U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER: 0-20259
SEAMLESS WI-FI, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada
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(State or other jurisdiction of incorporation of organization)
33-0845463
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(I.R.S. Employer Identification No.)
800 No. Rainbow Blvd. Parkway, Suite 200 Las Vegas, Nevada 89109
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(Address of principal executive offices)
(775) 588-2387
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(Issuer's telephone number)
f/k/a ALPHA WIRELESS BROADBAND, INC
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(Former name, former address and former fiscal year, if changed since last
report)
Check mark whether the issuer (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) been subject to such filing requirements for the past 90
days. Yes [X] No [ ].
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of March 31, 2006, the Issuer had
187,027,154 shares of common stock issued and outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ ]
TABLE OF CONTENTS
PART I - CONDENSED CONSOLIDATED FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2005.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION FOR THE THREE AND NINE MONTHS
ENDED MARCH 31, 2006 AND 2005
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE THREE AND NINE MONTHS
ENDED MARCH 31, 2006 AND 2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS
ITEM 3. CONTROLS AND PROCEDURES
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. CHANGES IN SECURITIES
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The consolidated financial statements of Seamless Wi-Fi, Inc. f/k/a Alpha
Wireless Broadband, Inc. and subsidiaries (collectively, the "Company"),
included herein were prepared, without audit, pursuant to rules and regulations
of the Securities and Exchange Commission. Because certain information and
notes normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States of America were
condensed or omitted pursuant to such rules and regulations, these financial
statements should be read in conjunction with the financial statements and notes
thereto included in the audited financial statements of the Company as included
in the Company's Form 10-KSB for the year ended June 30, 2005.
SEAMLESS WI-FI, INC.
F/K/A ALPHA WIRELESS BROADBAND, INC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS MARCH 31, 2006
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CURRENT ASSETS:
---------------
CASH. . . . . . . . . . . . . . . . . . . . . . $ 184,504
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TOTAL CURRENT ASSETS . . . . . . . . . . 184,504
PROPERTY AND EQUIPMENT, NET (NOTE 2). . . . . . 53,174
TECHNOLOGY. . . . . . . . . . . . . . . . . . . 516,000
INVESTMENTS (NOTE 2) . . . . . . . . . . . . . 1,075,088
OTHER RECEIVABLE (NOTE 3). . . . . . . . . . . 817,750
RESTRICTED CASH (NOTE 11) . . . . . . . . . . . 75,000
SECURITY DEPOSIT. . . . . . . . . . . . . . . . 6,600
-----------------
TOTAL ASSETS. . . . . . . . . . . . . . . $ 2,728,116
-----------------
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
--------------------
ACCOUNTS PAYABLE. . . . . . . . . . . . . . . . $ 917,203
PAYROLL TAXES . . . . . . . . . . . . . . . . . 654,511
JUDGMENTS PAYABLE . . . . . . . . . . . . . . . 353,530
OTHER CURRENT LIABILITIES (NOTE 6). . . . . . . 790,510
PAYABLE TO OFFICER. . . . . . . . . . . . . . . 56,316
INVESTMENT PAYABLE. . . . . . . . . . . . . . . 425,000
NOTE PAYABLE RELATED PARTY. . . . . . . . . . . 27,468
NOTE PAYABLE (NOTE 4) . . . . . . . . . . . . . 66,833
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TOTAL CURRENT LIABILITIES . . . . . . . . . . . 3,291,371
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LONG TERM DEBT. . . . . . . . . . . . . . . . . 1,626,313
-----------------
MINORITY INTEREST . . . . . . . . . . . . . . . -
TOTAL LIABILITIES. . . . . . . . . . . . 4,917,684
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STOCKHOLDERS' (DEFICIT): (NOTE 8 )
----------------------------------
PREFERRED A STOCK, PAR VALUE $.001
AUTHORIZED 5,000,000 ISSUED 961,331. . . . . 961
PREFERRED B STOCK PAR VALUE $.001
AUTHORIZED 3,000,000 0 SHARES ISSUED
PREFERRED C STOCK, PAR VALUE $1.00
AUTHORIZED 2,000,000 ISSUED 400,000 . . . . . 300,000
COMMON STOCK, PAR VALUE $.001
AUTHORIZED 11,000,000,000 ISSUED 187,027,154. 187,026
ADDITIONAL PAID IN CAPITAL. . . . . . . . . . . 17,675,993
ACCUMULATED DEFICIT . . . . . . . . . . . . . . (20,253,548)
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TOTAL STOCKHOLDERS' (DEFICIT). . . . . . (2,089,568)
LESS TREASURY STOCK AT COST . . . . . . . . . . 100,000
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ADJUSTED STOCK HOLDER'S EQUITY (DEFICIT) . (2,189,568)
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TOTAL LIABILITIES & STOCKHOLDERS EQUITY. $ 2,728,116
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
SEAMLESS WI-FI, INC.
F/K/A ALPHA WIRELESS BROADBAND, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
3 MONTHS ENDED 9 MONTHS ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2006 2005 2006 2005
REVENUES. . . . . . . . . . . . . . . . $ 8,581 $ 601 $ 18,535 $ 845
------------- --------------- ------------- ------------
COST AND EXPENSES:
COST OF REVENUES . . . . . . . . . . 51,340 13,819 85,783 20,498
SOFTWARE DEVELOPMENT COSTS. . . . . 140,452 - 1,641,022 -
FINANCING FEES. . . . . . . . . . . 212,500 - 212,500 -
SELLING, GENERAL AND ADMIN.. . . . . 141,124 105,779 437,761 1,148,504
CONSULTING . . . . . . . . . . . . . 70,024 247,836 844,413 410,405
LEGAL FEES. . . . . . . . . . . . . 114,283 15,000 221,254 210,864
OFFICER PAYROLL . . . . . . . . . . 119,280 60,000 410,730 180,000
WRITE DOWN OF INVESTMENTS. . . . . 270,384 450,625 270,384 450,625
DEPRECIATION AND AMORTIZATION . . . 3,969 25,137 5,796 75,411
------------- --------------- ------------- ------------
TOTAL COSTS AND EXPENSES . . . . . 1,123,356 918,196 4,129,643 2,496,307
------------- --------------- ------------- ------------
NET INCOME (LOSS) FROM OPERATIONS . . . (1,114,775) ( 917,595) (4,111,108) (2,495,462)
OTHER INCOME (EXPENSE)
CANCELLATION OF INDEBTNESS. . . . . 58,827 - 649,080 -
GAIN ON DISPOSAL OF EQUIPMENT . . . - - 3,284 -
OTHER INCOME/(EXPENSE) . . . . . . (30,239) - 147 -
INTEREST EXPENSE . . . . . . . . . (60,803) 131,351 (1,272,348) 403,553
------------- --------------- ------------- ------------
NET INCOME (LOSS) LOSS FROM OPEATIONS. (1,150,274) ( 1,048,946) (4,730,945) (2,899,015)
------------- --------------- ------------- ------------
OTHER INCOME. . . . . . . . . . . . . . - 36,543 - 38,778
------------- --------------- ------------- ------------
INCOME (LOSS) BEFORE INCOME TAXES . . . (1,150,274) (1,012,403) (4,730,945) (2,860,237)
------------- -------------
PROVISION FOR INCOME TAXES. . . . . . . - - - -
INCOME TAXES (BENEFIT). . . . . . . . . 0 0 0 0
------------- --------------- ------------- ------------
LOSS BEFORE MINORITY INTEREST . . . . . (1,150,274) (1,012,403) (4,730,945) (2,860,237)
------------- -------------
MINORITY INTEREST . . . . . . . . . . . 0 0 0 0
------------- --------------- ------------- ------------
NET INCOME (LOSS) . . . . . . . . . . . (1,150,274) ( 1,012,403) (4,730,945) (2,860,237)
------------- --------------- ------------- ------------
BASIC AND DILUTED LOSS PER
COMMON SHARE . . . . . . . . . . . . . ($.01) ($1.24) ($.05) ($3.42)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING. . . . . . . 152,241,589 846,947 102,831,999 846,947
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
SEAMLESS WI-FI, INC.
F/K/A ALPHA WIRELESS BROADBAND, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
MARCH 31,
2006 2005
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from continuing operations $(4,730,945) $(2,860,237)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization . . . . . . . . . . . . . 17,724 75,411
Issuance of common stock for services . . . . . . . . . 775,036 1,460,309
Issuance of common stock for payment of financing costs 984,000 -
Write down of intangible assets. . . . . . . . . . . . . 1,500,570 463,500
Write-down of investments. . . . . . . . . . . . . . . . 270,384
Cancellation of indebtedness. . . . . . . . . . . . . . (649,080) -
Financing Cost . . . . . . . . . . . . . . . . . . . . . 212,500 -
Changes in operating assets and liabilities
Other current liabilities . . . . . . . . . . . . . . (353,432) 108,094
Accounts payable. . . . . . . . . . . . . . . . . . . 121,617 164,118
Payroll taxes payable . . . . . . . . . . . . . . . . (7,759) -
Judgments payable . . . . . . . . . . . . . . . . . . (290,589) 112,239
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES . . . . . . . (2,149,974) (476,566)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets . . . . . . . . . . . . . . . - (137,939)
Technology . . . . . . . . . . . . . . . . . . . . . . . . . (91,000)
Proprietary Software. . . . . . . . . . . . . . . . . . . . (85,000) -
Investment . . . . . . . . . . . . . . . . . . . . . . . . . - (39,564)
Advances to related party . . . . . . . . . . . . . . . . . (132,099) -
Purchase of equipment . . . . . . . . . . . . . . . . . . . (70,898) -
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NET CASH PROVIDED BY INVESTING ACTIVITIES . . . . . . (378,997) (177,503)
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CASH FLOWS FROM FINANCING ACTIVITIES
Net increase/decrease in credit lines . . . . . . . . . . . - 532,337
Payment of Credit Line. . . . . . . . . . . . . . . . . . . (381,000)
Sale of Common Stock. . . . . . . . . . . . . . . . . . . . 381,000
Increase in long term debt. . . . . . . . . . . . . . . . . 2,877,471 -
Repayment of notes payable. . . . . . . . . . . . . . . . . (79,500) -
Repayment of advances from officer. . . . . . . . . . . . . (8,952) 165,228
Repayment of related party advances . . . . . . . . . . . . (75,814) (33,800)
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES . . . . . . 2,713,205 663,765
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NET INCREASE (DECREASE) IN CASH . . . . . . . . . . . . . . . 184,234 9,696
CASH, BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . 270 5,469
------------ ------------
CASH, END OF PERIOD . . . . . . . . . . . . . . . . . . . . . $ 184,504 $ 15,165
============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
SEAMLESS WI-FI, INC.
F/K/A ALPHA WIRELESS BROADBAND, INC.
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
MARCH 31,
2006 2005
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SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid . . . . . . . . . . . . . . . . . . . . . $ - $ -
Income taxes paid . . . . . . . . . . . . . . . . . . . $ - $ -
NONCASH INVESTING AND FINANCING ACTIVITIES
Common stock issued for services. . . . . . . . . . . . $ 775,036 $ 786,830
Common stock issued for officer's compensation. . . . . $ 180,000
Common stock issued for payment of financing costs. . . $ 984,000 -
Common stock issued for conversion of preferred A stock
and debt cancellation . . . . . . . . . . . . . . . . $4,096,547 $ -
Common stock issued for conversion of preferred C stock $ 400,000 $ -
Common stock issued for acquisition of assets . . . . . - 1,123,300
Common stock issued for investment. . . . . . . . . . . $ - $ 110,00
Subsidiary common stock issued for investment . . . . . - 266,500
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
SEAMLESS WI-FI, INC.
f/k/a ALPHA WIRELESS BROADBAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Organization and Operations
The Company, through its wholly owned subsidiary Seamless Wi-Fi, Inc., has
36 Wi-Fi locations. Seamless Skyy-Fi, Inc. has installed wireless Internet
access equipment at businesses allowing their patron's access to the Internet
for a fee or free basis.
In January 2005, the Company acquired the assets of Seamless P2P, LLC and
contributed these assets to its 80% owned subsidiary Seamless Peer to Peer,
Inc., which is a developer and provider of a patent pending software program
Phenom Encryption Software that encrypts Wi-Fi transmissions based upon RSA's
government certified 256 bit AES encryption coupled with RSA's Public Key
Infrastructure flexible telecom data and voice transport solutions.
In May 2005, the Company changed its name to Seamless Wi-Fi, Inc. and
changed Skyy-Fi, Inc., to Seamless Skyy-Fi, Inc.
In December 2005, the Company started a hosting company Seamless Internet
(formally known as Alpha Internet) offering Seamless clients a high-security
hosting facility.
The Company has three offices in Nevada and excluding Officers and
Directors uses the services of 10 independent contractors.
Principles of Consolidation
The financial statements include the accounts of the Company and its wholly
owned subsidiaries and majority-owned subsidiary. All significant intercompany
accounts and transactions have been eliminated in consolidation.
Proprietary Software in Development
In accordance with SFAS No. 86, accounting for the Cost of Computer
Software to be Sold, Leased, or Otherwise Marketed Software ("FAS 86"), the
Company has capitalized certain computer software development costs upon the
establishment of technological feasibility. Technological feasibility is
considered to have occurred upon completion of a detailed program design which
has been confirmed by documenting and tracing the detailed program design is not
pursued, upon completion of a working model that has been confirmed by testing
to be consistent with the product design. Amortization is provided based on the
greater of the ratios that current gross revenues for a product bear to the
total of current and anticipated future gross revenues for that product. The
estimated useful life for the straight-line method is determined to be 2 to 5
years.
The unamortized computer software and computer software development costs
were $1,570,000 at September 30, 2005. During the quarter ended December 31,
2005 the computer software development team failed to deliver the completed
software program as per agreement. The unamortized development cost was expensed
and on January 2006, a new computer software development team was contracted and
the costs related to the development will be expensed until the development of
the computer software program is completed.
Interim Financial Information
The accompanying unaudited financial statements of Seamless Wi-Fi, Inc.
f/k/a Alpha Wireless Broadband, Inc. have been prepared in accordance with
United States generally accepted accounting principles for interim financial
information. In our opinion, all adjustments (consisting solely of normal
recurring accruals) considered necessary for a fair presentation have been
included. Readers of these financial statements should note that the interim
results for the three month and nine month periods ended March 31, 2006 are not
necessarily indicative of the results that may be expected for the fiscal year
ending June 30, 2006. These unaudited consolidated financial statements should
be read in conjunction with the audited consolidated financial statements and
footnotes thereto included in the Company's Form 10-KSB/A for the year ended
June 30, 2005, as filed with the Securities and Exchange Commission.
Note 2: Certain Financial Statement Information as of March 31, 2005
Investments at cost
Carbon Jungle . . . . . . . $ 75,000
DCM Enterprises . . . . . . . 88
1st Global Financial. . . . . 1,000,000
--------------------
Total long term investments $ 1,075,088
====================
Other Receivables
Accepted sales (a wholly
owned subsidiary of 1st
Global . . . . . . . . . . . $ 134,010
Carbon Jungle . . . . . . . . 35,392
DK Corp.. . . . . . . . . . . 98,160
DLR Funding . . . . . . . . . 75,099
1st Global Financial. . . . . 475,089
--------------------
Total other receivables . . $ 817,750
====================
Note 3: Note Payable
During the quarter ended March 31, 2006, the Company made a $2,000,000 loan
agreement with Ayuda Funding LLC of which 16,000 of Series A preferred shares
are held as collateral. This note was in default which allowed the note holder
to convert the preferred stock to common stock. Proceeds from the converted
stock paid off some of the notes. Interest on the unpaid principal amount is
6.5% per annum which will be computed on the basis of 360-day year, due and
payable quarterly starting June 16, 2006. The principal payment is due and
payable on June 16, 2009.
During the quarter ended December 31, 2005 the remaining notes that were
payable to Windsor Professional Plaza LLC, were assigned to Ayuda Funding LLC.
These notes are secured by Series A convertible preferred stock, (See Note 8
Preferred Stock). These notes allow the note holder to convert the preferred
stock to common stock to pay off the note and interest due in case of a default
in the quarterly interest payments for the loan. See Note 7 Related Party
Transaction.
As of the quarter ended December 31, 2005, the Company made an offer to
settle the debt of $66,833 with Blue Bear Funding, which is currently in Chapter
11 Bankruptcy. As of this filing the Company has not received a response to its
offer.
During the quarter ended September 30, 2005 several notes payable to
Windsor Professional Plaza LLC, were paid in full and or assigned to Ayuda
Funding LLC. These notes were secured by Series A convertible preferred stock,
(See Note 8-Preferred Stock). These notes were in default which per legal
counsel, which allowed the note holder to convert the preferred stock to common
stock. Proceeds from the converted stock paid off some of the notes. See Note 7
Related Party Transaction.
Note 4: Going Concern
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate continuation of
the company as a going concern. The Company has experienced significant losses,
as of the third quarter ended March 31, 2006 for fiscal year ended June 30,
2006. The current assets are less then current liabilities by $ 3,106,867 and
the Company incurred a net loss of $4,460,561.
Management believes that if it was to lose its current funding source and
if an alternative funding source were not obtained the Company would not be able
to maintain its current operating level for the next twelve months.
Note 5: Other Current Liabilities
Other current liabilities consist of the following:
Credit cards payable $ 330,850 (1)
Payable to Integrated Communication 201,165 (2)
Various liabilities assumed from
Alpha Tooling acquisition 258,495
----------
$ 790,510
==========
(1) Payments in varying amounts are due monthly with interest at 18% per
annum.
(2) Results from contract cancellation.
Note 6: Related Party Transactions
During the quarter ended of December 31, 2005 of fiscal year ended June 30,
2006 the Company purchased two judgments from Adobe Oil. These judgments totaled
$773,145 of which one was in the amount of $134,052 in favor of Community Bank.
Adobe Oil received cash and stock as payment in full for the judgments. Russell
Singer is the Principal shareholder of Adobe Oil.
During the quarter ended December 31, 2005 a loan for $300,000 was made to
the Company by Russell Singer (owner of Adobe Oil) which was secured by 269,230
shares of GNVN stock as collateral. The Company defaulted on the loan and the
lender perfected ownership of the collateral stock.
During the quarter ended December 31, 2005 Adobe Oil acquired $200,000, of
Preferred C stock from Seamless P2P LLC.
During the first quarter ended September 30, 2005 of fiscal year ended June
30, 2006 Windsor Professional Plaza LLC converted 6,575 shares of Series A
preferred stock into 65,750,000 shares of Common stock and the loan to Windsor
was paid, (See Note 4 Note Payable).
As of September 30, 2005 the Company appointed Financial Services LLC as
the Trust Protector for the Creditor Trust. The Trust is currently managed by
Mildred Carroll who is also the Trustee and is also the Company's Secretary.
During the first quarter ended September 30, 2005, the Company created a
Creditor Trust and appointed KFG LLC as Trust Protector which was managed by
David Karst as the Trustee for the Creditor Trust - See Note 9 Creditor Trust.
Creditor Trust
Subsequent to June 30, 2004, Skyy-Fi entered into a factoring and Security
Agreement with 1st American Factoring a/k/a Blue Bear Funding, a sister Company
of Financial Services LLC.
The Company has entered into various transactions with entities affiliated with
its President as follows:
The President of the Company is also the CEO and Director of DCM Enterprises,
Inc. See Note 7 Stockholder's Equity for details.
The President of the Company is an officer of 1st Global Financial. During 2004,
the Company acquired marketing rights from 1st Global Financial for cash and
stock consideration valued at $515,000. The balances of the Marketing rights
were written off in the third quarter of fiscal 2005. See Note 8 Stockholder's
Equity for details.
During 2004 the Company issued 13,000 common shares to children of its president
for consulting services rendered.
Note 7: Stockholder's Equity
Issuance of Common Stock and Preferred Stock
The Board of Directors of the Corporation may from time to time authorize
by resolution the issuance of any or all shares of the Common Stock and the
Preferred Stock herein authorized in accordance with the terms and conditions
set forth in the Articles of Incorporation for such purposes, in such amounts to
such persons, corporations, or entities, for such consideration and in the case
of the Preferred Stock, in one or more series, all as the Board of Directors in
its discretion may determine and without any vote or either action by the
stockholders, except as otherwise required by law. The Board of Directors, from
time to time also may authorize by resolution, options, warrants and other
rights convertible into Common or Preferred stock (collectively "securities".
The securities must be issued for such consideration, including cash, property,
or services, as the Board of Directors may deem appropriate, subject to the
requirement that the value of such consideration be less than the par value of
the shares issued. Any shares issued for which the consideration so fixed paid
or delivered shall be fully paid stock and the holder of such shares shall not
be liable for any further call assessment or any other payment thereon, provided
that the actual value of such consideration is not less than the par value of
the shares so issued. The Board of Directors may issue shares Common Stock in
the form of a distribution or distributions pursuant to a stock dividend or
split-up of the shares of the Common Stock only to ten holders of the
outstanding shares of the Common stock.
Common Stock
During the third quarter ended March 31, 2006 of fiscal year ended June 30, 2006
--------------------------------------------------------------------------------
Ayuda Funding LLC converted 6,575 shares of Series A preferred stock were
converted into 66,330,520 shares of common stock and payback Ayuda Funding in
the amount of $617,575.
Adobe Oil acquired 200,000 of Series C preferred stock from Seamless P2P valued
at $200,000 of which 100,000 shares of Series C preferred stock were converted
into 2,032,000 shares of common stock.
During the second quarter ended December 31, 2005 of fiscal year ended June 30,
--------------------------------------------------------------------------------
2006
----
800,000 shares of common stock were issued for services and expensed at $32,000
for consulting on public relations.
112,500 shares of common stock were issued for services and expensed at $4,500
for marketing.
670,000 shares of common stock were issued for services and expensed at $33,500
for consulting on mergers and acquisitions.
Ayuda Funding LLC converted 2,280 shares Series A preferred stock into
22,800,000 shares of common stock, valued at $1,390,720, of which $773,145 was
used to pay judgments and $617,575 constitutes a loan to the Company.
200,000 shares of Series C preferred stock were converted by Adobe Oil into
3,622,537 shares of common stock valued at $200,000, who acquired those shares
from Seamless P2P LLC as per asset purchase agreement dated January 2005. See
Note 6 Related Party Transactions.
During the first quarter ended September 30, 2005 of fiscal year ended June 30,
--------------------------------------------------------------------------------
2006
----
140,000 shares of common stock were issued for advertising and expensed at
$6,622.
300,000 shares of common stock were issued for marketing and expensed at
$14,190.
Windsor Professional Plaza LLC converted 6,575 shares of preferred Series A
stock into 65,750,000 shares of common stock of which 10,000,000 shares of
common stock were issued for consulting and expensed at $473,000.
Preferred Stock
During the third quarter ended March 31, 2006 of fiscal year ended June 30, 2006
--------------------------------------------------------------------------------
Ayuda Funding LLC converted 6,575 shares of Series A preferred stock were
converted into 66,330,520 shares of common stock and payback Ayuda Funding in
the amount of $617,575.
Adobe Oil acquired 200,000 of Series C preferred stock from Seamless P2P valued
at $200,000 of which 100,000 shares of Series C preferred stock were converted
into 2,032,000 shares of common stock
During the second quarter ended December 31, 2005 of fiscal year ended June 30,
--------------------------------------------------------------------------------
2006
----
Ayuda Funding LLC converted 2,280 shares Series A Preferred stock into
22,800,000 shares of common stock.
200,000 shares of Series C preferred stock were converted Adobe Oil into
3,622,537 shares of common stock valued at $200,000, who acquired those shares
from Seamless P2P LLC as per asset purchase agreement dated January 2005. See
Note 7 Related Party Transactions.
During the first quarter ended September 30, 2005 of fiscal year ended June 30,
--------------------------------------------------------------------------------
2006
----
Windsor Professional Plaza LLC converted 6,575 shares Series A Preferred stock
into 65,750,000 shares of common stock.
Note 8: Segment Information
In accordance with SFAS No. 131 "Disclosure about Segments of an Enterprise and
Related Information, " management has determined that there are three reportable
segments based on the customers served by each segment: Such determination was
based on the level at which executive management reviews the results of
operations in order to make decisions regarding performance assessment and
resource allocation.
The Company is currently a start up business that is providing "Wireless
Internet" access at business locations and a developer and provider of a patent
pending software. In December 2005 the Company started a hosting company Alpha
Internet offering Seamless clients a high-security hosting facility. See Note
1.
Certain general expenses related to advertising and marketing, information
systems, finance and administrative groups are not allocated to the operating
segments and are included in "other" in the reconciliation of operating income
reported below.
Information on reportable segments is as follows:
For the third quarter ended March 31, of fiscal year ended
June 30, 2006 June 30, 2005
Wi-Fi ISP Net Sales. . 18,535 244
Cost of Wi-Fi Sales. . (85,783) (6,679)
Software Net Sales . . - -
Cost of Software Sales - -
Internet Net Sales - -
Cost of Internet Sales - -
Cost and Expenses. . . (5,027,860) (1,843,634)
Other net income . . . 364,163 2,235
-------------- --------------
Net loss . . . . . . (4,730,945) (1,847,834)
============== ==============
Note 9: Other Events
Creditor Trust
As of September 30, 2005, the Company appointed Financial Services LLC as the
Trust Protector for the Creditor Trust. The Trust is currently managed by
Mildred Carroll who is also the Trustee and is also the Company's Secretary -.
The Company's previous Creditor Trust had appointed KFG LLC as Trust Protector
which was managed by David Karst as the Trustee for the Creditor Trust - see
Note 6. Related party Transactions.
As filed in an 8K dated July 6, 2004, the Company established a creditor trust
Pursuant to the terms and conditions of the trust agreement, shares of the
Company's common stock were to be transferred in trust to KFC LLC, which has
accepted the appointment as trustee.
The Company's creditor trust had been established to return the maximum amount
to beneficiaries and to allow the Company to continue to operate without
interruption.
Following the submission of claims and validation of such claims, the trustee
was to liquidate the trust property and distribute the proceeds to the trust
beneficiaries in a manner the trustee deems most beneficial.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
The following discussion and analysis of the Company's financial condition and
results of operations should be read with the consolidated financial statements
and related notes included elsewhere in this Report.
When the words used in this Report, such as; "expects," "anticipates,"
"believes," "plans," "will" and similar expressions are intended to identify
forward-looking statements. These are statements that relate to future periods
and include, but are not limited to statements; as to statements regarding our
critical accounting policies, adequacy of cash, expectations regarding net
losses and cash flow, statements regarding growth and profitability, need for
future financing, dependence on personnel, operating expenses, ability to
respond to rapid technological change and statements regarding the issuance of
common stock to the Company's executive officers. Forward-looking statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those projected. These risks and uncertainties include,
but are not limited to, those discussed below, as well as risks related to our
ability to develop and timely introduce products that address market demand, the
impact of alternative technological advances and competitive products, market
fluctuations, the Company's ability to obtain future financing, and the risks
set forth below under "Factors That May Affect the Company's Results." These
forward-looking statements speak only as of the date hereof. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in our expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.
OVERVIEW
Seamless Wi-Fi, Inc. ("Company") is currently a start up business which web
---------------------
site is www.slwf.net is currently operating three subsidiaries as follows:.
------------
Seamless Skyy-Fi, Inc., is providing "Wireless Internet" access at business
-----------------------
locations. This service is referred to as Wireless Fidelity or Wi-Fi, for short.
Wi-Fi also refers to wireless equipment that meets published 802.11(x)
standards. Wi-Fi equipment operates in 2.4 and 5.8 GHz which are unlicensed
frequencies. There are many wireless Internet systems available but they all
have universal compatibility. The Wi-Fi POP is commonly referred to as a "Wi-Fi
Hotspot". Wireless Internet refers to radio frequencies that may either be
licensed (which is above 5.8 GHz "gigahertz") and or unlicensed frequency (which
is between 2.4 to 5.8 GHz). Seamless is currently developing its own Wi-Fi
encryptions software that is based upon the RSA's government certified 256 bit
AES encryption coupled with RSA's Public Key that is patent pending. Its web
site is www.skyyfi.com .
--------------
Seamless Peer 2 Peer, Inc., which is a developer and provider of a patent
-------------------------------
pending software program "Phenom TM " that encrypts internet communications
based upon RSA's government certified 256 bit AES encryption coupled with RSA's
Public Key Infrastructure flexible telecom data and voice transport solutions.
It also is a Virtual Private network that provides SOX and HIPAA-compliant
secure peer mail, chat, file transfer, remote PC access, secure VoIP, video
conferencing and white boarding in a two Mb client download. Seamless is also a
developer of a software program for a Peer 2 Peer social network that will offer
the highest levels of security, user verification and safety because its
backbone is based upon Seamless Peer 2 Peer's Phenom Secure Private Network
layer technology, which allows transmission of data to peers in a transparent
manner over conventional IP networks in such a way that information can be
shared among peers even if one or more are behind proxies, Firewalls, or NATs.
Seamless "Freek2Freek" social network will be a truly "safe" online community
where everyone who interacts on it will be authenticated and all communications
will be encrypted. Its web site is www.seamlessp2p.net .
-------------------
Seamless Internet, Inc,. offers high security hosting services for Seamless's
--------------------------
Peer 2 Peer and Skyy-Fi clients and is not available for general public hosting
services. Seamless Internet is also manufacturing and marketing its own version
of its Pocket Personal Computer (PPC). The current version of the PPC is a
full-fledged computer measuring only 5" x 4" x 2" and weighing less than 12
ounces that includes an MP3 player, and gaming console and a full-fledged
integrated keyboard which unfolds. The keyboard offers almost full-size keyboard
functionality and ergonomics. The PPC is being upgraded to add secure wireless
internet and voice communications and integrate Seamless' breakthrough Secure
Private Network (SPN) layer technology into the ED.1, which offers private
networking, FIPS compliant encryption and peer-to-peer communication thru
proxies and firewalls. Its web site is www.seamlessinternet.com.
------------------------
(A) PLAN OF OPERATION
The Company's current plan of operation is as follows:
Seamless Skyy-Fi, Inc., currently operates 36 Wi-Fi locations and provides 24/7
tech support for clients accessing the internet; Skyy-Fi is also developing the
first available patent pending secure Wi-Fi transmission software program, for
its Skyy-Fi clients and resellers. This program will be available for sale
before December 2006.
Seamless Peer 2 Peer, Inc. is developing a secure patent pending Peer 2 Peer
software program Phenom TM and also a secure social networking software. The
Phenom will be available for sale by August 1, 2006 for business and government
agencies that require secure Peer 2 Peer virtual private network and the social
network secure software program will be available for sale by December 2006.
Seamless Internet, Inc provides the hosting for the Company and its clients;
starting July 1st the clients will begin to pay for the hosting and technical
support that the company is currently providing to its clients. Internet has
also acquired the patents and will produce the worlds first personal pocket
computer that has a full key board, these units will be available for sale
before the end of December 2006.
The Company has three offices in Nevada and not including Officers and
Directors; has 10 independent contractor employees
(B) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
With the Company starting up its business it is important to note that the
following discussion and analysis of the Company's financial condition and
results of operations should be read with the consolidated financial statements
and related notes included elsewhere in this Report.
The selected financial data for the third quarter of fiscal years ended June 30,
2006, 2005, are derived from the financial statements of the Company and should
be read in conjunction with the audited financial statements included in the
June 30, 2006 and 2005 10K/SB.
RESULTS OF OPERATIONS
In accordance with SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information," management had determined that there are three reportable
segments: Seamless Skyy-Fi, Inc a software developer for Wi-Fi and a wireless
internet service provider, Seamless Peer 2 Peer, Inc a developer of a secure
peer 2 peer software program for business and a secure virtual private social
network and, Seamless Internet, Inc. which provides hosting for clients and is a
developer of a pocket personal computer. Such determination was based on the
level at which executive management reviews the results of operations in order
to make decisions regarding performance assessment and resource allocation.
Certain general expenses related to advertising and marketing, information
systems, finance and administrative groups are not allocated to the operating
segments and are included in "other" in the reconciliation of operating income
reported below. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies (Note 1).
ANALYSIS OF FINANCIAL CONDITION
REVENUES; for the three and nine months ended March 31, 2006 were $8,581 and
$18,535 respectively as compared with $601 and $845 for the corresponding
period in 2005, an increase of $7,980 and $17,690 respectively.
THE TOTAL COST AND EXPENSED WHICH INCLUDES SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES; for the three months and nine months ended March 31, 2006 was
$1,123,356 and $5,113,643 as compared to $1,049,547 and $2,899,860 for the same
period in 2005, which represents an increase of $73,809 and $2,214,628
respectively.
The continued high cost of the selling, general and administrative expenses
reflect the fact that the Company is still in its development stage. Another
factor is due to the fact that the original software development company failed
as per its agreement to deliver to the Company a completed software program for
its peer to peer venue there by causing the Company to write off its development
cost of $1,500,570. These funds would have been amortized over a three year
period instead of expensed this quarter if the software program would have been
delivered.
OTHER INCOME; either from extraordinary income due to cancellation of a debt to
the company or from payment in full on debt for a reduced amount (with the
difference represented as income) and /or from the sale of fully of partially
depreciated equipment where the income from the sale is greater than the amount
depreciated. Since there are no expectations that furthers activities will
occur and that the revenues from previous operations are dissimilar therefore
there will be no comparison of the quarters.
NET LOSSES; for the three and nine months ended March 31, 2006 are $1,150,274
and $4,730,945 as compared to $1,048,946 and $ 2,899,015 for the same period in
2005 an increase in the Net Loss of $102,328 and $1,831,930 respectively.
Management believes these results are a direct reflection of continued higher
expenses due to the continued expansion of the business and developmental cost
of the software program and its related expenses. These expenses are expected to
remain high however when sales for both the Wi-Fi and software programs are
offered for sale this revenue will result in a decrease in the net operating
loss.
FOR THIRD QUARTER ENDED MARCH 31, OF FISCAL YEAR ENDED
JUNE 30, 2006 JUNE 30, 2005
WI-FI ISP NET SALES . . $ 18,535 $ 845
COST OF WI-FI SALES. . . (85,783) (20,498)
SOFTWARE NET SALES . . . 0 0
COST OF SOFTWARE SALES . 0 0
SOFTWARE NET SALES . . . 0 0
COST OF SOFTWARE SALES . 0 0
INTERNET NET SALES . . 0 0
COST OF INTERNET SALES . 0 0
NET LOSS . . . . . . . . $ (5,027,860) $ (2,899,015)
OTHER INCOME (EXPENSES) 364,163 0
--------------- ---------------
NET LOSS . . . . . . . . $ (4,730,945) $ (2,899,015)
The following discussion should be read in conjunction with the financial
statements of the Company and notes thereto contained elsewhere in this report.
INFORMATION ON REPORTABLE SEGMENTS IS AS FOLLOWS:
(1) WISP: The resultant losses from operations for the Wi-Fi ISP segment,
including the third quarter of fiscal year ended June 30, 2006 of $85,783 are
expected to continue because of the expenses related to the startup of this
operation.
(2) SOFTWARE: The resultant losses from the Software encryption program
segment for the second quarter of fiscal year ended June 30, 2006, are expected
to continue because of the expenses related to the startup of this operation.
(3 INTERNET resultant losses from the Software encryption program
segment for the second quarter of fiscal year ended June 30, 2006, are expected
to continue because of the expenses related to the startup of this operation.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities at the end of the third quarter of fiscal
year ended June 30, 2006, decreased by ($2,149,974) due to the use of stock for
services which is an increase compared to the results for the same period ended
2005 of ($476,566). The Company has a source for capital so the Company can
expand its Internet operations of establishing wireless Internet locations
commonly referred to as Wi-Fi hotspots and to allow the continued development of
its Phenom Software program, the Wi-Fi encryption software, the social
networking software and the production of the pocket personal computer.
CAPITAL EXPENDITURES
During the third quarter of fiscal year ended June 30, 2006 the Company acquired
equipment for the distribution of Wi-Fi which has a current book value of
$70,898.
ACQUISITIONS
During the third quarter of fiscal year ended June 30, 2006 the Company acquired
the patent rights to the pocket personal computer for $500,000 cash and a
capital investment of $500,000 over an 8 month period of time from the date of
acquisition. This asset was transferred to Seamless Internet, Inc a subsidiary
of Seamless Wi-Fi, Inc.
In January 2005 the Company acquired the assets of Seamless P2P LLC for 700,000
shares of Preferred Class "C" Shares and 300,000,000 shares of the Company's
Common stock valued at $1,000,000 and 20% interest in the new subsidiary of the
Company "Seamless Peer 2 Peer, Inc" a Nevada Corporation. These assets were
transferred to the new subsidiary of the Company Seamless Peer 2 Peer, Inc.
In August 2003 the Company acquired Alpha Tooling, Inc. with 190,000 shares of
DCM Enterprises, Inc. common stock, as per an agreement with DCM Enterprises,
Inc. The Company then transferred Alpha Tooling, Inc. to DCM Enterprises, Inc.
for credit towards the debit it had with DCM Enterprises, Inc. After October 1,
2003 the transaction was changed by agreement to an Asset Assignment. The
Company assigned certain assets of Alpha Tooling for credit of $311,639 which
reduced the debt owed to DCM Enterprises, Inc. from $760,000 to $448,361.
quarter of retained the Alpha Tooling Corporation which had assets of $42,050
(which were not assigned to DCM Enterprises, Inc.), and debt of $351,306.
In April 2005 GLCD reversed it stock 1,000 shares of GLCD for 1 of GBCD (the new
stock symbol) GBCD recently traded at $1.01 per share in low volume.
In December 2003 GLCD acquired the assets of DCM for 60,000,000 common shares of
GLCD which included reduction of the note owed by the Company to $515,000, which
was transferred as an asset to GLCD. GLCD is traded over the counter (OTC) on
the Pink Sheets LLC quotation service under the symbol "GLCD".
In September 2003 the Company, through its wholly owned subsidiary Global Debit
Cash Card, Inc., a Nevada Corporation ("GLCD") agreed to purchase from DCM the
Colorado and Utah territories for marketing the CARDS as per the USA Territory
Marketing Representative Agreement. Pursuant to the terms of the agreement GLCD
will operate as the Territory Marketing Representative ("TMR") in Colorado and
Utah and license resellers of the CARDS. The Licensed Activated Resellers
("LAR") will be licensed through GLCD, the TMR.
CRITICAL ACCOUNTING POLICIES
The Securities and Exchange Commission issued Financial Reporting Release No.
60, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies,"
or FRR 60, suggesting that companies provide additional disclosure and
commentary on their most critical accounting policies. The most critical
accounting policies are the ones that are most important to the portrayal of a
company's financial condition and operating results, and require management to
make its most difficult and subjective judgments, often as a result of the need
to make estimates of matters that are inherently uncertain. The Company believes
that of the significant accounting policies used in the preparation of the
consolidated financial statements (see Note B to the Financial Statements); the
following are critical accounting policies, which may involve a higher degree of
judgment, complexity and estimates. The methods, estimates and judgments The
Company uses in applying these most critical accounting policies have a
significant impact on the results reported in the Company's financial
statements.
OFF BALANCE SHEET
The Company has not entered into any off balance sheet arrangements that have,
or are reasonably likely to have a current or future effect on the company's
financial condition, changes in financial condition, revenues or expenses,
result of operations, liquidity, capital expenditure, or capital resources which
would be considered material to investors.
USE OF ESTIMATES
The preparation of the consolidated financial statements are in conformity with
United States generally accepted accounting principles which require us to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates.
STOCK-BASED COMPENSATION ARRANGEMENTS
The Company issues shares of common stock to various individuals and entities
for certain management, legal, consulting and marketing services. These
issuances are valued at the fair market value of the service provided and the
number of shares issued is determined, based upon the closing price of our
common stock on the date of each respective transaction. These transactions are
reflected as a component of general and administrative expenses in the
accompanying statement of operations.
INFLATION
The moderate rate of inflation over the past few years has had an insignificant
impact on the Company's sales and results of operations during the period.
NET OPERATING LOSS CARRY FORWARDS
For the fiscal year ended June 30, 2005, the Company had net operating loss
carry forwards for federal and state purposes of approximately $5,117,636 and
$3,070,582 respectively. These carry forwards begin to expire in 2016 and 2006
respectively.
FORWARD LOOKING STATEMENTS
The foregoing Management's Discussion and Analysis of Financial Condition and
Results of Operations contains "forward looking statements" within the meaning
of Rule 175 under the Securities Act of 1933, as amended, and Rule 3b-6 under
the Securities Act of 1934, as amended, including statements regarding, among
other items, the Company's business strategies, continued growth in the
Company's markets, projections, and anticipated trends in the Company's business
and the industry in which it operates. The words "believe," "expect,"
"anticipate," "intends," "forecast," "project," and similar expressions identify
forward-looking statements. These forward-looking statements are based largely
on the Company's expectations and are subject to a number of risks and
uncertainties, certain of which are beyond the Company's control. The Company
cautions that these statements are further qualified by important factors that
could cause actual results to differ materially from those in the forward
looking statements, including, among others, the following: reduced or lack of
increase in demand for the Company's products, competitive pricing pressures,
changes in the market price of ingredients used in the Company's products and
the level of expenses incurred in the Company's operations. In light of these
risks and uncertainties, there can be no assurance that the forward-looking
information contained herein will in fact transpire or prove to be accurate.
The Company disclaims any intent or obligation to update "forward looking
statements."
ITEM 3. CONTROLS AND PROCEDURES
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. We maintain "disclosure
controls and procedures," as such term is defined in Rule 13a-14(c) under the
Securities Exchange Act of 1934, or the Exchange Act, that are designed to
ensure that information required to be disclosed by us in reports that we file
or submit under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in Securities and Exchange Commission
rules and forms, and that such information is accumulated and communicated to
our management, including our Chief Executive Officer and Treasurer, as
appropriate, to allow timely decisions regarding required disclosure. In
designing and evaluating our disclosure controls and procedures, management
recognized that disclosure controls and procedures, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the disclosure controls and procedures are met. Additionally, in
designing disclosure controls and procedures, our management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible disclosure controls and procedures. The design of any disclosure
controls and procedures also 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 our stated goals under all potential future conditions.
The evaluation revealed certain weaknesses in disclosure controls and
procedures. Based on their evaluation as of a date within 90 days prior to the
filing date of this Quarterly Report, our Chief Executive Officer and Treasurer
have concluded that, subject to the limitations noted above, and except for the
weaknesses noted above, our disclosure controls and procedures were effective to
ensure that material information relating to us, including our consolidated
subsidiaries, is made known to them by others within those entities,
particularly during the period in which this Quarterly Report was being
prepared.
(b) CHANGES IN INTERNAL CONTROLS. We plan to institute greater controls by
adding additional staff to allow for greater third person review and
verification of all transactions thereby enhancing the accuracy of all records.
We are also looking to implement many of the new requirements required under the
Sarbanes-Oxley Act of 2002 during the coming year. However, we believe that
there were no significant changes in our internal controls or, to our knowledge,
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Globalist v. Internet Business's International, Inc. et al
-----------------------------------------------------------------
In July 2003 Globalist sued the Company and was awarded a judgment plus interest
in the amount of approximately $301,000. The Company appealed the Court's
decision and the award amount. In February 2005 the Company reached a tentative
settlement with Globalist which required the payment of $75,000 by March 2005,
subject to Court approval. On March 8, 2005 the Company put $75,000 in its
lawyer's escrow account to satisfy the settlement. This cash is classified as
restricted cash on its balance sheet. The Company is still waiting for Court
approval regarding the final settlement, at which time the funds will be paid as
per agreement. However Globalist is contesting the settlement agreement and
further court action is contemplated.
ITEM 2. CHANGES IN SECURITIES
ISSUANCE OF COMMON STOCK AND PREFERRED STOCK
The Board of Directors of the Corporation may from time to time authorize by
resolution the issuance of any or all shares of the Common Stock and the
Preferred Stock herein authorized in accordance with the terms and conditions
set forth in the Articles of Incorporation for such purposes, in such amounts,
to such persons, corporations, or entities, for such consideration and in the
case of the Preferred Stock, in one or more series, all as the Board of
Directors in its discretion may determine and without any vote or either action
by the stockholders, except as otherwise required by law. The Board of
Directors, from time to time also may authorize by resolution, options, warrants
and other rights convertible into Common or Preferred stock (collectively
"securities"). The securities must be issued for such consideration, including
cash, property, or services, as the Board of Directors may deem appropriate,
subject to the requirement that the value of such consideration be less than the
par value if the shares issued. Any shares issued for which the consideration so
fixed paid or delivered shall be fully paid stock and the holder of such shares
shall not be liable for any further call of assessment or any other payment
thereon, provided that the actual value of such consideration is not less that
the par value of the shares so issued. The Board of Directors may issue shares
Common Stock in the form of a distribution or distributions pursuant to a stock
dividend or split-up of the shares of the Common Stock only to ten holders of
the outstanding shares of the Common Stock.
All shares issued by the Company for services through the period ended March 31,
2005, were issued at below par value.
AUTHORIZED SHARES
During November 2004 the board of directors amended the articles of
incorporation to increase the authorized to 20,000,000,000 shares (par value of
$.001) of which 19,990,000,000 are common shares and 10,000,000 are preferred.
There are three classes of preferred stock which are as follows; Class A
Preferred of 5,000,000 shares of which one (1) share of preferred converts to
10,000 shares of common stock, Class B Preferred of 3,000,000 shares of which
(1) share of preferred converts to 1,000 shares of common stock, and Class C
Preferred of 2,000,000 shares. As of this date the Company has not updated its
articles of incorporation with the state of Nevada, which shows only
11,000,000,000 shares authorized.
The company plans to amend the previous resolution decreasing the authorized to
11,000,000 shares so no amendment to the Articles of Incorporation will have to
be filed with the state of Nevada.
On September 30, 2004 the Company amended its Certificate of Incorporation and
authorized 5,000,000 shares of Class C Preferred stock, $0.001 par value,
convertible, with a stated value of $1.00 per share for conversion purposes.
The Class C Preferred stock is convertible at the option of the holder into
common shares of the Company at the end of 12 months from the date of its
issuance into based upon the ten day average trading price of the common stock
just prior to the end of the 12 month holding period. Therefore One Dollar
($1.00) of Preferred Stock (which is one share of Class C Preferred) will be
converted into $1.00 worth of common stock. For example if the price per share
of the common stock on the date of conversion is $.10 per share the holder of
the Preferred stock will receive 10 shares of common stock for every shares of
Class C Preferred stock that is converted into common.
During April 2003 the board of directors amended the articles of incorporation
to increase the authorized to 10,000,000,000 shares of which 9,990,000,000 are
common shares and 10,000,000 are preferred. The shares were initially increased
in April 2003 to 2,000,000, and the balance was issued in April 2004.
COMMON STOCK
During the third quarter ended March 31, 2006 of fiscal year ended June 30, 2006
--------------------------------------------------------------------------------
Ayuda Funding LLC converted 6,575 shares of Series A preferred stock were
converted into 66,330,520 shares of common stock and payback Ayuda Funding in
the amount of $617,575.
Adobe Oil acquired 200,000 of Series C preferred stock from Seamless P2P valued
at $200,000 of which 100,000 shares of Series C preferred stock were converted
into 2,032,000 shares of common stock
The Company acquired 100,000 shares of Series C preferred stock were returned
to Treasury.
During the second quarter ended December 31, 2005 of fiscal year ended June 30,
--------------------------------------------------------------------------------
2006
----
800,000 shares of common stock were issued for services and expensed at $32,000
for consulting on public relations.
112,500 shares of common stock were issued for services and expensed at $4,500
for marketing.
670,000 shares of common stock were issued for services and expensed at $33,500
for consulting on mergers and acquisitions.
Ayuda Funding LLC converted 2,280 shares Series A preferred stock into
22,800,000 shares of common stock, valued at $1,390,720, of which $773,145 was
used to pay judgments and $617,575 constitutes a loan to the Company.
200,000 shares of Series C preferred were converted into 3,622,537 valued at
$200,000 by P2P LLC as per asset purchase agreement dated January 2005.
During the first quarter ended September 30, 2005 of fiscal year ended June 30,
--------------------------------------------------------------------------------
2006;
-----
140,000 shares of common stock were issued for advertising and expensed at
$6,622.
300,000 shares of common stock were issued for marketing and expensed at
$14,190.
Windsor Professional Plaza LLC converted 6,575 shares of preferred Series A
stock into 65,750,000 shares of common stock of which 10,000,000 shares of
common stock were issued for consulting and expensed at $473,000.
During fiscal year ended June 30, 2005 the following stock was issued. (All
-------------------------------------------------------------------------
shares issued by the Company for services through the third quarter and most of
the fourth quarter of fiscal year ended June 30, 2005, were issued at below par
value):
14,160,000 shares of common stock were issued for services when 1,460 shares of
preferred stock were converted to common.
300,000 shares of common stock , valued at $.001 each were issued as partial
payment for the acquisition of the assets of Seamless P2P, LLC (the balance was
issued in Class C Preferred Stock, see "Preferred Stock")
3,368,734 shares of common stock were issued for officer salaries and for
services.
Windsor converted 100,000 shares of preferred Series A stock to 1,000,000 of
common shares, of which 900,000 of the common shares were issued for Company
services.
2,224,718 shares of common stock were issued for officer's salary and for
services.
$300,000 worth of shares of common stock was issued to Windsor Professional
Plaza LLC as payment for $300,000 worth of debt.
220,000 shares of common stock were issued to acquire 22,000 common shares of
Save the World valued at $5.00 per share.
874,430 shares of common stock were issued for services.
During fiscal year ended June 30, 2004, the following stock was issued:
--------------------------------------------------------------------------------
495,000 shares of common stock were issued for payment in full on a note owed by
the Company for past due wages.
540,000 shares of common stock were issued per the conversion of preferred
Series A stock into common, pursuant to the agreement with Windsor Professional
Plaza, LLC.
136,000 shares of common stock were issued as payment to consultants in lieu of
cash for services provided pursuant to consulting agreements. The fair value of
the shares was recorded as prepaid professional services and amortized ratably
over the term of the contract. These shares were issued pursuant to a Form S-8
registration statement
162,650 shares of restricted common stock were issued to Global Debit Cash Card
pursuant to the Territory Marketing Agreement, as amended, in exchange for the
limited exclusive marketing rights to sell the debit cards in the states of
Colorado and Utah for a period of ten (10) years.
170,000 shares of common stock were issued as payment to consultants in lieu of
cash for services provided pursuant to consulting agreements. The fair value of
the shares was recorded as prepaid professional services and amortized ratably
over the term of the contract. These shares were issued pursuant to a Form S-8
registration statement
280,000 shares of restricted common stock were issued to repurchase 280,000
common shares of DCM.
54,000 shares of common stock were issued as payment to consultants in lieu of
cash for services provided pursuant to consulting agreements. The fair value of
the shares was recorded as prepaid professional services and amortized ratably
over the term of the contract. These shares were issued pursuant to a Form S-8
registration statement
The Company complies with the provisions of Emerging Issues Task Force Issue No.
96-18, Accounting for Equity Instruments Issued to Other Than Employees for
Acquiring, or in Conjunction with, Selling Goods or Services ("EITF 96-18"),
with respect to stock issuances to such non-employees, whereby the value of the
services was determined as a reliable measurement of fair value.
PREFERRED STOCK
During the third quarter ended March 31, 2006 of fiscal year ended June 30, 2006
--------------------------------------------------------------------------------
Ayuda Funding LLC converted 6,575 shares of Series A preferred stock were
converted into 66,330,520 shares of common stock and payback Ayuda Funding in
the amount of $617,575.
Adobe Oil acquired 200,000 of Series C preferred stock from Seamless P2P valued
at $200,000 of which 100,000 shares of Series C preferred stock were converted
into 2,032,000 shares of common stock
The Company acquired 100,000 shares of Series C preferred stock were returned
to Treasury.
During the second quarter ended December 31, 2005 of fiscal year ended June 30,
--------------------------------------------------------------------------------
2006, Ayuda Funding LLC converted 2,280 shares Series A Preferred stock into
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22,800,000 shares of Common stock
200,000 shares of Series C preferred were converted into 3,622,537
During the first quarter ended September 30, 2005 of fiscal year ended June 30,
--------------------------------------------------------------------------------
2006, Windsor Professional Plaza LLC converted 6,575 shares Series A Preferred
-----
stock into 65,750,000 shares of Common stock.
During the fiscal year ended June 30, 2005, David Karst on behalf of Windsor
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Professional Plaza LLC converted 252,753 shares of preferred Series A stock of
which 100,000 shares were converted to pay the Company's operating expenses
leaving a balance of 644,625 preferred Series A shares held as collateral.
On March 8, 2005 the Board of Directors authorized the issuance of 562,500
shares of its unregistered restricted common stock to the Reda Family Trust for
$75,000.00. On April 1, 2005 this was changed to 56,250 shares of Class A
preferred stock for $75,000. This issuance was intended to be exempt from
registration under Section 4 (2) and/or Regulation D of the Securities Act of
1933.
The Company issued 700,000 shares of Class C Preferred Shares convertible into
$1.00 of Common Stock after 12 months, as partial payment for the assets of
Seamless P 2 P, LLC. The acquired assets were then transferred to a subsidiary
of the Company, Seamless Peer 2 Peer, Inc., a Nevada Corporation. The Company
also issued 55,784 shares of Class A Preferred Shares in order to reduce the
debit "Note payable to related party" this debit is still on the books as
required by the Accountant until the stock is cleared and the debit is paid in
full.
The Company cancelled 35,186 preferred Series A shares held by Windsor in order
to reduce preferred Series A stock outstanding because once converted, they
would have amounted to common shares of Stock in excess of those authorized.
Windsor Professional converted 117,453 shares of preferred Series A stock.
During the fiscal year ended June 30, 2004, In May 2004 Mercatus, with the
-------------------------------------------------
consent of the Company, assigned 1,029,231 preferred Series A shares to Windsor
Professional Plaza, LLC as collateral for the Company's funding line of credit.
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 AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibits included or incorporated by reference herein are set forth in the
Exhibit Index following the signatures.
(B) REPORTS ON FORM 8-K
On March 30, 2006 the Company filed an 8K which described the execution of an
"Asset Purchase and Investment Agreement" acquiring the patents to a mini
computer referred to as the ED.
On February 21, 2006 the Company filed an 8K which described the Company's
filing of a Schedule 14A
On February 21, 2006 the Company filed an 8K which stated that the name change
of the Company from Alpha Wireless Broadband, Inc to Seamless Wi-Fi, Inc. was
approved by the Board of Directors on May 16, 2005 and was permitted by the
company bylaws and did not require shareholder approval.
On January 26, 2006 the Company filed an 8K which described the Notice of
Default sent to Software Technology and Consulting, Inc. (STCI) regarding their
failure to deliver a completely debugged software program.
On January 26, 2006 the Company filed an 8K which described the signing of a
contract between the Company and Orion's Wave for the completion of the software
programs for Seamless Peer-to-Peer and Seamless Skyy-Fi.
On January 26, 2006 the Company filed an 8K which stated that the name change of
the Company from Alpha Wireless Broadband, Inc to Seamless Wi-Fi, Inc. was
approved by the Board of Directors on May 16, 2005 and was permitted by the
company bylaws and did not require shareholder approval.
On October 26, 2005 the Company filed an 8K which described Seamless
Peer-to-Peer, a subsidiary of the Company entered into a non-binding Letter of
Intent with Intent Media Works, Inc. ("Intent") whereby Seamless and Intent
shall negotiate in good faith, and upon mutually agreeable terms and
conditions, to develop Seamless' proprietary closed peer-to-peer network
services.
On October 20, 2005 the Company filed an 8K which described the asset purchase
agreement between Seamless Skyy-Fi, Inc., a subsidiary of the company and Indigo
Technology Services, Inc.
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, thereunto duly authorized.
SEAMLESS WI-FI, INC.
F/K/A ALPHA WIRELESS BROADBAND, INC.
Date: May 17, 2006
/s/ Albert R. Reda
---------------------
Albert R. Reda
Chief Executive Officer,
Chief Financial Officer
EXHIBIT INDEX
Number Description
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31 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(filed herewith).
32 Certification Pursuant to 18 U.S. C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).