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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
AMENDMENT NO. 2
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
VIAVID BROADCASTING, INC.
(Exact name of Company as specified in its charter)
NEVADA 98-020-6168
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 520, 625 Howe Street
Vancouver, British Columbia, Canada V6C 2T6
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: 604-669-0047
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
25,000,000 Shares of Common Stock
---------------------------------
(Title of class)
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TABLE OF CONTENTS
Page
COVER PAGE 1
TABLE OF CONTENTS 2
PART I 3
DESCRIPTION OF BUSINESS 3
DESCRIPTION OF PROPERTY 18
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES 18
REMUNERATION OF DIRECTORS AND OFFICERS 20
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS 21
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS 22
SECURITIES BEING REGISTERED 23
PART II 25
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS 25
LEGAL PROCEEDINGS 25
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 25
RECENT SALES OF UNREGISTERED SECURITIES 25
INDEMNIFICATION OF DIRECTORS AND OFFICERS 26
PART F/S 28
FINANCIAL STATEMENTS 28
PART III 29
INDEX TO EXHIBITS 29
SIGNATURES 30
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PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative
2.
Item 6. Description of Business
CORPORATE BACKGROUND
1. Corporate Organization
ViaVid Broadcasting, Inc. (the "Company") is a Nevada corporation
incorporated on January 20, 1999.
The Company conducts its business through its wholly owned operating
subsidiary, ViaVid Broadcasting Corp. ("ViaVid"). ViaVid is a
British Columbia company incorporated on July 26, 1994.
2. Acquisition of ViaVid Broadcasting Corp
The Company acquired ViaVid pursuant to an Acquisition Agreement
dated January 26, 1999 by and between the Company and Mr. Paul
Watkins, Ms. Cheryl Watkins, 549419 BC Ltd. and Kathler Holdings Ltd.
(the "Acquisition Agreement"). As consideration for this transfer,
the Company issued to Mr. Paul Watkins, Ms. Cheryl Watkins, 549419 BC
Ltd. and Kathler Holdings Ltd. a total of 5,100,000 restricted shares
of common stock of the Company.
ViaVid was an inactive British Columbia company from the date of its
incorporation in July, 1994 to the time of its acquisition by Paul
Watkins, Cheryl Watkins, Kathler Holdings Ltd. and 549419 B.C. Ltd.
in October, 1998. ViaVid commenced operations of the ViaVid Business
in November, 1998. ViaVid has not carried on any other business
operations other than the ViaVid Business.
THE VIAVID BUSINESS
ViaVid provides its customers with video production and Internet news
broadcasting and dissemination services (the "ViaVid Business"). The
ViaVid Business is carried on through ViaVid's web site on the
Internet at "www.viavid.com" (the "ViaVid Web Site"). It is the
intent of the Company as part of its business plan to develop an
internet video broadcasting company that offers a wide variety of
video services utilizing streaming video technology.
1. Development of the ViaVid Business
The ViaVid Business is still in the development stage. ViaVid
started development of the ViaVid Business in November, 1998. ViaVid
established the ViaVid Web Site in January, 1999. The Company spent
$181,615 on development and start-up of the ViaVid Business. The
ViaVid Business has generated revenues of $9,204 during the period
from its incorporation to June 30, 1999.
2. Further Description of the ViaVid Business
The Company is targeting public and financial companies as its
customer base. The Company plans to
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offer the following services to these customers:
(1) Video production of news releases, corporate events and
corporate announcements;
(2) Broadcast and dissemination of video productions from the ViaVid
Web Site over the Internet;
(3) Assistance in making video productions available from the
customer's web site.
The Company has completed the development of its web site and is now
in the process of starting video productions for customers and
broadcasting these video productions via the Internet.
The Company has also started developing its own financial news
broadcasts and video tapes for dissemination from the ViaVid Web
Site.
3. Format of the ViaVid Web Site
The Company has developed the ViaVid Web Site with the objective of
creating a financial resources site in which Internet users can
access and view video productions of the Company's customers and the
Company's own financial news broadcasts. The ViaVid Web Site has
been developed to enable users to access "channels". The Company
launched its first channel, VBC News 1, in the first quarter of 1999.
With sufficient funding, the Company plans to launch additional
channels for broadcast via the ViaVid Web Site.
An Internet user accessing the ViaVid Web Site is presented with
options on which video productions or financial news broadcasts to
view. Upon selection, the ViaVid Web Site launches a "streaming"
media program that enables the video production to be viewed by the
user more efficiently. "Streaming" is the term used for computer
data media files that begin playing at the same time they are being
transmitted to the user's computer. As the name streaming suggests,
files flow like a stream. Rather than attempting to send a whole
reservoir of data at one time, streaming sends the first part of an
audio or video clip through the Internet first, and then, while that
clip is playing, the rest of the data is sent, arriving in time to be
played. To make sure playback isn't interrupted if logjams slow the
network, the player collects a small backlog of data, called a
buffer, before it starts playing the first clip. If the data keeps
flowing fast enough, playback is continuous. Thus, users only have to
wait the few seconds it takes to create a buffer before viewing a
file, regardless of whether the file lasts 30 seconds or 30 minutes.
The ViaVid Web Site also displays the Company's logo and advertisements
from advertisers who have arranged to post their ads on the site.
REVENUE OPPORTUNITIES
The Company's objective is to derive revenue from three distinct
services:
(1) The broadcast of corporate overviews, press releases and
interviews with officials from public companies in the financial
markets.
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(2) Advertising.
(3) Hosting and server storage of video footage and web content for
corporate clients.
1. The Broadcast of Corporate Information
The Company will produce and broadcast corporate overviews, updates,
press releases and financial information for publicly traded
companies to its viewing audience. The goal is to make these
broadcasts a regular part of each customer's financial news
dissemination process.
The Company will broadcast news coverage for both its customers who
are paying a fee for the broadcast of news coverage, and for public
companies where the Company deems the news coverage to be of interest
to its audience. The Company's objective in broadcasting news
coverage for public companies who are not paying customers is to
enhance the content of the Company's broadcasts with the objective
of building and maintaining an audience for the Company's customers
who are paying for the broadcast of news coverage. The Company
considers that building and maintaining an audience that views the
Company's broadcasts is essential to the marketing and sales of the
Company's broadcast services.
As a company releases news, a ViaVid news crew will arrive at the
company's office, or any other pre-arranged location, to video
company officials announcing their news in detail. The video footage
would then be immediately edited into a streaming Internet video
format and broadcast on ViaVid's VBC News 1 Channel from the ViaVid
Web Site. The video footage may also be broadcast from the
customer's own web site and other strategic financial sites. All
footage shown outside of the ViaVid VBC News 1 Channel will be
clearly identified as ViaVid footage with ties back to the ViaVid
Channel. A fee will be charged to the Company's customers for the
broadcast and dissemination of this information. The Company will
re-evaluate the fees charged if the Company is successful in
achieving market acceptance for its Internet broadcasting services
and demand for the Company's Internet broadcast services increases.
Each customer that broadcasts will bring its own audience to the
channel which ViaVid will attempt to retain through its daily
programming.
The Company is currently limited in the companies to which it can
offer its Internet broadcast services by geographical and financial
constraints. The Company has focused initially on public companies
located in Vancouver, British Columbia due to the fact that the
Company's operations and broadcast crews are located in Vancouver,
British Columbia. The Company is able to provide services to
companies located in other markets, but the Company's ability is
constrained by financial and manpower limitations as any broadcast
outside of the Vancouver area would require that the broadcast crew
travel to the broadcast location. The cost and time involved in
travel increases the cost to the Company of providing broadcast
services to companies not in the Vancouver area. The Company's
objective is to expand its operations to have broadcast crews located
in principal financial regions in order to provide its broadcast
services to a broader range of prospective customers. Expansion is
subject to availability of funding and there is no assurance the
Company will be able to expand its business operations to additional
cities.
The Company perceives that there is demand by public companies with
small capitalization's for the Company's corporate news broadcast via
the Internet. The Company competes against other larger
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companies who also broadcast financial video on the Internet,
including Bloomberg and CNBC. The Company believes that its Internet
broadcast services are distinct from the services offered by large
Internet broadcast companies such as Bloomberg and CNBC as these large
Internet broadcast companies do not offer news coverage for small-cap
public companies. In addition, these large Internet broadcasters do
not offer the opportunity for small-cap public companies to pay for
Internet news broadcast at affordable rates.
The Company's objective is to attract an audience which is interested
in small cap public companies and who do not have any competing
opportunity in which to view news being broadcast by small cap public
companies.
2. Advertising
As in the television broadcast industry, the Company anticipates that
advertising revenues will make up the bulk of its future revenue.
The Company has developed the VBC News 1 Channel to take advantage of
advertising revenue while broadcasting its news. The ViaVid Web Site
can display multiple advertisements while broadcasting its video
coverage through the VBC 1 Channel. This
advertising format has been devised by the Company in order to
increase potential advertising revenues.
3. Hosting and Storage of Video Footage and Web Content
The Company will maintain the archived video footage produced for its
corporate clients on its servers so that the footage can be
re-broadcast on demand from the VBC News 1 Channel, the customer's
own web site or other financial sites. The Company proposes to
charge its customers a monthly fee for the maintenance and storage of
this footage. The Company proposes to evaluate increases in the fee
charged if demand for the Company's Internet broadcast services
increases.
ViaVid will also offer the service of hosting and updating its
customers' web sites for a monthly fee. In early marketing tests, a
number of the companies requested the ViaVid video footage be
incorporated into their web sites and indicated that they would rely
on ViaVid's expertise with video on the web to provide them with the
necessary web site programming.
BUSINESS DEVELOPMENT AND MARKETING STRATEGY
The Company has undertaken minimal marketing efforts to date, having
focused largely on the development of the ViaVid Web Site. With the
ViaVid Web Site and the VBC News 1 Channel now in operation, the
Company is preparing to initiate more significant marketing efforts.
The Company's objective is to become the Internet broadcasting site
of choice for public companies and the financial services industry.
The Company intends to achieve this objective by pursuing the
following key strategies:
1. Offering a Corporate News Broadcasting Service to Small-Cap
Public Companies.
The Company believes that there is market demand from small-cap
public companies who want to broadcast corporate news and information
on the Internet. As discussed above in The Broadcast of
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Corporate Information, the Company believes that small-cap public
companies have not been able to achieve coverage on traditional
media based Internet broadcast services such as Bloomberg and CNBC.
The Company believes that there is a demand by small-cap public
companies for Internet broadcast services which, to the knowledge
of the Company, is not being met by competitors. The Company's
objective is to meet this demand by providing Internet broadcasting
services to small-cap public companies who have not had the
opportunity to participate in Internet broadcasts. The Company's
Internet broadcasts will be produced solely for broadcast via the
Internet as opposed to being Internet broadcasts of television
coverage.
The Company will target public and financial services companies as
customers in order to educate them on the availability of the
Company's service and technology. The Company believes that many
potential customers are not aware of the Company's services and would
take advantage of Internet broadcasting if the opportunity is
presented to them.
The Company is aware of many competitors that provide both
conventional and Internet distribution of print-based news releases
and corporate information for small-cap public companies. One
example of a competitor in the Company's principal market of
Vancouver, British Columbia is Canada Stockwatch Inc. which provides
news dissemination services for small-cap public companies using both
conventional print media and electronic distribution. Public companies
such as Yahoo, Inc. and Microsoft Corporation also provide Internet
access to news releases and corporate information released by small-cap
companies. The Company views its Internet broadcast services as
being distinct to these print based distribution media sources. The
Company's Internet broadcast services enables a small-cap company to
deliver multi-media presentations with audio and video streaming
which has the potential to offer greater impact to the public
company's target audience. Greater impact may be achieved as the
viewer can view representatives of the small-cap company delivering a
news release or corporate information. Any presentation can be coupled
with video images of a small-cap company's business operations and
products. The presentation can also be integrated with a small-cap
company's marketing information and corporate information, thereby
reinforcing its corporate image. The Company is also able to broadcast
events such as shareholder meetings and press interviews which are
not typically published in a print-based format.
2. Increasing Awareness of the Web Site.
The Company operates in a market in which strong brand recognition is
critical to differentiating itself and attracting a high-level of
customer awareness and user traffic. Accordingly, the Company's
strategy is to increase its visibility and brand recognition through
a variety of marketing and promotional techniques.
Specifically, the Company intends to increase points of access by
forming relationships with, and advertising on, leading web sites,
such as StockHouse, Canada Stockwatch, Carlson Online, E*Trade, PC
Quote, etc. Premier positioning on these sites is intended to give
the ViaVid Web Site credibility with potential clients who are
unfamiliar with the Company. The Company also proposes to reinforce
the ViaVid brand in users' minds by employing consistent branding
from the design of the ViaVid Web Site and logo.
The Company will pursue co-marketing arrangements by cross-linking
with other web sites on the
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Internet. The Company may post links to other web sites in return
for that site posting the Company's link. The Company proposes to
pursue cross-linking only where there is a mutually beneficial
synergy with other web sites.
3. Promote Repeat Visits.
The Company has designed the ViaVid Web Site with an attractive and
engaging format in order to enhance the experience of users and
encourage repeat visits. The Company believes that repeat visits can
be further encouraged by the addition of new video content on a daily
basis.
4. Expansion of the Capabilities of the ViaVid Web Site.
The Company will attempt to continually enhance the functionality and
attractiveness of the ViaVid Web Site by regularly updating the
technology used to broadcast video information. The Company
proposes to expand the capability of the ViaVid Web Site by adding
additional channels according to perceived market demand.
5. Customer Monitoring and Data Gathering.
The Company believes that increased information regarding the
customers using the ViaVid Web Site will assist the Company in
marketing the ViaVid Web Site and increasing revenues. At present,
the Company gathers minimal information regarding users of the site.
The Company is proposing to expand the capability of the ViaVid Web
Site to obtain personal and business profile information
on users. This information will assist in marketing the site to
advertisers who are prepared to pay for the placement of ads on the
site. Information regarding the location, nature of business, income
level and other marketing criteria of users of the ViaVid Web Site
will assist in developing user profiles which will assist in
maximizing advertising revenue and marketing the Company's video
production and broadcast services.
6. Expand the Revenue Generating Capacity of the ViaVid Web Site
The Company will pursue alternate revenue streams for the ViaVid Web
Site and the ViaVid Business. The Company also proposes to pursue
arrangements with other companies whereby the Company may earn a
commission or fee based on customers referred to web sites operated
by other companies.
TECHNOLOGY
The Company uses commercially available licensed technology to
operate the ViaVid Web-Site.
1. Commercially Available Licensed Technology
The Company licenses commercially available technology whenever
possible instead of purchasing custom-made or internally developed
solutions. The Company believes that this strategy lowers operating
costs, and allows it to concentrate more fully on creating content
for the VBC News 1 Channel and developing new channels.
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2. Operations
Substantially all of the Company's communications hardware and
computer hardware is located at a leased facility in Vancouver,
British Columbia, Canada. As a result, the Company's systems are
vulnerable to damage from earthquake, fire, floods, power loss,
telecommunications failures, break-ins and similar events. The
Company does not presently have fully redundant systems and has not
yet completed implementing a formal disaster recovery plan. Despite
the implementation of network security measures, the Company's
servers are also vulnerable to computer viruses, physical or
electronic break-ins, attempts by third parties deliberately to
exceed the capacity of the Company's systems and similar disruptive
problems. The Company's coverage limits on property and business
interruption insurance may not be adequate to compensate the Company
for all losses that may occur.
The Company uses independent Internet Service Providers to provide
connectivity to the Internet, Internet traffic and data routing
services and email services for the Company. The Company believes
that these telecommunication and Internet service facilities are
essential to its operation and anticipates upgrading these
facilities, though more costly, telecommunication services in the
future.
INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS
The Company's performance and ability to compete are dependent to a
significant degree on its proprietary content. The Company relies on
a combination of trademark, copyright and trade secret laws, as well
as confidentiality agreements and non-compete agreements executed by
employees and consultants as the means to establish and protect its
proprietary rights.
The Company has applied to the United States Trademark office for
registration of "ViaVid" as a trademark in the United States. The
Company has also applied to the Canada Patent and Trademark Office
for registration of "ViaVid" as a trademark in Canada. No trademark
has been issued to the Company for "ViaVid" in either the United
States or Canada. The Company is not aware of any other companies
currently using the name "ViaVid". The Company has conducted
searches of trademark databases in both the United States and Canada
and has not found any registration of the name "ViaVid" as a
trademark. There is no assurance that the Company will be able
obtain a trademark for the "ViaVid" name, or that once obtained it
will stand up to objections by others who have made prior use of the
name. It is also possible that competitors of the Company or others
will adopt product or service names similar to "ViaVid" or other
service marks or trademarks of the Company, thereby impeding the
Company's ability to build brand identity and possibly leading to
customer confusion. The inability of the Company to protect the name
"ViaVid" adequately could have a material adverse effect on the
Company's business, results of operations and financial condition.
The Company also relies on a variety of technologies that it licenses
from third parties, including its Internet server software, which is
used in the Company's ViaVid Web Site to perform key functions.
There can be no assurance that these third-party technology licenses
will continue to be available to the Company on commercially
reasonable terms. The loss or inability of the Company to maintain or
obtain upgrades to any of these technology licenses, could result in
delays in completing enhancements and have a material adverse effect
on the Company's business, results of operations and financial
condition.
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COMPETITION
In general, business on the Internet is rapidly being developed by
companies with greater technical and financial resources than the
Company. Competitors may target the Company's business directly
and may offer services comparable to the Company's at no cost or at
prices below the Company's cost. There is no assurance that the
Company will have the financial or technical resources to compete
with such action or competitors.
The Internet news dissemination market is new, rapidly evolving and
intensely competitive, and the Company expects competition to
intensify in the future. The Company currently or potentially
competes with a variety of other companies. These competitors
include:
(i) Visual Data Corporation;
(ii) a number of indirect competitors that specialize in
Internet news broadcasting;
(iii) conventional news broadcasting and dissemination services,
including television, newspapers, and magazines;
(iv) a variety of other companies that offer services similar to
that of the Company.
Increased competition is likely to result in reduced operating
margins, loss of market share and reduced revenues, any one of which
could materially adversely affect the Company's business, results of
operations and financial condition. Many of the Company's current and
potential competitors have significantly greater financial, marketing,
customer support, technical and other resources than the Company. As
a result, such competitors may be able to attract potential users
away from the ViaVid Web-Site, and they may be able to respond
more quickly to changes in customer preferences or to devote greater
resources to the development, promotion and sale of their web sites
than can the Company.
PLAN OF OPERATIONS
The Company currently intends to pursue the following plan of
operations during the next twelve months:
1. The Company will continue to develop a customer base of public and
financial companies who will use the Company services for digital
video productions and Internet broadcasting. The Company anticipates
it will spend approximately $100,000 on this marketing expense over
the next twelve month period;
2. The Company will continue to develop the VBC News 1 Channel for
broadcast from the ViaVid Web Site. The Company anticipates it will
spend approximately $350,000 on this development expense over the
next twelve month period;
3. The Company will evaluate additional channels for broadcast from
the ViaVid Web Site, depending on market demand. The Company
anticipates it will spend approximately $50,000 on additional
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channels over the next twelve month period;
4. The Company will evaluate whether to set up an additional office
or offices in additional cities in order to expand the business of
the Company and meet customer demand. The Company anticipates it
will spend approximately $150,000 on additional offices over the next
twelve month period if the Company determines to proceed with an
additional office;
5. The Company will expand the ViaVid Web Site to attempt to extract
marketing information and data from users in order to obtain a basis
for earning advertising revenue. The Company anticipates it will
spend approximately $10,000 on expansion of the ViaVid Web Site over
the next twelve month period;
6. The Company will purchase additional equipment to expand the
ViaVid digital video production studio and video production
capabilities. The Company anticipates it will spend approximately
$250,000 on additional production equipment over the next twelve
month period.
In sum, the Company anticipates that it will spend approximately
$1,000,000 over the next twelve month period in pursuing the
Company's stated plan of operations. Of these anticipated
expenditures, the Company anticipates that approximately $514,000
will be required to be spent on the Company's plan of operations in
the next six months. Of this amount, the Company anticipates that
$105,000 will be realized from operating revenues of the Company and
$409,000 will be raised by additional equity financings of the
Company. The Company is presently undertaking an offering of its
shares of up to 1,000,000 shares of the Company's common stock at a
price of $1.00 per share to persons who are "non-U.S. persons" in
accordance with Regulation S of the United States Securities Act of
1933. See Part II - Item 4 "Recent Sales of Unregistered
Securities". The Company has sold approximately $295,000 of this
offering to date. If this offering pursuant to Regulation S is fully
completed, the Company anticipates it will be able to complete the
stated Plan of Operations without additional equity financing.
However, the actual expenditures and business plan of the Company may
differ from the stated Plan of Operations. The Board of Directors of
the Company may decide not to pursue the stated Business Plan of
Operations. In addition, the Company may modify the stated Plan of
Operations based on the available amounts of financing in the event
that the Company cannot achieve the required equity financings to
complete the stated Plan of Operations. The Company does not have
any arrangement in place for any debt or equity financing which would
enable the Company to meet the Stated Plan of Operations.
In the event the Company is not successful in achieving any further
sales of its common stock, the Company anticipates that it could
sustain its business operations for approximately six months without
additional equity financing based on the Company's current cash
position and revenues presently being realized by the Company.
The Company is currently receiving revenues from video production and
hosting services. The Company anticipates an increase in revenue
from production, advertising and hosting video footage and web
content if the Company is successful in increasing its viewership
over the next twelve months.
Notwithstanding the above plan of operations, as the Company has had
a short operating history with minimal revenues, the management
anticipates continuing operating losses in the foreseeable future.
The Company bases this expectation in part on the following:
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1. The Company will incur substantial marketing expense in order to
advertise and promote the ViaVid Web Site, to establish a customer
base and to increase the usage of the ViaVid Web Site.
2. Increased usage of the ViaVid Web Site will lead to increased
operating expenses and require additional capital expenditures on new
computer equipment, software and technology.
3. Operating expenses will continue to increase as the Company
expands the technical capabilities of the ViaVid Web Site.
4. Operating expenses will increase as the Company solicits potential
customers and completes video productions for customers for broadcast
via the ViaVid Web Site.
5. Operating expenses will increase as the Company solicits potential
advertisers and attempts to enter into agreements for advertising on
the ViaVid Web Site.
6. Operating expenses will increase as the Company undertakes to
implement programs to monitor usage of the ViaVid Web Site and
develops customer profiles of its users.
Even so, it should be noted that the Company's future financial
results are uncertain due to a number of factors, many of which are
outside the Company's control. These factors include, but are not
limited to:
1. the ability to increase usage of the ViaVid Web Site;
2. the ability to attract customers who are prepared to pay for
broadcast of video productions via the ViaVid Web Site;
3. the timing, cost and availability of advertising on other web
sites comparable to the Company's and over other media;
4. the amount and timing of costs relating to expansion of the
Company's operations;
5. the announcement or introduction of competing web sites and
products of competitors; and
6. general economic conditions and economic conditions specific to
the Internet and electronic commerce.
The Company believes the above statements may be forward-looking
statements. Actual results of the Company and the Company's actual
plan of operations may differ materially from what is stated above.
Factors which may cause the actual results of the Company or its
actual plan of operations to vary include, among other things,
decisions of the board of directors not to pursue a specific course
of action based on its re-assessment of the facts or new facts,
changes in the Internet business or general economic conditions and
those other factors identified herein.
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YEAR 2000 RISK
Background
Computer systems, software packages, and microprocessor dependent
equipment may cease to function or generate erroneous data when the
Year 2000 arrives. The problem affects those systems or products
that are programmed to accept a two-digit code in date code fields.
To correctly identify the Year 2000, a four-digit date code field
will be required to be what is commonly termed "Year 2000 compliant."
Readiness
The Company has completed an assessment of all internal systems and
operations to determine Year 2000 compliance. The Company's
assessment has included an assessment of computer hardware systems
and web site operations systems. The Company has determined that its
internal computer hardware systems and web site operations systems
and operations are Year 2000 compliant. As such, the Company does not
anticipate any material adverse operational issues to arise from the
Year 2000 problem affecting internal systems and operations.
The Company has completed upgrading of all third party licensed
software to ensure Year 2000 compliance. The Company has relied upon
the written representations of each of the third parties from whom
the Company licenses third party software that the upgraded software
is Year 2000 compliant. While the Company has relied upon
representations by third parties, the Company cannot give any
assurance that all third party licensed software will be Year 2000
compliant. The Company has implemented all Year 2000 software
patches for the software used by the Company in its operations,
including software patches for the Company's Microsoft operating
system. The Company will continue to implement any new software
patches for Year 2000 problems provided by software manufacturers
through to January 1, 2000.
The Company has investigated the Year 2000 compliance of all computer
hardware purchased by the Company since commencement of operations.
The Company has relied upon representations by hardware manufactures
that all computer hardware purchased is Year 2000 compliant. While
the Company has relied upon representations by manufacturers, the
Company cannot give any assurance that all computer hardware will be
Year 2000 compliant.
The Company has made inquires of its Internet service provider, AT&T
Corp. (AAT&T@), as to the Year 2000 compliance of the Internet
service provider's systems and operations. AT&T has given
representations to the Company that its systems and operations are
Year 2000 compliant. However, there is no assurance that the Company
will not be affected by Year 2000 problems arising from problems with
the Internet service provider's systems and operations or experienced
by the Internet service provider as a result of third party problems.
Risks
The Company may realize exposure and risk if the systems for which it
is dependent upon to conduct day-to-day operations are not year 2000
compliant. The Company's worst case scenario would be the inability
of the Web Site to function due to the inability of the computer
hardware systems and web site
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operations systems to function properly and disruptions to
telecommunications services experienced by Internet service
providers and their users throughout the world. Under this
worst case scenario, the Company would not be able to continue
operations and the Web Site would be inoperable until such
time as the Company had replaced or upgraded computer hardware or
software components. If the Year 2000 problem affects the Company's
Internet service provider, the Web Site would remain inoperable until
the Internet service provider re-commenced operations or until a
replacement Internet service provider had been found. In a worst
case scenario, the Year 2000 problem will result in increased expense
to the Company and decreased revenues being earned from the Web Site
or delay the realization of revenues from the Web Site. The Company
estimates that the cost of re-establishing operations with a
replacement Internet service provider would be approximately $7,500.
The Company is not able to estimate the potential loss of revenue
and cost of business description resulting from a worst-case scenario
with Year 2000 problems.
Estimated Year 2000 Costs
The Company anticipates that the cost to the Company would be in the
form of lost revenues, delays in achieving the Company's plan of
operations and the expense of re-establishing web site operations.
The Company is not able to quantify the cost of a worst-case
scenario. The Company estimates that its total internal cost for
ensuring Year 2000 compliance for all internal systems to date to be
less than $10,000. The Company anticipates incurring internal costs
of less than $5,000 in completing its Year 2000 compliance plan. The
Company has not incurred any external cost in ensuring Year 2000
compliance in view of the fact that the Company has only recently
commenced operations and has purchased computer hardware and software
on the basis of representations by manufacturers as to Year 2000
compliance.
Contingency Planning
The Company is developing a contingency plan to address situations
that may result if the Company is affected by Year 2000 problems.
Contingency plans include back-up of all computer software databases.
The Company is unable to make contingency plans if any significant
number of the computers constituting the Internet fail to process
dates properly for the year 2000 and there is a system-wide slowdown
or breakdown. The Company's business is dependent on the continued
successful operation of the Internet. Any interruption or significant
degradation of Internet operations due to Year 2000 problems could
harm the Company's business.
EMPLOYEES
The Company has six (6) full-time employees, including Mr. Brian
Kathler as President of the Company and Ms. Cheryl Watkins as
Secretary and Treasurer of the Company. The Company has no part-time
employees. The Company also conducts its business primarily through
agreements with its consultants and arms-length third parties. The
services of Mr. Brian Kathler, President of the Company, are provided
pursuant to a consulting agreement between the Company and Kathler
Holdings Ltd., a private company controlled by Mr. Kathler, as
discussed below. The services of Mr. Paul Watkins, a director of the
Company, are provided pursuant to a consulting agreement between the
Company and Watkins Communications, as discussed below. Watkins
Communications is a private company controlled by Mr. Watkins. The
services of Mr. Kathler and Mr. Watkins are provided through
consulting agreements with companies controlled by each of Mr.
Kathler and Mr. Watkins at the request
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of Mr. Kathler and Mr. Watkins. Each of Mr. Kathler and Mr. Watkins
have indicated to the Company their preference for such arrangements
due to their business reasons.
The services of Mr. Brian Kathler, President of the Company, are
provided pursuant to a Consulting Contract dated February 1, 1999 by
and between the Company and Kathler Holdings Ltd. ("Kathler
Agreement"). The Kathler Agreement requires, among other things,
that Mr. Brian Kathler will act as the Company's President, providing
the following services: (1) exercising general direction and
supervision over the business and financial affairs of the Company;
(2) providing overall direction to the management of the Company; (3)
managing the day to day operations of the Company; (4) performing
such other duties and observing such instructions as may be
reasonably assigned to him from time to time by the Board of
Directors; and (5) generally at all times abiding by all lawful
directions given to him by the Board of Directors of the Company.
The Kathler Agreement provides for a term of one year. The
compensation payable by the Company to Kathler Holdings Ltd. was
increased from $5,000 per month to $7,500 per month effective August
31, 1999 in accordance with the terms of the Kathler Agreement which
provided for a compensation review after six months from commencement
of the Kathler Agreement. The services of Mr. Kathler under this
agreement are on a full time basis. A copy of the Kathler Agreement
is provided herewith and made a part hereof by this reference. For
more information on Mr. Kathler, see the section on "Directors,
Executive Officers and Significant Employees" below.
The services of Mr. Paul Watkins as director and consultant are
provided to the Company pursuant to a Consulting Contract between the
Company and Watkins Communications Inc. ("Watkins Agreement"). The
Watkins Agreement requires, among other things, that Mr. Paul Watkins
act as the Company's director and consultant, providing the following
services: (1) exercising general direction and supervision over the
marketing and development of the business of the Company; (2)
providing direction to the management of the Company; (3) assisting
with the day to day operations of the Company; (4) performing such
other duties and observing such instructions as may be reasonably
assigned to him from time to time by the Board of Directors; and (5)
generally at all times abiding by all lawful directions given to him
by the Board of Directors of the Company. The Watkins Agreement
provides for a term of one year. The compensation payable by the
Company to Watkins Communications Inc. was increased from $5,000 per
month to $7,500 per month effective August 31, 1999 in accordance
with the terms of the Watkins Agreement which provided for a
compensation review after six months from commencement of the Watkins
Agreement. The services of Mr. Watkins under this agreement are on a
full time basis. A copy of the Watkins Agreement is provided
herewith and made a part hereof by this reference. For more
information on Mr. Watkins, see the section on "Directors, Executive
Officers and Significant Employees" below.
The Company employs Ms. Cheryl Watkins as its Secretary and Treasurer
to provide administrative, accounting and corporate services to the
Company. Ms. Watkins is an employee at will without a written
employment agreement, and is paid $4,000 CDN per month for her
services. For more information on Ms. Watkins, see the section on
"Directors, Executive Officers and Significant Employees" below.
The Company believes that the compensation paid to Kathler Holdings
Ltd. and Watkins Communications Inc. and Ms. Cheryl Watkins was below
market compensation rates for companies in the Company's industry.
The consultant fees paid to Kathler Holdings Ltd. and Watkins
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Communications Inc. were increased effective August 31, 1999 to bring
these rates of remuneration closer to market rates. The Company
believes that the terms of the agreements with Kathler Holdings Ltd.,
Watkins Communications Inc. and Ms. Cheryl Watkins are at least as
fair to the Company as would have been obtained from an unrelated
third party in an arms-length negotiation..
The services of Mr. O. Ronald Jones as Vice President of finance are
provided on a part time basis as an independent contractor, without
any formal written agreement with the Company. Consulting fees paid
to Mr. Jones are made on the basis of actual services provided, as
and when agreed by the Board of Directors.
The Company has four additional employees who provide video
production services to the Company.
These individuals and their duties are:
Name of Employee Duties
- ---------------- --------------------------------
Erica Henderson Videographer, Films video shoots
and edits video for streaming on
internet
Chelsea Atchison Video Production Coordinator.
Organizes video shoots and
provides production assistance
for VBC News 1
Aubyn Freybe-Smith Video Editor. Edits all video
shoots prior to streaming on the
internet
Bryan Dyck Systems Administrator
In addition to the above employees, Ms. Tiffany Burns provides
broadcast services to the Company as a consultant.
The Company has no written employment or consulting agreements with
any of the above-named persons.
None of the Company's employees are represented by a labor union, and
the Company considers its employee relations to be good. Competition
for qualified personnel in the Company's industry is intense,
particularly for software development and other technical staff. The
Company believes that its future success will depend in part on its
continued ability to attract, hire and retain qualified personnel.
The Company does not maintain key person life insurance.
The Company also depends on several third parties in conducting
operations, including the following:
* the Company does not own a gateway onto the Internet, but instead
relies on an Internet service
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provider to connect the ViaVid Web Site to the Internet; and
* the ViaVid Web Site depends on operating system, database, and
server software that has been developed, produced by and licensed
from third parties.
The Company has limited control over these third parties and has no
long-term relationships with any of them. If the Company is unable to
develop and maintain satisfactory relationships with such third
parties on acceptable commercial terms, or if the quality of products
and services by such third parties falls below a satisfactory
standard, the Company's business could be harmed. Also, any loss of
or inability to maintain or obtain upgrades to certain of its
technology licenses could result in delays in developing the
Company's systems until equivalent technology could be identified,
licensed or developed, and integrated.
RESEARCH AND DEVELOPMENT EXPENDITURES
Since the commencement of the ViaVid business in November, 1998, the
following amounts have been spent by the Company on start-up and
development expenses:
November 1,1998 to March 31, 1999 November 1, 1998
March 31, 1999 to June 30, 1999 to June 30, 1999
- ------------------ ---------------- ----------------
$75,104 $106,511 $181,615
Start-up and development expenses have consisted of expenses
associated with product development, including development of the
ViaVid Web Site and the VBC News 1 Channel, business development and
market development.
GOVERNMENT REGULATION
Due to the increasing popularity and use of the Internet, it is
likely that a number of laws and regulations may be adopted with
respect to the Internet generally, covering issues such as user
privacy, pricing, and characteristics and quality of products and
services. Similarly, the growth and development of the market for
Internet commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those companies
conducting business over the Internet. The adoption of any
additional laws or regulations may decrease the growth of commerce
over the Internet, increase the cost of doing business or otherwise
have a harmful effect on the Company's business. Government
regulation may also impact the introduction of high speed Internet
access to consumers. The functionality of the ViaVid Web Site and
its attractiveness to users is enhanced using high speed Internet
access over conventional access.
The Company may have to qualify to do business in other
jurisdictions. As the Company's broadcasts will be available over
the Internet in multiple states and foreign countries, such
jurisdictions may claim that the Company is required to qualify to do
business as a foreign Company in each such state and foreign country.
Failure to qualify as a foreign company in a jurisdiction where
required to do so could subject the Company to taxes and penalties.
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<PAGE>
There are no material environmental protection laws that will apply
to or effect the Company's business.
TRADING OF THE COMPANY'S COMMON STOCK
There is currently no market for the Company's common stock and there
is no assurance that a market will develop. If a market develops,
the Company anticipates that the market price of its common stock
will be subject to wide fluctuations in response to several factors,
such as:
* actual or anticipated variations in the Company's results of
operations;
* the Company's ability or inability to generate new revenues;
* increased competition; and
* conditions and trends in the Internet and electronic commerce
industries.
Further, the Company hopes to have its common stock traded on the
Nasdaq OTC Bulletin Board. Companies traded on the OTC Bulletin Board
have traditionally experienced extreme price and volume fluctuations.
The Company's stock price may be adversely impacted by factors which
are unrelated or disproportionate to the operating performance of the
Company. The trading prices of many technology companies' stocks
are currently at or near historical highs and reflect price earnings
ratios substantially above historical levels. These market
fluctuations, as well as general economic, political and market
conditions such as recessions, interest rates or international
currency fluctuations may adversely affect the market price of our
common stock.
Item 7. Description of Property
The primary business activities of the Company and ViaVid are carried
on at leased premises located at Suite 520, 625 Howe Street
Vancouver, British Columbia, Canada V6C 2T6. The premises are
comprised of 1,862 square feet and are leased for a term of one year
expiring on February 29, 2000. The Company does not lease or own any
other property.
Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of the officers and
directors of the Company, their present positions, ages and
biographical information.
Directors
Name of Director Age
- ---------------- -----
Brian Kathler 36
Paul Watkins 35
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<PAGE>
Officers
Name of Officer Age Office
- --------------- ----- -------
Brian Kathler 36 President
Cheryl Watkins 30 Secretary/Treasurer
O. Ronald Jones 56 Vice-President of Finance
Mr. Brian Kathler is a director and the President of the Company and
ViaVid. He has served as a director of ViaVid since October 31,
1998. Mr. Kathler has been employed since 1994 as follows:
1994 - 1996 MPR Teltech, Senior Software Engineer,
Team Lead
- MPR Teltech is a company involved in the
business of telephone research
1996 - 1997 Riptide Technologies, Director Consulting
Services
- Riptide Technologies is a company involved
in the business of software consulting
July 1997 - Nov. 1998 Self employed computer consultant.
Dec. 1998 - Present ViaVid Broadcasting Corp., President
and Director
Mr. Kathler possesses more than fourteen years of experience in the
computer software development, consulting and management industry.
Most recently, Mr. Kathler has provided technical consulting
services to several public companies based in Vancouver, British
Columbia, Canada as a self-employed computer consultant. Mr. Kathler
was a co-founder and a director of Riptide Technologies based in
Surrey, British Columbia, Canada from 1996 to 1997. Over his
fourteen years, Mr. Kathler has worked in a number of areas of the
software development industry ranging from programming to assisting
companies in getting started. Mr. Kathler was appointed as director
and President of the Company on January 20, 1999.
Mr. Paul Watkins is a director of the Company and ViaVid and is the
founder of Watkins Communications Inc., an Internet marketing and
news dissemination company with clients in the financial industry.
Watkins Communications Inc. has numerous clients listed on the
Vancouver Stock Exchange, Alberta Stock Exchange and Toronto Stock
Exchange for which it electronically files and disseminates press
releases and financial information. Mr. Watkins has a background in
computer sciences and has over 10 years experience in the business of
investor communications. Mr. Paul Watkins and Ms. Cheryl Watkins are
husband and wife.
Mr. Watkins has been the President and Director of Watkins
Communications Inc. from 1994 to the present. Mr. Watkins was
appointed a director of the Company on January 20, 1999.
Ms. Cheryl Watkins is the Secretary/Treasurer of the Company and
ViaVid. Ms. Watkins was
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<PAGE>
appointed as Secretary/Treasurer of the Company on January 20, 1999.
Ms. Watkins has over 10 years of experience as a legal assistant
in the area of securities and corporate commercial work. She is
the co-founder of Watkins Communications Inc., a British Columbia
company which provides public companies with a variety of investor
communications services. Ms. Watkins has been employed since 1994
as follows:
Oct 98 - Present ViaVid Broadcasting Corp. - Corporate
Secretary, Treasurer, and Administration
Oct 97 - Present Watkins Communications Inc. - Corporate
Secretary and Administrative Consultant
for Publicly Traded Companies
Mar 97 - Jul 98 Princeton Financial Services -
Administrator and Legal Support
Mar 96 - Mar 97 Gerald J. Shields Law Corp - Administrator
and Legal & Accounting Support
Feb 94 - Mar 96 Strategic Capital - Administrator and
Legal & Accounting Support
Mr. O. Ronald Jones is Vice-President of Finance of the Company. Mr.
Jones is the president and a director of O. Jones Financial Corp., a
private company which provides corporate finance and investor
relation services. Mr. Jones has been president and director of O.
Jones Financial Corp. since 1994. Mr. Jones was appointed as Vice-
President of Finance of the Company on January 20, 1999.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to the
Company's three highest paid officers and directors for the period
from the commencement of the ViaVid Business to July 31, 1999. No
other compensation was paid to any such officer or directors other
than the cash compensation set forth below.
SUMMARY COMPENSATION TABLE
Name of Individual or Capacities in which Aggregate
Identity of Group Remuneration was Received Remuneration
- --------------------- ------------------------- ------------
Brian Kathler Director and President $23,450
Paul Watkins Director $23,450
Cheryl Watkins Secretary/Treasurer $14,740
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<PAGE>
O. Ronald Jones Vice President, Finance $ 8,543
Officers and Directors Directors and Officers $70,183
of the Company as a Group
*Payment is made in Canadian Dollars, but is provided above in US
Dollars based on a conversion rate of 1.4925 Canadian to $1.00 U.S.
as of August 31, 1999.
The Company anticipates compensation being increased upon the Company
achieving sufficient revenues and/or financing to pay such increased
compensation.
Item 10. Security Ownership of Management and Certain Security
Holders
The following table sets forth, as of September 15, 1999, the
beneficial ownership of the Company's Common Stock by each officer
and director of the Company, by each person known by the Company to
beneficially own more than 10% of the Company's Common Stock
outstanding, and by the officers and directors of the Company as a
group. Except as otherwise indicated, all shares are owned directly.
Name and address Number of Shares Percentage of
Title of class of beneficial owner of Common Stock Common Stock(1)
- -------------- ------------------- ---------------- ---------------
Common Stock Brian Kathler(2) 1,700,000 27.5%
Director, President
40 - 16061 85th Avenue
Surrey, BC V4N 4Y5
Common Stock Paul Watkins 850,000 13.8%
Director
187 East Braemar Road
North Vancouver, BC
V7N 1P7
Common Stock Cheryl Watkins 850,000 13.8%
Secretary and
Treasurer
187 East Braemar
Road
North Vancouver, BC
V7N 1P7
Common Stock O. Ronald Jones 300,000 4.9%
Vice-President,
Finance
Suite 605 -
1155 Homer Street
Vancouver, BC
V6C 5T5
Common Stock Bob Gamon(3) 1,700,000 27.5%
4768 Woodgreen
West Vancouver, BC
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<PAGE>
Common Stock All Officers and
Directors 3,700,000 59.9%
as a Group
(4 persons)
(1) Based on 6,179,000 shares of Common Stock of the Company issued
and outstanding on September 15, 1999.
(2) The 1,700,000 shares of common stock beneficially owned by Brian
Kathler are registered in the name of Kathler Holdings Ltd.
(3) The 1,700,000 shares of common stock beneficially owned by Bob
Gamon are registered in the name of 549419 BC Ltd., a private
company. Mr. Gamon is the sole director and officer of 549419
BC Ltd. and is the owner of all of the voting common shares of
549419 BC Ltd.
There are no options, warrants or rights to purchase securities
issued by the Company or any of its subsidiaries held by any of the
above named individuals.
Item 11. Interest of Management and Others in Certain Transactions
Except as set forth below, none of the following persons has any
direct or indirect material interest in any transaction to which the
Company is a party since the incorporation of the Company in January,
1999, or in any proposed transaction to which the Company is to be a
party:
(A) any director or officer of the Company;
(B) any proposed nominee for election as a director of the Company;
(C) any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to the
Company's common stock; or
(D) any relative or spouse of any of the foregoing persons, or any
relative of such spouse, who has the same house as such person
or who is a director or officer of any parent or subsidiary of
the Company.
The Company acquired ViaVid pursuant to the acquisition agreement
dated January 26, 1999 between the Company and Mr. Paul Watkins, Ms.
Cheryl Watkins, 549419 BC Ltd. and Kathler Holdings Ltd. Mr. Brian
Kathler is a director and President of the Company and is a director
and the owner of 60% of the voting shares of Kathler Holdings Ltd., a
private company. Kathler Holdings Ltd. was issued 1,700,000 shares
of the Company's common stock on completion of the Acquisition
Agreement. Mr. Paul Watkins is a director of the Company and was
issued 850,000 shares of the Company's common stock on completion of
the Acquisition Agreement. Ms. Cheryl Watkins is the
Secretary/Treasurer of the Company and was issued 850,000 shares of
the Company's common stock upon completion of the Acquisition
Agreement. Mr. Bob Gamon is a director and is the owner of all of
the voting shares of 549419 BC Ltd., a private company . 549419 BC
Ltd. was issued 1,700,000 shares of the Company's common stock on
completion of the Acquisition Agreement. The shares issued to 549419
BC Ltd. represent more than 10% of the voting rights attached to the
Company's common stock outstanding.
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<PAGE>
In addition, Kathler Holdings Ltd. and Watkins Communications Inc.
have entered into consulting contracts (attached hereto), in which
those companies provide the services of Mr. Brian Kathler as
President and Mr. Paul Watkins as director and consultant,
respectively, in exchange for a payment of $7,500 per month each.
See Section on "Employees" provided above.
The Company has repaid loans to the following shareholders and
directors of the Company:
Shareholder Loan Repayment Balance Outstanding
- ----------- -------------- -------------------
Kathler Holdings Ltd. $3,240.56 NIL
549519 B.C. Ltd. $4,520.00 NIL
Paul Watkins $4,790.39 NIL
Item 12. Securities Being Registered
The securities being registered are the shares of the Company's
common stock, par value $0.001 per share. Under the Company's
Articles of Incorporation, the total number of shares of all classes
of stock that the Company has authority to issue is 25,000,000 shares
of common stock, par value $0.001 per share (the "Common Stock").
As of September 15, 1999, a total of 6,179,000 shares of Common Stock
are issued and outstanding.
Common Stock
Holders of Common Stock have the right to cast one vote for each
share held of record on all matters submitted to a vote of holders of
Common Stock, including the election of directors. Holders of Common
Stock do not have cumulative voting rights in the election of
directors. Holders of a majority of the voting power of the Common
Stock issued and outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any
meeting of the Company's stockholders, and the vote of the holders of
a majority of such outstanding shares is required to effect certain
fundamental corporate changes such as liquidation, merger or
amendment of the Company's Articles of Incorporation.
Holders of Common Stock are entitled to receive dividends pro rata
based on the number of shares held, when, as and if declared by the
Board of Directors, from funds legally available therefor. In the
event of the liquidation, dissolution or winding up of the affairs of
the Company, all assets and funds of the Company remaining after the
payment of all debts and other liabilities shall be distributed,
pro-rata, among the holders of the Common Stock. Holders of Common
Stock are not entitled to pre-emptive or subscription or conversion
rights, and there are no redemption or sinking fund provisions
applicable to the Common Stock. All outstanding shares of Common
Stock are fully paid and non-assessable.
Transfer Agent
Pacific Stock Transfer Company of Las Vegas, Nevada is the transfer
agent for the Shares.
Share Purchase Warrants
The Company has not issued and does not have outstanding any warrants
to purchase shares of the Common Stock.
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<PAGE>
Options
The Company has not issued and does not have outstanding any options
to purchase shares of the Common Stock. The Company anticipates
approving an incentive stock option plan for its directors, officers,
employees and permitted consultants.
Convertible Securities
The Company has not issued and does not have outstanding any
securities convertible into shares of Common Stock or any rights
convertible or exchangeable into shares of Common Stock.
24
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Stockholder Matters
There is no present public market for the Company's Common Stock.
The Company anticipates applying for a listing on the OTC Bulletin
Board upon effectiveness of this registration statement.
There can be no assurance that a public market will materialize.
As of the date of this registration statement, there were thirty-
three (33) registered shareholders in the Company.
None of the holders of the Company's common shares have any right to
require the Company to register its common shares pursuant to the
Securities Act of 1933.
The Company has not declared any dividends since its incorporation in
January, 1999. There are no dividend restrictions that limit the
Company's ability to pay dividends on Common Stock.
Item 2. Legal Proceedings
The Company is not currently a party to any legal proceeding which
may or could have a material adverse impact on the Company or its
operations.
Item 3. Changes in and Disagreements with Accountants
The Company has had no changes in or disagreements with its
accountants since its incorporation in January, 1999.
Item 4. Recent Sales of Unregistered Securities
The Company completed the issuance of 5,100,000 common shares on
January 27, 1999 pursuant to the Acquisition Agreement to the persons
and companies noted herein. These shares were issued
pursuant to Section 4(2) of the Securities Act of 1933 to the former
shareholders of ViaVid, each of whom is now a director, officer or
owner of more than 10% of the Company's issued and outstanding common
stock. The 5,100,000 shares of common stock are "restricted" shares,
as defined in the Act.
The Company completed an offering of 500,000 shares of Common Stock
to two (2) purchasers at a price of $0.01 per share on February 2,
1999. The purchasers were O. Ronald Jones, Vice-President of Finance
of the Company, and David Jones, the son of Ronald Jones. The
offering was completed pursuant to Rule 504 of Regulation D of the
Act.
The Company completed an offering of 100,000 shares of Common Stock
to eight (8) purchasers at a price of $0.50 per share on February 12,
1999 pursuant to Rule 504 of Regulation D of the Act. The offering
was completed to persons known to the officers and directors of the
Company.
The Company completed an offering of 184,000 common shares to twelve
(12) purchasers at a price of
25
<PAGE>
$1.00 per share on April 5, 1999 pursuant to Rule 504 of Regulation D
of the Act. The offeringwas completed to persons known to the officers
and directors of the Company.
The Company completed an offering of 100,000 common shares to one (1)
purchaser at a price of $1.00 per share on June 14, 1999 pursuant to
Regulation S. The purchaser is a private European investor. The
Company completed the sale of 30,000 common shares to two (2)
purchasers at a price of $1.00 per share on July 30, 1999. The
Company completed the sale of 165,000 common shares to four (4)
purchasers at a price of $1.00 per share on September 15, 1999.
These offerings were completed pursuant to Regulation S of the Act.
The Company has agreed to file a registration statement in accordance
with the Act in order to qualify these shares for resale upon
effectiveness of this Registration Statement and clearance of all of
the SEC's comments.
Item 5. Indemnification of Directors and Officers
The officers and directors of the Company are indemnified as provided
by the Nevada Revised Statutes (the "NRS") and the Bylaws of the
Company.
Under the NRS, director immunity from liability to a Company or its
shareholders for monetary liabilities applies automatically unless it
is specifically limited by a Company's Articles of Incorporation
(which is not the case with the Company's Articles of incorporation).
Excepted from that immunity are: (i) a willful failure to deal fairly
with the Company or its shareholders in connection with a matter in
which the director has a material conflict of interest; (ii) a
violation of criminal law (unless the director had reasonable cause
to believe that his or her conduct was lawful or no reasonable cause
to believe that his or her conduct was unlawful); (iii) a transaction
from which the director derived an improper personal profit; and (iv)
willful misconduct.
The By-laws of the Company provide that the Company will indemnify
its directors and officers to the fullest extent not prohibited by
Nevada law; provided, however, that the Company may modify the extent
of such indemnification by individual contracts with its directors
and officers; and, provided, further, that the Company shall not be
required to indemnify any director or officer in connection with any
proceeding (or part thereof) initiated by such person unless (i) such
indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the Company,
(iii) such indemnification is provided by the Company, in its sole
discretion, pursuant to the powers vested in the Company under Nevada
law or (iv) such indemnification is required to be made pursuant to
the By-laws.
The By-laws of the Company provide that the Company will advance to
any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director or officer, of the Company,
or is or was serving at the request of the Company as a director or
executive officer of another Company, partnership, joint venture,
trust or other enterprise, prior to the final disposition of the
proceeding, promptly following request therefor, all expenses
incurred by any director or officer in connection with such
proceeding upon receipt of an undertaking by or on behalf of such
person to repay said amounts if it should be determined ultimately
that such person is not entitled to be indemnified under the By-laws
of the Company or otherwise.
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<PAGE>
The By-laws of the Company provide that no advance shall be made by
the Company to an officer of the Company (except by reason of the
fact that such officer is or was a director of the Company in which
event this paragraph shall not apply) in any action, suit or
proceeding, whether civil, criminal, administrative or investigative,
if a determination is reasonably and promptly made (i) by the Board
of Directors by a majority vote of a quorum consisting of directors
who were not parties to the proceeding, or (ii) if such quorum is not
obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written
opinion, that the facts known to the decision-making party at the
time such determination is made demonstrate clearly and convincingly
that such person acted in bad faith or in a manner that such person
did not believe to be in or not opposed to the best interests of the
Company.
27
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The Company's audited Financial Statements, as described below, are
attached hereto.
1. Audited financial statements for the period ending March 31,
1999, including:
(a) Consolidated Balance Sheet;
(b) Consolidated Statement of Operations;
(c) Consolidated Statement of Stockholders' Equity;
(d) Consolidated Statement of Cash Flows;
(e) Notes to the Consolidated Financial Statements.
2. Consent of Auditor
3. Unaudited financial statements for the period ending June 30,
1999, including:
(a) Consolidated Balance Sheet;
(b) Consolidated Statement of Operations;
(c) Consolidated Statement of Stockholders' Equity;
(d) Consolidated Statement of Cash Flows;
(e) Notes to the Consolidated Financial Statements.
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<PAGE>
PART III
INDEX TO EXHIBITS
Exhibit 1: Articles of Incorporation
Exhibit 2: By-Laws of the Company
Exhibit 3: Acquisition Agreement dated January 26, 1999 between
the Company and Mr. Paul Watkins, Ms. Cheryl Watkins,
549419 BC Ltd. and Kathler Holdings Ltd.
Exhibit 4: Consulting Contract with Kathler Holdings Ltd.
Exhibit 5: Consulting Contract with Watkins Communications Inc.
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<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: September 24, 1999
VIAVID BROADCASTING, INC.
By: \s\ Brian Kathler
____________________________
Brian Kathler
President and Director
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