UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 31, 2003.
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No fee required) for the transition period
from _____________ to _______________.
Commission file number: 011-16099
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WAVE POWER.NET, INC.
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(Name of Small Business Issuer in its Charter)
Delaware 43-1798970
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(State of Incorporation) (I. R. S. Employer
Identification No.)
1004 Depot Hill Rd. #1E
Broomfield, Colorado 80020
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(Address of principal executive offices)(Zip Code)
303-404-9904
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(Issuer's telephone number)
Check whether the issuer: (1)filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
The number of shares outstanding of Registrant's common stock ($0.001 par value)
as of the quarter ended March 31, 2003 is _________________
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TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS........................................ 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION... 8
PART II
ITEM 1. LEGAL PROCEEDINGS...........................................10
ITEM 2. CHANGES IN SECURITIES.......................................10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.............................10
ITEM 4. SUBMISSION TO A VOTE OF SECURITY HOLDERS....................10
ITEM 5. OTHER.......................................................10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................10
SIGNATURES..................................................10
2
telcoBlue, Inc.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
As of March 31, 2003
ASSETS
Current asset
Cash $ 2,161
Distribution Agreement 926
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TOTAL ASSETS $ 3,087
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 57,963
Accounts payable to related parties 104,171
Accrued expenses 485
Notes payable 3,585
Notes payable to related parties 31,615
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Total Current Liabilities 197,819
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STOCKHOLDERS' DEFICIT
Common stock, $.001 par value, 75,000,000 shares
authorized, 39,949,400 issued and outstanding 39,949
Additional paid in capital 2,562,978
Deferred compensation (300,000)
Accumulated other comprehensive income (13,893)
Deficit accumulated during the development stage (2,483,766)
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Total Stockholders' Deficit (194,732)
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 3,087
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The accompanying notes are an integral part of these financial statements.
3
telcoBlue, Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF EXPENSES AND COMPREHENSIVE LOSS
For the Three Months and Six Months ended March
31, 2003 and the Period from August 2, 2002
(Inception)
Through March 31, 2003
3 Months 6 Months Inception
Ended Ended Through
Mar. 31 Mar. 31 Dec. 31
2003 2002 2003
------------ ------------ ------------
General and administrative $ 80,360 $ 293,580 $ 2,469,912
Interest expense 196 617 13,854
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Net loss (80,556) (294,197) (2,483,766)
Other Comprehensive Expense
Loss on foreign currency translation (6,653) (14,110) (13,893)
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Total Comprehensive Loss $ (87,209) $ (308,307) $ (2,497,659)
============ ============ ============
Basic and diluted net loss per
common share $ (.00) $ (.01)
Weighted average common shares
Outstanding 39,199,400 37,331,150
The accompanying notes are an integral part of these financial statements.
4
telcoBlue, Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months ended March 31, 2003 and
the period from August 2, 2002 (Inception)
Through March 31, 2003
6 Months Inception
Ended Through
Mar. 31, Mar. 31,
2003 2003
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (294,197) $(2,483,765)
Adjustments to reconcile net loss to
net cash used in operating activities:
Stock issued for services 106,428 2,240,431
Stock option and warrant expense 10,543 10,543
Intrinsic value of beneficial conversion
feature of convertible notes payable 13,176
Changes in:
Accounts payable 23,849 35,738
Accounts payable to related parties 86,954 104,171
Accrued expenses 424 485
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NET CASH USED IN OPERATING ACTIVITIES 65,999) (79,221)
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CASH FLOWS FROM FINANCING ACTIVITIES
Sale of stock 61,501 61,574
Proceeds from notes payable 3,346
Proceeds from notes payable to related parties 19,750 29,412
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NET CASH PROVIDED BY FINANCING ACTIVITIES 81,251 94,332
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Effect of exchange rate changes on cash (13,165) (12,950)
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NET CHANGE IN CASH 2,087 2,161
Cash balance, beginning 74 --
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Cash balance, ending $ 2,161 $ 2,161
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NONCASH ACTIVITIES:
Shares issued for notes payable $ 150,000
The accompanying notes are an integral part of these financial statements.
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telcoBlue, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of telcoBlue, Inc.
("telcoBlue") have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited financial statements and notes thereto contained in telcoBlue's
latest annual report filed with the SEC on Form 10KSB. In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of
operations for the interim periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the full year. Notes to the financial statements
which would substantially duplicate the disclosure contained in the audited
financial statements for fiscal year 2002, as reported in the 10KSB, have been
omitted.
NOTE 2 - COMMON STOCK
In the quarter ended December 31, 2002, telcoBlue issued 734,000 shares of
common stock valued at $106,428 for services.
In the quarter ended December 31, 2002, telcoBlue issued 5,600,000 shares of
common stock for $300,000 of deferred compensation.
In the quarter ended December 31, 2002, telcoBlue sold 615,000 shares of common
stock for $61,500.
In the quarter ended December 31, 2002, telcoBlue issued three-year options to
purchase 150,000 shares of telcoBlue common stock. $10,543 in expense has been
recorded for the quarter ended December 31, 2002. The exercise prices are as
follows:
Exercise
Options Price
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50,000 $ .50
50,000 1.00
50,000 1.50
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150,000
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In the quarter ended March 31, 2003, telcoBlue issued 3,000,000 shares of common
stock to pay off a $150,000 note payable.
NOTE 3 - NOTES PAYABLE TO RELATED PARTIES
Three shareholders loaned telcoBlue $19,750 during the quarter ending March 31,
2003. These loans are payable on demand, bear no interest and have no
collateral.
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NOTE 4 - SUBSEQUENT EVENTS
For a 12 month consulting agreement signed in April 2003, telcoBlue agreed to
issue four million shares of common stock, one million per quarter with the
first million due upon signing. As part of the agreement, telcoBlue also agreed
to issue two million 120 day warrants to purchase telcoBlue common stock at $.05
per share. If the two million warrants are exercised, the consultant will be
granted four million additional 120 day warrants to purchase telcoBlue common
stock at $.10 per share. If the four million warrants are exercised, the
consultant will be granted four million additional 120 day warrants to purchase
telcoBlue common stock at $.15 per share.
In April 2003, telcoBlue issued 3,900,000 shares of telcoBlue to four
consultants.
In June 2003, telcoBlue's board approved the issuance of 4,250,000 shares of
telcoBlue to Vocalscape Networks, Inc. ("Vocalscape") for payment of $75,000
owed under the management agreement, $30,868 of out of pocket expenses paid on
behalf of telcoBlue and $64,233 of lost stock proceeds because of telcoBlue's
failure to file an SB-2 within two months of the reorganization as required by
the plan of reorganization.
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Part II
OVERVIEW
Nature of Business. telcoBlue, Inc. ("telcoBlue") formerly Better Call Home,
Inc. ("BCH"), a development stage company, was formed in Nevada on August 2,
2002 to operate an Internet-based long distance telephony network using
state-of-the-art Voice over Internet Protocol (VoIP). Its long distance services
will be marketed mainly by third parties to end users in the form of pre-paid
phone cards or other media, including direct personal computer (PC) access and
Internet-based long distance telephony network using state-of-the-art Voice over
Internet Protocol. The name was changed to telcoBlue, Inc. on August 29, 2002.
The Company is in its development stage and to date its activities have been
limited to capital formation and the development of its Voice over Internet
Protocol (VoIP) long distance business.
telcoBlue products and services will enable customers to make low-cost, high
quality phone calls over the Internet using their personal computers or
traditional telephones. telcoBlue's PC to Phone pre-paid long distance service
is targeted at specific markets throughout North America and offers amongst the
lowest long distance rates available today.
The following discussion should be read in conjunction with the condensed
consolidated financial statements and segment data and in conjunction with the
Company's 10KSB/A filed March 19, 2003 and the Company's 10QSB filed March 21,
2003. Results for interim periods may not be indicative of the results for the
full year.
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RESULTS OF OPERATIONS
General and Administrative expenses for the three months consist primarily of
Management Fees of $75,125. General and Administrative expenses for the three
months ended March 31, 2003 were $80,360. General and Administrative expenses
for the six months ended March 31, 2003 were $$293,580.
Interest for the three months ended March 31, 2003 was $196 consisting of
accrued interest on the Company's convertible notes. Interest expenses for the
six months ended March 31, 2003 were $617.
Total Operating Expenses for the three months ended March 31, 2003 were $80,556
resulting in a total Comprehensive Loss of $87,209. Total Operating Expenses for
the six months ended March 31, 2003 were $294,197 resulting in a total
Comprehensive Loss of $308,307. Basic Net Loss per Share amounted to $.01 for
the six months ended March 31, 2003.
LIQUIDITY AND CAPITAL RESOURCES
In three months ended March 31, 2003, the Company has financed operations
principally through notes payable to related parties totaling $19,750. For the
six months ended March 31, 2003 cash generated by the sale of stock and notes
payable to related parties totaled $81,251.
Net cash used in operating activities was $12,132 for the three months ended
March 31, 2003 and consisted primarily of accounts payable and fees due to
related third parties. Net cash used in operating activities was $$65,999 for
The Company anticipates that its current cash and cash equivalents and cash
generated from operations, if any, will not be sufficient to satisfy its
liquidity requirements for at least the next 12 months. The Company will require
additional funds prior to such time and will seek to sell additional equity or
debt securities or seek alternative sources of financing. If the Company is
unable to obtain this additional financing, it may be required to reduce the
scope of its planned sales and marketing and product development efforts, which
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could harm its business, financial condition and operating results. In addition,
the Company may require additional funds in order to fund more rapid expansion,
to develop new or enhanced services or products or to invest in complementary
businesses, technologies, services or products. Additional funding may not be
available on favorable terms, if at all.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 1. Financial Statements for the period ending March 31, 2002
(b) None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
telcoBlue, Inc.
Dated: June 12, 2003 /s/ Ronald McIntyre
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Ronald McIntyr, CEO
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