UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended September 30, 2012.
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: 333-160786
WiFi
WIRELESS, INC.
(Exact
name of registrant as specified in its charter)
Oregon
|
|
90-0224959
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(I.R.S.
Employer Identification No.)
|
|
|
|
65
Enterprise, Aliso Viejo, CA
|
|
92656
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Tel
No: (949) 330-6
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address and former fiscal year, if changed since last report)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes [ ] No [X]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer [ ]
|
|
Accelerated
filer [ ]
|
Non-accelerated
filer [ ] (Do not check if a smaller reporting company)
|
Smaller reporting
company [X]
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes [ ] No [X]
APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of
the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE
ONLY TO CORPORATE ISSUERS
Indicate
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
57,250,466 Common
Shares
Outstanding
as
of
March
02,
2012.
WiFi WIRELESS, INC.
TABLE OF CONTENTS
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
September 30, 2012
Accountant’s Compilation Report
To the Board of Directors of
WiFi Wireless, Inc.
(A Development Stage Enterprise)
Aliso Viejo, California
We have compiled the accompanying balance
sheet of WiFi Wireless, Inc. (a development stage company) as of September 30, 2012 and December 31, 2011 and the related statements
of income, shareholders equity, and cash flows for the for the quarter ended September 30, 2012 and year ended December 31, 2011
and the period from August 28, 1989 (inception) to September 30, 2012. We have not audited or reviewed the accompanying financial
statements and, accordingly, do not express an opinion or provide any assurance about whether the financial statements are in accordance
with accounting principles generally accepted in the United States of America.
Management is responsible for the preparation
and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States
of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation
of financial statements.
Our responsibility is to conduct the
compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified
Public Accountants. The objective of a compilation is to assist management in presenting financial information in the form of financial
statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made
to the financial statements.
The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the financial statements,
the Company has suffered losses from operations, which raise substantial doubt about its ability to continue as a going concern.
The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
I am not independent in regards to these
financial statements.
/s/ Charles R. Close
|
|
Charles R. Close, CPA
|
|
C. R. Close & Associates, P.C.
|
|
Humble, Texas
|
|
November 14, 2012
|
|
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
WiFi
WIRELESS, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
For the Nine Months Ended
September 30, 2012
and the Year Ended December
31, 2011
ASSETS
|
|
Nine Months
|
|
|
|
|
|
|
Ended
|
|
|
Year Ended
|
|
|
|
9/30/2012
|
|
|
December
31, 2011
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
$
|
-
|
|
|
$
|
-
|
|
Prepaid Expenses
|
|
|
147
|
|
|
|
5,857
|
|
Inventory
|
|
|
4,551
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total Current Assets
|
|
$
|
4,698
|
|
|
$
|
5,857
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets:
|
|
|
|
|
|
|
|
|
Property and Equipment
|
|
|
29,823
|
|
|
|
21,860
|
|
R&D Equipment
|
|
|
54,227
|
|
|
|
54,227
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
84,050
|
|
|
$
|
76,087
|
|
Less: Accumulated Depreciation
|
|
|
(62,301
|
)
|
|
|
(55,816
|
)
|
|
|
|
|
|
|
|
|
|
Net Fixed Assets
|
|
$
|
21,749
|
|
|
$
|
20,271
|
|
|
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security and Other Deposits
|
|
$
|
3,915
|
|
|
$
|
3,915
|
|
Organizational Costs
|
|
|
10,874
|
|
|
|
10,874
|
|
Accumulated Amortization - Org Costs
|
|
|
(10,874
|
)
|
|
|
(10,874
|
)
|
Investments
|
|
|
-
|
|
|
|
-
|
|
Deferred Income Tax Benefit
|
|
|
1,610,066
|
|
|
|
1,610,066
|
|
Allowance for Realization
|
|
|
(1,610,066
|
)
|
|
|
(1,610,066
|
)
|
|
|
|
|
|
|
|
|
|
Total Other Assets
|
|
$
|
3,915
|
|
|
$
|
3,915
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
30,362
|
|
|
$
|
30,043
|
|
See accompanying notes to the financial statements.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
For the Nine Months Ended
September 30, 2012
and the Year Ended December
31, 2011
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
|
Nine Months
|
|
|
|
|
|
|
Ended
|
|
|
Year Ended
|
|
|
|
9/30/2012
|
|
|
December 31, 2011
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
$
|
16,069
|
|
|
$
|
732,613
|
|
Rent Payable
|
|
|
-
|
|
|
|
-
|
|
Other Current Liabilities
|
|
|
206,521
|
|
|
|
192,491
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
$
|
222,590
|
|
|
$
|
925,104
|
|
|
|
|
|
|
|
|
|
|
Long-Term Liabilities:
|
|
|
|
|
|
|
|
|
Loan from Shareholder
|
|
|
144,774
|
|
|
|
145,815
|
|
Note Payable to Shareholder
|
|
|
203,553
|
|
|
|
163,133
|
|
|
|
|
|
|
|
|
|
|
Total Long Term Liabilities
|
|
$
|
348,327
|
|
|
$
|
308,948
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
570,917
|
|
|
$
|
1,234,052
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
Common Stock, par value $0.005 per share, 100,000,000 shares authorized,
59,350,466 and 57,250,466 shares issued, 59,350,466 and 57,250,466 shares outstanding, respectively
|
|
$
|
1,359,922
|
|
|
$
|
1,349,422
|
|
Treasury Stock, 390,000 shares
|
|
|
(1,950
|
)
|
|
|
(1,950
|
)
|
Paid-in-Capital
|
|
|
2,911,023
|
|
|
|
2,184,009
|
|
Accumulated Deficit during Development Stage
|
|
|
(4,809,550
|
)
|
|
|
(4,735,490
|
)
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Equity
|
|
$
|
(540,555
|
)
|
|
$
|
(1,204,009
|
)
|
|
|
|
|
|
|
|
|
|
Total Liabilities & Capital
|
|
$
|
30,362
|
|
|
$
|
30,043
|
|
See accompanying notes to the financial statements.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
STATEMENT OF EXPENSES AND
ACCUMULATED DEFICIT
For the Three Months and
Nine Months Ended September 30, 2012
and the Period from August
29, 1989 (Inception) to September 30, 2012
|
|
|
|
|
|
|
|
August 29, 1989
|
|
|
|
Three Months
|
|
|
Nine Months
|
|
|
(Inception) to
|
|
|
|
Ended 9/30/2012
|
|
|
Ended 9/30/2012
|
|
|
9/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
COST OF SALES
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Research and Development
|
|
|
-
|
|
|
|
535
|
|
|
|
253,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting
|
|
|
5,000
|
|
|
|
20,000
|
|
|
|
72,428
|
|
Administrative
|
|
|
-
|
|
|
|
-
|
|
|
|
6,858
|
|
Amortization
|
|
|
-
|
|
|
|
-
|
|
|
|
10,874
|
|
Automobile expense
|
|
|
-
|
|
|
|
840
|
|
|
|
2,194
|
|
Bank service charges
|
|
|
417
|
|
|
|
962
|
|
|
|
3,321
|
|
Consulting
|
|
|
-
|
|
|
|
900
|
|
|
|
490,241
|
|
Depreciation
|
|
|
2,162
|
|
|
|
6,485
|
|
|
|
62,302
|
|
Taxes, licenses and fees
|
|
|
-
|
|
|
|
4,350
|
|
|
|
18,748
|
|
Insurance
|
|
|
-
|
|
|
|
1,195
|
|
|
|
6,854
|
|
Interest expense
|
|
|
5,088
|
|
|
|
14,030
|
|
|
|
223,294
|
|
Legal
|
|
|
-
|
|
|
|
503
|
|
|
|
1,716,265
|
|
Marketing
|
|
|
-
|
|
|
|
4,449
|
|
|
|
46,881
|
|
Membership Fees
|
|
|
-
|
|
|
|
-
|
|
|
|
3,000
|
|
Miscellaneous
|
|
|
-
|
|
|
|
1,835
|
|
|
|
8,004
|
|
Office supplies and expense
|
|
|
-
|
|
|
|
639
|
|
|
|
52,143
|
|
Office support and expenses
|
|
|
-
|
|
|
|
382
|
|
|
|
442
|
|
Other expenses
|
|
|
59
|
|
|
|
1,429
|
|
|
|
1,493
|
|
Outside services and other professional
|
|
|
-
|
|
|
|
-
|
|
|
|
19,502
|
|
Postage and delivery
|
|
|
690
|
|
|
|
1,388
|
|
|
|
17,224
|
|
Rent - facilities
|
|
|
-
|
|
|
|
3,767
|
|
|
|
121,230
|
|
Rent - equipment
|
|
|
1,620
|
|
|
|
7,107
|
|
|
|
8,562
|
|
Repairs and maintenance
|
|
|
-
|
|
|
|
66
|
|
|
|
9,923
|
|
Salaries and wages
|
|
|
-
|
|
|
|
-
|
|
|
|
61,558
|
|
Payroll tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
6,186
|
|
Telephone
|
|
|
88
|
|
|
|
812
|
|
|
|
35,511
|
|
Travel and entertainment
|
|
|
-
|
|
|
|
1,651
|
|
|
|
140,116
|
|
Utilities
|
|
|
-
|
|
|
|
-
|
|
|
|
11,320
|
|
Stock-based payments
|
|
|
-
|
|
|
|
-
|
|
|
|
1,389,922
|
|
Website Development
|
|
|
-
|
|
|
|
736
|
|
|
|
10,034
|
|
Total R&D, selling, general and administrative expenses
|
|
$
|
15,124
|
|
|
$
|
74,061
|
|
|
$
|
4,809,550
|
|
Loss
|
|
$
|
(15,124
|
)
|
|
$
|
(74,061
|
)
|
|
$
|
(4,809,550
|
)
|
Income tax expense (benefit)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
|
(15,124
|
)
|
|
$
|
(74,061
|
)
|
|
$
|
(4,809,550
|
)
|
See accompanying notes to the financial statements.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the Three Months and Nine Months
Ended September 30, 2012
and the Period from August 29, 1989 (Inception) to September 30, 2012
|
|
|
|
|
|
|
|
August 29, 1989
|
|
|
|
Three Months
|
|
|
Nine Months
|
|
|
(Inception) to
|
|
|
|
Ended 9/30/2012
|
|
|
Ended 9/30/2012
|
|
|
9/30/2012
|
|
CASH FLOW FROM OPERATION ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(15,124
|
)
|
|
$
|
(74,061
|
)
|
|
$
|
(4,809,550
|
)
|
ADJUSTMENT TO RECONCILE CHANGE IN NET ASSETS TO NET CASH FLOWS USED
FOR OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense
|
|
|
2,162
|
|
|
|
6,485
|
|
|
|
62,301
|
|
Amortization
|
|
|
-
|
|
|
|
-
|
|
|
|
10,874
|
|
Allowance for deferred tax benefit
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Decrease (Increase) in Inventory
|
|
|
-
|
|
|
|
(4,551
|
)
|
|
|
(4,551
|
)
|
Decrease (Increase) in prepaid expenses
|
|
|
1,620
|
|
|
|
5,710
|
|
|
|
(174
|
)
|
Increase (Decrease) in accounts payable
|
|
|
6,068
|
|
|
|
(716,545
|
)
|
|
|
16,097
|
|
Rent payable
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Increase (Decrease) in other current liabilities
|
|
|
5,089
|
|
|
|
14,030
|
|
|
|
206,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH USED IN OPERATING ACTIVITIES
|
|
$
|
(185
|
)
|
|
$
|
(768,932
|
)
|
|
$
|
(4,518,482
|
)
|
CASH FLOW FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Office equipment
|
|
|
-
|
|
|
|
(7,963
|
)
|
|
|
(29,823
|
)
|
R&D Equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
(54,227
|
)
|
Increase in security and other deposits
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,915
|
)
|
Investments
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Organization costs
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,874
|
)
|
Deferred income tax benefit from accum. losses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH USED IN INVESTING ACTIVITIES
|
|
$
|
-
|
|
|
$
|
(7,963
|
)
|
|
$
|
(98,839
|
)
|
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan from shareholder
|
|
|
60
|
|
|
|
(1,040
|
)
|
|
|
144,774
|
|
Net borrowings from shareholder loan
|
|
|
-
|
|
|
|
40,420
|
|
|
|
203,553
|
|
Stock issued in acquisitions
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Stock-based payments
|
|
|
-
|
|
|
|
-
|
|
|
|
1,389,922
|
|
Allowance for deferred tax benefit
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Proceeds from issuance of stock
|
|
|
-
|
|
|
|
737,515
|
|
|
|
2,879,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
|
$
|
60
|
|
|
$
|
776,895
|
|
|
$
|
4,617,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
|
$
|
(125
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
CASH AND CASH EQUIVALENTS, Beginning of period
|
|
|
125
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, End of Period
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
See accompanying notes to the financial statements.
WiFi WIRELESS, INC.
(A Development
Stage Enterprise)
STATEMENTS OF
STOCKHOLDERS’ EQUITY
September 30,
2012
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
Common shares
|
|
|
Paid-In
|
|
|
Treasury
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
Number
|
|
|
Amount
|
|
|
Capital
|
|
|
Shares
|
|
|
Deficit
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 12/31/04
|
|
|
8,109,000
|
|
|
$
|
8,109
|
|
|
$
|
1,381,813
|
|
|
$
|
-
|
|
|
$
|
(919,764
|
)
|
|
$
|
470,158
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(432,121
|
)
|
|
|
(432,121
|
)
|
Issuance of shares to affiliates
|
|
|
5,162,151
|
|
|
|
3,965
|
|
|
|
398,281
|
|
|
|
-
|
|
|
|
-
|
|
|
|
402,246
|
|
Investment in Vimax
|
|
|
200,000
|
|
|
|
200
|
|
|
|
399,800
|
|
|
|
-
|
|
|
|
-
|
|
|
|
400,000
|
|
Treasury Stock
|
|
|
(2,000,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,000
|
)
|
|
|
-
|
|
|
|
(2,000
|
)
|
Stock dividend: 2:1 split
|
|
|
11,077,200
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Balance at 12/31/05
|
|
|
22,548,351
|
|
|
$
|
12,274
|
|
|
$
|
2,179,894
|
|
|
$
|
(2,000
|
)
|
|
$
|
(1,351,885
|
)
|
|
$
|
838,283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for deferred tax asset
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(651,306
|
)
|
|
|
(651,306
|
)
|
Issuance of shares, 3/31/06
|
|
|
2,846,300
|
|
|
|
1,423
|
|
|
|
21,889
|
|
|
|
-
|
|
|
|
-
|
|
|
|
23,312
|
|
Reverse stock split 1:10, 6/30/06
|
|
|
(21,412,846
|
)
|
|
|
16,213
|
|
|
|
(16,213
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Issuance of shares, 6/30/06
|
|
|
7,037,452
|
|
|
|
35,187
|
|
|
|
(35,187
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Issuance of shares, 9/30/06
|
|
|
11,247,008
|
|
|
|
46,235
|
|
|
|
(46,235
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Issuance of shares, 12/31/06
|
|
|
3,000,000
|
|
|
|
15,000
|
|
|
|
(15,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(577,111
|
)
|
|
|
(577,111
|
)
|
Balance at 12/31/06
|
|
|
25,266,265
|
|
|
$
|
126,332
|
|
|
$
|
2,089,148
|
|
|
$
|
(2,000
|
)
|
|
$
|
(2,580,302
|
)
|
|
$
|
(366,822
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares
|
|
|
3,200,000
|
|
|
|
6,000
|
|
|
|
(6,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cancelled shares
|
|
|
(389,640
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Acquired Treasury Shares
|
|
|
190,000
|
|
|
|
-
|
|
|
|
950
|
|
|
|
(950
|
)
|
|
|
-
|
|
|
|
-
|
|
Cancelled Treasury Shares
|
|
|
(1,800,000
|
)
|
|
|
-
|
|
|
|
(1,000
|
)
|
|
|
1,000
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(47,525
|
)
|
|
|
(47,525
|
)
|
Balance at 3/31/2007
|
|
|
26,466,625
|
|
|
$
|
132,332
|
|
|
$
|
2,083,098
|
|
|
$
|
(1,950
|
)
|
|
$
|
(2,627,827
|
)
|
|
$
|
(414,347
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares
|
|
|
299,640
|
|
|
|
1,498
|
|
|
|
(1,498
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(36,818
|
)
|
|
|
(36,818
|
)
|
Balance at 6/30/2007
|
|
|
26,766,265
|
|
|
$
|
133,831
|
|
|
$
|
2,081,600
|
|
|
$
|
(1,950
|
)
|
|
$
|
(2,664,645
|
)
|
|
$
|
(451,165
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(55,271
|
)
|
|
|
(55,271
|
)
|
Balance at 9/30/2007
|
|
|
26,766,265
|
|
|
$
|
133,831
|
|
|
$
|
2,081,600
|
|
|
$
|
(1,950
|
)
|
|
$
|
(2,719,916
|
)
|
|
$
|
(506,436
|
)
|
See accompanying notes to the financial statements.
WiFi WIRELESS, INC.
(A Development
Stage Enterprise)
STATEMENTS OF STOCKHOLDERS’ EQUITY
September 30,
2012
|
|
|
(400,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(28,449
|
)
|
|
|
(28,449
|
)
|
Balance at 12/31/2007
|
|
|
26,366,265
|
|
|
$
|
133,831
|
|
|
$
|
2,081,600
|
|
|
$
|
(1,950
|
)
|
|
$
|
(2,748,365
|
)
|
|
$
|
(534,885
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares
|
|
|
19,165,267
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cancelled shares
|
|
|
(19,451,891
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(113,106
|
)
|
|
|
(113,106
|
)
|
Balance at 12/31/2008
|
|
|
26,079,641
|
|
|
$
|
133,831
|
|
|
$
|
2,081,600
|
|
|
$
|
(1,950
|
)
|
|
$
|
(2,861,471
|
)
|
|
$
|
(647,991
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares
|
|
|
500,000
|
|
|
|
50,000
|
|
|
|
(50,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,638
|
)
|
|
|
(9,638
|
)
|
Balance at 3/31/2009
|
|
|
26,579,641
|
|
|
$
|
183,831
|
|
|
$
|
2,031,600
|
|
|
$
|
(1,950
|
)
|
|
$
|
(2,871,109
|
)
|
|
$
|
(657,629
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
2,208,825
|
|
|
|
220,882
|
|
|
|
(220,882
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(103,687
|
)
|
|
|
(103,687
|
)
|
Balance at 6/30/2009
|
|
|
28,788,466
|
|
|
$
|
404,712
|
|
|
$
|
1,810,718
|
|
|
$
|
(1,950
|
)
|
|
$
|
(2,974,796
|
)
|
|
$
|
(761,316
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(12,833
|
)
|
|
|
(12,833
|
)
|
Balance at 9/30/2009
|
|
|
28,788,466
|
|
|
$
|
404,712
|
|
|
$
|
1,810,718
|
|
|
$
|
(1,950
|
)
|
|
$
|
(2,987,629
|
)
|
|
$
|
(774,149
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
2,000,000
|
|
|
|
250,000
|
|
|
|
(452,099
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(202,099
|
)
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(434,689
|
)
|
|
|
(434,689
|
)
|
Balance at 12/31/2009
|
|
|
30,788,466
|
|
|
$
|
654,712
|
|
|
$
|
1,358,620
|
|
|
$
|
(1,950
|
)
|
|
$
|
(3,422,318
|
)
|
|
$
|
(1,410,937
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
2,100,000
|
|
|
|
210,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
210,000
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(33,754
|
)
|
|
|
(33,754
|
)
|
Balance at 3/31/2010
|
|
|
32,888,466
|
|
|
$
|
864,712
|
|
|
$
|
1,358,620
|
|
|
$
|
(1,950
|
)
|
|
$
|
(3,456,072
|
)
|
|
$
|
(1,234,690
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
2,500,000
|
|
|
|
250,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
250,000
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
.
|
|
|
|
-
|
|
|
|
(25,997
|
)
|
|
|
(25,997
|
)
|
Balance at 6/30/2010
|
|
|
35,388,466
|
|
|
$
|
1,114,712
|
|
|
$
|
1,358,620
|
|
|
$
|
(1,950
|
)
|
|
$
|
(3,482,069
|
)
|
|
$
|
(1,010,687
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(24,503
|
)
|
|
|
(24,503
|
)
|
Balance at 9/30/2010
|
|
|
35,388,466
|
|
|
$
|
1,114,712
|
|
|
$
|
1,358,620
|
|
|
$
|
(1,950
|
)
|
|
$
|
(3,506,572
|
)
|
|
$
|
(1,035,191
|
)
|
See accompanying notes to the financial statements.
WiFi WIRELESS, INC.
(A Development
Stage Enterprise)
STATEMENTS OF STOCKHOLDERS’ EQUITY
September 30,
2012
Issuance of shares (from xfer agent)
|
|
|
1,320,000
|
|
|
|
132,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
132,000
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(23,452
|
)
|
|
|
(23,452
|
)
|
Balance at 12/31/2010
|
|
|
36,708,466
|
|
|
$
|
1,246,712
|
|
|
$
|
1,358,620
|
|
|
$
|
(1,950
|
)
|
|
$
|
(3,530,024
|
)
|
|
$
|
(926,642
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(20,776
|
)
|
|
|
(20,776
|
)
|
Balance at 3/31/2011
|
|
|
36,708,466
|
|
|
$
|
1,246,712
|
|
|
$
|
1,358,620
|
|
|
$
|
(1,950
|
)
|
|
$
|
(3,550,800
|
)
|
|
$
|
(947,418
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(20,446
|
)
|
|
|
(20,446
|
)
|
Balance at 6/30/2011
|
|
|
36,708,466
|
|
|
$
|
1,246,712
|
|
|
$
|
1,358,620
|
|
|
$
|
(1,950
|
)
|
|
$
|
(3,571,246
|
)
|
|
$
|
(967,865
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(36,740
|
)
|
|
|
(36,740
|
)
|
Balance at 9/30/2011
|
|
|
36,708,466
|
|
|
$
|
1,246,712
|
|
|
$
|
1,358,620
|
|
|
$
|
(1,950
|
)
|
|
$
|
(3,607,986
|
)
|
|
$
|
(1,004,605
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
20,542,000
|
|
|
|
102,710
|
|
|
|
825,388
|
|
|
|
-
|
|
|
|
-
|
|
|
|
928,098
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,127,503
|
)
|
|
|
(1,127,503
|
)
|
Balance at 12/31/2011
|
|
|
57,250,466
|
|
|
$
|
1,349,422
|
|
|
$
|
2,184,008
|
|
|
$
|
(1,950
|
)
|
|
$
|
(4,735,489
|
)
|
|
$
|
(1,204,010
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(31,452
|
)
|
|
|
(31,452
|
)
|
Balance at 3/31/2012
|
|
|
57,250,466
|
|
|
$
|
1,349,422
|
|
|
$
|
2,184,008
|
|
|
$
|
(1,950
|
)
|
|
$
|
(4,766,941
|
)
|
|
$
|
(1,235,461
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
2,100,000
|
|
|
|
10,500
|
|
|
|
727,015
|
|
|
|
-
|
|
|
|
-
|
|
|
|
737,515
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(27,486
|
)
|
|
|
(27,486
|
)
|
Balance at 6/30/2012
|
|
|
59,350,466
|
|
|
$
|
1,359,922
|
|
|
$
|
2,911,022
|
|
|
$
|
(1,950
|
)
|
|
$
|
(4,794,428
|
)
|
|
$
|
(525,433
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares (from xfer agent)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(15,123
|
)
|
|
|
(15,123
|
)
|
Balance at 9/30/2012
|
|
|
59,350,466
|
|
|
$
|
1,359,922
|
|
|
$
|
2,911,022
|
|
|
$
|
(1,950
|
)
|
|
$
|
(4,809,551
|
)
|
|
$
|
(540,556
|
)
|
See accompanying notes to the financial
statements.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The company was incorporated under the
laws of the State of Oregon on August 29, 1989 as Sunburst Resources Inc. The Company’s products are developed for use in
the military, maritime and commercial markets to be used internationally. WiFi Wireless utilizes GPS (Global Positioning Satellites)
for tracking products used in the shipping and transportation industries as well as applications using current UHF frequencies
enabling WiFi hardware to provide a greater range of service from the POP (“Point of Presence”) versus the conventional
wi-fi (802.11) retail space application.
WiFi Wireless, Incorporated provides
an expanded network technology to the traditional wi-fi (802.11) system. Currently, wi-fi (802.11) systems are confined to “Hot
Spot” locations within a limited radius. WiFi Wireless focuses on “Space-Time” technology applications by using
current UHF frequencies that enable WiFi Wireless’ hardware to provide 10 miles of service from the POP Point of Presence,
rather than the conventional wi-fi (802.11) retail space application. WiFi Wireless utilized a base station antenna with a capacity
that will allow up to 25,000 simultaneous users without degradation in performance. Business franchises can now be part of the
WiFi Wireless network by providing a POP site in one central location, instead of multiple, costly, small networks at a fraction
of the price of current T-Span charges affiliated with standard “Hot Spot” networks.
The Company has a calendar year end
for reporting purposes. The Company’s website address is
www.wifiwirelessinc.net
. The Company’s principal office
location is 65 Enterprise, Aliso Viejo, CA, 92656.
Development Stage Company
The Company is in the development stage
as more fully defined in Statement No. 7 of the Financial Accounting Standards Board. The Company is in the business of researching,
developing and commercializing new technologies. The Company will be devoting all of its resources to the research, development
and commercialization of its technologies.
In a development stage company, management
devotes most of its activities to preparing the business for operations. Planned principal activities have not yet begun. The ability
of the Company to emerge from the development stage with respect to any planned principal business activity is dependent upon its
successful efforts to raise additional equity financing and/or attain profitable operations. There is no guarantee that the company
will be able to raise any equity financing or sell any of its products at a profit. There is, therefore, doubt regarding the Company’s
ability to continue as a going concern.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
Use of Estimates
The preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions
that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ
materially from these estimates. On an ongoing basis, we expect to evaluate our estimates, including those related to the accounts
receivable and sales allowances, fair values of marketable and non-marketable securities, fair values of intangible assets and
goodwill, useful lives of intangible assets, property and equipment, fair values of options to purchase our common stock, and income
taxes, among others. We expect to base our estimates on historical experience and on various other assumptions that are believed
to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires management 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 reporting period. Actual results
could differ materially from those estimates. Significant accounting policies and estimates underlying the accompanying financial
statements include:
It is reasonably possible that the estimates
may change in the future.
Cash and Cash Equivalents
The Company considers all highly liquid
debt instruments with original maturities not exceeding three months to be cash equivalents.
Property, Equipment and Depreciation
Property and equipment are recorded
at cost. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial
statement purposes. The Company uses other depreciation methods (generally accepted) for tax purposes where appropriate. Amortization
of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term or the estimated
useful lives of the improvements.
The estimated useful lives of property
and equipment are as follows:
Office Equipment
|
3 – 10 years
|
R & D Equipment
|
3 – 10 years
|
Long-Lived Assets Including Goodwill
and Other Acquired Intangible Assets
The Company reviews property and equipment
and intangible assets, excluding goodwill, for impairment whenever events or changes in circumstances indicate the carrying amount
of an asset may not be recoverable. Recoverability of these assets is measured by comparison of carrying amounts to the future
undiscounted cash flows the assets are expected to generate. If property and equipment and intangible assets are considered to
be impaired, the impairment to be recognized equals the amount by which, the carrying value of the asset exceeds its fair market
value. The Company has made no adjustments to long-lived assets in any of the years presented.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
In accordance with SFAS No. 142,
Goodwill and Other Intangible Assets, the Company tests goodwill, if any, for impairment at least annually or more frequently if
events or changes in circumstances indicate that this asset may be impaired.
SFAS No. 142 also requires that intangible
assets with definite lives be amortized over their estimated useful lives and reviewed for impairment whenever events or changes
in circumstances indicate an asset’s carrying value may not be recoverable in accordance with SFAS No. 144, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.
Intangibles
Intangibles consist of software, including
purchased software, and development of new software products and enhancements to existing software products. Until technological
feasibility is established, costs associated with software development, including costs associated with the acquisition of intellectual
property relating to software development is expensed as incurred. After technological feasibility is established and until the
products are available for sale, software development costs are capitalized and amortized over the greater of the amount computed
using (a) the ratio that current gross revenue for the product bears to the total of current and anticipated future gross revenue
for that product or (b) the straight-line method over the estimated economic life of the product including the period being reported
on. The amortization period has been determined as the life of the product, which is three years.
Revenue Recognition
As the Company is continuing development
of its technologies, no significant revenues have been earned to date. The Company recognizes revenues at the time of delivery
of the product to the customers.
Research and Development costs
charged to Expense as Incurred
Expenditures for research activities
relating to product development and improvement are charged to expense as incurred. Such expenditures amounted to $253,120 since
inception.
Stock Issued in Exchange For Services
The valuation of the common stock issued in exchange for services
is valued at an estimated fair market value as determined by the officers and directors for the Company based upon other sales
and issuances of the Company’s common stock within the same general time period.
Accounting Standards Codification
In September 2009, the Financial Accounting
Standards Board (“FASB”) issued ASC 105, formerly FASB Statement No. 168, the FASB Accounting Standards Codification
(“Codification”) and the Hierarchy of Generally Accepted Accounting Principles (“GAAP”), a replacement
of FASB Statement No. 162 (“SFAS 168”). SFAS 168 establishes the Codification as the single source of authoritative
GAAP in the United States, other than rules and interpretive releases issued by the SEC. The Codification is a reorganization of
current GAAP into a topical format that eliminates the current GAAP hierarchy and establishes instead two levels of guidance —
authoritative and non-authoritative. All non-grandfathered, non-SEC accounting literature that is not included in the Codification
will become non-authoritative. The FASB’s primary goal in developing the Codification is to simplify user access to all authoritative
GAAP by providing all the authoritative literature related to a particular accounting topic in one place. The Codification was
effective for interim and annual periods ending after September 15, 2009. As the Codification was not intended to change or alter
existing GAAP, it did not have a material impact on the Company’s consolidated financial statements.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
Effect of Recent Accounting Pronouncements
The Company reviews new accounting standards
as issued. No new standards had any material effect on these consolidated financial statements. The accounting pronouncements issued
subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential
effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a
material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement
of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent
to June 30, 2012 through the date these financial statements were issued.
Litigation
The Company may be subject to various
claims and pending or threatened lawsuits in the normal course of business. Management believes that the outcome of any such lawsuits
would not have a materially adverse effect on the Company’s financial position, results of operations or cash flows.
Legal Costs
Legal costs are expensed as incurred.
Advertising and Promotional Expenses
Advertising and promotional costs are
expensed as incurred.
Retired Administrative Staff
In April 2008, WiFi Wireless, Inc. retired
our internal administrative staff in order to achieve a reduction in overhead expenses. However, WiFi continues to maintain its
office sites. WiFi maintained financial stability and continued current on all of its monthly expenses with an ongoing loan agreement
with a privately held LLC. After April 2008, the company outsourced all administrative work on a per-job basis, and submits these
expenses for payment through an LLC loan agreement.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
General Comment on Contingencies
Certain conditions may exist as of the
date the Financial Statements are issued, which may result in a loss to the company but which will only be resolved when one or
more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities,
and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that
are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates
the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought
or expected to be sought therein.
If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Company’s Financial Statements. If the assessment indicates that a potentially material
loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.
NOTE 2 – GOING CONCERN
WiFi Wireless’ financial statements
have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments
in the normal course of business for the foreseeable future. Since inception in August 1989, WiFi Wireless has accumulated losses
aggregating $4,809,551 of which $1,982,799 is related to stock-based payments for services.
Management’s plans for WiFi Wireless’
continued existence include selling additional stock or borrowing additional funds to pay overhead expenses while current marketing
efforts continue to raise its prospects of future sales. There is no guarantee that either of these efforts will be successful
in the future.
NOTE 3 – RELATED PARTY TRANSACTIONS
Related Parties Reimburse the
Company for Operating Expenses – Loan from Shareholder
A major shareholder reimburses the Company
for certain operating expenses. These expenses generally consist of salaries and related benefits paid to corporate personnel,
rent, data processing services, and other corporate facilities costs. The Company provides engineering, marketing, administrative,
accounting, information management, legal, and other services during their operations. All amounts paid by the shareholder are
recorded under shareholder loans and are payable under the specific terms of the loan. As of September 30, 2012, the amount of
shareholder loans payable was $348,327.
Patents – Intangible Assets
/ Affiliated Company
The Company plans to utilize certain
technology patents for use in its operations. These patents are controlled and owned by an affiliated company. The Company is dependent
on certain patents from an affiliated company for the development of its products. These patents are pending as of September 30,
2012.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
Companies under Common Control
May Experience Change in Operations
The Company’s majority shareholder
also controls other entities whose operations are similar to those of the Company. Although there were no transactions between
the Company and these entities as of September 30, 2012, the majority shareholder is, nevertheless, in a position to influence
the sales volume of the company for the benefit of the other entities that are under his control.
NOTE 4 – INCOME TAXES
Deferred income taxes reflect the tax
effect of the temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and
the amounts used for tax purposes. The components of the net deferred income tax assets are as follows:
|
|
December 31, 2011
|
|
|
|
|
|
CURRENT
|
|
$
|
-0-
|
|
DEFERRED
|
|
$
|
1,610,066
|
|
Allowance for realization
|
|
$
|
1,610,066
|
|
Total Deferred Income Tax Benefit
|
|
$
|
-0-
|
|
Realization of the Deferred Income
Tax Asset is Dependent on Generating Future Taxable Income
Background
Deferred tax assets arise when a company’s
financial statements recognize charges or expenses that, for income tax purposes, will not be allowed as deductions until future
periods. For example, when a corporation incurs an expense in its financial statements, such as certain restructuring type charges,
that it is not allowed to deduct on its federal tax return until paid in the future, the future tax benefit of that expense is
generally recorded in the income statement as a reduction of income tax expense and in the balance sheet as a tax asset. The same
general treatment applies to the carry forward of unused net operating losses and unused tax credits. Deferred tax assets are often
netted with deferred tax liabilities when presented in the balance sheet and are referred to as net deferred tax assets.
Under FAS 109, Accounting for Income
Taxes, a net deferred tax asset may only be carried on the balance sheet at its full value if it is more likely than not that the
deductions, losses, or credits giving rise to such deferred tax asset will be used in the future. If the more likely than not test
is not met, then a valuation allowance is required to be recorded against the net deferred tax asset.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
A valuation allowance creates a charge
to income tax expense in the income statement and a reduction of an asset on the balance sheet, in the period it is recorded. Common
practice would support a determination that a corporation with two or more consecutive years of significant losses is presumed
to fail the more likely than not test. Because of the Company’s losses in recent years the Company has examined the value
of its deferred tax assets and felt it was appropriate to record a valuation allowance against a major portion of them. The valuation
allowance essentially reduced the Company’s deferred tax asset to zero. The effect was to reverse the benefit of those deferred
tax assets that were recorded in prior years’ income statements and balance sheets. Consequently, these tax benefits will
be available in the future to reduce our income tax expense when we have positive income to use the tax benefits, or we have sufficient
deferred tax liabilities to absorb the tax assets.
Realization of the deferred income tax
asset is dependent on generating sufficient taxable income in future years. Although realization is not assured, management believes
it is more likely than not that all of the deferred income tax assets will be realized. The amount of the deferred income tax assets
considered realizable, however, could be reduced in the near term if estimates of future taxable income are reduced.
As of December 31, 2011, the Company’s
net operating loss carry forwards for income tax purposes were approximately $4,735,489. If not utilized, they will start to expire
in twenty years or 2026 for federal purposes and ten years or 2016 for state purposes.
NOTE 5 – COMMITMENTS AND
CONTINGENCIES
The Company leases certain business
facilities on a month-to-month basis. The Company also rents various equipment on an “as-needed” basis. Current year
lease expense for both facilities and equipment are as follows:
Current Year to Date
|
|
Amount
|
|
|
|
|
|
Facilities
|
|
$
|
3,767
|
|
Equipment
|
|
|
7,107
|
|
TOTAL LEASE EXP
|
|
$
|
10,874
|
|
The Company is utilizing, through what
is currently a month-to-month rental agreement, a 38-foot tour bus which will be used to market and promote new products and services
as they are brought to market. Monthly rental payments have been disbursed thru July 2012. The Company is contemplating a purchase
or long term lease of this vehicle, however at this time that transaction has not occurred.
NOTE 6 – CHANGE IN SECURITIES
During the period from July 1, 2012
to September 30, 2012 the Company did not issue any shares of common stock. The Company did not retire any shares of common stock
during this period.
WiFi WIRELESS, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
As of September 30, 2012, there were 59,350,466 shares of
common stock issued and outstanding, of which 13,940,568 shares are restricted and 45,409,898 shares are non-restricted. Total
shares authorized are 100,000,000.
INFORMATION AND DISCLOSURE STATEMENT
SEPTEMBER 30, 2012
Certification
I, Eugene L. Curcio,
Chairman of WiFi Wireless, Inc., hereby certify that the unaudited financial statements filed herewith and related footnotes thereto,
fairly present, in all material respects, the financial position, results of operations and cash flows for the Quarter Report ending
September 30, 2012, to the best of my knowledge, information and belief, in conformity with accounting principles generally accepted
in the United States of America.
/s/ Eugene L. Curcio
|
|
Eugene L. Curcio
|
|
|
|
October 29, 2012
|
|
Date
|
|
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Forward-Looking Statements
We believe that it is important to communicate
our future expectations to our security holders and to the public. This report, therefore, contains statements about future events
and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of
1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects
under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You
can expect to identify these statements by forward-looking words such as “may,” “might,” “could,”
“would,” “will,” “anticipate,” “believe,” “plan,” “estimate,”
“project,” “expect,” “intend,” “seek” and other similar expressions. Any statement
contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we
believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are
reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements,
and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.
Important factors that might cause our actual
results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors”
section of and elsewhere in our Form 10-K dated December 19, 2012 for the fiscal year ended December 31, 2011 and in our subsequent
filings with the Securities and Exchange Commission.
THIS REPORT CONTAINS FORWARD LOOKING STATEMENTS
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934. THESE FORWARD
LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM HISTORICAL
RESULTS OR ANTICIPATED RESULTS, INCLUDING THOSE SET FORTH UNDER “RISK FACTORS” IN THIS “MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” AND ELSEWHERE IN THIS REPORT. THE FOLLOWING DISCUSSION AND
ANALYSIS SHOULD BE READ IN CONJUNCTION WITH “SELECTED FINANCIAL DATA” AND THE COMPANY’S FINANCIAL STATEMENTS AND NOTES
THERETO INCLUDED ELSEWHERE IN THIS REPORT.
All dollar amounts in this Quarterly Report
are in U.S. dollars unless otherwise stated.
Nature of Business
We are a development stage company incorporated
under the laws of the State of Oregon on August 29, 1989 as Sunburst Resources Inc. The Company’s products are developed
for use in the military, maritime and commercial markets to be used internationally. WiFi Wireless utilizes GPS (Global Positioning
Satellites) for tracking products used in the shipping and transportation industries as well as applications using current UHF
frequencies enabling WiFi hardware to provide a greater range of service from the POP (“Point of Presence”) versus
the conventional wi-fi (802.11) retail space application.
WiFi Wireless, Incorporated provides an expanded
network technology to the traditional wi-fi (802.11) system. Currently, wi-fi (802.11) systems are confined to “Hot Spot”
locations within a limited radius. WiFi Wireless focuses on “Space-Time” technology applications by using current UHF
frequencies that enable WiFi Wireless’ hardware to provide 10 miles of service from the POP Point of Presence, rather than
the conventional wi-fi (802.11) retail space application. WiFi Wireless utilized a base station antenna with a capacity that will
allow up to 25,000 simultaneous users without degradation in performance. Business franchises can now be part of the WiFi Wireless
network by providing a POP site in one central location, instead of multiple, costly, small networks at a fraction of the price
of current T-Span charges affiliated with standard “Hot Spot” networks.
The Company has a calendar year end for reporting
purposes. The Company’s website address is www.wifiwirelessinc.net. The Company’s principal office location is 65 Enterprise,
Aliso Viejo, CA, 92656.
Plan of Operation
The Company is in the development stage as
more fully defined in Statement No. 7 of the Financial Accounting Standards Board. The Company is in the business of researching,
developing and commercializing new technologies. The Company will be devoting all of its resources to the research, development
and commercialization of its technologies.
In a development stage company, management
devotes most of its activities to preparing the business for operations. Planned principal activities have not yet begun. The ability
of the Company to emerge from the development stage with respect to any planned principal business activity is dependent upon its
successful efforts to raise additional equity financing and/or attain profitable operations. There is no guarantee that the company
will be able to raise any equity financing or sell any of its products at a profit.
Our plan of operation for the
twelve months following the date of this report is to continue our research and development on the technology. As well, we anticipate
spending additional amounts for general and administrative expenses, including fees we will incur in complying with reporting
obligations. All functions will be coordinated and managed by our Board of Directors, including marketing, finance, and operations.
If we are unable to effectively market and
fund these projects we may have to suspend or cease our efforts. If we cease our previously stated efforts we do not have plans
to pursue other business opportunities. If we cease operations investors will not receive any return on their investments.
Going Concern
WiFi Wireless contemplates the realization
of assets and settlement of liabilities and commitments in the normal course of business for the foreseeable future. Since inception
in August 1989, WiFi Wireless has accumulated losses aggregating $4,809,550 of which $1,982,799 is related to stock-based payments
for services.
Management’s plans for WiFi Wireless’
continued existence include selling additional stock or borrowing additional funds to pay overhead expenses while current marketing
efforts continue to raise its prospects of future sales. There is no guarantee that either of these efforts will be successful
in the future.
Further losses are expected until we enter
into a licensing agreement with a manufacturer and reseller. These factors raise substantial doubt about the ability of the Company
to continue as a going concern.
We may receive interim support from affiliated
companies and plan to raise additional capital through debt and/or equity financings. We may also raise additional funds through
the exercise of warrants and stock options, if exercised. However, there is no assurance that any of these activities will be successful.
Results of Operations
Three months ended September 30, 2012
compared to the three months ended September 30, 2011
Revenue.
For the three months ended
September 30, 2012, our revenue was $-0-, compared to $-0- for the same period in 2011.
Gross Profit / Loss.
For the three months
ended September 30, 2012, our gross profit was $-0-, compared to gross profit of $-0- for the same period in 2011.
Selling, General and Administrative Expenses.
For the three months ended September 30, 2012, selling, general and administrative expenses were $15,124 compared to $36,740
for the same period in 2011, an increase of 59%, which relates to the reduction in interest expense due to payment of debt.
Net Loss.
We generated net losses of
$15,124 for the three months ended September 30, 2012 compared to $36,740 for the same period in 2011.
Nine months ended September 30, 2012
compared to the nine months ended September 30, 2011
Revenue.
For the nine months ended September
30, 2012, our revenue was $-0-, compared to $-0- for the same period in 2011.
Gross Profit / Loss.
For the nine months
ended September 30, 2012, our gross profit was $-0-, compared to gross profit of $-0- for the same period in 2011.
Selling, General and Administrative Expenses.
For the nine months ended September 30, 2012, selling, general and administrative expenses were $74,061 compared to $77,962
for the same period in 2011, an insignificant decrease.
Net Loss.
We generated net losses of
$74,061 for the nine months ended September 30, 2012 compared to $77,962 for the same period in 2011, an insignificant decrease.
Liquidity and Capital Resources
General.
At September 30, 2012, we had
cash and cash equivalents of $0. We have historically met our cash needs through a combination of cash flows from operating activities,
proceeds from private placements of our securities, and loans including loans from our majority shareholder. Our cash requirements
are generally for selling, general and administrative activities. We believe that our cash balance is not sufficient to finance
our cash requirements for expected operational activities, capital improvements, and partial repayment of debt through the next
12 months.
Our operating activities used
cash of $768,932 for the nine months ended September 30, 2012, and net cash used in operations of $24,938, during the same period
in 2011. The principal elements of cash flow from operations for the nine months ended September 30, 2012 included a net loss
of $74,061 and a decrease in payables due to payment of expenses in stock in the amount of $737,515.
Cash used in investing activities was $7,963
for the nine months ended September 30, 2012, compared to cash used of $0 during the comparable period in 2011.
Cash provided by our financing activities was
$776,895 for the nine months ended September 30, 2012, compared to cash provided by financing activities of $25,300 during the
comparable period in 2011. The principal elements of cash flow from financing activities for the nine months ended September 30,
2012, included $39,380 of advances from our majority shareholder and $737,515 of common stock issued for payment of expenses.
As of September 30, 2012, current liabilities
exceeded current assets by 47.4 times. Current assets decreased from $5,857 at December 31, 2011 to $4,698 at September 30, 2012
whereas current liabilities decreased from $925,104 at December 31, 2011 to $222,590 at September 30, 2012.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that
have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.
Item 3. Quantitative and Qualitative Disclosures
about Market Risk
We are a smaller reporting company as defined
by Rule 12b-2 of the
Securities Exchange Act of 1934
and are not required to provide the information under this item.
Item 4. Controls and Procedures
The Securities and Exchange Commission defines
the term “disclosure controls and procedures” to mean a company’s controls and other procedures of an issuer that are designed
to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s
rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of
1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers,
or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains
such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports
it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified
under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to the chief executive
and interim chief financial officer to allow timely decisions regarding disclosure.
As of the end of the period covered by the
Form 10-K for fiscal year 2011, we carried out an evaluation, under the supervision and with the participation of our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.
Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure
controls and procedures are not effective as of such date. The Chief Executive Officer and Chief Financial Officer have determined
that the Company continues to have the following deficiencies which represent a material weakness:
1.
|
The Company has an independent director but does not have an Audit Committee. The Company intends to appoint additional independent directors and set up an Audit Committee;
|
2.
|
Lack of in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;
|
3.
|
Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting;
|
4.
|
Insufficient written policies and procedures over accounting transaction processing and period end financial disclosure and reporting processes.
|
To remediate our internal control weaknesses,
management intends to implement the following measures:
|
●
|
The Company will add sufficient number of independent directors to the board and appoint additional member(s) to the Audit Committee.
|
|
●
|
The Company will add sufficient accounting personnel to properly segregate duties and to effect a timely, accurate preparation of the financial statements.
|
|
●
|
The Company will hire staff technically proficient at applying U.S. GAAP to financial transactions and reporting.
|
|
●
|
Upon the hiring of additional accounting personnel, the Company will develop and maintain adequate written accounting policies and procedures.
|
The additional hiring is contingent upon The
Company’s efforts to obtain additional funding through equity or debt and the results of its operations. Management expects
to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.
Changes in Internal Control over Financial
Reporting
Except as set forth above, there were no changes
in our internal control over financial reporting that occurred during the quarter covered by this report that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
The Company’s management, including the
CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will
prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must
reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making
can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls
is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness
to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration
in the degree of compliance with policies or procedures.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in litigation
relating to claims arising out of our operations in the normal course of business. As of September 30, 2012 to the best of our
knowledge, understandings, or records, there are no current, past, pending or threatened legal proceedings or administrative actions
either by or against the Company that could have a material effect on the Company’s business, financial condition, or operations.
Item 1A. Risk Factors
We are a smaller reporting company as defined
by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 2. Unregistered Sales
of Equity Securities and Use of Proceeds
To the best of our knowledge, understandings,
or records, there have been no unregistered sales of equity securities during the quarter ending September 30, 2012.
Item 3. Defaults Upon Senior Securities
To the best of our knowledge, understandings,
or records, there have been no Defaults Upon Senior Securities during the quarter ending September 30, 2012.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
To the best of our knowledge, understandings,
or records, there is no other information for the quarter ending September 30, 2012.
Item 6. Exhibits
(a) Exhibit(s)
31.1
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
31.2
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
32.1
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
32.2
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
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.
|
WiFi
WIRELESS, INC.
|
|
|
Date: December
21, 2012
|
By:
|
/s/
Eugene L.
Curcio
|
|
|
Eugene L. Curcio
|
|
|
Chairman of the Board of Directors
|
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