10-Q 1 a2082606z10-q.txt 10-Q ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002 OR ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NO. 1-10588 WIRELESS WEBCONNECT!, INC. (Exact name of registrant as specified in its charter) Delaware 75-1993841 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 2435 N. CENTRAL EXPRESSWAY, SUITE 600 RICHARDSON, TX 75080 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (972) 744-2900 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Indicate by check mark whether the Registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No X --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

~~September~~Outstanding ~~30,~~at ~~December~~Class ~~31,~~June 2001 2000 ---- ---- (Unaudited) ASSETS Current assets: Cash .................................................................................... $ 1,097 $ 1,532 Accounts receivable, net of allowance for doubtful accounts of $1,159 and $131, respectively ..................................................... -- 640 Inventory, net .......................................................................... 34 205 Prepaid expenses and other current assets ............................................... 68 92 -------- -------- Total current assets ............................................................... 1,199 2,469 Property and equipment, net ............................................................... 246 124 Other assets .............................................................................. 392 14 -------- -------- Total assets ....................................................................... $ 1,837 $ 2,607 ======== ======== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable ........................................................................ $ 5,317 $ 518 Accrued expenses ........................................................................ 478 640 Customer liabilities .................................................................... 3,~~124~~ ~~1,929~~2002 ~~Note payable ............................................................................~~ -- ~~750 Other current liabilities ............................................................... 163~~ -- -------- -------- ~~Total current liabilities .......................................................... 9,082 3,837 Long~~-~~term debt to related party ......................................................... 1,910~~ -- ~~Other long~~-~~term liabilities ............................................................. 250~~ -- -~~-------~~ -------- ~~Total liabilities .................................................................. 11,242 3,837~~ -------- ~~-------- Commitments and contingencies (Note 4) Stockholders' equity (deficit):~~ Common ~~stock,~~Stock $.01 par value; 6014,~~000~~891,~~000~~500 ~~shares~~Preferred ~~authorized;~~$.01 ~~35,386,459 shares issued and outstanding at September 30, 2001; 10,000 shares authorized, issued and outstanding, no~~ par value, ~~at December 31~~24, 2000 ................................................................... 354 -- Additional paid-in capital .............................................................. 1,074 374 Less common stock in treasury, at cost, 74,908 shares ................................... (318) -- Accumulated deficit ..................................................................... (10,515) (1,604) -------- -------- Total stockholders' deficit ........................................................ (9,405) (1,230) -------- -------- Total liabilities and stockholders' deficit ........................................ $ 1,837 $ 2,607 ======== ========000

================================================================================ INDEX WIRELESS WEBCONNECT!, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets at March 31, 2002 (Unaudited) and December 31, 2001............................ 3 Statements of Operations (Unaudited) for the three months ended March 31, 2002 and 2001................................................................ 4 Statement of Stockholders' Deficit for the three months ended March 31, 2002 (Unaudited)................................................................... 5 Statements of Cash Flows (Unaudited) for the three months ended March 31, 2002 and 2001................................................................ 6 Notes to Financial Statements (Unaudited) .................................................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................. 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk ............................................................................ 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings ............................................................................ 14 Item 2. Changes in Securities and Use of Proceeds..................................................... 14 Item 4. Submission of Matters to a Vote of Security Holders........................................................................... 14 Item 6. Exhibits and Reports on Form 8-K.............................................................. 15 Signatures .............................................................................................. 16

-2- WIRELESS WEBCONNECT!, INC. (FORMERLY KNOWN AS INTELLICALL, INC.) CONSOLIDATED BALANCE SHEETS

~~September~~MARCH 3031, ~~2001~~DECEMBER, ~~2000~~31 ~~----~~2002 ~~----~~2001 ~~Revenue:~~(Unaudited) ~~Commissions~~ASSETS ~~and~~Current ~~related~~assets: Cash............................................ ~~$ -- $ -- Services~~.................................~~..........................~~ 1$ 30,~~951~~000 ~~170~~$ ~~Equipment~~-- Prepaid expenses and other current assets........................................~~..................~~ ~~104~~38,628 ~~207~~47,876 ~~Other~~------------ ------------ Total current assets........................................................~~......~~ 2668,628 147,876 ~~-------- -------- Total revenues~~Investments.................................................. ~~2,081 378 -------- -------- Operating expenses: Cost of services and equipment revenues~~......................~~......~~ 1319,~~683~~853 ~~414 Selling~~319,853 ~~general~~Other ~~and~~assets, ~~administrative~~net................................ ~~2,082 450 Bad debt expense~~..................................~~.................~~ ~~552~~ -- ~~Inventory~~53,177 ~~write-down~~Assets of discontinued operations.................................................. 1-- 684,~~706~~503 -- ---------- ------------ Total ~~operating expenses~~assets........................................ ~~6,023 864 -------- -------- Operating loss~~..................... $ 388,481 $ 1,105,409 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable and accrued expenses............................................ (3$ 563,~~942)~~413 ~~(486)~~$ 660,229 ------------ ------------ ~~Other~~Total ~~income~~current ~~(expense): Interest income~~liabilities.................................................... 15563,413 660,229 Long--term ~~Interest~~debt ~~expense~~to related party, net...............................................~~....~~ ~~(51)~~ -- ~~Other~~1,918,200 ~~income~~Liabilities ~~(expense),~~of ~~net~~discontinued operations............................................. ~~(497)~~ -- 8,620,235 ------------ ------------ Total ~~other income (expense)~~liabilities........................................................ ~~(533)~~563,413 11,198,664 -- ---------- ------------ ~~Loss~~Commitments ~~before~~and ~~income~~contingencies ~~taxes~~Stockholders' deficit: Series B convertible preferred stock, $.01 par value:1,000,000 shares authorized; 24,000 issued and outstanding at March 31, 2002, none issued and outstanding at December 31, 2001................................................. (4240 -- Common stock,~~475)~~ ~~(486)~~$.01 ~~Income~~par ~~tax~~value; ~~benefit~~60,000,000 shares authorized; 35,386,459 issued and outstanding at March 31, 2002 and December 31, 2001..........................~~.........................~~ --353,849 ~~182~~353,849 ~~---------~~Additional paid-~~-------~~in ~~--- Net loss~~capital.......................................................~~......~~ ~~$(4~~11,~~475)~~238,183 $1,084,053 ~~(304)~~Treasury ~~========~~stock, ~~========~~at ~~Pro~~cost; ~~forma~~74,908 ~~income tax benefit~~shares........................................... ~~165~~(317,421) ~~--------~~(317,421) ~~Pro~~Retained ~~forma net loss~~ deficit................................................................. $(11,449,783) (~~321~~11,213,736) ~~========~~------------ ~~Net loss per share~~--~~basic~~---------- ~~and~~Total ~~diluted~~stockholders' deficit.............................. ~~$ (~~.~~13) ======== Weighted average shares outstanding--basic and diluted~~................ 35(174,~~386~~932) ~~========~~(10,093,255) ~~Proforma~~------------ ~~net loss per share~~ ------------ ~~basic~~Total liabilities and ~~diluted~~stockholders' deficit............................. $ ~~(.01)~~388,481 $ 1,105,409 ============ ~~Proforma weighted average shares outstanding - basic and diluted..... 34,886~~ ============ See accompanying notes to the consolidated financial statements

-3- WIRELESS WEBCONNECT!, INC. (FORMERLY KNOWN AS INTELLICALL, INC.) CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2002 AND 2001 (UNAUDITED)

~~September~~2002 ~~30,~~ 2001 ~~2000~~ ---- ---- ~~Revenue~~Operating expenses: ~~Commissions~~General and ~~related~~administrative.........................~~...................~~ $ --36,824 $ 706 Services........................................................... 8,070 204 Equipment.......................................................... 3,844 207 Other.............................................................. 417 1 -- ------ ----~~----~~ ~~Total revenues.................................................. 12,331 1,118~~ -------- --~~------~~ ~~Operating~~Total ~~expenses:~~operating ~~Cost of services and equipment revenues~~expenses........................~~....~~ 936,~~817~~824 ~~443 Selling, general and administrative................................ 6,345 929 Bad debt expense................................................... 1,154~~ -- ~~Inventory write~~-~~down............................................... 2,406~~ -- -------- -------- ~~Total operating expenses........................................ 19,722 1,372~~ --~~------~~ ~~--------~~ Operating loss from continuing operations............~~...........................................~~ (736,~~391~~824) ~~(254)~~-- ---------- ---------- Other income (expense): Interest ~~income.................................................... 63 -- Interest~~ expense.................................~~..................~~ (~~100~~38,653) -- Other income (expense), net......................~~..................~~ 9,474 (~~897~~67,000) ---------- ~~Impairment~~---------- ~~loss~~Total onother ~~assets~~income ~~held for sale~~(expense)....................~~........~~ (~~586~~29,179) (67,000) -- -------- -------- -- ~~Total~~Loss ~~other~~from continuing operations before income taxes.. (~~expense~~66,003) (67,000) Income tax benefit .................................... ~~(1,520)~~-- -- ---------- -------- -- Loss ~~before~~from ~~income~~continuing ~~taxes~~operations......................~~.......................~~ (866,~~911~~003) (~~254~~67,000) ~~Income~~Loss ~~tax~~from ~~benefit~~discontinued operations....................~~...............................~~ --(170,044) ~~169~~(663,800) -------- -- ------ ---- Net loss ............................................~~.................~~ $ (8236,~~911~~047) $ (85730,800) ========== ========== ~~Pro~~Loss ~~forma~~per ~~income~~common ~~tax~~share ~~benefit~~from continuing operations - basic and diluted......................................... 86$ --~~------~~ --$ ~~Pro~~(.09) ~~forma~~========== ~~net~~========== ~~loss~~Loss per common share from discontinued operations - basic and diluted........................................ $ (.~~........~~01) $ (~~168~~.84) ========== ========== Net loss per common share -- basic and diluted ........ $ (.~~.....................~~01) $ (.2593) ========== ========== Weighted average common shares outstanding -- basic and diluted................ ~~35,386 ======== Proforma net loss per share - basic and diluted~~............................ $35,386,459 --784,479 ========== ~~Proforma weighted average shares outstanding - basic and diluted..... 34,886~~ ==========

See accompanying notes to the consolidated financial statements

~~Common~~WIRELESS ~~Stock~~WEBCONNECT!, ~~Paid-In~~INC. ~~Treasury~~(FORMERLY ~~Stock~~KNOWN ~~Retained~~AS INTELLICALL, INC.) CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT THREE MONTHS ENDED MARCH 31, 2002 (UNAUDITED) COMMON STOCK PREFERRED STOCK TREASURY STOCK ADDITIONAL ------------ ------- -------- ------ -------- ~~Shares~~PAID-IN ~~Amount~~RETAINED ~~Capital~~SHARES ~~Shares~~AMOUNT ~~Amount~~SHARES ~~Deficit~~AMOUNT ~~Total~~SHARES AMOUNT CAPITAL DEFICIT TOTAL ------ ------ ------ ------ ------ ------ ------- ------- ----- Balance at ~~January~~December 131, 2001..... 1035,386,459 $353,849 -- $ ~~374~~ -- 74,908 $(317,421) -- $ (1,~~604)~~084,053 $(11,213,736) $(110,~~230~~093,255) ~~Effect~~Divestiture of ~~the~~WWC ~~merger: Intellicall historical Shares~~ Florida.......~~.....~~ 138,~~083~~169,028 ~~131~~8,169,028 --Conversion 75of ~~(318)~~related --party ~~(187)~~debt ~~Issuance~~to ofpreferred ~~new~~stock ~~shares~~ ............~~.....~~ 2124,~~803~~000 ~~218~~240 ~~466~~1,985,102 --1,985,342 --Net ~~-- 684 Cancellation of pre- merger Wireless WebConnect! shares~~ loss. ~~(10) -- -- -- -- -- -- Amendments to warrants as a result of the merger~~ ........................ -- -- 67-- -- -- -- 67-- ~~Issuance~~(236,047) of(236,047) ~~new shares 500 5 167~~ -- -- -- ~~172 Net loss ...............~~ -- -- -- -- -- ~~(8,911) (8,911)~~ -- ------ ---- ------ --------- ----------- -------- ---- ---- -------- Balance at ~~September~~March 3031, ~~2001~~ 2002........~~...........~~ 35,386,459 $353,849 ~~354~~24,000 $240 174,~~074~~908 75 $ (~~318~~317,421) $11,238,183 $(1011,~~515~~449,783) $ (9174,~~405~~932) ========== ======== ====== ==== ====== ========= =========== ============ ============

See accompanying notes to the consolidated financial statements -5- WIRELESS WEBCONNECT!, INC. (FORMERLY KNOWN AS INTELLICALL, INC.) CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 2002 AND 2001 (UNAUDITED)

~~September~~2002 ~~30,~~ 2001 ~~2000~~ -------- -------- Operating activities: Net loss .................................................~~.........~~ $(8236,~~911~~047) $ (85730,800) Adjustments to reconcile net loss from continuing operations to net cash provided by ~~(used in)~~ operating activities: ~~Depreciation~~Loss ~~....................................................~~from 40discontinued ~~12 Deferred tax benefit~~ operations......................~~......................~~ --170,044 ~~(169)~~663,800 ~~Provision~~Amortization ~~for~~of ~~doubtful~~deferred ~~accounts~~loan costs......................~~...........~~ 14,~~154~~338 -- ~~Inventory~~Amortization ~~write-down~~of debt discount............................~~................~~ 26,~~406~~962 -- ~~Impairment~~Amendment ~~loss~~to onwarrants ~~assets held for sale ......................... 586~~ -- ~~Stock~~merger ~~issued in exchange for professional services .............. 172 -- Merger~~ costs ~~- amendments to warrants~~ .....................~~......~~ 67 -- 67,000 Changes in operating assets and liabilities: ~~Accounts~~Increase ~~receivable~~in ~~.............................................~~accounts ~~(127) 92 Inventory~~ payable.............................~~..........................~~ (245,~~222)~~455 -- ~~Prepaid~~Decrease in prepaid expenses and other current assets ....~~...................~~ ~~120~~9,248 ~~2 Other assets .................................................... 97~~ -- ~~Accounts payable and accrued expenses ........................... 3,594 408 Customer liabilities ............................................ 1,195 420 Other long~~-~~term liabilities ..................................... 250~~ -- ------- ---------- Net cash ~~provided by (~~used in) operating activities .................... ~~(1,579)~~-- ~~680~~-- ---------- ---------- Investing activities: ~~Additions~~Cash toreceived ~~property and equipment ............................... (162) (3) Proceeds~~ from ~~the~~divestiture ~~sale~~ of ~~assets~~WWC Florida............~~......................~~ ~~350~~30,000 -- ~~Cash acquired in merger ........................................... 706~~ -- -------- ---------- Net cash provided by ~~(used in)~~ investing activities ................ ~~894~~30,000 ~~(3)~~-- ---------- ---------- ~~Financing~~Net ~~activities:~~increase ~~Distributions~~in ~~to partners~~ cash......................................... 30,000 -- ~~(44)~~Cash, ~~Proceeds~~beginning ~~from~~of ~~note payable~~ period..................................~~......~~ ~~250~~-- ~~250~~-- ---------- ---------- ~~Net~~Cash, ~~cash~~end ~~provided~~of ~~by financing activities~~ period........................................ ~~250~~$ ~~206~~30,000 ~~-------~~$ --~~-----~~ ~~Net~~========== ~~increase~~========== ~~(decrease)~~Supplemental in cash flow information: Cash paid for interest..................................... ~~(435)~~$ ~~883~~-- $ -- ========== ========== Cash, ~~beginning~~paid offor ~~period~~income taxes...............................~~............~~ ~~1,532~~$ 45 -- $ -- ========== ========== Non---cash investing and financing activities: Issuance of stock to effect the merger (net of cash acquired) $ --~~-----~~ ~~Cash~~$ (209,000) ~~end~~========== ========== Divestiture of ~~period~~WWC Florida - increase in additional paid-in capital..........................................~~.......~~ $ 18,~~097~~169,028 $ ~~928~~-- ========== ========== ~~Non-cash~~Conversion ~~transactions:~~of ~~Issuance~~related ofparty ~~stock~~debt to ~~affect~~preferred ~~the merger (net of cash acquired)~~ stock...... $1,283,655 ~~(209)~~ $ -- ========== ==========

See accompanying notes to the consolidated financial statements -6- WIRELESS WEBCONNECT!, INC. (FORMERLY KNOWN AS INTELLICALL, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 NOTE 1 -- BASIS OF PRESENTATION, MERGER, BUSINESS AND GOING CONCERN In February 2002, Wireless WebConnect!, Inc. ("WWC" or the "Company") (formerly known as Intellicall, Inc.), announced that it had commenced a restructuring plan. Under the first phase of this restructuring plan, WWC sold all of the stock of its wholly-owned subsidiary, Wireless WebConnect!, Inc., a Florida corporation ("WWC Florida"), to E-Home.com, Inc., a Texas corporation doing business as HomeMark ("HomeMark"), in exchange for $20,000. In turn, HomeMark exchanged the stock of WWC Florida with the former shareholders of WWC Florida for 20,494,959 shares of WWC common stock held by such persons (the "WWC Shares"). As a result, HomeMark acquired control of WWC through their holding of approximately 60% of the voting securities of the Company. WWC also received an option from HomeMark to purchase the WWC Shares from HomeMark for $20,000. At January 31, 2002, intercompany indebtedness between the Company and WWC Florida consisted of $1,011,200 owed by WWC Florida to the Company and $977,741 owed by the Company to WWC Florida. The Company and WWC Florida agreed to cancel all intercompany indebtedness and WWC Florida paid the Company $30,000. The Company and WWC Florida also agreed that in the event of a bankruptcy of the Company or WWC Florida, if the bankruptcy court were to rescind the cancellations of the intercompany indebtedness between the Company and WWC Florida, such cancellations shall be considered null and void. In connection with the restructuring, all of the directors of the Company designated by the former WWC Florida shareholders have resigned from the WWC Board of Directors, leaving William O. Hunt, John J. McDonald and Richard F. Dahlson as the remaining directors (the "Remaining Directors"). In addition to serving as Chairman of the Board for the Company, Mr. McDonald is the Company's Chief Executive Officer, Chief Financial Officer and President. The above transactions resulted in an unwinding of the previous merger of WWC and WWC Florida (see WWC FLORIDA MERGER). Since the bankruptcy of Metricom, Inc. and subsequent shut-down of the Ricochet network in July and August 2001, WWC Florida has had virtually no revenue. At December 31, 2001, WWC Florida had a stockholders' deficit of over $8 million. The Remaining Directors felt that WWC Florida was not financially viable and were in disagreement with the WWC Florida-designated directors as to the course of action to take with WWC Florida. Given this situation, the Remaining Directors believed it was in the best interests of WWC, its creditors and its stockholders to complete the divestiture of WWC Florida. The WWC Board of Directors and a majority of its stockholders approved this transaction. WWC's major creditor, Banca Del Gottardo ("Banca"), also approved this transaction. In June 1999, WWC issued 7% Convertible Notes in the aggregate principal amount of $2.0 million (the "Notes"). In connection with the Notes, WWC issued to Banca warrants to purchase approximately 856,000 shares of WWC's common stock. In March 2002, Banca agreed to convert the Notes, all accrued and unpaid interest on the Notes and all outstanding warrants into 24,000 shares of Series B Convertible Preferred Stock of the Company ("Series B Preferred Stock"). On May 10, 2002, the Company acquired the WWC Shares from HomeMark pursuant to the above described option with HomeMark in exchange for the cancellation of the $20,000 payable by HomeMark to the Company. As a result of the exercise of this option in May 2002, Banca del Gottardo, through its holding 24,000 shares of Series B Preferred Stock representing approximately 62% of the outstanding voting securities of WWC, now controls the Company. On May 10, 2002, the previously announced reverse merger agreement with HomeMark was terminated. The Company has determined not to entertain any further discussions regarding the acquisition of HomeMark at this time, although it is still the intent of the board of directors to look for an attractive reverse merger candidate. WWC currently has no operations. -7- WIRELESS WEBCONNECT!, INC. (FORMERLY KNOWN AS INTELLICALL, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 NOTE 1 -- BASIS OF PRESENTATION, MERGER, BUSINESS AND GOING CONCERN (CONTINUED) WWC FLORIDA MERGER On March 30, 2001, WWC Acquisition, Inc., a Florida corporation and wholly-owned subsidiary of the Company, merged with and into WWC Florida, pursuant to the Agreement and Plan of Merger, as amended, dated August 29, 2000, by and among the Company, WWC Florida, the shareholders of WWC Florida and WWC Acquisition, Inc. (the "Merger Agreement"). Pursuant to the Merger Agreement, WWC Florida emerged as a wholly-owned subsidiary of the Company. The Company's stockholders approved the issuance of 21,803,148 shares of common stock to the former shareholders of WWC Florida (the "Former Shareholders"). As a result of the merger, the Former Shareholders acquired control of the Company through their aggregate holdings of approximately 62.5% of the voting securities of the Company. In April 2001, the Company changed its name from Intellicall, Inc. to Wireless WebConnect!, Inc. WWC Florida was considered the accounting acquirer since the Former Shareholders controlled the Company through their holdings of approximately 62.5% of the combined outstanding shares of Common Stock and controlled the Company's Board of Directors. Because the Company was the legal acquirer, this was considered a "reverse acquisition." In addition, on March 15, 2001, the former employees of WWC Florida who became employees of the Company received options to purchase an aggregate of 1.8 million shares of Common Stock under the Company's 1991 Stock Option Plan. As of March 31, 2002, as a result of the unwinding of the merger, none of these options remain outstanding. Certain warrants outstanding prior to the Merger that were issued to Banca, were amended as a result of the Merger. The increase in the fair value of such warrants as a result of the amendments was $67,000, which has been recorded as an expense of the Merger and additional paid-in capital. The Company disposed of Intellicall's remaining payphone business operations in August 2001. The merger has been accounted for as an acquisition of the net assets of Intellicall in exchange for stock, similar to a recapitalization of WWC Florida. The financial information for the periods presented are the historical results of WWC Florida. The assets acquired and liabilities assumed have been recorded at their estimated fair value on the date of acquisition, March 30, 2001, with a corresponding entry to equity for the shares issued. The net assets acquired are as follows (in thousands): Assets: Cash 706 Accounts receivable.............................. 387 Note receivable from WWC Florida................. 1,011 Other current assets ............................ 95 Assets held for sale............................. 950 Other assets..................................... 475 ------ Total assets............................... 3,624 ------ Liabilities: Accounts payable................................. 1,056 Accrued liabilities.............................. 178 Long-term debt to related party.................. 1,893 ------ Total liabilities........................... 3,127 ------ Net assets............................. $ 497 ======

-8- WIRELESS WEBCONNECT! INC. (FORMERLY KNOWN AS INTELLICALL, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 NOTE 1 -- BASIS OF PRESENTATION, MERGER, BUSINESS AND GOING CONCERN (CONTINUED) BUSINESS AND GOING CONCERN WWC currently has no operations. It is the intent of the Remaining Directors to restructure and/or settle the liabilities owed by WWC and to look for an attractive reverse merger candidate. In connection with the restructuring, in March 2002, Banca converted all of its debt, accrued interest and all common stock warrants into preferred stock of the Company (see NOTE 4). The Company is currently in negotiations with its trade creditors to settle its remaining obligations. In the event that the Company is unable to find an attractive merger candidate or significant sources of revenue or to obtain additional capital in the very near future, the Company is unlikely to be able to meet its financial obligations and commitments or to continue as a going business concern. The likely impact on the Company's financial condition is that the Company may be required to seek protection from its creditors under the United States Bankruptcy Code. Any filing by the Company under the United States Bankruptcy Code would likely seek a liquidation of the Company. NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES QUARTERLY REPORTING - Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to Article 10 of Regulation S-X of the Securities and Exchange Commission. The accompanying unaudited condensed financial statements reflect, in the opinion of management, all adjustments necessary to achieve a fair statement of the Company's financial position and results of operations for the interim periods presented. All such adjustments are of a normal and recurring nature. These condensed financial statements should be read in conjunction with the financial statements for the year ended December 31, 2001, included in the Company's Annual Report on Form 10-K. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE - Basic earnings per share is computed using the weighted average number of shares of Common Stock outstanding and excludes any dilutive effects of options, warrants and convertible securities. Diluted earnings per common share is the same as basic earnings per common share for the three months ended March 31, 2002, due to the net loss. As of March 31, 2002, the Company had 2.1 million and .5 million of outstanding common stock options and warrants to purchase common stock, respectively. RECENT ACCOUNTING PRONOUNCEMENTS - Statement of Financial Accounting Standards No. 141, Business Combinations ("SFAS 141"), is effective July 1, 2001 and prohibits pooling-of-interests accounting for acquisitions. Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets ("SFAS 142"), is effective January 1, 2002 and includes requirements to test goodwill and indefinite lived intangible assets for impairment rather than amortize them. In addition, the standard includes provisions for the reclassification of certain existing recognized intangibles as goodwill, reassessment of the useful lives of existing recognized intangibles, reclassification of certain intangibles out of previously reported goodwill and the identification of reporting units for purposes of assessing future impairments of goodwill. Adoption of SFAS 141 and SFAS 142 did not have a material impact on the Company's financial position, results of operations or cash flows. -9- WIRELESS WEBCONNECT! INC. (FORMERLY KNOWN AS INTELLICALL, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In August 2001, the Financial Accounting Standards Board issued Statement of Financial Standards No. 144 ("SFAS 144"), "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS retains the fundamental provisions of generally accepted accounting principles with respect to the recognition and measurement of long-lived asset impairment contained in Statement of Financial Accounting Standards No. 121 ("SFAS 121"), "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of." However, SFAS 144 provides new guidance intended to address certain significant implementation issues associated with SFAS 121, including expanded guidance with respect to appropriate cash flows to be used to determine whether recognition of any long-lived asset impairment is required, and, if required, how to measure the impairment. SFAS 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001, and interim periods within those fiscal years. Adoption of SFAS 144 did not have a material impact on the Company's financial position, results of operations or cash flows. NOTE 3 -- DISCONTINUED OPERATIONS As a result of the unwinding of the WWC Florida merger (see NOTE 1), the Company has classified WWC Florida's operations as "Net loss from Discontinued Operations". WWC Florida provided high-speed wireless data solutions and generated its revenue as a wireless Internet service reseller selling services and wireless modems. The condensed summary of operations for discontinued operations for the three months ended March 31, 2002 and 2001, and condensed balance sheet data for discontinued operations at December 31, 2001, is as follows (in thousands):

-10- WIRELESS WEBCONNECT! INC. (FORMERLY KNOWN AS INTELLICALL, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 NOTE 4 -- LONG-TERM DEBT TO RELATED PARTY AND EARLY EXTINGUISHMENT OF DEBT: The Company's debt as of December 31, 2001, consisted of the following (in thousands): 7% Convertible subordinated notes, due 2004 to Banca del Gottardo.................. $ 2,000 Less: Unamortized debt discount.................................................... (82) ------- Total long-term debt...................................................... $ 1,918 =======

On March 12, 2002, Banca converted the $2.0 million, 7% convertible note, accrued interest and approximately 856,000 common stock warrants into 24,000 shares of the Company's Series B Convertible Preferred Stock. The transaction was recorded as an increase in preferred stock and additional paid-in capital given Banca's status as the controlling shareholder of the Company. The outstanding balances of debt, accrued and unpaid interest and unamortized debt costs and unamortized discount as of March 11, 2002, were as follows (in thousands): Long-term debt.......................... $2,000 Unamortized debt discount............... (75) Accrued interest........................ 109 Unamortized debt costs.................. (49) ------ Net.................................. $1,985 ======

NOTE 5 -- SUBSEQUENT EVENTS On May 10, 2002, the Company acquired 20,494,959 shares of its common stock from E-Home.com, Inc., a Texas Corporation doing business as HomeMark pursuant to an option received by the Company in connection with its previously announced divestiture of its wholly-owned subsidiary, Wireless WebConnect!, Inc., a Florida corporation. The Company acquired the WWC Shares in exchange for the cancellation of a promissory note in the principal amount of $20,000 payable by HomeMark to the Company. Prior to the exercise of this option, HomeMark had control of the Company through their aggregate holdings of approximately 62.5% of the voting securities of the Company. As a result of the exercise of this option in May 2002, Banca, though holding 24,000 shares of Series B Preferred Stock representing approximately 62% of the outstanding voting securities of the Company, now has control of the Company. On May 10, 2002, the previously announced reverse merger agreement with HomeMark expired. The Company has determined not to entertain any further discussions regarding the acquisition of HomeMark at this time, although it is still the intent of the board of directors to look for an attractive reverse merger candidate. -11- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS-CAUTIONARY STATEMENTS This Form 10-K contains certain "forward-looking statements" that we believe are within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Specifically, all statements other than statements of historical facts included in this report regarding the Company's financial position, business strategy and plans and objectives of management of the Company for future operations are forward-looking statements. These forward-looking statements are based on the beliefs of the Company's management, as well as assumptions made by and information currently available to the Company's management. When used in this report, the words "anticipate," "believe," "estimate," "expect," "intend", and words or phrases of similar import, as they relate to the Company or Company management, are intended to identify forward-looking statements. Such statements (the "cautionary statements") reflect the current view of the Company with respect to future events and are subject to risks, uncertainties and assumptions related to various factors including, without limitation, competitive factors, general economic conditions, the interest rate environment, governmental regulation and supervision, and one-time events. Although the Company believes that expectations are reasonable, it can give no assurance that such expectations will prove to be correct. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the applicable cautionary statements. The Company's future operating results are subject to a number of risks and uncertainties. RESULTS OF OPERATIONS --------------------- The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the Financial Statements of the Company, the Notes thereto and information included elsewhere in this report. It should also be noted that since WWC Florida was not a public entity before it was merged with the Company and the merger was subsequently unwound, all of the results of operations for WWC Florida for the three months ended March 31, 2002 and 2001 are reflected in net loss from discontinued operations. GENERAL AND ADMINISTRATIVE. General and administrative expense of $36,824 for the three months ended March 31, 2002, represents directors and officers insurance and minimal administrative costs including contract labor. INTEREST EXPENSE. Interest expense of $38,653 for the three months ended March 31, 2002, represents interest on the Banca debt, the related amortization of debt costs and debt discount to March 12, 2002, the date of the conversion to preferred stock. OTHER INCOME (EXPENSE). Other income for the three months ended March 31, 2002, represents, primarily, dividend income from the 3,000 shares of Series B preferred stock in ILD Telecommunications, Inc. LOSS FROM DISCONTINUED OPERATIONS. The loss from discontinued operations for the three months ended March 31, 2002, was $170,044 compared to a loss from discontinued operations of $663,800 for the three months ended March 31, 2001. The decrease in the loss from 2001 to 2002 reflects the wind down of operations of WWC Florida as a result of the Metricom, Inc. bankruptcy filing in July 2001 and the subsequent shut down the Ricochet network in August 2001. -12- LIQUIDITY AND CAPITAL RESOURCES WWC currently has no operations. It is the intent of the Remaining Directors to look for an attractive reverse merger candidate. The Company is currently in negotiations with its trade creditors to settle its remaining obligations. In the event that the Company is unable to find an attractive merger candidate or significant sources of revenue or to obtain additional capital in the very near future, the Company is unlikely to be able to meet its financial obligations and commitments or to continue as a going business concern. The likely impact on the Company's financial condition is that the Company may be required to seek protection from its creditors under the United States Bankruptcy Code. Any filing by the Company under the United States Bankruptcy Code would likely seek a liquidation of the Company. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company has no market risk exposure related to interest rates, derivative financial instruments or foreign currency. -13- PART II ITEM 1. LEGAL PROCEEDINGS. The Company is subject to ordinary legal proceedings incidental to and arising in the normal course of its business. It is the opinion of the management of the Company that the ultimate disposition of these proceedings will not have a material adverse effect on the Company's financial position or results of operations. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. -14- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. The following exhibits are filed as a part of this Quarterly Report on Form 10-Q. (g)2.1 Stock Purchase and Exchange Agreement, dated as of February 1, 2002, entered into by and among Wireless WebConnect!, Inc., a Delaware corporation, E-Home.com, Inc., a Texas corporation doing business as HomeMark, the undersigned stockholders of Parent, and Wireless WebConnect!, Inc., a Florida corporation. (e)2.2 Agreement and Plan of Merger by and between the Company, WWC Acquisition, Inc. and Wireless WebConnect!, Inc. dated August 29, 2000. (h)2.3 Business Relationship Restructuring Agreement dated as of March 2002, by and between Wireless WebConnect!, Inc. and Banca del Gottardo. (a)3.1 Certificate of Incorporation of the Company and all amendments thereto through December 31, 1992. (c)3.2 Amendment to Certificate of Incorporation raising the authorized common stock from 10,000,000 shares to 50,000,000 shares. (d)3.3 Amendment to Certificate of Incorporation lowering the authorized common stock from 50,000,000 shares to 20,000,000 shares. (b)3.4 Bylaws of the Company, as amended. (f)3.5 Articles of Amendment of the Certificate of Incorporation of Intellicall, Inc. changing the name to Wireless WebConnect!, Inc. and raising the total number of authorized shares to 61,000,000 (60,000,000 million shares of common stock and 1,000,000 shares of preferred stock). (h)3.6 Certificate of Designations, Preferences, Rights and Limitations of Series B Convertible Preferred Stock of Wireless WebConnect, Inc. (a)4.1 Specimen certificate for Common Stock of the Company. ----------- (a) Incorporated by reference from the Company's Form S-1 filed August 28, 1987, file no. 33-15723. (b) Incorporated by reference from the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1991. (c) Incorporated by reference from the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993. (d) Incorporated by reference from the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. (e) Incorporated by reference from the Company's Definitive Proxy Statement filed on Form DEFM14A on February 14, 2001. (e) Incorporated by reference from the Company's Definitive Proxy Statement filed on Form DEFM14A on February 14, 2001. (f) Incorporated by reference from the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2001. (g) Incorporated by reference from the Company's Current Report on Form 8-K filed on February 14, 2002. (h) Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001. (b) Reports on Form 8-K: Changes in Control of Registrant and Other Events filed May 10, 2002. -15- Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WIRELESS WEBCONNECT!, INC. /s/ John J. McDonald --------------------------------------------- John J. McDonald CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER (Principal Executive and Financial Officer) Date: June 17, 2002 -16-

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