UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8K
CURRENT REPORT
Pursuant to Section 13 OR 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 14, 2005
Unity Wireless Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-30620
Commission File Number)
91-1940650
(IRS Employer Identification No.)
7438 Fraser Park Drive, Burnaby, BC Canada V5J 5B9
(Address of principal executive offices and Zip Code)
(800) 337-6642
(Registrant’s telephone number, including area code)
not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On November 14, 2005 the Registrant issued a press release announcing financial results for the third quarter ended September 30, 2005. A copy of the press release is furnished as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01
(A)
Exhibits
99.1
Press release of Unity Wireless Corporation dated November 14, 2005.
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 hereunto duly authorized.
UNITY WIRELESS CORPORATION
By: /s/ Ilan Kenig
ILAN KENIG
Chief Executive Officer and Principal Executive Officer
Date: November 14, 2005
INDEX TO EXHIBITS
Exhibit No. |
| Description |
|
|
|
99.1 |
| Press release of Unity Wireless Corporation, dated November 14, 2005. |
Unity Wireless
Technology & Innovation to Power a Wireless World!
FOR IMMEDIATE RELEASE
Unity Wireless Reports Results for the Third Quarter 2005
Gross Margins Reach 21% for Third Quarter; Revenue up 20% for 9-Month Period
November 14, 2005 - BURNABY, BC – Unity Wireless Corporation (OTCBB: UTYW), a developer of integrated wireless subsystems, power amplifiers and coverage enhancement solutions, reported today summary financial results for the three and nine-month periods ended September 30, 2005.
Revenue for the third quarter ended September 30, 2005 was $949,700 compared to $1,027,160 in the same period in 2004. The gross margin of $201,865, or 21.26%, for the third quarter of 2005 declined from a gross margin of $223,590, or 21.76%, for the third quarter of 2004. Loss for the third quarter of 2005 was $1,017,538 compared to $605,447 for the same period in 2004. Net of stock based compensation and other non-cash expenses of $390,805 in the 2005 period and $165,099 in the 2004 period, loss for the third quarter of 2005 was $626,733 compared to $440,348 for the same period in 2004.
Revenue for the nine-month period ended September 30, 2005 was $4,634,158, up 20.34%, compared to $3,850,740 in the same period in 2004. The gross margin of $1,039,614, or 22.43% of net sales, for the nine month period ended of 2005 increased from a gross margin of $719,854, or 18.69% of net sales, for the nine month period ended of 2004. Loss for the nine-month period was $3,561,117 compared to $2,026,172 for the same period in 2004. Net of stock based compensation and other non-cash expenses of $1,562,590 in the 2005 period and $706,322 in the 2004 period, loss for the nine-month period was $1,998,527 compared to $1,319,850 for the same period in 2004.
Ilan Kenig, President and CEO of Unity Wireless, stated, “Revenues were lower than anticipated because certain expected orders were postponed. We did, however, increase the scope of our potential growth as we diversified both our product portfolio and customer base. Several products are now qualified for multiple base station configurations with multiple OEM customers and are ready for ramp-up when we receive production orders. Our Operator Solutions Group has several evaluation and field trials underway in North America for our tower mounted amplifier (TMA) products, and the Group is also developing new coverage solutions for specific customer opportunities in North America and Europe. We feel that penetrating the operator market segment with these products in a meaningful way can be accomplished more quickly than it has taken to penetrate the OEM market.”
The Company’s Form 10Q-SB for the period ended September 30, 2005 contains additional financial information, and can be accessed at the Company’s website or through the Securities and Exchange Commissions website at www.sec.gov.
About Unity Wireless www.unitywireless.com
Unity Wireless is an ISO 9001:2000 certified developer of RF (radio frequency) power amplifiers, components, integrated front-ends and coverage enhancement solutions for wireless communications networks. Our products are an integral part of the base station and repeater infrastructure that comprise the backbone of wireless communications networks around the world. From analog cellular to 3G mobile and fixed wireless applications from 450 MHz to 3.5 GHz, Unity Wireless products deliver enhanced efficiency and performance with field-proven quality and reliability in tens of thousands of base stations and repeaters around the world.
Forward Looking Statements
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," “feel,” "plan," "anticipate," “should” and other similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation, inability to raise the funds necessary for the Company’s continued operations, changes in external market factors including the economy and other risks and uncertainties indicated in the Company's most recent SEC filing on form SB-2. Actual results could differ materially from the results referred to in the forward-looking statements.
Non-GAAP Financial Information
This press release contains certain non-GAAP financial information as defined by the U.S. Securities Commission Regulation G. Pursuant to the requirements of this regulation, a reconciliation of this financial information to our financial statements as prepared under generally accepted accounting principles in the United States (GAAP) is included in this press release. Unity’s management believes that the disclosure of this non-GAAP financial information is useful to our investors and the investment community since certain non-cash charges and expenses may not be reflective of future expenses.
For More Information Contact:
Dallas Pretty, Unity Wireless, (604) 267-2736 dallasp@unitywireless.com
Mike Mulshine, Osprey Partners, (732) 292-0982 osprey57@optonline.net
UNITY WIRELESS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
RECONCILIATION OF PRO FORMA RESULTS
| Three months ended | |||
| September 30, 2005 | |||
Original | Adjustment | Pro-Forma | ||
Net sales | $ 949,700 | $ - | $ 949,700 | |
Cost of goods sold | 747,835 | (6,165) | ( a ) | 741,670 |
201,865 | 6,165 | 208,030 | ||
Expenses: | ||||
Research and development | 393,744 | (9,001) | ( a ) | 384,743 |
Government grant | 14,245 | - | 14,245 | |
Sales and marketing | 134,573 | (9,091) | ( a ) | 125,482 |
Depreciation and amortization | 79,546 | (79,546) | ( b ) | - |
Exchange (gain) loss | (6,909) | - | (6,909) | |
Interest expense, excluding accretion of interest and debt settlement | 72,838 | (57,632) | ( c ) | 15,206 |
General and administrative | 415,389 | (113,393) | ( a ) | 301,996 |
| 1,103,426 | (268,663) | 834,763 | |
Operating loss for the period | (901,561) | 274,828 | (626,733) | |
Accretion of interest and debt settlement | (115,977) | 115,977 | ( d ) | - |
Other income | - | - | - | |
Loss for the period | ($1,017,538) | $390,805 | ($626,733) | |
( a ) - This represents stock-based compensation. | ||||
( b ) - This represents costs related to the amortization of equipment and intangible assets. | ||||
( c ) - This represents shares issued in settlement of interest expense. | ||||
( d ) - This represents accretion of interest and debt settlement related to convertible debentures. | ||||
| Three months ended | |||
| September 30, 2004 | |||
Original | Adjustment | Pro-Forma | ||
Net sales | $ 1,027,160 | $ - | $1,027,160 | |
Cost of goods sold | 803,570 | (5,608) | ( a ) | 797,962 |
223,590 | 5,608 | 229,198 | ||
Expenses: | ||||
Research and development | 243,524 | (8,043) | ( a ) | 235,481 |
Government grant | 15,407 | - | 15,407 | |
Sales and marketing | 96,207 | 8,638 | ( a ) | 104,845 |
Depreciation and amortization | 15,812 | (15,812) | ( b ) | - |
Exchange (gain) loss | 69,628 | - | 69,628 | |
Interest expense, excluding accretion of interest and debt settlement | 26,843 | - | ( c ) | 26,843 |
General and administrative | 341,651 | (124,192) | ( a ) | 217,459 |
| 809,072 | (139,409) | 669,663 | |
Operating loss for the period | (585,482) | 145,017 | (440,465) | |
Accretion of interest and debt settlement | (20,082) | 20,082 | ( d ) | - |
Other income | 117 | - |
| 117 |
Loss for the period | ($605,447) | $165,099 | ($440,348) | |
( a ) - This represents stock-based compensation. | ||||
( b ) - This represents costs related to the amortization of equipment and intangible assets. | ||||
( c ) - This represents shares issued in settlement of interest expense. | ||||
( d ) - This represents accretion of interest and debt settlement related to convertible debentures. | ||||
UNITY WIRELESS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
RECONCILIATION OF PRO FORMA RESULTS
| Nine months ended | |||
| September 30, 2005 | |||
Original | Adjustment | Pro-Forma | ||
Net sales | $ 4,634,158 | $ - | $4,634,158 | |
Cost of goods sold | 3,594,544 | (18,153) | ( a ) | 3,576,391 |
1,039,614 | 18,153 | 1,057,767 | ||
Expenses: | ||||
Research and development | 1,642,193 | (46,285) | ( a ) | 1,595,908 |
Government grant | 69,512 | - | 69,512 | |
Sales and marketing | 396,847 | 30,368 | ( a ) | 427,215 |
Depreciation and amortization | 173,458 | (173,458) | ( b ) | - |
Exchange (gain) loss | 35,129 | - | 35,129 | |
Interest expense, excluding accretion of interest and debt settlement | 203,877 | (137,159) | ( c ) | 66,718 |
General and administrative | 1,368,517 | (506,705) | ( a ) | 861,812 |
| 3,889,533 | (833,239) | 3,056,294 | |
Operating loss for the period | (2,849,919) | 851,392 | (1,998,527) | |
Accretion of interest and debt settlement | (711,198) | 711,198 | ( d ) | - |
Other income | - | - | - | |
Loss for the period | ($3,561,117) | $1,562,590 | ($1,998,527) | |
( a ) - This represents stock-based compensation. | ||||
( b ) - This represents costs related to the amortization of equipment and intangible assets. | ||||
( c ) - This represents shares issued in settlement of interest expense. | ||||
( d ) - This represents accretion of interest and debt settlement related to convertible debentures. | ||||
| Nine months ended | |||
| September 30, 2004 | |||
Original | Adjustment | Pro-Forma | ||
Net sales | $ 3,850,740 | $ - | $3,850,740 | |
Cost of goods sold | 3,130,886 | (14,728) | ( a ) | 3,116,158 |
719,854 | 14,728 | 734,582 | ||
Expenses: | ||||
Research and development | 891,629 | (29,616) | ( a ) | 862,013 |
Government grant | 57,761 | - | 57,761 | |
Sales and marketing | 373,471 | (38,808) | ( a ) | 334,663 |
Depreciation and amortization | 42,374 | (42,374) | ( b ) | - |
Exchange (gain) loss | 68,279 | - | 68,279 | |
Interest expense, excluding accretion of interest and debt settlement | 41,366 | - | ( c ) | 41,366 |
General and administrative | 1,227,921 | (523,321) | ( a ) | 704,600 |
| 2,702,801 | (634,119) |
| 2,068,682 |
Operating loss for the period | (1,982,947) | 648,847 | (1,334,100) | |
Accretion of interest and debt settlement | (57,475) | 57,475 | ( d ) | - |
Other income | 14,250 | - |
| 14,250 |
Loss for the period | ($2,026,172) | $706,322 | ($1,319,850) | |
( a ) - This represents stock-based compensation. | ||||
( b ) - This represents costs related to the amortization of equipment and intangible assets. | ||||
( c ) - This represents shares issued in settlement of interest expense. | ||||
( d ) - This represents accretion of interest and debt settlement related to convertible debentures. | ||||