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As filed with the Securities and Exchange Commission on April 9, 1999
Registration No. 333-71733
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 2
to
Form S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
foreignTV.com, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 4899 13-4037641
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code) Identification Number)
</TABLE>
162 Fifth Avenue, Suite 1005A
New York, New York 10010
(212) 206-1121
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
---------------
JONATHAN BRAUN, Chief Executive Officer
foreignTV.com, Inc.
162 Fifth Avenue, Suite 1005A
New York, New York 10010
(212) 206-1121
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Copies to:
IRA I. ROXLAND, ESQ. LAW OFFICES OF
STEPHEN E. FOX, ESQ. VICTOR EDWIN STEWART, ESQ.
COOPERMAN LEVITT WINIKOFF 269 South Irving Street
LESTER & NEWMAN, P.C. Ridgewood, New Jersey 07450
800 Third Avenue (201) 445-3661
New York, New York 10022 Fax: (201) 445- 5301
(212) 688- 7000
Fax: (212) 755- 2839
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration
Statement
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be +
+changed. These securities may not be sold until the registration statement +
+filed with the Securities and Exchange Commission becomes effective. This +
+preliminary prospectus is not an offer to sell these securities nor does it +
+seek offers to buy these securities in any jurisdiction where the offer or +
+sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion
Preliminary Prospectus dated April 9, 1999
PROSPECTUS
foreignTV.com, Inc.
-----------
This is an initial public offering of our securities. Westminster Securities
Corporation, our underwriter, acting as our exclusive agent, is offering for
sale a minimum of 850,000 units and a maximum of 1,700,000 units. The
underwriter has agreed to exert its best efforts to sell the units on our
behalf, but has not committed to purchase any of the units for itself.
Each unit consists of:
. one share of common stock, and
. one warrant, which
. entitles the holder to purchase one share of common stock at a price
of $9.00 at any time
through April , 2002 [3 years from the date of this prospectus].
. may be redeemed by us, under certain circumstances, at $0.05 per
warrant at any time prior to
its expiration.
-----------
We are still in the planning stages of our development and have not as yet
commenced any operations. These are speculative securities. Please read the
Risk Factors beginning on page 5 before making a decision to invest in our
securities.
-----------
The underwriter will deposit all investor funds in an escrow account that
will be established at Citibank, N.A., 120 Broadway, New York, New York 10271.
. If the underwriter cannot sell at least 850,000 units by July , 1999 [90
days from the date of this prospectus], unless extended for up to an
additional 90 days, this offering will be terminated and all investor
funds in the Citibank escrow account will be promptly returned to
investors, with interest.
. If the underwriter is able to sell at least 850,000 units by July ,
1999, unless extended for up to an additional 90 days, we will receive
all investor funds in the Citibank escrow account, less the underwriter's
commissions and expense reimbursements, and this offering will continue
until the earlier of the sale of all 1,700,000 units or October , 1999
[180 days from the date of this prospectus].
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. It is illegal for any person to tell
you otherwise.
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<TABLE>
<CAPTION>
Total
----------------------
Per Unit Minimum Maximum
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<S> <C> <C> <C>
Public offering price.......................... $6.00 $5,100,000 $10,200,000
Underwriting commissions....................... $ .54 $ 459,000 $ 918,000
Proceeds, before expenses, to foreignTV.com.... $5.46 $4,641,000 $ 9,282,000
</TABLE>
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We have applied to the Nasdaq SmallCap Market to list our units, common stock
and warrants under the symbols FNTVU, FNTV and FNTVW. If we do not satisfy the
Nasdaq SmallCap Market's initial listing requirements, we intend to have our
units, common stock and warrants quoted on the OTC Bulletin Board.
-----------
Westminster Securities Corporation
-----------
April , 1999
<PAGE>
SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all the information that is important to you. To understand
our proposed business and this offering fully, you should read this entire
prospectus carefully, including the financial statements and related notes
beginning on page F-1.
Our Proposed Business
We aim to become a leading Internet broadcaster, initially specializing in
the origination of compelling foreign content, which we believe is not
currently available in a similar format on the Internet. We propose to develop
a number of related Internet Web sites, commonly called a network, utilizing
geographic location-specific site addresses that we have licensed for our
exclusive use for an initial term of 25 years. Each site on our proposed
foreignTV.com network will be accessible either directly by its own site
address or through our network's primary site at foreignTV.com. Each site will
offer original programming, in English, about local events, news, politics,
entertainment, business and culture, with a strong human interest appeal to
provide viewers with a sense of what it is like to not only visit but actually
live and work in that particular location. We initially intend to hire
freelance reporters, anchors and producers to develop and produce content for
each site. Ultimately, we intend to create additional channels for locations in
the United States and for special interest programming.
Our programming will be viewable on the Internet by means of currently
available streaming video technology, which allows a viewer to watch
programming without the time consuming task of first downloading content from a
Web site to the viewer's computer hard drive. As streaming technology is
perfected, we anticipate that watching a program on the foreignTV.com network
will be similar to watching a program on network or cable television.
We will not own the broadcasting technology used to transmit our content
over the Internet. We have reached an agreement in principle with Microsoft to
use and promote Microsoft's Windows Media Player(TM) on our primary
foreignTV.com Web site and on each of our network Web sites as they are
developed, to provide our viewers with the ability to download Windows Media
Player(TM) for their own use and to employ its Windows Media Technology 4.0 to
deliver our streaming video content. Microsoft, in turn, will provide a brief
summary of our programming content on its U.S. Web Events Internet site and
will enable their viewers to access our Web sites from such site. We intend to
contract with Internet service providers for network support and to enter into
strategic relationships with other content providers, key Internet companies,
and technology and bandwidth providers as we believe such relationships may
enable us to increase traffic and brand awareness.
We expect to offer a comprehensive, informative and entertaining experience.
A visitor to our proposed parisTV.com site, for instance, may view an exclusive
video news report about current events in Paris, produced in Paris but in
English and from an American-style human interest angle; watch an interview
with a local personality; go on a video tour of the streets of Paris; preview
an award-winning French film; or buy the latest novel or non-fiction book about
Paris, sample and purchase French music or make airline, hotel, and restaurant
reservations.
Our belief in the viability of our proposed business is based upon
assumptions that we have made about the public's willingness to treat streaming
video as an alternative to broadcast television and its acceptance of the
Internet as an advertising media and not upon independent feasibility studies
and assessments. Our assumptions may not be accurate or well-founded.
Our Concept
We will attempt to attract viewers to our foreignTV.com Web sites by
offering original real-time or on-demand programming that we believe a viewer
presently cannot find through other sources due to the American
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<PAGE>
media's trend towards featuring local news to the exclusion of "non-
sensational" foreign news. Additionally, we believe that viewers will be
attracted to foreignTV.com because of our niche programming, i.e., our concept
that viewers prefer channels that offer a particular subject matter as opposed
to being grouped into one-size-fits-all categories, and our human interest
approach to the subject matter, which will further differentiate us from
conventional news and travel sites.
We intend to offer access to the foreignTV.com network and its programming
free of charge to viewers. Our intention is to derive revenues from selling
advertising space on our Web sites using targeted marketing efforts. We also
intend to obtain commission revenues from electronic commerce tie-ins.
We are still in the planning stages of our development and have not as of
yet created any of the content to be offered on the foreignTV.com network or
established any of our contemplated network Web sites. We intend to devote our
initial efforts to developing our primary site at foreignTV.com which will
offer viewers information about our evolving business and a convenient means to
connect to our network Web sites as well as streaming video programming of
daily video briefings, film clips and feature stories from a diversity of
foreign locations. We will endeavor to complete our primary site at
foreignTV.com by the end of 1999. We also intend to establish and commence
operation prior to June 30, 2000 of two foreignTV.com network sites for London,
England and Paris, France if the minimum number of units that we are offering
are sold, and an additional two sites which we anticipate will be for Berlin,
Germany and Tokyo, Japan if all of the units that we are offering are sold.
Our History
We were incorporated in Delaware on November 12, 1998. Our offices are
located at 162 Fifth Avenue, Suite 1005A, New York, New York 10010, and our
telephone number is (212) 206-1121. Our primary Internet site can be accessed
at "http://www.foreigntv.com."
2
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The Offering
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<C> <S>
Securities offered 1,700,000 units, at $6.00 per unit, each
unit consisting of one share of common
stock and one warrant to purchase one share
of common stock. The common stock and
warrants will begin to trade separately on
the 31st day after the sale of at least
850,000 units or on such earlier date as
may be determined by the underwriter.
Common stock outstanding prior to 8,300,000 shares
this offering
Common stock to be outstanding 9,150,000 shares (minimum)
after this offering(1) 10,000,000 shares (maximum)
Warrants:
Number to be outstanding after 850,000 warrants (minimum)
this offering(1) 1,700,000 warrants (maximum)
Exercise period The exercise price of each warrant is $9.00
per share, subject to adjustment in certain
circumstances.
Exercise period The warrants will be exercisable at any
time, until they expire on April , 2002 [3
years after the date of this prospectus].
Redemption We may redeem the outstanding warrants in
whole or in part, at any time upon at least
30 days prior written notice to the
registered holders, at a price of $.05 per
warrant, provided that the closing bid
price of the common stock was at least
$12.00 for the 20 consecutive trading days
ending on the third business day prior to
our giving notice of redemption to the
warrantholders, and provided there is then
a current registration statement in place
for the shares underlying the warrants.
Proposed Nasdaq
SmallCap Market(2) Symbols for
common stock, FNTV
warrants FNTVW
and units FNTVU
</TABLE>
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(1) We have reserved additional shares of our common stock for issuance upon
the occurrence of the following:
. 1,700,000 shares upon exercises of the maximum number of warrants
included in the units.
. 170,000 shares upon exercise of the Underwriter's unit warrants.
. 170,000 shares upon exercises of the warrants included in the
Underwriter's units.
. 400,000 shares upon exercises of options available for grant under our
Stock Option Plan.
(2) We have applied to the Nasdaq SmallCap Market to list our units, common
stock and warrants. If we do not satisfy the Nasdaq SmallCap Market's initial
listing requirements, we intend to have our units, common stock and warrants
quoted on the OTC Bulletin Board. We cannot assure investors that our
securities will be listed on the Nasdaq SmallCap Market.
3
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Summary Financial Information
The following data have been derived from our financial statements and
should be read in conjunction with those statements, which are included in this
prospectus. The "As Adjusted" financial information gives effect to the sale of
both the minimum and maximum number of units as if such sale had occurred at
December 31, 1998.
<TABLE>
<CAPTION>
December 31, 1998
-------------------------------
Actual(1) As Adjusted(1)
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Minimum Maximum
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<S> <C> <C> <C>
Balance Sheet Data:
Total assets.................................. $83,000 $4,622,000 $9,161,000
Total liabilities............................. $ 6,670 $ 0 $ 0
Stockholders' equity.......................... $ 0 $4,622,000 $9,161,000
</TABLE>
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(1) The "as adjusted" data gives effect to our receipt subsequent to December
31, 1998 of $83,000 in stock subscriptions receivables.
4
<PAGE>
RISK FACTORS
An investment in our securities involves certain risks. To understand these
risks and to evaluate an investment in our securities, you should read this
entire prospectus, including the following risk factors.
We do not have any operating history upon which you may evaluate our future
performance
As we have no history of operations, investors will be unable to assess our
future operating performance or our future financial results or condition by
comparing these criteria against their past or present equivalents.
We cannot predict our future revenues
We expect to derive our future revenues from the sale of advertising on our
Web sites and from commissions upon electronic commerce transactions between
our viewers and our advertisers. We do not believe that we will be able to
attract advertisers to our Web sites unless we can develop and maintain a
viewer base of sufficient size and economic means to offer prospective
advertisers meaningful marketing opportunities for their products and services.
We cannot assure investors that viewers, generally, will be receptive to our
proposed programming content, in which event our future revenue generation
capabilities will be materially impaired.
We expect to incur significant losses for the foreseeable future
We expect to incur significant losses on both a quarterly and an annual
basis for the foreseeable future. We cannot assure investors that we will ever
achieve profitability.
We will be unable to attract viewers to our Web sites if the public rejects
streaming technology
Our success will depend upon market acceptance of streaming technology as an
alternative to broadcast television. Without streaming technology, viewers of
our proposed on-demand programming would not be able to initiate its playback
until such programming was downloaded in its entirety, resulting in significant
waiting times. The acceptance of streaming technology is dependant on a number
of factors, including
. market acceptance of streaming players such as Microsoft's Windows Media
Player(TM) and RealNetworks' RealPlayer(R).
. technological improvements to the Internet infrastructure to allow for
improved video and audio quality and a reduction in Internet usage
congestion.
. the ability of Internet users to acquire sufficient skill and experience
to download and operate streaming players.
. reconfiguration of older Web browsers to handle the inclusion of
streaming players.
Early streaming technology suffered from poor audio quality, and current
video streaming is of lower quality than conventional media broadcasts. In
addition, Internet congestion may interrupt audio and video streams, resulting
in user dissatisfaction. Our prospects will be adversely affected if streaming
media technology fails to achieve or maintain broad acceptance.
We will be unable to generate revenues if the Internet fails as an advertising
medium
We anticipate deriving revenues from the sale of advertisements on our
network. Internet advertising is a new and rapidly evolving industry whose
demand and market acceptance has not as yet been proven. Furthermore, standards
have as yet been widely accepted for the measurement of the effectiveness of
Web-based advertising. Our ability to generate advertising revenue will depend
upon a number of factors, including
. pricing of advertising on other Web sites.
. the amount of traffic on our proposed Web sites.
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. our ability to demonstrate user demographic characteristics that are
attractive to advertisers.
. the establishment of desirable advertising agency relationships.
Acceptance of the Internet among advertisers and advertising agencies will
also depend, to a large extent, on the level of Internet use by consumers and
upon growth in the commercial use of the Internet. Because global commerce and
the on-line exchange of information is new and evolving, we are unable to
predict with any assurance whether the Internet will prove to be a viable
commercial marketplace in the long term. Our prospective revenues would be
adversely affected if widespread commercial use of the Internet does not
develop or is substantially delayed, or if the Internet does not develop as an
effective and measurable advertising medium.
We will be unable to generate revenues if the Internet fails as a retail medium
Besides advertising, our only other intended source of revenue is from
electronic commerce tie-ins.E-commerce has only recently begun to develop and
is rapidly evolving. As is typical in a new and rapidly evolving industry,
demand and market acceptance for recently introduced services and products are
subject to a high level of uncertainty. Consumer satisfaction from shopping
over the Internet has been mixed and we cannot assure investors that e-commerce
will continue to grow. Our ability to derive revenues from arrangements with e-
commerce businesses depend upon a number of factors, including
. acceptance by the general public of the Internet as a convenient and
safe shopping forum.
. the offer of quality products at competitive process.
. our ability to attract viewers and direct such viewers to our e-commerce
business tie-ins.
Any curtailment of free access to streaming technology may affect our ability
to attract viewers
At present, prospective viewers can download streaming software off the
Internet, in most instances at no charge. We cannot assure investors that
streaming software will continue to be made available to the public free of
charge. If users are charged to acquire streaming software, streaming
technology may not be widely accepted by Internet users.
Our operations may be adversely affected by Internet infrastructure failures
Internet infrastructure failures or disruptions caused by increased traffic
on the Web, technical difficulties, vandalism or acts of god, among other
factors, may impede our ability to transmit streaming video content to viewers.
Repeated failures or disruptions may result in viewer dissatisfaction with the
Internet as a viewing medium, which may lead to a diminution of our viewer base
and resultant impairment of our ability to generate advertising and e-commerce
transaction revenues.
We must rely upon telecommunications carriers to provide accessibility to our
Web sites
We will have to rely on local and long-distance telecommunications companies
to provide us with data communications capacity. These providers may experience
service disruptions or have limited capacity, which could disrupt our provision
of streaming video content to our viewers. We may not be able to replace or
supplement these services on a timely basis, if at all. In addition, because we
must rely on third-party telecommunications services providers for our
connection to the Internet, we may not be able to control decisions regarding
the availability of, or our access to, services at any particular time.
We may not be able to establish or maintain relationships with third parties
upon whom we will depend to provide us with streaming technology, which could
result in our inability to provide content to our viewers
We do not intend to develop our own streaming technology. We intend to
license such technology from companies such as Microsoft or RealNetworks in
order to deliver our proposed content over the Internet. We cannot assure
investors that we will be able to do so.
6
<PAGE>
Our success is dependent on our key personnel who we may not be able to retain
and we may not be able to hire enough additional personnel to meet our needs
Our success will depend to a large degree upon the efforts of our
management, our technical and marketing personnel and the reporter/anchors who
will be staffing our content bureaus. Our success will also depend on our
ability to attract and retain additional qualified management, technical and
marketing personnel and reporter/anchors. Hiring employees with the combination
of skills and attributes required to carry out our strategy is extremely
competitive. We do not have "key person" life insurance policies upon any of
our officers or other personnel. Our loss of the services of key personnel,
particularly either or both of Jonathan Braun, our vice chairman and chief
executive officer, and our president, Albert T. Primo, or our inability to
attract qualified replacements, could adversely affect our prospective growth.
We will compete for both viewers and advertisers with numerous larger and well-
financed companies
We expect to compete with
. other Web sites, Internet access providers and Internet broadcasters that
provide content to attract users.
. on-line services, other Web site operators and advertising networks, as
well as traditional media such as television, radio and print, for a
share of advertisers' total advertising budgets.
. traditional media such as broadcast television, cable television, radio
and print with international content.
To compete successfully, we will have to provide sufficiently compelling and
popular content to generate users and support advertising intended to reach
such users. We believe that the principal competitive factors in attracting
Internet users include the quality of service and the relevance, timeliness,
depth and breadth of content and services offered.
We also expect to compete with on-line services, other Web site operators
and advertising networks, as well as traditional media such as television,
radio and print for a share of advertisers' total advertising budgets. We
believe that the principal competitive factors for attracting advertisers
include
. the number of users accessing our Web sites.
. the demographics of our users.
. our ability to deliver focused advertising and interactivity through our
Web sites.
. the overall cost-effectiveness and value of advertising on our network.
. our ability to achieve recognition of the foreignTV.com name.
Our inability to successfully compete, whether expressed in terms of the
number of viewers attracted to our Web sites or in our ability to attract
advertising revenues, could materially adversely affect our likelihood of
ultimately achieving profitability.
There are major risks associated with establishing international operations
Our intended establishment of operations centers in foreign countries and
hiring freelance reporter/anchors will entail significant expenditures and some
knowledge of each country's national and local laws, including tax and labor
laws. Only two of our executive officers have any experience in conducting
business operations in foreign countries, and such experience is not directly
related to our proposed foreign activities. Furthermore, there are certain
risks inherent in conducting business internationally, including, among others,
regulatory requirements, legal uncertainty regarding liability, difficulties in
staffing and managing foreign operations, longer payment cycles, different
accounting practices, currency exchange rate fluctuations, tariffs and other
trade barriers, political instability and potentially adverse tax consequences,
any of which could adversely affect
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our growth opportunities. Furthermore, we intend to hire English-speaking,
experienced freelance reporter/anchors to create the content for each of our
Web sites. We cannot assure investors that we will be able to attract and
retain such hires.
We may not be able to protect our proprietary rights
We regard our copyrights, trade secrets and similar intellectual property as
significant to our growth and success. We rely upon a combination of copyright
and trademark laws, trade secret protection, confidentiality and non-disclosure
agreements and contractual provisions with our employees and with third parties
to establish and protect our proprietary rights. We have applied for federal
trademark protection for "foreignTV.com" and intend to apply for federal
trademark protection for all domain names used in the foreignTV.com network.
Legal standards relating to the validity, enforceability and scope of
protection of certain proprietary rights in Internet-related industries are
uncertain and still evolving. We are unable to assure investors as to the
future viability or value of any of our proprietary rights or those of other
companies within the industry. We are also unable to assure investors that the
steps taken by us to protect our proprietary rights will be adequate.
Furthermore, we can give no assurance that our proposed business activities
will not infringe upon the proprietary rights of others, or that other parties
will not assert infringement claims against us.
We will need significant additional financing to grow our proposed network
Even if we are able to sell all of the units, the net proceeds will be
insufficient to enable us to develop, establish and operate more than five
foreignTV.com Web sites, including our primary site at foreignTV.com. We will
require substantial additional financing in order to seek to expand our network
beyond these initial sites, and to become a meaningful competitor in the
Internet broadcast industry. We have no current arrangements with respect to,
or sources of, additional financing and there can be no assurance that any such
financing will be available to us on commercially reasonable terms, or at all.
Moreover, if we raise this additional capital through borrowing or other debt
financing, we would incur substantial interest expense. Sales of additional
equity securities will dilute on a pro rata basis the percentage ownership of
all holders of common stock. Any inability to obtain additional financing will
materially adversely affect us, including possibly requiring us to
significantly curtail operations.
Limitations upon our ability to produce programming may adversely affect our
viewer base
We expect to have limited resources for the foreseeable future to produce
original programming. The lack of original programming, with a consequent
inability to attract and maintain a significant viewer base, could adversely
affect our prospects.
We may be subject to legal liability for Internet content
We may be subject to claims under both United States and foreign law for
defamation, libel, invasion of privacy, negligence, copyright or trademark
infringement, or other theories based on the nature and content of our proposed
programming. Although we intend to acquire and maintain general liability
insurance, it is possible that such insurance may not cover potential claims of
this type or may not be adequate to indemnify us for all liabilities that may
be imposed upon us. If we incur any liability in excess of our insurance
coverage, our proposed business and operating results may be adversely
affected.
Government regulation of the Internet could slow its growth
Although there are currently few laws and regulations directly applicable to
the Internet, it is likely that new laws and regulations will be adopted in the
United States and elsewhere covering issues as music licensing, copyrights,
privacy, pricing, sales taxes and characteristics and quality of Internet
services. The adoption of restrictive laws and regulations could slow Internet
growth or its use as a commercial or advertising medium.
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Security concerns may limit Internet growth and our ability to generate
revenues
Inappropriate use of the Internet by third parties could potentially
jeopardize the security of confidential information which could deter certain
foreignTV.com viewers from making e-commerce purchases, thereby adversely
impacting a potentially significant source of our anticipated revenue. We
cannot assure investors that users of our programming or persons accessing e-
commerce businesses from our network will not assert claims of liability
against us as a result of any such failures or breaches. Further, until more
comprehensive security technologies are developed, the security concerns of
actual and potential users may inhibit the growth of the Internet service
industry in general and our revenue prospects in particular.
The Year 2000 issue could adversely affect our proposed operations
The Year 2000 issue is the result of computer programs only being able to
use two digits rather than four to define the applicable year. Thus, date-
sensitive software may recognize a date using "00" as the year 1900 rather than
the year 2000. System failures caused by the Year 2000 issue could cause
miscalculations and disruptions of operations, including, among others, a
temporary inability to process transactions, send invoices or engage in similar
normal business activities. We have reviewed our existing systems and we have
determined that there are no significant Year 2000 issues that need to be
addressed. As we have not as yet established strategic relationships with any
Internet service providers or streaming video broadcasters, we are unable to
predict the extent to which the Year 2000 issue will affect their rendition of
services on our behalf. We also cannot assure investors that the service or
product offering of our hardware or software suppliers are Year 2000 compliant.
The interests of our controlling shareholders may conflict with our interests
and the interests of our other shareholders
We license most of the Internet addresses that we intend to use in our
proposed business from either Jonathan Braun, our chief executive officer, or
from a not-for-profit organization which is controlled by Mr. Braun and certain
of our other officers and directors. These relationships may give rise to
future conflicts of interest, which may work to our detriment and to that of
our other shareholders and to the benefit of these officers and directors. We
do not as yet have any independent directors who might otherwise be in a
position to impartially resolve any such conflicts.
Our underwriter lacks experience
Our underwriter has relatively limited experience as a lead underwriter of
public equity offerings. This lack of experience may adversely impact both the
future liquidity and market price of our securities.
The book value of your common stock will be substantially diluted by as much as
$5.50 per share
The public offering price of the common stock component of the units,
assuming no value is assigned to the warrant component, will be substantially
higher than the pro forma tangible book value per share of outstanding common
stock. Purchasers of common stock in this offering will therefore experience
immediate and substantial dilution in tangible book value per share, and the
existing stockholders will receive a material increase in the tangible book
value per share of their shares of common stock. The dilution to investors in
this offering will be $5.50 per share assuming the minimum number of units are
sold and $5.08 per share assuming all of the units are sold.
The large number of shares of common stock available for future sale could
adversely affect
the price of our publicly traded common stock
All of the shares of common stock sold in this offering will be freely
tradeable without further restriction or further registration under the
Securities Act. However, shares owned by our affiliates, as this term is
defined in the Securities Act, will be restricted and subject to the
limitations of SEC Rule 144. Subject to certain
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contractual limitations, holders of restricted shares generally will be
entitled to sell these shares in the public market without registration either
pursuant to Rule 144 or any other applicable exemption under the Securities
Act. Sales of substantial amounts of restricted shares when they become
available for public sale, or the anticipation of such sales, could adversely
affect the then prevailing market price of our common stock and may also impair
our future ability to raise equity capital.
Our right to issue preferred stock may facilitate management entrenchment
Our board has the authority to issue up to 5,000 shares of preferred stock
and to determine the price, rights, preferences, privileges and restrictions,
including voting right, of these shares without approval of our stockholders.
Any future issuance of shares of preferred stock could be employed by our
present management to delay, defer or prevent a change in our control or to
discourage bids for our common stock at a premium above its market price solely
to retain their respective management positions, which may not be in the best
interests of our stockholders, generally. We have no present plans to issue any
shares of preferred stock.
The market for our common stock and warrants after this offering may be
volatile
The market price of our securities following this offering may be highly
volatile as has been usual with the securities of other small capitalization
companies and Internet stocks in general. Factors such as our operating
results, announcements as to technological developments and various factors
affecting streaming technology and the Internet industry in general may have a
significant impact on the market price of our securities. In addition, in
recent months the stock market has experienced a high level of price and volume
volatility, especially with respect to Internet stocks, and the market prices
for the securities of many companies, particularly of small and emerging growth
companies, which trade in the over the counter market have experienced high
price fluctuation which have not necessary been related to the operating
performance of such companies.
We may be subject to the SEC's "penny stock" rules if our common stock falls
below $5.00 per share
If the trading price of our common stock was to fall below $5.00 per share,
trading in our securities would be subject to the requirements of the SEC's
penny stock rules. These rules require the delivery prior to any penny stock
transaction of a disclosure schedule explaining the penny stock market and all
associated risks and impose various sales practice requirements on broker-
dealers who sell penny stocks to persons other than established customers and
accredited investors, which are generally defined as institutions or an
investor with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 together with the spouse. For these types of transactions
the broker-dealer must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transaction
prior to sale. In addition, broker-dealers must disclose commissions payable to
both the broker-dealer and the registered representative and current quotations
for the securities they offer. The additional burdens imposed upon broker-
dealers by such requirements may discourage broker-dealers from effecting
transactions in our common stock which could severely limit its market price
and liquidity.
Investors may not have any significant impact on controlling our affairs
Upon completion of this offering, our current stockholders, including our
officers and directors, collectively, will own approximately 91% of the then
issued and outstanding shares of our common stock if the minimum number of
units are sold and approximately 83% if all of the units are sold. Stockholders
are not entitled to cumulate their votes for the election of directors.
Accordingly, it is likely that our current stockholders will be able to elect
all of the members of our board and otherwise direct our affairs.
Our inability to achieve a Nasdaq listing for our securities could adversely
affect both their liquidity and market price
If we do not satisfy the initial listing requirements of the Nasdaq SmallCap
Market, we expect the units, common stock and warrants will be traded in the
over-the-counter market. We anticipate that they will be
10
<PAGE>
quoted on the OTC Bulletin Board, an NASD sponsored and operated inter-dealer
automated quotation system for equity securities not included in The Nasdaq
Stock Market, as well as in the NQB Pink Sheets. The OTC Bulletin Board was
introduced as an alternative to "pink sheet" trading of over-the-counter
securities. Although we believe that the OTC Bulletin Board has been recognized
by the brokerage community as an acceptable alternative to the NQB Pink Sheets,
we cannot assure investors that the liquidity and prices of our securities in
the secondary market will not be adversely affected.
Warrantholders may be unable to exercise their warrants in the absence of an
effective registration statement
We will be able to issue shares of our common stock upon exercise of the
warrants only if there is a then-current prospectus relating to the common
stock issuable upon the exercise of the warrants under an effective
registration statement filed with the SEC, and only if such common stock is
qualified for sale or exempt from qualification under applicable state
securities laws of the jurisdictions in which the various holders of warrants
reside. Although we have agreed to use our best efforts to meet such
requirements, we cannot assure investors that we will be able to do so. The
warrants may be deprived of any value and the market for the warrants may be
limited if a then current prospectus covering the common stock issuable upon
the exercise of the warrants is not effective pursuant to an effective
registration statement or if such common stock is not qualified or exempt from
qualification in the jurisdictions in which the holders of the warrants reside.
Forward looking statements
This prospectus contains certain forward-looking statements and information
relating to foreignTV.com, Inc. and its proposed business. We have identified
forward-looking statements in this prospectus using words such as "believes,"
"intends," "expects," "predicts," "may," "will," "should," "contemplates,"
"anticipates," or similar statements.
These statements are based on our beliefs as well as assumptions we made
using information currently available to us. Because these statements reflect
our current views concerning future events, these statements involve certain
risks, uncertainties and assumptions. Actual future results may differ
significantly from the results discussed in the forward-looking statements.
11
<PAGE>
USE OF PROCEEDS
We anticipate that the net proceeds from the sale of the minimum number of
units, after deducting underwriting commissions and other expenses of this
offering, will aggregate $4,346,000, and $8,857,000 if all of the units are
sold. We currently intend to use such net proceeds for the following purposes:
<TABLE>
<CAPTION>
Minimum Maximum
------------------- -------------------
<S> <C> <C> <C> <C>
Development and establishment of net-
work sites.......................... $ 300,000 (6.9)% $ 600,000 (6.8)%
Establishment of foreign-based "con-
tent' bureaus and development of
programming......................... 2,000,000 (45.9)% 4,000,000 (45.1)%
Network promotion and advertising.... 200,000 (4.6)% 1,500,000 (16.9)%
Payment of Web address license
fees(1)............................. 158,000 (3.6)% 158,000 (1.8)%
Working capital and general corporate
purposes, including payment of offi-
cers' salaries...................... 1,688,000 (38.8)% 2,599,000 (29.4)%
$4,346,000 (100.0)% $8,857,000 (100.0)%
========== ======== ========== ========
</TABLE>
- --------
(1) Represents payment of license fees to Jonathan Braun, our chief executive
officer, and to a not-for-profit organization controlled by Mr. Braun and
certain of our other officers and directors for a period of two years from
the date of this prospectus.
The foregoing represents our best estimate of our use of the net proceeds
from the sale of units, based upon our present planning, Internet industry
conditions and our estimated future revenues and expenditures. We may change
our intended use of such net proceeds in response to unanticipated events such
as increased expenses, accelerated growth or stronger than anticipated
competition, which may cause us to redirect our current priorities and re-
allocate or use portions of such net proceeds for other purposes.
We anticipate that the net proceeds that we will receive from the sale of
the minimum number of units will be adequate to fund our currently proposed
activities for at least 18 months. Pending our use of such net proceeds, we
intend to invest such net proceeds in short-term, investment grade, interest-
bearing instruments.
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<PAGE>
DILUTION
The difference between the public offering price per share of our common
stock, assuming no value is attributed to the warrants included in the units,
and the pro forma net tangible book value per share of our common stock after
this offering constitutes the dilution to investors in this offering. Net
tangible book value per share is determined by dividing our net tangible book
value, which represents our total tangible assets less our total liabilities,
by the number of outstanding shares of common stock.
At December 31, 1998 and after giving retroactive effect to our sale in
January 1999 of 8,300,000 shares of our common stock at $.01 per share, or an
aggregate of $83,000, our net tangible book value was $83,000, or $(.01) per
share of common stock. After giving effect to the sale of a minimum of 850,000
and a maximum of 1,700,000 shares of common stock included in the units, less
the estimated expenses of this offering, our pro forma net tangible book value
at December 31, 1998 would have been $4,622,000, or $.50 per share if the
minimum number of units is sold or $9,161,000 or $.92 per share if the maximum
number of units is sold, representing an immediate increase in our net tangible
book value of $.49 per share (minimum) and $.91 per share (maximum) to current
stockholders and an immediate dilution of $5.50 per share (minimum) and $5.08
per share (maximum) to new investors. The following table illustrates the
foregoing information with respect to dilution to new investors on a per share
basis, assuming no value is attributed to the warrants included in the units:
<TABLE>
<CAPTION>
Minimum Maximum
------------ ------------
<S> <C> <C> <C> <C>
Public offering price............................ $6.00 $6.00
Net tangible book value before offering........ $(.01) $(.01)
Increase attributable to new investors......... .49 .91
----- -----
Pro forma net tangible book value after offer-
ing............................................. .50 .92
----- -----
Dilution to new investors........................ $5.50 $5.08
===== =====
</TABLE>
The following table sets forth, with respect to our current stockholders and
new investors, a comparison of the number of shares of common stock acquired
from us, the percentage ownership of such shares, the total consideration paid,
the percentage of total consideration paid and the average price per share (1):
<TABLE>
<CAPTION>
Shares Purchased Total Consideration
-------------------- -------------------------------------- Average Price
Amount Percentage Amount Percent Per Share
-------------------- --------------- ---------------------- --------------- ---------------
Minimum Maximum Minimum Maximum Minimum Maximum Minimum Maximum Minimum Maximum
--------- ---------- ------- ------- ---------- ----------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Existing Stock-holders.. 8,300,000 8,300,000 90.7% 83.0% $ 83,000 $ 83,000 1.6% 0.8% $0.01 $0.01
New Investors........... 850,000 1,700,000 9.3% 17.0% $5,100,000 $10,200,000 98.4% 99.2% $6.00 $6.00
Total................... 9,150,000 10,000,000 100.0% 100.0% $5,183,000 $10,283,000 100.0% 100.0%
</TABLE>
- --------
(1) Does not include the issuance of up to 2,440,000 shares of our common stock
which we have reserved for issuance upon future exercises of options and
warrants.
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<PAGE>
CAPITALIZATION
The following table sets forth our capitalization at December 31, 1998 and
as adjusted to give effect to the sale of the units and the application of the
estimated net proceeds derived from the sale of the minimum and maximum number
of units offered by this prospectus.
<TABLE>
<CAPTION>
As Adjusted(1)(2)
--------- ---------------------
Actual(1) Minimum Maximum
--------- ---------- ----------
<S> <C> <C> <C>
Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares
authorized; -0- shares issued and
outstanding................................. -- -- --
Common stock, $.01 par value, 30,000,000
shares authorized; 8,300,000 shares issued
and outstanding; 9,150,000 and 10,000,000
shares issued and outstanding, as adjusted.. $ 83,000 $ 91,500 $ 100,000
Capital in excess of par value............... 0 4,530,500 9,061,000
Accumulated deficit.......................... 0 0 0
Less stock subscriptions receivable.......... $(83,000) $ 0 $ 0
-------- ---------- ----------
Total stockholders' equity................ $ 0 $4,622,000 $9,161,000
======== ========== ==========
</TABLE>
- --------
(1) The "as adjusted" data gives effect to our receipt subsequent to December
31, 1998 of $83,000 in stock subscriptions receivables.
(2) Does not include up to 2,440,000 shares of our common stock that we have
reserved for issuance upon future exercises of options and warrants.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We are in a developmental stage. We have not generated any revenues to date.
Our entire activity since our inception has been to prepare for our proposed
fundraising through an offering of our equity securities.
We will be unable to begin our proposed operations unless and until we are
able to sell a minimum of 850,000 units. We expect to receive net proceeds from
such sale of approximately $4,346,000, which we intend to primarily utilize for
the development of our primary site at foreignTV.com and for the development
and establishment of two Web sites, for the establishment of a European
operations base and for program development, as well as for the other purposes
set forth under "Use of Proceeds" elsewhere in this prospectus. Our first two
location-specific Web sites are expected to be london-TV.com and parisTV.com.
If we are able to sell all of the units, we expect to receive net proceeds
of approximately $8,857,000, which we intend to primarily utilize for the
development and establishment of two additional network sites, which we expect
to be berlinTV.com and the tokyoTVchannel.com., for a total of five sites. We
will also substantially increase our expenditures to promote our proposed
foreignTV.com network in an effort to develop advertising revenues and e-
commerce tie-in commissions.
We intend to commence broadcasting on the primary site at foreignTV.com
shortly after we sell the minimum number of units. The primary site at
foreignTV.com will contain daily news briefings from locations around the world
as well as other programming. Most programming found on the primary site at
foreignTV.com will also be found on its corresponding location-specific Web
site, as and when operational. We intend to launch two location-specific Web
sites, if the minimum number of units are sold, and four location-specific Web
sites, if the maximum number of units are sold, by March 31, 2000, and
additional Web sites at staged intervals thereafter, upon the successful
completion of additional financing or if our proposed business becomes
profitable.
Our business plan, which assumes that we will not derive any significant
revenues from either advertising sales or e-commerce for at least 12 months
after our first sale of units, contemplates that the net proceeds that we
expect to receive from the sale of a minimum of 850,000 units should be
sufficient to sustain our proposed operations for at least 18 months after our
receipt of such net proceeds.
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<PAGE>
PROPOSED BUSINESS
foreignTV.com
We aim to become a leading Internet broadcaster, initially specializing in
the origination of compelling international content, which we believe is not
currently available in a similar format on the Internet. We propose to develop
a network of Internet Web sites, utilizing geographic location-specific Web
site addresses that we have licensed for our exclusive use for an initial term
of 25 years, to offer viewers foreign newscasts and other programming produced
in various locations worldwide. Each site, or "channel," on our proposed
foreignTV.com network, will be accessible either directly by its own Web site
address or through our network's primary site at foreignTV.com. Each site will
offer original programming, in English, of local events, politics,
entertainment, business and culture, with a strong human interest appeal to
provide viewers with a sense of what it is like to not only visit but actually
live and work in that particular location. We initially intend to hire
freelance reporters, anchors and producers to produce the content for each
site. Ultimately, we intend to create additional channels for locations in the
United States and for special interest programming.
Our programming will be viewable on the Internet by means of currently
available streaming video technology, which allows a viewer to watch live or
on-demand programming without the time consuming demands of downloading video
directly onto the viewer's computer hard drive. As this technology is
perfected, we anticipate that watching a program on the foreignTV.com network
will be similar to watching a program on network or cable television.
We expect to offer a comprehensive, informative and entertaining experience,
which will enable a visitor to our proposed parisTV.com web site, for instance,
to view an exclusive video news report about current events in Paris, produced
in Paris but in English and from an American-style human interest angle; watch
an interview with a local personality; go on a video tour of the streets of
Paris; preview an award-winning French film; or buy the latest novel or non-
fiction book about Paris, sample and purchase French music or make airline,
hotel, and restaurant reservations.
We will not own the broadcasting technology used to transmit our content
over the Internet. Rather, we intend to license such technology from streaming
media broadcast hosts, and contract with Internet service providers for network
support.
Industry Background
The Internet
The Internet is a global web of computer networks. Developed over 25 years
ago, this "network of networks" allows any computer attached to the Internet to
talk to any other using the Internet Protocol. The Internet has traditionally
been subsidized by the U.S. federal government. As the number of commercial
entities that rely on the Internet for business communications and commerce has
increased, the level of federal subsidies has significantly diminished, and
funding for the Internet infrastructure and backbone operations has shifted
primarily to the private sector. Further, the Internet has historically been
used by academic institutions, defense contractors and government agencies
primarily for remote access to host computers and for sending and receiving e-
mail.
Individuals are connecting directly to the Internet through Internet access
services such as those provided by MCI, NETCOM, PSINet and UUNET. These
services are growing as easy-to-use software package make accessing the
Internet as easy as getting onto the popular on-line services. To compete with
these direct Internet access providers, consumer on-line services including
AOL, CompuServe and Prodigy, have also introduced Internet access gateways for
their existing subscribers. With these gateways, the on-line services
effectively become large Internet "on-ramps," bringing large numbers of
subscribers onto the Internet.
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<PAGE>
World Wide Web
Much of the recent growth in Internet use by businesses and individuals has
been driven by the emergence of a network of servers and information available
on the Internet called the World Wide Web. The Web, based on a client/server
model and a set of standards for information access and navigation, can be
accessed using software that allows non-technical users to exploit the
capabilities of the Internet. The Web enables users to find, retrieve and link
information on the Internet in a consistent way that makes the underlying
complexities transparent to the user. Electronic documents are published on Web
servers in a common format described by the hypertext markup language commonly
referred to as "html". Web client software can retrieve these documents across
the Internet by making requests using a standard protocol called Hypertext
Transfer Protocol, commonly referred to as "http".
The proliferation of Web clients has created significant demand for software
to enable Internet servers and private servers on corporate networks to
function as Web servers. These servers are used by organizations to offer their
products and services on the Internet and to publish confidential company
information to employees inside the enterprise. Web usage is expected to be
further fueled by advances in Web client, server and application software, in
concert with technological developments that drive cost reductions and
performance enhancements.
Internet Commerce
The Internet provides organizations and individuals with new means to
conduct business. Commercial uses of the Internet include business-to-business
and business-to-consumer transactions, product marketing, advertising,
entertainment, electronic publishing, electronic services and customer support.
The Internet offers a new and powerful medium for traditional retail and mail
order businesses to target and manage a wider customer base more rapidly,
economically and productively. We believe that only a small fraction of this
retail business is currently conducted electronically but we expect it to grow
substantially. Another important application for Internet commerce is
electronic publishing through advertiser supported and fee-based Internet
services. Electronic publishing offers substantial savings as compared to
publishing on paper or computer discs. In addition, Web software permits the
publishing of audio files and video clips as well as text and graphical data.
In addition to retailers and publishers, other new businesses are appearing
on the Web as it provides access to a growing base of home, business and
education customers. Financial service institutions are providing on-line
banking information, stock information and trading services. Companies from
many industries are publishing product and company information to their channel
partners and customers, providing customer support via the Web, allowing
customers to immediately buy products on-line, and collecting customer feedback
and demographic information interactively.
Streaming Technology
Until quite recently, all Internet sites were text-based with little or no
movement or sound. It was possible to view a video clip, but it required
downloading the video onto the viewer's computer. Technology introduced in 1995
called "streaming" changed this by introducing sound, video and animation to
sites all over the Internet, either as "on demand" or live broadcasts.
Streaming addresses three major problems that downloading multimedia files
onto a viewer's computer are plagued with
. the entire file needs to be downloaded before the viewer can play back
the file.
. lack of sufficient data-carrying capacity, or bandwidth.
. some content developers do not want their multi-media files to be
downloaded and stored. Streaming addresses copyright issues because the
files cannot be downloaded.
17
<PAGE>
Downloading
Streaming reduces the time a viewer needs to wait while an audio or video
digital file is downloaded onto the viewer's computer. Before streaming
technology, a viewer wishing to watch a video clip while on the Internet had to
download the entire file before any part of it could be viewed. For a PC owner
using a 28.8kbs narrow bandwidth modem, the most common speed of household PC
modems, it could take between 5-10 minutes to download a 30 second to one
minute audio file or a 5 seconds to 45 second video file. Larger files would
take even longer to download, during which time the viewer was left to do
nothing else but watch a status meter. When a user opens or accesses an audio
or video file that uses streaming technology, a portion of the data is first
downloaded into a form of computerized holding pen, usually in a matter of
seconds. When the holding pen is full, the data starts to play, while
additional data is continuously downloaded to keep the holding pen full.
Technology
Streaming multimedia is created by taking standard video tape formats and
digitizing and compressing the information using encoder software on a Pentium-
class PC. The final product--a digital file--is then placed on a server where a
user can link to it using streaming software.
Although software is required to view streaming video, many browsers now
come with built in players. Additionally, programs such as Microsoft's Windows
Media Player(TM) or RealNetwork's RealPlayer(R) which play streaming multimedia
clips, can be downloaded from the Internet for free. It is estimated that more
than 40 million users have downloaded these and similar programs since 1996.
The technology has advanced to the point where the quality of audio streaming
over a 28.8kbps modem, such as listening to your favorite radio station over
the Internet, rivals FM radio and over a T1 line, which is most often found in
offices, rivals compact disk quality. Video, which requires much more data to
download than audio streaming, can now also be viewed over 28.8kbps modems,
although not without legitimate complaints as to quality. T1 lines allow for
improved picture quality, however it still does not rival the quality of a
television broadcast.
Streaming technology requires large amounts of bandwidth due to the immense
amount of data contained in each video clip. Bandwidth technologies have not
yet progressed to the point to implement a full-scale video network allowing a
viewer to watch his or her favorite movies or television shows over the
Internet, but we believe that technological improvements will make that a
reality in the near future. Technological improvements to compression,
bandwidth and the introduction of multi-casting--where a broadcaster can send a
single data stream to a virtually unlimited number of users--will allow
streaming video quality, and subsequently, viewers, to increase dramatically.
Increased viewers to Internet sites utilizing such technology will give a
competitive edge over sites that do not utilize streaming technology.
Additionally, the introduction of cable modems, which rival the speed of T1
lines, are introducing higher quality streaming videos into people's homes.
According to Dataquest, as reported in Wired News, sales of cable modems more
than doubled in 1998 and worldwide shipments of cable modems will hit 492,000,
up from 214,000 units in 1997. Worldwide shipments are estimated to reach 2.4
million units by 2002. Further advances in PC-based technologies are also
increasing the likelihood that streaming video that rivals television picture
quality will someday be ubiquitous in people's homes. For instance, Compaq
recently announced that it will market a PC with pre-installed high speed
Internet access equipment, which is being billed as a bid to extend the powers
of the Internet to US consumers and to accelerate development of a mass market
for high speed Internet use.
Although the quality of streaming video is not yet comparable with
television, we believe that most users have positive experiences with or
recognize the potential of streaming at this early stage of technology and will
continue to use it as the technology matures.
18
<PAGE>
The Internet as Television
An additional advantage of streaming multimedia is that it allows a user to
view content on his or her own time, not just on television network schedules.
The borderless nature of the Internet lets viewers watch what they want when
they want it. We believe that once the picture quality improves to rival
today's television broadcasts, the average PC user will prefer the convenience
and ease of calling up a program over the Internet instead of traditional
broadcast or cable television.
Broadcasting audio and video content over the Internet offers certain other
advantages that are not generally available from traditional media sources.
Currently available analog technology and government regulations limit the
ability of radio and television stations to broadcast beyond certain geographic
areas and radios and televisions are not widely used in office buildings and
other workplaces, where Internet access has become commonplace.
Our Growth Strategy
We will attempt to create a network of Web sites which will broadcast
original programming using streaming video technology through the Internet.
Each individually accessible Web site will also be linked to our primary site
at foreignTV.com which we intend to also broadcast content, so if a user logs
onto foreignTV.com, he or she will have the option of clicking through to any
one of our other sites. Each site will deliver content produced in different
locations world-wide and will broadcast programming only related to that
location. Although the programming will be produced in that specific location,
it will be sent back to our offices in New York for editing and eventual
transmittal over the Internet.
We intend to attract viewers to our foreignTV.com Web sites by offering
original programming that we believe a viewer presently cannot find anywhere
else. According to publications such as the Economist and the New York Times,
the current trend in the news media is away from foreign reporting towards
domestic, from politics to human interest and from issues to people. We will
seek to capitalize on this trend by filling the void left by the US news media
with our original, foreign-based programming.
We believe that in-depth network news coverage of world affairs is
diminishing in both quantity and quality; with the exceptions of wars,
terrorist incidents, disasters and the like, the sensation-seeking networks are
turning away from the world.
This is in part due to a feeling of relative calm following the end of the
Cold War as well as a rich-world insularity. Although specific examples of
global unrest still prevail, the collapse of southeast Asian and Latin American
economies and the Balkan crisis for example, we believe the inward-bound
reflections of the major news networks is continuing. An example of these
cutbacks can be seen in the lack of on-the-scene reporting which sacrifices the
depth and perspective that only an on-the-scene reporter can give. We believe
that the increased competition between journalism and entertainment, along with
what appears to be a widespread belief held by producers that American
audiences are no longer as interested in daily events happening beyond the
United States' borders, is causing a decline of international-oriented news.
Americans who require or demand international-oriented news must now turn to
new media to satisfy their cravings.
An additional trend we will seek to capitalize upon is the concept that as
more and more channels are beamed into people's homes, people will no longer
watch one-size-fits-all programming and will instead focus on channels that
offer a particular subject matter, such as a television station that solely
broadcasts golf and golf-related shows.
We are still in the planning stages of our development and have not as yet
created any of the content to be offered on the foreignTV.com network or
develop any of the Web sites to view such content. We intend to initially
develop, establish and operate our primary site at foreignTV.com, which, in
addition to providing information about us and our business and, eventually,
serving as a gateway to other foreignTV.com Web sites, will feature its own
programming. We also intend by March 31, 2000, to develop, establish and
operate two
19
<PAGE>
foreignTV.com Web sites for London, England and Paris, France if we are able to
sell the minimum number of units, and an additional two Web sites, which we
anticipate will be for Berlin, Germany and Tokyo, Japan, if we are able to sell
all of the units.
Upon the consummation of this offering, we intend to feature on our primary
site at foreignTV.com, daily video briefing from select foreign cities which we
will commission from freelance correspondents, as well as interviews of foreign
personalities, foreign film clips, feature stories and other news and
entertainment programming. We intend to create daily briefings for London,
Paris, Berlin, Tokyo, Tel Aviv and Dublin if the minimum number of units in
this offering are sold, and an additional six, presently undetermined cities if
all of the units are sold. When the corresponding Web site to the daily
briefing is operational, we intend for the briefing to be found on both the
location-specific Web site and our primary site at foreignTV.com.
We intend for all Web sites on the foreignTV.com network to have a similar
appearance, which will make our network immediately recognizable. For example,
each Web site will feature regularly scheduled segments specifically devoted to
living, working, shopping and playing in that specific location, in addition to
being able to access previously "televised" programming at will. We also intend
to augment our original broadcasting with free-of-charge content, such as
promotional foreign film trailers, satellite press tours and interviews, as
well as Web-based e-mail services and special interest search engines acquired
through licensing and partnering agreements.
We intend to launch each foreignTV.com Web site according to a three-stage
process as follows
. once the design and initial content of a site is developed, we will
invite participants, using a special Internet address allowing
limited access to the site, to view and review the design and
content of the site for comments and feedback. This testing period
is expected to last approximately four to six weeks.
. we intend thereafter to "soft launch" that site for full viewing by
the general public, meaning the launch will not be widely publicized
or promoted. This will enable us to test the load capacity for our
on-line service providers, and generate additional comments and
feedback. Once we have received such feedback, we intend to do a
full-scale launch with maximum publicity on the Internet and other
media. It is at this time that we intend to open discussions with
other Web sites and the general media to create cross-promotional
opportunities.
. after the full-scale launch, we will seek to direct traffic to the
site through a combination of cross-promotions, advertising and the
quality of our programming.
We intend to offer access to the foreignTV.com network and its programming
free of charge to viewers. Our intention is to derive revenues from the sale of
advertising, as well as from commissions arising from e-commerce tie-ins, with
the anticipation that such revenues will increase if, as and when we create and
offer more programming and more viewers log onto the network.
Content Bureaus
We intend to establish "virtual" content bureaus in principal cities around
the world, meaning there will be no permanent office or full time employees,
which will be the equivalent of a foreign news bureau to a broadcast television
station. Each foreignTV.com Web site will have its own content bureau to
provide the original content to be shown on that site.
Each content bureau will be staffed by qualified freelance Americans or
English speaking nationals who have a background in production, journalism or
reporting, to produce content under the direction of our home office in the
United States. It is our intention to initially employ up to four freelance
reporter/anchors for each
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content bureau. These reporter/anchors will not only create the programming,
either entirely on their own or pursuant to agreements with local production
studios, but will also star in the programs, as interviewers, news anchors or
hosts. The raw footage created by the reporter/anchors will then be sent back
to our offices in New York where it will be edited and formatted for viewing
over the Internet.
Licensing of Internet Addresses
License Agreement with The Center of Contemporary Diplomacy
The Center of Contemporary Diplomacy, Inc. is a New York not-for-profit,
tax-exempt organization formed in 1997 for the purpose promoting and preserving
world peace through public awareness and understanding of diplomacy in
international relations. Among the Center's activities is the monitoring and
observation of elections in third-world countries and emerging democracies,
especially in the African continent.
The Center, which is a corporate member of the Council on Foreign Relations
based in New York City, was founded by I. William Lane, our chairman, and
Jonathan Braun, our vice chairman and chief executive officer. Dr. Lane is
currently serving as the Center's chairman and Mr. Braun is the Center's
president. Additionally, Mr. Albert T. Primo, our president, and Mr. Marc D.
Leve, our vice president-legal affairs, secretary and treasurer, are officers
of the Center. Its Web site is "www.centerfordiplomacy.org."
The Center currently owns the right, which it has licensed to us, to use 95
different Internet Web site addresses that combine prefixes ending in or
incorporating the word TV with the .com, .org or .net suffix and 4 Internet Web
site addresses that either incorporate the word "channel" or contain a country
name in the prefix. As with all Internet addresses, the names are not case
sensitive--the letters TV are capitalized for design purposes only. We believe
this library to be the largest of its kind. These addresses are, in
alphabetical order:
airtravelTV.com foreignTV.org norwayTV.com
amsterdamTV.com foreignaffairsTV.com osloTV.com
asiaTVonline.com genevaTV.com pacificTV.com
athensTV.com globalvillageTV.com palestineTV.com
australia-TV.com globalvillageTV.net panafricanTV.com
bakuTV.com globalvillageTV.org parisTV.com
beijingTV.com harlemTV.com polandTV.com
berlinTV.com havanaTV.com pragueTV.com
bombayTV.com helsinkiTV.com publicaffairsTV.com
brazil-TV.com holylandTV.com puertoricoTV.com
brusselsTV.com hongkong-TV.com quebecTV.com
budapest-TV.com icelandTV.com romeTV.com
caspianTV.com icelandicTV.com saigonTV.com
copenhagenTV.com irelandTV.com scandinavianet.com
cracowTV.com istanbulTV.com scandinaviaTV.com
danishTV.com italianTV.com scandinavianTV.com
davosTV.com italy-TV.com scotlandTV.com
denmarkTV.com jamaica-TV.com seoulTV.com
diplomacyTV.com korea-TV.com southamericaTV.com
dublin-TV.com krakowTV.com southamericanTV.com
ecochannel.com london-TV.com spychannel.com
europeTV.com lisbonTV.com stockholmTV.com
explorationchannel.com madridTV.com swedenTV.com
explorationTV.com milanTV.com swedishTV.com
finlandTV.com monacoTV.com taipeiTV.com
foreignTV.net mongoliaTV.com tehranTV.com
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telavivTV.com veniceTV.com worldreligionTV.com
turkishTV.com viennaTV.com worldTVchannel.com
tokyoTVchannel.com warsawTV.com worldTVnetwork.com
trinidadTV.com worldaffairsTV.com worldTVonline.com
tuscanyTV.com worldhistoryTV.com zurichTV.com
unitednationsTV.com worldnewsTV.com
We anticipate that "TV" incorporated in an Internet address, whether in the
specific part prior to the "." or the more general term after the ".",
ultimately will be recognized as the mark of Internet sites utilizing streaming
technology. We therefore believe that our license to use the Center's large
collection of such addresses will afford us the potential to enhance the
likelihood of attracting casual Internet viewers to our proposed Web sites.
We have entered into an agreement with the Center which affords us a 25-year
exclusive license for unlimited use of these addresses, including the right to
sublicense their use to others. This agreement requires us to pay the Center an
annual license fee of $600 per address for each of the first five years of such
25-year term, increasing by 5% a year thereafter through the 13th year, by 7%
per year thereafter through the 21st year, by 10% per year through the 24th
year and at a rate of $2,500 per address for the final year. These fees are
payable to the Center irrespective of whether or not we use any or all of such
addresses . The initial annual cost to us will be $57,000, increasing to
$237,500 for the final year of this 25-year license.
In addition, we are obligated to pay the annual maintenance fee for the
addresses, currently $35 per address, to InterNIC Registration Services for the
25-year term of this agreement. We are also obligated to indemnify the Center
against any and all claims asserted against the Center relating to our use of
the addresses.
The license will automatically renew upon its scheduled expiration for an
additional term of 25 years unless we and the Center otherwise agree, except
that we may unilaterally terminate the license at any time by paying the Center
a sum equal to (i) the aggregate license fees payable to the Center in the year
in which we so terminate the license and (ii) the aggregate license fees we
would have been required to pay to the Center in the immediately subsequent
year.
The Center has agreed that for the term of our license, it will not register
any further addresses containing the letters "TV" or which states or implies
streaming or any other similar aspect of foreignTV.com's proposed business. The
Center has also agreed that should it license any further addresses to us for
our exclusive use, our license fee shall be equal to the initial registration
fee paid by the Center for its rights to such addresses.
License Agreement with Jonathan Braun
We have entered into a substantially identical license agreement with
Jonathan Braun, our Vice Chairman and Chief Executive Officer, who owns or has
exclusive rights to 36 additional addresses, at an initial annual cost to us of
$21,600, increasing to $90,000 for the final year of this 25-year license.
These addresses are, in alphabetical order:
arthistoryTV.com siliconvalleyTV.com mauiTV.com
beverlyhillsTV.com southbeachTVchannel.com medium4TV.com
bluesTV.com swimchannel.com nantucket-TV.com
collegetownTV.com taosTV.com nicheTV.com
hamptonsTV.com vermont-TV.com popcultureTV.com
maineTV.com westernTV.com santafeTV.com
martialartsTV.com aspenTV.com smalltownTV.com
medium4.com bigeasyTV.com streamingUSA.com
multichannelTV.com californiastreaming.com swimmingTV.com
newenglandTV.com emergencyTV.com texasTV.com
offroadTV.com jacksonholeTV.com vinyardTV.com
ruralTV.com manhattanTV.com wildernessTV.com
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In addition to our efforts to develop the foreignTV.com network, we intend
to eventually develop a domestic streaming video network of Web sites produced
in U.S. locations and a special interest streaming video network of Web sites,
which will be similar in structure to the foreignTV.com network. We intend to
undertake such development only if and when we are able to complete at least 12
fully-developed foreignTV.com Web sites, which is subject to the future
availability of adequate financing.
Additional Internet Addresses
In addition to the Internet addresses we are licensing from the Center and
Mr. Braun, we have registered, under foreignTV.com's name, the following
Internet addresses:
albertaTV.com foreignTVfashion.com luxembourgTV.com
argentina-TV.com foreignTVfilm.com marakeshTV.com
acapulcoTV.com foreignTVfitness.com melbourneTV.com
baliTV.com foreignTVforum.com mexico-TV.com
barcelona-tv.com foreignTVgifts.com mexicocityTV.com
beirut-TV.com foreignTVhealth.com mideast-TV.com
bigskyTV.com foreignTVholidays.com mideasTV.com
buenosairesTV.com foreignTVmail.com montecarloTV.com
caracasTV.com foreignTVmall.com munichTV.com
casablancaTV.com foreignTVmusic.com myforeignTV.com
cinemaTV.com foreignTVnews.com newfoundlandTV.com
deauvilleTV.com foreignTVpeople.com patagoniaTV.com
dutyfreeTV.com foreignTVradio.com railtravelTV.com
edinburghTV.com foreignTVsearch.com reykjavikTV.com
fgnTV.com foreignTVsports.com riodejaneiroTV.com
foreignfilmclips.com foreignTVstore.com saopauloTV.com
foreignchat.com foreignTVstyle.com stjohnsTV.com
foreignradio.com foreignTVtalk.com stmoritzTV.com
foreignmall.com foreignTVtravel.com surfsideTV.com
foreignshopping.com foreignTVweather.com sydney-TV.com
foreign-TV.com frgn.com tahitiTV.com
foreignTVbooks.com glasgowTV.com themeparkTV.com
foreignTVbriefings.com kathmanduTV.com tunisTV.com
foreignTVbusiness.com keywest-TV.com venezuela-TV.com
foreignTVbuzz.com k9TV.com year2000TV.com
foreignTVchat.com lucerneTV.com
foreignTVevents.com luganoTV.com
We are only required to pay the annual maintenance fee for the use of such
names.
We do not intend to create programming for all of our owned or licensed
Internet addresses. We have registered some of the names to prevent third
parties from acquiring Web addresses that are similar to our addresses, which
could confuse our viewers and dilute the value of our name, network and
programming.
Advertising and E-commerce
Advertising
We expect to derive our revenues from the sale of advertising space on our
Web sites and from commissions to be paid to us by e-commerce businesses for
originating click-through sales of their services and products.
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With respect to advertising, we intend to offer prospective advertisers the
opportunity to place customized ads on our Web sites. Some of the choices we
intend to provide include
. the ability to brand entire sections of our Web sites which may include
rotating and permanent placement of buttons, logos and Web site links,
integrated gateway ads, multimedia banner ads and mentions on the
foreignTV.com home page and location-specified Web site home pages.
. inclusion in an e-mail newsletter, which we intend to make available on a
subscription basis to viewers of our network sites at no cost, containing
highlights of upcoming events and new programming.
. the integration of audio and video into text and graphics banner ads
which will play when the user clicks on the banner. We believes that
video can increase the impact of a banner ad, which can in turn be sold
at a higher cost than traditional banner ads.
We do not intend to initially employ a direct advertising sales force.
Instead, we plan to engage a leading Internet ad sales rep firm, such as the
industry leader, DoubleClick Inc.
E-commerce
Besides advertising, our other intended source of revenue is from e-commerce
tie-ins with e-commerce businesses. We intend to enter into agreements with
such businesses so that we would receive a commission upon each sale of their
services or products to a buyer who clicked through to such e-commerce
businesses from the foreignTV.com network.
We believe that retail sales over the Internet will grow substantially over
the next few years as more people log onto the Internet in general, more
services market and sell their services or products on-line and safety concerns
about transmitting confidential data are addressed. According to Forrester
Research, Inc., world-wide e-commerce sales will reach as high as $3.2 trillion
in the year 2003 and on-line travel reservations will produce up to 29.5
billion in revenue in the year 2003. By entering into alliances with e-commerce
companies while the industry is young, we hope to grow along with such
companies as the industry matures.
Network Promotion
Our marketing efforts will include hiring and training a public relations
staff, which will be responsible for news releases targeted to major print and
broadcast media, and the production and on-air placement of high-quality,
professional video news releases aimed at major-market US and overseas TV
stations and cable networks.
We intend to market the foreignTV.com network by exchanging banner ads with
high-traffic Web sites and develop and distribute free e-mail newsletters to
our registered users to highlight upcoming events and content.
We have reached an agreement in principle with Microsoft to use and promote
Microsoft's Windows Media Player(TM) on our primary foreignTV.com Web site and
on each of our network Web sites as they are developed, to provide our viewers
with the ability to download Windows Media Player(TM) for their own use and to
employ its Windows Media Technology 4.0 to deliver our streaming video content.
Microsoft, in turn, will provide a brief summary of our programming content on
its U.S. Web Events Internet site and will enable their viewers to access our
Web sites from such site.
We also intend to enter into strategic relationships with other content
providers, key Internet companies, and technology and bandwidth providers, as
we believe such relationships may enable us to increase traffic and brand
awareness.
We hope that by gaining share in the market for streaming video at this
early stage, the foreignTV.com network will gain in brand recognition when
streaming multimedia becomes more commonplace over the Internet. Greater brand
recognition, in turn, may translate into a steadily building user base with
great potential
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value for advertisers, e-commerce companies, other content providers and any
company with an interest in attracting and aggregating a growing audience of
Internet users.
In addition, the Center is currently in negotiations to develop and produce
a half-hour, weekly foreign affairs cable TV magazine-style program entitled
"The World This Week," which it hopes to air on leased access type stations on
cable television networks in New York, Washington, DC and select additional
markets. We intend to utilize this program as a traditional media vehicle for
promoting and advertising foreignTV.com and as a tool for creating content for
the foreignTV.com network by interviewing international personalities in
government, industry and entertainment.
Competition
The market for Internet broadcasting is highly competitive and we expect
that such competition will continue to intensify. We will compete with
. other Web sites, Internet portals and Internet broadcasters that provide
content to attract users.
. on-line services, other Web site operators and advertising networks, as
well as traditional media such as television, radio and print, for a
share of advertisers' total advertising budgets.
. local radio and television stations and national radio and television
networks for sales of advertising spots.
We will compete against a variety of businesses that provide content through
one or more mediums, such as print, radio, television, cable television and the
Internet. Although traditional media companies have not established a
significant streaming media presence on the Internet, they may expend resources
to establish a more significant presence in the future. To compete
successfully, we will have to provide sufficiently compelling and popular
content to attract viewers and support advertising intended to reach such
users. We believe that the principal competitive factors in attracting Internet
users include the quality of service and the relevance, timeliness, depth and
breadth of content and services offered.
We expect competition from on-line services, other Web site operators and
advertising networks, as well as traditional media such as television, radio
and print for a share of advertisers' total advertising budgets. We believe
that the principal competitive factors for attracting advertisers include
. the number of users accessing our Web sites.
. the demographics of our users.
. our ability to deliver focused advertising and interactivity through our
Web sites.
. the overall cost-effectiveness and value of advertising on our network.
There is intense competition for the sale of advertising on high-traffic Web
sites, which has resulted in a wide range of rates quoted by different vendors
for a variety of advertising services, making it difficult to project levels of
Internet advertising that will be realized generally or by any specific
company. Any competition for advertisers among present and future Web sites, as
well as competition with other traditional media for advertising placements,
could result in significant price competition.
We also expect to compete for traditional media advertising sales with
national radio and television networks, as well as local radio and television
stations. Initially, local radio and television content providers and national
radio and television networks in virtually all instances will have larger and
more established sales organizations than us. These companies, initially, will
also have greater name recognition and more established relationships with
advertisers and advertising agencies than us. Such competitors may be able to
undertake more extensive marketing campaigns, obtain a more attractive
inventory of ad spots, adopt more aggressive pricing policies and devote
substantially more resources to selling advertising inventory.
We believe there is no similar content-based network of original
international programming that would compete with foreignTV.com. However, there
are a number of Internet companies that aggregate and broadcast streaming video
and audio, including music, music videos, movie trailers, sports, news and
business events.
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The largest of these companies is broadcast.com, which went public in 1998.
Although broadcast.com has exclusive and non-exclusive licences to broadcast a
wide range of events, we do not believe we will compete with broadcast.com
directly, or any other streaming content provider, based upon subject matter as
we are not aware of any other streaming content provider which produces its own
programming and focuses on local events, politics, entertainment, business and
culture in locations around the world. However, our ability to market our name
and services and to differentiate ourselves from broadcast.com and other will
have a direct impact on the number of viewers we will be able to obtain. We can
give no assurance to investors that broadcast.com or any another streaming
media site will not focus internationally to directly compete with
foreignTV.com. As the Internet becomes more ubiquitous, and quality streaming
content becomes more accessible, there will be additional competitors seeking
to broadcast content over the Internet which can detract from foreignTV.com's
potential audience.
Intellectual Property
We regard our copyrights, trade secrets and similar intellectual property as
significant to our growth and success. We rely upon a combination of copyright
and trademark laws, trade secret protection, confidentiality and non-disclosure
agreements and contractual provisions with our employees and with third parties
to establish and protect our proprietary rights. We have applied for federal
trademark protection for "foreignTV.com" and intend to apply for federal
trademark protection for all domain names used in the foreignTV.com network.
Legal standards relating to the validity, enforceability and scope of
protection of certain proprietary rights in Internet-related industries are
uncertain and still evolving. We are unable to assure investors as to the
future viability or value of any of our proprietary rights or those of other
companies within the industry. We are also unable to assure investors that the
steps taken by us to protect our proprietary rights will be adequate.
Furthermore, we can give no assurance that our proposed business activities
will not infringe upon the proprietary rights of others, or that other parties
will not assert infringement claims against us.
Government Regulation
There are few laws or regulations directly applicable to the Internet. The
appeal of the Internet makes it likely, however, that state or national laws
may be implemented in the future covering such issues as taxes, intellectual
property and property ownership, privacy, defamation and freedom of speech.
Most laws were adopted prior to the advent of the Internet, and their
applications are uncertain. Any new law or regulation may have the effect of
limiting the use of the Internet and its growth as a new medium to communicate.
Employees
We do not presently have any employees other than our executive officers. If
we are able to sell the minimum number of units, we intend to hire up to four
full-time computer programmers, Web designers and editors to be based in our
New York office and an as yet to be determined number of freelance
reporter/anchors to create the content for each site.
Facilities
We have maintained our executive offices, since January 1999, on a rent-free
basis in premises of approximately 300 square feet that we share with Y Design,
Ltd., a new media design firm which was founded by Mr. Yeon S. Hong, our vice
president-creative. If we are able to sell the minimum number of units, we have
agreed to reimburse Mr. Hong for his rental costs for these premises of
approximately $500 per month from that time forward until we can locate, lease
and occupy approximately 7,000 square feet of office space, which we presently
anticipate will be situated in the Borough of Manhattan in New York City, and
thereafter through the expiration of Mr. Hong's present lease in August 1999.
We also intend to open an office in Paris to serve as our European
operations center, as well as lease space in the New York City suburbs to house
our editors and to allow for satellite feeds at lower rates than if we
established corresponding facilities in New York City. We do not know at this
time what our requirements are with respect to the square footage of such
facilities.
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MANAGEMENT
Directors and Executive Officers
Our current directors and executive officers are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
I. William Lane.................. 76 Chairman of the board of directors
Jonathan Braun................... 48 Vice chairman, chief executive
officer and director
Albert T. Primo.................. 63 President and director
Bruno Finel...................... 39 Senior vice president--European
operations and director
Marc D. Leve..................... 42 Vice president--legal affairs,
secretary, treasurer and director
Yeon S. Hong..................... 29 Vice president--creative
Elorian C. Landers............... 51 Vice president--corporate
development
</TABLE>
I. William Lane, PhD has been our chairman of our board since our inception.
Dr. Lane has served as a consultant to Lane Labs, a natural medicine company
founded upon Dr. Lane's principles and teachings, primarily dealing with cancer
research, since 1994. He has been the chairman of Cartilage Consultants, Inc.,
a company that researches and provides consulting services for the use of shark
cartilage and other natural medicines, since 1989. Dr. Lane is also chairman of
the Center. Dr. Lane received his B.S. and Masters in Nutritional Science from
Cornell University and his PhD. in Agricultural Biochemistry and Nutrition from
Rutgers University.
Jonathan Braun founded and has been our vice chairman and chief executive
officer since our inception. Mr. Braun is the originator of the foreignTV.com
concept. From 1995 to 1997, Mr. Braun was the president of Marinex Multimedia
Corporation, a CD-rom publishing and Internet content provider company. From
1991 to 1995 Mr. Braun was the President of Marinex, Inc., a public relations
firm he founded. Mr. Braun began his career as a journalist working for such
publications as Parade Magazine, The Jewish Week, and the New York Daily News
and currently serves on the editorial board of Midstream, a monthly journal
specializing in Israel and the Middle East. Mr. Braun is also president of the
Center. Mr. Braun received his M.S. from the Columbia University School of
Journalism and his B.A. in Political Science from the City College of New York,
where he graduated phi beta kappa and magna cum laude.
Albert T. Primo has been one of our directors and our president since our
inception. Mr. Primo is the president of Primo Newservice, a company that has
provided advice to television and cable systems on news production and
marketing since 1976, the executive producer/narrator of Sci-Tech TV, a thirty
minute TV magazine devoted to science and technology since 1994 and the
executive producer of Newsworthy, a weekly television feature magazine
syndicated to 58 television stations and 1,200 cable systems since 1989.
According to articles which have appeared in The Wall Street Journal, USA Today
and Advertising Age, Mr. Primo is credited with being the author of the
"eyewitness news" format that is currently widely used in the television news
industry. He has produced programming and worked in the broadcast industry for
over 40 years, including stints as the executive producer of prime-time
television specials and investigative news series, the owner of a radio station
and a weekly newspaper in Connecticut and the vice president, news of ABC-TV
from 1972 to 1974. He received his B.A. from the University of Pittsburgh.
Bruno Finel has been one of our directors and vice president-european
operations since our inception. Mr. Finel is the managing director and
principal stockholder of Cablevision, a ten-year old Paris-based company that
produces programs for African, French and European television and provides
communication and investment counseling on behalf of the governments of
Namibia, the Ivory Coast, Togo and Tunisia. In addition, Mr. Finel created and
is managing, through Cablevision, the official public information Web sites of
Namibia, Togo and Tunisia and has created news and information related Web
sites devoted to Sudan and Tunisia.
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Marc D. Leve has been one of our directors, vice president-legal affairs,
secretary and treasurer since our inception. Mr. Leve is, and has been an
attorney with Yerushalmi & Associates, LLP, a New York law firm, and its
predecessor firm, since 1995. He was an associate at Yerushalmi, Shiboleth,
Ysraeli & Roberts, LLP from 1993 to 1995. Mr. Leve has been general counsel,
vice president, secretary and a director of the Center since shortly after its
inception. Mr. Leve received an LLB in 1984 from Bar Ilan University in Israel.
He is admitted to practice law in Israel and in the State of New York.
Yeon Hong has been our vice president-creative since our inception. Mr. Hong
is the founder, president and creative director of Y Design, Ltd., a new media
design firm that services Fortune 500 companies such as Samsung America and EDS
since 1997. Mr. Hong also works as a freelance art/creative director for such
companies as Time Warner, MCI, Beverly Hills Polo Club, Barron's Weekly News,
Columbia House and Waters Design since 1991. Mr. Hong was vice president and
creative director of Marinex Multimedia Corporation from 1994 to 1995. Mr. Hong
served as the creative director for CBC Media, Inc., where he launched The Web
Stop, an Internet portal Web site from 1995 to 1997. Mr. Hong received his B.A.
in Communications Arts from the University of Buffalo and has also studied
engineering and computer programming at the Rochester Institute of Technology.
Elorian C. Landers has been vice president-corporate development since our
inception. Mr. Landers is the managing partner of South Coast Venture Group, a
venture capital firm in Houston, Texas, since 1991 and is a founder and the
acting president of Fyrglas, Inc., an innovator in fiber optic imaged gifts and
promotional items. Mr. Landers has over 20 years experience in marketing,
advertising and public relations. Mr. Landers received his B.A. in Marketing
and Advertising from Art Center College in Pasadena, California.
All of our directors hold office until the next annual meeting of
stockholders and the election and qualification of their successors. Our
directors receive no compensation for serving on our board other than
reimbursement of reasonable expenses incurred in attending meetings. Officers
are elected annually by the board and serve at the discretion of the board.
Our board intends to create a compensation committee and an audit committee
upon the consummation of this offering. Each committee will consist of two or
more independent directors. We are currently searching for qualified
independent directors. The compensation committee will review our compensation
policies and administer our stock option plan. The audit committee will review
the scope of our audit, the engagement of our independent auditors and their
audit represents.
Executive Compensation
We do not presently pay compensation to any of our officers and directors,
although we do reimburse them on an accountable basis for any reasonable
expenditures made on our behalf.
We intend to enter into five year employment agreements with each of
Jonathan Braun, Albert T. Primo and Bruno Finel, effective upon the sale of the
minimum number of units, retroactive to January 1, 1999 in the case of Mr.
Braun, which will require each such person to devote substantially his full
time efforts to our affairs and will provide for each to receive an initial
minimum base salary of $150,000 per annum, annually increasing thereafter at a
rate of not less than 10%. Additionally, each such person will receive a one-
time bonus of $25,000 if and when we first achieve profitability.
Each such employment agreement will also provide for the payment of
severance in the event of our termination of employment other than for "cause"
in an aggregate lump sum equal to one year's minimum base salary for the
affected employee at the rate prevailing at the date of his termination,
augmented by a like amount for each year of prior employment, to be
appropriately pro-rated for partial years.
Messrs. Braun, Primo and Finel will also be entitled to participate in such
benefit plans, including life insurance, hospitalization, pension or profit-
sharing plans, as we may adopt from time to time. Messrs. Braun,
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Primo and Finel will also be precluded from, subject to certain exceptions,
entering into the employ of, or investing in an Internet company for a period
of 2 years following the expiration of their respective employment terms. Mr.
Braun will additionally receive a vehicle allowance of $575 per month and we
will pay for his office parking.
We also intend to enter into substantially similar employment agreements
with Marc Leve and Yeon Hong upon the closing of the minimum offering, which
will afford Messrs. Leve and Hong minimum annual compensation levels of
$100,000 each. Mr. Leve will additionally be entitled to continue his private
law practice, so long as such practice does not conflict with his duties as our
Vice President, Secretary and Treasurer. Additionally, pursuant to Mr. Hong's
employment agreement, we have agreed, commencing upon our sale of the minimum
number of units, to thereafter reimburse Mr. Hong on a dollar-for-dollar basis
for the rent currently paid by Mr. Hong's company, Y Design, Ltd., for leased
office space that we currently share with such company until the end of the
lease term in August 1999.
Stock Option Plan
Our stock option plan was adopted by both our board and a majority in
interest of our stockholders in January 1999. The plan provides for the
granting of options which are intended to qualify either as incentive stock
options within the meaning of section 422 of the Internal Revenue Code of 1986
or as nonstatutory stock options which are not intended to meet the
requirements of section 422. The total number of shares of common stock
reserved for issuance under the plan is 400,000. Options to purchase shares may
be granted under the plan to persons who, in the case of incentive stock
options, are our employees and officers, or, in the case of nonstatutory stock
options, are employees and officers or non-employee directors.
Our plan provides for its administration by our board of directors or a
committee chosen by the board of directors, which has discretionary authority,
subject to certain restrictions, to determine the number of shares issued
pursuant to incentive stock options and nonstatutory stock options and the
individuals to whom, the times at which and the exercise price for which
options will be granted.
The exercise price of all incentive stock options granted under the plan
must be at least equal to the fair market value of such shares on the date of
the grant or, in the case of incentive stock options granted to the holder of
more than 10% of our common stock, at least 110% of the fair market value of
such shares on the date of the grant. The maximum exercise period for which
incentive stock options may be granted is ten years from the date of grant or
five years in the case of an individual owning more than 10% of our common
stock. The aggregate fair market value as determined at the date of the option
grant of shares with respect to which incentive stock options are exercisable
for the first time by the holder of the option during any calendar year shall
not exceed $100,000.
No options have been granted under the plan as of the date of this
prospectus.
CERTAIN TRANSACTIONS
Each of our executive officers, directors and other initial stockholders
acquired their respective shares of our common stock in January 1999 at a price
of $.01 per share, or an aggregate of $83,000.
As discussed elsewhere in this prospectus, we have entered into licensing
arrangements for use of certain domain names owned by the Center. Messrs. Lane,
Braun and Leve are officers of the Center. We have also entered into a
substantially similar licensing arrangement with Mr. Braun for certain other
domain names owned by him. Although we believe that the terms of the respective
licensing arrangements are no less favorable to us than those we could have
negotiated with persons having no relation to us, these arrangements should be
viewed by investors as being non-arms-length in their nature.
29
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth the number and percentage of outstanding
shares of our common stock included in both the minimum number of units and in
all of the units which we are offering for sale that were owned as of January
31, 1999 and that will be owned following completion of this offering, based on
information obtained from the persons named below, by
. each person known by us to be the owner of more than 5% of the
outstanding shares of common stock.
. each director and officer.
. all officers and directors as a group.
<TABLE>
<CAPTION>
Percentage of
Outstanding Shares Owned
Amount and ------------------------
Nature of After Offering
Name and Address of Beneficial Before ---------------
Beneficial Owner Ownership(1) Offering Minimum Maximum
- ------------------- ------------ -------- ------- -------
<S> <C> <C> <C> <C>
I. William Lane......................... 2,700,000 32.5% 29.% 27.0%
80 Woodland Avenue
Short Hills, NJ 07078
Jonathan Braun.......................... 3,100,000 37.3% 33.9% 31.0%
24 Holly Hill Lane
Katonah, NY 10536
Albert T. Primo......................... 750,000 9.0% 8.2% 7.5%
182 Sound Beach Avenue
Old Greenwich, CT 06870
Bruno Finel............................. 600,000 7.2% 6.6% 6.0%
15, rue Ambroise Thomas
Paris 75009 France
Elorian C. Landers...................... 500,000 6.0% 5.5% 5.0%
9307 West Sam Houston Parkway
Houston, TX 77099
Marc D. Leve............................ 200,000 2.4% 2.2% 2.0%
264 Lexington Avenue
New York, NY 10016
Yeon Hong............................... 200,000 2.4% 2.2% 2.0%
622A Bruce Street
Ridgefield, NJ 07657
All officers and directors as a group (7
persons)............................... 8,050,000 97.0% 88.0% 80.5%
</TABLE>
- --------
(1) Unless otherwise noted, we believe that all persons named in the table have
sole voting and investment power with respect to all shares of our common
stock beneficially owned by them.
Messrs. Lane, Braun and Primo may be deemed to be our "parents" and
"promoters", as such terms are defined under the federal securities laws.
30
<PAGE>
DESCRIPTION OF SECURITIES
General
Our authorized capitalization consists of 30,000,000 shares of common stock,
par value $.01 per share, and 5,000 shares of preferred stock, par value $.01
per share. As of the date of this prospectus, 8,300,000 shares of common stock
are outstanding, held of record by 15 persons. No shares of preferred stock are
currently outstanding.
Units
Each unit consists of one share of common stock and one warrant, each
warrant entitling the holder to purchase one share of common stock. The common
stock and warrants will become separable and transferable 90 days after the
date of this prospectus, or on such earlier date as may be determined by the
underwriter.
Common Stock
Each stockholder of record is entitled to one vote for each share of our
common stock owned by that stockholder on all matters properly submitted to the
stockholders for their vote. Our certificate of incorporation does not provide
for cumulative voting for the election of our directors, with the result that
stockholders owning or controlling more than 50% of the shares voted for the
election of directors can elect all of the directors. Subject to the dividend
rights of holders of preferred stock, holders of common stock are entitled to
receive dividends when, as and if declared by our board out of funds legally
available for this purpose. In the event of our liquidation, dissolution or
winding up, the holders of common stock are entitled to receive on a pro rata
basis any assets remaining available for distribution after payment of our
liabilities and after provision has been made for payment of liquidation
preferences to all holders of preferred stock. Holders of common stock have no
conversion or redemption provisions or preemptive or other subscription rights.
The outstanding shares of common stock are, and the shares of common stock
included in the units, when issued and paid for as set forth in this
prospectus, will be, fully paid and nonassessable.
Preferred Stock
Our certificate of incorporation authorizes us to issue 5,000 shares of so-
called "blank check" preferred stock having rights senior to our common stock.
Our board is authorized, without further stockholder approval, to issue
preferred stock in one or more series and to fix the stock's rights,
preferences, privileges and restrictions, including dividend rights, conversion
rights, voting rights, redemption terms and liquidation preferences, and to fix
the number of shares constituting any series and the designations of these
series.
The issuance of preferred stock may have the effect of delaying or
preventing a change of control of our management. Additionally, the issuance of
preferred stock could decrease the amount of earnings and assets available for
distribution to the holders of common stock or could adversely affect the
voting power or other rights of the holders of common stock. We currently have
no plans to issue any shares of preferred stock.
Warrants
Each warrant entitles the holder of record to purchase one share of our
common stock at a price of $9.00 per share, subject to adjustment in certain
circumstances, at any time until the warrants expire at 5:00 p.m., New York
City time, on April , 2002 [3 years from the date of this prospectus].
We may redeem the warrants, in whole and not in part, at our option, at a
price of $.05 per warrant at any time after their issuance upon not less than
30 days' prior written notice to the warrantholders, provided that the reported
closing bid price of the common stock equals or exceeds $12.00 per share, for
the 20 consecutive trading days ending on the third business day prior to our
giving notice of redemption to warrantholders. The warrantholders shall have
exercise rights until the close of business on the date fixed for redemption.
31
<PAGE>
The warrants will be issued in registered form under a warrant agreement
between us and American Stock Transfer & Trust Company, as warrant agent. We
refer you to the Warrant Agreement, which has been filed as an exhibit to the
Registration Statement on Form S-1 of which this prospectus is a part, for a
complete description of the terms and conditions of the warrants.
The exercise price and number of shares of common stock issuable on exercise
of the warrants are subject to adjustment upon the occurrence of certain events
such as stock dividends, or if we recapitalize, reorganize, merge with another
company or consolidate. However, the warrants are not subject to adjustment for
issuances of common stock at a price below their exercise price.
We have the right, in our sole discretion, to decrease the exercise price of
the warrants for a period of not less than 30 days on not less than 30 days'
prior written notice to the warrantholders. In addition, we have the right, in
our sole discretion, to extend the expiration date of the warrants on five
business days' prior written notice to the warrantholders.
Warrantholders may exercise warrants by surrendering the certificates
evidencing warrants on or prior to the warrants' expiration date at the offices
of the warrant agent, with the exercise form on the reverse side of such
certificate completed and executed as indicated, accompanied by full payments
of the exercise price, by certified check payable to foreignTV.com, Inc., to
the warrant agent for the number of warrants being exercised. Warrantholders do
not have the rights or privileges of holders of common stock.
You will be unable to exercise your warrants unless we have filed with the
SEC a current prospectus covering our shares of common stock underlying your
warrants and such shares have been registered or qualified or deemed to be
exempt under the securities laws of your state of residence. We will use our
best efforts to have all shares so registered or qualified on or before the
exercise date and to maintain a current prospectus relating thereto until the
expiration of the warrants, subject to the terms of the warrant agreement.
While it is our intention to do so, we cannot assure investors that we will be
able do so.
No fractional shares will be issued upon exercise of the warrants. However,
if a warrantholder exercises all warrants then owned of record by him, we will
pay to such warrantholder, in lieu of the issuance of any fractional share
which is otherwise issuable to such warrantholder, an amount in cash based on
the market value of the common stock on the last trading day prior to the
exercise date.
Dividends
We have not paid any dividends on our common stock to date. Our payment of
dividends in the future, if any, will be contingent upon our revenues and
earnings, if any, capital requirements and general financial condition. The
payment of any future dividends will be within the discretion of our board. It
is the present intention of our board to retain all earnings, if any, for use
in our business operations and, accordingly, we do not anticipate declaring any
dividends in the foreseeable future.
Limitation of Liability
As permitted by the Delaware General Corporation Law, our Certificate of
Incorporation provides that our directors shall not be personally liable to us
or our stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to us or our stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, relating to unlawful
payment of dividends or unlawful stock purchases or redemption of stock or (iv)
for any transaction from which the director derives an improper personal
benefit. As a result of this provision, we and our stockholders may be unable
to obtain monetary damages from a director for breach of his or her duty of
care.
32
<PAGE>
Our certificate of incorporation and bylaws provide for the indemnification
of our directors and officers and, to the extent authorized by the board in its
sole and absolute discretion, employees and agents, to the fullest extent
authorized by, and subject to the conditions set forth in the Delaware General
Corporation Law, except that we will indemnify a director or officer in
connection with a proceeding initiated by such person only if the proceeding
was authorized by our board. The indemnification provided under our certificate
of incorporation and bylaws includes the right to be paid the expenses,
including attorneys' fees, in advance of any proceeding for which
indemnification may be had, provided that the payment of such expenses incurred
by a director, officer, employee or agent in advance of the final disposition
of a proceeding may be made only upon delivery to us of an undertaking by or on
behalf of the director, officer, employee or agent to repay all amounts so paid
in advance if it is ultimately determined that the director or officer is not
entitled to be indemnified.
Under our bylaws, we have the power to purchase and maintain insurance on
behalf of any person who is or was one of our directors, officers, employees or
agents, against any liability asserted against the person or incurred by the
person in any such capacity, or arising out of the person's status as such, and
related expenses, whether or not we would have the power to indemnify the
person against such liability under the provisions of the Delaware General
Corporation Law. We currently have no plans to purchase director and officer
liability insurance on behalf of our directors and officers.
Transfer Agent
The transfer agent for our common stock and the warrant agent for our
warrants is American Stock Transfer & Trust Company, 40 Wall Street, New York,
New York 10005.
Shares Eligible for Future Sale
Upon completion of this offering, we will have 9,150,000 shares of common
stock outstanding if we sell the minimum number of units and 10,000,000 shares
if all of the units are sold. Of these shares, 850,000 shares, assuming the
minimum number of units are sold and 1,700,000 shares if all of the units are
sold, will be freely tradeable without restriction or further registration
under the Securities Act, except that any shares purchased by our affiliates,
generally persons who have a control relationship with a company, will be
subject to limitations of Rule 144. The remaining 8,300,000 shares will be
restricted shares under the Securities Act. In addition, all holders of record
of 10,000 or more restricted shares are subject to lock-up agreements with the
underwriter which provide that their respective shares cannot be publicly
offered for sale absent the underwriter's prior consent prior to September ,
2000 [18 months after the date of this prospectus]. The underwriter has advised
us that it has no general policy with respect to the release of shares prior to
the end of the lock-up period and has no present intention to waive or modify
any of these restrictions.
In general, under Rule 144 as currently in effect, a person, or persons
whose shares are aggregated, including an affiliate of the Company, who has
owned restricted shares of common stock beneficially for at least one year is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or, if the common stock is quoted on Nasdaq, the average weekly
trading volume during the four calendar weeks preceding the date upon which
notice of the sale is filed with the SEC, provided certain requirements
concerning availability of public information, manner of sale and notice of
sale are satisfied. A person who has not been one of our affiliates for at
least the three months immediately preceding the sale and who has beneficially
owned restricted shares for at least two years is entitled to sell such shares
under Rule 144 without regard to any of the requirements described above.
There has been no market for the common stock prior to this offering. We
cannot predict what effect, if any, that either sales of restricted common
stock or its availability for sale will have from time to time on then
prevailing market prices. Nevertheless, the possibility that substantial
amounts of common stock may be sold in the public market may adversely affect
the market price for such common stock and could impair our ability to raise
capital through the sale of our equity securities.
33
<PAGE>
UNDERWRITING
As of the date of this prospectus, we will enter into an underwriting
agreement with Westminster Securities Corporation, 19 Rector Street, New York,
New York 10006, which will provide that the underwriter, acting on our behalf
as our exclusive agent, will use its best efforts to sell a minimum of 850,000
units on an "all or none" basis. Such minimum number of units must be sold
within a period of 90 days from the date of this prospectus, subject to an
extension by mutual agreement for an additional period of up to 90 days, plus
an additional 10 business days to permit clearing of funds deposited prior to
the beginning of such 10-day period, or this offering will be terminated. If
the underwriter successfully sells the minimum number of units, the underwriter
will use its best efforts to sell up to an additional 850,000 units. The
underwriter has made no commitment to purchase any of the units. The
underwriting agreement also includes provisions providing for its termination
by the underwriter upon the occurrence of certain conditions including, in the
opinion of the underwriter, such adverse market conditions so as to make
proceeding with this offering impractical.
All subscriptions for units are to be made by wire transfer or check payable
to "Citibank, N.A., as Escrow Agent for foreignTV.com, Inc." and, when remitted
to the underwriter, are to be deposited by the underwriter by noon of the next
business day following receipt in an escrow account with Citibank, N.A., 120
Broadway, New York, New York 10271, as escrow agent, pursuant to the terms of
an escrow agreement entered into by us, the underwriter and the escrow agent.
During the subscription period, subscribers for units will not be entitled to a
return of their subscriptions. If payment for the minimum number of units is
not deposited with the escrow agent within the subscription period, all
escrowed funds will be promptly returned to subscribers, with interest. If
payment for the minimum number of units is deposited with the escrow agent
within the subscription period, such funds will be paid to us, less commissions
and expense reimbursements payable to the underwriter. Until such time as the
proceeds from the sale of units are actually received by us and certificates
evidencing the common stock and warrants comprising the units delivered to
purchasers, such purchasers will be deemed subscribers and not securityholders.
Subject to the sale of the minimum number of units, we have agreed to pay
the underwriter a cash commission of $.54 for each unit sold. In addition, we
have agreed to pay the underwriter a non-accountable expense allowance of two
percent of the gross proceeds from the sale of the units and to pay all
expenses in connection with qualifying the units and their underlying
securities under the laws of such states as the underwriter may reasonably
designate.
The underwriter has advised us that it proposes to offer the units to the
public at the public offering price set forth on the cover page of this
prospectus. The underwriter has the right to offer the units through members of
the National Association of Securities Dealers, Inc. and to foreign dealers who
agree to be bound by the NASD's Rules of Fair Practice and may pay such dealers
concessions for units sold by them as the underwriter may determine. The
underwriter has informed us that it does not expect sales to its discretionary
accounts to exceed five percent of the minimum number of units.
The underwriter may sell a substantial portion of the units to purchasers
who reside outside the United States. The effect of any such sales may decrease
the size and scope of the domestic market for the units and their component
securities, thereby limiting their liquidity.
We have agreed to indemnify the underwriter against certain liabilities,
including liabilities under the Securities Act.
We have granted the underwriter the right for a period of 3 years from the
date of this prospectus to have a representative of the underwriter present at
all meetings of our board. Such representative will be entitled to receive the
same notices and communications sent by us to our directors and to attend
directors' meetings, but will not be entitled to vote at any such meetings.
John O'Shea, the underwriter's president, will serve as the underwriter's
representative.
34
<PAGE>
We have engaged the underwriter to act as our exclusive solicitation agent
in connection with the exercise of the warrants. Upon the exercise of the
warrants more than one year after the date of this prospectus, and to the
extent not inconsistent with the guidelines of the NASD and the Rules and
Regulations of the SEC, we have agreed to pay the underwriter a commission
equal to 3% of the proceeds received by us from the exercise of the warrants.
However, we will pay no compensation to the underwriter in connection with the
exercise of the warrants if (a) the market price of the underlying shares of
common stock is lower than the exercise price, (b) the warrants are held in a
discretionary account, or (c) the warrants are exercised in an unsolicited
transaction. In addition, absent an exemption afforded by the provisions of
Regulation M under the Exchange Act, the underwriter will be prohibited from
engaging in any market making activities or solicited brokerage activities with
regard to any of our securities until the later of the termination of such
solicitation activity or the termination by waiver or otherwise of any right
the underwriter may have to receive a fee for the exercise of the warrants
following such solicitation. The underwriter may employ subagents for such
solicitation activity.
In connection with this offering, we have agreed to sell to the underwriter,
at nominal cost, an option to purchase up to 170,000 units. These units are
substantially identical to those being publicly offered by us except that the
warrants comprising a part of these units cannot be redeemed. Further, the
underwriter's units are exercisable initially at $9.60 per unit for a period of
four years commencing one year from the date of this prospectus. The exercise
price of these units may be adjusted upon the occurrence of certain events,
including any recapitalization, reclassification, stock dividend, stock split,
stock combination or similar transaction. The units and their underlying
securities will be restricted from sale, transfer, assignment or hypothecation
for a period of one year from the date of this prospectus, except to officers
or partners of the underwriter and members of the selling group and their
officers or partners. We have agreed to use our best efforts to maintain an
effective registration statement with respect to the underwriter's units and
their underlying securities. In addition, the holders of these units have been
granted one demand registration right under the Securities Act at our expense
for a period of 6 years from the date of this prospectus, and "piggy back"
registration rights under the Securities Act for a period of 4 years from the
date of this prospectus with respect to those securities directly and
indirectly issuable upon exercise of the units.
Pricing of this Offering
Prior to this offering there has been no public market for any of our
securities. Accordingly, the public offering price of the units and the terms
of the warrants was determined by negotiation between us and the underwriter.
Among the factors considered in determining the public offering price were
. estimates of our business potential.
. prevailing market conditions in the U.S. economy and in the industry in
which we propose to compete.
. the market capitalization and stages of other companies which the
underwriter believes to be comparable to us.
. an assessment of our management.
LEGAL MATTERS
The validity of our securities will be passed upon on our behalf by
Cooperman Levitt Winikoff Lester & Newman, P.C., New York, New York. Certain
legal matters will be passed upon for the Underwriter by Victor Edwin Stewart,
Esq., Ridgewood, New Jersey. Members of Cooperman Levitt beneficially own
40,000 shares of our common stock.
EXPERTS
The financial statements included in this prospectus have been audited by
Martin A. Weiselberg, independent certified public accountant, as indicated in
his report with respect thereto, and are included herein in reliance upon his
authority as an expert in accounting and auditing in giving said report.
Reference is made to said report which includes an explanatory paragraph with
respect to the fact that our ability to commence operations is dependent upon,
among other factors, the success of this offering or other fundraising
activities.
35
<PAGE>
ADDITIONAL INFORMATION
We have filed a registration statement, including exhibits, schedules and
amendments, with the SEC pursuant to the Securities Act with respect to this
offering of our securities. This prospectus is part of the registration
statement but does not contain all of the information in the registration
statement. We refer you to the registration statement for further information
about us, our securities and this offering. Statements in this prospectus about
documents filed as exhibits to the registration statement are necessarily
summaries of these documents, and each of these statements is qualified in its
entirety by reference to the copy of the applicable document filed with the
SEC. The registration statement is available for inspection at the SEC's Public
Reference Room at 450 Fifth Street N.W., Washington, D.C. 20549. The public may
obtain information about the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site that
contains the registration statement. The address of the SEC's Internet site is
"http://www.sec.gov."
36
<PAGE>
INDEPENDENT AUDITOR'S REPORT
TO foreignTV.com, Inc.
We have audited the accompanying balance sheet of foreignTV.com, Inc. (a
corporation in the development stage) as of December 31, 1998, and the related
statement of changes in shareholder's equity for the period from November 12,
1998 (date of inception) to December 31, 1998. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of foreignTV.com, Inc. as of
December 31, 1998, and changes in shareholders' equity for the period from
November 12, 1998 (date of inception) to December 31, 1998 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As shown in the accompanying
financial statements the company is a development stage enterprise with no
significant operating results to date. The factors discussed in Note 1 to the
financial statements raise substantial doubt as to the ability of the Company
to continue as a going concern. Management's plans in regards to those matters
are also described in Note 1. The financial statements do not include any
adjustment that might result from the outcome of this uncertainty.
Martin A. Weiselberg, CPA
January 28, 1998
New York, New York
F-1
<PAGE>
foreignTV.com, Inc.
(a corporation in the development stage)
BALANCE SHEET
DECEMBER 31,1998
ASSETS
<TABLE>
<S> <C>
Current Assets
Deferred Offering Costs.............................................. $ 6,670
-------
Total Assets....................................................... $ 6,670
=======
LIABILITIES AND SHAREHOLDERS' EQUITY
Due To Officer......................................................... 6,670
-------
Total Liabilities................................................ 6,670
-------
Shareholders' equity
Preferred Stock, $.01 par value;
Authorized 5,000 shares, issued and outstanding -0- shares......... --
Common Stock, $.01 par value;
Authorized 30,000,000 shares, issued and outstanding 8,300,000..... 83,000
Additional Paid In Capital............................................. --
-------
83,000
Less Subscriptions Receivable.......................................... (83,000)
-------
Total Shareholders Equity........................................ --
-------
$ 6,670
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
foreignTV.com, Inc.
(a corporation in the development stage)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM NOVEMBER 12, 1998 (date of inception)
TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
Common Stock Additional Total
----------------- Paid In Shareholders'
Shares Amount Capital Equity
--------- ------- ---------- -------------
<S> <C> <C> <C> <C>
Beginning Balance -- -- -- --
Issuance Of Common Stock for
Subscriptions.................... 8,300,000 $83,000 $ -- $83,000
Less subscriptions receivable..... -- (83,000) -- (83,000)
Balance at December 31,1998....... 8,300,000 $ -- $ -- $ --
========= ======= ===== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
ForeignTV.com Inc.
NOTES TO FINANCIAL STATEMENTS
1--Organization
foreignTV.com, Inc. (the "Company"), a Delaware corporation in the
development stage, was founded on November 12, 1998. The Company was organized
to develop opportunities as an Internet broadcaster specializing in
international content not available from other sources. The Company proposes
to develop a network of Internet web sites, using domain names that will be
licensed or otherwise acquired to offer viewers foreign newscasts and other
programming produced in various locations throughout the world.
The Company is currently in the development stage. All activities of the
Company to date relates to its formation and proposed fund raising. For the
period from November 12, 1998 (date of inception) through December 31, 1998
there were no material operations or cash activities on the part of the
Company.
The Company's ability to commence operations is contingent upon its ability
to obtain financing through a public offering (the "Proposed Offering") of the
Company's common stock. Note 8 discusses the details of the Proposed Offering.
Upon completion of the Proposed Offering the Company will not satisfy the
criteria for qualifying its securities in the NASDAQ system. The Company's
securities will be traded in the over the counter market. It is anticipated
that they will be quoted on the OTC Bulletin Board, an NASD sponsored and
operated inter-dealer automated quotation system for equity securities not
included on the NASDAQ stock market, as well as in the NQB Pink Sheets
published by National Quotation Bureau Incorporated. The OTC Bulletin Board
was introduced as an alternative to "pink sheet" trading of over the counter
securities. Although the Company believes that the OTC Bulletin Board has been
recognized by the brokerage community as an acceptable alternative to the NQB
Pink Sheets, there can be no assurance that the liquidity and prices of the
Units and their component securities in the secondary market will not be
adversely affected.
2--Summary Of Significant Accounting Policies
Income Taxes
The Company account for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, " Accounting For Income
Taxes" ("SFAS 109"). SFAS 109 requires a company to recognize deferred income
tax liabilities and assets for the expected future tax consequences of events
that have been recognized in a company's financial statements or tax returns.
Under this method, deferred tax liabilities and assets are determined based
on the difference between the financial statement carrying amounts and the tax
basis of assets and liabilities using enacted tax rates in effect in the year
in which the differences are expected to reverse. At December 31, 1998 there
are no such differences.
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 revenues and expenses during the
reported period. Actual results could differ from those estimates.
Effect Of Recently Issued Accounting Standards
In June 1997 the Financial Accounting Standards Board ("FASB") issued two
new disclosure standards.
F-4
<PAGE>
ForeignTV.com Inc.
NOTES TO FINANCIAL STATEMENTS--(Continued)
SFAS No. 130 ("SFAS No. 130") "Reporting Comprehensive Income" established
standards for reporting and display of comprehensive income, its components and
accumulated balances. Comprehensive income is defined to include all changes in
equity except those resulting from investment by owners and distributions to
owners.
SFAS No. 131 ("SFAS No. 131") "Disclosure About Segments of an Enterprise
and Related Information", which supersedes SFAS No.14 "Financial Reporting for
Segments of a Business Enterprise", establishes standards for the way that
public enterprises report information about operating segments in annual
financial statements and requires reporting of selected information about
operating segments in interim financial statements issued to the public.
Both of these new standards are effective for financial statements for
periods beginning after December 15, 1997 and require comparative information
for earlier years to be restated. The Company's results of operations and
financial position will be unaffected by implementation of these new standards.
During February 1998 the FASB issued SFAS No.132 ("SFAS No. 132") "Employers
Disclosure about Pensions and Other Postretirement Benefits", which
standardizes the disclosure requirements for pension and other postretirement
benefits. The adoption of SFAS No.132 in 1998 is not expected to impact the
Company's current disclosure.
3--Preferred Stock
The Company is authorized to issue preferred stock and to fix the rights,
preferences, privileges, and restrictions thereof, including dividend rights,
conversion rights, voting rights, redemption terms and liquidation preferences.
4--Subscriptions Receivables
Subsequent to December 31, 1998, substantially all stock subscriptions were
paid in full.
5--Supplemental Cash Flow Information
No cash was paid for interest or income taxes for the period from November
12, 1998 (date of inception) through December 31, 1998.
Noncash investing and financing activities for the period from November 12,
1998 (date of inception) through December 31, 1998 include the following:
<TABLE>
<S> <C>
Payment by shareholders of offering costs on behalf of the
Company....................................................... $ 6,670
</TABLE>
6--License Agreements
The Company entered into two license agreements with related parties for the
sole and absolute use of certain Internet domain names. One of the agreements
is with an officer and director of the Company and the other is with a not-for-
profit organization whose board of directors is substantially identical to that
of the Company. The term of the agreements is twenty five years through
December 31, 2023 with an additional renewal period of twenty five years
thereafter. The agreements require the Company to pay license fees which begin
at $600 per domain name and escalate to $2,500 per domain name through the
twenty fifth year of the agreement. Thereafter, the fee increase is based on
the Consumer Price Index. The agreement with the not-for-profit organization
also requires the Company to provide office space, on its premises, for up to
four employees of the not-for-profit organization for up to three years.
F-5
<PAGE>
ForeignTV.com Inc.
NOTES TO FINANCIAL STATEMENTS--(Continued)
7--Stock Option Plan
The Company's Board of Directors has approved a stock option plan (the
"Plan"). The Plan, which is subject to shareholder approval, provides for
issuance of up to 400,000 options (the "Options') to acquire shares of the
Company's Common Stock.
The Options are intended to qualify either as incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986 or as options which are not intended to meet the
requirements of such section ("Nonstatutory Stock Options"). The Options may be
granted under the Plan to persons who, in the case of Incentive Stock Options,
are key employees (including officers) of the Company or, in the case of
Nonstatutory Stock Options, are key employees (including officers) and
nonemployee directors of the Company, except that Nonstatutory Stock Options
may not be granted to a holder of more than 10% of the total voting power of
the Company.
The exercise price of all Incentive Stock Options granted under the Plan
must be at least equal to the fair market value of such shares on the date of
grant or, in the case of Incentive Stock Options granted to the holder of 10%
or more of the Company's Common Stock, at least 110% of the fair market value
of such shares on the date of grant. The exercise price of all Nonstatutory
Stock Options granted under the Plan shall be determined by the Board of
Directors of the Company at the time of grant. The maximum exercise period for
which the Options may be granted is ten years from the date of grant (five
years in the case of Incentive Stock Options granted to an individual owning
more than 10% of the Company's Common Stock). The aggregate fair market value
(determined at the date of the option grant) of such shares with respect to
which Incentive Stock Options are exercisable for the first time by the holder
of the option during any calendar year shall not exceed $100,000.
The FASB issued Statement of Financial Accounting Standards No. 123,
"Accounting for Stock Based Compensation" ("SFAS 123"), which will require
companies either to reflect in their financial statements or reflect as
supplemental disclosure the impact on earnings and earnings per share of the
fair value of stock based compensation using certain pricing models for the
option component of stock option plans. As of December 31, 1998, no options
have been granted under the Plan. Disclosure, as required SFAS 123, will be
made upon the issuance of options.
8--Proposed Initial Public Offering
The Proposed Offering calls for the Company to offer for public sale up to
1,700,000 units (the "Units") at a price of $6.00 per Unit. Each Unit consists
of one share of Common Stock, $.01 par value, and one redeemable warrant. Each
warrant entitles the holder to purchase from the Company one share of Common
Stock at an exercise price of $9.00. The warrants will be exercisable at any
time, until they expire three years after the effective date of the Proposed
Offering. The warrants may be redeemed by the Company, in whole or in part, at
any time upon at least 30 days prior written notice to the registered holders,
at a price of $.05 per warrant, provided that the closing bid price of the
Common Stock was at least $12.00 for the 20 consecutive trading days ending on
the third business day preceding the date of the Company's giving of notice of
redemption to the warrantholders, and provided there is then a current
registration statement in effect for the shares underlying the warrants.
The Units are being offered for public sale on the Company's behalf by the
Underwriter, as the Company's exclusive agent, on a "best efforts, all or none"
basis as to the first 850,000 Units and, if such 850,000 Units are sold, on a
"best efforts" basis as to the remaining 850,000 Units. The Underwriter has not
committed to purchase any of the Units for its own account.
F-6
<PAGE>
ForeignTV.com Inc.
NOTES TO FINANCIAL STATEMENTS--(Continued)
In connection with the Proposed Offering, the Company will sell to the
Underwriter, for nominal consideration, warrants to purchase Units (the
"Underwriter's Unit Warrants") at the rate of one Underwriter's Unit Warrant
for each ten Units sold in the Proposed Offering, up to a maximum of 170,000
Underwriter's Unit Warrants. The units issuable upon exercise of the
Underwriter's Unit Warrants are substantially identical to the Units except
that they are not redeemable by the Company and expire five years after the
effective date of the Proposed Offering. The Underwriter's Unit Warrants are
exercisable at $6.60 per unit.
As of December 31, 1998 the Company had recorded deferred charges of $6,670
relating to various expenses incurred in connection with the Proposed Offering.
Upon consummation of the Proposed Offering these costs will be charged to
equity. Should the Proposed Offering prove to be unsuccessful these deferred
costs, as well as any other additional expenses that may be incurred, will be
charged to operations.
9--Contingency
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act. The Company has
also agreed to pay to the Underwriter an expense allowance on a non-accountable
basis equal to 2% of the gross proceeds derived from the sale of the Units.
F-7
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must
not rely on any unauthorized information. This prospectus does not offer to
sell or to buy any securities in any jurisdiction where it is unlawful. The
information in this prospectus is current only as of the date of this
prospectus.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................. 1
Risk Factors............................................................. 5
Use of Proceeds.......................................................... 12
Dilution................................................................. 13
Capitalization........................................................... 14
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 15
Proposed Business........................................................ 16
Management............................................................... 27
Certain Transactions..................................................... 29
Principal Stockholders................................................... 30
Description of Securities................................................ 31
Underwriting............................................................. 34
Legal Matters............................................................ 35
Experts.................................................................. 35
Additional Information................................................... 36
Financial Statements..................................................... F-1
</TABLE>
----------------
Until July , 1999 (90 days after the date of this prospectus), all dealers
that buy, sell or trade these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
foreignTV.com, Inc.
1,700,000 Units
-------------
PROSPECTUS
-------------
Westminster
Securities Corporation
April , 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth various expenses, other than underwriting
commissions, which will be incurred in connection with the offering. Other than
the SEC registration fee, NASD filing fee and the non-accountable expense
allowance of Westminster Securities Corporation (the "Underwriter"), all
amounts set forth below are estimates:
<TABLE>
<CAPTION>
Minimum Maximum
----------- -----------
<S> <C> <C>
SEC registration fee............................. $ 7,826.26 $ 7,826.26
NASD filing fee.................................. 3,315.20 3,315.20
Underwriter's nonaccountable expense allowance... 102,000.00 204,000.00
Blue sky fees and expenses....................... 12,000.00 12,000.00
Printing and engraving expenses.................. 50,000.00 50,000.00
Legal fees and expenses.......................... 90,000.00 120,000.00
Accounting fees and expenses..................... 10,000.00 10,000.00
Transfer and Warrant Agent fees.................. 5,000.00 5,000.00
NASDAQ listing fee............................... 10,000.00 10,000.00
Miscellaneous expenses........................... 4,858.54 2,858.54
----------- -----------
$295,000.00 $425,000.00
----------- -----------
</TABLE>
Item 14. Indemnification of Directors and Officers
Article FIFTH of the Certificate of Incorporation of foreignTV.com
("Registrant") provides that Registrant shall indemnify to the fullest extent
permitted by Sections 102(b)(7) and 145 of the Delaware General Corporation
Law, as amended from time to time, each of its officers and directors, such
right to indemnification being expressed in said Article FIFTH as a contractual
right, and may so indemnify such other persons that such Sections grant
Registrant the power to indemnify. Article FIFTH of the Certificate of
Incorporation of Registrant also provides that no director shall be liable to
the corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except with respect to (1) a breach of the
director's duty of loyalty to the corporation or its stockholders, (2) acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (3) liability under Section 174 of the Delaware
General Corporation Law or (4) a transaction from which the director derived an
improper personal benefit.
Reference is made to Section 9 of the Underwriting Agreement, which provides
for indemnification of the officers and directors of Registrant under certain
circumstances.
II-1
<PAGE>
Item 15. Recent Sales of Unregistered Securities
The following sets forth information relating to all securities of
Registrant sold by it since November 12, 1998, the date of Registrant's
inception, all such sales having occurred in January 1999:
<TABLE>
<CAPTION>
Number of Consideration
Name Shares Per Share
---- --------- -------------
<S> <C> <C>
Jonathan Braun.......... 3,100,000 $0.01
I. William Lane......... 2,700,000 $0.01
Albert T. Primo......... 750,000 $0.01
Bruno Finel............. 600,000 $0.01
Yeon S. Hong............ 200,000 $0.01
Marc D. Leve............ 200,000 $0.01
Elorian C. Landers...... 500,000 $0.01
Junichi Watanabe........ 50,000 $0.01
Klaus Kraemer........... 50,000 $0.01
Rubin Shur.............. 20,000 $0.01
Norma Sacks............. 20,000 $0.01
E. Gabriel Perle........ 60,000 $0.01
Cooperman Levitt
Winikoff Lester &
Newman, P.C............ 40,000 $0.01
Seymour Stauber......... 7,000 $0.01
Ann Morrell............. 3,000 $0.01
</TABLE>
Exemption from registration under the Securities Act of 1933, as amended
(the "Securities Act"), is claimed for the sales of Common Stock referred to
above in reliance upon the exemption afforded by Section 4(2) of the Securities
Act for transactions not involving a public offering. Each certificate
evidencing such shares of Common Stock bears an appropriate restrictive legend
and "stop transfer" orders are maintained on Registrant's stock transfer
records thereagainst. None of these sales involved participation by an
underwriter or a broker-dealer.
Item 16. Exhibits and Financial Statement Schedules
(a) The following is a list of Exhibits filed herewith as part of the
Registration Statement:
<TABLE>
<CAPTION>
<C> <S>
Revised Form of Underwriting Agreement between Registrant and the
1.1* Underwriter
3.1* Amended and Restated Certificate of Incorporation of Registrant
3.2* By-laws of Registrant
4.1* Form of certificate evidencing shares of Common Stock
4.2* Form of certificate evidencing Common Stock Purchase Warrant
4.4* Form of Unit Purchase Option between Registrant and the Underwriter
<CAPTION>
<C> <S>
4.5* Form of Warrant Agreement between Registrant and American Stock
Transfer & Trust Company, as warrant agent
5.1* Opinion of Cooperman Levitt Winikoff Lester & Newman, P.C.
10.1* 1999 Stock Option Plan
License Agreement between Registrant and the Center for Contemporary
10.2* Diplomacy, Inc.
10.3* License Agreement between Registrant and Jonathan Braun
10.4* Escrow Agreement by and between Registrant and CitiBank, N.A.
Proposed Form of Employment Agreement between Registrant and Jonathan
10.5* Braun
Proposed Form of Employment Agreement between Registrant and Albert
10.6* Primo
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
Proposed Form of Employment Agreement between Registrant and Bruno
10.7* Finel
Proposed Form of Employment Agreement between Registrant and Marc
10.8* Leve
Proposed Form of Employment Agreement between Registrant and Yeon
10.9* Hong
23.1** Consent of Martin A. Weiselberg & Co.
Consent of Cooperman Levitt Winikoff Lester & Newman, P.C. (included
23.2* in Exhibit 5.1)
Power of Attorney (included on the signature page of Part II of this
24.1* Registration Statement)
27.1* Financial Data Schedule
</TABLE>
- --------
*Previously filed.
**Filed herewith.
(b) Financial Statement Schedules.
None.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) That for purposes of determining any liability under the
Securities Act, the information omitted from the form of Prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of Prospectus filed by Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(2) That for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any Prospectus required by Section 10(a)(3) of the
Securities Act;
(b) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in "Calculation of
Registration Fee" table in the effective registration statement;
(c) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
(4) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
II-3
<PAGE>
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(6) To provide to the Underwriter at the closing specified in the
Underwriting Agreement, certificates in such denominations and registered
in such names as required by the Underwriter to permit prompt delivery to
each purchaser.
(7) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of Registrant pursuant to Item 14 of this Part II to the
Registration Statement, or otherwise, Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person of Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Registrant has
duly caused this Registration Statement or amendments, thereto to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on the 8th day of April, 1999.
foreignTV.com, Inc.
/s/ Marc D. Leve
By___________________________________
Marc D. Leve
Secretary
----------------
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chairman April 8, 1999
____________________________________
I. William Lane
/s/ Jonathan Braun Chief Executive Officer and April 8, 1999
____________________________________ Director
Jonathan Braun
* President and Director April 8, 1999
____________________________________ (Chief Operating Officer)
Albert T. Primo
/s/ Marc D. Leve Vice President-Legal, April 8, 1999
____________________________________ Secretary, Treasurer and
Marc D. Leve Director (Chief Accounting
and Financial Officer)
* Senior Vice President- April 8, 1999
____________________________________ European Operations and
Bruno Finel Director
</TABLE>
- --------
* Marc Leve, pursuant to Powers of Attorney (executed by each of the officers
and directors listed above and indicated as signing above, and filed with the
Securities and Exchange Commission), by signing his name hereto does hereby
sign and execute this Amendment to the Registration Statement on behalf of
each of the persons referenced above.
<TABLE>
<S> <C> <C>
/s/ Marc Leve
Dated: April 8, 1999 Marc Leve
</TABLE>
II-5
<PAGE>
Exhibit 23.1
Consent of Independent Public Accountant
As Independent Certified Public Accountant, I hereby consent to the use of my
report (and to all references to myself) included in or made a part of this
Registration Statement, as amended.
/s/ Martin A. Weiselberg
-------------------------
Martin A. Weiselberg
New York, New York
April 8, 1999
