((Exact
Name of Registrant as Specified in its
Charter)
NEVADA
86-0862532
(State
or Other Jurisdiction of
incorporation
or organization)
(I.R.S.
Employer
Identification
No.)
4603
NE St. Johns Road, Ste. B
Vancouver,
Washington
98661
(Address
of Principal Executive Offices)
(Zip
Code)
Issuer's
Telephone Number: (360)-635-6521
Indicate
by check mark whether the registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements
for
the past 90 days. Yes x No o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See
the definitions of “large accelerated filer,”“accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer o
Accelerated
filer o
Non-accelerated
filer o
Smaller
reporting company x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes
o
No
x
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING
THE PRECEDING FIVE YEARS
Indicate
by check mark whether the registrant filed all documents and reports required
to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes o No o
APPLICABLE
ONLY TO CORPORATE ISSUERS
State
the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date: As of November 07, 2008, there were
316,185,705 outstanding shares of the Registrant's Common Stock, $.00001 par
value.
TABLE
OF CONTENTS
Page
PART
I – FINANCIAL INFORMATION
Item
1.
Condensed
Consolidated Financial Statements
3
Condensed
Consolidated Balance Sheets
3
Condensed
Consolidated Statement Of Operations
5
Cash
Flows From Operating Activities
6
Notes
To The Condensed Consolidated Financial Statements
8
Item
2.
Management’s
Discussion and Analysis and Results of
Operations
19
Item
3.
Quantitative
and Qualitative Market Risk
23
Item
4.
Controls
and Procedures
23
PART
II - OTHER INFORMATION
Item
1.
Legal
Proceedings
24
Item
1A.
Risk
Factors
24
Item
2.
Unregistered
Sales of Equity Securities and Use of Proceeds
24
Item
3.
Defaults
Upon Senior Securities
25
Item
4.
Submission
of Matters to a Vote of Security Holders
NOTE
1 - SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Organization
NW
Tech
Capital, Inc. (OTCBB: NWTT) (the “Company”) is organized for the primary purpose
of engaging in all facets of the business comprising the telecommunications
industry and is a provider of long distance voice and data
telecommunications. The Company actively identifies other companies in the
telecommunications industry for acquisition or strategic partnerships. These
companies may be providers of long distance service, Voice over Internet
Protocol providers, consulting companies, prepaid service companies, network
management operations, or other companies in the telecommunication arena. The
Company is also looking into acquisition possibilities and funding from China.
The Company has a Hong Kong/China company named “NW Tech Capital Group Limited”
to engage in completing merger and acquisitions opportunities with private
China
companies. As of June 16, 2008the Company has acquired a locally owned and
operated Data and Telecommunications Integrator, Teledigit, Inc. (“Teledigit”)
of Portland, Oregon as its wholly owned subsidiary.
Teledigit,
Inc. is a Select Certified Registered Partner with Cisco Systems. Teledigit
is
expanding the Routing, Switching, Firewall & Wireless products they have
been selling and supporting for the last 3 years. Teledigit, Inc. will now
be
offering the Cisco Unified Communications Product line, featuring IP, SIP,
and
VoIP communications. Focusing mainly on the Small & Medium Businesses market
target, Teledigit will be offering the Unified Communications 500 Series for
Small Business. The UC500 Series Solutions unify voice, video, data, and mobile
applications on fixed and mobile networks, delivering a media-rich collaboration
experience across business workspaces. Cisco Unified Communications is part
of a
comprehensive solution that includes network infrastructure, security, wireless,
management applications, lifecycle services, flexible deployment and outsourced
management options, and third-party applications.
Becoming
a Select Certified Registered Partner with Cisco requires that the Company
has
Technicians and Account Managers that are trained and certified not only in
the
Network technologies but also now in the Unified Communications product lines.
The benefits the company gains are increased knowledge in the products Cisco
Systems offers, as well as additional training opportunities for the Teledigit,
Inc. staff. Teledigit also has access to Cisco Campaign Builder, which is a
database of co-branded collateral you can use to build customizable messaging
to
your customers. Campaign Builder can be used to create customizable e-mail
blasts, postcards, ads, flyers and more to build customer awareness, while
reducing time-to-market and overall costs. As a Select Certified Registered
Partner, Teledigit will be working closely with Cisco Systems to build the
marketplace in the Pacific Northwest for the existing Cisco products and
offering the new Unified Communication Series of products for Small Businesses
to service and support their customers.
Basis
of Presentation
The
accompanying unaudited interim financial statements of NW Tech Capital ("NWTT"
or the “Company”) have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited consolidated financial statements and notes thereto contained
in the Company's Annual Report on Form 10-KSB for the fiscal year ended December31, 2007 filed with the SEC on March 31, 2008 (the “2007 Form 10K-SB”). In the
opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the
results of operations for the interim periods presented have been reflected
herein. The results of operations for the interim period are not necessarily
indicative of the results to be expected for the full fiscal year. Notes to
the
financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for 2007 as reported in the 2007
Form 10K-SB have been omitted.
Allowance
for Doubtful Accounts
Bad
debt
expense is recognized based on management’s estimate of likely losses per year,
based on past experience and an estimate of current year uncollectible
amounts.
8
NW
TECH CAPITAL, INC.
FORMERLY
CYBERTEL CAPITAL CORPORATION
Notes
to the Condensed Consolidated Financial Statements
(continued)
Inventories
are stated at the lower of cost (principally standard cost which approximates
actual cost on a first-in, first-out basis) or market value. Adjustments for
potentially excess and obsolete inventory are made based on management’s
analysis of inventory levels and future sales forecasts. Once the value is
adjusted, the original cost of the Company’s inventory less the related
inventory write-down represents the new cost basis of such products. Reversal
of
these write downs is recognized only when the related inventory has been
scrapped or sold. The Company’s inventory consists primarily of
telecommunication equipment.
Property
and Equipment and Leasehold Improvements
Property
and equipment are stated at cost and depreciated using the straight-line method
over their estimated useful lives of three to five years. Leasehold improvements
are being depreciated over the term of the lease, excluding option periods.
When
assets are disposed of, the cost and accumulated depreciation (net book value
of
the assets) are eliminated and any resultant gain or loss reflected accordingly.
Upgrades and improvements are capitalized over their estimated useful lives
whereas repairs and maintenance expenditures on the assets are charged to
expense as incurred.
Revenue
Recognition
The
Company recognizes revenue when persuasive evidence of an arrangement exists,
services have been rendered, the sales price is fixed or determinable, and
collectability is reasonably assured. This typically occurs when the services
have been performed.
The
Company’s revenues are derived primarily from the servicing, installation, and
sales of telecommunication products with the majority of the business in the
West Coast of the United States and the Portland, metropolitan area but ranging
all over the United States.
Basic
and Diluted Net Loss per Share
The
basic
net loss per common share is computed by dividing the net loss by the weighted
average number of common shares outstanding. Diluted net loss per common share
is computed by dividing the net loss adjusted on an “as if converted” basis, by
the weighted average number of common shares outstanding plus potential dilutive
securities. For the quarter ended September 30, 2008 and 2007, potential
dilutive securities had an anti-dilutive effect and were not included in the
calculation of diluted net loss per common share. In January 2008, the Company
effected a 1:1000 reverse split. All shares and per share amounts for the
quarters ended September 30, 2008 and 2007 have been restated to reflect the
splits as if it had occurred on the first day of the first period
presented.
NOTE
2 – MATERIAL EVENTS
Acquisitions
On
January 29, 2008the company signed an acquisition agreement to purchase a
Portland, OR based company named Teledigit, Inc. The acquisition agreement
is to
purchase 100% of Teledigit in exchange for 80,000 shares of the Company’s Series
E Preferred Stock convertible to $1.00 of common stock per share and a $720,000
convertible note payable. The note is convertible into 720,000 shares of Series
E Preferred Stock plus interest of 6%. The acquisition was completed on June16,2008. See Note 7 – Acquisitions and Investments.
Reverse
Split
On
January 21, 2008, the Company effected a 1000 to 1 reverse split. All
shareholder deficit accounts have been restated to reflect the stock splits
and
change in par value as of the earliest date presented in the financial
statements.
9
NW
TECH CAPITAL, INC.
FORMERLY
CYBERTEL CAPITAL CORPORATION
Notes
to the Condensed Consolidated Financial Statements
(continued)
On
January 18, 2008, the Company filed a Certificate of Amendment with the State
of
Nevada changing its corporate name from Cybertel Capital Corporation to NW
Tech
Capital, Inc.
Discontinued
Operations
On
December 31, 2007, a separation agreement was reached between the Company and
AireWire releasing AireWire back to its original state (before the acquisition)
and returning $1,000,000 dollars worth of Series C Preferred Stock back to
the
Company.
NOTE
3 - GOING CONCERN
As
shown
in the accompanying financial statements, for the nine months ended September30, 2008, NWTT incurred recurring net losses from continuing operations in
the
amount of $1,621,832 and has an accumulated deficit of $25,979,540 and a working
capital deficit of $1,436,299 as of September 30, 2008. These conditions raise
substantial doubt as to the Company’s ability to continue as a going concern.
Management’s plans to support the Company’s operations include increasing
revenues, cutting overhead costs, borrowing additional funds and raising
additional capital. The Company’s inability to obtain additional capital or
obtain such capital on favorable terms could have a material adverse effect
on
its consolidated financial position, results of operations and its ability
to
continue operations. The financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
NOTE
4 - NOTES PAYABLE
As
of the
quarter ended September 30, 2008, the Company and its subsidiary have two lines
of credit with two banking institutions. One of the credit lines, originating
from the acquisition of Teledigit, provides for borrowings up to $100,000 at
a
variable interest rate of prime plus 1%. The second credit line provides for
borrowings up to $10,000 at an interest rate of 14.25%. As of September 30,2008, the Company has a total outstanding bank credit line balance of
$70,940.
As
of the
quarter ended September 30, 2008, the Company has four notes originating from
the acquisition of Teledigit. Teledigit purchased four company vehicles totaling
$92,100 with a down payment of $12,600 and total notes payable equating to
$79,500. The terms of the notes call for total monthly payments of $1,584,
interest rates ranging from 4.49% to 9.99%, and maturity dates ranging from
September 2010 to June 2011. As of September 30, 2008, the balances of the
notes
totaled $43,096. The total current portions due on the notes are
$15,699.
As
of the
quarter ended September 30, 2008, the Company has three notes which may be
converted into shares of the Company’s common stock based on 75% of the average
of the lowest three closing bid prices in the past 20 trading days immediately
preceding the conversion as long as such conversions do not exceed 4.99% of
the
then-outstanding common stock of the Company. In relation to the convertible
feature of these notes, a debt discount totaling $85,846 was calculated in
accordance with EITF 00-27 and is being amortized over the life of the
debenture. The amortization is being recorded as interest expense and totaled
$40,718 for the quarter ended September 30, 2008 and $68,042 for the period
from
inception to September 30, 2008. The embedded conversion option is also
accounted for under EITF 00-19 and we have accounted for the embedded conversion
option as a derivative liability. Accordingly, the embedded conversion option
is
marked to market through earnings at the end of each reporting period. The
conversion option is valued using the Black-Scholes valuation model and totaled
$82,285 as of September 30, 2008. During the quarter, the noteholders converted
a total of $21,556 of principal and interest payments. As of September 30,2008,
the balances of the notes totaled $55,726.
10
NW
TECH CAPITAL, INC.
FORMERLY
CYBERTEL CAPITAL CORPORATION
Notes
to the Condensed Consolidated Financial Statements
(continued)
As
of the
quarter ended September 30, 2008, the Company has fourteen notes which may
be
converted into shares of the Company’s common stock based on 70% of the average
of the lowest three closing bid prices in the past 20 trading days immediately
preceding the conversion as long as such conversions do not exceed 4.99% of
the
then outstanding common stock of the Company. As of September 30, 2008, two
of
these notes are not convertible until a later date. In relation to the
convertible feature of these notes, a debt discount totaling $291,651 was
calculated in accordance with EITF 00-27 and is being amortized over the life
of
the debenture. The amortization is being recorded as interest expense and
totaled $107,966 for the quarter ended September 30, 2008 and $169,922 for
the
period from inception to September 30, 2008. The embedded conversion option
is
also accounted for under EITF 00-19 and we have accounted for the embedded
conversion option as a derivative liability. Accordingly, the embedded
conversion option is marked to market through earnings at the end of each
reporting period. The conversion option is valued using the Black-Scholes
valuation model and totaled $454,122 for the quarter. During the quarter, the
noteholders converted a total of $42,971 of principal and interest payments.
As
of September 30, 2008, the balances of the fourteen notes were $311,885.
As
of the
quarter ended September 30, 2008, the Company has one note which may be
converted into shares of the Company’s common stock based on 50% of the average
of the lowest three closing bid prices in the past 20 trading days immediately
preceding the conversion as long as such conversions do not exceed 4.99% of
the
then outstanding common stock of the Company. In relation to the convertible
feature of the note, a debt discount totaling $15,000 was calculated in
accordance with EITF 00-27 and is being amortized over the life of the
debentures. The amortization is being recorded as interest expense and was
fully
accreted as of June 30, 2008. The embedded conversion option is also accounted
for under EITF 00-19 and we have accounted for the embedded conversion option
as
a derivative liability. Accordingly, the embedded conversion option is marked
to
market through earnings at the end of each reporting period. The conversion
option is valued using the Black-Scholes valuation model and totaled $82,230
for
the quarter. During the quarter, the noteholder converted a total of $9,967
of
principal and interest payments. As of September 30, 2008, the balance of the
note was $33,556.
As
of the
quarter ended September 30, 2008, the Company has a $720,000 note payable for
the purchase of Teledigit at a 6% interest rate with a maturity date of July31,2013. This note is convertible into 720,000 shares of the Company’s Series E
Preferred Stock at a monthly payment of 13,920 shares of Series E Preferred
Stock commencing August 31, 2008. During the quarter the note holder converted
a
total of $27,840 principal and interest payments represented by 27,840 shares
of
the Company’s Series E preferred stock. As of September 30, 2008, the balance of
the note was $699,309. The current portion of the note is $128,574.
As
of the
quarter ended September 30, 2008, the Company has a $25,000 note payable at
an
18% interest rate with a maturity date of 2/20/2009. The terms of the notes
call
for interest only monthly payments of $375.
11
NW
TECH CAPITAL, INC.
FORMERLY
CYBERTEL CAPITAL CORPORATION
Notes
to the Condensed Consolidated Financial Statements
(continued)
The
unaudited Chart below summarizes the Notes Payable mentioned in Note
4:
Terms
Amount
Bank
Lines of Credit:
- $100,000
Credit line at prime plus 1%
$
61,390
- $10,000
Credit line at 14.25%
9,550
Total
Bank Lines of Credit
$
70,940
Short
Term Notes Payable to Non-Shareholders:
- Current
portion of 4.49% interest; principal of $6,479; due 9/30/10; monthly
payments of $318
$
3,596
- Current
portion of 9.99% interest; principal of $10,388; due 5/15/11; monthly
payments of $358
3,432
- Current
portion of 9.99% interest; principal of $14,368; due 5/19/11; monthly
payments of $509
4,884
- Current
portion of 9.99% interest; principal of $11,861; due 6/29/11; monthly
payments of $399
3,787
- 8%
interest; principal of $10,846; convertible to common stock based
on 75%
of average price; due on 9/8/09; net of unamortized discount related
to
debt discount of $8,350
2,496
- 18%
interest; principal of $25,000; due on 2/20/09; monthly payments
of
$375
25,000
Total
Short Term Notes Payable to Non-Shareholders
$
43,195
Short
Term Notes Payable to Shareholders:
- 8%
interest; principal of $19,444; convertible to common stock based
on 75%
of average price; due on 10/11/08; net
of unamortized discount related to the debt discount of
$1,017
$
18,427
- 12%
interest; principal of $25,436; convertible to common stock based
on 75%
of average price; due on 02/29/09; net
of unamortized discount related to the debt discount of
$8,437
16,999
- 10%
interest; principal of 30,000; convertible to common stock based
on 70% of
average price; due on 10/1/08
30,000
- 10%
interest; principal of $6,281; convertible to common stock based
on 70% of
average price; due on 10/1/08
6,281
- 10%
interest; principal of 19,336; convertible to common stock based
on 70% of
average price; due on 12/20/08; net
of unamortized discount related to the debt discount of
$9,436
9,900
- 8%
interest; principal of $7,022 convertible to common stock based on
70% of
average price; due on 12/31/08
7,022
- 10%
interest; principal of $20,000; convertible to common stock based
on 70%
of average price; due on 2/28/09; net
of unamortized discount related to the debt discount of
$14,068
5,932
- 10%
interest; principal of $25,000; convertible to common stock based
on 70%
of average price; due on 3/31/09; net
of unamortized discount related to the debt discount of
$11,415
13,585
- 10%
interest; principal of $10,000; convertible to common stock based
on 70%
of average price; due on 4/30/09
10,000
- 10%
interest; principal of $20,000; convertible to common stock based
on 70%
of average price; due on 5/20/09
20,000
- 10%
interest; principal of $81,717; convertible to common stock based
on 70%
of average price; due on 5/29/09; net of unamortized discount related
to
debt discount of $52,827
28,890
- 10%
interest; principal of $9,728; convertible to common stock based
on 70% of
average price; due on 5/29/09; net of unamortized discount related
to debt
discount of $6,374
3,354
- 10%
interest; principal of $20,000; convertible to common stock based
on 70%
of average price; due on 5/29/09; net of unamortized discount related
to
debt discount of $9,722
10,278
- 8%
interest; principal of $33,556; convertible to common stock based
on 50%
of average price; due on 3/15/09
33,556
- 8%
interest; principal of $30,000; convertible to common stock based
on 70%
of average price; due on 5/1/09; net of unamortized discount related
to
debt discount of $18,843
11,157
- 8%
interest; principal of $28,800; convertible to common stock based
on 50%
of average price; due on 3/15/09; net of unamortized discount related
to
debt discount of $18,089
10,711
- No
interest; principal of $4,000; convertible to common stock based
on 70% of
average price; due on 3/9/09; net of unamortized discount related
to debt
discount of $1,975
2,025
- No
interest; principal of $125,702
125,702
- Current
portion of 6% interest; principal of $720,000; due 7/31/13 convertible
to
Series E Preferred Stock; monthly payments of 13,920
shares
128,574
Total
Short Term Notes Payable to Shareholders
$
492,393
Long
Term Notes Payable to Non-Shareholders:
- Long
term portion of 4.49% interest; principal of $6,479; due 9/30/10;
monthly
payments of $318
2,883
- Long
term portion of 9.99% interest; principal of $10,388; due 5/15/11;
monthly
payments of $358
6,956
- Long
term portion of 9.99% interest; principal of $14,368; due 5/19/11;
monthly
payments of $509
9,484
- Long
term portion of 9.99% interest; principal of $11,861; due 6/29/11;
monthly
payments of $399
8,074
Total
Long Term Notes Payable to Non-Shareholders
$
27,397
Long
Term Notes Payable to Shareholders:
- Long
term portion of 6% interest; principal of $720,000; due 7/31/13
convertible to Series E Preferred Stock; monthly payments of 13,920
shares
570,735
Total
Long Term Notes Payable to Shareholders
$
570,735
12
NW
TECH CAPITAL, INC.
FORMERLY
CYBERTEL CAPITAL CORPORATION
Notes
to the Condensed Consolidated Financial Statements
(continued)
During
the quarter ended June 30, 2008, the Company issued a total of 22,000,000 shares
of common stock for services valued at $62,100. The Company also issued a total
of 38,695,110 shares of common stock for repayment of debt valued at $27,718
and
12,063,492 shares of common stock valued at $17,500.
During
the quarter ended March 31, 2008, the Company issued a total of 6,550,000 shares
of common stock for services valued at $112,430. The Company also issued a
total
of 8,927,502 shares of common stock for repayment of debt valued at $66,471.
Holders
of the Company’s Series A Preferred stock converted 7.38 shares of Series
A preferred stock into 9,226,663 shares of the Company’s common stock and
$3,608 of dividends into 4,509,707 shares of the Company’s common stock as
indicated on the chart above.
·
The
Company issued 27,840 shares of the Company’s Series E preferred stock
valued at $27,840 as partial payment for the acquisition of Teledigit.
Since the Series E Preferred Stock has a convertible feature, a Preferred
Dividend of $1,127 was calculated in accordance with EITF
00-27.
Holders
of the Company’s Series A Preferred stock converted 28.96 shares of Series
A preferred stock into 29,462,800 shares of the Company’s common
stock.
13
NW
TECH CAPITAL, INC.
FORMERLY
CYBERTEL CAPITAL CORPORATION
Notes
to the Condensed Consolidated Financial Statements
(continued)
The
Company designated a new series of preferred stock named the Series
F
Preferred Stock with 10,000,000 authorized shares with each share
convertible to $1.00 worth of the Company’s common stock. The Company
issued 7,500 shares of the Company’s Series F Preferred Stock during the
quarter. Since the Series F Preferred Stock has a convertible feature,
a
Preferred Dividend of $1,098 was calculated in accordance with EITF
00-27.
·
The
Company issued 80,000 shares of the Company’s Series E Preferred Stock as
partial payment for the acquisition of Teledigit. Since the Series
E
Preferred Stock has a convertible feature, a Preferred Dividend of
$23,175
was calculated in accordance with EITF
00-27.
Holders
of the Company’s Series A preferred stock converted 80.47 shares of the
Series A Preferred Stock and $59,819 of Series A dividends into 2,027,068
shares of the Company’s common
stock.
·
The
Company amended the Series B Preferred Stock by increasing the authorized
shares from 50,000,000 shares to 100,000,000 million shares with
a par
value of $0.00001 per share. The Company also added a conversion
feature
which allows shareholders of the Series B Preferred Stock to convert
one
share of Series B Preferred Stock into 25 shares of Common Stock
upon
request of the shareholder.
·
The
President and CEO of the Company converted 800,000 shares of his
Series B
Preferred Stock into 20,000,000 shares of the Company’s common
stock.
·
The
Company designated a new series of preferred stock named the Series
E
Preferred Stock with 10,000,000 authorized shares and a par value
of
$0.00001. Each share of the Series E Preferred Stock is convertible
to
$1.00 of the Company’s Common Stock six months after issuance.
14
NW
TECH CAPITAL, INC.
FORMERLY
CYBERTEL CAPITAL CORPORATION
Notes
to the Condensed Consolidated Financial Statements
(continued)
On
December 15, 2007, the Company entered into a Mutual Separation Agreement (the
“Separation Agreement”) with AireWire, Inc. (“AireWire”). The Company and
AireWire were parties to an acquisition agreement dated March 31, 2006 (the
“Acquisition Agreement”). Both parties deemed it in their best interests to
unwind the Acquisition Agreement. The Separation Agreement provided that the
Company would return the 1,000,000 shares of the Company that AireWire owned
and
that AireWire would return the 500,000 shares of NW Tech Capital, Inc. that
AireWire owned. As of the effective date of December 31, 2007, neither party
had
any obligation to the other.
On
December 31, 2007, the Company recorded a loss from their discontinued
operations and recorded a gain on the disposition of this subsidiary. Prior
year
financial statements for 2007 have been reclassified to present the operations
of AireWire as Discontinued Operations. There is no activity in the current
year
related to AireWire.
The
following amounts, related to our AireWire business, have been segregated from
Continuing Operations and included in Discontinued Operationsin
the
Consolidated Statements of Operations:
On
January 29, 2008the company signed an acquisition agreement to purchase a
Portland, OR based company named Teledigit Inc. The acquisition agreement is
to
purchase 100% of Teledigit in exchange for 80,000 shares of the Company’s series
“E” Preferred Stock convertible to $1.00 common stock per share and a $720,000
convertible note payable. The note is convertible into 720,000 Series “E”
Preferred Shares plus interest of 6%. As of June 16, 2008, the acquisition
of
Teledigit was completed.
Teledigit
was a locally owned and operated Telecommunications & Data company in the
Pacific Northwest. Established in 1995, Teledigit bases its operations out
of
Portland, Oregon serving customers in the greater Portland
Metropolitan/Vancouver, WA areas. It provides installation and service for
business voice needs, including key systems, PBX’s, voicemail, data networking
and cabling. Revenues for fiscal year 2007 exceeded $1.7 million dollars. As
of
June 16, 2008, Teledigit is now a wholly owned subsidiary of NW Tech Capital,
Inc. The general operations of Teledigit remain the same.
The
acquisition has been accounted for as a purchase in accordance with Statement
of
Financial Accounting Standard No. 141 Business
Combinations.
The
total purchase price was allocated as follows:
Cash
$
21,871
Accounts
receivable
176,187
Inventories
46,808
Fixed
assets
138,203
Other
assets
680
Accounts
payable
(18,835
)
Current
liabilities
(1,080
)
Bank
line of credit
(82,580
)
Notes
payable
(47,770
)
Goodwill
586,516
Purchase
price
$
820,000
None
of
the $586,516 of goodwill is subject to amortization, but an annual impairment
test. As of the date of these financial statements, no triggering event has
occurred which would indicate an impairment of this amount.
The
Company’s condensed consolidated financial statements include Teledigit’s
results of operations subsequent to its acquisition on June 16,2008.
16
NW
TECH CAPITAL, INC.
FORMERLY
CYBERTEL CAPITAL CORPORATION
Notes
to the Condensed Consolidated Financial Statements
(continued)
The
following is the supplemental pro forma information that discloses the results
of operations as though the business combination had been completed as of the
beginning of the period being reported on.
NW
TECH CAPITAL, INC.
PROFORMA
CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS
The
President and CEO lent the Company $17,073 in exchange for promissory notes
in
the same amount. During the quarter, the President and CEO assigned $10,846
of
the promissory note to an unrelated party.
NOTE
9 – LITIGATION JUDGMENT
Litigation
judgment expense of $87,775 was related to a Notice of Judgment in a case
between GRE Mira Mesa LLC (“GRE”), a California limited liability company, and
Cybertel Communications Corp. (“Cybertel”), dated May 7, 2007, in the amount of
$87,775 in favor of GRE. Cybertel Communications Corp. (formerly ProTel
Communications, Inc.) is a former subsidiary of the Company and is no longer
operational. The designated Case No. is GIC875633 in which GRE stated that
Cybertel owed unpaid rent. A hearing on the matter occurred on August 22, 2008
in which the Company tried to appeal the judgment. The judgment was ruled
against the Company and the amount is accrued as of September 30,2008.
NOTE
10 - CONCENTRATIONS
Major
Customers
The
Company’s business is driven by many small businesses throughout the West Coast
of the United States. The Company has a few large customers, none of which
consist of more than 15% of the overall revenue of the company. Therefore the
Company’s revenue does not rely heavily on any major company contract that could
adversely affect their business significantly in a negative fashion.
Major
Suppliers
The
Company has a few major suppliers all of which are large national and
international companies. Examples of these major suppliers are Cisco, Nortel,
Comdial, Vertical Communications, Adtran, VMWare, Kaspersky Labs and Graybar.
Each of these companies are well funded and at this time we have no indication
that the Company will have any problems getting adequate supplies from any
of
these suppliers. There are also alternative sources that could be used if
necessary to get supplies.
NOTE
11 - SUBSEQUENT EVENTS
Stock
Issuances:
-
The
Company issued a total of 9,500,000 shares of Common stock valued
at
$1,995 for repayment of debt.
-
4,000,000
shares were returned to the company and subsequently canceled as
of the
quarter ended September 30, 2008 in connection with services
rendered.
In
October, the Company entered into a Letter of Intent to acquire the Pink Sheet
listed company, Microholdings US (OTC:MCHU.PK) on or before November 15,2008.
Notes
Payable
Three
notes totaling $55,725 originally due subsequent to the end of the quarter
was
extended one year.
18
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF
OPERATIONS.
Overview
The
following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements in the Form 10-KSB for the year ended December31, 2007 and the other financial data appearing elsewhere in this Form
10-Q.
The
information set forth in this Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A") contains certain
"forward-looking statements," including, among others (i) expected changes
in
the Company's revenues and profitability, (ii) prospective business
opportunities and (iii) the Company's strategy for financing its business.
Forward-looking statements are statements other than historical information
or
statements of current condition. Some forward-looking statements may be
identified by use of terms such as "believes,""anticipates,""intends" or
"expects." These forward-looking statements relate to the plans, objectives
and
expectations of the Company for future operations. Although the Company believes
that its expectations with respect to the forward-looking statements are based
upon reasonable assumptions within the bounds of its knowledge of its business
and operations, in light of the risks and uncertainties inherent in all future
projections, the inclusion of forward-looking statements in this report should
not be regarded as a representation by the Company or any other person that
the
objectives or plans of the Company will be achieved.
In
light
of these risks and uncertainties, there can be no assurance that actual results,
performance or achievements of the Company will not differ materially from
any
future results, performance or achievements expressed or implied by such
forward-looking statements. The foregoing review of important factors should
not
be construed as exhaustive. The Company undertakes no obligation to release
publicly the results of any future revisions it may make to forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Executive
Overview
NW
Tech
Capital, Inc. (the “Company,”“we,”“us,” or “our”), formerly Cybertel Capital
Corporation, was originally organized for the primary purpose of engaging in
all
facets of the business comprising the telecommunications industry and is a
provider of long distance voice and data telecommunications.
On
June16, 2008, the Company acquired Teledigit, Inc. (“Teledigit”), an Oregon
corporation, pursuant to an acquisition agreement entered into by the Company
and Teledigit on January 29, 2008 (the “Acquisition Agreement”). Teledigit was
established in 1995, and bases its operations out of Portland, Oregon, serving
customers in the greater Portland Metropolitan/Vancouver, WA areas. Teledigit
has had a progressive growth rate over the last several years. Its revenues
for
its last year exceeded $1.7 million. Teledigit provides installation and service
for business voice needs, including key systems, PBX’s, Voicemail, VoIP systems,
Managed Data Services, Data network service and support and Structured and
Low
Voltage cabling. The Acquisition Agreement is to purchase 100% of Teledigit
in
exchange for 80,000 shares of the Company’s Series E Preferred Stock worth $1.00
per share and a $720,000 convertible note payable. The note is convertible
into
720,000 shares of Series E Preferred Stock plus interest of 6%. The acquisition
was completed on June 16, 2008 and the results of operations have been
consolidated into the Company’s results as of acquisition date.
Through
our subsidiary, Teledigit, we are now a Data and Telecommunications Integrator.
Our mission is to provide business technology and support solutions to our
customers so they can achieve a competitive edge. The majority of our customers
are on the West Coast of the United States but have a few national contracts
that cover the entire United States. We believe in building long lasting, honest
relationships with our customers.
19
The
company is fluent in the following areas of Voice and Data
technologies:
·
VoIP,
TDM, and Hybrid voice functionality and
networking.
·
10G,
Switched Gigabit, Wireless voice, and multi-protocol
networking.
·
Computer/Telephony
integration for call centers or Database
backends.
·
Converged
multimedia applications such as contact centers, desktop
conferencing.
·
Managed
IT Support Services and
Outsourcing.
·
LAN
/ WAN design and network planning.
·
Data
network support and desktop
support.
·
VoIP
network support and integration.
·
VPN
and Branch office data deployment.
·
Wireless
LAN survey and installation support and
deployment.
·
Outdoor
Wireless/Microwave data integration and service (Unlicensed & FCC
Licensed).
·
Remote
network support and management.
·
CCTV
and IP Video surveillance network design, installation and
support.
·
Cat5e
and Cat6 Copper networking cabling
installation.
·
Single-Mode
and Multi-Mode Fiber Optic Cabling installation and
support.
·
CATV
Distribution Design, Service and
Installation.
·
Data
and Telecommunication room design and
installation.
In
addition to the services provided by Teledigit, we also are actively involved
in
identifying other companies in the telecommunications industry for acquisition
or strategic partnerships. These companies may be providers of long distance
service, Voice over Internet Protocol providers, consulting companies, prepaid
service companies, network management operations, or other companies in the
telecommunication arena.
We
also
are looking into acquisition possibilities and funding from China. During the
second quarter of 2008, we incorporated a new Hong Kong/China company named
“NW
Tech Capital Group Limited” to engage in completing merger and acquisitions
opportunities with private China companies. In August, we signed a Letter of
Intent to acquire 51% of the controlling shares of Zhuihai Jialun Guangcai
Chain
Drugstore co, Ltd (“ZJG Drugstores”) subject to a financial audit and upon
satisfactory completion of the final acquisition agreement. ZJD Drugstores
is a
retail and wholesale chain offering a variety of pharmaceutical and health
products. We are currently re-evaluating this LOI and working toward a joint
venture with ZJG Drustores on a new distribution center.
We
currently have insufficient funds to operate our business according to its
proposed business plan. In addition, if unanticipated expenses, problems, and
difficulties occur which result in material delays in the development of its
products, we will not be able to operate within our budget. If we do not operate
within our budget, we will require additional funds to continue its business.
We
may not be able to obtain additional financing as needed, on acceptable terms,
or at all, which would force us to delay our plans for growth and implementation
of our strategy, which could seriously harm our business, financial condition,
and results of operations. If we need additional funds, we may seek to obtain
them primarily through stock or debt financings. Those additional financings
could result in dilution to our stockholders.
Recent
Developments
Effective
as of June 16, 2008, we acquired Teledigit pursuant to an acquisition agreement
entered into by the Company and Teledigit on January 29, 2008 (the “Acquisition
Agreement.”). Teledigit is a Portland, Oregon based telecommunications sales and
service company that has been in business since 1995 and has grown progressively
over the last 10 years. Teledigit does a wide range of business for a national
dental company which has locations all across the United States, supplying
everything from new phone systems to servicing old systems and engineering
wiring for new offices.
On
January 21, 2008, we effected a 1000 to 1 reverse split of our common stock.
All
shareholder deficit accounts have been stated to reflect the stock splits and
change in par value as of the earliest date presented in the financial
statements.
20
On
January 18, 2008, we filed a Certificate of Amendment with the State of Nevada
changing our corporate name to NW Tech Capital, Inc.
On
December 31, 2007, a separation agreement was reached between us and AireWire
releasing AireWire back to its pre-acquisition state and returning $1,000,000
dollars worth of Series C Preferred Stock back to us.
Critical
Accounting Policies
Accounting
for Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios.
We
carry
notes with convertible features embedded and we accounted for them under the
Financial Accounting Standards Board’s Emerging Issues Task Force (“EITF”) 00-27
and 00-19.
EITF
00-27 requires us to calculate the fair value of stock-based embedded
convertible feature in notes as a debt discount, also known as a beneficial
conversion feature “BCF”. The convertible notes allow the note holder to convert
the note into common shares of the company at a specified discounted rate.
The
value of the debt discount is calculated on the date of the note issuance using
the intrinsic value method. Essentially the debt discount equates to the
difference between the note and the fair market value of the stocks if the
entire note were to be converted. The debt discount is expensed as interest
ratably on a straight-line basis over the requisite service period.
EITF
00-19 requires the use of a valuation model to calculate the fair value of
the
embedded convertible feature in the notes. We use the Black-Scholes Model (the
“BSM”) to calculate the fair value of the embedded convertible feature. The BSM
incorporates various assumptions including expected volatility, expected life,
and interest rates. The expected volatility is based on the historical
volatility of our common stock. We base our expected life assumption on our
historical experience and on the terms and conditions of the notes. Accordingly,
the embedded conversion feature is marked to market through earnings at the
end
of each reporting period and reported as a derivative liability.
Results
of Operations
We
have
changed our business by discontinuing and disposing of our former subsidiary
AireWire and acquiring Teledigit. While AireWire was also in the
telecommunications business, the disposal of AireWire is not indicative of
current or future results of operations. We have included a supplemental Pro
Forma Financials of Operations, which discloses the results of operations as
though the business combination with Teledigit had been completed as of the
beginning of the reporting period (see Acquisitions and Investments – Note 7 in
Item 1).
For
the
three months ending September 30, 2008, our revenues totaled $511,465 including
revenue contributed by the acquisition of Teledigit on June 16, 2008. There
were
no revenues for the three months ending September 30, 2007 (see Note 6 –
Discontinued Operations in Item 1). The difference between the two periods
is
attributable to the difference in the two subsidiaries, Teledigit versus
AireWire. 100% of the Company’s revenues for the quarter were brought in through
our subsidiary, Teledigit.
We
generated a net income of $741,444 for the quarter ended September 30, 2008,
compared to a net loss of $336,299 for the same quarter in 2007. The difference
of $1,077,743 increase in net income was primarily due to decreased stock based
compensation and the change in the value of the derivative liability calculated
in accordance with EITF 00-19.
The
majority of the difference in net income between the two periods is attributed
to a non-cash expense which calculates the change in the derivative liability
in
accordance with EITF 00-19 amounting to a decrease of $1,225,077. Compared
to
the same period last year, there is an increase in interest expense consisting
mainly of a non-cash amortization of the beneficial conversion feature or “BCF”
as calculated in accordance with EITF 00-27. Selling, general, and
administrative costs were $495,581 during the three months ended September30,2008, as compared to $181,251 for the corresponding period in 2007. The increase
of $314,330 is due to expenses associated with the operation of our Teledigit
subsidiary.
21
Litigation
judgment expense of $87,775 was related to a Notice of Judgment in a case
between GRE Mira Mesa LLC and a former subsidiary of the Company. The creditor
stated the subsidiary owed unpaid rent. A hearing on the matter occurred on
August 22, 2008 in which the Company tried to appeal the judgment. The court
ruled against the Company and the amount is accrued as of September 30, 2008.
(see Note 9 – Litigation Judgment in Item 1)
For
the
nine months ending September 30, 2008, our revenues totaled $574,200 including
revenue contributed by the acquisition of Teledigit on June 16, 2008. There
were
no revenues for the same period during the prior year (see Note 6 – Discontinued
Operations in Item 1). The difference between the two periods is attributed
to
the difference in the two subsidiaries, Teledigit versus AireWire. 100% of
the
Company’s revenues for the nine months ending September 30, 2008 were brought in
through our subsidiary, Teledigit.
We
generated a net loss of $1,621,832 for the nine months ended September 30,2008,
compared to $1,237,716 for the same quarter in 2007. The $390,245 increase
in
net loss was primarily due to increases in the change in the value of the
derivative liability in accordance with EITF 00-19, interest expense, and
selling and administrative expenses.
The
majority of the difference in net loss between the two periods is attributed
to
a $591,227 increase in selling, general, and administrative costs associated
with operating our subsidiary, Teledigit. Also contributing to the difference
in
net loss between the two periods are a non-cash expense which calculates the
change in the derivative liability in accordance with EITF 00-19 and an increase
in interest expense consisting largely of a non-cash amortization of the
beneficial conversion feature or “BCF” as calculated in accordance with EITF
00-27.
Litigation
judgment expense of $87,775 was related to a Notice of Judgment in a case
between GRE Mira Mesa LLC and a former subsidiary of the Company. The creditor
stated the subsidiary owed unpaid rent. A hearing on the matter occurred on
August 22, 2008 in which the Company tried to appeal the judgment. The court
ruled against the Company and the amount is accrued as of September 30, 2008.
(see Note 9 – Litigation Judgment in Item 1)
Liquidity
and Capital Resources
During
the nine-month period ended September 30, 2008, cash used by operations was
$162,811. We intend to continue to search for ways to expand our business
through new service contracts and by continuing to search for new acquisitions.
We anticipate that we will incur smaller losses in the future if we are able
to
expand our business and the marketing of our products and services now offered.
The losses will continue until the excess of operation and marketing expenses
is
overcome by the increase in revenue from operations.
During
the nine months ended September 30, 2008, we incurred a net loss of $1,621,832,
had cash used for operations of $162,811, and cash provided by financing
activities was $172,254. All of these proceeds were used to fund operations.
We
continue to seek short-term financing through debt and equity financing and
are
also seeking long-term financing through debt and/or equity financing through
a
private placement or a retail offering of our common stock.
In
order
to execute our business plan, we will need to acquire additional capital from
debt or equity financing. Our independent certified public accountants have
stated in their report for the year-end that there is a substantial doubt about
our ability to continue as a going concern. In the absence of significant
revenue and profits, we will be completely dependent on additional debt and
equity financing arrangements. There is no assurance that any financing will
be
sufficient to fund our capital expenditures, working capital and other cash
requirements for the fiscal year ending December 31, 2008. We cannot assure
you
that any such additional funding will be available or that, if available, can
be
obtained on terms favorable to us. If we are unable to raise needed funds on
acceptable terms, we will not be able to execute our business plan, develop
or
enhance existing services, take advantage of future opportunities or respond
to
competitive pressures or unanticipated requirements. A material shortage of
capital will require us to take drastic steps such as further reducing our
level
of operations, disposing of selected assets or seeking an acquisition partner.
If cash is insufficient, we will not be able to continue operations.
22
Off-Balance
Sheet Transactions
As
of the
date of this Quarterly Report, there are no off-balance sheet arrangements
that
have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources
that
are material to investors. The term "off-balance sheet arrangement" generally
means any transaction, agreement or other contractual arrangement to which
an
entity unconsolidated with us is a party, under which the we have (i) any
obligation arising under a guarantee contract, derivative instrument or variable
interest; or (ii) a retained or contingent interest in assets transferred to
such entity or similar arrangement that serves as credit, liquidity or market
risk support for such assets.
Material
Commitments
As
of the
date of this Quarterly Report, we do not have any material commitments that
are
not reflected as liabilities on our consolidated balance sheet included
elsewhere in this report, nor does management anticipate any further material
commitments within the next twelve months.
Evaluation
of disclosure controls and procedures.
As of
the end of the period covered by this Quarterly Report, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer of the effectiveness of our
disclosure controls and procedures. Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that, as of the end
of
such period, our disclosure controls and procedures are effective to provide
reasonable assurance that the information required to be disclosed by the
Company in the reports that it files or submits under the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed,
summarized and reported, within the time periods specified in the SEC’s rules
and forms. It should be noted that the design of any system of controls is
based
in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions, regardless of how remote.
Changes
in internal control.
In
addition, we have reviewed our internal controls over financial reporting,
and
there have been no changes in our internal controls over financial reporting
in
the last fiscal quarter that has materially affected or is reasonably likely
to
materially affect our internal control over financial
reporting.
23
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings.
Except
as
indicated below, the Company is not a party to any pending legal proceeding.
To
the knowledge of management, no federal, state or local governmental agency
is
presently contemplating any proceeding against the Company. No director,
executive officer or other person who may be deemed to be an “affiliate” of the
Company or owner of record or beneficially of more than five percent of its
common stock is a party adverse to the Company or has a material interest
adverse to the Company in any proceeding.
On
or
about January 25, 2002, Prudential Home Building Investors, Inc., a New Jersey
corporation (“Prudential”), filed a complaint against the Company in the
Superior Court of California, County of San Diego, and Central Division. The
case was designated Case No. GIC 782069, and sought damages in the amount of
$32,000 for unpaid rent due on the Company’s former La Jolla, California
facility for the period of September, 2001, through December, 2001, when the
lease terminated. The Company has accrued this expense and expects no additional
cost or expense upon settlement of this case.
On
March2, 2006, Epstein, Fitzsimmons, Brown, Gioia, Jacobs & Sprouls, P.C.,
obtained a $15,000 default judgment against the Company in the Superior Court
of
New Jersey for Morris County. The Company expects no additional cost or expense
upon settlement of this case.
On
June20, 2008, the Company received a Notice of Judgment in a case between GRE Mira
Mesa LLC (“GRE”), a California limited liability company, and Cybertel
Communications Corp. (“Cybertel”), dated May 7, 2007, in the amount of $87,775
in favor of GRE. Cybertel (formerly ProTel Communications, Inc.) is a former
subsidiary of the Company and it is no longer operational. The designated Case
No. is GIC875633 in which GRE stated that Cybertel owed unpaid rent. A hearing
on the matter occurred on August 22, 2008 in which the Company tried to appeal
the judgment. The court ruled against the Company in the amount of $87,775.
Item
1A. Risk Factors
There
have been no material changes from the Risk Factors described in our Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2007.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.
The
following table indicates all sales of unregistered securities by NWTT during
the quarterly period ended September 30, 2008:
Date
of Issue
Number
of Shares Issued
Aggregate
Sales Price
Nature
of Transaction
07/02/08
4,600,000
$
2,254
Debt
Repayment
07/08/08
3,000,000
1,470
Debt
Repayment
07/10/08
3,000,000
1,470
Debt
Repayment
07/18/08
10,000,000
10,000
Cash
for Stock
08/07/08
8,193,000
5,735
Debt
Repayment
08/07/08
9,226,663
7,381
Preferred
A conversion
08/07/08
4,509,707
3,608
Preferred
A Dividend
08/13/08
9,000,000
6,750
Debt
Repayment
08/18/08
16,980,000
12,335
Debt
Repayment
08/20/08
12,000,000
8,400
Debt
Repayment
08/27/08
11,600,000
5,800
Debt
Repayment
08/28/08
9,000,000
6,300
Debt
Repayment
09/03/08
8,800,000
10,000
Cash
for Stock
09/05/08
32,500,000
17,583
Debt
Repayment
09/08/08
7,000,000
3,696
Repayment
of debt
09/24/08
9,000,000
2,700
Repayment
of debt
Total
158,409,370
$
105,482
24
Management
believes each of the foregoing persons or entities was either an "accredited
investor," or "sophisticated investor" as defined in Rule 501 of Regulation
D
promulgated under the Securities Act of 1933, as amended (the “Act”). Each such
person or entity had access to all material information about NWTT prior to
the
offer, sale or issuance of these "restricted securities." Management believes
that these shares were exempt from the registration requirements of the Act,
pursuant to Section 4(2) thereof.
Amendment
of Designation After Issuance of Class or Series for Series B “Super
Voting” Preferred Stock (incorporated by reference to Exhibit 4.1 to the
Company’s Quarterly Report on Form 10Q for the quarter ended March 31,2008, filed with the SEC on May 14,2008).
4.2
Certificate
of Designation for Series E Convertible Preferred Stock (incorporated
by
reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10Q for
the quarter ended March 31, 2008, filed with the SEC on May 14,2008).
4.3
Certificate
of Designation for Series F Convertible Preferred Stock (incorporated
by
reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10Q for
the quarter ended March 31, 2008, filed with the SEC on May 14,2008)
31.1
Certification
of Chief Executive Officer and Chief Financial Officer, James A.
Wheeler,
pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange
Act.
32.1
Certification
of Chief Executive Officer and Chief Financial Officer, James A.
Wheeler,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002.
25
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused
this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Amendment
of Designation After Issuance of Class or Series for Series B “Super
Voting” Preferred Stock (incorporated by reference to Exhibit 4.1 to the
Company’s Quarterly Report on Form 10Q for the quarter ended March 31,2008, filed with the SEC on May 14,2008).
4.2
Certificate
of Designation for Series E Convertible Preferred Stock (incorporated
by
reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10Q for
the quarter ended March 31, 2008, filed with the SEC on May 14,2008).
4.3
Certificate
of Designation for Series F Convertible Preferred Stock (incorporated
by
reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10Q for
the quarter ended March 31, 2008, filed with the SEC on May 14,2008).
31.1
Certification
of Chief Executive Officer and Chief Financial Officer, James A.
Wheeler,
pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange
Act.
32.1
Certification
of Chief Executive Officer and Chief Financial Officer, James A.
Wheeler,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002.
27
Dates Referenced Herein and Documents Incorporated by Reference
