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 March 31, 2000
----------------
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _________________ to ________________
Commission file number 0-27043
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E-VIDEOTV, INC.
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(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 51-0389325
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(State or Other Jurisdiction of IRS Employer
Incorporation or Organization) Identification No.)
8360 East Via de Ventura, Building L-200, Scottsdale, AZ 85258
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(Address of Principal Executive Offices)
480-905-5838
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(Issuer's Telephone Number, Including Area Code)
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(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 [X] No [ ]
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 [ ]
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: 16,757,072
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Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
Page 1 of 12
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E-VIDEOTV, INC.
FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION 2
Item 1. Financial Statements. 2
Item 2. Management's Discussion and Analysis and Plan of Operation. 8
PART II OTHER INFORMATION 10
Item 1. Legal Proceedings. 10
Item 2. Changes in Securities. 10
Item 3. Defaults Upon Senior Securities. 10
Item 4. Submission of Matters to a Vote of Security Holders. 10
Item 5. Other Information. 10
Item 6. Exhibits and Reports on Form 8-K. 10
SIGNATURES 11
<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 March 31, 2000 and December 31, 1999. . . . . . 3
Unaudited Consolidated Statement of Operations for the period from inception, March 5,
1999, to March 31, 2000 and for the quarter ended March 31, 2000. . . . . . . . . . . . 4
Unaudited Consolidated Statement of Cash Flows for the period from inception, March 5,
1999, to March 31, 2000 and for the quarter ended March 31, 2000. . . . . . . . . . . . 5
Unaudited Consolidated Statement of Shareholders' Equity for the period from inception,
March 5, 1999, to March 31, 2000. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Unaudited Notes to the Consolidated Financial Statements. . . . . . . . . . . . . . . . 7
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<TABLE>
<CAPTION>
E-VIDEOTV, INC.
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED BALANCE SHEET
UNAUDITED
U.S. DOLLARS
MARCH 31, DECEMBER 31,
2000 1999
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<S> <C> <C>
$ $
ASSETS
CURRENT ASSETS
Cash 335,289 105,002
Prepaid expenses 2,904 2,904
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TOTAL CURRENT ASSETS 338,193 107,906
OFFICE EQUIPMENT 3,088 3,334
DISTRIBUTION RIGHTS AND SOFTWARE DEVELOPMENT 1,987,027 756,478
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TOTAL ASSETS 2,328,308 867,718
=========== =============
LIABILITIES
CURRENT LIABILITIES
Accounts payable 122,988 248,899
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SHAREHOLDERS' EQUITY
SHARE CAPITAL (note 2)
Authorized
- - 100,000,000 shares of common stock, $0.0001 par value
- - 5,000,000 shares of preferred stock, $0.0001 par value
Issued and outstanding
- - 16,757,072 common shares (1999 - 15,588,359) 1,676 1,559
Additional paid in capital 2,935,553 1,095,297
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TOTAL SHARE CAPITAL 2,937,229 1,096,856
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (731,909) (478,037)
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NET SHAREHOLDERS' EQUITY 2,205,320 618,819
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,328,308 867,718
=========== =============
<FN>
CONTINUANCE OF OPERATIONS (NOTE 1)
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<TABLE>
<CAPTION>
E-VIDEOTV, INC.
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
U.S. DOLLARS
INCEPTION, QUARTER
MARCH 5, 1999, ENDED
TO MARCH 31, MARCH 31,
2000 2000
---------------- ----------
<S> <C> <C>
$ $
GENERAL AND ADMINISTRATIVE EXPENSES
Corporate promotion 70,558 28,421
General corporate expenses 75,576 19,964
Management and consulting fees 249,992 93,352
Office expenses 22,508 8,229
Professional fees 240,453 74,532
Rent 34,801 10,973
Travel 47,956 19,478
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TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 741,844 254,949
INTEREST INCOME (9,935) (1,077)
---------------- ----------
NET LOSS FOR THE PERIOD 731,909 253,872
================ ==========
Weighted Average Number of Shares Outstanding 8,800,145
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NET LOSS PER SHARE 0.03
==========
</TABLE>
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<TABLE>
<CAPTION>
E-VIDEOTV, INC.
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
U.S. DOLLARS
INCEPTION, QUARTER
MARCH 5, 1999, ENDED
TO MARCH 31, MARCH 31,
2000 2000
---------------- ----------
<S> <C> <C>
$ $
OPERATING ACTIVITIES
Net loss for the period (731,909) (253,872)
Adjustments to reconcile net loss to net cash
used in operating activities:
- - depreciation 493 246
- - accounts receivable and prepaid expenses 9,700 -
- - accounts payable 90,758 (125,911)
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NET CASH USED IN OPERATING ACTIVITIES (630,958) (379,537)
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FINANCING ACTIVITIES
Proceeds from sale of common shares 1,048,601 1,048,600
Loans from parent company prior to acquisition 115,000 -
Cash acquired on acquisition of parent company 1,001,481 -
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TOTAL CASH FLOW FROM FINANCING ACTIVITIES 2,165,082 1,048,600
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INVESTING ACTIVITIES
Distribution rights and software development (1,195,254) (438,776)
Office equipment (3,581) -
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TOTAL CASH USED IN INVESTING ACTIVITIES (1,198,835) (438,776)
---------------- ----------
INCREASE IN CASH DURING THE PERIOD 335,289 230,287
CASH AT THE BEGINNING OF THE PERIOD - 105,002
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CASH AT THE END OF THE PERIOD 335,289 335,289
================ ==========
NON-CASH ACTIVITIES NOT INCLUDED IN CASH FLOWS
Ascribed value of shares issued to acquire copy protection license 791,773 791,773
Cancellation of loans from parent company on acquisition 115,000 -
Ascribed value of shares issued in excess of cash acquired
on acquisition of parent company 95,374 -
</TABLE>
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<TABLE>
<CAPTION>
E-VIDEOTV, INC.
(FORMERLY, ASIA PACIFIC ENTERPRISES, INC.)
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
INCEPTION, MARCH 5, 1999, TO MARCH 31, 2000
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 8,965,343 897 1,095,958 - 1,096,855
Net loss, inception to
December 31, 1999 - - - (478,037) (478,037)
----------- ------ ----------- --------------- ----------
Balance, December 31, 1999 15,588,359 1,559 1,095,297 (478,037) 618,819
Issuance of shares for cash 666,000 67 1,048,533 - 1,048,600
Issuance of shares to acquire
copy protection license 502,713 50 791,723 - 791,773
Net loss, quarter ended
March 31, 2000 - - - (253,872) (253,872)
----------- ------ ----------- --------------- ----------
Balance, March 31, 2000 16,757,072 1,676 2,935,553 (731,909) 2,205,320
=========== ====== =========== =============== ==========
</TABLE>
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<PAGE>
E-VIDEOTV, INC.
A DEVELOPMENT STAGE COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
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. As certain information has been condensed or omitted from the notes
to the financial statements, these financial statements should only be read in
conjunction with the audited consolidated financial statements for the period
from inception, March 5, 1999, to December 31, 1999, contained in the company's
annual report on Form 10-KSB.
The Company was inactive from inception, March 5, 1999, to March 31, 1999,
accordingly, no comparative information is provided for that period.
The Company has not yet commenced its planned principal operations and it has
not yet earned any revenue. The Company's current operational focus is to
ensure that its electronic video delivery system is able to be commercially
exploited. To that end, management is devoting substantially all of the
Company's resources to the development of the system. The electronic video
delivery technology and software that it is in the process of developing will
require cash significantly in excess of its current resources. The ability of
the Company to develop this technology and software into a marketable product is
dependent on the Company's ability to obtain adequate additional financing,
develop a commercially saleable process and to achieve profitable operations.
The Company is devoting significant efforts to obtaining private financing to
fund the continued development of its technology and software. Significant
additional cash will be required.
2. SHARE CAPITAL
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.
The Company has agreed to issue 3 common shares to the licensor of the Company's
copy protection software for each 97 shares the Company issues in future to
third parties.
3. RELATED PARTY TRANSACTIONS
<TABLE>
<CAPTION>
Inception, Quarter
March 5, 1999, ended
to March 31, March 31,
2000 2000
--------------- ---------
<S> <C> <C>
$ $
Management fees paid to a company controlled by the
president of the Company for the services of the president
and a project manager 140,000 45,000
Consulting fees paid to other companies that employ other
directors and officers of the Company 77,001 18,352
Rent paid to a company that employs other directors and
officers of the Company 34,801 10,973
</TABLE>
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.
The Company has not yet developed the systems required to operate the eVideo
business. The following are the major steps and estimated costs to develop the
Company's operating systems:
<TABLE>
<CAPTION>
Estimated Estimated
Description Time Frame Cost
<S> <C> <C>
Capital Development Expenditures
- Design, write and test video ordering system software April - May $ 30,000
- Set-Top Box specifications engineering and design,
including embedded software programming, and
operational testing April - May 132,000
- Purchase and install computer hardware for movie file
servers and peripherals May 700,000
- Purchase and install computer hardware for web server May 200,000
- Purchase, install and configure operating system and
database management software May 150,000
- Purchase and configure software for embedding in
Set-Top boxes May 140,000
-----------
Total capital development expenditures 1,352,000
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Development Stage Operating Expenses, April - December 2000
- Marketing 250,000
- Personnel 500,000
- Professional fees 600,000
- Licensing fees 350,000
- Contract services 50,000
- Travel expenses 200,000
- Management services 90,000
- Offices and facilities 170,000
-----------
Total development stage operating expenses 2,210,000
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Total development stage cash requirements $ 3,562,000
============
</TABLE>
At March 31, 2000 the Company had cash on hand of $335,289. The Company
anticipates that it will need approximately $5,000,000 in the next three months
in order to meet its development timetable. The Company's development schedule
will be delayed unless the additional capital required by the Company is
available when needed.
A critical factor in the Company's ability to market its video movies will be
developing digital set-top box specifications for cable and satellite TV systems
and convincing manufacturers to include those specifications in their set-top
boxes. A digital set-top box capable of receiving and storing the videos to be
distributed by the Company is estimated to cost $600. Each subscriber will
require a digital set-top box in order to receive eVideoTV.
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<PAGE>
The Company's proposed capital expenditures do not include the cost of
manufacturing and distributing the set-top boxes. The Company's business plan
contemplates that the costs associated with manufacturing the set-top boxes will
be financed by cable and satellite television providers, advertisers and
customers. The inability of the Company to arrange third party funding for the
cost of the set-top boxes will have a material adverse effect on the Company's
proposed operations.
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<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 March 15, 2000 a majority of the shareholders of the Company approved an
amendment to the Company's certificate of incorporation that increased the
authorized capital to 100,000,000 shares of common stock, par value $0.0001 per
share, and 5,000,000 shares of preferred stock, par value $0.0001 per share.
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 3.1 Articles of Incorporation, as amended on March 30, 2000 page 12
(b) Reports on Form 8-K.
The Company did not file any reports on Form 8-K during the quarter ended March
31, 2000.
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<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 May 11, 2000 By /s/ Roy B. Bennett
-------------- -----------------------
Roy B. Bennett
President (Chief Executive Officer)
Date May 11, 2000 By /s/ Robert G. Dinning
-------------- -------------------------
Robert G. Dinning
Chief Financial Officer
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<PAGE>
EXHIBIT 3.1
E-VIDEOTV, INC.
AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
Pursuant to the provisions of the Delaware General Corporation Law,
e-VideoTV, Inc. adopts the following Amendment to its Certificate of
Incorporation:
The following amendment was adopted on March 15, 2000. Such amendment was
adopted by a vote of the shareholders owning a majority of the Corporation's
issued and outstanding shares of common stock pursuant to Section 228 of the
Delaware General Corporation Law. Notice of the adoption of the amendment has
been given to all shareholders in accordance with Section 228 (d) of the
Delaware General Corporation Law.
AMENDMENT
- ---------
Article IV of the Certificate of Incorporation is amended to read as
follows:
The authorized capital stock of the Corporation shall consist of
100,000,000 shares of common stock, $0.0001 par value, and 5,000,000 shares of
preferred stock, $0.0001 par value.
E-VIDEOTV, INC.
By /s/ Owen Granger
----------------------------------
Date: March 30, 2000 Owen Granger,
Secretary and Treasurer
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CAPTION>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 335289
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 338193
<PP&E> 3088
<DEPRECIATION> 0
<TOTAL-ASSETS> 2328308
<CURRENT-LIABILITIES> 122988
<BONDS> 0
0
0
<COMMON> 1676
<OTHER-SE> 2203644
<TOTAL-LIABILITY-AND-EQUITY> 2328308
<SALES> 0
<TOTAL-REVENUES> 1077
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 254949
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (253872)
<INCOME-TAX> 0
<INCOME-CONTINUING> (253872)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (253872)
<EPS-BASIC> (.03)
<EPS-DILUTED> (.03)
</TABLE>
