<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
Commission File No. 000-23361
INTERVU INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0680870
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6815 Flanders Drive, San Diego CA 92121
(Address of principal executive offices)
Registrant's telephone number, including area code: (619) 623-8400
Securities Registered Pursuant to Section 12 (b) of the Act: None
Securities Registered Pursuant to Section 12 (g) of the Act:
Common Stock (par value $.001 per share)
(Title of Class)
Indicate by check mark whether Registrant (1) has filed all reports to
be filed by section 13 or 15(d) of the Securities Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]
The number of shares outstanding of the Registrant's Common Stock on
April 30, 1999 was 10,956,365
<PAGE> 2
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain "forward-looking"
statements within the meaning of the Private Securities Litigation Reform Act of
1995 which provides a "safe harbor" for these types of statements. To the extent
statements in this Quarterly Report involve, without limitation, the Company's
expectations for growth, estimates of future revenue, expenses, profit, cash
flow, balance sheet items or any other guidance on future periods, these
statements are forward-looking statements. These risks and uncertainties include
those identified in the Company's Annual Report on Form 10-K in Item 1 -
"Business-Factors That May Affect Future Performance" and other risks identified
from time to time in the Company's filings with the Securities and Exchange
Commission, press releases and other communications. Copies of the Company's
Form 10-K are available from the Company upon request. The Company assumes no
obligation to update forward-looking statements.
2
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INTERVU INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS PAGE
<S> <C>
Balance Sheets ..................................................... 4
Statements of Operations ........................................... 5
Statements of Cash Flows ........................................... 6
Notes to the Financial Statements .................................. 7
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS ...................... 8-12
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK .................................................. 12
PART II - OTHER INFORMATION
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS .......................... 13
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K ................................... 14
SIGNATURES ................................................................. 15
</TABLE>
3
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PART I
ITEM 1. FINANCIAL STATEMENTS
INTERVU INC.
BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
MARCH 31, DECEMBER 31,
1999 1998
-------- --------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents ...................................... $ 7,236 $ 9,346
Short-term investments ......................................... 14,928 17,700
Accounts receivable, net of $190,000 and $122,000
allowance, respectively ..................................... 1,521 729
Prepaid and other current assets ............................... 436 75
-------- --------
Total current assets ............................................. 24,121 27,850
Property and equipment, net ...................................... 4,307 2,469
Other assets ..................................................... 71 45
-------- --------
Total assets ............................................. $ 28,499 $ 30,364
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................... $ 1,267 $ 1,334
Accrued liabilities ............................................ 296 299
Payable to NBC Multimedia ...................................... 750 750
Accrued payroll and related .................................... 541 661
Current portion, lease commitments ............................. 358 7
-------- --------
Total current liabilities ................................ 3,212 3,051
Lease commitments ................................................ 794 --
Stockholders' equity:
Preferred stock,$0.001 par value: 5,000,000 shares authorized
Series G convertible preferred stock, Designated
-- 1,280,000 shares; Issued and outstanding -- 1,280,000
shares at March 31, 1999 and December 31, 1998, respectively 1 1
Common stock, $0.001 par value: Authorized-- 20,000,000 shares;
Issued and outstanding --10,946,622 shares and
10,894,487 shares at March 31, 1999 and December 31, ....... 11 11
1998, respectively
Additional paid-in capital ..................................... 51,945 51,346
Deferred compensation .......................................... (1,042) (746)
Accumulated deficit ............................................ (26,422) (23,299)
-------- --------
Total stockholders' equity ............................... 24,493 27,313
-------- --------
Total liabilities and stockholders' equity ............... $ 28,499 $ 30,364
======== ========
</TABLE>
Note: The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date but does not include all of the disclosures
required by generally accepted accounting principles.
See accompanying notes.
4
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INTERVU INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------------------
1999 1998
------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Revenues ............................ $ 1,232 $ 113
Operating expenses:
Research and development .......... 744 560
Selling, general and administrative 3,909 1,628
Charges associated with the NBC
Strategic Alliance Agreement ..... -- 3,873
------------ ------------
Total operating expenses ............ 4,653 6,061
------------ ------------
Loss from operations ................ (3,421) (5,948)
Interest income ..................... 298 196
------------ ------------
Net loss ............................ $ (3,123) $ (5,752)
============ ============
Basic and diluted net loss per
share ............................. $ (.31) $ (.73)
============ ============
Shares used in calculating basic
and diluted net loss per share .... 10,038,343 7,889,459
============ ============
</TABLE>
See accompanying notes.
5
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INTERVU INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------------
1999 1998
-------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES
Net loss ........................................ $ (3,123) $ (5,752)
Adjustments to reconcile net loss to net cash
used in operating activities:
Recognition of lapse of NBC's obligation to
return 680,000 shares of Series G convertible
preferred stock issued under the NBC Strategic
Alliance Agreement ........................... -- 3,373
Issuance of common stock for services ........... 62 22
Amortization of deferred compensation ........... 56 45
Depreciation and amortization ................... 251 70
Changes in operating assets and liabilities:
Accounts receivable ........................... (792) (68)
Prepaid and other current assets .............. (361) --
Accounts payable .............................. (67) (264)
Accrued liabilities ........................... (3) (3)
Payable to NBC Multimedia ..................... -- 500
Accrued payroll and related ................... (120) 33
-------- --------
Net cash used in operating
activities .................................... (4,097) (2,044)
INVESTING ACTIVITIES
Purchase of short-term investments .............. (1,928) (7,026)
Proceeds from sale of short-term investments .... 4,700 --
Purchases of property and equipment ............. (941) (208)
Other assets .................................... (26) (40)
-------- --------
Net cash provided by (used in) investing
activities ...................................... 1,805 (7,274)
FINANCING ACTIVITIES
Payments on capital leases ...................... (3) (3)
Issuance of common stock ........................ 187 --
Repurchase of common stock ...................... (2) --
Repayment of stockholder notes receivable ....... -- 1
-------- --------
Net cash provided by (used in) financing
activities .................................... 182 (2)
Net decrease in cash and cash equivalents ....... (2,110) (9,320)
Cash and cash equivalents at beginning of
period .......................................... 9,346 21,380
-------- --------
Cash and cash equivalents at end of period ...... $ 7,236 $ 12,060
======== ========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Capital lease obligations entered into for
equipment ..................................... $ 1,147 $ --
-------- --------
Recognition of lapse of NBC's obligation to
return 680,000 shares of Series G
convertible preferred stock issued under
the NBC Strategic Alliance Agreement .......... $ -- $ 3,373
-------- --------
Expense related to issuance of common stock ..... $ 62 $ 22
-------- --------
</TABLE>
See accompanying notes
6
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INTERVU, INC.
NOTES TO FINANCIAL STATEMENTS
1. THE COMPANY AND BASIS OF PRESENTATION
InterVU Inc. (the "Company" or "INTERVU") was incorporated in Delaware on
August 2, 1995 to provide services for the delivery or "streaming" of live and
on-demand video and audio content over the Internet. The Company utilizes a
distributed network to accelerate the speed and improve the quality of video and
audio delivery. In 1998, the Company emerged from the development stage.
The interim unaudited condensed financial statements of the Company contained
herein have been prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. These financial statements should
be read in conjunction with the Company's Annual Report on Form 10-K filed with
the Securities and Exchange Commission. In management's opinion, the unaudited
information includes all adjustments (consisting only of normal recurring
adjustments) necessary for fair presentation of the financial position, results
of operations and cash flows for the periods presented. Interim results are not
necessarily indicative of results to be expected for the full year. Certain
prior year amounts have been reclassified to conform with the current year
presentation.
2. NEW ACCOUNTING STANDARDS
In 1998, the Company adopted SFAS No. 130, Reporting Comprehensive Income,
and SFAS No. 131, Segment Information. SFAS No. 130 requires that all components
of comprehensive income, including net income, be reported in the financial
statements in the period in which they are recognized. Comprehensive income is
defined as the change in equity during the period from transactions and other
events and circumstances from non-owner sources. Net income and other
comprehensive income, including foreign currency translation adjustments, and
unrealized gains and losses on investments shall be reported, net of their
related tax effect, to arrive at comprehensive income. Comprehensive loss was
not materially different than net loss. SFAS No. 131 amends the requirements for
public enterprises to report financial and descriptive information about their
reportable operating segments. Operating segments, as defined in SFAS No. 131,
are components of an enterprise for which separate financial information is
available and is evaluated regularly by a company in deciding how to allocate
resources and in assessing performance. The financial information is required to
be reported on the basis that is used internally for evaluating the segment
performance. The Company believes it operates in one business and operating
segment and adoption of this standard did not have a material impact on the
Company's financial statements.
3. CONTINGENCIES
The Company is a party to certain claims and legal actions arising in the
normal course of business. Although the ultimate outcome of these matters is not
presently determinable, management believes that the resolution of all such
pending matters will not have a material adverse affect on the Company's
financial position or liquidity; however, there can be no assurance that the
ultimate resolution of these matters will not have a material impact on the
Company's results of operations in any period.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion contains forward-looking statements regarding the
Company, its business, prospects and results of operations that are subject to
certain risks and uncertainties posed by many factors and events that could
cause the Company's actual business, prospects and results of operations to
differ materially from those that may be expressed or implied by such
forward-looking statements. Such risks, uncertainties and other factors include,
but are not limited to, the risks detailed under the caption "Item 1. Business
- -- Factors that May Affect Future Performance" in the Company's Annual Report on
Form 10K for the year ended December 31, 1998.
OVERVIEW
INTERVU provides Web site owners and content publishers with services for the
delivery or "streaming" of live and on-demand video and audio content over the
Internet. INTERVU's customers use its video and audio distribution services to
transmit entertainment, sports, news, business to business, advertising and
distance learning content. INTERVU's services automate the publishing,
distribution and programming of video and audio content.
Revenues
INTERVU derives revenues from delivering live and on-demand video and audio
content over the Internet and providing related services, including production,
encoding, uplinking, Web site integration, distribution, audience building,
reporting and archiving. INTERVU typically charges its customers fees with fixed
and variable components. The fixed component consists of a monthly fee based on
the particular bundle of services provided and an agreed upon amount of content
to be stored and streams to be delivered. To the extent that a customer exceeds
agreed upon storage and delivery amounts, INTERVU typically charges variable
fees based on the amount by which content delivered exceeds the agreed upon
amount. For customers for which INTERVU performs specific projects, it charges a
combination of fixed and variable fees depending on the project. INTERVU also
derives revenues from consulting services relating to streaming media
technologies, although this is not expected to constitute a material portion of
INTERVU's revenues in the future.
Expenses
INTERVU's expenses consist of research and development and selling, general
and administrative expenses. Research and development expenses consist primarily
of salaries and related expenses for personnel, fees to outside contractors and
consultants, allocated costs of facilities and depreciation and amortization of
capital equipment. Research and development expenses to date have been focused
in three areas: (1) development of software to improve the INTERVU Network's
ability to deliver video and audio content, (2) development of software to
analyze Internet performance and redirect individual end-users to optimal
servers and (3) development of software to help Web sites publish and promote
their events.
Selling, general and administrative expenses consist primarily of salaries,
commissions, promotional expenses, professional services and general operating
costs. Also included are the
8
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costs INTERVU incurs for bandwidth. INTERVU expects that as it adds additional
customers, the corresponding increase in video delivery volumes will allow
INTERVU to generate economies of scale relative to its bandwidth costs because
it will be able to obtain larger volume discounts. To the extent that INTERVU
does not realize such economies of scale, INTERVU's business will be adversely
affected.
As INTERVU expands its business in 1999 and beyond, its research and
development and selling, general and administrative expenses will increase
substantially. Research and development expenses will increase as INTERVU adds
engineers to its in-house software development team. INTERVU's selling, general
and administrative expenses will increase as INTERVU, among other things, hires
additional personnel, increases its advertising expenditures and establishes
additional sales offices.
INTERVU also expects to expand the INTERVU Network by adding servers in
additional Internet hosting centers. INTERVU will depreciate equipment added to
the INTERVU Network over the useful life of the asset and include this expense
in selling, general and administrative expense.
NBC Strategic Alliance
In connection with entering into a strategic alliance with NBC Multimedia,
Inc., INTERVU issued 1,280,000 shares of its Series G Convertible Preferred
Stock to NBC. INTERVU charged $3.4 million to expense in January 1998,
representing the fair value of 680,000 shares of Series G Preferred Stock at the
time NBC's obligation to return those shares lapsed. INTERVU expects to charge
the then fair value of the remaining 600,000 shares of Series G Preferred Stock
to expense during the fourth quarter of 1999 when NBC's obligation to return
those shares is expected to lapse, although if INTERVU breaches, renegotiates or
removes the provision of the NBC strategic alliance agreement relating to this
obligation, it may need to expense the charge at that time. INTERVU believes
that the fair value of each share of Series G Preferred Stock will roughly
approximate the price per share at which INTERVU's common stock is then trading,
multiplied by the 0.6298 conversion ratio applicable to the Series G Preferred
Stock. The non-cash charge with respect to the remaining 600,000 shares of
Series G Preferred Stock is expected to be substantial and to materially impact
INTERVU's results of operations in the period the expense is recognized. NBC
Multimedia is not required to return any shares upon termination until it
receives $2.0 million of non-refundable payments from INTERVU.
RESULTS OF OPERATIONS
INTERVU has incurred net losses in each fiscal period since its inception
and, as of March 31, 1999, had an accumulated deficit of $26.4 million. To date,
INTERVU has not generated any significant revenues, and, as a result of the
significant expenditures INTERVU plans to make as described above, INTERVU
expects to continue to incur significant operating losses and negative cash
flows from operations for the foreseeable future.
9
<PAGE> 10
THREE MONTHS ENDED MARCH 31, 1999 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1998
Total revenues for the three months ended March 31, 1999 increased to $1.2
million from $113,000 in the comparable period in 1998. The increase in revenues
is primarily due the expansion of INTERVU's streaming media services and its
customer base. INTERVU also generated additional revenue from its services to
NBC's VideoSeeker Web site.
Research and development expenses for the three months ended March 31, 1999
increased to $744,000 from $560,000 in the same period in the prior year. The
increase in research and development expenses was attributable to the increase
in personnel and related expenses.
Selling, general and administrative expenses for the three months ended
March 31, 1999 increased to $3.9 million from $1.6 million for the same period
in from the prior year. The increase was attributable primarily to an increase
of $1.0 million in personnel and associated costs, an increase of $271,000 for
bandwith and co-location costs, an increase of $216,000 in consulting fees, and
an increase of $115,000 in expenditures for trade shows and other marketing
efforts.
Charges associated with the NBC strategic alliance agreement for the three
months ended March 31, 1998 were $3.9 million. No such charges were recorded in
the three months ended March 31, 1999. The charges in the 1998 period reflected:
(1) a non-cash charge of $3.4 million relating to the lapse of NBC's obligation
to return 680,000 shares of Series G Preferred Stock to INTERVU and (2) a charge
of $0.5 million relating to nonrefundable cash payments due to NBC Multimedia
under the strategic alliance agreement for the costs of producing and operating
NBC's VideoSeeker Web site and the costs of advertising and promotions to be
placed by INTERVU on NBC Internet sites.
Interest income for the three months ended March 31, 1999 increased to
$298,000 from $196,000 for the same period in the prior year. Interest income
represents interest earned by INTERVU on its cash, cash equivalents and
short-term investments. The increase in interest income over the comparable
period in 1998 was the result of higher cash, cash equivalents and short-term
investments balances INTERVU obtained from sales of equity securities.
INTERVU's net loss was $3.1 million and $5.8 million for the three months
ended March 31, 1999 and 1998, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, INTERVU has financed its operations primarily through
sales of stock. Through March 31, 1999, INTERVU had raised $46.9 million from
the sale of preferred stock and common stock. At March 31, 1999, the principal
source of liquidity for INTERVU was $22.2 million of cash, cash equivalents and
short-term investments.
INTERVU has had significant negative cash flows from operating activities
since inception. Cash used in operating activities for the three months ended
March 31, 1999 and 1998 was $4.1 million and $2.0 million, respectively. Cash
used in operating activities in the first quarter of 1999 increased primarily as
a result of increased business activity and related operating expenses.
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Cash provided from investing activities for the three months ended March 31,
1999 was $1.8 million primarily representing the net proceeds of $2.8 million
from the sale of short term investments to fund operating activities, which
amount was offset by the purchase of $2.1 million of property and equipment of
which $1.1 million was financed under a capital lease. Cash used in investing
activities for the three months ended March 31, 1998, primarily represented
purchases of short-term investments and capital expenditures for equipment,
software and furniture and fixtures. In March 1999, INTERVU financed $1.1
million of equipment under a three-year non-cancelable leaseline with an
interest rate of 7.75%. Additionally, INTERVU expects to expend significant
amounts for equipment, software and fixtures over the next 24 months to expand
the INTERVU Network, a portion of which it plans to finance through capital
leases.
Cash provided by financing activities was $182,000 for the three months ended
March 31, 1999, primarily representing the proceeds received from the exercise
of stock options. Cash used in financing activities was $2,000 for the three
months ended March 31, 1998 and represented payments on capital leases.
On May 14, 1999, INTERVU received net proceeds of $97.8 million upon
completion of a public offering of 2,875,000 shares of Common Stock at a price
to the public of $36.00 per share.
In connection with the strategic alliance agreement INTERVU entered into with
NBC in October 1997, INTERVU became obligated to make $2,000,000 in
non-refundable payments to NBC Multimedia for certain production, operating and
advertising costs associated with some of NBC's Web sites, including payments of
(1) $750,000 paid on the completion of the initial public offering in November
1997, (2) $500,000 paid in April 1998, (3) $500,000 due in May 1998 and (4)
$250,000 due in August 1998. Through March 31, 1999, INTERVU has made a total of
approximately $1.3 million in payments to NBC Multimedia and $750,000 is
currently payable.
INTERVU believes existing cash and cash equivalents will be sufficient to
meet its working capital and capital expenditure requirements for the next
several years. However, if cash generated by operations is insufficient to
satisfy INTERVU's liquidity requirements, INTERVU may need to sell additional
equity or debt securities or obtain credit facilities. INTERVU currently does
not have any lines of credit.
IMPACT OF YEAR 2000
Many computer systems and software products are coded to accept only
two-digit entries in date code fields. Beginning the year 2000, these date code
fields will need to distinguish 21st century dates from 20th century dates. As a
result, computer systems and/or software used by many companies may need to be
upgraded to comply with "Year 2000" requirements. Although INTERVU believes that
the INTERVU Network is Year 2000 compliant, INTERVU may discover coding errors
or other defects in the future. INTERVU has appointed a Year 2000 Task Force to
assess the scope of its risks and bring its applications into compliance. This
Task Force is undertaking its assessment of INTERVU's compliance and has begun
testing its corporate business and information systems. To date, INTERVU has
discovered few problems during its Year 2000 testing, and INTERVU has fixed
those identified in its day to day operating environment. INTERVU intends to
complete the compliance testing in September 1999. To date,
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INTERVU has incurred minimal expenses related to Year 2000 compliance. It
expects to incur approximately $50,000 of expenses in 1999 related to Year 2000
compliance. INTERVU has not adopted a contingency plan to address possible risks
to its systems.
INTERVU relies on a number of software and systems provided by third parties
to operate the INTERVU Network, any of which could contain coding which is not
Year 2000 compliant. These systems include server software used to operate the
network servers, software controlled routers, switches and other components of
the data network, firewall, security, monitoring and back-up software used by
INTERVU, as well as desktop PC applications software. In each case, INTERVU
employs widely available software applications from leading third-party vendors
and expects that such vendors will provide any required upgrades or
modifications in a timely fashion. However, if any third party software
suppliers fail to provide Year 2000 compliant versions of the software,
INTERVU's operations, including the INTERVU Network, could be disrupted.
Year 2000 compliance problems also could undermine the general infrastructure
necessary to support INTERVU's operations. For instance, INTERVU depends on
third-party Internet service providers (known as "ISPs") or hosting centers to
provide connections to the Internet and to customer information systems. Any
interruption of service from ISPs or hosting centers could result in a temporary
interruption of the INTERVU Network and other services. INTERVU has attempted to
address this risk by obtaining the same service capacity from multiple ISPs. Any
interruption in the security, access, monitoring or power systems at the ISPs or
hosting centers could result in an interruption of services. Moreover, it is
difficult to predict what effects Year 2000 compliance problems will have on the
integrity and stability of the Internet. If businesses and consumers are not
able to reliably access the Internet, the demand for INTERVU's services could
decline, resulting in an adverse impact to INTERVU's business, financial
condition and results of operations.
INTERVU's operations also could be adversely affected if its customers fail
to ensure that their software systems are Year 2000 compliant. INTERVU cannot
assess or control the degree of Year 2000 compliance in its customers'
information systems. Disruptions in the information systems of customers could
temporarily prevent such customers from accessing or using the INTERVU Network,
which could materially affect INTERVU's business, financial condition and
results of operations. The spending patterns of current or potential customers
may be affected by Year 2000 issues as companies expend significant resources to
correct or update their systems for Year 2000 compliance. Because of these
expenditures, INTERVU's customers may have less money available to pay for
services, which could have a material adverse affect on INTERVU's business,
financial condition and results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTERVU is exposed to changes in interest rates primarily from its
investments in certain available for sale securities. Under its current
policies, INTERVU does not use interest rate derivative instruments to manage
exposure to interest rate changes. A hypothetical one-percent adverse change in
interest rates on instruments of all maturities would not materially effect the
fair value of interest sensitive financial instruments at March 31, 1999.
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PART II
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In August 1997, the Company filed a registration statement under the
Securities Act of 1993 to sell up to 2.3 million shares of Common Stock in its
IPO. The effective date of registration of the IPO was November 19, 1997, under
Commission file No. 333-33521. The offering was managed by Josephthal Lyon &
Ross and Cruttenden Roth and closed on November 23, 1997 after the Company sold
an aggregate of 2,210,526 shares of Common Stock in the IPO and a direct
offering to NBC Multimedia, Inc. (the "Direct Offering). Expenses related to the
IPO and Direct Offering incurred through December 31, 1997 were as follows:
<TABLE>
<S> <C> <C>
Proceeds from IPO..................................... $19,000,000
Proceeds from Direct Offering......................... 2,000,000
-------------
Total Proceeds........................................ 21,000,000
Underwriters' Discount................................ $1,330,000
Underwriter's advisor fee............................. 140,000
Securities and Exchange Commission registration fee... 9,000
NASD filing fee....................................... 2,000
Nasdaq National Market listing fee.................... 40,000
Non-accountable expense allowance..................... 190,000
Legal fees and expenses............................... 199,000
Accounting fees and expenses.......................... 191,000
Printing and engraving expenses....................... 169,000
Blue Sky fees and expenses............................ 13,000
Transfer agent and registrar fees..................... 3,000
Miscellaneous......................................... 146,000
----------
TOTAL OFFERING COSTS................................ 2,432,000
-------------
Net Proceeds.......................................... $18,568,000
=============
</TABLE>
Since completion of the IPO and Direct Offering in November 1997, the Company
has used $18,568,000 of the proceeds in the following manner:
<TABLE>
<S> <C>
Prepayment to NBC Multimedia, an affiliate
of the Company, for production, operating
and advertising costs associated with
certain NBC websites .......................... $ 1,250,000
Purchase of property and equipment ............ 3,477,000
General and administrative and working capital 3,937,000
Research and Development expenditures ......... 3,555,000
Sales & Marketing expenditures ................ 6,349,000
-----------
Total proceeds used through March 31,1999 ..... $18,568,000
</TABLE>
Except where noted, no proceeds were paid directly or indirectly to
directors, officers, general partners of the Company or to persons holding ten
percent or more of any class of equity security issued by the Company, or to any
other affiliate of the Company.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number
------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
(b) No reports on Form 8-K were filed for the three months ended
March 31, 1999.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant duly causes this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
InterVU Inc.
Date: May 14, 1999 By: /s/ Harry Gruber
-------------- --------------------------------------------------
Harry Gruber
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the Board and Chief Executive Officer May 14, 1999
/s/ Harry Gruber (Principal Executive Officer) ------------
- ----------------------------------
Harry Gruber
Vice President and Chief Financial Officer May 14, 1999
/s/ Kenneth L. Ruggiero (Principal Financial and Accounting Officer) ------------
- ----------------------------------
Kenneth L. Ruggiero
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15
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<S> <C>
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0
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