
|
|
934
|
|
|
-
|
|
|
934
|
|
|
-
|
|
TOTAL
OPERATING EXPENSES
|
|
|
362,976
|
|
|
719,125
|
|
|
568,399
|
|
|
856,293
|
|
OPERATING
LOSS
|
|
|
(330,838
|
)
|
|
(719,125
|
)
|
|
(536,261
|
)
|
|
(856,293
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
1
|
|
|
35
|
|
|
1
|
|
|
35
|
|
Interest
expense
|
|
|
(51,541
|
)
|
|
(409
|
)
|
|
(123,688
|
)
|
|
(1,463
|
)
|
Change
in fair value of derivative liability
|
|
|
(1,632,052
|
)
|
|
(13,662
|
)
|
|
(1,703,527
|
)
|
|
(20,087
|
)
|
Other
income
|
|
|
199
|
|
|
-
|
|
|
199
|
|
|
-
|
|
TOTAL
OTHER INCOME/(EXPENSE)
|
|
|
(1,683,393
|
)
|
|
(14,036
|
)
|
|
(1,827,015
|
)
|
|
(21,515
|
)
|
LOSS
FROM CONTINUING OPERATIONS
|
|
|
(2,014,231
|
)
|
|
(733,161
|
)
|
|
(2,363,276
|
)
|
|
(877,808
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DISCONTINUED
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations of discontinued business
|
|
|
-
|
|
|
(16,098
|
)
|
|
-
|
|
|
(23,609
|
)
|
LOSS
FROM DISCONTINUED OPERATIONS
|
|
|
-
|
|
|
(16,098
|
)
|
|
-
|
|
|
(23,609
|
)
|
NET
LOSS
|
|
|
(2,014,231
|
)
|
|
(749,259
|
)
|
|
(2,363,276
|
)
|
|
(901,417
|
)
|
Preferred
dividend
|
|
|
(25,294
|
)
|
|
(1,166
|
)
|
|
(26,653
|
)
|
|
(3,104
|
)
|
NET
LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
|
$
|
(2,039,525
|
)
|
$
|
(750,425
|
)
|
|
(2,389,929
|
)
|
|
(904,521
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER COMMON SHARE - BASIC AND DILUTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.02
|
)
|
$
|
(14.54
|
)
|
|
(0.05
|
)
|
|
(32.40
|
)
|
Discontinued
operations
|
|
$
|
0.00
|
|
$
|
(0.32
|
)
|
|
0.00
|
|
|
(0.87
|
)
|
Net
loss per common share
|
|
$
|
(0.02
|
)
|
$
|
(14.88
|
)
|
|
(0.05
|
)
|
|
(33.39
|
)
|
Weighted
average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
|
88,117,204
|
|
|
50,438
|
|
|
44,302,020
|
|
|
27,091
|
|
See
accompanying notes to condensed consolidated financial statements.
NW
TECH CAPITAL, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
For the six months
Ended June 30,
|
|
|
|
2008
|
|
2007
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net
loss from continuing operations
|
|
$
|
(2,363,276
|
)
|
$
|
(877,808
|
)
|
Adjustments
to reconcile net income to net cash provided by operating
activities
|
|
|
|
|
|
|
|
Depreciation
|
|
|
934
|
|
|
-
|
|
Notes
issued for expenses
|
|
|
254,079
|
|
|
-
|
|
Interest
expense associated with beneficial conversion feature
|
|
|
104,280
|
|
|
-
|
|
Change
in fair value of derivative liability
|
|
|
1,703,527
|
|
|
6,425
|
|
Common
stock issued to third parties for services
|
|
|
174,530
|
|
|
160,220
|
|
Common
stock issued for interest payment on debt
|
|
|
8,543
|
|
|
-
|
|
Changes
in assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
27,115
|
|
|
-
|
|
Inventory
|
|
|
(5,996
|
)
|
|
-
|
|
Prepaid
expenses
|
|
|
20,000
|
|
|
-
|
|
Accounts
payable and accrued expenses
|
|
|
8,415
|
|
|
25,754
|
|
Net
cash used in continuing operations
|
|
|
(67,849
|
)
|
|
(685,409
|
)
|
Net
loss from discontinued operations
|
|
|
-
|
|
|
(23,609
|
)
|
Net
cash provided by discontinued operations
|
|
|
-
|
|
|
607,716
|
|
Net
cash used in operating activities
|
|
|
(67,849
|
)
|
|
(101,302
|
)
|
|
|
|
|
|
|
|
|
CASH
FLOW FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Net
cash provided by investing activities
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
CASH
FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds
from shareholder notes payable
|
|
|
50,000
|
|
|
-
|
|
Proceeds
from issuance of common stock
|
|
|
32,500
|
|
|
-
|
|
Proceeds
from issuance of preferred stock & note payable for purchase of
Teledigit
|
|
|
21,871
|
|
|
-
|
|
Proceeds
from notes payable
|
|
|
10,000
|
|
|
50,000
|
|
Proceeds
from related party notes payable
|
|
|
3,000
|
|
|
-
|
|
Proceeds
from exercise of ESOP
|
|
|
-
|
|
|
196,280
|
|
Repayments
of notes payable
|
|
|
(22,485
|
)
|
|
-
|
|
Net
cash provided by continuing operations
|
|
|
94,886
|
|
|
246,280
|
|
Net
cash used in discontinued operations
|
|
|
-
|
|
|
(55,671
|
)
|
Net
cash provided by financing activities
|
|
|
94,886
|
|
|
190,609
|
|
See
accompanying notes to condensed consolidated financial
statements.
NW
TECH CAPITAL, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(CONTINUED)
|
(UNAUDITED)
|
|
|
For the six months
ended June 30,
|
|
|
|
2008
|
|
2007
|
|
Cash
and cash equivalents:
|
|
|
|
|
|
|
|
Increase
in cash
|
|
|
27,037
|
|
|
89,307
|
|
Cash,
beginning of period
|
|
|
16,675
|
|
|
1,718
|
|
Cash
of discontinued operations, beginning of period
|
|
|
-
|
|
|
19,736
|
|
Less
cash of discontinued operations, end of period
|
|
|
-
|
|
|
(90,324
|
)
|
Cash,
end of period
|
|
$
|
43,712
|
|
$
|
20,437
|
|
|
|
|
|
|
|
|
|
SUPLLEMENTAL
DISCLOSURES
|
|
|
|
|
|
|
|
Cash
paid for interest & taxes
|
|
$
|
915
|
|
$
|
8,727
|
|
|
|
|
|
|
|
|
|
Non-cash
financing and investing activities
|
|
|
|
|
|
|
|
Issuance
of note for accrued expense
|
|
$
|
254,079
|
|
$
|
-
|
|
Common
stock issued to third parties for services
|
|
$
|
174,530
|
|
$
|
-
|
|
Issuance
of common stock for payment of debt
|
|
$
|
94,189
|
|
$
|
-
|
|
Conversion
of accrued dividend to common stock
|
|
$
|
59,819
|
|
$
|
-
|
|
Accrued
preferred stock dividends
|
|
$
|
2,381
|
|
$
|
-
|
|
Issuance
of note payable for purchase of Teledigit
|
|
$
|
720,000
|
|
$
|
-
|
|
Issuance
of preferred stock for purchase of Teledigit
|
|
$
|
80,000
|
|
$
|
-
|
|
See
accompanying notes to condensed consolidated financial
statements.
NOTE
1 -
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Organization
NW
Tech
Capital, Inc. (OTCBB: NWTT) (the “Company”) is organized for the primary purpose
of engaging in all facets of the business comprising the telecommunications
industry and is a provider of long distance voice and data
telecommunications. The Company actively identifies other companies in the
telecommunications industry for acquisition or strategic partnerships. These
companies may be providers of long distance service, Voice over Internet
Protocol providers, consulting companies, prepaid service companies, network
management operations, or other companies in the telecommunication arena. The
Company is also looking into acquisition possibilities and funding from China.
The Company
has
a
Hong Kong/China company named “NW Tech Capital Group Limited” to engage in
completing merger and acquisitions opportunities with private China companies.
As of June 16, 2008 the Company has acquired a locally owned and operated Data
and Telecommunications Integrator, Teledigit, Inc. (“Teledigit”) of Portland,
Oregon as its wholly owned subsidiary.
Basis
of Presentation
The
accompanying unaudited interim financial statements of NW Tech Capital ("NWTT"
or the “Company”) have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited consolidated financial statements and notes thereto contained
in the Company's Annual Report on Form 10-KSB for the fiscal year ended December
31, 2007 filed with the SEC on March 31, 2008 (the “2007 Form 10K-SB”). In the
opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the
results of operations for the interim periods presented have been reflected
herein. The results of operations for the interim period are not necessarily
indicative of the results to be expected for the full fiscal year. Notes to
the
financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for 2007 as reported in the 2007
Form 10K-SB have been omitted.
Allowance
for Doubtful Accounts
Bad
debt
expense is recognized based on management’s estimate of likely losses per year,
based on past experience and an estimate of current year uncollectible
amounts.
Inventories
Inventories
are stated at the lower of cost (principally standard cost which approximates
actual cost on a first-in, first-out basis) or market value. Adjustments for
potentially excess and obsolete inventory are made based on management’s
analysis of inventory levels and future sales forecasts. Once the value is
adjusted, the original cost of the Company’s inventory less the related
inventory write-down represents the new cost basis of such products. Reversal
of
these write downs is recognized only when the related inventory has been
scrapped or sold. The Company’s inventory consists primarily of
telecommunication equipment.
Property
and Equipment and Leasehold Improvements
Property
and equipment are stated at cost and depreciated using the straight-line method
over their estimated useful lives of three to five years. Leasehold improvements
are being depreciated over the term of the lease, excluding option periods.
When
assets are disposed of, the cost and accumulated depreciation (net book value
of
the assets) are eliminated and any resultant gain or loss reflected accordingly.
Upgrades and improvements are capitalized over their estimated useful lives
whereas repairs and maintenance expenditures on the assets are charged to
expense as incurred.
Revenue
Recognition
The
Company recognizes revenue when persuasive evidence of an arrangement exists,
services have been rendered, the sales price is fixed or determinable, and
collectability is reasonably assured. This typically occurs when the services
have been performed.
The
Company’s revenues are derived primarily from the servicing, installation, and
sales of telecommunication products with the majority of the business in the
West Coast of the United States and the Portland, metropolitan area but ranging
all over the United States.
Basic
and Diluted Net Loss per Share
The
basic
net loss per common share is computed by dividing the net loss by the weighted
average number of common shares outstanding. Diluted net loss per common share
is computed by dividing the net loss adjusted on an “as if converted” basis, by
the weighted average number of common shares outstanding plus potential dilutive
securities. For the quarters ended June 30, 2008 and 2007, potential dilutive
securities had an anti-dilutive effect and were not included in the calculation
of diluted net loss per common share. In January 2008, the Company effected
a
1000:1 reverse split. All shares and per share amounts for the quarters ended
June 30, 2008 and 2007 have been restated to reflect the splits as if it had
occurred on the first day of the first period presented.
NOTE
2 – MATERIAL EVENTS
Acquisitions
On
January 29, 2008 the Company signed an acquisition agreement to purchase a
Portland, OR based company named Teledigit, Inc. The acquisition agreement
is to
purchase 100% of Teledigit in exchange for 80,000 shares of the Company’s Series
E Preferred Stock convertible to $1.00 of common stock per share and a $720,000
convertible note payable. The note is convertible into 720,000 shares of Series
E Preferred Stock plus interest of 6%. The acquisition was completed on June
16,
2008. See Note 7 - Acquisitions and Investments.
Reverse
Split
On
January 21, 2008, the Company effected a 1000 to 1 reverse split of its common
stock. All shareholder equity accounts have been restated to reflect the stock
splits and change in par value as of the earliest date presented in the
financial statements.
Name
Change
On
January 18, 2008, the Company filed a Certificate of Amendment with the State
of
Nevada changing its corporate name from Cybertel Capital Corporation to NW
Tech
Capital, Inc.
Discontinued
Operations
On
December 31, 2007, a separation agreement was reached between the Company and
AireWire releasing AireWire back to its original state (before the acquisition)
and returning $1,000,000 dollars worth of Series C Preferred Stock back to
the
Company.
NOTE
3 - GOING CONCERN
As
shown
in the accompanying financial statements, for the six months ended June 30,
2008, NWTT incurred recurring net losses from continuing operations in the
amount of $2,363,276 and has an accumulated deficit of $26,719,093 and a working
capital deficit of $2,395,000 as of June 30, 2008. These conditions raise
substantial doubt as to the Company’s ability to continue as a going concern.
Management’s plans to support the Company’s operations include increasing
revenues, cutting overhead costs, borrowing additional funds and raising
additional capital. The Company’s inability to obtain additional capital or
obtain such capital on favorable terms could have a material adverse effect
on
its consolidated financial position, results of operations and its ability
to
continue operations. The financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
NOTE
4 - NOTES PAYABLE
As
of the
quarter ended June 30, 2008, the Company and its subsidiary have two lines
of
credit with two banking institutions. One of the credit lines, originating
from
the acquisition of Teledigit, provides for borrowings up to $100,000 at a
variable interest rate of prime plus 1%. The second credit line provides for
borrowings up to $10,000 at an interest rate of 14.25%. As of June 30, 2008,
the
Company has a total outstanding bank credit line balance of
$71,948.
As
of the
quarter ended June 30, 2008, the Company has four notes originating from the
acquisition of Teledigit. Teledigit purchased four company vehicles totaling
$92,100 with a down payment of $12,600 and total notes payable equating to
$79,500. The terms of the notes call for total monthly payments of $1,584,
interest rates ranging from 4.49% to 9.99%, and maturity dates ranging from
September 2010 to June 2011. As of June 30, 2008, the balances of the notes
totaled $46,537. The total current portions due on the notes are
$16,015.
As
of the
quarter ended June 30, 2008, the Company has two notes which may be converted
into shares of the Company’s common stock based on 75% of the average of the
lowest three closing bid prices in the past 20 trading days immediately
preceding the conversion as long as such conversions do not exceed 4.99% of
the
then-outstanding common stock of the Company. In relation to the convertible
feature of these notes, a debt discount totaling $75,000 was calculated in
accordance with EITF 00-27 and is being amortized over the life of the
debenture. The amortization is being recorded as interest expense and totaled
$13,603 for the quarter ended June 30, 2008 and $27,325 for the period from
inception to June 30, 2008. The embedded conversion option is also accounted
for
under EITF 00-19 and we have accounted for the embedded conversion option as
a
derivative liability. Accordingly, the embedded conversion option is marked
to
market through earnings at the end of each reporting period. The conversion
option is valued using the Black-Scholes valuation model and totaled $337,629
as
of June 30, 2008.
During
the quarter, the noteholders converted a total of $3,480 of principal and
interest payments.
As
of
June 30, 2008, the balances of the notes totaled $64,413.
As
of the
quarter ended June 30, 2008, the Company has eleven notes which may be converted
into shares of the Company’s common stock based on 70% of the average of the
lowest three closing bid prices in the past 20 trading days immediately
preceding the conversion as long as such conversions do not exceed 4.99% of
the
then outstanding common stock of the Company. As of June 30, 2008, five of
these
notes are not convertible until a later date. In relation to the convertible
feature of these notes, a debt discount totaling $186,153 was calculated in
accordance with EITF 00-27 and is being amortized over the life of the
debenture. The amortization is being recorded as interest expense and totaled
$30,527 for the quarter ended June 30, 2008 and $51,956 for the period from
inception to June 30, 2008. The embedded conversion option is also accounted
for
under EITF 00-19 and we have accounted for the embedded conversion option as
a
derivative liability. Accordingly, the embedded conversion option is marked
to
market through earnings at the end of each reporting period. The conversion
option is valued using the Black-Scholes valuation model and totaled $1,153,268
for the quarter.
During
the quarter, the noteholders converted a total of $23,182 of principal and
interest payments.
As
of
June 30, 2008, the balances of the eleven notes were $289,409.
As
of the
quarter ended June 30, 2008, the Company has two notes which may be converted
into shares of the Company’s common stock based on 50% of the average of the
lowest three closing bid prices in the past 20 trading days immediately
preceding the conversion as long as such conversions do not exceed 4.99% of
the
then outstanding common stock of the Company. In relation to the convertible
feature of these notes, a debt discount totaling $85,000 was calculated in
accordance with EITF 00-27 and is being amortized over the life of the
debentures. The amortization is being recorded as interest expense and was
fully
accreted as of June 30, 2008. The embedded conversion option is also accounted
for under EITF 00-19 and we have accounted for the embedded conversion option
as
a derivative liability. Accordingly, the embedded conversion option is marked
to
market through earnings at the end of each reporting period. The conversion
option is valued using the Black-Scholes valuation model and totaled $352,817
for the quarter.
During
the quarter, the noteholder converted a total of $1,056 of principal and
interest payments.
As
of
June 30, 2008, one of the notes was paid in full and the balance of the
remaining note was $41,493.
As
of the
quarter ended June 30, 2008, the Company owes a related party $119,475 without
interest.
As
of the
quarter ended June 30, 2008, the Company has a $720,000 note payable for the
purchase of Teledigit at a 6% interest rate with a maturity date of July 31,
2013. This note is convertible into 720,000 shares of the Company’s Series E
Preferred Stock at a monthly payment of 13,920 shares of Series E Preferred
Stock commencing August 31, 2008. As of the quarter ended June 30, 2008, no
payment was due or made. The current portion of the note is $116,397.
The
unaudited Chart below summarizes the Notes Payable mentioned in Note
4:
Terms
|
|
|
|
Amount
|
|
|
|
|
|
|
|
Bank
Lines of Credit:
|
|
|
|
|
|
|
|
- $100,000
Credit line at prime plus 1%
|
|
|
|
|
$
|
62,253
|
|
- $10,000
Credit line at 14.25%
|
|
|
|
|
|
9,695
|
|
Total
Bank Lines of Credit
|
|
|
|
|
$
|
71,948
|
|
|
|
|
|
|
|
|
|
Short
Term Notes Payable to Non-Shareholders:
|
|
|
|
|
|
|
|
- Current
portion of 4.49% interest; principal of $7,058; due 9/30/10; monthly
payments of $318
|
|
|
|
|
$
|
3,569
|
|
- Current
portion of 9.99% interest; principal of $11,197; due 5/15/11; monthly
payments of $358
|
|
|
|
|
|
3,347
|
|
- Current
portion of 9.99% interest; principal of $15,528; due 5/19/11; monthly
payments of $509
|
|
|
|
|
|
4,309
|
|
- Current
portion of 9.99% interest; principal of $12,754; due 6/29/11; monthly
payments of $399
|
|
|
|
|
|
4,790
|
|
Total
Short Term Notes Payable to Non-Shareholders
|
|
|
|
|
$
|
16,015
|
|
|
|
|
|
|
|
|
|
Short
Term Notes Payable to Shareholders:
|
|
|
|
|
|
|
|
- 8%
interest; principal of $30,000; convertible to common stock based
on 75%
of average price; due on 10/11/08; net of unamortized discount related
to
the debt discount of $24,919
|
|
|
|
|
$
|
5,081
|
|
- 12%
interest; principal of $34,413; convertible to common stock based
on 75%
of average price; due on 02/29/09; net of unamortized discount related
to
the debt discount of $22,756
|
|
|
|
|
|
11,657
|
|
- 10%
interest; principal of 30,000; convertible to common stock based
on 70% of
average price; due on 10/1/08; net of unamortized discount related
to the
debt discount of $20,941
|
|
|
|
|
|
9,059
|
|
- 10%
interest; principal of $13,200; convertible to common stock based
on 70%
of average price; due on 10/1/08; net of unamortized discount related
to
the debt discount of $3,332
|
|
|
|
|
|
9,868
|
|
- 10%
interest; principal of 29,245; convertible to common stock based
on 70% of
average price; due on 12/20/08; net of unamortized discount related
to the
debt discount of $15,601
|
|
|
|
|
|
13,644
|
|
- 8%
interest; principal of $17,082; convertible to common stock based
on 70%
of average price; due on 12/31/08; net of unamortized discount related
to
the debt discount of $0
|
|
|
|
|
|
17,082
|
|
- 10%
interest; principal of $20,000; convertible to common stock based
on 70%
of average price; due on 2/28/09; net of unamortized discount related
to
the debt discount of $0
|
|
|
|
|
|
20,000
|
|
- 10%
interest; principal of $25,000; convertible to common stock based
on 70%
of average price; due on 3/31/09; net of unamortized discount related
to
the debt discount of $0
|
|
|
|
|
|
25,000
|
|
- 10%
interest; principal of $10,000; convertible to common stock based
on 70%
of average price; due on 4/30/09; net of unamortized discount related
to
debt discount of $0
|
|
|
|
|
|
10,000
|
|
- 10%
interest; principal of $20,000; convertible to common stock based
on 70%
of average price; due on 5/20/09; net of unamortized discount related
to
the debt discount of $0
|
|
|
|
|
|
20,000
|
|
- 10%
interest; principal of $84,042; convertible to common stock based
on 70%
of average price; due on 5/29/09; net of unamortized discount related
to
debt discount of $75,739
|
|
|
|
|
|
8,303
|
|
- 10%
interest; principal of $20,840; convertible to common stock based
on 70%
of average price; due on 5/29/09; net of unamortized discount related
to
debt discount of $18,584
|
|
|
|
|
|
2,256
|
|
- 10%
interest; principal of $20,000; convertible to common stock based
on 70%
of average price; due on 5/29/09; net of unamortized discount related
to
debt discount of $0
|
|
|
|
|
|
20,000
|
|
- 8%
interest; principal of $41,493; convertible to common stock based
on 50%
of average price; due on 3/15/09; net of unamortized discount related
to
the debt discount of $0
|
|
|
|
|
|
41,493
|
|
- No
interest; principal of $119,475
|
|
|
|
|
|
119,475
|
|
- Current
portion of 6% interest; principal of $720,000; due 7/31/13 convertible
to
Series E Preferred Stock; monthly payments of 13,920
shares
|
|
|
|
|
|
116,397
|
|
Total
Short Term Notes Payable to Shareholders
|
|
|
|
|
$
|
449,315
|
|
|
|
|
|
|
|
|
|
Long
Term Notes Payable to Non-Shareholders:
|
|
|
|
|
|
|
|
- Long
term portion of 4.49% interest; principal of $7,058; due 9/30/10;
monthly
payments of $318
|
|
|
|
|
|
3,489
|
|
- Long
term portion of 9.99% interest; principal of $11,197; due 5/15/11;
monthly
payments of $358
|
|
|
|
|
|
7,850
|
|
- Long
term portion of 9.99% interest; principal of $15,528; due 5/19/11;
monthly
payments of $509
|
|
|
|
|
|
11,219
|
|
- Long
term portion of 9.99% interest; principal of $12,754; due 6/29/11;
monthly
payments of $399
|
|
|
|
|
|
7,964
|
|
Total
Long Term Notes Payable to Non-Shareholders
|
|
|
|
|
$
|
30,522
|
|
|
|
|
|
|
|
|
|
Long
Term Notes Payable to Shareholders:
|
|
|
|
|
|
|
|
- Long
term portion of 6% interest; principal of $720,000; due 7/31/13
convertible to Series E Preferred Stock; monthly payments of 13,920
shares
|
|
|
|
|
|
603,603
|
|
Total
Long Term Notes Payable to Shareholders
|
|
|
|
|
$
|
603,603
|
|
NOTE
5 - STOCK HOLDER’S EQUITY
Common
Stock
During
the quarter ended June 30, 2008, the Company issued the following shares of
its
Common stock:
Date of Issue
|
|
Number of Shares Issued
|
|
Aggregate Sales Price
|
|
Nature of Transaction
|
|
04/02/08
|
|
|
2,006,110
|
|
$
|
2,556
|
|
|
Debt
Repayment
|
|
04/02/08
|
|
|
1,500,000
|
|
|
5,550
|
|
|
Payment
for Services
|
|
04/02/08
|
|
|
2,200,000
|
|
|
8,140
|
|
|
Preferred
A conversion
|
|
04/15/08
|
|
|
2,188,000
|
|
|
4,376
|
|
|
Preferred
A conversion
|
|
04/15/08
|
|
|
4,400,000
|
|
|
6,280
|
|
|
Debt
Repayment
|
|
04/16/08
|
|
|
2,000,000
|
|
|
4,000
|
|
|
Payment
for Services
|
|
04/17/08
|
|
|
2,600,000
|
|
|
4,680
|
|
|
Preferred
A conversion
|
|
05/07/08
|
|
|
2,000,000
|
|
|
2,400
|
|
|
Debt
Repayment
|
|
05/09/08
|
|
|
6,111,111
|
|
|
12,222
|
|
|
Cash
for Stock
|
|
05/12/08
|
|
|
2,880,000
|
|
|
4,608
|
|
|
Preferred
A conversion
|
|
05/14/08
|
|
|
2,000,000
|
|
|
2,200
|
|
|
Debt
Repayment
|
|
05/15/08
|
|
|
3,300,000
|
|
|
4,950
|
|
|
Preferred
A conversion
|
|
05/22/08
|
|
|
3,500,000
|
|
|
4,550
|
|
|
Payment
for Services
|
|
05/22/08
|
|
|
2,000,000
|
|
|
1,400
|
|
|
Debt
Repayment
|
|
05/26/08
|
|
|
3,026,000
|
|
|
3,631
|
|
|
Preferred
A conversion
|
|
06/03/08
|
|
|
3,700,000
|
|
|
3,700
|
|
|
Preferred
A conversion
|
|
06/05/08
|
|
|
4,130,000
|
|
|
2,024
|
|
|
Repayment
of debt
|
|
06/08/08
|
|
|
8,100,000
|
|
|
3,969
|
|
|
Repayment
of debt
|
|
06/30/08
|
|
|
15,000,000
|
|
|
48,000
|
|
|
Payment
for Services
|
|
06/30/08
|
|
|
9,568,800
|
|
|
30,620
|
|
|
Preferred
A conversion
|
|
06/30/08
|
|
|
14,059,000
|
|
|
6,889
|
|
|
Repayment
of debt
|
|
06/30/08
|
|
|
5,952,381
|
|
|
19,048
|
|
|
Cash
for Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
102,221,402
|
|
$
|
185,793
|
|
|
|
|
During
the quarter ended March 31, 2008, the Company issued a total of 6,550,000 shares
of common stock for services valued at $112,430. The Company also issued a
total
of 8,926,899 shares of common stock for repayment of debt valued at $66,471.
Preferred
Stock
During
the quarter ended June 30, 2008:
|
·
|
Holders
of the Company’s Series A Preferred stock converted 28.96 shares of Series
A preferred stock into 29,462,800 shares of the Company’s common stock as
indicated on the chart above.
|
|
·
|
The
Company designated a new series of preferred stock named the Series
F
Preferred Stock with 10,000,000 authorized shares with each share
convertible to $1.00 worth of the Company’s common stock. The Company
issued 7,500 shares of the Company’s Series F Preferred Stock during the
quarter. Since the Series F Preferred Stock has a convertible feature,
a
Preferred Dividend of $1,098 was calculated in accordance with EITF
00-27.
|
|
·
|
The Company issued 80,000 shares of the Company’s Series
E Preferred Stock as partial payment for the acquisition of Teledigit.
Since the Series E Preferred Stock has a convertible feature, a Preferred
Dividend of $23,175 was calculated in accordance with EITF
00-27.
|
During
the quarter ended March 31, 2008:
|
·
|
Holders
of the Company’s Series A preferred stock converted 80.47 shares of the
Series A Preferred Stock and $59,819 of Series A dividends into 2,027,068
shares of the Company’s common
stock.
|
|
·
|
The
Company amended the Series B Preferred Stock by increasing the authorized
shares from 50,000,000 shares to 100,000,000 million shares with
a par
value of $0.00001 per share. The Company also added a conversion
feature
which allows shareholders of the Series B Preferred Stock to convert
one
share of Series B Preferred Stock into 25 shares of Common Stock
upon
request of the shareholder.
|
|
·
|
The
President and CEO of the Company converted 800,000 shares of his
Series B
Preferred Stock into 20,000,000 shares of the Company’s common
stock.
|
|
·
|
The
Company designated a new series of preferred stock named the Series
E
Preferred Stock with 10,000,000 authorized shares and a par value
of
$0.00001. Each share of the Series E Preferred Stock is convertible
to
$1.00 of the Company’s Common Stock six months after issuance.
|
NOTE
6 – DISCONTINUED OPERATIONS
On
December 15, 2007, the Company entered into a Mutual Separation Agreement (the
“Separation Agreement”) with AireWire, Inc. (“AireWire”). The Company and
AireWire were parties to an acquisition agreement dated March 31, 2006 (the
“Acquisition Agreement”). Both parties deemed it in their best interests to
unwind the Acquisition Agreement. The Separation Agreement provided that the
Company would return the 1,000,000 shares of the Company that AireWire owned
and
that AireWire would return the 500,000 shares of NW Tech Capital, Inc. that
AireWire owned. As of the effective date of December 31, 2007, neither party
had
any obligation to the other.
On
December 31, 2007, the Company recorded a loss from their discontinued
operations and recorded a gain on the disposition of this
subsidiary.
Prior
year financial statements for 2007 have been reclassified to present the
operations of AireWire as Discontinued Operations. There is no activity in
the
current year related to AireWire.
The
following amounts, related to our AireWire business, have been segregated from
Continuing Operations and included in Discontinued Operations
in
the
Consolidated Statements of Operations:
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
-
|
|
$
|
99,452
|
|
$
|
-
|
|
$
|
273,599
|
|
Cost
of goods sold
|
|
|
|
|
|
(391
|
)
|
|
|
|
|
(5,823
|
)
|
Gross
profit
|
|
|
-
|
|
|
99,061
|
|
|
-
|
|
|
267,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
|
|
-
|
|
|
115,168
|
|
|
-
|
|
|
290,131
|
|
Total
operating expenses
|
|
|
-
|
|
|
(115,168
|
)
|
|
-
|
|
|
(290,131
|
)
|
Other
Income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
-
|
|
|
(687
|
)
|
|
-
|
|
|
(1,950
|
)
|
Other
income
|
|
|
-
|
|
|
696
|
|
|
-
|
|
|
696
|
|
Total
other income
|
|
|
-
|
|
|
9
|
|
|
-
|
|
|
(1,254
|
)
|
Loss
from discontinuing operations
|
|
$
|
-
|
|
$
|
(16,098
|
)
|
$
|
-
|
|
$
|
(23,609
|
)
|
NOTE
7 – ACQUISITIONS AND INVESTMENTS
Teledigit,
Inc.
On
January 29, 2008 the Company signed an acquisition agreement to purchase a
Portland, OR based company named Teledigit Inc. The acquisition agreement is
to
purchase 100% of Teledigit in exchange for 80,000 shares of the Company’s Series
E Preferred Stock convertible to $1.00 common stock per share and a $720,000
convertible note payable. The note is convertible into 720,000 Series “E”
Preferred Shares plus interest of 6%. The acquisition of Teledigit was completed
on June 16, 2008.
Teledigit
was a locally owned and operated telecommunications company in the Pacific
Northwest. Established in 1995, Teledigit bases its operations out of Portland,
Oregon serving customers in the greater Portland Metropolitan/Vancouver, WA
areas. It provides installation and service for business voice needs,
including key systems, PBX’s, voicemail, and cabling. Revenues for fiscal year
2007 exceeded $1.7 million dollars. As of June 16, 2008, Teledigit is now a
wholly owned subsidiary of NW Tech Capital, Inc. The general operations of
Teledigit remain the same.
The
acquisition has been accounted for as a purchase in accordance with Statement
of
Financial Accounting Standard No. 141
Business
Combinations
.
The
total purchase price was allocated as follows:
Cash
|
|
$
|
21,871
|
|
Accounts
receivable
|
|
|
176,187
|
|
Inventories
|
|
|
46,808
|
|
Fixed
assets
|
|
|
138,203
|
|
Other
assets
|
|
|
680
|
|
Accounts
payable
|
|
|
(18,835
|
)
|
Current
liabilities
|
|
|
(1,080
|
)
|
Bank
line of credit
|
|
|
(82,580
|
)
|
Notes
payable
|
|
|
(47,770
|
)
|
Goodwill
|
|
|
586,516
|
|
Purchase
price
|
|
$
|
820,000
|
|
None
of
the $586,516 of goodwill is subject to amortization, but an annual impairment
test. As of the date of these financial statements, no triggering event has
occurred which would indicate an impairment of this amount.
The
Company’s condensed consolidated financial statements include Teledigit’s
results of operations subsequent to its acquisition on June 16,
2008.
The
following is the supplemental pro forma information that discloses the results
of operations as though the business combination had been completed as of the
beginning of the period being reported on.
NW
TECH CAPITAL, INC.
PROFORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
|
For
the three months ended June 30,
|
|
For
the six months ended June 30,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$
|
481,716
|
|
$
|
467,117
|
|
$
|
686,719
|
|
$
|
945,341
|
|
Cost
of goods sold
|
|
|
167,119
|
|
|
137,162
|
|
|
244,657
|
|
|
315,433
|
|
Gross
profit
|
|
|
314,596
|
|
|
329,956
|
|
|
442,062
|
|
|
629,908
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
|
|
267,803
|
|
|
388,167
|
|
|
862,399
|
|
|
686,434
|
|
Stock
based compensation
|
|
|
299,942
|
|
|
588,348
|
|
|
174,530
|
|
|
740,255
|
|
Depreciation
and amortization
|
|
|
6,237
|
|
|
11,609
|
|
|
12,474
|
|
|
23,218
|
|
TOTAL
OPERATING EXPENSES
|
|
|
573,982
|
|
|
988,124
|
|
|
1,049,403
|
|
|
1,449,907
|
|
OPERATING
LOSS
|
|
|
(259,386
|
)
|
|
(658,168
|
)
|
|
(607,341
|
)
|
|
(819,999
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
1
|
|
|
36
|
|
|
2
|
|
|
38
|
|
Interest
expense
|
|
|
(53,442
|
)
|
|
(1,788
|
)
|
|
(125,589
|
)
|
|
(4,222
|
)
|
Change
in fair value of derivative liability
|
|
|
(1,632,052
|
)
|
|
(13,662
|
)
|
|
(1,703,527
|
)
|
|
(20,087
|
)
|
Other
income
|
|
|
69,599
|
|
|
-
|
|
|
75,406
|
|
|
-
|
|
TOTAL
OTHER INCOME/(EXPENSE)
|
|
|
(1,615,895
|
)
|
|
(15,414
|
)
|
|
(1,753,708
|
)
|
|
(24,271
|
)
|
LOSS
FROM CONTINUING OPERATIONS
|
|
|
(1,875,280
|
)
|
|
(673,582
|
)
|
|
(2,361,049
|
)
|
|
(844,270
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DISCONTINUED
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations of discontinued business
|
|
|
-
|
|
|
(16,098
|
)
|
|
-
|
|
|
(23,609
|
)
|
LOSS
FROM DISCONTINUED OPERATIONS
|
|
|
-
|
|
|
(16,098
|
)
|
|
-
|
|
|
(23,609
|
)
|
NET
LOSS
|
|
|
(1,875,280
|
)
|
|
(689,680
|
)
|
|
(2,361,049
|
)
|
|
(867,878
|
)
|
Preferred
dividend
|
|
|
(25,294
|
)
|
|
(1,166
|
)
|
|
(26,654
|
)
|
|
(3,104
|
)
|
NET
LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
|
$
|
(1,900,575
|
)
|
$
|
(690,846
|
)
|
|
(2,387,703
|
)
|
|
(870,982
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER COMMON SHARE - BASIC AND DILUTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.02
|
)
|
$
|
(13,35
|
)
|
|
(0.05
|
)
|
|
(31,16
|
)
|
Discontinued
operations
|
|
$
|
0.00
|
|
$
|
(0.32
|
)
|
|
0.00
|
|
|
(0.87
|
)
|
Net
loss per common share
|
|
$
|
(0.02
|
)
|
$
|
(13,67
|
)
|
|
(0.05
|
)
|
|
(32.04
|
)
|
Weighted
average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
|
88,117,204
|
|
|
50,438
|
|
|
44,302,020
|
|
|
27,091
|
|
NOTE
8 – RELATED PARTY TRANSACTIONS
For
the
quarter ended June 30, 2008:
The
President and CEO converted $132,500 of accrued consulting expenses owed to
the
President into notes payable.
A
related
party loaned the Company $3000 cash.
During
the quarter ending March 31, 2008, the President and CEO of the Company
converted 800,000 shares of his Series B Preferred Stock into 20,000,000 shares
of the Company’s common stock.
NOTE
9 - CONCENTRATIONS
Major
Customers
The
Company’s business is driven by many small businesses throughout the West Coast
of the United States. The Company has a few large customers, none of which
consist of more than 15% of the overall revenue of the company. Therefore the
Company’s revenue does not rely heavily on any major company contract that could
adversely affect their business significantly in a negative fashion.
Major
Suppliers
The
Company has a few major suppliers all of which are large national and
international companies. Examples of these major suppliers are Nortel, Comdial,
and Graybar. Each of these companies are well funded and at this time we have
no
indication that the Company will have any problems getting adequate supplies
from any of these suppliers. There are also alternative sources that could
be
used if necessary to get supplies.
NOTE
10 - SUBSEQUENT EVENTS
Stock
Issuances:
The
Company issued a total of 18,793,000 shares of Common stock valued at $10,929
for repayment of debt; 3,000,000 shares of Common stock valued at $4,200 as
payment for services; and 10,000,000 shares of Common stock valued at $15,000
for cash.
Holders
of the Company’s Series A Preferred Stock converted 7.38 shares of the Series A
Preferred Stock and $3,608 of Series A dividends into 13,736,370 shares of
the
Company’s common stock.
Convertible
Promissory Notes
The
following notes illustrated in the table below have a conversion feature
consisting of a 70% conversion rate based on the average of the lowest 3 closing
bid prices within the 20 trading days preceding the conversion. No conversion
shall exceed 4.99% of the then outstanding common stock of the Company. The
note
matures on March 1, 2009 and is convertible at any time. The two notes
originated from one $58,800 note that was subsequently bifurcated and assigned
to two other note holders.
Date
|
|
Amount
|
|
07/02/2008
|
|
$
|
30,000
|
|
07/02/2008
|
|
|
28,800
|
|
|
|
|
|
|
Total
|
|
$
|
58,800
|
|
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
.
Overview
The
following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements in the Form 10-KSB for the year ended December
31, 2007 and the other financial data appearing elsewhere in this Form
10-Q.
The
information set forth in this Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A") contains certain
"forward-looking statements," including, among others (i) expected changes
in
the Company's revenues and profitability, (ii) prospective business
opportunities and (iii) the Company's strategy for financing its business.
Forward-looking statements are statements other than historical information
or
statements of current condition. Some forward-looking statements may be
identified by use of terms such as "believes," "anticipates," "intends" or
"expects." These forward-looking statements relate to the plans, objectives
and
expectations of the Company for future operations. Although the Company believes
that its expectations with respect to the forward-looking statements are based
upon reasonable assumptions within the bounds of its knowledge of its business
and operations, in light of the risks and uncertainties inherent in all future
projections, the inclusion of forward-looking statements in this report should
not be regarded as a representation by the Company or any other person that
the
objectives or plans of the Company will be achieved.
In
light
of these risks and uncertainties, there can be no assurance that actual results,
performance or achievements of the Company will not differ materially from
any
future results, performance or achievements expressed or implied by such
forward-looking statements. The foregoing review of important factors should
not
be construed as exhaustive. The Company undertakes no obligation to release
publicly the results of any future revisions it may make to forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Executive
Overview
NW
Tech
Capital, Inc (the “Company,” “we,” “us,” or “our”), formerly Cybertel Capital
Corporation, was originally organized for the primary purpose of engaging in
all
facets of the business comprising the telecommunications industry and is a
provider of long distance voice and data telecommunications.
On
June
16, 2008, the Company acquired Teledigit, Inc. (“Teledigit”), an Oregon
corporation, pursuant to an acquisition agreement entered into by the Company
and Teledigit on January 29, 2008 (the “Acquisition Agreement”). Teledigit was
established in 1995, and bases its operations out of Portland, Oregon, serving
customers in the greater Portland Metropolitan/Vancouver, WA areas. Teledigit
has had a progressive growth rate over the last several years. Its revenues
for
its last year exceeded $1.7 million. Teledigit provides installation and service
for business voice needs, including key systems, PBX’s, voicemail, and cabling.
The Acquisition Agreement is to purchase 100% of Teledigit in exchange for
80,000 shares of the Company’s Series E Preferred Stock worth $1.00 per share
and a $720,000 convertible note payable. The note is convertible into 720,000
shares of Series E Preferred Stock plus interest of 6%. The acquisition was
completed on June 16, 2008 and the results of operations have been consolidated
into the Company’s results as of acquisition date.
Through
our subsidiary, Teledigit, we are now a Data and Telecommunications Integrator.
Our mission is to provide business technology and support solutions to our
customers so they can achieve a competitive edge. The majority of our customers
are in the West Coast of the United States but have a few national contracts
that cover the entire United States. We believe in building long lasting, honest
relationships with our customers.
The
company is fluent in the following areas of Voice and Data
technologies:
|
·
|
VoIP,
TDM, and Hybrid voice functionality and
networking.
|
|
·
|
10G,
Switched Gigabit, Wireless voice, and multi-protocol
networking.
|
|
·
|
Computer/Telephony
integration for call centers or Database
backends.
|
|
·
|
Converged
multimedia applications such as contact centers, desktop
conferencing.
|
|
·
|
LAN
/ WAN design and network planning.
|
|
·
|
Data
network support and desktop
support.
|
|
·
|
VoIP
network support and integration..
|
|
·
|
VPN
and Branch office data deployment.
|
|
·
|
Wireless
LAN survey and installation support and
deployment.
|
|
·
|
Outdoor
Wireless/Microwave data integration and service (Unlicensed & FCC
Licensed).
|
|
·
|
Remote
network support and management.
|
|
·
|
CCTV
and IP Video surveillance network design, installation and
support.
|
|
·
|
Cat5e
and Cat6 Copper networking cabling
installation.
|
|
·
|
Single-Mode
and Multi-Mode Fiber Optic Cabling installation and
support.
|
|
·
|
CATV
Distribution Design, Service and
Installation.
|
|
·
|
Data
and Telecommunication room design and
installation.
|
In
addition to the services provided by Teledigit, we also are actively involved
in
identifying other companies in the telecommunications industry for acquisition
or strategic partnerships. These companies may be providers of long distance
service, Voice over Internet Protocol providers, consulting companies, prepaid
service companies, network management operations, or other companies in the
telecommunication arena.
We
also
are looking into acquisition possibilities and funding from China. During the
second quarter of 2008, we
incorporated
a new Hong Kong/China company named “NW Tech Capital Group Limited” to engage in
completing merger and acquisitions opportunities with private China
companies.
We
currently have insufficient funds to operate our business according to its
proposed business plan. In addition, if unanticipated expenses, problems, and
difficulties occur which result in material delays in the development of its
products, we will not be able to operate within our budget. If we do not operate
within our budget, we will require additional funds to continue its business.
We
may not be able to obtain additional financing as needed, on acceptable terms,
or at all, which would force us to delay our plans for growth and implementation
of our strategy, which could seriously harm our business, financial condition,
and results of operations. If we need additional funds, we may seek to obtain
them primarily through stock or debt financings. Those additional financings
could result in dilution to our stockholders.
Recent
Developments
Effective
as of June 16, 2008, we acquired Teledigit pursuant to an acquisition agreement
entered into by the Company and Teledigit on January 29, 2008 (the “Acquisition
Agreement.”). Teledigit is a Portland, Oregon based telecommunications sales and
service company that has been in business since 1995 and has grown progressively
over the last 10 years. Teledigit does a wide range of business for a national
dental company which has locations all across the United States, supplying
everything from new phone systems to servicing old systems and engineering
wiring for new offices.
On
January 21, 2008, we effected a 1000 to 1 reverse split of our common stock.
All
shareholder equity accounts have been stated to reflect the stock splits and
change in par value as of the earliest date presented in the financial
statements.
On
January 18, 2008, we filed a Certificate of Amendment with the State of Nevada
changing our corporate name to NW Tech Capital, Inc.
On
December 31, 2007, a separation agreement was reached between us and AireWire
releasing AireWire back to its pre-acquisition state and returning $1,000,000
dollars worth of Series C Preferred Stock back to us.
Critical
Accounting Policies
Accounting
for Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios.
We
carry
notes with convertible features embedded and we accounted for them under the
Financial Accounting Standards Board’s Emerging Issues Task Force (“EITF”) 00-27
and 00-19.
EITF
00-27 requires us to calculate the fair value of stock-based embedded
convertible
feature in notes as a debt discount, also known as a beneficial conversion
feature “BCF”. The convertible notes allow the note holder to convert the note
into common shares of the company at a specified discounted rate.
The
value
of the debt discount is calculated on the date of the note issuance using the
intrinsic value method. Essentially the debt discount equates to the difference
between the note and the fair market value of the stocks if the entire note
were
to be converted. The debt discount is expensed as interest ratably on a
straight-line basis over the requisite service period.
EITF
00-19 requires the
use
of a
valuation model to calculate the fair value of the embedded convertible feature
in the notes. We use the Black-Scholes Model (the “BSM”) to calculate the fair
value of the embedded convertible feature. The BSM incorporates various
assumptions including expected volatility, expected life, and interest
rates. The expected volatility is based on the historical volatility of our
common stock. We base our expected life assumption on our historical experience
and on the terms and conditions of the notes.
Accordingly,
the embedded conversion feature is marked to market through earnings at the
end
of each reporting period and reported as a derivative liability.
Results
of Operations
We
have
changed our business by discontinuing and disposing of our former subsidiary
AireWire and acquiring Teledigit. While AireWire was also in the
telecommunications business, the disposal of AireWire is not indicative of
current or future results of operations.
We
have
included a supplemental Pro Forma Financials of Operations, which discloses
the
results of operations as though the business combination with Teledigit had
been
completed as of the beginning of the reporting period (see Acquisitions and
Investments – Note 7 in Item 1).
Three
Months Ended June 20, 2008 and 2007
For
the
three months ending June 30, 2008, our revenues totaled $62,735 including
revenue contributed by the acquisition of Teledigit on June 16, 2008. Revenues
for the three months ended June 30, 2007 totaled $99,452 (see Note 6 –
Discontinued Operations in Item 1). The difference of $36,717 is attributable
to
the difference in the two subsidiaries, Teledigit versus AireWire. Whereas
AireWire’s income included amounts for the full three months of the quarter
ended June 30, 2007, Teledigit’s revenue is only from June 16, 2008 to June 30,
2008.
We
generated a net loss of $2,014,231 for the quarter ended June 30, 2008, compared
to $733,161 for the same quarter in 2007. The $1,281,070 increase in net loss
was primarily due to increases in the change in the value of the derivative
liability in accordance with EITF 00-19, interest expense, and selling and
administrative expenses.
The
majority of the difference in net loss between the two periods is attributed
to
a non-cash expense which calculates the change in the derivative liability
in
accordance with EITF 00-19 amounting to $1,632,052. The increase in interest
expense also consists largely of a non-cash amortization of the beneficial
conversion feature or “BCF” as calculated in accordance with EITF 00-27.
Selling, general, and administrative costs were $362,976 during the three months
ended June 30, 2008, as compared to $719,125 for the corresponding period in
2007. The ($356,149) decrease is primarily due to fewer shares of stock issued
for services and our overall efforts to cut costs along with the disposal of
the
AireWire subsidiary.
Six
months ended June 30, 2008 and 2007
For
the
six months ending June 30, 2008, our revenues totaled $62,735 including revenue
contributed by the acquisition of Teledigit on June 16, 2008. Prior year
revenues for the six months ended June 30, 2007 totaled $273,599 (see Note
6 – Discontinued Operations in Item 1). The difference of $210,864 is
attributed to the difference in the two subsidiaries, Teledigit versus AireWire.
Whereas AireWire’s income included amounts for the full six months ended June
30, 2007, Teledigit’s revenue is only from June 16, 2008 to June 30, 2008.
We
generated a net loss of $2,363,376 for the six months ended June 30, 2008,
compared to $877,808 for the same quarter in 2007. The $1,485,568 increase
in
net loss was primarily due to increases in the change in the value of the
derivative liability in accordance with EITF 00-19, interest expense, and
selling and administrative expenses.
The
majority of the difference in net loss between the two periods is attributed
to
a non-cash expense which calculates the change in the derivative liability
in
accordance with EITF 00-19 amounting to $1,703,527. The increase in interest
expense also consists largely of a non-cash amortization of the beneficial
conversion feature or “BCF” as calculated in accordance with EITF 00-27.
Selling, general, and administrative costs were $568,399 during the three months
ended June 30, 2008, as compared to $856,293 for the corresponding period in
2007. The ($287,894) decrease is primarily due to fewer shares of stock issued
for services and our overall efforts to cut costs along with the disposal of
the
AireWire subsidiary.
Liquidity
and Capital Resources
During
the six-month period ended June 30, 2008, cash used by operations was $67,849.
We intend to continue to search for ways to expand our business through new
service contracts and by continuing to search for new acquisitions. We
anticipate that we will incur smaller losses in the future if we are able to
expand our business and the marketing of our products and services now offered.
The losses will continue until the excess of operation and marketing expenses
is
overcome by the increase in revenue from operations.
During
the six months ended June 30, 2008, we incurred a net loss of $2,363,276, had
cash used for operations of $67,849, and cash provided by financing activities
was $94,886. All of these proceeds were used to fund operations. We continue
to
seek short-term financing through debt and equity financing and are also seeking
long-term financing through debt and/or equity financing through a private
placement or a retail offering of our common stock.
In
order
to execute our business plan, we will need to acquire additional capital from
debt or equity financing. Our independent certified public accountants have
stated in their report for the year-end that there is a substantial doubt about
our ability to continue as a going concern. In the absence of significant
revenue and profits, we will be completely dependent on additional debt and
equity financing arrangements. There is no assurance that any financing will
be
sufficient to fund our capital expenditures, working capital and other cash
requirements for the fiscal year ending December 31, 2008. We cannot assure
you
that any such additional funding will be available or that, if available, can
be
obtained on terms favorable to us. If we are unable to raise needed funds on
acceptable terms, we will not be able to execute our business plan, develop
or
enhance existing services, take advantage of future opportunities or respond
to
competitive pressures or unanticipated requirements. A material shortage of
capital will require us to take drastic steps such as further reducing our
level
of operations, disposing of selected assets or seeking an acquisition partner.
If cash is insufficient, we will not be able to continue operations.
Off-Balance
Sheet Transactions
As
of the
date of this Quarterly Report, there are no off-balance sheet arrangements
that
have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources
that
are material to investors. The term "off-balance sheet arrangement" generally
means any transaction, agreement or other contractual arrangement to which
an
entity unconsolidated with us is a party, under which the we have (i) any
obligation arising under a guarantee contract, derivative instrument or variable
interest; or (ii) a retained or contingent interest in assets transferred to
such entity or similar arrangement that serves as credit, liquidity or market
risk support for such assets.
Material
Commitments
As
of the
date of this Quarterly Report, we do not have any material commitments that
are
not reflected as liabilities on our consolidated balance sheet included
elsewhere in this report, nor does management anticipate any further material
commitments within the next twelve months.
ITEM
3.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not
Applicable.
ITEM
4. CONTROLS AND PROCEDURES.
Evaluation
of disclosure controls and procedures.
As of
the end of the period covered by this Quarterly Report, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer of the effectiveness of our
disclosure controls and procedures. Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that, as of the end
of
such period, our disclosure controls and procedures are effective to provide
reasonable assurance that the information required to be disclosed by the
Company in the reports that it files or submits under the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed,
summarized and reported, within the time periods specified in the SEC’s rules
and forms. It should be noted that the design of any system of controls is
based
in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions, regardless of how remote.
Changes
in internal control.
In
addition, we have reviewed our internal controls over financial reporting,
and
there have been no changes in our internal controls over financial reporting
in
the last fiscal quarter that has materially affected or is reasonably likely
to
materially affect our internal control over financial
reporting.
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings.
Except
as
indicated below, the Company is not a party to any pending legal proceeding.
To
the knowledge of management, no federal, state or local governmental agency
is
presently contemplating any proceeding against the Company. No director,
executive officer or other person who may be deemed to be an “affiliate” of the
Company or owner of record or beneficially of more than five percent of its
common stock is a party adverse to the Company or has a material interest
adverse to the Company in any proceeding.
On
or
about January 25, 2002, Prudential Home Building Investors, Inc., a New Jersey
corporation (“Prudential”), filed a complaint against the Company in the
Superior Court of California, County of San Diego, and Central Division. The
case was designated Case No. GIC 782069, and sought damages in the amount of
$32,000 for unpaid rent due on the Company’s former La Jolla, California
facility for the period of September, 2001, through December, 2001, when the
lease terminated. The Company has accrued this expense and expects no additional
cost or expense upon settlement of this case.
On
March
2, 2006, Epstein, Fitzsimmons, Brown, Gioia, Jacobs & Sprouls, P.C.,
obtained a $15,000 default judgment against the Company in the Superior Court
of
New Jersey for Morris County. The Company expects no additional cost or expense
upon settlement of this case.
On
June
20, 2008, the Company received a Notice of Judgment in a case between GRE Mira
Mesa LLC (“GRE”), a California limited liability company, and Cybertel
Communications Corp., dated May 7, 2007, in the amount of $87,775 in favor
of
GRE. Cybertel Communications Corp. (formerly ProTel Communications, Inc.) is
a
former subsidiary of the Company and is no longer operational. The designated
Case No. is GIC875633, and a hearing on the matter is scheduled for August
22,
2008. The Company has not been legally served and has engaged legal counsel
to
handle the matter. Management believes that the judgment against a defunct
subsidiary is not transferable to the parent NW Tech Capital, Inc. since it
is a
separate legal entity. It is management’s belief that this suit will have no
material affect on the Company.
Item
1A. Risk Factors
There
have been no material changes from the Risk Factors described in our Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2007.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.
The
following table indicates all sales of unregistered securities by NWTT during
the quarterly period ended June 30, 2008:
Date
of Issue
|
|
Number of Shares Issued
|
|
Aggregate Sales Price
|
|
Nature of Transaction
|
|
04/02/08
|
|
|
2,006,110
|
|
$
|
2,556
|
|
|
Debt
Repayment
|
|
04/02/08
|
|
|
1,500,000
|
|
|
5,550
|
|
|
Payment
for Services
|
|
04/02/08
|
|
|
2,200,000
|
|
|
8,140
|
|
|
Preferred
A conversion
|
|
04/15/08
|
|
|
2,188,000
|
|
|
4,376
|
|
|
Preferred
A conversion
|
|
04/15/08
|
|
|
4,400,000
|
|
|
6,280
|
|
|
Debt
Repayment
|
|
04/16/08
|
|
|
2,000,000
|
|
|
4,000
|
|
|
Payment
for Services
|
|
04/17/08
|
|
|
2,600,000
|
|
|
4,680
|
|
|
Preferred
A conversion
|
|
05/07/08
|
|
|
2,000,000
|
|
|
2,400
|
|
|
Debt
Repayment
|
|
05/09/08
|
|
|
6,111,111
|
|
|
12,222
|
|
|
Cash
for Stock
|
|
05/12/08
|
|
|
2,880,000
|
|
|
4,608
|
|
|
Preferred
A conversion
|
|
05/14/08
|
|
|
2,000,000
|
|
|
2,200
|
|
|
Debt
Repayment
|
|
05/15/08
|
|
|
3,300,000
|
|
|
4,950
|
|
|
Preferred
A conversion
|
|
05/22/08
|
|
|
3,500,000
|
|
|
4,550
|
|
|
Payment
for Services
|
|
05/22/08
|
|
|
2,000,000
|
|
|
1,400
|
|
|
Debt
Repayment
|
|
05/26/08
|
|
|
3,026,000
|
|
|
3,631
|
|
|
Preferred
A conversion
|
|
06/03/08
|
|
|
3,700,000
|
|
|
3,700
|
|
|
Preferred
A conversion
|
|
06/05/08
|
|
|
4,130,000
|
|
|
2,024
|
|
|
Repayment
of debt
|
|
06/08/08
|
|
|
8,100,000
|
|
|
3,969
|
|
|
Repayment
of debt
|
|
06/30/08
|
|
|
15,000,000
|
|
|
48,000
|
|
|
Payment
for Services
|
|
06/30/08
|
|
|
9,568,800
|
|
|
30,620
|
|
|
Preferred
A conversion
|
|
06/30/08
|
|
|
14,059,000
|
|
|
6,889
|
|
|
Repayment
of debt
|
|
06/30/08
|
|
|
5,952,381
|
|
|
19,048
|
|
|
Cash
for Stock
|
|
Total
|
|
|
102,221,402
|
|
$
|
185,793
|
|
|
|
|
Management
believes each of the foregoing persons or entities was either an "accredited
investor," or "sophisticated investor" as defined in Rule 501 of Regulation
D
promulgated under the Securities Act of 1933, as amended (the “Act”). Each such
person or entity had access to all material information about NWTT prior to
the
offer, sale or issuance of these "restricted securities." Management believes
that these shares were exempt from the registration requirements of the Act,
pursuant to Section 4(2) thereof.
Item
3. Defaults Upon Senior Securities.
None
.
Item
4. Submission of Matters to a Vote of Security Holders.
None
Item
5. Other Information.
None
Item
6. Exhibits.
Exhibit No.
|
|
Description
|
|
|
|
4.1
|
|
Amendment
of Designation After Issuance of Class or Series for Series B “Super
Voting” Preferred Stock (incorporated by reference to Exhibit 4.1 to the
Company’s Quarterly Report on Form 10Q for the quarter ended March 31,
2008, filed with the SEC on May 14, 2008).
|
|
|
|
4.2
|
|
Certificate
of Designation for Series E Convertible Preferred Stock (incorporated
by
reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10Q for
the quarter ended March 31, 2008, filed with the SEC on May 14,
2008).
|
|
|
|
4.3
|
|
Certificate
of Designation for Series F Convertible Preferred Stock (incorporated
by
reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10Q for
the quarter ended March 31, 2008, filed with the SEC on May 14,
2008).
|
|
|
|
31.1
|
|
Certification
of Chief Executive Officer and Chief Financial Officer, James A.
Wheeler,
pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange
Act.
|
|
|
|
32.1
|
|
Certification
of Chief Executive Officer and Chief Financial Officer, James A.
Wheeler,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002.
|
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.
|
NW
TECH CAPITAL, INC.
|
|
|
|
|
By:
|
/s/ James
A. Wheeler
|
|
James
A. Wheeler
CEO,
CFO, President and Director
|
Dated:
August 12, 2008
Exhibit No.
|
|
Description
|
|
|
|
4.1
|
|
Amendment
of Designation After Issuance of Class or Series for Series B “Super
Voting” Preferred Stock
(incorporated by reference to Exhibit 4.1 to the Company’s Quarterly
Report on Form 10Q for the quarter ended March 31, 2008, filed with
the
SEC on May 14, 2008).
|
|
|
|
4.2
|
|
Certificate
of Designation for Series E Convertible Preferred Stock
(incorporated
by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10Q
for the quarter ended March 31, 2008, filed with the SEC on May 14,
2008).
|
|
|
|
4.3
|
|
Certificate
of Designation for Series F Convertible Preferred Stock
(incorporated
by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10Q
for the quarter ended March 31, 2008, filed with the SEC on May 14,
2008).
|
|
|
|
31.1
|
|
Certification
of Chief Executive Officer and Chief Financial Officer, James A.
Wheeler,
pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange
Act.
|
|
|
|
32.1
|
|
Certification
of Chief Executive Officer and Chief Financial Officer, James A.
Wheeler,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002.
|
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