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<td width="23%" valign="top"><p>&#160;</p>
</td>
<td width="54%" align="center" valign="top"><p>Securities and Exchange Commission</p>
</td>
<td width="23%" valign="top"><p>&#160;</p>
</td>
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</table>
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<td width="23%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-top: 0.0133333in solid" align="center" valign="top"><p>Washington, D.C. 20549</p>
</td>
<td width="23%" valign="top"><p>&#160;</p>
</td>
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<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="33%" align="center" valign="top"><p>Form 8-K</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="33%" align="center" valign="top"><p>Current Report</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
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<table width="100%" cellpadding="6" cellspacing="0">
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<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
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<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="77%" align="center" valign="top"><p>Pursuant to Section 13 or 15(d) of the Securities and Exchange
Commission</p>
</td>
<td width="11%" valign="top"><p>&#160;</p>
</td>
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</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
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<td width="13%" valign="top"><p>&#160;</p>
</td>
<td width="76%" align="center" valign="top"><p>Date of Report (Date of earliest event reported): June 20, 2003.</p>
</td>
<td width="11%" valign="top"><p>&#160;</p>
</td>
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</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
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<td width="23%" valign="top"><p>&#160;</p>
</td>
<td width="54%" align="center" valign="top"><p>Air-Q Wi-Fi Corporation</p>
</td>
<td width="23%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
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<td width="23%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-top: 0.0133333in solid" align="center" valign="top"><p>(Exact name of registrant as specified in its
charter)</p>
</td>
<td width="23%" valign="top"><p>&#160;</p>
</td>
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<table width="100%" cellpadding="6" cellspacing="0">
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<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="27%" align="center" valign="top"><p>Delaware</p>
</td>
<td width="8%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="31%" align="center" valign="top"><p>01-0623010</p>
</td>
<td width="8%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="26%" align="center" valign="top"><p>33-19961</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
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<td width="27%" style="border-top: 0.0133333in solid" align="center" valign="top"><p>(State or other
jurisdiction of
incorporation)</p>
</td>
<td width="8%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="31%" style="border-top: 0.0133333in solid" align="center" valign="top"><p>(Commission File No.)</p>
</td>
<td width="8%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="26%" style="border-top: 0.0133333in solid" align="center" valign="top"><p>(I.R.S. Employer
Identification No.)</p>
</td>
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<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
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<table width="100%" cellpadding="6" cellspacing="0">
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<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="85%" align="center" valign="top"><p>7635 Jefferson Highway, Suite 309, Baton Rouge, Louisiana 70809</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
</tr>
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<table width="100%" cellpadding="6" cellspacing="0">
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<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="85%" style="border-top: 0.0133333in solid" align="center" valign="top"><p>(Address of principal executive offices, including zip code)</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="85%" align="center" valign="top"><p>Registrant's telephone number, including area code: (225) 927-1697</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
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</table>
<table width="100%" cellpadding="6" cellspacing="0">
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<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="33%" valign="top"><p>&#160;</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="85%" align="center" valign="top"><p>Covenant Financial Corporation, 1215 East I-30, Greenville, Texas 75402</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="85%" style="border-top: 0.0133333in solid" align="center" valign="top"><p>(Former name or former address, if changed since last report)</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" style="border-top: 0.0266667in solid" align="center" valign="top"><p>Form 8-K</p>
</td>
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</table>
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<tr>
<td width="100%" style="border-bottom: 0.0266667in solid" align="center" valign="top"><p>Air-Q Wi-Fi Corporation</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="85%" style="background-color: #e5e5e5" valign="top"><p>Item 1. Changes in Control of Registrant.</p>
</td>
<td width="15%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>On June 20, 2003, there occurred a change in control of Air-Q Wi-Fi Corporation, formerly
Covenant Financial Corporation.  Pursuant to a stock purchase agreement, FMF Investments,
Ltd., a Texas limited partnership, purchased 611,000 shares, or 54.59%, of our outstanding
common stock from Eric Anderson.  FMF Investments paid Mr. Anderson a total of $70,000 in
cash, which funds were obtained by FMF Investments through its other business activities and
not as a loan.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>Following FMF Investments&#8217; acquiring control, our then-directors resigned and FMF
Investments, acting by written consent in lieu of a meeting of a majority of shareholders,
elected David Loflin and Waddell D. Loflin as our directors.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>The following table and the notes thereto set forth certain information regarding the beneficial
ownership of our common stock, as of the date of this Current Report, by (1) each of our
current directors, (2) each our current executive officers, (3) all of our executive officers and
directors as a group and (4) each other person known to us to own beneficially more than five
percent of our common stock outstanding.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>Unless otherwise indicated, all shareholders set forth below have the same principal business
address as do we.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="4%" style="border-bottom: 0.01in solid" valign="top"><p>&#160;</p>
</td>
<td width="27%" style="border-bottom: 0.01in solid" align="center" valign="top"><p>Name and Address of
Beneficial Owner</p>
</td>
<td width="4%" style="border-bottom: 0.01in solid" valign="top"><p>&#160;</p>
</td>
<td width="5%" valign="top"><p>&#160;</p>
</td>
<td width="23%" style="border-bottom: 0.01in solid" align="center" valign="top"><p>Number of Shares
Beneficially Owned</p>
</td>
<td width="3%" valign="top"><p>&#160;</p>
</td>
<td width="23%" style="border-bottom: 0.01in solid" align="center" valign="top"><p>Percentage of
Shares Beneficially
Owned(1)</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="35%" valign="top"><p>David Loflin</p>
</td>
<td width="5%" valign="top"><p>&#160;</p>
</td>
<td width="23%" align="center" valign="top"><p>9,000,000</p>
</td>
<td width="3%" valign="top"><p>&#160;</p>
</td>
<td width="23%" align="center" valign="top"><p>36.56%</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="35%" valign="top"><p>FMF Investments, Ltd.(2)</p>
</td>
<td width="5%" valign="top"><p>&#160;</p>
</td>
<td width="23%" align="center" valign="top"><p>2,611,000</p>
</td>
<td width="3%" valign="top"><p>&#160;</p>
</td>
<td width="23%" align="center" valign="top"><p>10.61%</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="35%" valign="top"><p>All executive officers and
directors as a group (2
persons)</p>
</td>
<td width="5%" valign="top"><p>&#160;</p>
</td>
<td width="23%" align="center" valign="top"><p>9,000,000</p>
</td>
<td width="3%" valign="top"><p>&#160;</p>
</td>
<td width="23%" align="center" valign="top"><p>36.26%</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="35%" valign="top"><p>Douglasdale Capital Ltd.(3)(7)</p>
</td>
<td width="5%" valign="top"><p>&#160;</p>
</td>
<td width="23%" align="center" valign="top"><p>6,250,000(4)</p>
</td>
<td width="3%" valign="top"><p>&#160;</p>
</td>
<td width="23%" align="center" valign="top"><p>25.39%</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="35%" style="border-bottom: 0.01in solid" valign="top"><p>Douglasbank Capital Ltd.
(5)(7)</p>
</td>
<td width="5%" style="border-bottom: 0.01in solid" valign="top"><p>&#160;</p>
</td>
<td width="23%" align="center" valign="top"><p>6,250,000(6)</p>
</td>
<td width="3%" valign="top"><p>&#160;</p>
</td>
<td width="23%" align="center" valign="top"><p>25.39%</p>
</td>
<td width="7%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" align="right" valign="top"><p>(1)</p>
</td>
<td width="88%" valign="top"><p>Based on 24,619,204 shares outstanding, including a total of 10,000,000 shares
underlying currently outstanding and exercisable warrants.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" align="right" valign="top"><p>(2)</p>
</td>
<td width="88%" valign="top"><p>FMF Investments&#8217; address is 819 Office Park Circle, Lewisville, Texas 75057</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" align="right" valign="top"><p>(3)</p>
</td>
<td width="88%" valign="top"><p>Douglasdale Capital&#8217;s address is 418 Douglas Park View S.E., Calgary, Alberta,
Canada T2Z 2R1. </p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" align="right" valign="top"><p>(4)</p>
</td>
<td width="88%" valign="top"><p>1,250,000 of these shares have been issued; 5,000,000 of these shares have not been
issued, but underlie currently exercisable warrants.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" align="right" valign="top"><p>(5)</p>
</td>
<td width="88%" valign="top"><p>Douglasbank Capital&#8217;s address is 418 Douglas Park View S.E., Calgary, Alberta,
Canada T2Z 2R1.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" align="right" valign="top"><p>(6)</p>
</td>
<td width="88%" valign="top"><p>1,250,000 of these shares have been issued; 5,000,000 of these shares have not been
issued, but underlie currently exercisable warrants.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" align="right" valign="top"><p>(7)</p>
</td>
<td width="88%" valign="top"><p>Douglasdale Capital and Douglasbank Capital have common management who
possess the power of disposition over the securities owned by these entities; the
beneficial ownership of each of these entities is different.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="85%" style="background-color: #e5e5e5" valign="top"><p>Item 2. Acquisition or Disposition of Assets.</p>
</td>
<td width="15%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>On June 20, 2003, pursuant to a stock purchase agreement, we acquired all of the outstanding
capital stock of Air-Q Corp., a Nevada corporation (&#8220;Air-Q NV&#8221;), by issuing a total of
11,000,000 shares of our common stock to the shareholders of Air-Q NV.  In connection with
our acquiring Air-Q NV, our president, David Loflin, was issued 9,000,000 shares of our
common stock and FMF Investments, Ltd., an affiliate, was issued 2,000,000 shares of our
common stock.  In determining the number of shares of our common stock to be issued to the
shareholders of Air-Q NV, our board of directors did not employ any standard valuation
formula or any other standard measure of value.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="85%" style="background-color: #e5e5e5" valign="top"><p>Item 5. Other Events and Regulation FD Disclosure.</p>
</td>
<td width="15%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="62%" style="border-bottom: 0.01in solid" valign="top"><p>Change in Corporate Name.</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Effective June 24, 2003, a change in our corporate name occurred. On that date, we
became known as &#8220;Air-Q Wi-Fi Corporation&#8221;,</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>The corporate name change was approved by a majority of our shareholders, acting by
written consent without a meeting. </p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="62%" style="border-bottom: 0.01in solid" valign="top"><p>Change in Corporate Headquarters.</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Effective June 20, 2003, we relocated our corporate headquarters to: 7635 Jefferson
Highway, Suite 309, Baton Rouge, Louisiana 70809.  Our new telephone number is
(225) 927-1697.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="62%" style="border-bottom: 0.01in solid" valign="top"><p>Securities Purchase Agreements.</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="38%" style="border-bottom: 0.01in solid" valign="top"><p>Douglasdale Capital Ltd.</p>
</td>
<td width="54%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>On June 20, 2002, we entered into a securities purchase agreement with Douglasdale
Capital Ltd., whereby we issued  securities for cash in the amount of $125,000.   We
sold Douglasdale Capital (1) 1,250,000 shares of our common stock, (2) 1,250,000
common stock purchase warrants to purchase a like number of shares at an exercise
price of $.20 per share, (3) 1,250,000 common stock purchase warrants to purchase a
like number of shares at an exercise price of $.30 per share, (4) 1,250,000 common
stock purchase warrants to purchase a like number of shares at an exercise price of $.40
per share and (5) 1,250,000 common stock purchase warrants to purchase a like
number of shares at an exercise price of $.50 per share.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="38%" style="border-bottom: 0.01in solid" valign="top"><p>Douglasbank Capital Ltd.</p>
</td>
<td width="54%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>On June 20, 2002, we entered into a securities purchase agreement with Douglasbank
Capital Ltd., whereby we issued  securities for cash in the amount of $125,000.   We
sold Douglasbank Capital (1) 1,250,000 shares of our common stock, (2) 1,250,000
common stock purchase warrants to purchase a like number of shares at an exercise
price of $.20 per share, (3) 1,250,000 common stock purchase warrants to purchase a
like number of shares at an exercise price of $.30 per share, (4) 1,250,000 common
stock purchase warrants to purchase a like number of shares at an exercise price of $.40
per share and (5) 1,250,000 common stock purchase warrants to purchase a like
number of shares at an exercise price of $.50 per share.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="62%" style="border-bottom: 0.01in solid" valign="top"><p>Change in Business Plan.</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>General.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>We are a start-up business.  Our new management has committed all available current
and future capital and other resources to the commercial exploitation of our &#8220;Wi-Fi&#8221;
(wireless fidelity) Internet access products (these proprietary products are referred to as
our Wi-Fi products).  Our first market will be Baton Rouge, Louisiana.  Our business
plan is based on the marketing of our wireless Internet access services (these services
are referred to as our Wi-Fi services) to businesses and residential customers using our
Wi-Fi products.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>What is Wi-Fi?</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>The term &#8220;Wi-Fi&#8221; is short for &#8220;wireless fidelity&#8221; and refers to an industry standard for
wireless equipment that meets published 802.11(x) standards.  Wi-Fi equipment
operates in unlicensed spectra, such as 2.4 and 5.8 GHz.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>What is Wireless Internet?</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>&#8220;Wireless Internet&#8221; is a new type of communications spectrum recently designated by
the Federal Communications Commission.  Wireless Internet access requires a
transmission facility maintained by an ISP employing a wireless system and the user&#8217;s
modem (a transmitter/receiver modem) equipped with an antenna.  Wireless Internet
capability allows users to access the Internet from a stationary computer or, in some
situations, from a mobile, lap-top computer.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>How Our Wi-Fi System Works.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Our wireless Internet access system (this system is referred to as our Wi-Fi system)
operates on a platform comprised of Wi-Fi standard equipment that has been configured
in a proprietary manner.  Our Wi-Fi system is comprised of one or more &#8220;hot spots&#8221;
where a server cell (a modem) is located.  The server cell that comprises a hot spot is
less than one cubic foot in size and is mounted on a tall structure, a tower, a tall
building or a billboard, for example.  The space needed for mounting a server cell can
be leased for an average monthly payment of about $500.  Each server cell relays
transmitted data directly into the Internet via a direct connection into a T1, or larger,
telephone line or the local cable television provider&#8217;s system.  The monthly charge for
each T1 line ranges from $600 to $2,000, depending on the market, and the monthly
charge for each cable television system connection ranges from $300 to $1,000,
depending on the market.  We have not yet established brand names for our Wi-Fi
system and products.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Installed customer modems, which are slightly larger in size than a deck of playing
cards, transmit data to, and receive data from, a server modem.  Each customer modem
is installed in the customer&#8217;s computer and connected by a thin cable to a small antenna
that is mounted on the outside of the customer&#8217;s place of business or home, as the case
may be.  The installation process for customer modems is quite similar to that of cable
television: the installation crew installs the customer modem in the computer, mounts
the antenna outside, connects the modem and antenna with the cable and tests the
connection.  Depending on the market, each customer installation is expected to cost
approximately $100.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>The number of hot spots needed for a particular system depends on a few factors:</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>the geographic size of the city to be served - the signal of each hot spot covers
an area approximately one mile in diameter;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>the population density of the city to be served - since each hot spot is capable of
handling approximately 250 customers, the greater the population density, the
greater the number of hot spots required;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>the terrain of the city to be served - the hillier the terrain, the greater the number
of hot spots required; and</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>the density of foliage of the city to be served - more densely foliated areas
require a greater number of hot spots.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Within a Wi-Fi system, each hot spot is configured to share transmitted data with the
other hot spots, so as to provide an uninterrupted connection to the Internet.  In a Wi-Fi system with multiple hot spots, hot spots are geographically located in a honeycomb
fashion, for technical reasons.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Data transmission speeds remain constant within a Wi-Fi system&#8217;s transmission radius,
regardless of the distance from the transmission point.  On the fringes of a Wi-Fi
system&#8217;s transmission radius, a customer&#8217;s connection may fade in and out, similar to
the reception of distant AM radio stations.  To avoid this circumstance, we will attempt
to avoid installing a customer modem within the fringe areas.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Wi-Fi Equipment and Facilities.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>All of the equipment used in our Wi-Fi systems will be off-the-shelf.  Inasmuch as there
are several manufacturers of Wi-Fi equipment, we expect no problems in obtaining
needed equipment at competitive prices.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>We will not construct towers on which to establish hot spots.  Instead, we will lease
tower spaces, rooftop spaces or spaces on other tall structures.  We are currently
negotiating with owners of these types of spaces in Baton Rouge, Louisiana.  Based on
our management&#8217;s experience, securing adequate locations to establish hot spots is not
expected to impede the construction of a Wi-Fi system in any market.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>In each market, we will obtain the necessary telephone line or cable television system
connections to the Internet from one of the companies capable of providing an adequate
Internet connection.  Based on our management&#8217;s experience, we do not believe that we
will encounter any difficulty in obtaining needed connections to the Internet at
acceptable prices.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Markets.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>We have also completed engineering efforts in Baton Rouge, Louisiana, relating to the
construction of our first Wi-Fi system.  We expect to begin construction efforts during
July 2003 and to have the first beta-customers online soon thereafter.  The speed with
which we will be able to construct this Wi-Fi system is dependent upon the amount of
capital we are able to obtain.  We cannot predict our future capital position.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Marketing Strategies.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>We intend to employ telephone marketing as the initial means for acquiring customers,
primarily business customers.  As a particular market begins to mature, we will employ
mass media, including radio advertising.  In conjunction with our mass media
advertising, we will employ a sales force that will focus primarily on potential business
customers.  This focus on business customers is based on our management&#8217;s informal
study of Internet usage by businesses versus home users that revealed businesses&#8217; higher
demand for high-speed Internet access.  Our management&#8217;s decision may prove to have
been incorrect, which would significantly impair our ability to earn a profit.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Competitive Features of Our Wi-Fi Services.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>While we believe our Wi-Fi service possesses some competitive advantages over other
Internet access modes, it currently has three significant competitive disadvantages:</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>No wide-spread brand name recognition;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>Professional installation usually required; and</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>Internet access only available locally, compared to dial-up Internet access that is
available from virtually any telephone in any geographic location.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>It is possible that we could overcome the first two listed disadvantages, after a lengthy
period of marketing and product research and development.  However, we currently
lack capital to overcome either disadvantage.  Further, it is likely that we will never
overcome the third disadvantage, due to the inherent broadcast limitations of wireless
technologies.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>We believe our Wi-Fi services offer the following competitive advantages: speed, lower
cost, no telephone company involvement and security through encryption.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Competition.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>We believe that the primary competitive factors determining success as an Internet
access provider are: a reputation for reliability and high-quality service; effective
customer support; access speed; pricing; effective marketing techniques for customer
acquisition; ease of use; and scope of geographic coverage.  We believe that we will be
able to address adequately all of these factors, except that we will not be able to offer
scope of geographic coverage for the foreseeable future.  It is also possible that we will
not address any of these competitive factors successfully.  Should we fail to do so, our
business would likely never earn a profit.  We currently lack capital necessary to
compete effectively.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>We face severe competition from other wireless Internet access providers, as well as
large, national providers of cellular telephone service.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>The market for the provision of dial-up Internet access services, in which our Wi-Fi
services will compete, is extremely competitive and highly fragmented.  Current and
prospective competitors include many large, nationally-known companies that possess
substantially greater resources, financial and otherwise, market presence and brand
name recognition than do we.  We expect to compete, for the foreseeable future, with
the following: national Internet service providers, numerous regional and local Internet
service providers, most of which have significant market share in their markets;
established on-line information service providers, such as America Online, which
provide basic Internet access, as well as proprietary information not available through
public Internet access; providers of web hosting, co-location and other Internet-based
business services; computer hardware and software and other technology companies
that provide Internet connectivity with their products; telecommunications companies,
including global long distance carriers, regional Bell operating companies and local
telephone companies; operators that provide Internet access through television cable
lines; electric utility companies; communications companies; companies that provide
television or telecommunications through participation in satellite systems; and, to a
lesser extent, non-profit or educational Internet access providers.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>With respect to potential competitors, we expect that manufacturers of computer
hardware and software products, as well as media and telecommunications companies
will continue to enter the Internet services market, which will serve to intensify
competition.  In addition, as more consumers and businesses increase their Internet
usage, we expect existing competitors to increase further their emphasis on Internet
access and electronic commerce initiatives, resulting in even greater competition.  The
ability of competitors or others to enter into business combinations, strategic alliances
or joint ventures, or to bundle their services and products with Internet access, could
place us at a significant competitive disadvantage.  We currently lack capital necessary
to compete effectively and we may never obtain enough capital to permit us to compete
effectively in our markets.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Moreover, we expect to face competition in the future from companies that provide
connections to consumers' homes, such as telecommunications providers, cable
companies and electrical utility companies. For example, recent advances in technology
have enabled cable television operators to offer Internet access through their cable
facilities at significantly higher speeds than existing analog modem speeds. These types
of companies could include Internet access in their basic bundle of services or offer such
access for a nominal additional charge.  Any such developments could reduce our
market share, thereby impairing our ability to earn a profit.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="62%" style="border-bottom: 0.01in solid" valign="top"><p>Risk Factors Associated with an Investment in Our
Common Stock.</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="96%" valign="top"><p>You should carefully consider the risks described below before you decide to buy our
common stock.  If any of the following risks actually occur, our business, financial
condition or results of operations would likely suffer.  In such case, the trading price of our
common stock could decline, and you could lose all or part of your investment.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Because we have a short operating history, there
is a limited amount of information about us upon
which you can evaluate our business and potential
for future success.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>We have only a limited operating history upon which you can evaluate our business and
prospects.  You must consider the risks and uncertainties frequently encountered by
early-stage companies in new and rapidly evolving markets, such as the market for
wireless Internet access services.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>You will suffer substantial dilution in the net
tangible book value of the common stock you
purchase.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>You will suffer substantial and immediate dilution, due to the lower book value per
share of our common stock compared to the purchase price per share of our common
stock.  We cannot predict your actual dilution.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>The market price of our common stock will
continue to be extremely volatile, and it may drop
unexpectedly.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>The market price of our common stock has fluctuated significantly in the past and we
expect this volatility to continue in the future.  The stock prices for many high
technology companies, especially those that base their businesses on the Internet,
recently have experienced wide fluctuations and extreme volatility.  This volatility has
often been unrelated to the operating performance of such companies, so our stock
price could decline even if our wireless Internet access business is successful.  Also,
following periods of volatility in the market price of a company&#8217;s securities, securities
class action claims frequently are brought against the subject company.  To the extent
that the market price of our shares falls dramatically in any period of time, shareholders
may bring claims, with or without merit, against us.  Such litigation would be expensive
to defend and would divert management attention and resources regardless of outcome.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Our common stock is a &#8220;penny stock&#8221;.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Our common stock is quoted on the NASDAQ&#8217;s OTC Bulletin Board and will be
considered a &#8220;penny stock&#8221;, as long as it trades below $5.00 per share.  Broker-dealer
practices in connection with transactions in penny stocks are regulated by penny stock
rules adopted by the SEC.  The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure statement prepared by the SEC that provides information
about penny stocks and the nature and level of risks in the penny stock market.  The
broker-dealer also must provide the customer with current bid and offer quotations for
the penny stock, the compensation of the broker-dealer and its salesperson in the
transaction, as well as the monthly account statements showing the market value of
each penny stock held in the customer&#8217;s account.  In addition, the penny stock rules
require that, prior to a transaction in a penny stock not otherwise exempt from such
rules, the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser&#8217;s written agreement
to the transaction.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>These disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny stock
rules.  In this regard, it can be expected that investors in our common stock may find it
more difficult to profit on their investments in our common stock.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>We may be unable to obtain sufficient capital to
sustain our business or pursue our growth
strategy.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Currently, we do not have sufficient financial resources to implement our business plan.
There is no assurance that we will be able to generate revenues that are sufficient to
sustain our operations, nor can we assure you that we will be able to obtain additional
sources of financing in order to satisfy our working capital needs.  Should needed
financing be unavailable or prohibitively expensive when we require it, it is possible that
we would be forced to cease operations.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Our future operating results may vary from period
to period, and, as a result, we may fail to meet the
expectations of our investors and analysts, which
could cause our stock price to fluctuate or decline
and inhibit our ability to obtain funds.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Our revenues and results of operations are expected to fluctuate as we make financial
commitments to facilitate expected growth.  The following factors will influence our
operating results:</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>access to funds for capital expenditures, including Wi-Fi equipment purchases;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>market acceptance of our Wi-Fi services;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>the rates of new Wi-Fi services subscriber acquisition and retention;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>changes in our pricing policies or those of our competitors; and</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="right" valign="top"><p>-</p>
</td>
<td width="85%" valign="top"><p>potential competition from large, well-funded national telecommunications
companies.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Our future personnel costs, marketing programs and overhead cannot be adjusted
quickly and are, therefore, relatively fixed in the short term.  Our operating expense
levels will be based, in part, on our expectations of future revenue.  If actual revenues
are below our expectations, our results of operations will suffer and we could be forced
to cease operations.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Period-to-period comparisons of our results of operations will likely not provide reliable
indications of our future performance.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Price fluctuations of our common stock could negatively impact our ability to obtain
needed capital.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Our future success will depend on our ability to
keep pace with the Internet industry&#8217;s  rapid
technological changes, evolving industry
standards and changing customer needs.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>The Internet access market is constantly evolving, due primarily to technological
innovations, as well as evolving industry standards, changes in subscriber needs and
frequent new service and product introductions.  New services and products based on
new technologies or new industry standards expose us to risks of equipment
obsolescence.  We must use leading technologies effectively, continue to develop our
technical expertise and enhance our existing services on a timely basis to remain
competitive in this industry.  We cannot assure you that we will be able to do so.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Our ability to compete successfully in our markets also depends on the continued
compatibility of our services with products and systems utilized and sold by various
third parties.  Our failure to do so could cause us to lose a competitive position in our
markets, thereby causing us to operate less profitably.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Our Wi-Fi services are new and consumer
acceptance may not be achieved.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Our Wi-Fi services are new and do not enjoy wide-spread name recognition among
consumers.  If we are unable to achieve consumer acceptance of our products, it is
unlikely that we would be able to earn a profit.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>We could fail to overcome the severe competition
for Internet access customers, which would impair
our ability to earn a profit and cause our overall
financial condition to deteriorate.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>The market for Internet access services is extremely competitive and highly fragmented.
As there are no significant barriers to entry, we expect that competition will intensify
over time.  Our competitors include many large, nationally-known companies, such as
America Online and Earthlink.  These and other companies possess greater resources,
particularly access to capital sources, market presence and brand name recognition than
do we.  In addition, we will face competition from other wireless Internet access
providers and larger, national cellular telephone service providers.  If we are unable to
overcome this severe competition, we do not expect that we would earn a profit and
our overall financial condition would decline.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>We depend on our key personnel; the loss of any
key personnel could disrupt our operations,
adversely affect our business and result in reduced
revenues.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Our future success will depend on the continued services and on the performance of our
senior management and other key employees.  We have not entered into employment
agreements with any of our officers, although we expect to do so in the near future.
The loss of their services for any reason could seriously impair our ability to execute
our business plan, which could reduce our revenues and have a materially adverse effect
on our business and results of operations.  We have not purchased any key-man life
insurance.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Our directors and executive officers own enough
of our common stock effectively to control
directors&#8217; elections and thereby control our
management policies.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Our directors and executive officers own approximately 61.56% of our currently
outstanding common stock.  These shareholders may be able effectively to control the
outcome of corporate actions requiring shareholder approval by majority action.  Their
stock ownership may have the effect of delaying, deferring or preventing a change in
control of Air-Q Wi-Fi Corporation.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Our business plan is not based on independent
market studies, so we cannot assure you that our
strategy will be successful.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>We have not commissioned any independent market studies concerning the extent to
which customers will utilize our Wi-Fi services and products.  Rather, our plans for
implementing our business strategy and achieving profitability are based on the
experience, judgment and assumptions of our key management personnel, and upon
other available information concerning the communications industry.  If our
management&#8217;s assumptions prove to be incorrect, we will not be successful in
establishing our Wi-Fi services business.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>We may not be able to protect our intellectual
property rights, which could dramatically reduce
our ability to earn a profit.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>We currently rely on common law principles for the protection of our copyrights and
trademarks and trade secret laws to protect our proprietary intellectual property rights.
We do not intend to file patent applications relating to our Wi-Fi system.  We have not
filed trademark applications relating to the &#8220;Air-Q Wi-Fi&#8221; brand name.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Without patent or trademark protection, the existing trade secret and copyright laws
afford us only limited protection.  Third parties may attempt to disclose, obtain or use
our technologies.  Others may independently develop and obtain patents or copyrights
for technologies that are similar or superior to our technologies.  If that happens, we
may need to license these technologies and we may not be able to obtain licenses on
reasonable terms, if at all, thereby causing great harm to our business.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="4%" valign="top"><p>&#160;</p>
</td>
<td width="62%" style="border-bottom: 0.01in solid" valign="top"><p>Current Management.</p>
</td>
<td width="34%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="54%" style="border-bottom: 0.01in solid" valign="top"><p>Directors and Officers.</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>The following table sets forth the officers and directors of Air-Q Wi-Fi Corporation.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="22%" style="border-bottom: 0.01in solid" align="center" valign="top"><p>Name</p>
</td>
<td width="1%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="8%" style="border-bottom: 0.01in solid" align="center" valign="top"><p>Age</p>
</td>
<td width="1%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="53%" style="border-bottom: 0.01in solid" align="center" valign="top"><p>Position(s)</p>
</td>
</tr>
<tr>
<td width="15%" valign="top"><p>&#160;</p>
</td>
<td width="22%" valign="top"><p>David Loflin</p>
</td>
<td width="1%" valign="top"><p>&#160;</p>
</td>
<td width="8%" align="center" valign="top"><p>45</p>
</td>
<td width="1%" valign="top"><p>&#160;</p>
</td>
<td width="53%" valign="top"><p>President, Principal Accounting Officer and
Director</p>
</td>
</tr>
<tr>
<td width="15%" valign="top"><p>&#160;</p>
</td>
<td width="22%" style="border-bottom: 0.01in solid" valign="top"><p>Waddell D. Loflin</p>
</td>
<td width="1%" valign="top"><p>&#160;</p>
</td>
<td width="8%" align="center" valign="top"><p>52</p>
</td>
<td width="1%" valign="top"><p>&#160;</p>
</td>
<td width="53%" valign="top"><p>Vice President, Secretary and Director</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="15%" valign="top"><p>&#160;</p>
</td>
<td width="85%" valign="top"><p>David M. Loflin and Waddell D. Loflin are brothers.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="92%" valign="top"><p>Our current officers and directors serve until the next annual meeting of our board of
directors or until their respective successors are elected and qualified.  All officers serve
at the discretion of our board of directors.  Family relationships between our officers
and directors are noted above.  Certain information regarding the backgrounds of each
of the officers and directors is set forth below.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="50%" style="border-bottom: 0.01in solid" valign="top"><p>David Loflin</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="88%" valign="top"><p>Mr. Loflin has, for more than the last five years, served as an executive officer and
director of USURF America, Inc. (AMEX Symbol: UAX).  He is currently
Chairman of the Board of USURF America.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="50%" style="border-bottom: 0.01in solid" valign="top"><p>Waddell D. Loflin</p>
</td>
<td width="38%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="88%" valign="top"><p>For more than the five years prior to April 2003, Mr. Loflin served as vice
president, secretary and director of USURF America, Inc.  Since April 2003, Mr.
Loflin has served as a consultant.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="85%" style="background-color: #e5e5e5" valign="top"><p>Item 6. Resignations of Registrant&#8217;s Directors.</p>
</td>
<td width="15%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>On June 20, 2003, three of our then-directors resigned as directors of Air-Q Wi-Fi
Corporation. The three directors who resigned were C. Keith Wilkerson II, Keith D. Newton
and Gary W. Bell  In their respective resignations, neither of Messrs. Wilkerson, Newton and
Bell made any reference to any disagreement with us on any matter relating to our operations,
policies or practices and we are not aware of any such disagreements. Copies of the letters of
resignation of each of Messrs. Wilkerson, Newton and Bell which were sent to us are attached
hereto as Exhibits 17.1, 17.2 and 17.3, respectively.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="85%" style="background-color: #e5e5e5" valign="top"><p>Item 7. Financial Statements and Exhibits.</p>
</td>
<td width="15%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" align="right" valign="top"><p>(a)</p>
</td>
<td width="92%" valign="top"><p>Exhibits:</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="15%" style="border-bottom: 0.01in solid" align="center" valign="top"><p>Exhibit No.</p>
</td>
<td width="8%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="65%" style="border-bottom: 0.01in solid" align="center" valign="top"><p>Description</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>3.1</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Certificate of Amendment of Certificate of Incorporation of
Registrant, as filed on June 24, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.1</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Stock Purchase Agreement between Registrant and the
Shareholders of Air-Q Corporation, dated as of June 20,
2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.2</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Consulting Agreement between Registrant and A.L.P.
Investments, Inc., dated as of June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.3</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Securities Purchase Agreement between Registrant and
Douglasdale Capital Ltd., dated as of June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.4</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.20 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.5</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.30 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.6</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.40 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.7</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.50 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.8</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Securities Purchase Agreement between Registrant and
Douglasbank Capital Ltd., dated as of June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.9</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.20 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.10</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.30 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.11</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.40 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.12</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.50 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>17.1</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Letter of Resignation of C. Keith Wilkerson, II, dated June
20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>17.2</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Letter of Resignation of Keith D. Newton, dated June 20,
2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>17.3</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Letter of Resignation of Gary W. Bell, dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" style="background-color: #e5e5e5; border-top: 0.0266667in solid; border-bottom: 0.0266667in solid" align="center" valign="top"><p>SIGNATURES</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>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, hereunder duly authorized.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="35%" valign="top"><p>Dated: June 25, 2003.</p>
</td>
<td width="57%" valign="top"><p>AIR-Q WI-FI CORPORATION</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="42%" valign="top"><p>&#160;</p>
</td>
<td width="6%" valign="top"><p>&#160;</p>
</td>
<td width="40%" valign="top"><p>&#160;</p>
</td>
<td width="12%" valign="top"><p>&#160;</p>
</td>
</tr>
<tr>
<td width="42%" valign="top"><p>&#160;</p>
</td>
<td width="6%" valign="top"><p>By:</p>
</td>
<td width="40%" style="border-bottom: 0.01in solid" valign="top"><p>/s/ DAVID LOFLIN</p>
</td>
<td width="12%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="50%" valign="top"><p>&#160;</p>
</td>
<td width="21%" valign="top"><p>David Loflin
President</p>
</td>
<td width="29%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" valign="top"><p>&#160;</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="100%" style="background-color: #e5e5e5" align="center" valign="top"><p>EXHIBIT INDEX</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="15%" style="border-bottom: 0.01in solid" align="center" valign="top"><p>Exhibit No.</p>
</td>
<td width="8%" align="center" valign="top"><p>&#160;</p>
</td>
<td width="65%" style="border-bottom: 0.01in solid" align="center" valign="top"><p>Description</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>3.1</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Certificate of Amendment of Certificate of Incorporation of
Registrant, as filed on June 24, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.1</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Stock Purchase Agreement between Registrant and the
Shareholders of Air-Q Corporation, dated as of June 20,
2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.2</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Consulting Agreement between Registrant and A.L.P.
Investments, Inc., dated as of June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.3</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Securities Purchase Agreement between Registrant and
Douglasdale Capital Ltd., dated as of June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.4</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.20 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.5</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.30 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.6</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.40 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.7</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.50 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.8</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Securities Purchase Agreement between Registrant and
Douglasbank Capital Ltd., dated as of June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.9</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.20 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.10</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.30 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.11</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.40 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>10.12</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>$.50 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>17.1</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Letter of Resignation of C. Keith Wilkerson, II, dated June
20, 2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>17.2</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Letter of Resignation of Keith D. Newton, dated June 20,
2003.</p>
</td>
</tr>
</table>
<table width="100%" cellpadding="6" cellspacing="0">
<tr>
<td width="12%" valign="top"><p>&#160;</p>
</td>
<td width="15%" align="center" valign="top"><p>17.3</p>
</td>
<td width="8%" valign="top"><p>&#160;</p>
</td>
<td width="65%" valign="top"><p>Letter of Resignation of Gary W. Bell, dated June 20, 2003.</p>
</td>
</tr>
</table>
</body>

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{"company-data": {"conformed-name": "COVENANT FINANCIAL CORP", "cik": "0000828940", "assigned-sic": "6799", "irs-number": "752224650", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "033-19961", "film-number": "03757010"}, "business-address": {"street1": "4714 GREENVILLE AVENUE", "city": "DALLAS", "state": "TX", "zip": "75206", "phone": "9728416929"}, "mail-address": {"street1": "4714 GREENVILLE AVENUE", "city": "DALLAS", "state": "TX", "zip": "75206"}, "former-company": [{"former-conformed-name": "HOMEGATE CORP", "date-changed": "20001115"}, {"former-conformed-name": "SPARTAN OIL CORP", "date-changed": "20000309"}, {"former-conformed-name": "OWEN OLIVER CORP", "date-changed": "19881107"}]}
Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities and Exchange
Commission
Date of Report (Date of earliest event reported): June 20, 2003.
Air-Q Wi-Fi Corporation
(Exact name of registrant as specified in its
charter)
Delaware
01-0623010
33-19961
(State or other
jurisdiction of
incorporation)
(Commission File No.)
(I.R.S. Employer
Identification No.)
7635 Jefferson Highway, Suite 309, Baton Rouge, Louisiana 70809
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (225) 927-1697
Covenant Financial Corporation, 1215 East I-30, Greenville, Texas 75402
(Former name or former address, if changed since last report)
Form 8-K
Air-Q Wi-Fi Corporation
Item 1. Changes in Control of Registrant.
On June 20, 2003, there occurred a change in control of Air-Q Wi-Fi Corporation, formerly
Covenant Financial Corporation.  Pursuant to a stock purchase agreement, FMF Investments,
Ltd., a Texas limited partnership, purchased 611,000 shares, or 54.59%, of our outstanding
common stock from Eric Anderson.  FMF Investments paid Mr. Anderson a total of $70,000 in
cash, which funds were obtained by FMF Investments through its other business activities and
not as a loan.
Following FMF Investments' acquiring control, our then-directors resigned and FMF
Investments, acting by written consent in lieu of a meeting of a majority of shareholders,
elected David Loflin and Waddell D. Loflin as our directors.
The following table and the notes thereto set forth certain information regarding the beneficial
ownership of our common stock, as of the date of this Current Report, by (1) each of our
current directors, (2) each our current executive officers, (3) all of our executive officers and
directors as a group and (4) each other person known to us to own beneficially more than five
percent of our common stock outstanding.
Unless otherwise indicated, all shareholders set forth below have the same principal business
address as do we.
Name and Address of
Beneficial Owner
Number of Shares
Beneficially Owned
Percentage of
Shares Beneficially
Owned(1)
David Loflin
9,000,000
36.56%
FMF Investments, Ltd.(2)
2,611,000
10.61%
All executive officers and
directors as a group (2
persons)
9,000,000
36.26%
Douglasdale Capital Ltd.(3)(7)
6,250,000(4)
25.39%
Douglasbank Capital Ltd.
(5)(7)
6,250,000(6)
25.39%
(1)
Based on 24,619,204 shares outstanding, including a total of 10,000,000 shares
underlying currently outstanding and exercisable warrants.
(2)
FMF Investments' address is 819 Office Park Circle, Lewisville, Texas 75057
(3)
Douglasdale Capital's address is 418 Douglas Park View S.E., Calgary, Alberta,
Canada T2Z 2R1.
(4)
1,250,000 of these shares have been issued; 5,000,000 of these shares have not been
issued, but underlie currently exercisable warrants.
(5)
Douglasbank Capital's address is 418 Douglas Park View S.E., Calgary, Alberta,
Canada T2Z 2R1.
(6)
1,250,000 of these shares have been issued; 5,000,000 of these shares have not been
issued, but underlie currently exercisable warrants.
(7)
Douglasdale Capital and Douglasbank Capital have common management who
possess the power of disposition over the securities owned by these entities; the
beneficial ownership of each of these entities is different.
Item 2. Acquisition or Disposition of Assets.
On June 20, 2003, pursuant to a stock purchase agreement, we acquired all of the outstanding
capital stock of Air-Q Corp., a Nevada corporation ("Air-Q NV"), by issuing a total of
11,000,000 shares of our common stock to the shareholders of Air-Q NV.  In connection with
our acquiring Air-Q NV, our president, David Loflin, was issued 9,000,000 shares of our
common stock and FMF Investments, Ltd., an affiliate, was issued 2,000,000 shares of our
common stock.  In determining the number of shares of our common stock to be issued to the
shareholders of Air-Q NV, our board of directors did not employ any standard valuation
formula or any other standard measure of value.
Item 5. Other Events and Regulation FD Disclosure.
Change in Corporate Name.
Effective June 24, 2003, a change in our corporate name occurred. On that date, we
became known as "Air-Q Wi-Fi Corporation",
The corporate name change was approved by a majority of our shareholders, acting by
written consent without a meeting.
Change in Corporate Headquarters.
Effective June 20, 2003, we relocated our corporate headquarters to: 7635 Jefferson
Highway, Suite 309, Baton Rouge, Louisiana 70809.  Our new telephone number is
(225) 927-1697.
Securities Purchase Agreements.
Douglasdale Capital Ltd.
On June 20, 2002, we entered into a securities purchase agreement with Douglasdale
Capital Ltd., whereby we issued  securities for cash in the amount of $125,000.   We
sold Douglasdale Capital (1) 1,250,000 shares of our common stock, (2) 1,250,000
common stock purchase warrants to purchase a like number of shares at an exercise
price of $.20 per share, (3) 1,250,000 common stock purchase warrants to purchase a
like number of shares at an exercise price of $.30 per share, (4) 1,250,000 common
stock purchase warrants to purchase a like number of shares at an exercise price of $.40
per share and (5) 1,250,000 common stock purchase warrants to purchase a like
number of shares at an exercise price of $.50 per share.
Douglasbank Capital Ltd.
On June 20, 2002, we entered into a securities purchase agreement with Douglasbank
Capital Ltd., whereby we issued  securities for cash in the amount of $125,000.   We
sold Douglasbank Capital (1) 1,250,000 shares of our common stock, (2) 1,250,000
common stock purchase warrants to purchase a like number of shares at an exercise
price of $.20 per share, (3) 1,250,000 common stock purchase warrants to purchase a
like number of shares at an exercise price of $.30 per share, (4) 1,250,000 common
stock purchase warrants to purchase a like number of shares at an exercise price of $.40
per share and (5) 1,250,000 common stock purchase warrants to purchase a like
number of shares at an exercise price of $.50 per share.
Change in Business Plan.
General.
We are a start-up business.  Our new management has committed all available current
and future capital and other resources to the commercial exploitation of our "Wi-Fi"
(wireless fidelity) Internet access products (these proprietary products are referred to as
our Wi-Fi products).  Our first market will be Baton Rouge, Louisiana.  Our business
plan is based on the marketing of our wireless Internet access services (these services
are referred to as our Wi-Fi services) to businesses and residential customers using our
Wi-Fi products.
What is Wi-Fi?
The term "Wi-Fi" is short for "wireless fidelity" and refers to an industry standard for
wireless equipment that meets published 802.11(x) standards.  Wi-Fi equipment
operates in unlicensed spectra, such as 2.4 and 5.8 GHz.
What is Wireless Internet?
"Wireless Internet" is a new type of communications spectrum recently designated by
the Federal Communications Commission.  Wireless Internet access requires a
transmission facility maintained by an ISP employing a wireless system and the user's
modem (a transmitter/receiver modem) equipped with an antenna.  Wireless Internet
capability allows users to access the Internet from a stationary computer or, in some
situations, from a mobile, lap-top computer.
How Our Wi-Fi System Works.
Our wireless Internet access system (this system is referred to as our Wi-Fi system)
operates on a platform comprised of Wi-Fi standard equipment that has been configured
in a proprietary manner.  Our Wi-Fi system is comprised of one or more "hot spots"
where a server cell (a modem) is located.  The server cell that comprises a hot spot is
less than one cubic foot in size and is mounted on a tall structure, a tower, a tall
building or a billboard, for example.  The space needed for mounting a server cell can
be leased for an average monthly payment of about $500.  Each server cell relays
transmitted data directly into the Internet via a direct connection into a T1, or larger,
telephone line or the local cable television provider's system.  The monthly charge for
each T1 line ranges from $600 to $2,000, depending on the market, and the monthly
charge for each cable television system connection ranges from $300 to $1,000,
depending on the market.  We have not yet established brand names for our Wi-Fi
system and products.
Installed customer modems, which are slightly larger in size than a deck of playing
cards, transmit data to, and receive data from, a server modem.  Each customer modem
is installed in the customer's computer and connected by a thin cable to a small antenna
that is mounted on the outside of the customer's place of business or home, as the case
may be.  The installation process for customer modems is quite similar to that of cable
television: the installation crew installs the customer modem in the computer, mounts
the antenna outside, connects the modem and antenna with the cable and tests the
connection.  Depending on the market, each customer installation is expected to cost
approximately $100.
The number of hot spots needed for a particular system depends on a few factors:
-
the geographic size of the city to be served - the signal of each hot spot covers
an area approximately one mile in diameter;
-
the population density of the city to be served - since each hot spot is capable of
handling approximately 250 customers, the greater the population density, the
greater the number of hot spots required;
-
the terrain of the city to be served - the hillier the terrain, the greater the number
of hot spots required; and
-
the density of foliage of the city to be served - more densely foliated areas
require a greater number of hot spots.
Within a Wi-Fi system, each hot spot is configured to share transmitted data with the
other hot spots, so as to provide an uninterrupted connection to the Internet.  In a Wi-Fi system with multiple hot spots, hot spots are geographically located in a honeycomb
fashion, for technical reasons.
Data transmission speeds remain constant within a Wi-Fi system's transmission radius,
regardless of the distance from the transmission point.  On the fringes of a Wi-Fi
system's transmission radius, a customer's connection may fade in and out, similar to
the reception of distant AM radio stations.  To avoid this circumstance, we will attempt
to avoid installing a customer modem within the fringe areas.
Wi-Fi Equipment and Facilities.
All of the equipment used in our Wi-Fi systems will be off-the-shelf.  Inasmuch as there
are several manufacturers of Wi-Fi equipment, we expect no problems in obtaining
needed equipment at competitive prices.
We will not construct towers on which to establish hot spots.  Instead, we will lease
tower spaces, rooftop spaces or spaces on other tall structures.  We are currently
negotiating with owners of these types of spaces in Baton Rouge, Louisiana.  Based on
our management's experience, securing adequate locations to establish hot spots is not
expected to impede the construction of a Wi-Fi system in any market.
In each market, we will obtain the necessary telephone line or cable television system
connections to the Internet from one of the companies capable of providing an adequate
Internet connection.  Based on our management's experience, we do not believe that we
will encounter any difficulty in obtaining needed connections to the Internet at
acceptable prices.
Markets.
We have also completed engineering efforts in Baton Rouge, Louisiana, relating to the
construction of our first Wi-Fi system.  We expect to begin construction efforts during
July 2003 and to have the first beta-customers online soon thereafter.  The speed with
which we will be able to construct this Wi-Fi system is dependent upon the amount of
capital we are able to obtain.  We cannot predict our future capital position.
Marketing Strategies.
We intend to employ telephone marketing as the initial means for acquiring customers,
primarily business customers.  As a particular market begins to mature, we will employ
mass media, including radio advertising.  In conjunction with our mass media
advertising, we will employ a sales force that will focus primarily on potential business
customers.  This focus on business customers is based on our management's informal
study of Internet usage by businesses versus home users that revealed businesses' higher
demand for high-speed Internet access.  Our management's decision may prove to have
been incorrect, which would significantly impair our ability to earn a profit.
Competitive Features of Our Wi-Fi Services.
While we believe our Wi-Fi service possesses some competitive advantages over other
Internet access modes, it currently has three significant competitive disadvantages:
-
No wide-spread brand name recognition;
-
Professional installation usually required; and
-
Internet access only available locally, compared to dial-up Internet access that is
available from virtually any telephone in any geographic location.
It is possible that we could overcome the first two listed disadvantages, after a lengthy
period of marketing and product research and development.  However, we currently
lack capital to overcome either disadvantage.  Further, it is likely that we will never
overcome the third disadvantage, due to the inherent broadcast limitations of wireless
technologies.
We believe our Wi-Fi services offer the following competitive advantages: speed, lower
cost, no telephone company involvement and security through encryption.
Competition.
We believe that the primary competitive factors determining success as an Internet
access provider are: a reputation for reliability and high-quality service; effective
customer support; access speed; pricing; effective marketing techniques for customer
acquisition; ease of use; and scope of geographic coverage.  We believe that we will be
able to address adequately all of these factors, except that we will not be able to offer
scope of geographic coverage for the foreseeable future.  It is also possible that we will
not address any of these competitive factors successfully.  Should we fail to do so, our
business would likely never earn a profit.  We currently lack capital necessary to
compete effectively.
We face severe competition from other wireless Internet access providers, as well as
large, national providers of cellular telephone service.
The market for the provision of dial-up Internet access services, in which our Wi-Fi
services will compete, is extremely competitive and highly fragmented.  Current and
prospective competitors include many large, nationally-known companies that possess
substantially greater resources, financial and otherwise, market presence and brand
name recognition than do we.  We expect to compete, for the foreseeable future, with
the following: national Internet service providers, numerous regional and local Internet
service providers, most of which have significant market share in their markets;
established on-line information service providers, such as America Online, which
provide basic Internet access, as well as proprietary information not available through
public Internet access; providers of web hosting, co-location and other Internet-based
business services; computer hardware and software and other technology companies
that provide Internet connectivity with their products; telecommunications companies,
including global long distance carriers, regional Bell operating companies and local
telephone companies; operators that provide Internet access through television cable
lines; electric utility companies; communications companies; companies that provide
television or telecommunications through participation in satellite systems; and, to a
lesser extent, non-profit or educational Internet access providers.
With respect to potential competitors, we expect that manufacturers of computer
hardware and software products, as well as media and telecommunications companies
will continue to enter the Internet services market, which will serve to intensify
competition.  In addition, as more consumers and businesses increase their Internet
usage, we expect existing competitors to increase further their emphasis on Internet
access and electronic commerce initiatives, resulting in even greater competition.  The
ability of competitors or others to enter into business combinations, strategic alliances
or joint ventures, or to bundle their services and products with Internet access, could
place us at a significant competitive disadvantage.  We currently lack capital necessary
to compete effectively and we may never obtain enough capital to permit us to compete
effectively in our markets.
Moreover, we expect to face competition in the future from companies that provide
connections to consumers' homes, such as telecommunications providers, cable
companies and electrical utility companies. For example, recent advances in technology
have enabled cable television operators to offer Internet access through their cable
facilities at significantly higher speeds than existing analog modem speeds. These types
of companies could include Internet access in their basic bundle of services or offer such
access for a nominal additional charge.  Any such developments could reduce our
market share, thereby impairing our ability to earn a profit.
Risk Factors Associated with an Investment in Our
Common Stock.
You should carefully consider the risks described below before you decide to buy our
common stock.  If any of the following risks actually occur, our business, financial
condition or results of operations would likely suffer.  In such case, the trading price of our
common stock could decline, and you could lose all or part of your investment.
Because we have a short operating history, there
is a limited amount of information about us upon
which you can evaluate our business and potential
for future success.
We have only a limited operating history upon which you can evaluate our business and
prospects.  You must consider the risks and uncertainties frequently encountered by
early-stage companies in new and rapidly evolving markets, such as the market for
wireless Internet access services.
You will suffer substantial dilution in the net
tangible book value of the common stock you
purchase.
You will suffer substantial and immediate dilution, due to the lower book value per
share of our common stock compared to the purchase price per share of our common
stock.  We cannot predict your actual dilution.
The market price of our common stock will
continue to be extremely volatile, and it may drop
unexpectedly.
The market price of our common stock has fluctuated significantly in the past and we
expect this volatility to continue in the future.  The stock prices for many high
technology companies, especially those that base their businesses on the Internet,
recently have experienced wide fluctuations and extreme volatility.  This volatility has
often been unrelated to the operating performance of such companies, so our stock
price could decline even if our wireless Internet access business is successful.  Also,
following periods of volatility in the market price of a company's securities, securities
class action claims frequently are brought against the subject company.  To the extent
that the market price of our shares falls dramatically in any period of time, shareholders
may bring claims, with or without merit, against us.  Such litigation would be expensive
to defend and would divert management attention and resources regardless of outcome.
Our common stock is a "penny stock".
Our common stock is quoted on the NASDAQ's OTC Bulletin Board and will be
considered a "penny stock", as long as it trades below $5.00 per share.  Broker-dealer
practices in connection with transactions in penny stocks are regulated by penny stock
rules adopted by the SEC.  The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure statement prepared by the SEC that provides information
about penny stocks and the nature and level of risks in the penny stock market.  The
broker-dealer also must provide the customer with current bid and offer quotations for
the penny stock, the compensation of the broker-dealer and its salesperson in the
transaction, as well as the monthly account statements showing the market value of
each penny stock held in the customer's account.  In addition, the penny stock rules
require that, prior to a transaction in a penny stock not otherwise exempt from such
rules, the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written agreement
to the transaction.
These disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny stock
rules.  In this regard, it can be expected that investors in our common stock may find it
more difficult to profit on their investments in our common stock.
We may be unable to obtain sufficient capital to
sustain our business or pursue our growth
strategy.
Currently, we do not have sufficient financial resources to implement our business plan.
There is no assurance that we will be able to generate revenues that are sufficient to
sustain our operations, nor can we assure you that we will be able to obtain additional
sources of financing in order to satisfy our working capital needs.  Should needed
financing be unavailable or prohibitively expensive when we require it, it is possible that
we would be forced to cease operations.
Our future operating results may vary from period
to period, and, as a result, we may fail to meet the
expectations of our investors and analysts, which
could cause our stock price to fluctuate or decline
and inhibit our ability to obtain funds.
Our revenues and results of operations are expected to fluctuate as we make financial
commitments to facilitate expected growth.  The following factors will influence our
operating results:
-
access to funds for capital expenditures, including Wi-Fi equipment purchases;
-
market acceptance of our Wi-Fi services;
-
the rates of new Wi-Fi services subscriber acquisition and retention;
-
changes in our pricing policies or those of our competitors; and
-
potential competition from large, well-funded national telecommunications
companies.
Our future personnel costs, marketing programs and overhead cannot be adjusted
quickly and are, therefore, relatively fixed in the short term.  Our operating expense
levels will be based, in part, on our expectations of future revenue.  If actual revenues
are below our expectations, our results of operations will suffer and we could be forced
to cease operations.
Period-to-period comparisons of our results of operations will likely not provide reliable
indications of our future performance.
Price fluctuations of our common stock could negatively impact our ability to obtain
needed capital.
Our future success will depend on our ability to
keep pace with the Internet industry's  rapid
technological changes, evolving industry
standards and changing customer needs.
The Internet access market is constantly evolving, due primarily to technological
innovations, as well as evolving industry standards, changes in subscriber needs and
frequent new service and product introductions.  New services and products based on
new technologies or new industry standards expose us to risks of equipment
obsolescence.  We must use leading technologies effectively, continue to develop our
technical expertise and enhance our existing services on a timely basis to remain
competitive in this industry.  We cannot assure you that we will be able to do so.
Our ability to compete successfully in our markets also depends on the continued
compatibility of our services with products and systems utilized and sold by various
third parties.  Our failure to do so could cause us to lose a competitive position in our
markets, thereby causing us to operate less profitably.
Our Wi-Fi services are new and consumer
acceptance may not be achieved.
Our Wi-Fi services are new and do not enjoy wide-spread name recognition among
consumers.  If we are unable to achieve consumer acceptance of our products, it is
unlikely that we would be able to earn a profit.
We could fail to overcome the severe competition
for Internet access customers, which would impair
our ability to earn a profit and cause our overall
financial condition to deteriorate.
The market for Internet access services is extremely competitive and highly fragmented.
As there are no significant barriers to entry, we expect that competition will intensify
over time.  Our competitors include many large, nationally-known companies, such as
America Online and Earthlink.  These and other companies possess greater resources,
particularly access to capital sources, market presence and brand name recognition than
do we.  In addition, we will face competition from other wireless Internet access
providers and larger, national cellular telephone service providers.  If we are unable to
overcome this severe competition, we do not expect that we would earn a profit and
our overall financial condition would decline.
We depend on our key personnel; the loss of any
key personnel could disrupt our operations,
adversely affect our business and result in reduced
revenues.
Our future success will depend on the continued services and on the performance of our
senior management and other key employees.  We have not entered into employment
agreements with any of our officers, although we expect to do so in the near future.
The loss of their services for any reason could seriously impair our ability to execute
our business plan, which could reduce our revenues and have a materially adverse effect
on our business and results of operations.  We have not purchased any key-man life
insurance.
Our directors and executive officers own enough
of our common stock effectively to control
directors' elections and thereby control our
management policies.
Our directors and executive officers own approximately 61.56% of our currently
outstanding common stock.  These shareholders may be able effectively to control the
outcome of corporate actions requiring shareholder approval by majority action.  Their
stock ownership may have the effect of delaying, deferring or preventing a change in
control of Air-Q Wi-Fi Corporation.
Our business plan is not based on independent
market studies, so we cannot assure you that our
strategy will be successful.
We have not commissioned any independent market studies concerning the extent to
which customers will utilize our Wi-Fi services and products.  Rather, our plans for
implementing our business strategy and achieving profitability are based on the
experience, judgment and assumptions of our key management personnel, and upon
other available information concerning the communications industry.  If our
management's assumptions prove to be incorrect, we will not be successful in
establishing our Wi-Fi services business.
We may not be able to protect our intellectual
property rights, which could dramatically reduce
our ability to earn a profit.
We currently rely on common law principles for the protection of our copyrights and
trademarks and trade secret laws to protect our proprietary intellectual property rights.
We do not intend to file patent applications relating to our Wi-Fi system.  We have not
filed trademark applications relating to the "Air-Q Wi-Fi" brand name.
Without patent or trademark protection, the existing trade secret and copyright laws
afford us only limited protection.  Third parties may attempt to disclose, obtain or use
our technologies.  Others may independently develop and obtain patents or copyrights
for technologies that are similar or superior to our technologies.  If that happens, we
may need to license these technologies and we may not be able to obtain licenses on
reasonable terms, if at all, thereby causing great harm to our business.
Current Management.
Directors and Officers.
The following table sets forth the officers and directors of Air-Q Wi-Fi Corporation.
Name
Age
Position(s)
David Loflin
45
President, Principal Accounting Officer and
Director
Waddell D. Loflin
52
Vice President, Secretary and Director
David M. Loflin and Waddell D. Loflin are brothers.
Our current officers and directors serve until the next annual meeting of our board of
directors or until their respective successors are elected and qualified.  All officers serve
at the discretion of our board of directors.  Family relationships between our officers
and directors are noted above.  Certain information regarding the backgrounds of each
of the officers and directors is set forth below.
David Loflin
Mr. Loflin has, for more than the last five years, served as an executive officer and
director of USURF America, Inc. (AMEX Symbol: UAX).  He is currently
Chairman of the Board of USURF America.
Waddell D. Loflin
For more than the five years prior to April 2003, Mr. Loflin served as vice
president, secretary and director of USURF America, Inc.  Since April 2003, Mr.
Loflin has served as a consultant.
Item 6. Resignations of Registrant's Directors.
On June 20, 2003, three of our then-directors resigned as directors of Air-Q Wi-Fi
Corporation. The three directors who resigned were C. Keith Wilkerson II, Keith D. Newton
and Gary W. Bell  In their respective resignations, neither of Messrs. Wilkerson, Newton and
Bell made any reference to any disagreement with us on any matter relating to our operations,
policies or practices and we are not aware of any such disagreements. Copies of the letters of
resignation of each of Messrs. Wilkerson, Newton and Bell which were sent to us are attached
hereto as Exhibits 17.1, 17.2 and 17.3, respectively.
Item 7. Financial Statements and Exhibits.
(a)
Exhibits:
Exhibit No.
Description
3.1
Certificate of Amendment of Certificate of Incorporation of
Registrant, as filed on June 24, 2003.
10.1
Stock Purchase Agreement between Registrant and the
Shareholders of Air-Q Corporation, dated as of June 20,
2003.
10.2
Consulting Agreement between Registrant and A.L.P.
Investments, Inc., dated as of June 20, 2003.
10.3
Securities Purchase Agreement between Registrant and
Douglasdale Capital Ltd., dated as of June 20, 2003.
10.4
$.20 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.
10.5
$.30 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.
10.6
$.40 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.
10.7
$.50 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.
10.8
Securities Purchase Agreement between Registrant and
Douglasbank Capital Ltd., dated as of June 20, 2003.
10.9
$.20 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.
10.10
$.30 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.
10.11
$.40 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.
10.12
$.50 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.
17.1
Letter of Resignation of C. Keith Wilkerson, II, dated June
20, 2003.
17.2
Letter of Resignation of Keith D. Newton, dated June 20,
2003.
17.3
Letter of Resignation of Gary W. Bell, dated June 20, 2003.
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, hereunder duly authorized.
Dated: June 25, 2003.
AIR-Q WI-FI CORPORATION
By:
/s/ DAVID LOFLIN
David Loflin
President
EXHIBIT INDEX
Exhibit No.
Description
3.1
Certificate of Amendment of Certificate of Incorporation of
Registrant, as filed on June 24, 2003.
10.1
Stock Purchase Agreement between Registrant and the
Shareholders of Air-Q Corporation, dated as of June 20,
2003.
10.2
Consulting Agreement between Registrant and A.L.P.
Investments, Inc., dated as of June 20, 2003.
10.3
Securities Purchase Agreement between Registrant and
Douglasdale Capital Ltd., dated as of June 20, 2003.
10.4
$.20 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.
10.5
$.30 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.
10.6
$.40 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.
10.7
$.50 Warrant Agreement between Registrant and
Douglasdale Capital Ltd., dated June 20, 2003.
10.8
Securities Purchase Agreement between Registrant and
Douglasbank Capital Ltd., dated as of June 20, 2003.
10.9
$.20 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.
10.10
$.30 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.
10.11
$.40 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.
10.12
$.50 Warrant Agreement between Registrant and
Douglasbank Capital Ltd., dated June 20, 2003.
17.1
Letter of Resignation of C. Keith Wilkerson, II, dated June
20, 2003.
17.2
Letter of Resignation of Keith D. Newton, dated June 20,
2003.
17.3
Letter of Resignation of Gary W. Bell, dated June 20, 2003.