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Broadband Wireless International Corp – ‘10KSB’ for 3/31/02

On:  Wednesday, 8/7/02, at 2:07pm ET   ·   For:  3/31/02   ·   Accession #:  1168048-2-8   ·   File #:  0-08507

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/07/02  Broadband Wireless Int’l Corp     10KSB       3/31/02    1:557K                                   Secs Compliancs … LLC/FA

Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Bban 10KSB                                          HTML    361K 


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  10KSB 1 bb10ksb  


U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-KSB



(Mark One)

[X]     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934


[  ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from __________________________

                                                                  to __________________________.


For the Fiscal Year Ended March 31, 2002


Commission File Number 0-08507


BROADBAND WIRELESS INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its charter)


NEVADA  

75-1441442

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)



2304 North Interstate Drive, Norman, OK 73072

(Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code: (405) 321-8530


Securities registered pursuant to Section 12(b) of the Act:  None


Securities registered pursuant to Section 12(g) of the Act:  Common Stock, $.0125 par value per share"

(Title of Class)


Check whether the registrant (1) has filed all reports required 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


Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained in this form, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. –X-.


Registrant's revenues for its most recent fiscal year were $8,407


As of July 26, 2002, the aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, was $8,201,058.58.


As of July 26, 2002 there were 58,724,386 shares of Common Stock outstanding.


Transitional Small Business Disclosure Format (check one): Yes              No   X  







FORM 10-KSB


TABLE OF CONTENTS



Item 2. Description of Property.


Item 3. Legal Proceedings.


Item 4. Submission of Matters to Vote of Security Holders.


Item 5. Market for Common Equity and Related Stockholder Matters.


Item 6. Management's Discussion and Analysis of Financial Condition and Results of Operations.


Item 7. Financial Statements.


Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.


Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With 16(a) of the Exchange Act


Item 10. Executive Compensation.


Item 11. Security Ownership of Certain Beneficial Owners and Management.


Item 12. Certain Relationships and Related Transactions.


Item 13. Exhibits and Reports on Form 8-K.


Signatures


Appendix A





















SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS


      Certain statements contained with this report may be deemed "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, the "Private Securities Litigation Reform Act of 1995"). All statements in this report other than a statement of historical fact are forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which could cause actual results and performance of the Company to differ materially from such statements. The words "believe," "expect," "anticipate," "intend," "will," and similar expressions identify forward-looking statements. Forward-looking statements contained herein relate to, among other things, (i) the ability of the Receiver to locate and recover assets of the Company; (ii) the appointment of officers for the Company; (iii) the ability of the Company to enter into a business combination or merger; (iv) the ability or inability to continue operations using the Business Plan; (v) the Company's ability to develop or adopt new and existing technologies in the conduct of its operations; (vi) anticipated financial performance; (vii) ability to comply with the Company's general working capital requirements; (vii) the outcome of the various lawsuits; and (viii) the cancellation of shares of the Company's common stock issued without consideration or in violation of applicable law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, we do not assume responsibility for the accuracy and completeness of such statements. We undertake no obligations to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise.




PART I


Item 1. Description of Business.


GENERAL OVERVIEW


     Broadband Wireless International Corporation (the "Company") is a Nevada corporation that was originally formed on July 23, 1973 for the purpose of engaging in exploration for oil and gas.  From 1986 to 1997, the Company functioned essentially as a "public shell" because it had no operations and continued to be publicly traded. During the fiscal year ended March 31, 1998, the Company searched for other business opportunities, and solicited merger partners interested in acquiring a "public shell." In late 1999 and early 2000, the Company implemented a shift of its business focus to telecommunications, as described in its Quarterly Report on Form 10-QSB for the quarterly period ended December 31, 1999.


     In November 1999, the Company executed an Agreement in Principle and Letter of Understanding (the "Letter of Understanding") with Broadcom Wireless Communications Corporation ("Broadcom"), after extensive negotiations with Donald L. Knight ("Knight"). Pursuant to the Letter of Understanding, the Company, in principle, agreed to be acquired by Broadcom.  Broadcom would be the controlling shareholder of the Company upon the consummation of the stock issuances described in the Letter of Understanding. Except for the issuance of 4,400,000 shares of common stock for $55,000, each of the other stock issuances described in the Letter of Understanding, totaling 48,000,000 shares, were made based on the representations of Broadcom and Knight that Broadcom either had valuable assets to exchange for such stock, or had the rights to acquire such assets. Although 15,000,000 shares of the 48,000,000 shares remained in escrow with the Company (and were ultimately canceled in June 2000) pending receipt of documentation that Broadcom had in fact acquired such assets, an aggregate 33,000,000 shares of common stock were actually delivered to Broadcom under the Letter of Understanding, for which the Company reported, in previous filings with the Securities and Exchange Commission (the "SEC"), the receipt of various assets and contract rights. See "--THE BACKGROUND OF BROADCOM'S ACQUISITION EFFORTS -- The Letter of Understanding." Immediately after the stock issuances, Broadcom owned of record approximately 64% of the outstanding common stock of the Company, and until May of 2000, exerted control of the Company.


     On April 13, 2000, the Company received an administrative subpoena from the Oklahoma Department of Securities that requested, inter alia, the production of all documents in the possession of the Company relating to transactions with Broadcom, as well as the underlying transaction giving rise to the Broadcom stock issuances.


     On June 22, 2000, the Securities and Exchange Commission ("SEC") issued an order directing a private investigation of the Company's stock issuances to Broadcom relating to potential violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, as amended (the "Securities Act"), Section 19(b) and 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rules 10b-5, 12b-20, 13(a)11 and 13a-13 thereunder. The Company began producing documents in response to the SEC's subpoena and cooperating with the investigation.


     On August 11, 2000, the SEC filed a complaint in the United States District Court for the Western District of Oklahoma (the "Court") against the Company and Ivan W. Webb ("Webb"), the then President and Director of the Company, and others, including Knight, Broadcom, and certain other entities affiliated with the Broadcom Group. The complaint is styled Securities and Exchange Commission v. Broadband Wireless International, Corporation, Broadcom Wireless Communications Corporation, Ivan W. Webb, and Donald L. Knight, Defendants, and Black Giant Resources Corporation, Broadband Wireless Communications Corporation, Medscan Technologies, Inc., and Kimberly Knight, Relief Defendants (United States District Court for the Western District of Oklahoma, CIV 00-1375) (the "SEC Lawsuit"). The SEC Lawsuit alleges various violations of federal securities laws and seeks preliminary and permanent injunctive relief, disgorgement and civil monetary penalties. In connection with the filing of the SEC Lawsuit, the SEC obtained an emergency, ex parte order appointing a temporary receiver, Peter Bradford (the "Temporary Receiver"), for the Company and a temporary restraining order enjoining the defendants from further violations of the federal securities laws and freezing their assets.


     Also on August 11, 2000, the Oklahoma Department of Securities filed a petition for permanent injunction, seeking relief similar in nature to that sought in the SEC Lawsuit. The petition is styled Oklahoma Department of Securities ex. rel. Irving L. Faught, Administrator, v. Broadband Wireless International Corporation, formerly Black Giant Oil Company, Broadband Wireless Communications Corporation, Broadcom Wireless Communications Corporation, Donald L. Knight, Ivan Webb, and Tommy K. Hill, Defendants, and DLK Family Trust, England's Tea & Coffee Exchange Ltd., Kimberly Knight, Relief Defendants (District Court of Oklahoma County, CJ-2000-5851).


     In July 2000, the Company directed its outside counsel to conduct an internal investigation into all matters surrounding the attempted acquisition of control of the Company by Broadcom, Knight and others affiliated with them (the "Broadcom Group"). As a result of the investigation the Company has concluded that, not only was it the subject of a scheme by the Broadcom Group to acquire control of a public company, but that the Broadcom Group acted as statutory underwriters in the connection with the resale of the securities acquired by them from the Company, all of which, if true, constitute violations of federal and state securities laws. See "-- BACKGROUND OF BROADCOM'S ACQUISITION EFFORTS; -- ACQUISITIONS OF COMMON STOCK FROM WEBB; and -- RESALES OF SECURITIES BY THE BROADCOM GROUP."


     In October 2000, the Temporary Receiver appointed an advisory committee of interested shareholders of the Company to evaluate possible business combinations with one or more other entities, which could establish business operations producing revenues and earnings for the Company. That advisory committee consisted of Albie Shaffer of Sugarland, Texas, Dr. Ron Tripp of Norman, Oklahoma, Michael Holbrook of Edmond, Oklahoma and William Higgins of Claremore, Oklahoma. On December 21, 2000, the Board of Directors of the Company appointed three of the members of the advisory committee, Albie Shaffer, Ron Tripp and William Higgins, to vacant positions on the Board of Directors of the Company, in accordance with the Company's Bylaws. Also on December 21, 2000, Webb and Howard B. Siegel resigned from the Board of Directors of the Company. Neither Webb nor Mr. Siegel stated that their resignations were precipitated by a disagreement with the Company or any matter relating to the Company's operations. On December 28, 2000 the Board of Directors appointed Albie Shaffer as Chairman of the Board of Directors, Ron Tripp as Secretary, and Treasurer of the Company, and Ron D. Harris as Chief Operating Officer. Mr. Harris was previously a technical consultant to the Company who had been retained by the Company prior to the SEC Lawsuit. On December 28, 2000, Elizabeth Webb resigned as Secretary of the Company.  Ivan Webb resigned as president and director of the Company on December 21, 2000.


     In December 2000, the Board of Directors considered a business plan (the "Business Plan"), which contemplated a wireless Internet service provider business in the greater Oklahoma City geographical market. The Company conducted test applications of the wireless operations described in the Business Plan in Edmond and Norman, Oklahoma. These tests were successfully completed in December 2000. After reviewing the reports of the tests, the Board of Directors approved the Business Plan. In February 2001, the Temporary Receiver submitted the Business Plan to the Court for approval.


     The Company received Court approval on February 7, 2001, to immediately commence with business operations pursuant to the Business Plan, provided that the Company pay $150,000 owing under the Company's 12% convertible debenture held by Steven R. Cox. On February 9, 2001, the Company utilized its existing working capital to pay Mr. Cox $150,000 in satisfaction of the debenture held by Mr. Cox. In 2001, the Company commenced business operations pursuant to the Business Plan.


     On February 23, 2001, the Company entered into agreements with the American Bank & Trust Company of Edmond, Oklahoma and with Republic Bank of Norman, Oklahoma on March 19, 2001, to provide wireless communication services for those banks to and from their branch offices in central Oklahoma. The Company also entered into a similar agreement with McClain County Bank on May 17, 2001. The Company began realizing revenues from these clients in May 2001.


     The Company is exploring the potential for business development in Native American markets and has developed collateral materials and processes necessary to deliver qualified proposals to any nation based upon site surveys and/or campus maps.  The Company has presented several comprehensive proposal documents to various Indian Nations, including the Northern Cheyenne, Pomo, Colorado River, Chipewa-Cree, and the Seneca Nations, and expects one or more to be ratified in July 2001 by the respective Tribal Councils.  The Company believes that these markets have the potential to generate a substantial portion or all of the revenues necessary to fund the Company's operations as contemplated under the Business Plan.  


     The Company's economic development initiatives for the Northern Cheyenne Nation provide for the Northern Cheyenne Nation to install and implement the Company's solutions (as subcontracted labor) in the reservations in a five-state area around Montana. The Company believes it is positioned to provide the technical solutions and necessary tools and training to assist the tribes in developing their own technical support and installation staff. These communities are technology and job deprived, and we have garnered much attention to bring a cost-effective, communications infrastructure and jobs to these underserved markets. Our goal is to install and implement at least one wireless, reservation-network per month, of the similar size and magnitude as that proposed to the Northern Cheyenne Nation. AITEC (the American Indian-owned contractor with whom we have developed a strategic relationship) is prepared for this "run-rate." We have recently participated in the NIBA (Native Indian Business Association) conference in Albuquerque, New Mexico in an attempt to market our capabilities. There are no assurances that we will obtain these contracts or realize our installation goal.


BACKGROUND OF BROADCOM'S ACQUISITION EFFORTS


     In or about July 1999, a businessman who was acquainted with the then President of the Company introduced the Company to Knight. Knight, who was looking for a public shell to acquire, represented that he had significant assets to bring into the Company that would enhance current shareholder value and revive the Company. Between July 1999 and November 1999 Knight made several proposals to the Company that involved various assets to be brought into the Company in connection with a merger transaction.


     While merger negotiations continued, Knight acquired 2,000,000 shares of the Company's common stock through a stock purchase made directly from the Company for a cash payment of $25,000, representing a purchase price per share of $.0125. The shares were actually issued 100,000 shares to Knight and 1,900,000 shares to Black Giant Resources, Inc. ("Black Giant Resources"), an Oklahoma corporation owned by Knight and two other individuals, Donald E. Dickson ("Dickson") and Curtis Wilson, Sr. ("Wilson").


THE LETTER OF UNDERSTANDING


     On November 1, 1999, the Letter of Understanding was executed, between the Company and a company called Broadcom Wireless Communications Corporation ("Broadcom"). Broadcom is an Oklahoma corporation incorporated on October 22, 1999, and is owned by Knight, Dickson and Wilson.


     The Letter of Understanding described certain issuances of stock that would be made in connection with cash payments by Broadcom or the contribution by it of various assets or contract rights to the Company. Except for the issuance of 4,400,000 shares of common stock for $55,000 cash, each of the other stock issuances described in the Letter of Understanding, totaling an aggregate of 48,000,000 shares, were made based on the representations of Broadcom and Knight that Broadcom either had valuable assets to exchange for such stock or had the rights to acquire such assets. The assets or contract rights to be contributed by Broadcom to the Company included the following:



*

a 50% interest in mineral leases covering 4,300 acres in Larue County, Kentucky (the "Kentucky Gas Properties"), in exchange for 5,000,000 shares of the Company's common stock. The leases were represented to have 9 recently drilled, but uncompleted gas wells to have a purported value of $1,000,000. An additional 13,000,000 shares were to be issued and held in escrow upon completion of the wells if it were shown that the wells could substantiate a value of $2,000,000.




*

a 40% interest in GetMore Wireless, a retail seller of cellular telephones and pagers represented to have at least 3 locations in Oklahoma, in exchange for 10,000,000 shares of the Company's common stock. At the time, Broadcom claimed to have a letter of intent with GetMore Wireless and Ron Baker & Associates to acquire the 40% interest. The shares were to be released when Broadcom delivered to the Company an executed contract showing that the interest in GetMore Wireless had been fully paid.


*

a 50% interest in GetMore Communications, a newly formed corporation with plans to provide wireless Internet access across the United States, in exchange for 10,000,000 shares of the Company's common stock. Broadcom represented that it had a letter of intent to acquire the 50% interest in GetMore Communications in exchange for providing funding to such company for transmitting towers. The shares were to be held in escrow pending a definitive agreement between Broadcom and GetMore Communications, and Broadcom meeting the funding requirements associated with the venture. The shares were to be released incrementally as each site was funded.

*

Broadcom's rights in a contract (the "Broadcom/Global Access Agreement") it purported to have with Global Access ("Global Access") for the sale of long distance minutes to Mexico, in exchange for 10,000,000 shares of the Company's common stock. The documents Broadcom provided to the Company indicated that it had an agreement with Global Access, a Wyoming corporation owned and controlled by Tommy K. Hill ("Hill"), for a one-third interest in the net profits attributable to Global Access' interest in a joint venture between it and iTell, Inc. ("iTell"), a Delaware corporation owned and controlled by Sergio Ado ("Ado"). The Global Access/iTell agreement was to provide long distance service to a Mexican carrier under a two-year contract. The Broadcom/Global Access Agreement, which purported to provide a revenue source of not less than $140,000 per month, apparently was conditioned on Broadcom furnishing, or funding the acquisition of, certain telecommunications switches.


     Although 15,000,000 shares of the 48,000,000 shares remained in escrow with the Company (and were ultimately canceled in June 2000) pending receipt of documentation that Broadcom had in fact acquired such assets, an aggregate 33,000,000 shares of common stock were actually delivered to Broadcom under the Letter of Understanding, for which the Company reported, in previous filings with the SEC, the receipt of various assets and contract rights.


The Kentucky Gas Properties Transaction


     Subsequent to the execution of the Letter of Understanding, Webb rejected the Kentucky Gas Properties as a suitable asset to be contributed to the Company in exchange for shares, inasmuch as Broadcom could not convey clear title to the properties. Accordingly, on December 30, 1999, the Company, Broadcom, and Broadband Wireless Communications Corporation ("Broadband Wireless-Oklahoma"), an Oklahoma corporation incorporated on January 3, 2000, and owned by Knight, Dickson, and Wilson, entered into an agreement (the "Modification Agreement") modifying the Letter of Understanding and indicating that the Kentucky Gas Properties were no longer a part of the agreement. On June 30, 2000, the Company formally canceled the issuance of the 5,000,000 shares issued in connection with this transaction and held in escrow since their issuance.


     Under the Letter of Understanding, an additional 13,000,000 shares were issued and held in escrow for release to Broadcom if, upon completion of the wells attributable to the Kentucky Gas Properties, the wells had a value of $2,000,000. Since the Kentucky Gas Properties were no longer a part of the agreement, Broadcom negotiated with the Company to substitute other assets in order that it might receive the 13,000,000 shares held in escrow. On January 20, 2000, Broadband Wireless-Oklahoma entered into an agreement (the "Tryco Agreement") with Global Access New Millennium, Inc. ("GANMI") "to effectuate the purchase, by Black Giant Oil Company [referring to the Company] . . . of [a one-third equity interest in the] shares, interest and equity of Tryco, Inc. ["Tryco"] currently held by Global Access New Millennium, Inc." Under the terms of the agreement, Broadband Wireless-Oklahoma was to pay GANMI $50,000 within 30 days, which funds were to be used to pay the expenses of another party, First Diversified Financial Services ("FDFS"), the placement agent for a $25 million private placement offering to be conducted by GANMI. Although the Company was not a signatory to the agreement, the agreement also provided that the Company was to immediately wire-transfer $10,000 to FDFS, which was to serve as a deposit for GANMI's private placement fees, with an additional $90,000 to be paid to FDFS no later than January 28, 2000. Finally, the agreement provided that the Company would issue to GANMI a convertible debenture in the amount of $2,500,000. On January 24, 2000, the 13,000,000 shares previously issued and held in escrow for the Kentucky Gas Properties were released to Broadcom, in consideration for the Tryco deal brought to the Company by Broadcom.


     The Company later realized that GANMI's representations in the Tryco Agreement that GANMI owned Tryco were false. In fact, the Company discovered subsequently that GANMI did not enter into a contract to acquire Tryco until February 1, 2000. To the Company's knowledge, GANMI has never consummated its acquisition agreement with Tryco, and thus, the one-third interest in Tryco has never been conveyed to the Company as required under the Tryco Agreement.


      The GetMore Wireless Transaction


     On November 24, 1999, Broadcom entered into an agreement (the "GetMore Wireless Agreement") with Ron Baker ("Baker") and Gary Duke ("Duke"), the principals of GetMore Wireless, that memorialized the letter of intent referenced in the Letter of Understanding regarding Broadcom's acquisition of a 40% interest in the retail store operations. In addition, Broadcom was to pay to Baker and Duke a total of $200,000 in four installments of $25,000 each beginning December 15, 1999 and ending March 15, 2000. Broadcom was also to fund additional stores at the rate of $50,000 per store and was to place $800,000 in escrow by January 17, 2000 to cover the funding obligation. On December 28, 1999, an assignment was executed pursuant to which Broadcom's rights in the GetMore Wireless Agreement were assigned to the Company. The assignment acknowledged the transfer from Broadcom to Baker and Duke of the 1,000,000 shares of common stock required under the GetMore Wireless Agreement and the partial payment of the money due under the agreement. However, the assignment reflected it was not intended to act as a release of any of the other funding obligations of Broadcom under the agreement.


     On December 30, 1999, the 10,000,000 shares held in escrow for the GetMore Wireless transaction were released to Broadcom based upon its stated acquisition of the 40% interest in GetMore Wireless and assignment of such interest to the Company. Later on March 3, 2000, Baker and Duke executed an assignment transferring to Broadcom the remaining 60% interest in the GetMore Wireless retail operation in exchange for 2,000,000 shares of the Company's common stock. On the same day, Broadcom assigned to the Company, in exchange for 5,000,000 shares of the Company's common stock, the 60% interest that it had purportedly just acquired from Baker and Duke.


      On June 30, 2000, Duke and Baker filed an action against Broadcom alleging that Broadcom breached the contract and committed fraud in connection with the GetMore Wireless Agreement. The Company entered into a Settlement Agreement with Baker, Duke, Aarow and GetMore Wireless which was approved by the Court on October 17, 2000. See Part I, Item 3 "Legal Proceedings."


     The GetMore Communications Transaction


     On the same date as the GetMore Wireless Agreement, November 24, 1999, Broadcom entered into another agreement with Baker and Duke (the "GetMore Communications Agreement") relating to the GetMore Communications wireless Internet venture referenced in the Letter of Understanding. The GetMore Communications Agreement provided that Broadcom was to receive a 50% interest in a joint venture between Broadcom and a Baker/Duke entity formed to deploy wireless Internet services. In consideration of the 50% interest, Broadcom committed to provide the joint venture with $2,000,000 in funding, which was to be placed in escrow no later than January 17, 2000. Because of Baker's actions, as described in "--LITIGATION AGAINST BAKER AND AAROW ENVIRONMENTAL GROUP, INC.," on June 30, 2000, the Company formally canceled the issuance of the 10,000,000 shares that had been held in escrow in connection with this transaction.


     The Company entered into a Settlement Agreement with Baker, Duke, Aarow and GetMore Wireless which was approved by the Court on October 17, 2000. See Part I, Item 3 "Legal Proceedings."


     The Global Access Transaction


     Pursuant to the Modification Agreement, Broadcom was stated to have fulfilled its obligations under the Broadcom/Global Access Agreement with cash and other consideration, rather than providing the switches as contemplated in the original agreement. After the Company received an assignment signed by Hill indicating that Broadcom had satisfied its performance obligations under the agreement, the Company agreed to release the 10,000,000 shares held in escrow in connection with the transaction and further agreed to issue an additional 5,000,000 shares to Broadcom if it were successful in acquiring the switches and obtaining an increased participation in the revenues generated by the contracts of no less than an additional $140,000 per month. On March 6, 2000, Broadcom and Global Access entered into yet another agreement that made reference to previous agreements between the parties dated October 2, 1999, January 5, 2000, and January, 2000, concerning the assignment of one-third of the profits of 28,000,000 minutes to Mexico. The March 6 agreement indicated that Broadcom had yet to fund Global Access in that it called for the payment by Broadcom of no less than $250,000 to activate the network. When the Company became aware of this new agreement, Webb, on or about March 13, 2000, advanced the Company $150,000 of his personal funds which were sent to iTell, Global Access' joint venture partner, for the purpose of activating the network so that the promised revenue stream could commence. Additionally, Webb arranged for another party to advance $50,000 to iTell. Knight also promised to send iTell an additional $100,000 at the request of Mr. Webb (which were funds actually owed by Broadcom to Webb). Subsequently, iTell advised the Company that the funds sent by the Company had not been used by the joint venture to activate the network, but instead, had been kept by Ado as the cash portion of the consideration due for its acquisition of iTell. See "--iTELL ACQUISITION." The Company has never received any revenues from its interest in the Broadcom/Global Access Agreement.


ACQUISITIONS OF COMMON STOCK FROM WEBB


     As a part of Broadcom's attempt to gain control of the Company, Knight negotiated with Webb to buy not only the shares of the Company owned by Webb, but as many of the other outstanding shares as possible. Accordingly, between September 11, 1999, and December 29, 1999, Black Giant Resources or Broadcom entered into three different stock purchase agreements to acquire the Company's common stock owned by Webb and another stockholder. Only the final agreement was actually consummated as to Webb's shares, resulting in the purchase by Broadcom of 1,000,000 shares at a purchase price of $.15 per share. Subsequently, Webb sold another 1,000,000 shares to Black Giant Resources or Broadcom at $.35 per share and 300,000 shares for $1.00 per share, for an aggregate sale by Webb of 2,300,000 shares (the "Webb Shares") for a total consideration of $800,000 cash.


     All of the Webb Shares were "restricted securities," as such term is defined in paragraph (a) (3) of Rule 144 under the Securities Act ("Rule 144") and, accordingly, could only be resold publicly pursuant to registration of such securities under the Securities Act or, alternatively, pursuant to the provisions of Rule 144. In spite of the status of the Webb Shares as restricted securities, Broadcom, Black Giant Resources and Broadband Wireless-Oklahoma (together with their affiliates, including Knight, Dickson and Wilson, collectively, the "Broadcom Group") resold to the public all of the Webb Shares, in apparent violation of the Securities Act. In making such sales, the Broadcom Group made written representations to the purchasers that the shares would become freely tradable within a very short period of time after the sale, typically within 90 days. The Company believes that the Broadcom Group in connection with their purchases of the Webb Shares misled such purchasers.


     The Temporary Receiver, on behalf of the Company, has made claims against certain shareholders who acquired their stock from Webb or through the Broadcom Group.


RESALES OF SECURITIES BY THE BROADCOM GROUP


     In addition to the resales of the Webb Shares, the Broadcom Group resold large amounts of the Company's common stock immediately after receiving it pursuant to the Letter of Understanding and otherwise. In fact, of the 61,400,000 shares received by the Broadcom Group pursuant to the Letter of Understanding or in connection with other issuances by the Company, at July 10, 2000, the Broadcom Group held of record only 18,129,617 shares, excluding shares held in the individual names of various Broadcom Group affiliates. As of the date of this Report, the Broadcom Group does not hold any shares of record. All shares held by the Broadcom Group were either transferred or canceled, with the exception of Wilson. The Company believes that sales of these securities were made to numerous individuals, in apparent violation of the Securities Act. The Company believes that many of these purchasers, whose shares were not part of the Webb Shares but were redistributions of securities acquired directly from the Company, were advised in writing by the Broadcom Group that their shares would be "freely tradable" within a 90-day window from their purchase, similar to the representations made by the Broadcom Group to the purchasers of the Webb Shares. All of the securities acquired directly from the Company by the Broadcom Group were "restricted securities" and, as such, could not be sold without registration or compliance with the exemption requirements of the Securities Act, such as Rule 144. The Company also knows of many, and believes that there may be many more, shareholders who purchased the Company's common stock from Broadcom, who have not received the shares from Broadcom. Many of these purchasers believed that they were acquiring their shares directly from the Company and that the funds were being deposited with the Company, when such was not the case. On April 9, 2001, the Board of Directors adopted a resolution that the Company would consider all claims of persons who claim to have purchased stock of the Company after July 1, 1999, but did not receive stock or received less stock than they paid. July 1, 1999, is the date of a corporate resolution by the Company to change its name from Black Giant Oil Co. to Broadband Wireless International Corporation, with control surrendered to the Broadcom Group.


     The Temporary Receiver, on behalf of the Company, is working with shareholders on a case-by-case basis, to resolve any situations in which a shareholder who meets the above criteria has not received shares for which consideration was given. The Temporary Receiver, on behalf of the Company, has also made claims against certain shareholders who acquired their stock from Webb or through the Broadcom Group and a number of shares have been returned to the Company and have been canceled as illegally issued or issued without consideration.


CURRENT STATUS OF RELATIONSHIP BETWEEN THE COMPANY AND THE BROADCOM GROUP


     All of the activities between the Company and the Broadcom Group have ceased. The Temporary Receiver has been unable to locate any assets of Broadcom or Black Giant Resources. The Company is no longer exploring its options with respect to the transactions that were the subject of the Letter of Understanding, and the Broadcom Group no longer owns any shares of common stock of the Company, with the exception of Wilson. See "--ACTIVITIES OF THE TEMPORARY RECEIVER."


THE FORM S-8 REGISTRATION


     In April 2000, the Company filed a registration statement on Form S-8 (the "Form S-8"), ostensibly registering an aggregate of 8,000,000 shares issuable in connection with the Company's employee stock grant and stock option plans (the "S-8 Shares").


     As of July 10, 2000, the Company had issued 7,250,000 shares of common stock that were registered under the Form S-8. The Company believes that the registration of the S-8 Shares was used, in part, as a means to distribute securities to the public without the protections of registration under Section 5 of the Securities Act and in violation of the Securities Act.


     Certain of the ostensible "consultants" who received S-8 Shares immediately distributed them to persons believed by the Company to have purchased restricted securities from the Broadcom Group, but who had been promised "free-trading" shares. Many of these purchasers contacted the Company to demand the receipt of their "free-trading" shares, indicating that the Broadcom Group represented that the securities purchased would become "free-trading" within 90 days of Webb's departure from the Company because Webb would no longer be considered an affiliate under Rule 144. However, the provisions of Rule 144(k) do not apply to one who purchases the securities of a person who is an affiliate at the time of the sale. The Broadcom Group has stated to the Company that it relied on the representations of Webb in making such promises.  Although Webb has stated that he made no such representations to the Broadcom Group, he did inform the Company that he participated in the preparation of the Form S-8 in the belief that it was necessary to protect the purchasers of the Webb Shares.  The purchasers of the Webb Shares were told that they would receive freely tradable shares within 90 days of Webb's departure from the Company. Webb has advised the Company that, after the registration of the S-8 Shares, he discovered that there were far more of the S-8 Shares that were redistributed than the number of Webb Shares. The Company believes that the Broadcom Group utilized the Form S-8 as a conduit to provide freely tradable shares of the Company's common stock to persons to whom they had sold shares bearing a legend restricting transferability.


     The Temporary Receiver, on behalf of the Company, has identified the recipients of shares of common stock registered under the Company's Form S-8 and is in the process of attempting to recover a portion of such shares from persons whom the Company believes improperly or illegally obtained shares. Lawsuits have been filed by the Company against those persons to recover the shares and/or the proceeds of those shares when they were resold. The Temporary Receiver entered into a settlement agreement on or about December 24, 2000, with an individual who improperly received S-8 Shares. Pursuant to the settlement agreement, an individual assigned several notes receivable to the Company for a total of about $300,000, which were to be paid out in several payments over many months, and transferred 250,000 shares of the Company's common stock to the Company.  150,000 shares of stock registered under the Form S-8 were issued to Genesis Market Neutral Partners, L.P. ("Genesis") as part of a settlement agreement effective March 1, 2001, in payment of consulting fees.


SUPPORT24


     On February 25, 2000, Baker, the newly named President of the Company, executed an agreement with Support24 and its shareholders to acquire 100% of Support24 in exchange for the issuance of 700,000 shares of the Company's common stock. The agreement also provided that Support 24 would sell $500,000 of the Company's debentures and retain 80% of the proceeds. In February and March, 2000, Baker issued press releases announcing the acquisition of Support24. However, on April 28, 2000, Steve Zabel of Support24 declared the February 25, 2000, agreement for the acquisition of Support24 null and void for failure of the Company to issue the 700,000 shares or provide the $400,000 in working capital as contemplated in the agreement. As a result, 5,000,000 shares of the common stock which had been issued to Broadcom in connection with Broadcom's role in bringing the acquisition to the Company were canceled on April 7, 2000.


CISCO LINE OF CREDIT


     In March 2000, the Company issued to Broadcom 5,000,000 shares of common stock for its role in negotiating a $1.6 million line of credit for the Company with Cisco Systems, Inc. (Nasdaq: CSCO). The Company intended to utilize the line of credit to fund the purchase of equipment for the installation, implementation and operation of high-speed wireless Internet networks in the GetMore Communications transaction. Cisco filed a lawsuit for payment of $1.1 million due it from the Company. That lawsuit was settled by return of the equipment to Cisco and its release of any further claims against the Company.


iTELL ACQUISITION


     On March 1, 2000, Hill, as President of the International Division of the Company, entered into a Letter of Agreement to acquire 100% of iTell, the joint venture partner of Global Access (the "iTell Agreement"). See "THE LETTER OF UNDERSTANDING -- The Global Access Transaction." The purchase price for iTell was 2,000,000 shares of the Company's common stock and $200,000 in cash, the final portion of which iTell acknowledged receipt on March 27, 2000. The Company additionally agreed to assist in securing financing for iTell's operations by providing up to 10,000,000 shares of the Company's common stock for use as collateral in securing project financing.  In connection with the transaction, the Company issued 1,000,000 shares of its common stock to Global Access and 1,000,000 shares of common stock to Broadcom.


     In the Form 8-K reporting the iTell acquisition, the Company reported, based on information provided by Hill, that iTell was an international telecommunications carrier with substantial assets and significant potential monthly income. None of the representations made by Hill in the Form 8-K could be substantiated by the Company. Commencing in May 2000, in preparation for the Company's 10-KSB for fiscal year ended March 31, 2000, the Company began pressing for documentation of the information reported in the Form 8-K, as well as in several press releases. Although the Company sent its counsel to the offices of iTell on May 31, 2000 to obtain the requested information, Ado (who on May10, 2000 had become a director of the Company), refused to release any documentation.


     The failure to obtain the requested documentation made it impossible to verify the veracity of the statements made regarding iTell. Hill, who had negotiated the iTell acquisition agreement on behalf of the Company, and in fact, had received (through Global Access, the company owned by him) 1,000,000 shares of common stock in connection with the transaction, had repeatedly assured the Company that the necessary documentation was forthcoming, and specifically, that an audit of iTell, which was necessary to supplement the Form 8-K disclosure of the acquisition, was in progress.


 

     After being informed of Ado's refusal to provide the requested documentation, the Board of Directors held a special meeting on June 6, 2000. During that meeting, Hill and Ado resigned from the Board. On June 7, 2000, Ado delivered a memorandum outlining the conditions necessary "for the inclusion of iTell as a wholly owned subsidiary of BBAN." The memorandum indicated that Ado had repudiated the iTell Agreement and that iTell was not a wholly owned subsidiary of the Company. Webb sent a letter to Hill and Ado concerning the repudiation of the iTell Agreement advising them that a stop transfer had been placed on the securities issued to them in connection with the transaction and demanding the immediate return of their shares. The Company has since filed suit against Hill, Ado, and iTell seeking to recover the monies paid in connection with the transaction, the return of the shares, and for damages caused to the Company.  See "Part I, Item 3, Legal Proceedings."


ACQUISITION OF JARVIS ENTERTAINMENT GROUP, INC.


     On April 4, 2000, Broadcom, in a letter signed by Knight, entered into a letter of intent with the Jarvis Entertainment Group, Inc. (the "Jarvis Group") in which he stated that, as the largest shareholder of the Company, he intended to facilitate the Company's purchase of the Jarvis Group. Based on the representations of Knight regarding the Jarvis Group, two days later, on April 6, 2000 a letter of intent was entered between the Company and the Jarvis Group to acquire 100% of the Jarvis Group in exchange for 50,000,000 worth of the Company's restricted stock and cash or cash equivalents of $5,000,000, 500,000 shares of the Company's common stock, which would be registered, and 5,000,000 shares of restricted stock which was to be used for funding purposes. On April 7, 2000, Knight advised the Jarvis Group that the Company had agreed to register 500,000 shares under a Form S-8 registration statement so that John Jarvis, the President of the Jarvis Group, would have free trading shares, and that Broadcom would, if necessary, exchange 500,000 of its own free trading shares for any shares Jarvis might receive from the Company in connection with the transaction. Knight later signed an agreement with the Jarvis Group on behalf of Black Giant Resources in which Black Giant Resources agreed to provide the Jarvis Group with an agreement ratified by the Company for the purchase of the Jarvis Group by May 2, 2000. In the agreement between Black Giant Resources and the Jarvis Group, the Jarvis Group agreed to sell its assets for 500,000 non-restricted shares of the Company's common stock, the payment of $1,000,000 in cash within 45 days of the stock issuance and cash of $35,000,000 within 18 months, payable in quarterly increments of no less than $5,000,000. An agreement with the Jarvis Group has never been  consummated under the terms of the letter of intent, and the Company has determined not to proceed with the proposed transaction under the terms outlined in such letter of intent.


     On June 9, 2000, the Company and the Jarvis Group entered into an "Expression of Mutual Interest," pursuant to which the Company expressed its desire to continue discussions with the Jarvis Group regarding a merger or other similar transaction between the companies, but stating that any such transaction would be subject to the completion of satisfactory due diligence, the receipt by the Company of an opinion of an independent financial advisor that any merger consideration is fair to the shareholders of the Company, and the negotiation and execution of definitive transaction documents.


     After June 30, 2000, the Company entered into a letter of intent with the Jarvis Group to form a joint venture limited liability company for the purpose of deploying broadband wireless connectivity. The proposed joint venture, which was subject to the execution of definitive joint venture agreements, was to have an initial capitalization of $1.35 million, $450,000 of which was to be contributed by Jarvis in cash and equipment upon the execution of the definitive joint venture agreements, with the remaining $900,000 to be contributed by the Company in two installments upon the achievement of certain joint venture milestones. On July 28, 2000, at a meeting between Webb and John Jarvis, the President of the Jarvis Group, the Company was informed that the funding for the Jarvis Group's cash portion of the initial capita requirement was to come from sales of the Company's common stock in the hands of third parties. Based on that information, the Company determined not to pursue further any transaction with the Jarvis Group, due to concerns about any funding involving the sale of the Company's securities.


ACTIVITIES OF THE TEMPORARY RECEIVER


     Peter Bradford, the Temporary Receiver, was appointed by the Court on August 11, 2000. Mr. Bradford is an attorney in private practice since 1961. Mr. Bradford specializes in the areas of litigation and dispute resolution and has been a member of the American Bar Association and the Oklahoma Bar Association since 1961. He has been a Fellow of the American College of Trial Lawyers since 1987 and was Chair for the Civil Justice Advisory Group for the Western District of Oklahoma in 1992. Mr. Bradford received his J.D. from the University of Tulsa School of Law in 1961 and is certified as an AAA arbitrator and mediator.  Bradford has considerable federal court securities litigation experience.


     Pursuant to the order entered by the Court in the SEC Lawsuit on August 11, 2000, the Temporary Receiver has filed with the Court five reports, dated September 15, 2000, October 31, 2000, January 4, 2001, April 6, 2001, and May 15, 2001, all of which are either attached as exhibits hereto or are incorporated by reference from previous filings with the SEC.


     As reflected in the reports, the Temporary Receiver has been engaged in locating assets of the Company, the Broadcom Group, and Webb. In addition the Temporary Receiver has entered into several settlement agreements with third parties which have provided revenues for operation of the Receivership and the payment of outstanding indebtedness during the reporting period. Webb surrendered books and records of the Company to the Temporary Receiver and was not active in the management of the Company from August 11, 2000, to December 21, 2000, when he resigned as President and as a member of the Board of Directors.


     The Temporary Receiver has also been in communication with third parties who are interested in entering into a business combination or merger with the Company which could result in the Company commencing or joining with such third parties for the purpose of operating a communications business.


    The Company, as of the date of this Report, has no governmental licenses and no research and development expenses.  The market for wireless service has numerous competitors.  The Company has therefore sought customers in "niche" markets where less competition exists.


The Temporary Receiver was discharged by the court on December 21, 2001.


On December 27, 2001 the Company filed an application to reorganize under Chapter 11 of the Bankruptcy Code.


In December of 2001, the Company agreed  with Entertainment Direct TV (EDTV) to merge the two companies with EDTV being the survivor and holding 75% of the stock after completion of the transaction.


On May 7, 2002 the Company filed a disclosure statement pursuant to 11 U.S.C. § 1125 and a proposed plan of reorganization pursuant to 11 U.S.C. § 1121. The disclosure statement provides information of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the Company and the condition of the Company's books and records, to enable a hypothetical reasonable investor typical of holders of claims against, or interests in, the Company to make an informed judgment about the proposed plan. The Company also prepared a far more comprehensive disclosure statement.


Under the plan proposed, the Company will acquire 100% of the issued and outstanding stock of EDTV from its shareholders in exchange for EDTV's shareholders acquiring 51% of the Company's outstanding equity securities. It is contemplated that EDTV will be merged with the Company on or about the effective date of the plan and that the Company will be the surviving entity. As additional consideration, EDTV, either directly or through its shareholders, has agreed to fund to up to $250,000 to the Company. Ultimately, a private placement to provide additional funding may be necessary.


The issuance under the plan of 51% of the reorganized Company's equity securities to EDTV's shareholders will give them control of the reorganized Company and will dilute the interests of the current holders of the Company's equity securities. The interests of current holders of the Company's equity securities will be further diluted under the plan by the issuance of equity securities to the holders of allowed claims: a) arising from the rescission of a purchase or sale of an equity security of the Company or of an affiliate of the Company; b) for damages arising from the purchase or sale of such a security; or c) for reimbursement or contribution allowed under 11 U.S.C. § 502 on account of such a claim. The reorganized Company will have the authority to issue additional equity securities to meet future requirements, which would further dilute the position of parties in interest who are to receive or retain under the plan equity securities in the reorganized Company. Given that the allowed claims: a) arising from the rescission of a purchase or sale of an equity security of the Company or of an affiliate of the Company; b) for damages arising from the purchase or sale of such a security; or c) for reimbursement or contribution allowed under II U.S.C. § 502 on account of such a claim hve not been determined, it is not possible to determine how much those ch..ims may result in dilution of the interests of current holders of the Company's equity securities. Likewise, it is not possible to quantify now the dilution that would occur from further issuances of equity securities.


Subsequent to the merger with EDTV, the reorganized Company intends to offer a comprehensive communications and content service package to niche markets through a marketing strategy known as Extreme Niche Targeting. It is contemplated that the service offering will primarily consist of a combination of email, SMS (short messaging service), internet service, website design, database management, strategy and branding. It is expected that the reorganized Company will be positioned as a new media direct marketing company that generates revenue from email campaign management, e-commerce participation and advertiser placements through multiple forms of media (internet, magazines, TV). The combined revenue projection forecasts approximately $25 million for the first full year of operations post merger between the Company and EDTV, with nearly $11 million in earnings before interest, taxes and depreciation.


Under the proposed plan, the reorganized Company will pay some claims over time. Those claimants will be subject to the risk that the reorganized Company's business may not be profitable or as profitable as projected. If it is not, payments may not be made to claimants as and when proposed under the plan. Claimants will also be subject to the risk that the value of the reorganized Company's assets may decline. Holders of equity securities in the reorganized Company would presumably be adversely affected if the reorganized Company's business is not profitable or as profitable as projected. Additionally, there can be no assurance that holders of the reorganized Company's stock will be able to sell the reorganized Company's equity securities in the future and there is no assurance as to the price at which the reorganized Company's equity securities might trade.


On July 22, 2001, Dr. Ron Tripp, director, secretary and treasurer of the Company, resigned from his position as treasurer. On July 23, 2001, the board of directors appointed Dr. Tripp as president of the Company and the board appointed William Higgins, also a director of the Company, as treasurer. In October of 2001, Mr. Harris and the Company agreed to a consulting agreement, which reduced salary expense and his time devoted to the Company. Mr. Harris resigned from the Company effective October 15, 2001. The Company's board of directors actively supervised the operations of the Company while the Temporary Receiver pursued legal remedies against third persons who had caused damages to the Company. The board also pursued, and continues to pursue, sources of funds to reorganize and recapitalize the Company. The board has donated hundreds of hours of their time to working on the Company's future success. Each of the board members has received stock options.


Name

Amount

Price

Date

Albie Shafer

150,000

$ 0.0625

June 2000

Lloyd Claycomb (non-director advisor)

150,000

$ 0.0625

December 2001

Albie Shafer

200,000

$ 0.0800

May 2001

Albie Shafer

750,000

$ 0.0800

August 2001

Dr. Ron Tripp

100,000

$ 0.0800

May 2001

Dr. Ron Tripp

750,000

$ 0.0800

August 2001

William Higgins

100,000

$ 0.0800

May 2001

William Higgins

750,000

$ 0.0800

August 2001

Michael Smith (non-director advisor)

125,000

$ 0.1000

July 2001



In December of 2000, the board of directors considered a business plan (the "Business Plan"), which contemplated a wireless internet service provider business in the greater Oklahoma City geographical market. The Company conducted test applications of the wireless operations described in the Business Plan in Edmond and Norman, Oklahoma. These tests were successfully completed in December of 2000. After reviewing the reports of the tests, the board of directors approved the Business Plan. In February 2001,. the Temporary Receiver submitted the Business Plan to the Federal District Court for approval.


The Company received Federal District Court approval on February 7, 2001, to immediately commence business operations pursuant to the Business Plan, provided that the Company paid $150,000 owing under the Company's 12% convertible debenture held by Steven R. Cox. On February 9, 2001, the Company used its existing working capital to pay Mr. Cox $150,000 in satisfaction of his debenture. In 2001, the Company commenced business operations pursuant to the Business Plan.


On February 23,2001, the Company entered into an agreement with the American Bank & Trust Company of Edmond, Oklahoma, and on March 19, 2001, entered into an agreement with Republic Bank of Norman, Oklahoma, to provide wireless communication services for those banks to, and from, their branch offices in central Oklahoma. The Company also entered into a similar agreement with McClain County Bank on May 17, 2001.


On April 9, 2001, the board of directors adopted a resolution that the Company would consider all claims of persons who claim to have purchased stock of the Company after July 1, 1999, but did not receive stock or received less stock than they paid. July 1, 1999 was selected by the board because it was the date of the corporate resolution by the Company to change its name from Black Giant Oil Co. to Broadband Wireless International Corporation and surrender control to the Broadcom Group. An SEC Annual 10-K report was timely filed by the Company on June 29, 2001 for the fiscal year ending March 31, 2001. Audited financial statements were included which were prepared by Clyde Bailey, C.P.A., who has prepared the Company's financials and tax returns for the past year. A quarterly 1OQ Report was filed with the Securities and Exchange Commission on March 19, 2002.


On October 13, 2001, the Company and Entertainment Direct. TV, Inc. ("EDTV") signed a Stock Purchase Agreement and on October 20, 2001, executed an Addendum to Stock Purchase Agreement (collectively, the "EDTV Agreement"). A copy of the EDTV Agreement is attached hereto as Exhibit 1. EDTV produces incremental revenue through a process and delivery methodology known as Extreme Niche Targeting ("ENT"). ENT combines multiple technologies and communications media providing artists, athletes, labels, advertisers and consumer product manufacturers direct contact with the targeted niche market. E-mail, SMS (short messaging service), internet service, website design, database management, strategy and branding are the primary delivery channels.


Existing clients of EDTV are varied and consist of Wasatch Pharmaceutical, Golf is Fun, Crystal Dragon Entertainment (Coolio), MergelallslandlDef Jam (Shorty 101), Good Game Entertainment (Slinkey.com), Z-Money Records, Inc., Itchy Palms Records, Inc., Heart of Africa Foundation, Frontline Entertainment, Starship Record Company, Inc. P4F implementations have been or will shortly be commercially executed at Prizes4Fun.com, Vegas4Fun.com, Windaily.com and Coolio.com.


The entertainment market is heavily controlled by relationships, trust, and history. The EDTV principals and their contacts put EDTV in an unusual position to offer its services to a dozen or so key entertainment industry participants, which Company believes will enhance the business approach described herein. Under the terms of the EDTV Agreement, the Company will acquire 100% of EDTV's issued and outstanding stock for 51% of the Company's outstanding stock and EDTV will ultimately be merged with the Reorganized Company, which will be the surviving entity. As additional consideration, EDTV or its shareholders have agreed to fund to up to $250,000, and have provided $10,000 to date to the Company in Possession to maintain operations for the few wireless accounts. Ultimately, a private placement to provide the necessary funding for a rapid rollout of the marketing strategy is contemplated. It is contemplated that a private placement will raise $1.5 million of venture capital funding. The transaction is expected to close by the end of August of 2002, but will only close if the plan is confirmed and become effective.


Subsequent to the merger with EDTV, the Reorganized Company intends to offer a comprehensive communications and content service package to niche markets through a marketing strategy known as Extreme Niche Targeting. It is contemplated that the service offering will primarily consist of a combination of email, SMS (short messaging service), internet service, website design, database management, strategy and branding. It is expected that the Reorganized Company will be positioned as a new media direct marketing company that generates revenue from email campaign management, eCommerce participation and advertiser placements through multiple forms of media (internet, magazines, TV). The combined revenue projection forecasts approximately $25 million for the first full year of operations post merger with nearly $11 million in earnings before interest, taxes and depreciation. It is anticipated that the Reorganized Company will seek to increase revenue and awareness of its client's products or services by marketing to the highest qualified niche audience, primarily online, where the Reorganized Company will expect to increase its clients' customer base, their customer's message retention, their sales per customer, and the frequency of their customer transactions.


The Reorganized Company will seek to capitalize on the U.S. consumers' appetite for brands and idols. It is expected that the Reorganized Company will offer a demographically targeted campaign centered on a rich multimedia email campaign, which will drive consumers to the featured artist or label site that will also offer multiple opportunities to interact and be informed about the artist's activities. It is projected that this interaction will lead to multiple repeat transactions in which the Reorganized Company will participate.


The revenue stream from the anticipated package of services to be offered by the Reorganized Company is a combination of one time fees and revenue sharing. The goal of the Reorganized Company will be to create a recurring revenue stream that is approximately 35% of its total ongoing revenue, irrespective of product sales. In is expected that the Reorganized Company will record revenue from the following areas, among others: recurring CPD and administration, hosting, reporting, customization, product sales, ISP subscriptions, ticket sales and one-time setup fees.


The Condition and Performance of the Company since filing Bankruptcy


Since filing for bankruptcy relief, the Company has attempted to increase revenue, reduce expenses, settle controversies, and formulate a reorganization plan. The Company has spent considerable time trying to quantify the Estate's actual liabilities and formulating a plan of reorganization.


The Company continues to have extremely limited liquidity and its primary source of funds was the activities of the Temporary Receiver in seeking to marshal the assets of the Company and pursue all claims of the Company.


As previously discussed, the Company initiated the Business Plan pursuant to the February 7, 2001, order of the Federal District Court and continues to receive limited revenues from the American Bank & Trust Company of Edmond, Republic Bank of Norman, and the McClain County Bank contracts for wireless internet services. These contracts are expected to generate approximately $1,600 in monthly revenues for at least the next 6 months.


The Company also entered into the Hopland Agreement in August 2001. Under the terms of the Hopland Agreement, the Company is to receive $5,000 monthly and a commission equal to 15% of the gross revenues of the joint venture.


The Company currently has very limited resources with which to implement the Business Plan. The Company's ability to fully implement the Business Plan, or to continue beyond the next six months, will require immediate, additional resources which must be funded by the issuance of equity or debt and/or other external means of financing. There are no assurances the Company will have, or be able to obtain, such funds.


In July of 2002 the Company received final approval of the plan of reorganization from the shareholders and the bankruptcy court.


Proposed business plan of the Reorganized Company.


Overview


The Company will receive 100% of the outstanding stock of Entertainment Direct.TV, Inc. ("EDTV") in exchange for 51% of the stock of the Company. As additional compensation the Company will receive, either directly from EDTV or from its shareholders up to $250,000.


EDTV offers a comprehensive communications and content service package through a marketing strategy known as extreme niche targeting. The service offering will primarily consist of a combination of strategy, branding, email, SMS (short messaging service), internet service, website design, and database management. The two entities will be combined and operate as one company post-merger. EDTV will be positioned as a new media direct marketing company that generates revenue from email campaign management, ecommerce participation, and advertiser placements through multiple forms of media (internet, magazines, tv). The combined revenue forecasts approximately $25 million for the first full year of operations post merger with nearly $11 million in earnings before interest, taxes and depreciation.


Mission


EDTV will seek to proactively increase revenue and awareness of our client's products or services by marketing to the highest qualified niche audience, primarily online. We are successful when our clients have increased their customer base, their sales per customer and/or the frequency of their customer transactions. In other words, we are successful when our clients have made more money.


Market Analysis


Record labels such as Universal, entertainment artists such as Coolio, athletes such as Jamie Sharper, foundations such as Hydeia Broadbent Foundation are all looking to maximize their key asset. For each it is different yet each has an already existing interested group. The key challenge they face is how to retain the existing fan interest in their core product they are known for while expanding interest in other activities or products they are interested in offering. Simultaneously, the fan base needs to be continually expanding. EDTV specializes in developing the strategy and tactics necessary to maximize both of these efforts. A key fact to know is that 70% of an existing music celebrity's fan base is unaware of the release of their favorites artist's new album. EDTV focuses on making sure the fundamental methods are constantly being deployed to ensure that customer retention and acquisition are always happening.


Consumer product manufacturers must retain consumers to their brand. Research has shown again and again that the value of a retained repeat customer is 5 times that of a one-time consumer. Plus, truly successful companies generate 75% of their sales from current customers. Finally, a 5% repeat customer rate can result in a doubling of profits according to Mckinsey & Company


Business model


EDTV's focus is on maximizing the revenue per consumer through the highly targeted medium of the web. Many consumers are ready, willing and actively enthusiastic to participate in multiple 'branded' activities that involve their favorite artists and consumer product companies. EDTV seeks to capitalize on that demand. EDTV offers a demographically targeted campaign centered on a rich multimedia email campaign. This email drives consumers to the featured artist or label site, which also offers multiple opportunities to interact and be informed about the artist's activities. This interaction leads to multiple repeat transactions. For example, EDTV develops strategies and tactics, creates websites and email pages all for a profitable fee. Then the execution of the campaign begins after multiple testing occurs. As the campaign is successful, EDTV is compensated anywhere from 5 to 25°to of sales. A typical engagement is for $120,000 of fees and $50,000 to $450,000 of sales participation revenue. Our model is based on the low end of that participation scale and an average of $200,000 per engagement.


Revenue streams


The revenue stream from our package of services is a combination of one time fees and revenue sharing. The goal of the company is to create a recurring revenue stream that is approximately 35% of the total ongoing revenue of the company irrespective of product sales. EDTV will record revenue from the following areas, recurring advertising dollars and administration, hosting, reporting, customization, product sales, internet service provider subscriptions, ticket sales and one-time setup fees.


Target Market


Artists, entertainers and athletes, record labels, production companies and agents, media sales (advertisers and sponsors), and fortune 1000 companies.


Comparable companies


There are a number of companies that are working in the direct marketing via internet industry. The most closely related to EDTV are Avenue A, Bbigfoot Interactive, Digital Impact, Dynamics Direct and E-dialog.com. Two of these companies are publicly traded.


Clients


Existing clients of EDTV are varied and consist of Wasatch Pharmaceutical, Golf is Fun, Crystal Dragon Entertainment (Coolio), Mergela/Island/Def Jam (Shorty 101), Good Game Entertainment (Slinkey.com), Z-Money Records, Inc., Itchy Palms Records, Inc., Heart of Africa Foundation, Frontline Entertainment, Starship Record Company, Inc. Multiple additional clients are in process of being signed and include athletes, record labels and Fortune 500 companies.


Infrastructure


EDTV will be operated as a very lean sales and marketing organization. The staff consists of executive management, sales executives, project and account management, design, engineering, technology and database management. With headquarters in Las Vegas, EDTV will be in a prime location for sales and marketing contacts.


History


Past successful endeavors of the EDTV team include the following:

Revenue boost - changed database functions and grew advertising internet client revenue $1,750% in 90 days from $2 million per month to $37 million per month. Subscribers for promotion –for fast-food company used wireless message. Response rate of 3O% for 'elusive & fickle youth market and over 220,000 subscribers in 10 weeks. Traffic registration - a Fortune 100 consumer product firm sought user email address and of 31,000 to hit the website, over 25,000 registered setting foundation for newsletter. Internal messages -analysis of airline clients internal messages and format. Made two line printing change. Cut cargo transfers by 85%. Raised revenue $10 million in 1 year. New product development - added 1 message tool and 1 infrastructure too! to client's work process and cut average new product development time from 9 months to 14 days.


MANAGEMENT OF THE REORGANIZED COMPANY


Terry Gourley will serve as CEO and President of the Reorganized Company and a member of its board. Initially, Mr. Gourley will be paid $120,000 annually for services to be rendered and will receive employee benefits such as employer paid health insurance, a leased automobile, and stock options on terms not yet determined for services to be rendered.


Michael Williams will serve as Executive Vice President, Sales and Marketing of the Reorganized Company and as Co-Chairman of its board. Initially, Mr. William's will be paid $120,000 annually for services to be rendered and will also receive employee benefits such as employer paid health insurance, a leased automobile, and stock options on terms not yet determined for services to be rendered.


Keith McAllister will serve as Executive Vice President, Administration of the Reorganized Company and as Co-Chairman of its board. Mr. McAllister initially will be paid $120,000 annually for services to be rendered and will receive employee benefits such as employer paid health insurance, a leased automobile, and stock options on terms not yet determined for services to be rendered.


Richard Weddle will serve as Chief Operating Officer of the Reorganized Company and as a member of its board. Mr. Weddle initially will be paid $120,000 annually for services to be rendered and will receive employee benefits such as employer paid health insurance, a leased automobile, and stock options on terms not yet determined for services to be rendered.


Russ Regan, Robert Nau and Dr. Ron Tripp are proposed to serve as the other, initial directors of the Reorganized Company and initially will be paid $1,000 for quarterly board meetings and may be granted stock options in the Reorganized Company on terms not yet determined for services to be rendered.


None of the individuals named above, except Dr. Ron Tripp, had any Pre-Petition relationship with the Company or any Post-Petition relationship with the Company. Dr. Ron Tripp, as previously disclosed, served as President of Broadband Wireless International Corporation. It is anticipated that the Reorganized Company’s staff will consist of executive management, sales executives, project and account management, design, engineering, technology and database management. It is expected that the Reorganized Company will maintain headquarters in Las Vegas, which will place it in a prime location for sales and marketing contacts.


THE RELATIONSHIP OF THE COMPANY WITH AFFILIATES

The Company does not have any Affiliates, except as disclosed elsewhere in this document.


RISK FACTORS


Under the Plan, the Reorganized Company will pay some Claims over time. Those claimants will be subject to the risk that the Reorganized Company's business may not be profitable or as profitable as projected. If it is not, payments may not be made to Claimants as and when proposed under the Plan. Claimants and the holders of the Reorganized Company's Equity Securities will also be subject to the risk that the value of the Reorganized Company's assets may decline. Additionally, there can be no assurance that holders of the Reorganized Company's stock will be able to sell the Reorganized Company's Equity Securities in the future and there is no assurance as to the price at which the Reorganized Company's Equity Securities might trade.


Holders of the Reorganized Company's Equity Securities who are deemed to be "underwriters" as defined in Section 1145(b) of the Bankruptcy Code, including holders who are deemed to be "affiliates" or "control persons" of the Company within the meaning of the Securities Act, will be unable to freely transfer or sell their securities except pursuant to (a) "ordinary trading transactions" by an entity that is not an "issuer" within the meaning of Section 1145(b), (b) an effective registration of such securities under the Securities Act and under equivalent state securities or "blue sky" laws or (c) an available exemption from such registration requirements.


The Plan provides for the issuance of 51% of the Reorganized Company's Equity Securities to EDTV's shareholders, which will dilute the interests of the holders of the Company's Equity Securities. The interests of holders of the Company's Equity Securities will be further diluted by the issuance of Equity Securities to the holders of allowed Claims: a) arising from the rescission of a purchase or sale of an Equity Security of the Company or of an affiliate of the Company; b) for damages arising from the purchase or sale of such a security; or c) for reimbursement or contribution allowed under 11 U.S.C. § 502 on account of such a Claim. Additionally, the Reorganized Company will have the authority to issue additional Equity Securities to meet future equity requirements, which would further dilute the position of parties in interest who are to receive Reorganized Company's Equity Securities under the Plan. Given that the allowed Claims: a) arising from the rescission of a purchase or sale of an Equity Security of the Company or of an affiliate of the Company; b) for damages arising from the purchase or sale of such a security; or c) for reimbursement or contribution allowed under 11 U.s.C. § 502 on account of such a Claim have not been determined, it is not possible to determine how much those Claims may result in dilution of the interests of holders of the Company's Equity Securities. Likewise, it is not possible to quantify the dilution that would occur from further issuances of Equity Securities.


Certain statements contained with this disclosure statement may be deemed "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, the "Private Securities Litigation Reform Act of 1995"). All statements in this report other than a statement of historical fact are forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which could cause actual results and performance of the Company to differ materially from such statements. The words "believe," 'expect," "anticipate," "intend," "will," and similar expressions identify forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. Moreover, the Company does not assume responsibility for the accuracy and completeness of such statements.


EMPLOYEES


     The Company has a total of three employees, all of whom are full time in addition to its Officers and Directors.


Item 2. Description of Property.


The Company rents on a month-to-month basis approximately 600 square feet of office space in Oklahoma City, Oklahoma. The rental payment is $277 per month.


Item 3. Legal Proceedings.


KLAUS  LITIGATION


     On June 13, 2000, Frank L. Klaus, Jr., filed a petition in the District Court of Oklahoma County, State of Oklahoma against the Company, Broadcom, Black Giant Resources Corporation, Knight, and Webb. The petition alleges fraud and misrepresentations, breach of contract, and various violations of the Oklahoma Securities Act. The petition seeks damages in excess of $10,000 plus exemplary damages, attorney fees, and costs. Klaus's petition states, in summary, that he purchased 50,000 shares of the Company's common stock for the sum of $12,500 believing them to be unrestricted shares. The Temporary Receiver has been informed that the 50,000 shares in question were placed in a brokerage account in April 2001, and have either been sold or will be sold pursuant to Rule 144 of the Securities Act. The action is styled Frank L. Klaus, Jr. v. Broadband Wireless, et.al., Case No. CJ-2000-4319.


ITELL  LITIGATION


     On June 22, 2000 the Company filed a civil action in the District Court of Oklahoma County, State of Oklahoma against Ado, Hill, and iTell, seeking to recover the monies paid in connection with the failed acquisition of iTell, the return of shares of common stock issued by the Company to Ado, Hill, and iTell in connection with the failed transaction, and for damages caused to the Company. The Company has alleged breach of contract and has requested judgment in an amount in excess of $10,000. Due to the subject matter of the suit and the subsequent SEC Lawsuit, the iTell litigation has not been pursued. At this time, it is undetermined whether the Company will pursue the matter and whether any recovery is likely. The action is styled Broadband Wireless v. Sergio Ado, et.al., Case No. CJ-2000-4602.


NEWHOUSE  LITIGATION


     On September 8, 2000, the Company filed a civil action in the United States District Court for the Western District of Oklahoma against William G. Newhouse, III, an alleged beneficial 10 percent shareholder of the Company, for violations of state and federal securities laws and regulations. The Company sought a judgment in the amount of $293,749.70, with interest. On March 14, 2001, Newhouse and the Company entered into a settlement agreement. Pursuant to the terms of the settlement agreement, a judgment was entered against Newhouse in the sum of $247,543.70. Newhouse has represented that he has no assets available to pay the judgment. The Temporary Receiver has agreed to not enforce of the judgment until Newhouse's net worth equals or exceeds $220,000, at which time the Temporary Receiver, the Company, or the Company's surviving entity, assigns, or successors in interest may execute on the judgment. In addition, Newhouse surrendered to the Temporary Receiver 271,800 shares of Company stock.  See Note 15 at page F-17.  There are no assurances that the Company will collect any amount under the settlement agreement.


DICKSON  LITIGATION


     On September 9, 2000, the Company filed a civil action in the United States District Court for the Western District of Oklahoma against Dickson, an alleged beneficial 10 percent shareholder of the Company, for violations of state and federal securities laws and regulations. See Part 1, Item 1, "Background of Broadcom's Acquisition Efforts." The action seeks damages on several causes of action, each in excess of $75,000. The case is set for the trial docket of October 1, 2001. It is anticipated that the Company will likely prevail on a number of the claims asserted. The Company has recently determined that, due to Dickson's financial status, it is unlikely that there will be any recovery on any judgment obtained by the Company. The action is styled Broadband Wireless International Corporation, by and through Peter B. Bradford, Receiver v. Donald E. Dickson, Case No. CIV-00-1833-M.


WILSON  LITIGATION


     On September 8, 2000, the Company filed a civil action in the United States District Court for the Western District of Oklahoma against Wilson, an alleged beneficial 10 percent shareholder of the Company, for violations of state and federal securities laws and regulations. See Part 1, Item 1, "BACKGROUND OF BROADCOM'S ACQUISITION EFFORTS." The action seeks damages on several causes of action, each in excess of $75,000. The case is set for the trial docket of October 1, 2001. It is anticipated that the Company will likely prevail on a number of the claims asserted, including recovery on a promissory note executed by Wilson in favor of the Company. The amount likely to be recovered on any of the other claims is undeterminable at this stage of the litigation, although Wilson appears to have assets and recovery of amounts due on any judgment obtained is possible. The action is styled Broadband Wireless International Corporation, by and through Peter B. Bradford, Receiver v. Curtis H. Wilson , Sr., Case No. CIV-00-1567-W.


LITIGATION AGAINST BAKER AND AAROW ENVIRONMENTAL GROUP, INC.


     On March 20, 2000, Baker tendered his resignation as President of the Company, and Webb became President once more. In the letter of resignation, Mr. Baker specifically stated that he was not resigning his position as a director of the Company or as its Chief Operating Officer. Approximately six weeks later, on May 3, 2000, Mr. Baker tendered his resignation as a member of the Board of Directors of the Company, as well as from all other offices he held with the Company. In the interim, on May 1, 2000, Aarow Environmental Group, Inc. ("Aarow") announced the acquisition of Global Wireless Technologies, Inc., an Oklahoma corporation of which Baker was the President and controlling stockholder. As a result of the acquisition, Baker became the President of Aarow, a publicly held company, as well as its largest stockholder. In connection with the acquisition, Aarow announced that its new subsidiary, renamed "Aaro Broadband Wireless Communications Corporation," would focus its efforts on fixed, wireless, broadband communications services throughout the central, western, and southwestern United States. Aarow also announced that its national headquarters was in the location of office space that Baker had leased while President of and on behalf of the Company.


     On May 24, 2000, the Company filed a petition in Oklahoma County, Oklahoma against Baker and Aarow. The petition, which sought injunctive relief and asserted claims for conversion, fraud, and misrepresentations, sought damages in excess of $10,000.

     On May 31, 2000, Aarow filed a petition in the District Court of Oklahoma County, State of Oklahoma naming the Company, Broadband Wireless Communications, Inc., Broadcom Wireless Corporation and Cisco Systems, Inc. as parties to an interpleader suit in which Aarow tendered certain computer equipment in its possession to the court to make a determination of who has the right to the equipment. Aarow sought the recovery for its costs and fees incurred in connection with the suit, no money damages were sought.


     As reported in the Company's Current Report on Form 8-K dated October 28, 2000, as part of the SEC Lawsuit, on October 17, 2000, the Court issued an order (the "District Court Order") approving the entry of the Company into a certain Settlement Agreement (the "Settlement Agreement"), whereby the Company settled certain lawsuits pending in the District Court of Oklahoma County, as follows:


-Broadband Wireless International Corporation, f/k/a Black Giant Oil Company vs. Ronald L. Baker, AAROW Environmental Group, Inc., a/k/a AARO Broadband Wireless Communications Corporation, and GetMore Communications, Inc., Case No. CJ-2000-3816 (the "First Civil Action"), wherein the Company alleged, among other things, claims against Baker, GetMore, and Aarow for negligent misrepresentation. In the First Civil Action, Baker filed counterclaims against the Company and third party claims against other parties alleging, among other things, claims for breach of contract, violations of federal and state securities laws, fraud, and conversion.


-Broadcom Wireless Communications Corp. and Black Giant Resources Corporation vs. Ronald L. Baker, AAROW Environmental Group, Inc., a/k/a AARO Broadband Wireless Communications Corporation, and GetMore Communications, Inc., Case No. CJ-2000-5129 (the "Second Civil Action"), wherein Broadcom and Black Giant Resources Corporation alleged, among other things, claims against Baker, GetMore and Aarow for negligent misrepresentation.


-Gary Duke, Ron Baker, and GKD, Inc. vs. BroadCom Wireless Communications Corporation, Case No. CJ-2000-4813 (the "Third Civil Action"), wherein Duke, Baker, and GKD, Inc. alleged, among other things, claims against Broadcom for conversion and fraud.

     In the Settlement Agreement, the Company, Aarow, Broadcom, Black Giant Oil Company, Black Giant Resources Corporation, and all other parties settled all claims against each other in the First Civil Action, the Second Civil Action, and the Third Civil Action (collectively, the "Settled Claims"). The District Court Order provides, among other things, that the Settlement Agreement was in the best interest of the Company and was necessary and proper for the collection, preservation and maintenance of receivership assets.

     Under the terms of the Settlement Agreement, AARO assumed liability for $550,000 in convertible subordinated debentures issued by the Company and such debentures were canceled in exchange for 1,000,000 shares of common stock of AARO. Further, AARO solicited and procured purchasers of the Company's Settled Claims to third parties for the aggregate sum of $400,000, which proceeds have been paid to the Company. The claims of the Company purchased by the third parties have been exchanged with AARO for 1,800,000 shares of common stock of AARO. In addition, 2,700,000 shares of the Company's common stock possessed by Baker and Duke were returned to the Company, and Duke has received 200,000 shares of common stock of AARO. Further, certain of the Company's restricted shares of common stock were exchanged for warrants to acquire shares of AARO.

     As a part of the Settlement Agreement, Baker entered into a release of all claims of any kind against the Company and related entities, and the Company indemnified Baker in the event of any claims made against Baker arising from the Settlement Agreement. In May 2001, actions were filed in the District Court of Oklahoma County, State of Oklahoma by Mitchell Walker and Dan Walker against Baker and others alleging that said parties were aiders and abettors in connection with a sale of securities in violation of Oklahoma securities laws. Counsel for Baker has made a request for indemnification to the Temporary Receiver pursuant to the indemnification clause in the Settlement Agreement. The Temporary Receiver has responded to Baker's counsel's request and has advised them that the Temporary Receiver does not believe the indemnification clause contemplates third party actions and that because of the release and the stay in the SEC Lawsuit, that the Company will not have to indemnify Baker. The matter remains unresolved, but the Temporary Receiver believes it will not result in any loss or expense to the Company, although the Company's potential liability has not been determined.


WEBB  SETTLEMENT


     The Temporary Receiver, on behalf of the Company, entered into a settlement agreement with Webb on April 19, 2000, under which Webb has agreed to transfer cash and assets to the Company with a total value in excess of $350,000, including any common stock of the Company still held by Webb. Webb has also agreed to cooperate with the Temporary Receiver in providing any required information concerning other defendants. Under the Webb settlement agreement, Webb has transferred to the Temporary Receiver $44,000 in cash, 1,720,176 shares  of Company stock, 5 tracts of Texas real estate worth $75,000, and has assigned oil and gas revenues from two producing wells.  Webb has also forgiven a $150,000 note from the Company (see Note 12 to Financial Statements).  Webb also executed a sworn affidavit concerning his net worth and is cooperating with the Temporary Receiver's investigation.  The Webb settlement is awaiting approval of the Court.


THE GENESIS MARKET NEUTRAL PARTNERS, L.P. SETTLEMENT


    Genesis is a private investment entity headed by Conrad Seghers of Dallas, Texas.  Genesis and Seghers had performed consulting services for the Company in 2000.  In March 2000, Genesis entered into several agreements with Broadcom to purchase stock of the Company.  Genesis Market Neutral inadvertently overpaid for its stock by $175,000.  To settle this claim, the Temporary Receiver has entered into an agreement with Genesis, approved by the Court, to issue 1,050,000 shares of stock of the Company, of which 150,000 shares were issued from the authorized, but unissued, S-8 Shares.  The remaining shares are being issued at the rate of 150,000 shares a month which will be completed in October 2001 under the terms of the settlement agreement and Seghers and Genesis have released the Company from any further liability.


ADDITIONAL  LITIGATION


     The Company anticipates that additional lawsuits (the "Additional Lawsuits") will be filed against the Company in connection with activities prior to the filing of the SEC Lawsuit. While the Company intends to defend itself against any Additional Lawsuits, no assurance can be made as to the favorable outcome of such litigation. Judgments rendered against the Company in some or all of such litigation could have material adverse effect on the Company. Any lawsuits against the Company are stayed pursuant to the Order of August 11, 2000.

     The Company also anticipates filing additional lawsuits against former officers, directors, and former 10 percent shareholders who may have liability under Section 16(b) of the Exchange Act which imposes liability on officers and directors of an issuer for short-swing trading in equity securities if the issuer has a class of equities securities registered under Section 12 of the Exchange Act, and on the beneficial owner of 10 percent or more of the class of equities securities registered by such issuer under Section 12.


In May of 2001, actions were filed in the District Court of Oklahoma County, State of Oklahoma by Mitchell Walker and Dan Walker against Baker and others alleging that they were aiders and abettors in connection with a sale of securities in violation of Oklahoma securities laws.


Counsel for Baker has made a request for indemnification to the Temporary Receiver pursuant to the indemnification clause in the Settlement Agreement. The Temporary Receiver responded to Baker's counsel's request and advised them that the Temporary Receiver did not believe the indemnification clause contemplates third party actions and that because of the release and the stay in the SEC Lawsuit, that the Company will not have to indemnify Baker. The matter remains unresolved, but the Temporary Receiver believed it would not result in any loss or expense to the Company, although the Company's potential liability has not been determined.


In the 10-KS B filed by the Company on July 2, 2001, the Company reported that the Temporary Receiver, on behalf of the Company, entered into a settlement agreement with Webb on April 19, 2000, under which Webb had agreed to transfer cash and assets to the Company with a total value in excess of $350,000, including any Equity Securities of the Company still held by Webb. Webb also agreed to cooperate with the Temporary Receiver in providing any required information concerning other defendants. Under the Webb settlement agreement, Webb transferred to the Temporary Receiver $44,000 in cash, 1,720,176 shares of the Company's Equity Securities, 5 tracts of Texas real estate worth $75,000, and assigned oil and gas revenues from two producing wells. Webb also forgave a $150,000 note from the Company and executed a sworn affidavit concerning his net worth. The Federal District Court approved the Webb Settlement on July 13, 2001. Webb continued to cooperate with the Temporary Receiver's investigation. Additional sanctions and penalties are likely to be imposed by the SEC.


The Company met its obligations under a Federal District Court approved settlement agreement with Genesis Market Neutral Partners, L.P. under which the Company transferred a total of 1,050,000 of its shares to Genesis Market Neutral Partners, L.P. over a seven month period.


As stated above, the Company or Reorganized Company may file a number of objections to proofs of Claim and motions to estimate contingent Claims. Likewise, the Company in Possession or Reorganized Company may file a number of motions to value Collateral


The Estate may also hold causes of action against various Persons and Entities, including, but not limited to, causes of action under the Code. A detailed evaluation of the merits of these potential causes of action or estimate of their monetary worth has not been made. All causes of potential causes of action or estimate of their monetary worth has not been made. All causes of action, whether arising Pre-Petition or Post-Petition and whether arising under state or federal law,


Pursuing any litigation would entail incurring attorneys' fees and expenses. At this point, it is not possible to give any meaningful estimate of what those fees and expenses might ultimately total or the potential outcome. However, the fees and expenses in connection with the Claims and Equity Security Interest reconciliation process might easily exceed $100,000 in the event matters are not resolved by agreement.



Item 4. Submission of Matters to Vote of Security Holders.

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.


PART II


Item 5. Market for Common Equity and Related Stockholder Matters.


MARKET FOR COMMON EQUITY

The Company's common stock trades on the OTC Bulletin Board under the symbol "BBAN." Prior to February 2000, the Company's common stock was traded on the OTC Bulletin Board under the symbol "BGCC." On June 29, 2002, the closing bid price for the common stock was $.10 per share. The following table sets forth the high and low bid prices for our common stock during the calendar periods indicated, through March 31, 2002. Because the common stock trades on the OTC Bulletin Board, you should know that these stock price quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and they may not necessarily represent actual transactions.


 

 

 

 


Bid Prices

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


Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

 

High

Low

High

Low

High

Low

High

Low

1999

$ 0.095

$ 0.055

$ 0.80

$ 0.040

$ 0.040

$ 0.025

$ 0.030

$ 0.021

2000

$ 4.625

$ 4.0000

$ 0.652

$ 0.5625

$ 0.1719

$ 0.1406

$ 0.125

$ 0.0781

2001

$ 0.1719

$ 0.1406

$0.170

$0.070

$0.130

$0.050

$0.210

$0.060

2002

$0.180

$0.090

$0.200

$0.110

    


     The number of beneficial holders of record of the common stock of the Company as of the close of business on June 29, 2002, was approximately 13,615.


DIVIDENDS


     The Company has not paid cash dividends on our common stock since our inception. The Company does not anticipate paying any dividends at any time in the foreseeable future.  The Company expects to use any excess funds generated from our operations for working capital and to fund the Business Plan.


RECENT ISSUANCE OF COMMON STOCK

     The following sets forth certain information regarding the issuances of the Company's common stock, which were made on the authority of Peter Bradford the court appointed receiver for the Company. These shares represent the sale of stock over several recent years, but for which no stock was ever issued.  All those to whom stock was issued provided proof of purchase to the receiver.  No other shares were issued in the year ended March 31, 2002.


SHAREHOLDER

 

AMOUNT OF SHARES

Genesis Market Neutral Partners

 

1,050,000

Clear Creek Partners Ltd.

 

   175,000

Bryan L. Frank

 

     12,500

Steven T. McDaniel

 

       1,333

Tim and Colleen Dickey

 

     10,000

Willis and Tonja Shandy

 

     20,000

David Van Den Bosch

 

     25,000

Matt Trent

 

     33,333

Chad Huffmyer

 

     33,333

Marlin L. Dickey

 

       8,000

John Racz

 

       8,500

Arlo Siegersma

 

     10,000

Frank Sommer

 

     25,000

Howard E. Chapman

 

       4,000

Dwayne Hendrickson

 

          500

John and Mariann Vanderzwaan

 

        7,500

Lyndel and Dorothy Strain

 

        5,000

Andy and Staci Strain

 

           500


Item 6. Management's Discussion and Analysis of Financial Condition and Results of Operations.


Forward-looking Statements


     Certain statements contained with this report may be deemed "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, the "Private Securities Litigation Reform Act of 1995"). All statements in this report other than a statement of historical fact are forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which could cause actual results and performance of the Company to differ materially from such statements. The words "believe," "expect," "anticipate," "intend," "will," and similar expressions identify forward-looking statements. Forward-looking statements contained herein relate to, among other things, (i) the ability of the Receiver to locate and recover assets of the Company; (ii) the appointment of officers for the Company; (iii) the ability of the Company to enter into a business combination or merger; (iv) the ability or inability to continue operations using the Business Plan; (v) the Company's ability to develop or adopt new and existing technologies in the conduct of its operations; (vi) anticipated financial performance; (vii) ability to comply with the Company's general working capital requirements; (vii) the outcome of the various lawsuits; and (viii) the cancellation of shares of the Company's common stock issued without consideration or in violation of applicable law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, we do not assume responsibility for the accuracy and completeness of such statements. We undertake no obligations to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise.


Overview

     To date, none of the transactions underlying the Letter of Understanding, or the other transactions brought to the Company by the Broadcom Group, have resulted in any revenues to the Company. Moreover, the Company has significant liabilities and no significant assets, other than cash and notes receivable.


      On August 11, 2000, the SEC initiated the SEC Lawsuit and obtained an emergency, ex parte order (the "Order") appointing Peter B. Bradford, an Oklahoma City attorney, as Temporary Receiver for the Company (and two related entities, Broadcom Wireless Communications Corporation, an Oklahoma corporation, and Black Giant Resources Corporation, an Oklahoma corporation), and also obtained a temporary restraining order enjoining the defendants from further violations of the federal securities laws and freezing their assets. Pursuant to the Order entered by Court, the Temporary Receiver has filed five reports to the Court since the date of this Order regarding activities conducted by the Temporary Receiver since his appointment dated September 15, 2000, October 31, 2000, January 5, 2001, April 6, 2001, and May 15, 2001, all of which are attached as exhibits hereto (together, the "Receiver's Reports"). The Receiver's Reports indicate that the Company had no business activities or operations as of March 31, 2001. As reflected in the Receiver's Reports, the Receiver has been engaged in locating assets of the Company along with assets of the other SEC Lawsuit defendants, Broadcom, Black Giant Resources Corporation, Ivan Webb, Donald L. Knight, and Kimberly Knight.


      In December 2000, the Board of Directors considered adopting the Business Plan, which describes a wireless Internet service provider business in the greater Oklahoma City geographical market. The Company conducted test applications of the wireless operations described in the Business Plan in Edmond and Norman, Oklahoma. These tests were successfully completed in December 2000. After reviewing the reports of the tests, the Board of Directors approved the Business Plan. In February 2001, the Receiver submitted the Business Plan to the Court for approval. The Company received Court approval on February 7, 2001, to immediately commence with business operations pursuant to the Business Plan.


      The Company is in communication with third parties who are interested in entering into a business combination or merger with the Company which could result in the Company commencing, or joining with such third parties to operate, a communications business. All current communications are exploratory only, and there are no assurances that a potential combination or merger or other business purchase arrangement involving the Company will be realized.


     On February 23, 2001, the Company entered into agreements with the American Bank & Trust Company of Edmond, Oklahoma and with Republic Bank of Norman, Oklahoma on March 19, 2001, to provide wireless communication services for those banks to and from their branch offices in Central Oklahoma. The Company also entered into a similar agreement with McClain County Bank on May 17, 2001. The Company began realizing revenues from these clients in May 2001.


     The Company is exploring the potential for business development in Native American markets and has developed collateral materials and processes necessary to deliver qualified proposals to any nation based upon site surveys and/or campus maps. The Company believes this business sector will provide recurring revenues. The Company has presented several comprehensive proposal documents to various Indian Nations, including the Northern Cheyenne, Pomo, Colorado River, Chipewa-Cree, and the Seneca Nations, and expects one or more to be ratified in July 2001 by the respective Tribal Councils.  The Company believes that these markets have the potential to generate a substantial portion or all of the revenues recurring to fund the Company's business operations as contemplated in the Business Plan.


     The Company's economic development initiatives for the Northern Cheyenne Nation provide for the Northern Cheyenne Nation to install and implement the Company's solutions (as subcontracted labor) in the reservations in a five-state area around Montana. The Company believes it is positioned to provide the technical solutions and necessary tools and training to assist the tribes in developing their own technical support and installation staff. These communities are technology and job deprived, and we have garnered much attention to bring a cost-effective, communications infrastructure and jobs to these underserved markets. Our goal is to install and implement at least one wireless, reservation-network per month of the similar size and magnitude as that proposed to the Northern Cheyenne Nation. AITEC (the American Indian-owned contractor with whom we have developed a strategic relationship) is prepared for this "run-rate." We have recently participated in the NIBA (Native Indian Business Association) conference in Albuquerque, New Mexico in an attempt to market our capabilities. There are no assurances that we will obtain the contracts described above or realize our installation goal.


As described above, the Company has been in negotiation with and has reached agreement to acquire EDTV pursuant to published agreements and described above. Negotiating this agreement, dealing with the bankruptcy process, and related legal matters, also described above, has been the major focus of the Company in the year ended March 31, 2002.


Revenues


Total revenues of the Company for the 12 months ended March 31, 2002, and 2001, were $8,407 and $1,385 respectively, an increase of $7,022.


Operating Expenses


Operating expenses of the Company for the 12 months ended March 31, 2002, and 20001 were $630,401 and $942,819, respectively, a decrease of $312,418 The decrease is largely attributable to a decrease in professional services necessitated by the SEC Lawsuit and the resulting Receivership.


Liquidity and Capital Resources


The Company continues to have extremely limited liquidity and its primary source of funds is currently restricted to the activities of the Temporary Receiver in seeking to marshal the assets of the Company and pursue all claims of the Company and some minor amounts from its Internet Service operating  activities.


Although the Company currently has very limited resources with which to implement the Business Plan, the Company believes that the current resources available to the Company, along with the anticipated revenues from the wireless services contracts, will finance the activities of the Company until the bankruptcy is discharged and the acquisition of EDTV is accomplished.





Item 7. Financial Statements.


The financial statements of the Company are incorporated by reference from the attached Appendix A and include the following:

Financial Statements of Broadband Wireless International Corporation


 

(1) Reports of Independent Auditors

(2) Balance Sheets as of March 31, 2001 and 2000

(3) Statements of Operations for Years Ended March 31, 2002 and 2001

(4) Statements of Changes in Stockholders' Equity for Years Ended March 31, 2002 and 2001

(5) Statements of Cash Flows for Years Ended March 31, 2002 and 2001

(6) Notes to Financial Statements for Years Ended March 31, 2002 and 2001







Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.



      On June 28, 2000, the Company's Board of Directors approved the engagement of the accounting firm of Clyde Bailey, P.C. as its independent certifying accountants to replace the accounting firm of Jackson & Rhodes, P.C., who resigned on June 24, 2000. Jackson & Rhodes' reports on the financial statements of the Company for the two fiscal years ended March 31, 1999, and March 31, 1998, contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the two preceding  fiscal years and the interim periods subsequent to the Company's fiscal year ended March 31, 1999, there were no disagreements with Jackson & Rhodes on any matter of accounting principles or practices, financial statement disclosure, auditing scope or procedure, or any reportable events as defined in Item 304 (a) (1) (iv) of Regulation S-B.


PART III


Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With 16(a) of the Exchange Act


      The following information is furnished for each person who serves as an executive officer or director of the Company as of June 28, 2002. The Board of Directors currently consists of two members, Ron Tripp, and William Higgins, both of whom were appointed to vacant positions on the Board in December of 2000 by Ivan Webb and Howard Siegel who were then the only members of the Board of Directors. Webb and Siegel also resigned in December 2000.


Ron Tripp

49

President, Secretary, Treasurer, and Director


William Higgins

53

Director


Dr. Ron Tripp, President, Secretary, Treasurer, and  Director. Dr. Tripp is a chiropractic physician with a private practice in Norman, Oklahoma. He serves as President of the Oklahoma Board of Chiropractic Examiners through appointment in 1998 by Governor Frank Keating, is a delegate to the National Board of Chiropractic Examiners and the Federation of Chiropractic State Licensing Boards, and is President of USA Judo. Dr. Tripp is a former representative and President of U.S. Operations of the Mendel Japan Corporation based in Tokyo, Japan.


William Higgins, Director. Mr. Higgins practices law in Claremore, Oklahoma, with his practice focusing on business litigation and other trial work services. He previously served as Assistant District Attorney from 1974 through 1977 and has since been in private practice. Mr. Higgins is a member of the Oklahoma Trial Lawyers Association, American Bar Association and the Association of Trial Lawyers of America.


COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT; BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS.


    Section 16(a) of the Securities and Exchange Act of 1934, as amended, requires the Company's directors and executive officers and any persons who own more than 10 percent of a registered class of the Company's equity securities to file with the SEC and each exchange on which the Company's securities are listed reports of ownership and subsequent changes in ownership of common stock and other securities of the Company.  Officers, directors, and greater than 10 percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.  Based solely on review of the copies of such reports furnished to the Company or written representations that no requirements applicable to its officers, directors, and greater than 10 percent beneficial owners were met.


Item 10. Executive Compensation.


The following table sets forth the compensation paid by the Company to the Chief Executive Officer and the Chief Operating Officer (the "Named Executive Officers"). None of the Named Executive Officers received any compensation in fiscal years ended 2002, 2001, 2000, or 1999, unless indicated.


Annual Compensation


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

Name and Principal Position

Salary

Bonus

Other Compensation

Year Ended

Dr. Ron Tripp, President, Sectretary, Treasurer, and Director

None

None

None

2002

William Higgins, Director

None

None

None

2002


DIRECTOR COMPENSATION


      The members of the Board of Directors do not receive regular compensation for serving on the Board of Directors. However, on May 25, 2001, the Options Committee of the Board of Directors of the Company voted to grant nonqualified options to members of the Board of Directors as follows: Albie Shaffer, 200,000; Ron Tripp, 100,000; and William Higgins, 100,000. The exercise price on the options is to be $.08 per share, the closing bid price of the common stock on the date of grant. The options are exercisable as to 25% of the underlying shares of common stock after three months, an additional 25% after six months, an additional 25% after nine months, and are fully exercisable after 12 months.


       On June 30, 2000, the Board of Directors ratified the grant of warrants to the Advisory Committee to compensate them for their services provided and to be provided as members of the Advisory Committee. Each member of the Advisory Committee was granted 150,000 warrants that were immediately exercisable entitling the holder thereof to purchase 150,000 shares of the Company's common stock, with the exercise price of such warrants to be equal to $0.0625, the closing price of the Company's common stock on the date of grant.  The Temporary Receiver is currently investigating whether the warrants granted on June 30, 2000, were validly issued.


EMPLOYMENT AGREEMENTS


The Company has no employment agreements.


Item 11. Security Ownership of Certain Beneficial Owners and Management.


SECURITY OWNERSHIP


      The following table sets forth information as of June 29, 2001, concerning the beneficial ownership of common stock by each of the Company's directors, each Named Executive Officer, and all directors and executive officers of the Company as a group, and by each person who is known by the Company to own more than 5% of the outstanding shares of common stock. Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to such stock. The address for each beneficial owner is 2304 North Interstate Drive, Norman, OK 73072, unless otherwise indicated.



PERCENT

BENEFICIAL OWNER

NUMBER OF SHARES

PERCENT

Ron Tripp (1)

115,000

**

William Higgins

30,439

**

   

Officers and Directors as a Group

145,439

**




        **      Less than 1%.

        (1)      Mr. Tripp's spouse owns 115,000 of these shares, of which Mr. Tripp disclaims beneficial ownership.


Item 12. Certain Relationships and Related Transactions.

None.


Item 13. Exhibits and Reports on Form 8-K.


(a)  The following documents are filed as part of this report:


       (1)  Financial Statements are attached hereto as Appendix A and included herein on pages F-1 through F-24.

       (2)  The exhibits set forth on the following Exhibit Index are filed with this Report or are incorporated by 

reference as set forth therein.


Exhibit Number

Exhibit


3.1

 


Articles of Incorporation, filed as Exhibit 4.1 to the Company's Registration Statement of Form 8-A, dated June 13, 1977, and incorporated herein by reference.

3.2

 


Amendments to the Articles of Incorporation, filed as Exhibit 3.2 to the Company's Form 10-KSB for the fiscal year ended March 31, 2000, and incorporated herein by reference.

3.3

 


First Amended and Restated Bylaws, filed as Exhibit 99.1 to the Company's Form 8-K dated June 21, 2000, and incorporated herein by reference.

4.1

 


Specimen Certificate of the Company's common stock, filed as Exhibit 4.1 to the Company's Form 1-KSB for the fiscal year ending March 31, 2000, and incorporated herein by reference.

4.2

 


2000 Stock Option Plan of the Company, filed as Exhibit 4.1 to the Company's Registration Statement on Form S-8, file number 333-35440 and incorporated herein by reference.

10.1

 


Agreement in Principle and Letter of Understanding dated November 1, 1999, by and between Broadcom Wireless Communications Corporation and the Company, filed as Exhibit 4, to the Company's Quarterly Report on Form 10-QSB for the quarterly period ended December 31, 1999, and incorporated herein by reference.

10.2

 


March 3, 2000 Assignment by and between the Company, Ron Baker and Gary Duke, filed as Exhibit 10.1 to the Company's Form 8-K, dated April 6, 2000, and incorporated herein by reference.

10.3

 


Agreement in Principle and Letter of Understanding, dated December 30, 1999, by and between Broadcom Wireless Communications Corporation and the Company which amends the Agreement in Principle and Letter of Understanding dated November 1, 1999, filed as Exhibit 10.3 to the Company's Form 10-KSB for the fiscal year ending March 31, 2000 and incorporated herein by reference.

99.1

 


First Preliminary Report of the Temporary Receiver, dated September 15, 2000, filed as Exhibit 99.1 to the Company's Form 10-QSB for the quarterly period ended September 30, 2000, and incorporated herein by reference.

99.2

 


Second Preliminary Report of the Temporary Receiver, dated October 31, 2000, filed as Exhibit 99.2 to the Company's Form 10-QSB for the quarterly period ended September 30, 2000, and incorporated herein by reference.

99.3

 


Third Preliminary Report of the Temporary Receiver, dated January 5, 2001, filed as Exhibit 99.3 to the Company's Form 10-QSB for the quarterly period ended December 31, 2000, and incorporated herein by reference.

99.4

Fourth Preliminary Report of the Temporary Receiver, dated April 6, 2001.

99.5

Fifth Preliminary Report of the Temporary Receiver, dated May 15, 2001.

99.6

Sixth Preliminary Report of the Temporary Receiver, dated October 16, 2001, filed as Exhibit 99.3 to the Company's Form 10-QSB for the quarterly period ended September 30, 2001, and incorporated herein by reference.

(b)  Reports on Form 8-K


       The Company did not file a Form 8-K during the last quarter of the period covered by this Report.


 


Signatures


 


 


Pursuant to the requirements of Section 13 or 15(d) 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.


August 6, 2002



BROADBAND WIRELESS INTERNATIONAL CORPORATION,

a Nevada corporation


By

/s/ Ron Tripp

     Ron Tripp

     President and Director



Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


August 6, 2002


/s/ Ron Tripp

     Ron Tripp

     President, Secretary, Treasurer, and Director

 



August 6, 2002


/s/ William Higgins

     William Higgins

     Director

 






Appendix A


BROADBAND WIRELESS INTERNATIONAL

CORPORATION


Audited Financial Information


March 31, 2002

















Clyde Bailey, P.C.

Certified Public Accountant

10924 Vance Jackson #404

San Antonio, Texas 78230





BROADBAND WIRELESS INTERNATIONAL CORPORATION

(Formerly Black Giant Oil Company)









INDEX TO FINANCIAL STATEMENTS





     

        Page


Independent Auditor’s Report

1


Balance Sheets for the years ended

2

     for the years ended March 31, 2002 and 2001


Statements of Operations

3

     for the years ended March 31, 2002 and 2001



Statements of Changes in Stockholders’ Equity

  

4

    

     for the years ended March 31, 2002 and 2001


Statements of Cash Flows  

5

     for the years ended March 31, 2002 and 2001


Notes to Financial Statements

6














INDEPENDENT AUDITOR’S REPORT


Board of Directors

Broadband Wireless International Corporation

(Formerly Black Giant Oil Company)

We have audited the accompanying balance sheet of Broadband Wireless International Corporation (formally Black Giant Oil Company) as of March 31, 2002 and 2001 and the related statements of operations, changes in stockholders' equity, and cash flows for the years ended March 31, 2002 and 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Broadband Wireless International Corporation as of March 31, 2001 and 2000 and the results of its operations and its cash flows for the years ended March 31, 2001 and 2000 in conformity with generally accepted accounting principles.


On August 11, 2000, Peter B. Bradford (“Receiver”) was appointed Temporary Receiver for the Company in Case No. CIV-00-1375-R in the United States District Court for the Western District of Oklahoma in an Securities and Exchange Commission enforcement action. The Order appointing Temporary Receiver enjoins all persons and entities … “from in any way disturbing the Receivership assets from filing or prosecuting any actions or proceedings which involves the Receiver or which affect the receivership assets. The company has entered Chapter 11 Reorganization following the exit from the Federal Receivership and the dismissal of actions by the SEC. The SEC filed a motion on December 12 with the Federal Court requesting the pending actions against Broadband Wireless be dismissed. The court issued its final order approving the motion and removed the Temporary Receiver on December 21, 2001. The application to reorganize was filed on December 27, 2001 by the firm of Kline, Kline, Elliott, Castleberry & Bryant, P.C., on behalf of the company.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 10 to the financial statements, the Company's significant operating losses and its working capital deficit 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.


Clyde Bailey P.C.


San Antonio, Texas

July 12, 200




BROADBAND WIRELESS INTERNATIONAL CORPORATION

Balance Sheets

March 31, 2002 and 2001


  

2002

2001

                                             ASSETS

   
    

Current Assets:

   

Cash

 

$      5,502

$ 228,124

Notes Receivable

 

50,000

147,648

Total Current Assets

 

55,502

375,772

    

Investments

 

1,750

1,750

    

Fixed Assets:

   

Office Furniture and Equipment, net

 

38,400

14,957

    

Non-Current Assets

   

Notes Receivable

 

-

168,522

    

Other Assets

   

Net Assets of Discontinued Operations

 

26,700

26,700

  

26,700

26,700

Total Assets

 

$    122,352

$ 587,701

    
    

LIABILITIES AND STOCKHOLDERS’ EQUITY

   
    

Current Liabilities

   

Accounts Payable and accrued liabilities

 

$      31,638

$   57,091

Capital Lease

 

30,699

-

Notes Payable

 

75,000

50,000

    

Total Current Liabilities

 

137,337

107,091

    

Commitments and Contingencies

 

-

-

    

Stockholders’ Equity

   

Preferred Stock, $.10 par value. 25,000 shares

 

-

-

authorized, none issued and outstanding

   

Common Stock, $.0125 par value, 250,000 shares

 

734,055

832,525

authorized, 58,724,386 and 66,602,016

   

shares issued and outstanding

   

Additional paid-in capital

 

2,814,194

2,614,106

Accumulated deficit

 

(3,561,833)

(2,964,621)

  

(13,585)

482,010

Less Treasury stock (14,184 and 14,184)

 

(1,400)

(1,400)

Total Stockholders’ Equity

 

(14,985)

480,610

    

Total Liabilities and Stockholders’ Equity

 

$    122,352

$    587,701




BROADBAND WIRELESS INTERNATIONAL CORPORATION

Statement of Operations

Years Ended March 31, 2002 and 2001


  

2002

2001

    

Revenues:

   

Revenue

 

8,704

1,385

Total revenues

 

8,704

1,385

    

Operating Expenses:

   

Salaries

 

$     139,000

$                 -   

Payroll Taxes and Employee Benefits

 

20,214

-

Promotion and Advertising

 

-

85,920

Rent

 

4,065

286

Depreciation Expense

 

16,975

787

Professional Fees

 

357,485

82,887

Legal Fees

 

-

571,454

Consulting

 

-

121,633

General and Administrative

 

92,662

79,852

  

630,401

942,819

Loss from operations

 

(621,994)

(941,434)

    

Other income (expense)

   

Interest income

 

7,017

11,021

Other Income

 

14,000

-

Other Expense

 

-

(25,000)

Interest expense

 

(2,500)

(19,854)

Total other expense

 

18,517

(33,833)

Loss from continuing operations

 

(603,477)

(975,267)

    

Discontinued operations

   

Income from discontinued operations

 

6,265

2,963

Loss from discontinued operations

 

             -

(344,144)

    

Total discontinued operations

 

6,265

(341,181)

    

Loss before extraordinary items

 

(597,212)

(1,316,448)

    

Extraordinary Items

 

             -

476,750

Net Loss

 

(597,212)

(839,698)

    

Loss per common share:

   

From continuing operations

 

$         0.010

$      (0.013)

From discontinued operations

 

$         0.000

$      (0.004)

From extraordinary items

 

$                 -

$         0.006

  

              

 

Net Loss

 

$      (0.010)

$      (0.011)

    

Weighted average common shares outstanding

 

61,660,605

79,073,825

    
    





BROADBAND WIRELESS INTERNATIONAL CORPORATION

Statements of Changes in Stockholders' Equity



  

Common Stock

Shares

 

Common Stock

Amount

 

Additional Paid-In Capital

 

Accumulated (Deficit)

 

Treasury Total

 

Total

             

Balance, March 31, 2000

 

68,376,537

 

$     854,707

 

$1,346,663

 

$(2,124,923)

 

$      (1,400)

 

$     75,047

             

Stock Cancelled – 12/20/01

 

(250,000)

 

(3,125)

       

(3,125)

Stock Cancelled – 1/22/01

 

(9,304,011)

 

(116,300)

       

(116,300)

Stock Cancelled – 3/14/01

 

(271,800)

 

(3,398)

 

(42,808)

     

(46,206)

Stock Cancelled – 3/31/01

 

(1,380,617)

 

(17,258)

       

(17,258)

Stock Cancelled – 5/31/01

 

(8,525,500)

 

(106,569)

       

(106,569)

             

Total Stock Cancelled

 

(19,731,928)

 

(246,649)

 

(42,808)

     

(289,457)

             

Settlement of Inadequate Compensation for Stock

     

1,111,377

     

1,111,377

             

Stock Warrants Converted to Stock - 4/11/00

 

500,000

 

6,250

 

18,750

     

25,000

Stock Warrants Converted to Stock - 3/15/01

 

907,407

 

11,343

       

11,343

Stock issued per S-8 Filing - 4/26/00

 

7,250,000

 

90,625

 

180,124

     

270,749

Stock issued for notes and interest - 6/30/00

 

4,100,000

 

51,250

       

51,250

Stock issued for purchase of assets - 4/8/00

 

4,000,000

 

50,000

       

50,000

Stock issued pursuant of Settlement - 3/29/01

 

1,200,000

 

15,000

       

15,000

             

Net Loss

       

(839,698)

   

(839,698)

             

Balance, March 31, 2001

 

66,602,016

 

832,525

 

2,614,106

 

(2,964,621)

 

(1,400)

 

480,610

             

Stock Cancelled

 

(9,150,629)

 

(114,383)

 

200,088

      

Stock Issued

 

1,272,999

 

15,912

        
             

Net Loss

       

(597,212)

   

(597,212)

             
  

58,724,386

 

734,055

 

2,814,194

 

(3,561,833)

 

(1,400)

 

(14,984)

             







BROADBAND WIRELESS INTERNATIONAL CORPORATION

Statements of Cash Flows

Years Ended March 31, 2002 and 2001


  

2002

2001

    

Cash Flows from Operating Activities:

 

$  (597,212)

$  (839,698)

Net Loss

   

Adjustments to Reconcile net loss to net cash

   

Provided by (used in) operating activities:

   

Shares issued for services

 

-

-

Shares issued for interest

 

-

1,250

Changes in operating assets and liabilities

   

Depreciation

 

16,975

787

Prepaid Expenses

 

-

-

Accounts payable and accrued liabilities

 

(25,453)

24,614

Net assets of discontinued operations

 

                -

204,144

    

Net Cash provided by (used in) Operating Activities

 

$  (605,690)

$  (608,903)

    

Cash Flows from Investing Activities:

   

Purchase of Fixed Assets

 

(40,418)

(15,744)

Notes and Loans Receivable:

 

-

 

Advances

 

-

(271,955)

Collections/Transfers

 

266,170

1,375

Investments

 

                -

495,750

    

Net Cash provided by (used in) Investing Activities

 

$     225,752

$     209,426

    

Cash Flows from Financing activities:

   

Issuance of common stock

  

83,250

Advances from officer

  

(4,925)

Capital Leases

 

30,699

 

Note payable

 

25,000

(62,250)

Settlement of Inadequate Compensation for Stock

  

1,065,171

Convertible Subordinated Debentures

 

                  -

(700,000)

    

Net Cash provided by (used in) Financing Activities

 

$     157,316                 

$     381,246

    

Net Increase (Decrease) in cash and cash equivalents

 

(222,622)

(18,231)

    

Cash at beginning of Year

 

$     228,124

$     246,335

    

Cash at end of Year

 

$         5,502

$     228,124

    

Supplemental disclosure:

   

Total Interest paid

 

$                 -

$       17,354

    
    

Non-cash transactions:

   

(See Statement of Stockholders' Equity)

   

Shares Issued for Assets

 

-

4,000,000

Shares Issued for Convertible Debt

  

4,000,000

Shares Issued for Interest

  

100,000








BROADBAND WIRELESS INTERNATIONAL CORPORATION

(Formerly Black Giant Oil Company)

NOTES TO FINANCIAL STATEMENTS

Note 1  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Description of Business

Broadband Wireless International Corporation (the “Company”) was incorporated in Nevada on July 23, 1973 under the name of Black Giant Oil Company. The Company was formed for the general purpose of engaging in exploration for oil and gas. More recently, the Company has shifted its activities to acquiring customers for use of its wireless networking system.


Although the Company in November of 1999 executed an Agreement in Principle and Letter of Understanding with Broadcom Wireless Communications Corporation (“Broadcom”), no viable operations resulted in this transaction.

The Company held a shareholders’ meeting in February 2000 to change the name from Black Giant Oil Company to Broadband Wireless International Corporation. Also, the Company’s shareholders agreed to increase the authorized common shares to 250,000,000 from 100,000,000 and the authorized preferred stock to 25,000,000 from 10,000,000. At March 31, 2002, there were 58,724,386 shares of common stock (as adjusted for subsequent cancellations) and no preferred stock is outstanding.

On August 11, 2000, Peter B. Bradford (“Receiver”) was appointed Temporary Receiver for the Company in Case No. CIV-00-1375-R in the United States District Court for the Western District of Oklahoma in an Securities and Exchange Commission enforcement action. The Order appointing Temporary Receiver enjoins all persons and entities … “from in any way disturbing the Receivership assets from filing or prosecuting any actions or proceeding which involves the Receiver or which affect the receivership assets.


The company has entered Chapter 11 Reorganization following the exit from the Federal Receivership and the dismissal of actions by the SEC. The SEC filed a motion on December 12 with the Federal Court requesting the pending actions against Broadband Wireless be dismissed. The court issued its final order approving the motion and removed the Temporary Receiver on December 21, 2001. The application to reorganize was filed on December 27, 2001 by the firm of Kline, Kline, Elliott, Castleberry & Bryant, P.C., on behalf of the company.


Basis of Presentation

The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has suffered continuing net losses from operations and has a deficit in working capital as of March 31, 2002. As explained above, without a merger partner, the Company has nominal operations. The Company is dependent on a merger partner or raising additional funds in order to provide capital for the Company to continue as a going concern.


Note 1  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (con’t)


Use of Estimates and Assumptions

Preparation of the Company's financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.


Net Loss Per Common Share

In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings Per Share (“SFAS 128”). SFAS 128 provides a different method of calculating earnings per share than was formerly used in APB Opinion 15. SFAS 128 provides for the calculation of basic and diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive earnings per share reflects the potential dilution of securities that could share in the earnings of the Company. The Company was required to adopt this standard in the fourth quarter of calendar 1997. Because the Company has no potential dilutive securities, the accompanying presentation is only of basic loss per share.


Statement of Cash Flows

For statement of cash flow purposes, the Company considers short-term investments with original maturities of three months or less to be cash equivalents.


Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). SFAS 109 utilizes the asset and liability method of computing deferred income taxes. The objective of the asset and liability method is to establish deferred tax assets and liabilities for the temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. Under SFAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Note 2  -  CONVERTIBLE DEBT AND RELATED PARTY TRANSACTIONS


The Company has issued convertible debt to a shareholder with an original date of September 22, 1997, and matures September 22, 2001. Interest is at 10% payable quarterly. The debt is convertible to equity at $.02 per share. For the years ended March 31, 2001 and 2000, the Company has issued common stock at $.02 per share as payment for interest. The shareholder also holds a warrant to acquire 1,000,000 shares at $.025 per share. On June 30, 2000, the Company issued 4,100,000 shares to pay the balance of the Convertible Debt and accrued interest. At the time of there was a balance of $50,000 due on the notes payable and $1,250 in accrued interest. The warrants expires in September 2002, but the Company agreed on March 15, 2001 to honor the warrants request of the shareholder to issue 907,407 shares to this shareholder.  

During the years ended March 31, 2001 and 2000, the Company's president had advanced certain funds interest free to the Company.. Also, the Company’s president loaned the Company $150,000 to fund the portion of a merger in March of 2000, and further loans of $460,000 to fund the Company in June and July of 2000. That amount has been reduced because of a “short swing profit” of $87,750 described further in these notes. The Company’s president agreed to forgive these loans as a condition of his settlement with the Receiver and the Security and Exchange Commission (“SEC”). The balance of the loans ($422,250) has been recorded in the Stockholders’ Equity section as a “Settlement of Inadequate Compensation for stock.

In April of 2001, the Receiver obtained final settlement with Ivan Webb, the former President, that included cash in the amount of $44,111, 1,720,176 shares of the Company’s stock, gold coins, real estate lots, and working interest in three wells for two years. In September 2001, the Receiver sold some of the real estate with net proceeds of $55,441.

NOTE 3 – CAPITAL LEASES


The Company signed a lease on September 12, 2001 that lease its office equipment and assets purchased for its customers. The lease calls for 36 payments of $1,195.02 being in November 2001. The lease was funded October 10, 2001 in the amount of $33,037 and will be accounted for as a capital lease. The Company has not made any payment on the capital lease since January 2002 and is currently in default of the lease. The outstanding amount of $30,699 is being shown as a current liability since the lease is in default.


Note 4  -  INCOME TAXES

At March 31, 2001, the Company had net operating loss carryforwards totaling approximately $2,417,784 available to reduce future taxable income through the year 2017. Due to changes in control of the Company, these carryforwards are limited on an annual basis.

The Company has deferred tax assets amounting to approximately $465,300 and $285,500 at March 31, 2002 and 2001, respectively, related to the net operating loss carryforwards. The realization of the benefits from these deferred tax assets appears uncertain due to going concern questions. Accordingly, a valuation allowance has been recorded which offsets the deferred tax assets at the end of each period.



[ This space is intentionally left blank.]










Note 5  -  COMMITMENTS AND CONTINGENCIES

Concentration of Credit Risk

The Company invests its cash and certificates of deposit primarily in deposits with major banks. The Company has not incurred losses related to its cash.


Fair Value of Financial Instruments

The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of SFAS No. 107, Disclosures about Fair Value of Financial Instruments. The estimated fair value amounts have been determined by the Company, using available market information and appropriate valuation methodologies.

The fair value of financial instruments classified as current assets or liabilities including cash and cash equivalents, accounts payable and convertible debt approximate carrying value due to the short-term maturity of the instruments.

Note 6  -  DISCONTINUED OPERATIONS

As explained in Note 1, the net oil and gas assets of the discontinued operations are reported in the accompanying balance sheet as net assets of discontinued operations as of March, 2001 and 2002. Following is a summary of these net assets:

1

2002

             Assets:


Other Oil Properties

      

           

26,700

 

      

 26,700


              Total assets

     

        $   26,700

       $   26,700


Net assets

         

        $   26,700

       $    26,700  


The Company had intended to form a subsidiary to sell these oil and gas properties, but did not finish the transaction as of March 31, 2002.  

The Company sold the oil and gas leases in October 2000 to an individual for $10,000 resulting is a loss of $194,144 included in “Loss from discontinued operations” in the Statement of Operations. For the years ended March 31, 2002 and 2001, a total of $6,265 and $2,963 was received for oil & gas income and is recorded in Income from discontinued operations.

Note 7  -  NEW ACCOUNTING PRONOUNCEMENTS


SFAS 131

SFAS 131, "Disclosure about Segments of a Business Enterprise", establishes standards for the way that public enterprises report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. SFAS 131 defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. This accounting pronouncement has had no effect on the Company's financial statements for the periods presented.


SFAS 132

Statement of Financial Accounting Standards (SFAS) 132, "Employers' Disclosure about Pensions and Other Postretirement Benefits," revises standards for disclosures regarding pensions and other postretirement benefits. It also requires additional information on changes in the benefit obligations and fair values of plan assets that will facilitate financial analysis. This statement does not change the measurement or recognition of the pension and other postretirement plans. The financial statements are unaffected by implementation of this new standard.

SFAS 141

Goodwill and Other Intangible Assets - In July 2001, the Financial Accounting Standards Board issued Statements of Financial Standards ("SFAS") No. 141, "Business Combinations" and No. 142, "Goodwill and Other Intangible Assets". SFAS No. 141 established accounting and reporting standards for business combinations and eliminates the pooling-of-interests method of accounting for combinations for those combinations initiated after July 1, 2001. SFAS No, 141 also includes new criteria to recognize intangible assets separately from goodwill. SFAS No. 142 establishes the accounting and reporting standards from goodwill and intangible lives. Goodwill and intangibles with indefinite lives will no longer be amortized, but, alternatively will be reviewed periodically for indicators of impairment. Separate intangible assets that are not deemed to have an indefinite life will continue to be amortized over their useful lives. The Company does not anticipate that the adoption of SFAS No. 141 and SFAS No. 142 will have a significant effect on its results of operations or financial position.


FIN 44

 In March 2000, the Financial Accounting Standards Board issued Interpretation No. 44, (FIN 44), "Accounting for Certain Transactions Involving Stock Compensation--an Interpretation of APB 25." This Interpretation clarifies (a) the definition of employee for purposes of applying Opinion 25, (b) the criteria for determining whether a plan qualifies as a non compensatory plan, (c) the accounting consequence of various modifications to the terms of a previously fixed stock option or award, and (d) the accounting for an exchange of stock compensation awards in a business combination. This Interpretation became effective July 1, 2000, but certain conclusions in this Interpretation cover specific events that occurred after either December 15, 1998 or January 12, 2000. This accounting pronouncement has had no effect on the Company's financial statements for the periods presented.



Note 8 – MERGERS AND ACQUISITIONS


In December 2001, the Company agreed with Entertainment Direct TV, Inc. (EDTV) to merger the two Companies with EDTV being the survivor and the holder of 75% of the issued and outstanding stock of the Company after the merger. EDTV has agreed to provide $250,000 in funding to the Company while in Chapter 11, Debtor in Possession and prior to the plan being approved. EDTV has also committed to provide a $7,000,000 line of credit after the merger. The parties are in the process of getting the plan approved by the stockholders and the bankruptcy court in order for the Company to emerge for Chapter 11 bankruptcy. EDTV has advanced $14,000 for the period ended March 31, 2002 and has been recorded as other income until the plan has been approved.





Note 9 – CONVERTIBLE SUBORDINATED NON-DILUTIVE DEBENTURES

In February of 2000, the Company issued approximately $700,000 in Convertible Non-Dilutive Debentures (“debentures”) due in February 15, 2000 carrying a 12% interest rate to be converted into common stock at 65% of the per share market price on February 4, 2000 at any time prior to the maturity date. As of March 31, 2000, none of the debentures had been converted. The Company planned to use 80% of the proceeds for purposes relating to the proposed operations of GetMore Communications.

Of the amount recorded as being issued only $450,000 was actually received by the Company. Management and legal counsel has been performing an investigation to determine if this is the total outstanding. Confirmation was received by the firm who sold the debentures and interest was paid in May 2000 on the first quarter interest payment. Current management believes that if there were other debentures outstanding the holders would have contacted the Company by the date of this report.  

The Company pursued legal actions on the case was settle on October 17, 2000 and summarized below.


As part of the SEC Lawsuit, on October 17, 2000, the United States District Court for the Western District of Oklahoma issued an order (the "District Court Order")approving the entry of the Company into a certain Settlement Agreement (the "Settlement Agreement"), whereby the Company settled certain lawsuits pending in the District Court of Oklahoma County, as follows:

Broadband Wireless International Corporation, f/k/a Black Giant Oil Company vs. Ronald L. Baker ("Baker"), AAROW Environmental Group, Inc., a/k/a AARO Broadband Wireless Communications Corporation ("AARO"), and Getmore Communications, Inc. ("Getmore"), Case No. CJ-2000-3816 (the "First Civil Action"), wherein Broadband alleged, among other things, claims against Baker, Getmore and AARO for negligent misrepresentation.  In the First Civil Action Baker filed counter-claims against the Company, and third party claims against other parties alleging, among other things, claims for breach of contract, violations of federal and state securities laws, fraud and conversion.

BroadCom Wireless Communications Corp. and Black Giant Resources Corporation vs. Ronald L. Baker, ARROW Environmental Group, Inc., a/k/a AARO Broadband Wireless Communications Corporation, and Getmore Communications, Inc., Case No. CJ-2000- 5129 (the "Second Civil Action"), wherein BroadCom and Black Giant alleged, among other things, claims against Baker, Getmore and AARO for negligent misrepresentation.

Gary Duke, Ron Baker, and GKD, Inc. vs. BroadCom Wireless Communications Corporation, Case No. CJ-2000-4813 (the "Third Civil Action"), wherein Gary L. Duke ("Duke"), Baker, and GKD, Inc. alleged, among other things, claims against BroadCom for conversion and fraud.


In the Settlement Agreement, the Company, AARO, BroadCom, Black Giant and other parties, settled all claims against each other in the First Civil Action, the Second Civil Action, and the Third Civil Action (collectively, the "Settled Claims").  The Company received $400,000 pursuant to the terms of the Settlement Agreement.  In the District Court Order, the District Court found, among other things, that the Settlement Agreement was in the best interest of the Company and was necessary and proper for the collection, preservation and maintenance of receivership assets.


Under the terms of the Settlement Agreement, AARO assumes liability for certain debentures issued by the Company and such debentures will be canceled in exchange for 1,000,000 shares of common stock of AARO.  Further, AARO has solicited and procured purchasers of the Company's Settled Claims to third parties for the aggregate sum of $400,000, which proceeds will be paid to the Company.  The claims of the Company purchased by the third parties will be exchanged with AARO for 1,800,000 shares of common stock of AARO.  Further, certain restricted warrants previously issued by AARO to certain individuals will be exchanged for new warrants.  In addition, 2,700,000 shares of the Company's common stock which is possessed by Baker and Duke will be returned to the Company, and Duke will receive 200,000 shares of common stock of AARO.  The new warrants and the shares of common stock delivered to the third parties will be deemed to be free-trading stock exempt from registration pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended.


In February 2001, the Company paid the remaining $150,000 debenture to Steven Cox plus $10,000 in accrued interest to retire the balance of the debentures.


Note 10 – GOING CONCERN


The Company has sustained a net loss of $597,212 and a loss from continuing operations of $603,477.  These losses, deterioration of its financial condition and the problems associated with the Company being in Receivership raise substantial doubt about the Company’s ability to continue as a going concern. Further, although the Company has a large cash balance as of March 31, 2001 this balance was extinguished during the month of April 2001.


In December 2000, the Board of Directors considered a business plan (the "Business Plan"), which plan described an internet site provider business operation in the greater Oklahoma City geographical market. The Company conducted test applications of the wireless operations described in the Business Plan in Edmond and Norman, Oklahoma. These tests were successfully completed in December 2000. After reviewing the reports of the tests, the Board of Directors approved the Business Plan. In February 2001, the Receiver submitted the business plan to the Court for approval. The Company received Court approval on February 7, 2001 to immediately commence with business operations pursuant to the business plan.


Note 11 – NOTES PAYABLE


In March of 2002, there were two notes payable issued to Signature Motor Cars Inc.(Signature) and David Bernstein (Bernstein) in the amount of $50,000 and $25,000, respectively.


The Signature note is due on demand and carry an interest rate of 10%.  The note to Signature Motor Cars, Inc. remains and accrued interest in the amount of $7,500 was accrued as of March 31, 2002.


The Bernstein note was signed on December 13, 2002 and was originally due on February 13, 2002. The note carries an interest rate of 12% and is secured by the following collateral:

1)

Lot in Palo Pinto Conty

2)

Gold Coins

3)

Oil and Gas Royalties from oil properties in Canada

4)

25% of the Dakoto oil lease in Callaghan County, Texas

5)

Assignment of  the remaining 50% of the  Curtis Wilson Judgment dated October 30, 2001 with an unpaid amount of $50,000.


Note 12 – EXTRAORDINARY ITEM

As discussed in Note 10, the Company received a settlement from AERO Broadband and the Extraordinary Item from March 31, 2000 was recovered with damages in the amount of $476,750 in the year ended March 31, 2001..

Note 13 - LITIGATION

As discussed in Item 3 of the Form 10KSB, the Company is involved in several legal matters relating to the various mergers and transactions performed during the year. Of the legal matters against the Company, no prediction can be made at this time as to the outcome of such proceedings.

The Company also has filed several legal actions against former officers and directors for the actions performed in the Company’s behalf. The Company is unsure of the outcome at this time.

The Receiver through the SEC has initiated several legal actions on behalf of the Company to recover its assets. There are several pending litigations at the present time and the Company cannot predict an outcome at the present time.


The company has entered Chapter 11 Reorganization following the exit from the Federal Receivership and the dismissal of actions by the SEC. The SEC filed a motion on December 12 with the Federal Court requesting the pending actions against Broadband Wireless be dismissed. The court issued its final order approving the motion and removed the Temporary Receiver on December 21, 2001. The application to reorganize was filed on December 27, 2001 by the firm of Kline, Kline, Elliott, Castleberry & Bryant, P.C., on behalf of the company.



Note 14 – COMMON STOCK


In April 2000, the Company filed a registration statement on Form S-8, registering an aggregate of 8,000,000 shares issuable in connection with the Company’s 2001 Stock Option Plan.  In fact, the Company now believes that, among other things, the substantial majority of the 7,250,000 shares issued pursuant to the Form S-8 filing (the “S-8 Shares”), much of which has been publicly resold, have not been registered under Section 5(a) of the Securities Act and that it was unlawful to sell such shares in interstate commerce; and many of the persons who received and sold the S-8 Shares were not persons entitled to receive the same pursuant to the Instructions to the use of Form S-8.


The Company through its Receiver settled with several individuals that had either received the S-8 stock at a low price or had signed a Note Receivable and never paid for the stock yet they had sold the stock. The transactions are summarized as follows:


1)

Don Dixon – Mr. Dixon had executed a promissory note in April of 2000 for $170,000 for 650,000 shares of common stock. He settled with  the Receiver and has paid $2,000. The  note has been written off in the balance sheet as the Company estimates that it will not be collectible.


2)

Curtis Wilson – Mr. Wilson executed a promissory note in April of 2000 for $100,000 for 1,000,000 shares of common stock. He has not paid the promissory note and the Receiver is pursuing collection of the note. Mr. Wilson made a $50,000 payment and also returned 375,000 shares of common stock to the Receiver.


3)

William G. Newhouse III – Mr. Newhouse executed a promissory note in April of 2000 for $293,750 for 2,937,500 share of common stock. He has returned 271,800 shares of common stock and the Receiver has received a judgment in the amount of $247,534.70 that the Company does not consider collectible at the present time and the balance has been written off.


4)

Peter Knollenberg – Mr. Knollenberg executed a promissory note in April of 2000 for $170,000 for 400,000 shares of common stock. The Receiver settled with Mr. Knollenberg in August 2000 for $100,000. The balance of the note has been written off.


5)

Tony Braxton – Mr. Braxton received 1,000,000 shares of common stock for $20,000. The Receiver considered this to be inadequate price for the stock. In December of 2000,  a settlement was obtained that included cash in the amount of $26,000, notes receivable of $233,928 from third parties, 250,000 shares of common stock that was cancelled, and 500 shares of stock, valued at $1,750 that is carried as Investment. The notes receivables were transferred to the Receiver in December 2001 and settlement of fees owed for services performed for the Company while in receivership.



The total amount recorded for the S-8 stock was $792,000. The funds and notes that were received  from the settlements detailed above were used to reduce the cost of the S-8 stock in the stockholders’ equity section of the balance sheet.

In April of 2001, the Receiver obtained final settlement with Ivan Webb, the former President, that included cash in the amount of $44,111, 1,720,176 shares of the Company’s stock, gold coins, real estate lots, and working interest in three wells for two years. The Receiver is awaiting final approval from the Court.


A total of 9,150,629 and 19,731,928 shares of common stock were cancelled during the year and subsequent to March 31, 2002 and 2001 that has been recorded in the balance sheet. The Company expects to cancel more shares in the near future. Most of the common stock cancelled was due to either non-payment of shares or inadequate payment for the common stock.


The Company issued 1,272,999 shares during the year ended March 31, 2002 as part of the agreement to issued shares for the warrants outstanding and for adjustments for shares that were paid and the shares were not received.


NOTE 15 – STOCK BASED COMPENSATION

At March 31, 2002, the Company has non qualified plan options, which are described below.  The Company applies APB Opinion 25; Accounting for stock issued to employees, and related interpretations in accounting for the options.  Under APB Opinion 25, because the exercise price of the Company’s employee stock options equals or exceeds the market price of the underlying stock on the date of grant, no compensation cost is recognized.

FASB Statement 123, Accounting for Stock-Based Compensation, requires the Company to provide pro forma information regarding net income per share as if compensation cost for the Company’s options had been determined in accordance with the fair value based method prescribed in FASB Statement 123.  Under SFAS 123, the value of each option granted during 2002 and 2001 was estimated on the date of grant using the Black Scholes model with the following assumptions: Risk-free interest rate - 6.5%, dividend yield - 0%, volatility – 19.3% and expected life of the option - 5 years.


The Company has issued 3,175,000 stock options to its officers, directors, and related individuals at an option price from $.0625 to $.12 per share. The options were issued from June 2000 to July 2001 and expires five years from the date of grant.


NOTE 15 – STOCK BASED COMPENSATION (CON’T)

Under the accounting provisions of FASB Statement 123, the Company’s net income and earnings per share would have been reduced to the pro forma amount indicated below:


          

 2002        

                    2001

Net Income


     As reported

(   $  597,212 )

(   $  839,698  )


     Pro forma

(  $   689,462 )

(   $  854,698  )


Earnings per share

     As reported

( .010 )

 

( .011 )


     Pro forma

( .010 )

         

( .011 )



A summary of the status of the Company’s non-plan options as of March 31, 2002 and 2001, and changes during the years ended on those dates is presented below:


March 31, 2002

                              March 31, 2001




Outstanding at

Beginning of year   

    150,000

$ 0.0625

-0-

     $ 0.00

Granted

 

3,025,000

   0.08

        150,000

    0.0625

Exercised

  

  -

        -

                   -

        

         -

Forfeited

  

        -

                   -

         -


Outstanding at

 the end of year

3,175,000

$ 0.08

         150,000

 $ 0.0625


Options exercisable

   at year end

  

3,175,000

$ 0.08

         150,000

 $ 0.0625



Note 16 – NOTES RECEIVABLE


The Company had recorded $147,648 as a current assets and $168,522 as a non current asset for the notes receivable it has obtained through settlement with shareholders for the year ended March 31, 2001.  The details of the notes receivable are as follows:


Don Dixon

   $   50,000

S-8 Stock Promissory Note

Curtis Wilson

        62,500

S-8 Stock Promissory Note

Whittenburg

        74,223

Braxton Settlement

Flagg

        33,378

Braxton Settlement

Able Moving Service

        78,070

Braxton Settlement


Copenhaver

        18,000

Braxton Settlement


Total

                 $  316,171

 

Current Notes Receivable                     (147,649)


Non-Current Notes Receivable           $  168,522



The Dixon and Wilson notes are demand notes for the S-8 stock that was received in April of 2000. The notes have been adjusted based on the Company’s and the Receiver’s prediction of collectibility. No interest has been accrued for these notes.


The other four notes are part of a settlement from Toni Braxton. The Whittenburg note was originally dated May 26, 2000 in the amount of $74,718 and calls for monthly payments of $849.07 for 244 months at an interest rate of 12.5%. The note was assigned in December 2000 and three payments were collected by the Company as of March 31, 2001.


The Flagg note was originally dated May 26, 2000 in the amount of $33,500 and calls for monthly payments of $441.35 for 244 months at an interest rate of 15%. The note was assigned in December 2000 and three payments were collected by the Company as of March 31, 2001.


The Able Moving Service note was originally dated May 26, 2000 in the amount of $85,000 and calls for monthly payments of $2,022.15 for 60 months at an interest rate of 15%. The note was assigned in December 2000 and only one payment was collected by the Company as of March 31, 2001. The note is currently in default.


The Copenhaver  note was an oral note in the amount of $18,000 that was due January 31, 2001. The note was assigned in January 2001 and payment was not received. The note is currently is default.


These notes were transferred to the Receiver as settlement for the unpaid fees in December 2001. The plan was approved the federal judge in discharging the receivership and prior to the company filing a Chapter 11 plan.


There are other receivables for services of wireless products that have not been billed since January 2002. No receivables were recorded in these financial statements since they have not been billed and are not currently expended to be collected.


Note 17 – SETTLEMENT OF INADEQUATE COMPENSATION FOR STOCK


The Receiver sold an auto for $27,000 and a home for $188,564 that belonged to an unrelated party that received common stock without payment. Since the funds did not belong directly to the Company, the funds are being recorded as directly into stockholders’ equity. Other items have been placed in this section such as the forgiveness of debt from Ivan Webb, and miscellaneous funds received from related entities. These transactions occurred during the year ended March 31, 2001.


Note 18 – OTHER EVENTS


On December 21, 2000, the Board of Directors of the Company appointed Albie Shaffer, Ron Tripp and William Higgins to vacant positions on the Board of Directors of the Company, in accordance with its Bylaws. Later on December 21, 2000, Ivan Webb and Howard B. Siegel resigned from the Board of Directors of the Company. Neither Mr. Webb nor Mr. Siegel stated that their resignations were precipitated by a disagreement with the Company or any matter relating to the Company's operations. On December 28, 2000 the Board of Directors of the Company terminated Ivan Webb as President and Chief Executive Officer of the Company and also elected Albie L. Shaffer to Chairman of the Board of Directors and appointed Ron Tripp to the position of Secretary and Treasurer of the Company and appointed Ron D. Harris as Chief Operating Officer.  Mr. Harris resigned in September of 2001 as Chief Operating Officer. After Ron Harris resigned, Dr Ron Tripp resigned as Secretary/Treasurer of the Board of Directors, assumed the office of President of the Company, and served as a member of the Board of Directors.


Note 19 – SUBSEQUENT EVENTS

In July of 2002, the Company received final approval of the plan of reorganization from the shareholders and the bankruptcy court.



#




Dates Referenced Herein   and   Documents Incorporated by Reference

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