SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1999
--------------------
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________________ to ____________________
Commission file number 0-27043
-------
E-VIDEOTV, INC.
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 51-0389325
-------- ----------
(State or Other Jurisdiction of IRS Employer
Incorporation or Organization) Identification No.)
8360 East Via de Ventura, Building L-200, Scottsdale, AZ 85258
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
480-905-5838
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
ASIA PACIFIC ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes No X
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes No X
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common shares, as of the latest practicable date: 15,588,359
----------
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
1
<PAGE>
E-VIDEOTV, INC.
FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION 2
Item 1. Financial Statements. 2
Item 2. Management's Discussion and Analysis and Plan of Operation. 12
PART II OTHER INFORMATION 13
Item 1. Legal Proceedings. 13
Item 2. Changes in Securities. 13
Item 3. Defaults Upon Senior Securities. 13
Item 4. Submission of Matters to a Vote of Security Holders. 13
Item 5. Other Information. 13
Item 6. Exhibits and Reports on Form 8-K. 13
SIGNATURES 14
<TABLE>
<CAPTION>
PART I
FINANCIAL INFORMATION
<S> <C>
ITEM 1. FINANCIAL STATEMENTS.
The following financial statements are included as part of this quarterly report:
Unaudited Consolidated Balance Sheet at September 30, 1999. . . . . . . . . . . . . . . 3
Unaudited Consolidated Statement of Operations for the quarter ended September 30, 1999
and for the period from inception, March 5, 1999, to September 30, 1999 . . . . . . . . 4
Unaudited Consolidated Statement of Cash Flows for the period from inception, March 5,
1999, to September 30, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Unaudited Consolidated Statement of Shareholders' Equity for the period from inception,
March 5, 1999, to September 30, 1999. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Unaudited Notes to the Consolidated Financial Statements. . . . . . . . . . . . . . . . 7
Unaudited Pro-forma Consolidated Statement of Operations for the nine months ended
September 30, 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
E-VIDEOTV, INC.
(FORMERLY, ASIA PACIFIC ENTERPRISES, INC.)
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
UNAUDITED
U.S. DOLLARS
<S> <C>
$
ASSETS
CURRENT ASSETS
Cash 423,894
Prepaid expenses 14,003
-----------
TOTAL CURRENT ASSETS 437,897
TECHNOLOGY ACQUISITION COSTS (note 4) 315,001
OFFICE EQUIPMENT 5,452
COMPUTER SOFTWARE DEVELOPMENT COSTS 182,782
-----------
TOTAL ASSETS 941,132
===========
LIABILITIES
CURRENT LIABILITIES
Accounts payable 104,995
-----------
SHAREHOLDERS' EQUITY
SHARE CAPITAL (notes 3 and 5)
Authorized
- - 30,000,000 shares of common stock, $0.0001 par value
- - 5,000,000 shares of preferred stock, $0.0001 par value
Issued and outstanding
- - 15,588,359 common shares 1,559
Additional paid in capital 1,087,282
-----------
TOTAL SHARE CAPITAL 1,088,841
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (252,704)
-----------
NET SHAREHOLDERS' EQUITY 836,137
-----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 941,132
===========
</TABLE>
CONTINUANCE OF OPERATONS (NOTE 1)
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
<TABLE>
<CAPTION>
E-VIDEOTV, INC.
(FORMERLY, ASIA PACIFIC ENTERPRISES, INC.)
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
U.S. DOLLARS
QUARTER INCEPTION,
ENDED MARCH 5, 1999,
SEPTEMBER 30, TO SEPTEMBER 30,
1999 1999
$ $
GENERAL AND ADMINISTRATIVE EXPENSES
<S> <C> <C>
Corporate promotion 23,490 24,535
General corporate expenses 35,886 37,185
Management and consulting fees 79,633 87,106
Professional fees 79,201 80,901
Rent 10,691 11,525
Travel 16,878 18,311
-------------- -----------------
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 245,779 259,563
INTEREST INCOME 6,171 6,859
-------------- -----------------
NET LOSS FOR THE PERIOD 239,608 252,704
============== =================
Weighted Average Number of Shares Outstanding (note 5) 8,620,343 4,083,320
-------------- -----------------
NET LOSS PER SHARE 0.03 0.06
============== =================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
<TABLE>
<CAPTION>
E-VIDEOTV, INC.
(FORMERLY, ASIA PACIFIC ENTERPRISES, INC.)
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
INCEPTION, MARCH 5, 1999, TO SEPTEMBER 30, 1999
UNAUDITED
U.S. DOLLARS
<S> <C>
$
OPERATING ACTIVITIES
Net loss for the period (252,704)
Adjustments to reconcile net loss to net cash used in operating activities:
- - accounts receivable and prepaid expenses (1,399)
- - accounts payable 72,765
-----------
NET CASH USED IN OPERATING ACTIVITIES (181,338)
-----------
FINANCING ACTIVITIES
Proceeds from sale of common shares 1
Loans from parent company prior to acquisition 115,000
Cash acquired on acquisition of parent company 1,001,481
Re-payment of note payable (200,000)
Financing costs (8,015)
-----------
TOTAL CASH FLOW FROM FINANCING ACTIVITIES 908,467
-----------
INVESTING ACTIVITIES
Technology rights (115,001)
Office equipment (5,452)
Computer software development costs (182,782)
-----------
TOTAL CASH USED IN INVESTING ACTIVITIES (303,235)
-----------
INCREASE IN CASH DURING THE PERIOD AND CASH AT THE END OF THE PERIOD 423,894
=======
NON-CASH ACTIVITIES NOT INCLUDED IN CASH FLOWS
Acquisition of technology rights through note payable 200,000
Cancellation of loans from parent company on acquisition 115,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
<TABLE>
<CAPTION>
E-VIDEOTV, INC.
(FORMERLY, ASIA PACIFIC ENTERPRISES, INC.)
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
INCEPTION, MARCH 5, 1999, TO SEPTEMBER 30, 1999
UNAUDITED
U.S. DOLLARS
ADDITIONAL TOTAL
NUMBER PAR PAID IN SHAREHOLDERS'
OF SHARES VALUE CAPITAL DEFICIT EQUITY
$ $ $ $
<S> <C> <C> <C> <C> <C>
Issuance of shares for cash on
incorporation 1 1 - - 1
Adjustment for change in share
structure resulting from acquisition
of eVideo U.S.A., Inc. 6,623,015 661 (661) - -
Shares outstanding at date of
acquisition of eVideo U.S.A., Inc.,
previously issued for cash, net of
issue costs (note 3) 8,965,343 897 1,095,958 - 1,096,855
Financing costs - - (8,015) - (8,015)
Net loss, inception to
September 30, 1999 - - - (252,704) (252,704)
----------- ------ ----------- --------------- ----------
Balance, September 30, 1999 15,588,359 1,559 1,087,282 (252,704) 836,137
=========== ====== =========== =============== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE>
E-VIDEOTV, INC.
(FORMERLY, ASIA PACIFIC ENTERPRISES, INC.)
A DEVELOPMENT STAGE COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
UNAUDITED
U.S. DOLLARS
1. BASIS OF PRESENTATION
While the information presented in these interim consolidated financial
statements is unaudited, it includes all adjustments which are, in the opinion
of management, necessary to the fair presentation of the interim periods
reported.
The Company changed its name from Asia Pacific Enterprises, Inc. to e-VideoTV,
Inc. on August 5, 1999. The Company is developing an electronic video
distribution system and has not commenced commercial operations.
The ability of the Company to continue as a going concern is dependent upon its
ability to raise substantial amounts of equity for use in developing its
intended business and its administrative activities. While management believes
that the Company will be able to raise sufficient funds through the sale of
equity or debt securities, there is no assurance that sufficient funds will be
raised.
2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. The principal area requiring the use of management estimates is the
determination of the appropriate carrying values for the Company's investments
in technology and software. Actual results could differ from those estimates.
TRANSLATION OF FOREIGN CURRENCIES - Monetary assets and liabilities are
translated at the exchange rate in effect at the balance sheet date and
non-monetary assets and liabilities at the exchange rates in effect at the time
of acquisition or issue. Revenues and expenses are translated at the rates in
effect at the time of the transaction. Exchange gains or losses arising on
translation are included in net income or loss for the period.
FINANCIAL INSTRUMENTS - The company has various financial instruments, including
cash and payables. The carrying values of these financial instruments
approximate their fair values.
COMPUTER SOFTWARE DEVELOPMENT COSTS - The Company has capitalized the costs of
developing its computer software. Once the software has been fully developed
and implemented, its cost will be amortized over its estimated economic life.
TECHNOLOGY ACQUISITION COSTS - The costs incurred to acquire the Company's
technology have been capitalized and will be amortized over its estimated
economic life upon commencement of commercial operations.
7
<PAGE>
E-VIDEOTV, INC.
(FORMERLY, ASIA PACIFIC ENTERPRISES, INC.)
A DEVELOPMENT STAGE COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
UNAUDITED
U.S. DOLLARS
3. BUSINESS COMBINATION
On June 23, 1999, the Company acquired all of the outstanding shares of eVideo
U.S.A., Inc. in exchange for the issuance of 6,623,016 shares of common stock
and a commitment to issue an additional one and one-half shares of common stock
for every share the Company issues in raising $3,900,000 after June 23, 1999.
This business combination has been accounted for as an acquisition of the
Company by eVideo U.S.A., Inc. Accordingly, these consolidated financial
statements combine the operations of eVideo U.S.A., Inc. since its incorporation
on March 5, 1999 and the operations of e-VideoTV, Inc. since the date of
acquisition, June 23, 1999. All intercompany transactions and balances have
been eliminated.
At the date of acquisition, the net tangible assets of e-VideoTV, Inc. acquired
were:
Cash $ 1,001,481
Other current assets 12,604
Advances to eVideo U.S.A., Inc. 115,000
Current liabilities (32,230)
--------------
Value assigned to 8,965,343 shares outstanding
at date of acquisition $ 1,096,855
=============
4. TECHNOLOGY ACQUISITION COSTS
The costs include $300,001 that the company paid to a company controlled by the
president of the Company for the right to distribute video movies and games
electronically in the United States of America in accordance with a business
plan developed by the Company's president. The purchase price for this
technology was negotiated at arm's length with the Company prior to the
acquisition of eVideo U.S.A., Inc.
5. SHARE CAPITAL
8
<PAGE>
E-VIDEOTV, INC.
(FORMERLY, ASIA PACIFIC ENTERPRISES, INC.)
A DEVELOPMENT STAGE COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
UNAUDITED
U.S. DOLLARS
5. SHARE CAPITAL (CONTINUED)
Warrants are outstanding that entitle their holder to purchase up to 307,693
shares of common stock at $3.25 per share until May 25, 2000.
All of the shares issued for the acquisition of eVideo U.S.A., Inc. are or will
be held in escrow. These shares will be released on the basis of the company
achieving certain milestones according to the following schedule:
Portion released Conditions for release
- ----------------- ------------------------
25% when all of the following are achieved:
- the Company demonstrates an operational prototype
digital set-top box,
- the Company has entered into written agreements
with manufacturers to produce a total of 15,000
set-top boxes per month,
- a formal license to use video copyright protection
technology has been entered into, and
- a distribution agreement has been entered into
with a motion picture studio in respect of a
substantial portfolio of video movies.
25% when all of the following are achieved:
- a recognized Chief Executive Officer has been
successfully recruited by the Company,
- a successful file server beta testing with video
files has been developed,
- a distribution agreement with a cable company has
been entered into, and
- a head-end communication test has been
successfully completed.
25% when the Company first generates gross annual revenues
of $5,000,000.
25% when the Company first generates gross annual revenues
of $500,000,000.
All shares if the Company declares a dividend of at least $2.00 per
remaining in common share by June 23, 2001.
escrow, if any
All shares if the Company successfully completes a public offering
remaining in that raises more than $20,000,000 with less than 30%
escrow, if any dilution to the shareholders existing just before
completing the offering.
All shares if a successful takeover for a majority of the issued and
remaining in outstanding common shares of the Company is completed.
escrow, if any
All shares if the Company's common shares have a publicly quoted
remaining in market price of over $15.00 per share for more than
escrow, if any 20 consecutive trading days.
Any shares that have not been released from escrow by June 23, 2004 will be
cancelled.
9
<PAGE>
E-VIDEOTV, INC.
(FORMERLY, ASIA PACIFIC ENTERPRISES, INC.
A DEVELOPMENT STAGE COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
UNAUDITED
U.S. DOLLARS
An additional 345,000 shares of common stock are held in escrow and will be
released at the rate of 1 share for each $11.30 in equity financing that the
Company raises after September 30, 1999. Any shares remaining in escrow will be
cancelled 46 days after the earlier of:
- the Company demonstrating an operational set-top box, and
- the Company entering into an exclusive formal license to use
video copyright protection technology.
All shares held in escrow have been excluded from the calculation of the
weighted average number of shares outstanding.
6. RELATED PARTY TRANSACTIONS
Pursuant to a management agreement effective for two years commencing June 21,
1999, the Company has committed to pay $15,000 per month to a company controlled
by the president of the Company for the services of the president and a project
manager. $50,000 was paid for the period from inception to September 30, 1999.
Consulting fees of $76,085 and rent of $20,742 have been paid to other companies
that employ other directors and officers of the Company.
10
<PAGE>
E-VIDEOTV, INC.
(FORMERLY, ASIA PACIFIC ENTERPRISES, INC.)
A DEVELOPMENT STAGE COMPANY
PRO-FORMA CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999
UNAUDITED
U.S. DOLLARS
This unaudited pro-forma consolidated statement of operations has been prepared
to demonstrate the results of operations of the Company as if the acquisition of
eVideo U.S.A., Inc. had occurred on January 1, 1999. A pro-forma statement of
operations for the year ended December 31, 1998 has not been presented as eVideo
U.S.A., Inc. did not exist in 1998. The pro-forma results of operations are not
necessarily indicative of future financial results.
<TABLE>
<CAPTION>
EVIDEO
E-VIDEOTV, U.S.A. PROFORMA
INC. INC. CONSOLIDATED
$ $ $
<S> <C> <C> <C>
GENERAL AND ADMINISTRATIVE EXPENSES
Corporate promotion 27,787 - 27,787
General corporate expenses 19,114 21,926 41,040
Management and consulting fees 76,085 50,000 126,085
Professional fees 26,237 66,669 92,906
Rent 20,742 - 20,742
Travel 15,254 10,114 25,368
----------- -------- -------------
TOTAL GENERAL AND ADMINISTRATIVE
EXPENSES 185,219 148,709 333,928
INTEREST INCOME 10,373 - 10,373
----------- -------- -------------
NET LOSS FOR THE PERIOD 174,846 148,709 323,555
=========== ======== =============
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 8,620,343
-------------
NET LOSS PER SHARE 0.04
=============
</TABLE>
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.
The Company is in the process of developing the systems required to operate the
eVideo business. The Company has completed a laboratory based test of the
systems concept and is running initial demonstrations through a web enabled
database, fileserver and mock set-top box. The Company is in negotiations for
an up-link facility to enable communications to cable company distribution
networks.
At September 30, 1999 the Company had cash on hand of approximately $424,000.
The Company anticipates that it will need a total of $5,000,000 in additional
capital to complete the development of its eVideo business. The Company expects
to raise these funds through the sale of its equity capital. The Company's
development schedule will be delayed unless the capital required by the Company
is available when needed.
Capital expenditures are estimated at $2,000,000 for the period from October 1,
1999 to September 30, 2000. These expenditures include:
- - expanding the Scottsdale head office facilities,
- - establishing a Los Angeles office,
- - establishing field support offices and cable support offices,
- - acquiring a data communications and up-link system,
- - determining final specifications and quality controls for set-top boxes,
- - acquiring set-top box units for beta testing,
- - communications systems testing,
- - acquiring main database computers and video file server computers, and
- - acquiring operating systems software.
Operating expenses during the development stage are estimated at $3,000,000 for
the period from October 1, 1999 to September 30, 2000. These expenses include:
- - salaries, consulting fees and other personnel costs,
- - office supplies and services,
- - travel,
- - advertising and marketing,
- - license fees,
- - professional fees, and
- - contingency funds.
12
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no reportable legal proceedings.
ITEM 2. CHANGES IN SECURITIES.
There are no changes in the Company's securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
There have been no defaults upon senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On July 24, 1999 a majority of the shareholders of the Company approved an
amendment to the Company's certificate of incorporation that changed the name of
the Company to "e-VideoTV, Inc."
ITEM 5. OTHER INFORMATION.
The Company has no other information to report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
The following exhibits are filed as part of this report.
Exhibit 3 Articles of Incorporation, as amended on August 5, 1999 page 15
Exhibit 10 Amendment dated September 1, 1999 to the agreement dated
June 8, 1999 between the Company, eVideo U.S.A.,
Inc., eVideo International Inc., Roy B. Bennett &
Associates Ltd. and Roy B. Bennett page 16
Exhibit 27 Financial Data Schedule page 20
(b) Reports on Form 8-K.
The Company did not file any reports on Form 8-K during the quarter ended
September 30, 1999.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed by the undersigned, thereunto duly authorized.
E-VIDEOTV, INC.
Date November 12, 1999 By /s/ Roy B. Bennett
----------------- --------------------------------------
Roy B. Bennett
President (Chief Executive Officer)
Date November 12, 1999 By /s/ Owen Granger
----------------- --------------------------------------
Owen Granger
Secretary/Treasurer
(Chief Financial Officer)
14
<PAGE>
EXHIBIT 3
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 08/05/1999
991325344 - 2779696
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ASIA PACIFIC ENTERPRISES, INC.
------------------------------
ASIA PACIFIC ENTERPRISES, INC., a corporation organized and existing under and
by virtue of the general Corporation Law of the state of Delaware, DOES HEREBY
CERTIFY:
FIRST. That the Board of Directors hereby declares it advisable
and in the best interest of the Company that Article FIRST of the Certificate of
Incorporation be amended to read as follows:
FIRST: The name of this corporation shall be:
E-VIDEOTV, INC.
SECOND. That the said amendment has been consented to and authorized by
the holders of a majority of the issued and outstanding stock entitled to vote
by written consent given in accordance with the provisions of Section 228 of the
General Corporation Law of the State of Delaware.
THIRD. That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Sections 242 and 228 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, said corporation has caused this Certificate to be
signed by Owen Granger this 4th day of August A.D. 1999.
/s/ Owen Granger
- -----------------------------------
Owen Granger, Secretary/Treasurer
15
<PAGE>
EXHIBIT 10
THIS AMENDING AGREEMENT made and dated for reference the 1st day of September,
1999.
AMONG: ASIA PACIFIC ENTERPRISES, INC., a body corporate, incorporated
------------------------------
under the laws of the State of Delaware, having its registered
office at 1313 North Market Street, New Castle County,
Wilmington, Delaware 19801-1151
(hereinafter called "Asia Pacific")
OF THE FIRST PART
AND: EVIDEO USA, INC., a body corporate, incorporated under the laws
----------------
of Nevada, having its registered office at 502 East John Street,
Carson City, Nevada 89706
(hereinafter called "USA")
OF THE SECOND PART
AND: EVIDEO INTERNATIONAL, INC., a body corporate, incorporated under
---------------------------
the laws of The Commonwealth of the Bahamas, having its
registered office at ABL Building, Bank Lane, Nassau, Bahamas
(hereinafter called "International")
OF THE THIRD PART
AND: ROY B. BENNETT & ASSOCIATES LTD., a body corporate, incorporated
--------------------------------
under the laws of the Province of British Columbia, having its
head office at 2757 Chelsea Court, West Vancouver, British
Columbia V7S 3E9
(hereinafter called "Bennett")
OF THE FOURTH PART
AND: ROY B. BENNETT, an individual, of 2757 Chelsea Court, West
-----------------
Vancouver, British Columbia V7S 3E9
(hereinafter called "Roy Bennett")
OF THE FIFTH PART
WHEREAS:
A. Pursuant to an agreement among the parties hereto dated June 8, 1999
(hereinafter called the "Agreement"), Asia Pacific agreed to acquire all of the
issued and outstanding shares of USA from International on the terms set forth
in the Agreement;
B. The closing pursuant to the Agreement occurred on June 23, 1999;
16
<PAGE>
C. The parties now wish to amend certain of the provisions of the Agreement
on the terms and conditions hereinafter set forth;
NOW THEREFORE THIS AMENDING AGREEMENT WITNESSETH that in consideration of these
presents and the sum of Ten Dollars ($10.00) now paid by each of the parties to
each of the other parties hereto, the receipt and sufficiency of which is hereby
acknowledged by each of the parties, and for other good and valuable
consideration, the receipt and sufficiency of which is also hereby acknowledged
by each of the parties, the parties hereby agree as follows:
1. Paragraph 1.02 of the Agreement is deleted in its entirety, and is replaced
with the following:
"1.02It is Asia Pacific's intention to raise an additional Three Million
Nine Hundred Thousand Dollars ($3,900,000) by the sale of equity
capital subsequent to the date of this Agreement as follows:
(a) at least Two Hundred Thousand Dollars ($200,000) by October 29,
1999; and
(b) the balance within 45 days after the first to occur of either of
the following events (each of which is hereinafter called a
"Release Event"):
(i) USA demonstrating a set-top box capable of receiving,
storing and replaying a video movie received in less than
real-time format from a file server using the proprietary
software currently being developed for it by Burnt Sand
Solutions Inc.; and
(ii) Macrovision Corporation issuing an exclusive long-form
license to USA to use Macrovision's analog copy protection
technology in the United States of America for less than
real-time video programming services.
For every common share of Asia Pacific issued to raise the
additional funds provided for in sub-paragraphs (a) and (b) of
this paragraph 1.02, Asia Pacific agrees to issue one and
one-half (1 ) common shares in its capital stock to
International, which shares are to be issued on October 29, 1999
or, to the extent that the funds are raised subsequent to October
29, 1999, such later date(s) as International may agree to, with
all of these shares to be held in escrow by an independent escrow
agent and released to International from escrow on the same basis
as the 6,623,016 common shares to be held in escrow pursuant to
paragraph 1.01 hereof."
2. Paragraph 1.03 of the Agreement is deleted in its entirety, and is replaced
with the following:
"1.03In order to secure Asia Pacific's performance in the raising of the
additional equity capital provided for in paragraph 1.02 hereof,
Adrian Rollke, a director of Asia Pacific, has agreed to lodge 345,000
common shares of Asia Pacific currently owned by him with an
independent escrow agent, which shares will be released to Mr. Rollke
from escrow on the following basis:
17
<PAGE>
(a) on November 1, 1999, that portion of the total shares held in
escrow that equals the portion that the equity funds raised by
Asia Pacific subsequent to the date of the Agreement and on or
before October 29, 1999 is of Three Million Nine Hundred Thousand
Dollars ($3,900,000), provided that at least Two Hundred Thousand
Dollars ($200,000) of these funds has been raised by Asia Pacific
on or before October 29, 1999; and
(b) 46 days after the earliest Release Event occurs, that portion of
the total shares originally held in escrow that equals the
portion that the equity funds raised by Asia Pacific subsequent
to the date of the Agreement is of Three Million Nine Hundred
Thousand Dollars ($3,900,000), less the number of shares released
on November 1, 1999 as provided for in subparagraph (a) hereof;
and
(c) any shares not entitled to be released from escrow as provided
for in subparagraphs (a) and (b) of this paragraph 1.03 will be
surrendered to Asia Pacific for cancellation on the 47th day
after the earliest Release Event occurs."
3. In all other respects the terms and conditions of the Agreement shall
remain in full force and effect.
4. The parties hereto agree that the terms and conditions of the Amending
Agreement shall supercede and replace any other agreement or arrangements,
whether oral or written, heretofore existing among the parties in respect
of the subject matter of this Amending Agreement.
5. This Amending Agreement and any certificate or other writing delivered in
connection herewith may be executed in any number of counterparts and any
party hereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which counterparts of
this Amending Agreement or such other writing, as the case may be, taken
together, will be deemed to be one and the same instrument. The execution
of this Amending Agreement or any other writing by any party hereto will
not become effective until all counterparts hereof have been executed by
all of the parties hereto.
6. Each of the parties hereto will be entitled to rely upon delivery by
facsimile of executed copies of this Amending Agreement and any
certificates or other writings delivered in connection herewith, and such
facsimile copies will be legally effective to create a valid and binding
agreement among the parties in accordance with the terms and conditions of
this Amending Agreement.
7. Each of the parties hereto agrees to do and/or execute all such further and
other acts, deeds, things, devices, documents and assurances as may be
required in order to carry out the true intent and meaning of this Amending
Agreement.
18
<PAGE>
8. This Amending Agreement shall enure to the benefit of and be binding upon
the parties hereto and each of their successors and permitted assigns, as
the case may be.
IN WITNESS WHEREOF this Agreement has been executed as of the day and year first
above written.
SIGNED and DELIVERED by
ASIA PACIFIC ENTERPRISES, INC.
in the presence of:
/s/ Owen Granger
- ------------------
Authorized Signatory
SIGNED and DELIVERED by
EVIDEO USA, INC.
in the presence of:
/s/ Roy B. Bennett
- -----------------------
Authorized Signatory
SIGNED and DELIVERED by
EVIDEO INTERNATIONAL, INC.
in the presence of:
/s/ Roy B. Bennett
- -----------------------
Authorized Signatory
SIGNED and DELIVERED by
ROY B. BENNETT & ASSOCIATES LTD.
in the presence of:
/s/ Roy B. Bennett
- -----------------------
Authorized Signatory
SIGNED and DELIVERED by )
ROY B. BENNETT )
in the presence of: )
) /s/ Roy B. Bennett
) ------------------
) ROY B. BENNETT
Signature of Witness )
)
)
Name of Witness - please type or print )
)
)
Address of Witness - please type or print )
)
)
)
)
Occupation of Witness - please type or print )
19
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> MAR-05-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 423894
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 437897
<PP&E> 5452
<DEPRECIATION> 0
<TOTAL-ASSETS> 941132
<CURRENT-LIABILITIES> 104995
<BONDS> 0
0
0
<COMMON> 1559
<OTHER-SE> 834578
<TOTAL-LIABILITY-AND-EQUITY> 941132
<SALES> 0
<TOTAL-REVENUES> 6859
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 259563
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (252704)
<INCOME-TAX> 0
<INCOME-CONTINUING> (252704)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (252704)
<EPS-BASIC> (.06)
<EPS-DILUTED> (.06)
</TABLE>
