8-K/A for Wireless WebConnect!, Inc.

8-K/A 1 f8ka.htm 8-K/A for Wireless WebConnect!, Inc.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest Event reported) March 30, 2001

WIRELESS WEBCONNECT!, INC.
(Exact name of registrant as specified in its charter)

Delaware 001-10588 75-1993841
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)

2155 Chenault, Suite 410, Carrollton, Texas 75006
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (972) 416-0022

INTELLICALL, INC.
(Former name or former address, if changed since last report.)

----------------------------------

EXPLANATORY NOTE

This Form 8-K/A amends the Current Report on Form 8-K, event dated March 30,
2001 filed with the Securities and Exchange Commission on April 3, 2001, by
Wireless WebConnect!, Inc. (formerly known as Intellicall, Inc.) (the
"Company"), a Delaware corporation. The purpose of this amendment is to provide
financial statements and the pro forma financial information for Wireless
WebConnect!, Inc. (formerly known as Business Tel), a Florida corporation, as
required by Item 7 of Form 8-K.

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Item 7. Financial Statements and Exhibits.

(a) Financial Statements of businesses acquired.

Audited balance sheets of Wireless WebConnect!, Inc. as of
December 31, 2000 and 1999, and the related statements of
income, changes in owners' equity and cash flows for each
of the years in the three year period ended December 31,
2000 are incorporated by reference to Exhibit 99.1
included herein.

The Company's balance sheet at March 31, 2001, which
reflects the merger with Wireless WebConnect!, Inc. was
included in the Form 10-Q for the quarter ended March 31,
2001, which was filed with the Securities and Exchange
Commission on May 15, 2001.

(b) Pro forma financial information.

No pro forma statements of operations reflecting the
impact of the merger (acquisition) of Intellicall, Inc.
on March 30, 2001, are presented based on the
intention of Wireless WebConnect!, Inc. to sell or
liquidate the remaining payphone operations of
Intellicall, Inc., the legal acquirer.

++99.1 Audited Financial statements of Wireless
WebConnect!, Inc.

++ herewith filed.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

WIRELESS WEBCONNECT!, INC.

/s/ R. Phillip Boyd
-----------------------------------
R. Phillip Boyd
Chief Financial Officer

DATE: May 30, 2001

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Exhibit 99.1

Wireless WebConnect!, Inc.
(Formerly Known as Business Tel)

Index to Financial Statements

Independent Auditors' Report........................................F-2

Balance Sheets at December 31, 2000 and 1999........................F-3

Statements of Operations for each of the three years ended
December 31, 2000, 1999 and 1998...................................F-4

Statements of Owners' Equity (Deficit) for each of the three years
ended December 31, 2000, 1999 and 1998.............................F-5

Statements of Cash Flows for each of the three years ended
December 31, 2000, 1999 and 1998...................................F-6

Notes to Financial Statements ......................................F-7

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Independent Auditors' Report

To the Stockholders of
Wireless WebConnect!, Inc.

We have audited the accompanying balance sheets of Wireless
WebConnect!, Inc. (formerly known as Business Tel, a California partnership) as
of December 31, 2000 and 1999, and the related statements of operations, owners'
equity (deficit), and cash flows for each of the years in the three year period
ended December 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2000
and 1999, and the results of its operations and its cash flows for each of the
years in the three year period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

May 10, 2001
Dallas, Texas

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Wireless WebConnect!, Inc.
(Formerly Known as Business Tel)
Balance Sheets
December 31, 2000 and 1999

December 31,
-----------------------
2000 1999
---- --------

ASSETS
Current assets:
Cash.......................................................... $1,531,984 $44,587

Accounts receivable, net of allowance of $130,500 for 2000
and $0 for 1999............................................. 640,001 121,150
Inventory..................................................... 205,054 --
Prepaid expenses and other current assets..................... 91,801 17,595
--------- --------
Total current assets.......................................... 2,468,840 183,332

Property and equipment, net (Note 2)............................ 123,851 47,215

Other assets.................................................... 13,884 --
---------- --------
Total assets.......................................... $2,606,575 $230,547
========== ========

LIABILITIES AND OWNERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable.............................................. $ 518,631 $ 52,825
Accrued expenses.............................................. 639,599 4,089
Deferred revenue.............................................. 1,928,951 --

Note payable.................................................. 750,000 --
---------- --------
Total current liabilities................................ 3,837,181 56,914
---------- --------
Commitments and contingencies (Note 4)
Owners' equity (deficit):
Common stock, 10,000 shares authorized, issued and
outstanding, no par value, at December 31, 2000............. - -
Paid-in capital............................................... 373,836 -
Retained deficit.............................................. (1,604,442) -
Partners' capital............................................. -- 173,633
--------- --------
Total owners' equity (deficit)........................... (1,230,606) 173,633
---------- --------
Total liabilities and owners' equity (deficit)....... $2,606,575 $230,547
========== ========

See accompanying notes to the financial statements

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Wireless WebConnect!, Inc.
(Formerly Known as Business Tel)
Statements of Operations
Years Ended December 31, 2000, 1999, and 1998

December 31,
-------------------------------------------------
2000 1999 1998
--------------- ------------ ------------

Revenue:
Commissions and related............................ $ 724,352 $1,678,566 $1,311,633
Services........................................... 1,076,657 157,660 88,205
Equipment.......................................... 793,657 -- --
Other.............................................. 118,487 16,835 1,684
----------- ---------- ----------
Total revenues.................................. 2,713,153 1,853,061 1,401,522
----------- ---------- ----------

Operating Expenses:
Cost of services and equipment revenues............ 1,642,451 133,467 74,029
Selling, general and administrative................ 2,420,140 1,685,944 1,207,742
----------- ---------- ----------
Total operating expenses........................ 4,062,591 1,819,411 1,281,771
----------- ---------- ----------

Operating income (loss).............................. (1,349,438) 33,650 119,751

Interest expense..................................... (11,200) -- --
----------- ---------- ----------
Income (loss) before income taxes.................... (1,360,638) 33,650 119,751

Income tax benefit (expense)......................... -- -- --
----------- --
Net income (loss).................................... $(1,360,638) 33,650 119,751
===========

Pro forma income tax expense......................... (12,000) (41,000)
--------- --------
Pro forma net income................................. $ 21,650 $ 78,751
========== ==========

Net income (loss) per share-basic and
diluted.......................................... $ (136.06) $ 3.37 $ 11.98
=========== ========== ==========

Pro forma net income per share-
basic and diluted................................. $ 2.17 $ 7.88
========== ===========

Weighted average shares outstanding.................. 10,000
===========

Pro forma weighted average shares
outstanding....................................... 10,000 10,000
========== ==========

See accompanying notes to the financial statements

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Wireless WebConnect!, Inc.
(Formerly Known as Business Tel)
Statements of Changes in Owners' Equity (Deficit)
Years Ended December 31, 2000, 1999, and 1998

Common Stock Retained Partners'
---------------------- -------- ---------
Shares Amount Paid-in Capital Deficit Capital Total
------ ------ --------------- ------- ------- -----

BALANCE AT JANUARY 1, 1998........ 100,949 100,949
Distributions to partners....... (15,015) (15,015)
Net income...................... 119,751 119,751
--------- ---------

BALANCE AT DECEMBER 31, 1998...... 205,685 205,685
Distributions to partners....... (65,702) (65,702)

Net income...................... 33,650 33,650
--------- ---------

BALANCE AT DECEMBER 31, 1999...... 173,633 173,633
Net income-January 1, 2000 to May
29, 2000........................ 243,804 243,804
Distributions................... (43,601) (43,601)
Contribution by partners of
partnership net assets to
corporation..................... 10,000 $ - $373,836 (373,836) -
Net loss-May 30, 2000 to
---------
December 31, 2000............... - - - $(1,604,442) - (1,604,442)
- ------------- ------------- - ------------ --------- ---------

BALANCE AT DECEMBER 31, 2000...... 10,000 $ - $373,836 $(1,604,442) $ - $ (1,230,606)
====== ===== ======== ============ ========= ============

See accompanying notes to the financial statements

-------------------------------------------------------------------------------

Wireless Webconnect!, Inc.
(Formerly Known As Business Tel)
Statements of Cash Flows
Years Ended December 31, 2000, 1999, and 1998

December 31,
-------------------------------------------------
2000 1999 1998
------------ ------------ ------------

Operating activities:
Net income (loss)........................................ $(1,360,638) $ 33,650 $119,751
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation............................................. 16,618 15,252 11,604
Provision for doubtful accounts.......................... 130,500 -- --

Changes in operating assets and liabilities:
Accounts receivable...................................... (649,351) 4,206 (43,015)
Inventory................................................ (205,054) -- --
Prepaid expenses and other current assets................ (74,206) (17,595)
Other assets............................................. (13,884) -- --
Accounts payable and accrued expenses.................... 1,101,316 22,841 (58,609)

Deferred revenue......................................... 1,928,951 -- --
----------- --------- --------
Net cash provided by operating activities................ 874,252 58,354 29,731
----------- --------- --------

Investing activities:
Additions to property and equipment...................... (93,254) (11,913) (30,695)
----------- --------- --------
Net cash used in investing activities.................... (93,254) (11,913) (30,695)
----------- --------- --------

Financing activities:
Distributions to partners................................ (43,601) (65,702) (15,015)
Repayments to partners................................... -- -- (2,939)

Proceeds from note payable............................... 750,000 -- --
----------- --------- --------
Net cash provided by (used in) financing activities...... 706,399 (65,702) (17,954)
----------- --------- --------
Net increase (decease) in cash............................. 1,487,397 (19,261) (18,918)
Cash, beginning of period.................................. 44,587 63,848 82,766
----------- --------- --------
Cash, end of period........................................ $ 1,531,984 $ 44,587 $ 63,848
=========== ========= ========

Supplemental cash flow information:
Cash paid for interest................................... $ -- $ -- $ --
=========== ======== =======
Cash paid for income taxes............................... $ -- $ -- $ --
=========== ======== =======

Non-cash investing and financing activities:
Contribution by partners of partnership net
assets to corporation............................... $ 373,836 $ -- $ --
=========== ======== =======

See accompanying notes to the financial statements

Wireless WebConnect!, Inc.
(Formerly Known as Business Tel)
Notes to Financial Statements
Years Ended December 31, 2000, 1999, and 1998

1. Summary of Significant Accounting Policies

Organization and Business-Wireless WebConnect!, Inc. (the "Company")
was originally formed in 1996 as Business Tel, a California Partnership. The
Company provided customer acquisition services to Metricom, Inc. ("Metricom")
for Metricom's Ricochet wireless Internet access services through early 2000 and
is currently a reseller of Metricom's services to selected customers.

On May 30, 2000, the Company was incorporated by the partners
contributing their respective interests in the net assets of the partnership to
a newly formed Florida corporation, Wireless WebConnect!, Inc., in exchange for
all of the corporation's issued and outstanding common stock.

Effective July, 2000, the Company, along with other competitors, began
reselling Metricom's 128.8 kbps wireless Internet access service. The Company
has formed strategic relationships with Metricom and an Internet service
provider who together provide mobile computer users the high speed wireless
communications services that are resold by the Company.

The Company operates in a highly competitive environment subject to
rapid technological change and emergence of new technology. Although management
believes its services are transferable to emerging technologies, rapid changes
in technology could have an adverse financial impact on the Company. The Company
is highly dependent on Metricom for wireless communication services and the
further deployment of the wireless Internet access network.

Use of Estimates-The preparation of financial statements in conformity
with generally accepted accounting principles in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting periods. Actual results
could differ from those estimates.

Inventory-Inventory consists of modems (wireless Internet access
devices) and are stated at the lower of cost or market, on a first-in, first-out
(FIFO) basis.

Property and Equipment-Property and equipment are stated at cost.
Depreciation is provided on the straight-line method over the estimated useful
lives of the related assets which is five years. Expenditures for maintenance
and repairs are charged to expense as incurred.

Long-Lived Assets-The Company periodically reviews the values assigned
to long-lived assets, such as property and equipment, to determine if any
impairments have occurred. Provisions for asset impairment are based on
discounted cash flow projections in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of" and such assets
are written down to their estimated fair values.

Wireless WebConnect!, Inc.
(Formerly Known as Business Tel)
Notes to Financial Statements
Years Ended December 31, 2000, 1999, and 1998

1. Summary of Significant Accounting Policies (Continued)

Revenue Recognition-Prior to July 2000 the Company derived commission
revenue from Metricom for the sale of Metricom's wireless Internet services.
Commission revenues were recognized as customer contracts were delivered to
Metricom. Effective July 2000, the Company began reselling wireless Internet
access devices and service. Revenues and costs to the extent of revenues from
the sale of devices and activation fees are recognized over the estimated life
of the subscriber. Service revenues subject to money back guarantee provisions
are deferred until such period has expired. Prepaid annual service fees are
initially deferred and recognized as revenue as the services are provided over
the related contract term. Revenues derived from monthly subscribers are
recognized as the services are provided. Management of the Company believes that
the Company's accounting policies comply with Staff Accounting Bulletin 101,
"Revenue Recognition in Financial Statements."

Income Taxes-As a partnership, the partners were taxed on their
proportionate share of the Partnership's income. Therefore, no provision or
liability for federal or state income taxes has been included in these financial
statements, until the Company was incorporated in May 2000. Upon incorporation,
the Company, which has elected a C Corporation tax status, is subject to federal
and state income taxes. Deferred tax assets and liabilities, if any, are
recognized for the future tax consequences attributable to differences between
the carrying amount of existing assets and liabilities for financial reporting
purposes and amounts used for income tax purposes. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in years in which those temporary differences are expected to reverse.
The Company has fully reserved all of its deferred tax assets at December 31,
2000, due to projected future taxable losses.

Basic and Diluted Net Income (Loss) Per Share-Basic earnings per share
is computed using the weighted average number of common shares outstanding and
excludes any dilutive effects of options, warrants and convertible securities.
Diluted earnings per share reflects the potential dilution that could occur upon
exercise or conversion of these instruments. As the Company had no options,
warrants or convertible securities outstanding for the periods presented herein,
basic and diluted income (loss) per share amounts are the same for all periods
presented. Per share amounts are presented on a pro forma basis for periods
prior to incorporation (May 2000) as the Company operated as a partnership prior
to that time.

Concentrations of Credit Risk and Revenues-Financial instruments that
potentially subject the Company to a concentration of credit risk consist of
accounts receivable. The Company performs periodic credit evaluations of its
customers but generally does not require collateral. All of the Company's
commissions and related revenues were earned from Metricom during the years
ended December 31, 2000, 1999 and 1998.

Fair Value of Financial Instruments-The carrying amounts of the
Company's financial instruments, which include cash, accounts receivable,
accounts payable, and accrued expenses approximate their fair values due to
their relative short time to maturity.

--------------------------------------------------------------------------------

Wireless WebConnect!, Inc.
(Formerly Known as Business Tel)
Notes to Financial Statements
Years Ended December 31, 2000, 1999, and 1998

1. Summary of Significant Accounting Policies (Continued)

Comprehensive Income-The Company has no components of other
comprehensive income. Accordingly, comprehensive income is the same as net
income (loss) for each of the years ended December 31, 2000, 1999, and 1998.

Recent Accounting Pronouncements-In June 1998, the FASB issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivatives
and Hedging Activities ("SFAS 133"), which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities. SFAS 133, as amended, is effective for all fiscal quarters
of fiscal years beginning after June 15, 2000. The adoption of SFAS 133 had no
impact on the Company's financial statements.

2. Property and Equipment

Property and equipment consists
of the following:

December 31,
----------------------------
2000 1999
----------------------------

Computer equipment and software............ $138,472 $ 45,218
Office furniture and other................. 36,228 36,228
-------- --------
174,700 81,446
Accumulated depreciation................... (50,849) (34,231)
-------- --------
$123,851 $ 47,215
======== ========

Depreciation expense totaled $16,618, $15,252 and $11,604 for the
years ended December 31, 2000, 1999 and 1998, respectively.

3. Partners' Capital

In addition to distributions, the partners (and subsequent to the
incorporation of the Company, shareholders) received salaries and other payments
which are included in selling, general and administrative expenses totaling
$327,090, $352,321 and $213,005 for the years ended December 31, 2000, 1999 and
1998, respectively.

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Wireless WebConnect!, Inc.
(Formerly Known as Business Tel)
Notes to Financial Statements
Years Ended December 31, 2000, 1999, and 1998

4. Commitments and Contingencies

At December 31, 2000, the Company was the lessee under various lease
agreements for office space and equipment. Future minimum rental commitments
under noncancelable operating leases are $83,000 in 2001, all of which expire in
2001.

For the years ended December 31, 2000, 1999 and 1998, rent expense
totaled approximately $85,000, $37,000 and $40,600, respectively.

The Company is committed to purchase $2.3 million of devices (modems)
from two suppliers during 2001.

5. Income Taxes

Differences between the expected income tax benefit calculated using
the statutory federal income tax rate (34%) and the actual income tax provision
for the year ended December 31, 2000, are (in thousands):

Expected income tax benefit at the statutory rate...... $(546)

Other
Other............................................... (4)
Operating loss not benefited........................ 550
----
Income tax (benefit) provision......................... $ 0
====

Significant components of the Company's deferred tax assets and
deferred tax liabilities as of December 31, 2000 are (in thousands):

Deferred tax assets:
Bad debt reserves.................................. $ 50
Net operating loss carryforward.................... 550
----
Total gross deferred tax assets....................... 600
----
Deferred tax liabilities:
Depreciation and amortization...................... (2)
--
Total gross deferred tax liabilities.................. (2)
----
Less valuation allowance.............................. (598)
----
Net deferred tax assets............................... $ 0
====

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Wireless WebConnect!, Inc.
(Formerly Known as Business Tel)
Notes to Financial Statements
Years Ended December 31, 2000, 1999, and 1998

5. Income Taxes (continued)

The valuation allowance on deferred tax assets reflects the Company's
uncertainty regarding realization of such assets due to recent operating loss
trends, as the future realization of the deferred tax asset is not considered
more likely than not at this time.

At December 31, 2000, the Company has a net operating loss
carryforward of approximately $1.5 million for federal income tax reporting
purposes. The carryforward, which may provide future tax benefits, expires in
2020.

6. Note Payable to Intellicall, Inc.

On August 29, 2000, the Company executed a promissory note with
Intellicall, Inc. ("Intellicall") for borrowings up to $1.5 million. The
promissory note bears interest at an annual rate of 8%. The outstanding
principal balance of the note and any accrued unpaid interest are due on August
29, 2001. As of December 31, 2000, the Company had borrowed $750,000 under the
terms of the promissory note. The Company has merged with Intellicall.
See Note 7.

7. Subsequent Events

On August 29, 2000, the Company's shareholders entered into an
Agreement and Plan of Merger with Intellicall and its wholly owned subsidiary
WWC Acquisition, Inc. The merger was consummated March 30, 2001, and pursuant to
the terms thereof, the Company's shareholders exchanged all issued and
outstanding shares of common stock of the Company for 21,803,148 shares of
Intellicall common stock. Immediately following such merger, the Company's
shareholders owned approximately 62.5% of the outstanding stock of Intellicall.

The Company will be considered the accounting acquirer since
immediately following the closing of such merger, the former shareholders of the
Company controlled Intellicall through their holdings of approximately 62.5% of
the combined outstanding shares of Intellicall common stock and have control
over the Board of Directors of Intellicall. Because Intellicall is the legal
acquirer, this is considered a "reverse acquisition."

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Wireless WebConnect!, Inc.
(Formerly Known as Business Tel)
Notes to Financial Statements
Years Ended December 31, 2000, 1999, and 1998

7. Subsequent Events (continued)

The Company plans to discontinue or dispose of Intellicall's remaining
payphone business operations within one year of the date of closing of the
merger. Intellicall (the acquiree) will have no continuing operations and the
Company has acquired only the tangible net assets. Accordingly, the transaction
will be accounted for as an acquisition of the net assets of Intellicall in
exchange for stock, similar to a recapitalization of the Company. The assets
acquired and liabilities assumed will be recorded at their estimated fair value
on the date of acquisition, March 30, 2001, with a corresponding entry to equity
for the shares issued. The net assets acquired are as follows (in thousands):

Assets:
Cash...................................................... $ 706
Accounts receivable....................................... 387
Note receivable from Wireless WebConnect!, Inc. .......... 1,011
Other current assets ..................................... 95
Assets held for sale...................................... 950
Other assets.............................................. 475
------

Total assets.............................................. 3,624
------

Liabilities:
Accounts payable.......................................... 756
Accrued liabilities....................................... 178
Long-term debt to related party........................... 1,893
------

Total liabilities......................................... 2,827
-----

Net assets...................................... $797
====

Assets held for sale represent inventory and fixed assets associated
with Intellicall's payphone business operations.

No pro forma income statements are presented based on the intention of
the Company to sell or liquidate the remaining operations of Intellicall after
the merger.

Under the terms of the Agreement and Plan of Merger with Intellicall,
upon completion of the merger all accrued interest and outstanding principal
under the terms of the promissory note due to Intellicall was forgiven.