SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES
-----------------
Pursuant to Section 12(g) of
The Securities Exchange Act of 1934
WORLD WIDE VIDEO, INC.
(Exact name of registrant as specified in its charter)
Colorado 54-1921580
- -------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
102A North Main Street, Culpeper, VA 22701
- ---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(540) 727-7551
--------------------------
Registrant's telephone number, including area code:
<PAGE>
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:
Title of class
Common 100,000,000 Shares of Common Stock
<PAGE>
TABLE OF CONTENTS
PART I
Page
Item 1. Description of Business..........................................1
Item 2. Management Discussion & Analysis of Operations..................12
Item 3. Properties......................................................18
Item 4. Security Ownership of Certain
Beneficial Owners and Management...............................19
Item 5. Directors and Executive Officers................................20
Item 6. Executive Compensation..........................................23
Item 7. Certain Relationships and Related
Transactions....................................................25
Item 8. Description of Securities.......................................25
PART II
Item 1. Market Price of and Dividends on
Registrants Common Equity and
Related Stockholder matters....................................26
Item 2 Legal Proceedings......................................................27
<PAGE>
Item 3. Disagreements with accountants on accounting and
financial disclosure............................................27
Item 4. Recent Sales of Unregistered Securities.........................28
Item 5. Indemnification of Directors and Officers.......................35
Financial Statements and Exhibits...............................36
Index to Financial Statements...................................41
Exhibit Index............................................42
Signatures...............................................43
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS
World Wide Video, Inc. (the "Issuer" or "Company" or "WWV") was organized
under the corporate laws of the State of Colorado on April 9, 1998. The Company
designs and manufactures technology and products for the Video Telephony market.
WWV has been a development stage company during the final design and delivery of
custom ultra high speed hardware H.324 Codec (audio/video
compression/decompression) technology. During the period to date, the founders
have developed prototype products, written proprietary enabling
software/firmware, presented the products to large potential customers, and
established strategic partners/distribution channels throughout the United
States in anticipation of market introduction of its products. The Company
acquired 100% of World Wide Video, Inc. of Virginia in a share exchange in 1998.
World Wide Video, Inc. of Virginia was the predecessor company which commenced
the product design.
Research and product design was conducted by the two key principals, John
Perry and Frank Maas, over the last four years. World Wide Video, Inc. of
Virginia was established in July of 1997, and ongoing work by Messrs Perry and
Maas in the area of video over the plain old telephone system (POTS) was
contributed to the Virginia Corporation.
(a) The Company owns one subsidiary: World Wide Video Inc. of Virginia. The
Company currently maintains its offices 102A North Main Street, Culpeper, VA
22701. Its telephone number is (540) 727-7551.
(b) Parents and Subsidiaries
Parent
WORLD WIDE VIDEO, INC., a Colorado corporation.
1
<PAGE>
Subsidiary
- ----------
World Wide Video, Inc., a Virginia corporation 100% wholly owned.
Financing of Product Development Activities.
- -------------------------------------------
The Company offered and sold 200,000 shares at $.50 per share pursuant to
Regulation D in early 1998. In the spring of 1998, the Company sold 75,000
shares at $2.00 per share to capitalize its initial product development. In
mid-1998 into 1999, the Company sold 233,987 shares at $2.75 per share to
capitalize its product development to date.
(d) Narrative Description of Business.
THE COMPANY BUSINESS
The Company has had very limited operations within the last two years, and such
operations have been restricted to design of products and small consulting and
development contracts. Most of the last two years, WWV has been developing new
video telephony products. Production for the first in a series of products is
scheduled for mid-1999.
The Company products deliver high speed television signals over the plain old
telephone system lines (POTS). The market potential for video communications
included every desktop computer, home computer and every business that needs to
communicate, especially as video systems become more and more affordable.
Multimedia Research Group forecasts that the video phones market and video
conferencing markets will total over $15 billion within the next five years as
the video technology becomes more common place. The Company's technology is
designed to provide video telephony for the individual user (home), small to
large businesses, the security, and tele-medicine markets. WWV expects the
market growth of these systems to be similar to that of the modem. At first
modems were only used by highly paid business people who traveled extensively
2
<PAGE>
and needed to connect to their office computer while they were away. Now most
computer users use modems to hook to the "Internet," to access electronic
bulletin boards and to conduct research. Modems have become standard equipment
for most computers, and video may become standard equipment.
The International Telecommunication Union H.324 standard permits video,
voice and data to be shared simultaneously over a simple telephone modem
connection. It is the first standard to specify interoperability over a single
analog phone line. Because of the H.324 standard, the next generation of video
phones products will be able to talk to one another and provide a foundation for
gross market expansion.
The Company's products operate over traditional, business and residential copper
wire telephone systems commonly referred to as Plain Old Telephone Systems
(POTS). POTS represent over 87% of the world's present telephone networks. The
Company's technology compresses video and data at a higher rate than anyone else
in the industry at this time. This gives the Company a tremendous advantage in
frame rate and quality, which has been one of the limiting factors on widespread
acceptance of the technology. The Company's products will provide video service
at a new plateau in availability, video quality and at a lower cost than is
available now.
The primary initial focus of business operations will be to complete
product development of the products described under "Business" and market such
products to target industry prospects.
3
<PAGE>
COMPANY'S PRODUCT LINES
Product Name: Centurion(TM)
Target Markets: Security and Surveillance
This is a major market segment for The Company's technology. Surveillance and
security information consisting of data, control, audio and high quality video
images can be transmitted over POTS between cities, states, and countries or
across the world.
The Centurion(TM) product family provides the first complete integrated system
allowing data, audio and video surveillance from remotely located sites.
Centurion is a small self contained hardware module that does not require a PC.
At 4" x 6" x 1.5" inches and 5 watts of power, it is the smallest
compression/decompression (codec) available to OEM designers and end-users. The
Centurion(TM) product family supports the International Telecommunication Union
(ITU) H.324 standard for low bandwidth video over normal (analog) telephone
lines.
Spectator(TM) is a co-companion to Centurion(TM) that provides one-way video
transmission for low cost surveillance applications. Both Centurion(TM) and
Spectator(TM) are designed to be compatible with future hardware and software
releases from WWV. Other Centurion(TM) family products, in the development
stage, will support the ITU standards such as H.320 (for ISDN, ATM, T.1) and
H.323 (for Internet and Ethernet) will be supported. A high performance PCI
computer card will support all three ITU standards. "Wavelet" runtime and still
video compression will be added to provide superior performance using either
analog or digital telephone lines.
Using standard telephone lines, the Centurion(TM) puts any site, no matter how
distant, within customer access. The unique 2-way video motion provides complete
communication for virtually any surveillance or conferencing application. For
security monitoring there will be fewer unknown false alarms. For monitoring
cash related activities Centurion(TM) can provide an interface for POS (Point of
Sale) scanners. Centurion(TM) can control remotely situated pan-tilt-zoom (PTZ)
4
<PAGE>
cameras and can be interfaced to security alarm equipment and other devices to
verify a triggered alarm.
Product Name: RAV(TM) Medical
Target Markets: Remote Audio/Video/Data Tele-Medicine, Home Care Medical
Monitoring, Doctor and Nursing Facilities, Private Care
The RAV(TM) Medical allows health care professionals to keep abreast of new
procedures, consult on X-rays or other visual documents, obtain health
information by monitor home-bound patients and participate in conferences with
specialists using normal analog POTS telephone lines. RAV(TM) Medical
transportable convenience can inexpensively improve the quality of medical care
that provided to patients in remote areas and link patients to experts at
distant medical centers. The trend of HMOs and insurance companies to insist on
home recovery instead of in-hospital recovery has opened a new market for the
home monitoring of patient vital signs. A number of US and Japanese medical
firms are providing vital sign monitors connected to the phone network for
checking patient condition at random times. RAV(TM) Medical now provides the
missing link: a two-way video connection between the patient and the care
provider.
Product Name: RAV(TM) Notebook
Target Markets: Portable Video Conferencing
The RAV(TM) Notebook (RAV(TM)) is a complete multimedia computer system in a
notebook. The RAV(TM) is designed as a tool for the business person. The system
is designed to provide the full range of typical multimedia computing (windows,
modems, color display, fax, microphone, speakers) plus full portable video
conferencing (shared files, shared applications, shared white boards and camera)
using POTS or an option for cellular video communication. The RAV(TM) is the
first Remote Audio-Video notebook that includes a custom removable ITU H.324
compatible hardware video compression/decompression (codec) module that frees up
the CPU and provides the highest quality video conferencing. For video
conferencing simply, plug a phone line into the RAV(TM) and use all the features
of a "top of the line" notebook:
5
<PAGE>
Pentium II MMX/366 MHZ with 64 - 128MB RAM, 512KB L2 Cache
Brilliant 15.1" active 1024x768x16M color display with 4MB controller
Data Storage includes 6.4 GB HDD, DVD, 3.5" FDD
Keyboard &Trackpad & 2 PCMCIA slots
Sound support includes built-in microphone and speakers
Communication includes:
56 Kbps fax/modem,
IR Transceiver and
Inputs/Output ports includes Audio In, Audio Out, Headphone Out, Video In,
and S-Video Out
Software includes: Windows 98 including Net Meeting
Dragon Speech Recognition Software
ITU T.120 Whiteboard, File Transfer, and Shared Application
1 Year Depot Warranty
Battery & Leather Carrying Case
In addition, the RAV(TM) includes an integrated high resolution color camera and
a removable video codec module that contains multiple high speed digital signal
processors to provide unparalleled frame rate and quality using the
International Telecommunication Union H.324 standard for low bit rate video
conferencing. Using the H.324 protocol, the RAV(TM) Notebook video conferencing
is Microsoft Net Meeting and International Telecommunication Union's T.120
software that provides for file transfers, shared applications, and shared white
boards.
Product Name: RAV(TM) STB
Target Markets: Video Communication (non-computer based) over POTS
The RAV(TM) STB (Set-Top-Box) does not require a computer for video, audio, and
data communication simultaneously over POTS. The RAV(TM) STB uses the industry
6
<PAGE>
H.324 standards and operates using a standard television and telephone, and
operates with an internal video camera or an external standard NTSC video
camera. The telephone set is capable of making normal voice only calls when it
is not being utilized as a RAV(TM) STB. RAV(TM) STB near real-time, very high
quality, video imagery at a speed of approximately 10 to 20 frames per second is
displayed in a user sizable window on the TV screen. Web Browser capabilities
will be added in the near future as an option.
Product Name: RAV(TM) PCI
Target Markets: Video Communication (computer based) over POTS
The RAV(TM) PCI board is a low cost; high quality alternative to dedicated video
conferencing systems. It can be used for commercial applications as diverse as
desktop video conferencing and Tele-medicine to consumer personal use. The
RAV(TM) PCI is a standard half sized board that plugs into a PCI bus slot in a
personal computer (PC). It can be utilized for both consumer and business video
communications. It comes with software that is loaded into the PC and has a
simple user interface. The RAV(TM) PCI installed in a workstation can make
industry standard H.324 video phone calls to any computer already using Intel's
ProShare software. The RAV(TM) PCI will also support white boarding, file
transfers and application sharing using the T.120 standard.
See also (c) "Business."
Products, Services, Markets, Methods of Distribution and Revenues. Digital
electronic products are presently the principal products sought to be produced
by the company. The Company has commenced limited production for orders in hand
with first shipments in June 1999.
Curently, marketing is by trade shows and word of mouth and by Internet web
page.
7
<PAGE>
Working Capital Needs. The working capital needs of the company consist
primarily of: operating capital, product development capital and marketing
capital (see "Operating Budget"). These requirements may be met by private
placement of stock or loans or sale of working interests. The Company will need
to develop additional working capital for future operations. At present time it
has no source or commitment for any additional funds.
Budget for Next Twelve Months
Personnel $285,000
Rent 9,000
Office & Administration 7,000
Communications 21,000
Travel 17,000
Professional Services 11,000
Stock Transfer & Filing 8,000
Product Development 355,000
Marketing 115,000
TOTAL $828,000
(3) Dependence on a Single Customer or a Few Customers
a) Revenues - $0 for fiscal year ended September 30, and the
quarter ended March 31, 1998
Current Customers
1. MetroBook Computer Corporation, Inc.
2. Help Innovations, Inc. (largest single)
3. DataPower USA, Inc.
4. Boeing Information Services
5. Andries Tek, Inc.
8
<PAGE>
6. ABM IT
7. DataPoint, Inc.
8. MTS, Inc.
b) Client Services Revenues - None
During the five (5) years ending September 30, 1998 and
through nine months ended June 30, 1999, no revenues were
generated from client services.
(4) Backlog of Orders.
1. MetroBook Computer Corporation, Inc. $100,000
2. Help Innovations, Inc. $1 million order
(conditional upon
sales)
3. DataPower USA, Inc. $100,000
4. Boeing Information Services $2,000
5. Andries Tek, Inc. $2,000
6. ABM IT $4,000
7. DataPoint, Inc. $2,000
8. MTS, Inc. $5,000
(5) Government Contracts. None.
(6) Competitive Conditions. The video electronics industry is highly
competitive. The Company faces competition from large numbers of large and small
companies, both public and private. Many of the competitive companies so engaged
possess greater financial and personnel resources than the Company and therefore
have greater leverage to use in acquiring prospects, hiring personnel
development and marketing. Accordingly, a high degree of competition in these
areas is expected to continue. The markets for video
9
<PAGE>
electronic products have increased substantially in recent years, and
competitors in such markets have increased substantially.
There is no assurance that the Company's revenues, if any ever develop, will
not be adversely affected by these factors.
WORLD WIDE VIDEO, INC.
COMPETITION
WWV recognizes that the competition in this industry is intense. There are only
two H.324 hardware based codec manufacturers. Both have focused on the consumer
video conferencing market. The POTS industry players are 8x8, Inc. (see below
for more details) and to a lessor degree C-Phone, Inc. They have directed their
marketing toward the home video phone environment. The home based conferencing
market competes mainly on price. WWV has identified that video communication is
most valuable to businesses, not home users.
The WWV marketing approach will be directed toward industries that need remote
monitoring, as in security and surveillance, and quality video conferencing.
Industry applications such as the security market are more dependent upon
acceptable video quality and video performance. World Wide Video hardware
provides superior video quality using newer digital technology. In addition to
the quality of the video, WWV initial products will be priced equal to or less
than the competition.
8x8, Inc. (formerly IIT) is the main competitor to WWV. 8x8 has been in the
business of selling video compression chips for about ten years. About four
years ago, they starting producing a consumer POTS Set-Top-Box, which is a H.324
codec with a built-in camera to be used with a standard TV for video display and
audio. The 8x8 quality is poor, the frame rate is slow (theoretical maximum is
15 SQCIF frames per second) and the minimum bandwidth is 19.2 Kbps. WWV's
Centurion(TM) product is about 1/4 the physical size and requires about 1/4 the
power. The Centurion(TM) frame rate is better (theoretical maximum is 20 SQCIF
10
<PAGE>
frames per second) and the minimum bandwidth required is 9.6 Kbps. About a year
ago 8x8 starting developing POTS based security products using the same chip
designs. They have not made much progress again for the same reasons. Recent 8x8
announcements indicate that they may be leaving the consumer POTS area and that
now 8x8 is concentrating on industrial/commercial markets.
(7) Registrant Sponsored Research and Development. The Company has continuing
product development for which some research is required. The initial product
production is planned for mid-1999.
(8) Compliance with Environmental Laws and Regulations. The operations of the
Company are subject to local, state, and national laws and regulations in the
USA. To date, compliance with these regulations by the Company has had no
material effect on the Company's operations, capital, earnings, or competitive
position, and the cost of such compliance has not been material. The Company is
unable to assess or predict at this time what effect such regulations or
legislation could have on its activities in the future.
(a) State and Local Regulation - None.
The Company cannot determine to what extent future operations and
earnings of the Company may be affected by new legislation, new regulations or
changes in existing regulations at state or local level.
(b) National Regulation - None.
The Company cannot determine to what extent future operations and
earnings of the Company may be affected by new legislation, new regulations or
changes in existing regulations at a national (U.S.) level.
(c) Environmental Matters - None at the date of this registration
statement.
11
<PAGE>
(d) Other Industry Factors - None at the date of this registration
statement.
(9) Number of Persons Employed. As of June 30, 1999, the Company had two full
time employees:
John G. Perry
Frank A. Maas
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND CHANGES
IN FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's only primary income source at this time is its limited product
sales. Capital from private placements or borrowing against assets are required
to fund future operations. The Company completed a private offering of Stock in
May of 1999.
The Company revenues for the twelve month period ending September 30, 1998,
were none. The Company commenced limited business operations in 1998 and showed
a significant net loss from operations for year ended September 30, 1998
resulting from costs of developing its products. The Company may continue to
show losses resulting from the start up of operations for an indeterminate time.
RESULTS OF OPERATIONS
During its operations ended September 30, 1998, the Company incurred expenses in
irregular amounts through year ended September 30, 1998. By "irregular," the
Company is referring to the fact that due to operations, fixed expenses such as
rent, general and administrative, accounting, telephone, etc. have been
variable, and sporadic. The Company has generated no business revenue from
operations up to September 30, 1998, but had sales revenues of $876 in the
quarter ended March 31, 1999. The Company has commenced limited production for
orders in hand with shipments in Summer 1999.
The Company incurred the following expenses in the past fiscal year end and six
months ended March 31, 1999.
13
<PAGE>
Fiscal Year Ended Quarter Ended
September 30, 1998 March 31, 1999
------------------ --------------
Operating expenses
Product Development $373,928 $ 68,875
General and Administrative 97,148 47,134
-------- ---------
Total operating costs $468,326 $116,009
Cost of sales 0 6,497
It is expected that expenses will continue at a significantly increased rate
due to costs of developing and marketing products.
Cash Flows for Year Ended September 30, 1998:
The Company achieved no revenues from operations during the fiscal year, ending
September 30, 1998.
The income from operations for prior years compares as follows: Fiscal year
ended September 30, 1997 (none) and to fiscal year ended September 30, 1998
(none). The Company has never had any profits.
At this time, the Company is dependent upon private placements or loans for
future operations and funding. Therefore it will have to either borrow money, if
possible, or raise funds through subsequent public or private offerings to
continue operations until when, or if, it ever develops sufficient revenue from
its assets to maintain operations. If such revenues are not generated, or
participants not found the Company will be forced to develop another line of
business, or to finance its operations through borrowed funds, the sale of
assets it has, or enter into the sale of stock for additional capital none of
which may be feasible when needed. The Company has no management ability, and no
14
<PAGE>
financial resources or plans to enter any other business as of this date
although the Company will be open to suggestion and opportunity.
CHANGES IN FINANCIAL CONDITION
At fiscal year ended September 30, 1998 the Company's assets increased to
$343,056 compared to $0 at September 30, 1997. The increase was a result of
shareholder contributions and private placement of common shares.
The liabilities, all of which are current liabilities, increased significantly
as a result of product development costs to $175,780, at year end September 30,
1998, an increase over the year ended September 30, 1997 liabilities of $0.
Stockholders' equity at year ended September 30, 1998 was $167,276, an increase
in the 1997 stockholder's equity of $0. This was caused by the Company's failure
to generate any revenues from any source, in spite of continued expenses and
product investment and development costs which were funded from the proceeds of
private placements.
From the aspect of whether the Company can continue toward its business goal of
commencing production and sales of its products, the Company is deficient in
needed capital. Without continued capital infusions or loans or a combination of
capital and loans, the Company may not be able to carry out its business goals
to market products for future fiscal years.
Comparison of Results of Operation for the Fiscal Years Ended September 30, 1998
and 1997
The Corporation had no operating revenues in 1998 or 1997. The Company incurred
product development costs of $373,928 and operating expenses, all of which are
general and administrative in nature, totaling $97,148 in fiscal year ended
September 30, 1998 as compared to $0 in 1997. As a result of having no operating
15
<PAGE>
income, the Company incurred operating losses of $(468,326) in year ended
September 30, 1998 and $0 in year ended September 30, 1997. The Company
anticipates that the trend of net losses will continue in 1999 as it continues
to incur major expenses in attempting to develop and market its products.
General and Administrative costs increased in the year ended September 30, 1998
to $97,148 from a total of $0 in 1997. Expenses of a General and Administrative
nature will increase substantially as a result of registering its common stock
under the Securities and Exchange Act of 1934, increased audit costs and
expenses related to private placements to fund product development and marketing
costs and miscellaneous operations costs.
Office expenses, including telephone, were $12,388 in fiscal year ended
September 30, 1998 and $0 in 1997. These expenses were paid from shareholder
contributions. This will increase in 1999 due to expanded operations.
1998 expense for accounting totaled $2,670, while in 1997 accounting and other
professional expenses were $0. Likewise, accounting and other professional
expenses in 1999 will be materially larger due to efforts required to keep the
Company's SEC filings current. It should be expected that legal and accounting
expenses will increase substantially for 1999.
The per-share loss amounted to ($.06) in fiscal year ended September 30, 1998
as compared to $.00 in 1997.
16
<PAGE>
RESULTS OF OPERATIONS FOR QUARTER ENDED MARCH 31, 1999 COMPARED TO SAME PERIOD
IN 1998
The Company generated revenues totaling $2,189 in the second quarter of the
fiscal year compared to $4,500 in revenues in the period in 1998. The cost of
goods sold was ($750) for net sales of $2,315 in the quarter in 1999 compared to
a cost of goods sold of 43,931 and net sales of $569 in 1998.
The Company had product development costs of $9,806 in the second quarter in
1999 compared to $20,000 in the same quarter in 1998. The general and
administrative expenses in the quarter in 1999 were $91,344 compared to $23 in
the same quarter in 1998. The Company had net operating losses of ($98,515) in
the second quarter in 1999 compared to ($19,454) in the same quarter in 1998.
The Company, at quarter end, needed additional capital infusion, and only had
cash of $4,032 and total current assets of $259,832 which were mostly illiquid.
Its current liabilities at quarter end were $236,882.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 1999
The Company generated $10,562 in sales and income revenue in the six months
period ended March 31, 1999 as compared to $4,500 in sales revenue in the same
period ended March 31, 1998. The Company incurred cost of goods of $1,750 in the
period ended March 31, 1999 as compared to 43,931 in cost of goods sold in the
same period ended March 31, 1998. The Company incurred 4138,671 in general and
administrative expenses in the period ended as compared to $23 in general and
administrative expenses in the same period in 1998. The Company had product
develeopment expenses of $77,961 in the six month period ended March 31, 1999 as
compared to $20,000 in the same period in 1998. The Company incurred a loss on
operations in the six month period ended March 31, 1999 of ($207,820) as
compared to a loss on operations in the six month period ended March 31, 1998 of
($19,454).
17
<PAGE>
LIQUIDITY
- ---------
The Company expects that its need for liquidity will increase for the coming
year due to its anticipation of expending funds for product marketing and
development.
Short Term
----------
On a short term basis, the Company does not generate enough revenue to cover
operations. Based on prior experience, the Company believes it will continue to
have insufficient revenue to satisfy current and recurring liabilities as it
seeks to increase sales and produce product. For short term needs the Company
will be dependent on receipt, if any, of private placement proceeds or loans.
The Company's current assets were $259,832 at March 31, 1999 and its current
liabilities are $236,882. Of the current liabilities, $60,000 was owed to
officer shareholders. The Company had cash of $4,039 at March 31, 1999 and
inventory of $131,570 and accounts receivable of $37,323. It has recently
completed a private placement of its securities for additional capital.
Long Term
---------
On a long-term basis, the Company had non-current assets consisting of
property, equipment, and other assets of $74,299 at March 31, 1999.
The Company has a start-up business at this time from which it generates small
income. Its operations have negative cash flow at this time. It is reliant upon
success of product marketing, at this time, for possibility of future income.
18
<PAGE>
CAPITAL RESOURCES
- -----------------
The primary capital resources of the Company are its stock only. Stock may be
illiquid because it is restricted in an unproved company with limited assets and
a start-up business.
The Company completed a private placement of 200,000 shares consisting of
common shares @ $.50 per unit for operating capital. The Offering ceased as of
May 1, 1998.
The Company completed a private placement of 75,000 shares consisting of common
shares @ $2.00 per unit for operating capital. The Offering ceased as of July 1,
1998.
The Company completed a private placement of 233,987 shares consisting of
common shares @ $2.75 per unit for operating capital in late 1998 and early
1999.
As of the date of the registration statement, the Company has plans for capital
expenditures within the next year to manufacture product, which amounts exceed
its available capital by over $200,000.
Need for Additional Financing
The Company does not have capital sufficient to meet the Company's cash needs
for continuing operations. The Company will have to seek loans or equity
placements to cover such cash needs. In the event the Company is able to
complete a business combination during this period, lack of its existing capital
will be a sufficient impediment to allow it to accomplish the goal of
completeing a business combination. There is no assurance, however, that the
available funds will ultimately prove to be adequate to allow it to complete a
business combination, and once a business combination is compeleted, the
Company's needs for additional financing are likely to increase substantially.
19
<PAGE>
No commitments to provide additional funds have been made by management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to the Company to allow it to cover its expenses.
The Company discloses hereby that it is in a dispute with an entity, Albemarle
Investments, Ltd. regarding a purported consulting arrangement under which claim
has been made for $45,000 and issuance of common shares totaling 500,000. There
has been no further assertion of claim since September 14, 1998. The Company
disputes that any monies or shares are due and is prepared to assert legal
defenses in the event any legal action were to be taken.
ITEM 3. PROPERTIES
(a) Real Estate. The Company rents office space of 1,000 sq. ft. from a non-
affiliate.
(b) Title to properties. None.
(c) Oil and Gas Drilling Activities. None.
(d) Oil and Gas Production. None.
(e) Oil and Gas Reserves. None
(f) Present value of Estimated future Net Reserves From Proved Developed
Oil and Gas Reserves. None.
(g) Reserves Reported to Other Agencies. None.
(h) Natural Gas Gathering/Processing Facilities. None.
20
<PAGE>
(i) Present Activities and Subsequent Events:
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AS OF
MAY 20, 1999
Security Ownership of Certain Beneficial Owners and Management
As of June 30, 1999, the Company had issued and outstanding 10,911,368 shares of
its common stock, $.0001 par value. The following tabulates holdings of common
stock of the Company by each person who holds of record or is known by
management of the Company to own beneficially more than five percent (5%) of the
common stock outstanding, and, in addition, by all directors and officers of the
Company individually, and as a group. The shareholders listed below have sole
voting and investment power, except as otherwise noted.
(a) Beneficial owners of five percent (5) or greater, of the
Registrant's Common Stock. The following sets forth information with respect to
ownership by holders of more than five percent (5%) of the Company's Common
Stock known by the Company based upon 10,911,368 shares outstanding at June 30,
1999.
<TABLE>
<CAPTION>
Title Name and Amount and Percent
of Address of Nature of of
Class Beneficial Owner Beneficial Interest Class
- ----- ---------------- ------------------- -------
<S> <C> <C> <C>
Common John G. Perry 5,000,000 45.82%
14327 Smith Road
Culpeper, VA 22701
Common Frank A. Maas 5,000,000 45.82%
808 Culpeper Street
Fredericksburg, VA 22405
</TABLE>
21
<PAGE>
b) The following sets forth information with respect to the Company's
Common Stock beneficially owned by each Officer and Director, and by all
Directors and Officers as a group.
Title Name of Amount and Percent
of Beneficial Nature of of
Class Owner Beneficial Ownership Class
- ----- ---------- -------------------- -------
Common John G. Perry 5,000,000 45.82%
Common Ronald Cropper 0 0%
Common Frank A. Maas 5,000,000 45.82%
------
Officers and Directors as a goup 91.64%
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
(a) The following table furnishes the information concerning the
directors of the Company as of June 30, 1999. The directors of the Company are
elected every year and serve until their successors are elected and qualify.
Name Age Title Term
- ---- --- ----- ----
John G. Perry 53 President and Director Annual
Frank A. Maas 54 Secretary, Director, Annual
and Chairman
Ronald Cropper 52 Director Annual
22
<PAGE>
The term of office for each director is one (1) year, or until his/her
successor is elected at the Company's annual meeting and qualified. The term of
office for each officer of the Company is at the pleasure of the board of
directors.
The board of directors has no nominating, auditing committee but has
set up a compensation committee. Therefore, the selection of person or election
to the board of directors was neither independently made nor negotiated at arm's
length.
The term of office for each director is one (1) year, or until his/her
successor is elected at the Company's annual meeting and qualified. The term of
office for each officer of the Company is at the pleasure of the board of
directors.
(c) Identification of Certain Significant Employees.
There are no employees other than the executive officers disclosed
above who make, or are expected to make, significant contributions to the
business of the Company, the disclosure of which would be material.
(d) Family Relationships. None.
(e) Business Experience. None.
The following is a brief account of the business experience during the
past five years of each director and executive officer of the Company, including
principal occupations and employment during that period and the name and
principal business of any corporation or other organization in which such
occupation and employment were carried on.
23
<PAGE>
MANAGEMENT EXPERIENCE
JOHN G. PERRY, age 53, President and Director of the Company and its predecesor
since 1997, has over 34 years of experience in the management, analysis, design,
research, development, and implementation of complex, networked computer
systems. Possesses a thorough knowledge of computer science and systems
engineering, and a broad spectrum of computer technologies. Experience covers a
wide variety of projects including research and development of highly
sophisticated weapons and ballistics systems for DoD and Intelligence agencies,
design and development of wide area and local area networks, development and
application of standards, technology and project management, and marketing of
secure products. He possesses in depth knowledge of federal computer
acquisition, Life Cycle Management (LCM), Information Resource Management (IRM),
Government Open System Interconnect Profile (GOSIP) and computer and
communications security. Work experience has required detailed working knowledge
of LANs, WANs, FIPS, EDI, CALS, Video, and DoD Security. Mr. Perry has been the
President of IMProCOM (a publicly reporting company), Inc., 1994-1996. Mr. Perry
has a B. S. Mathematics, Randolph-Macon College, 1967, M. S. Computer Science,
University of Maryland, 1976.
FRANK A. MAAS, age 54, for more than 28 years, Mr. Maas has participated in a
large number of research and development programs for the U.S. Navy and
industry. He has extensive experience in the design, development, fabrication,
test, evaluation, and operational installation and maintenance of electronic,
mechanical, and electro-optical (E-O) components, equipment, and systems in
support of pointing and tracking, surveillance, missile and gun system, chemical
and biological defense, intelligence gathering, and electronic and infrared
countermeasures programs for the U.S. Navy. He was recently involved in the
successful design and implementation of a desktop Video-teleconferencing (VIC)
system that featured links to distant CFTC systems over POTS and ISDN and has
developed a portable video-teleconferencing system. Mr. Maas has been Vice
President of Engineering for Mesa, Inc. (1983-94) and Pixels, Inc. (1994-95),
two companies in the communication industry. Mr. Maas has a B. S. Electrical
24
<PAGE>
Engineering, Case Institute of Technology, 1968. Mr. Maas has been Chariman,
Director, and Secretary of the Company and its predecessor since 1997.
RONALD CROPPER, age 51, has been the President of RPC International, Inc., since
June of 1998 when he started the Company. RPC International is an international
business and consulting company with experience in merger and acquisition of
technical companies. RPC has provided it's services to companies with over one
hundred countries during the past ten years. from November of 1976 through June
of 1988 he was President of United Technical Institute and was responsible for
establishing this international training company he took the Company from
startup to over fourteen million dollars of annual sales during his Presidency.
United Technical Institute specialized in training in the disciplines of
business computers, medical, electronics and distance learning. Mr. Cropper is a
graduate of Georgetown University with a Bachelors, International Business and
he participated in the Harvard University Accelerated MBA Program. Mr. Cropper
has received numerous Awards and has published articles relating to education
and distance learning. Mr. Cropper has been Director of the Company since early
1998.
Directors Compensation
Members of the Board of Directors of the Company receive no compensation at
this. Each Director is reimbursed reasonable outside travel expenses for each
Board meeting he attends and for each Committee meeting he attends during the
fiscal year. Directors who are also officers of the Company receive no
compensation for services as a director.
ITEM 6. EXECUTIVE COMPENSATION
(a) Cash Compensation.
Compensation paid by the Company for all services provided during the fiscal
year ended September 30, 1998, (1) to each of the Company's five most highly
25
<PAGE>
compensated executive officers whose cash compensation exceeded $60,000 and (2)
to all officers as a group: None. directors.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE OF EXECUTIVES
Annual Compensation Awards
Name and Year Salary Bonus Other Restricted Securities
Principal ($) ($) Stock Underlying
Position Annual Award(s) ($)
Compen- Options
sation ($) SARs (#)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John G. Perry, 1997* 0 0 0 0 0
President and
Director
---------------------------------------------------------------------------------------------------------
1998 90,000 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Frank A. Maas, 1997* 0 0 0 0 0
Secretary and
Director
---------------------------------------------------------------------------------------------------------
1998 90,000 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Frank A. Maas and John G. Perry purchased founder shares in WWV of Virginia
(1997), and those shares were exchanged for 5,000,000 shares each in WWV of
Colorado (1998).
(b) Compensation Pursuant to Plans. None.
(c) Other Compensation. None. No stock appreciation rights or warrants exist to
management.
(d) Compensation of Directors.
Compensation paid by the Company for all services provided during the fiscal
year ended September 30, 1998, (1) to each of the Company's directors whose cash
compensation exceeded $60,000 and (2) to all directors as a group is set forth
below: None.
26
<PAGE>
(e) Termination of Employment and Change of Control Arrangements. None
(f) KEY EMPLOYEES INCENTIVE STOCK OPTION PLAN: None at this time.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Certain Transactions
- --------------------
A Director, Ronald Cropper, of the Company was engaged to assist in the raising
of capital. He is compensated on the basis of a percentage (from two to five
percent) of the completed transaction. During the same period ended September
30, 1998, he was paid $23,435 under this contract. The contact was terminated as
of August 1998. In addition, the same Director has been prepaid $16,000 under a
product marketing agreement.
John Perry and Frank Maas were sole owners of World Wide Video, Inc. a Virginia
corporation (WWVa). Mssrs. Perry and Maas entered into a Share Exchange
Agreement with Registrant May 12, 1998 in which they exchanged 100% of WWVa to
Registrant in exchange for 10,000,000 shares of common stock of Registrant.
John Perry and Frank Maas were each employed by the Company at a consulting fee
of $10,000 per month for 9 months ended September 30, 1998. They were paid
$115,000 total to September 30, 1998 and deferred $65,000. Both Mr. Perry and
Mr. Maas are now employees of the Company at a salary of $10,000 per month.
ITEM 8. DESCRIPTION OF SECURITIES
The Company is presently authorized to issue hundred million (100,000,000)
shares of its $.0001 par value common shares in such classes as the Board may
determine. As of June 30, 1999 ten million nine hundred eleven thousand three
hundred sixty-eight (10,911,368) Common Shares are presently issued and
outstanding.
27
<PAGE>
Preferred Stock
- ---------------
10,000,000 shares of preferred stock are authorized. The Board of Directors has
total discretion as to the extablishment of the series or classes of preferred
stock and the rights and privileges of such classes. This type of discretion for
Preferred Stock is often referred to as "Blank Check." The Company has not, as
of the date hereof, determined any class or series of shares nor any rights or
privileges. No preferred shares are outstanding as of June 30, 1999.
Common Shares
- -------------
All shares, when issued, will be fully paid and non-assessable. All shares are
equal to each other with respect to voting, liquidation, and dividend rights.
Special shareholders' meetings may be called by the officers or director, or
upon the request of holders of at least one-tenth (1/10th) of the outstanding
shares. Holders of shares are entitled to one vote at any shareholders' meeting
for each share they own as of the record date fixed by the board of directors.
There is no quorum requirement for shareholders' meetings. Therefore, a vote of
the majority of the shares represented at a meeting will govern even if this is
substantially less than a majority of the shares outstanding. Holders of shares
are entitled to receive such dividends as may be declared by the board of
directors out of funds legally available therefor, and upon liquidation are
entitled to participate pro rata in a distribution of assets available for such
a distribution to shareholders. There are no conversion, pre-emptive or other
subscription rights or privileges with respect to any shares. Reference is made
to the Company's Articles of Incorporation and its By-Laws as well as to the
applicable statutes of the State of Colorado for a more complete description of
the rights and liabilities of holders of shares. It should be noted that the
By-Laws may be amended by the board of directors without notice to the
shareholders. The shares of the Company do not have cumulative voting rights,
which means that the holders of more than fifty percent (50%) of the shares
voting for election of directors may elect all the directors if they choose to
do so. In such event, the holders of the remaining shares aggregating less than
fifty percent (50%) of the shares voting for election of directors may not elect
all the directors if they choose to do so. In each event, the holders of the
remaining shares aggregating less than fifty percent (50%) will not be able to
elect directors.
28
<PAGE>
Warrants
- --------
The Company had 70,274 common share purchase warrants outstanding. Such warrants
allow the holder to purchase common shares @ $2.75 per share for a period of two
years from date of issue. The warrants are non-transferable.
PART II
ITEM 1. (a) MARKET PRICE OF AND DIVIDENDS ON REGISTRANTS COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The Company's common stock is not now traded on the "Over-the-Counter" market,
but when traded may be quoted on the NASD Electronic Bulletin Board. The
following table sets forth high and low bid prices of the Company's common stock
for the two (2) years ended June 30, 1999 and 1998 (note: Company did not exist
in 1996) as follows:
1999 High Low
First Quarter 0 0
Second Quarter 0 0
High Low
1998
First Quarter 0 0
Second Quarter 0 0
Third Quarter 0 0
Fourth Quarter 0 0
29
<PAGE>
High Low
1997
First Quarter 0 0
Second Quarter 0 0
Third Quarter 0 0
Fourth Quarter 0 0
(b) As of June 30, 1999, the Company had 61 shareholders of record of the common
stock.
(c) No dividends on outstanding common stock have been paid within the last two
fiscal years, and interim periods. The Company does not anticipate or intend
upon paying dividends for the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS
No legal proceedings were pending at date of Registration Statement.
ITEM 3. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
a) None
b) In connection with audits of two most recent fiscal years and any
interim period preceding resignation, no disagreements exist with any former
accountant on any matter of accounting principles or procedure, which
disagreements if not resolved to the satisfaction of the former accountant would
have caused him to make reference in connection with his report to the subject
matter of the disagreement(s).
30
<PAGE>
c) The principal accountant's report on the financial statements for
any of the past two years contained no adverse opinion or a disclaimer of
opinion nor was qualified as to uncertainty, audit scope, or accounting
principles except for the "going concern" qualification.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
UNREGISTERED STOCK SALES IN THE THREE YEAR PERIOD PRIOR TO THIS REGISTRATION
STATEMENT.
Founders Purchase Amount of
Shareholder Price Shares Consideration
- ----------- -------- --------- -------------
John G. Perry 0.0 5,000,000 Exchange of shares of World Wide Video
dated May 12, 1998
Frank A. Maas 0.0 5,000,000 Exchange of shares of World Wide Video
dated May 12, 1998
All of the following sales were made in Reliance upon the exemption provided
under Regulation D, Rule 504.
31
<PAGE>
<TABLE>
<CAPTION>
Private Placements in April 1, 1998 - April 20, 1999
Shareholder Purchase Amount of Consideration
Price Shares
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4/3/98 Nublan Zaky Yusoff $0.50 200,000 $100,000.00
PJS 19/1, Jalan Lagoon T
Kumper Lumpor
Malaysia
4/17/98 Vidid Resources, Inc. $2.00 25,000 $50,000.00
4370 LaJolla
San Diego, CA92122
4/18/98 George and Janet Camberis $2.00 75,000 $15,000.00
40 Trish Court
Danville, CA 94506
5/8/98 Patrick D. Lee $2.00 12,500 $25,000.00
319 Oak Drive South
Green Grove Springs, FL
32043
5/8/98 Frederick E. Roughton $2.00 30,000 $60,000.00
POB 454
Middleburg, VA 20118
7/16/98 Dante Berry $2.75 728 $2,000.00
3FA Lerkenlard
St. Thomas, USVI 00801
7/11/98 Marcia Leonard $2.75 364 $1,001.00
c/o Carribean Cowgirl
St. Thomas, USVI 00802
32
<PAGE>
7/14/98 Anne Borne $2.75 2,000 $5,500.00
3700 Vills OLGIA
St. Thomas, USVI 00802
7/13/98 Molly Mills Fuch $2.75 11,000 $30,250.00
P.O. Box 9965
St. Thomas, USVI 00801
7/14/98 Dennis M. Vollmer $2.75 2,000 $5,500.00
P.O. Box 306417
St. Thomas, USVI 00803
7/15/98 Charles Berry $2.75 1,819 $5,000.00
P.O. Box 11583
St. Thomas USVI 00801
7/15/98 Stephen Bajor $2.75 725 $1,993.75
6263 EST Nazareth
St. Thomas, USVI 00802
7/15/98 Sandra R. Tate $2.75 364 $1,001.00
6501 Red Hook Plaza #23
St. Thomas, USVI 00802-1306
7/15/98 Antionette B. Day $2.75 364 $1,000.00
C5-28 Sorgenfri Estate
St. Thomas, USVI 00803
7/16/98 Matthew J. McCormack $2.75 364 $1,000.00
501-4009 Raphine Hill
St. Thomas, USVI 00802
33
<PAGE>
7/17/98 Gigi Anne Zaccagnino $2.75 127,273 $350,000.00
2850 Pleasant Hill Rd.
Kissimmee, FL 34746
7/17/98 Bruce M. Berry, Jr. $2.75 365 $1,003.75
372 Wintbert
St. Thomas, USVI 00805
7/17/98 Mary C. Deering $2.75 728 $2,000.00
1823 Mahogany Run
St. Thomas, USVI
00801/00803
7/16/98 Joe Stull $2.75 728 $2,000.00
P.O. Box 305021
St. Thomas, USVI 00803
7/15/98 Donald B. Callaway $2.75 1,455 $4,000.00
308 Crown Bay Marina
St. Thomas, USVI 00802
7/17/98 Linda Carlisi-Lugo $2.75 364 $1,000.00
P.O. Box 3751
St. Thomas, USVI 00802
7/16/98 Diane M. Aamodt $2.75 400 $1,100.00
6501 Red Hook Plaza #201
St. Thomas, USVI 00802
7/16/98 Geoffrey Deering $2.75 364 $1,000.00
19031 NW 89th Court
Miami, FL 33108
34
<PAGE>
7/16/98 Sandra DeSimone $2.75 546 $1,500.00
P.O. Box 306631
St. Thomas, USVI 00803
7/15/98 Matt D. Pierson $2.75 364 $1,000.00
601 Red Hook Plaza #201
St. Thomas, USVI 00802
7/16/98 Franklin Danziger $2.75 7,500 $20,625.00
2020 E. Colter Street
Phoenix, AZ 85016
7/16/98 Cathy Lyn Wilde $2.75 4,000 $11,000.00
4737 E. Sheena Drive
Phoenix, AZ 85032
7/23/98 Stephen Speranza $2.75 400 $1,100.00
36 Sunset Bridge Drive
East Hardford, CT 6118
7/23/98 Kenneth Young $2.75 728 $2,002.00
228 Columbia Street
Ithace, NY 14850
7/20/98 Gary Holland $2.75 2,000 $5,500.00
5859 Dovetail Drive
Aurora Hills, CA 91301
8/31/98 Jerry A. Stangohr $2.75 1,800 $4,950.00
9801 Rosewood Hill Drive
Vienna, VA 22182
35
<PAGE>
10/2/98 Charles Bonanno $0.00 125,000 services
P.O. Box 11180
St. Thomas, USVI 00801
12/13/98 DataPower USA, Inc. $0.00 250,000 exchange
101-1425 West Pender St.
Vancouver, BC Canada V6G2S3
11/5/98 Alfred W. McClelland $2.75 725 $1,993.75
10 Cobblestone Road
Greenville, SC 29615
12/16/98 Lawrence F. Kahn $2.75 2,000 $5,500.00
105 Woodfall Way
Lilburn, GA 30047
1/11/99 Betty W. Jones $2.75 200 $5,500.00
3819 N. Wakefield Street
Arlington VA 22207
1/17/99 Jeannine Atalay Harvey $2.75 200 $5,500.00
7216 Poplar Street
Annandale, VA 22003
1/17/99 Roy & Laura Weinstock $2.75 2,000 $5,500.00
10405 Amberst Court
Fredricksburg, VA 22408
1/17/99 Michael Atalay $2.75 200 $550.00
31 Stablemere Court
Baltimore, MD 21209
36
<PAGE>
1/17/99 Bulent Atalay $2.75 1,100 $3,025.00
10202 N. Hampton Lane
Fredericksburg, VA 22408
1/17/99 Joseph Ratnam $2.75 1,000 $2,750.00
BLK 816 Yishun ST
81 #11-712
Singapore 760816
1/17/99 Lowis Chelliah $2.75 1,000 $2,750.00
BLK 141, #08-275
Lorong AH, S00
Singapore 530141
1/17/99 Bulent & Carol Jean Atalay $2.75 1,500 $4,125.00
10202 N. Hampton Lane
Fredericksburg, VA 22408
1/19/99 Thomas N. Slutsker $2.75 500 $1,375.00
6 Emerson Court
Morristown, NJ 07960
1/29/99 Rochele Hirsch $2.75 15,682 $43,123.90
510 Seminole Avenue
Atlanta, GA 30307
1/29/99 Thomas & Dennie Stansell $2.75 1,000 $2,750.00
30110 Via Rivera
Rancho Palos Verdes, CA
90275
37
<PAGE>
1/29/99 McKenzie A. Perry, Jr. $2.75 1,000 $2,750.00
510 Seminole Avenue
Atlanta, GA 30307
1/29/99 Rochele Hirsch $0.00 27,381 services
510 Seminole Avenue
Atlanta, GA 30307
2/16/99 Duane & Cheryl Clayton $2.75 2,000 $5,500.00
6733 Estate Lane
Fredericksburg, VA 22407
3/15/99 C.J. Zielinski $2.75 3,637 $10,000
7,274
warrants
4/2/99 Summit Limited Partnership $2.75 5,000* $13,750
19045 Clair Manor Drive
10,000
Culpeper, VA 22701 warrants
4/5/99 Jerrold W. Hoehn $2.75 3,500* $9,625
HC72 Box 543A 7,000
warrants
Locust Grove, VA 22508
4/6/99 Leonard C. Feldman $2.75 2,000* $5,500
2155 Laurel Lane 4,000
warrants
N. Miami, VA 22701
4/6/99 Auby D. Curtis $2.75 6,000* $16,500
16068 Rocky Road 12,000
warrants
Culpeper, VA 22701
38
<PAGE>
4/6/99 John D. Zaleski II $2.75 3,000* $8,250
11249 Pimilico Circle 6,000
warrants
Culpeper, VA 22701
4/6/99 Stephanie Mendlow, M.D. & $2.75 4,000* $11,000
Leighton B. Brown
8,000
H.C.R. 2, Box 540 warrants
Madison, VA 22727
4/6/99 H. Lee Kirk, Jr. & Kim M. $2.75 2,000* $5,500
Kirk 19301 Bleumont Court
4,000
Culpeper, VA 22701 warrants
4/6/99 E. Francis Updike $2.75 4,000* $11,000
12305 Hidden Lakes 8,000
warrants
Culpeper, VA 22701
4/6/99 Jonathan M. & June M. Brick $2.75 2,000* $5,500
11211 Pimilco Circle
4,000
Culpeper, VA 22701 warrants
</TABLE>
No other sales have occurred in the three years preceding filing of this
registration statement.
With respect to all sales of securities to persons other than the founders, Data
Power, Inc., Charles Bonanno, and Rochele Hirsch the Registrant relied on the
provisions of Rule 504 of Regulation D promulgated under the Securities Act of
1933, as amended (the "Act"). The offering was not made by means of any general
solicitation, shares were acquired without a view toward distribution thereof
and all purchasers represented that they were able to bear the economic risk of
their investment, and a representation letter to that effect was obtained from
each purchaser. The shares were issued with an investment legend thereon, and
stop transfer instructions were noted on the Registrant's stock transfer
records. Aggregate sales were less than $1,000,000. No offerings of unregistered
securities are currently being offered. Data Power, Inc. obtained shares through
39
<PAGE>
a share exchange exempt under Section 4(2), and Charles Bonanno and Rochele
Hirsch received shares for services rendered as an exempt transaction under
Section 4(2), but Rochele Hirsch separately purchased 15,682 shares pursuant to
Reg. D., Rule 504.
* In addition to shares, an aggregate total of 70,274 warrants to purchase
common shares at $2.75 per share were issued to those persons marked with an *.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Colorado Corporation Act and Company by-laws offer protection by way of
indemnification to any officer, director or employee of the Company. The
indemnification extends to expenses, including attorney's fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred in connection
with an action, suit or proceeding if the party acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
Company and with respect to any criminal proceeding if the party had no
reasonable cause to believe the conduct was unlawful.
The general effect of the above indemnification provisions allow the employees,
directors, and officers of the Company to function and engage in the day to day
business activities of the Company knowing the Company will offer protection
against the threat or event of litigation subject to the limitations that said
individual must exercise good faith and reasonableness.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 or Securities Exchange Act of 1934 may be permitted to directors, officers
and controlling persons of the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
40
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS
The following documents are filed as a part of this report:
1) Financial Statements: (See Financial Exhibits Index below and Financial
Exhibits furnished as Pages F-1 through F-20).
2) Financial Statement Schedules: None
3) SK Exhibits: (See SK Exhibits Index SK, page 23, and SK Exhibits, SK-3.0
through SK- 24.2.)
4) Supplemental Oil and Gas Information - None.
41
<PAGE>
FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
INDEX TO FINANCIAL STATEMENTS
AND SUPPORTING SCHEDULES
Page
Reports of Independent Public Accountants F-2
I. Financial Statements (audited):
Consolidated Balance Sheets, Sept. 30, F-3
1998 and since inception
Consolidated Statements of Operations, F-4
Sept. 30, 1998 and since inception
Statement of Equity F-5 - F-6
Statement of Cash Flows F-7 - F-8
Notes to Consolidated Financial Statements F-9 - F-11
Interim Financial Statements (unaudited)
Period ended March 31, 1999
Balance Sheet F-12
Statement of Operations F-13
Statement of Cash Flows F-14
Notes to Financial Statements F-15-20
42
<PAGE>
INDEX
SK EXHIBITS
3.1 Articles of Incorporation of World Wide Video, Inc. (Colorado)
3.2 Bylaws of World Wide Video, Inc. (Colorado)
3.3 Articles of Incorporation of World Wide Video, Inc. (Virginia)
3.4 Bylaws of World Wide Video, Inc. (Virginia)
10.1 Agreement with Data Power, Inc.
10.2 Share Exchange Agreement
24.1 Consent of Accountant
SUPPLEMENTAL OIL AND GAS INFORMATION
None.
43
<PAGE>
SIGNATURES:
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
DATED: August 17, 1999
World Wide Video, Inc.
/s/ John G. Perry
by:----------------------------------
John G. Perry, President
Directors:
/s/ Frank A. Maas
-------------------------------------
Frank A. Maas, Secretary and Director
/s/ John G. Perry
------------------------------------
John G. Perry, Director
/s/ Ronald Cropper
------------------------------------
Ronald Cropper, Director
44
<PAGE>
WORLD WIDE VIDEO, INC.
A Colorado Corporation
A Development Stage Enterprise
Financial Statements
PERIOD ENDED SEPTEMBER 30, 1998
AND FROM INCEPTION
(Audited)
F-1
<PAGE>
THOMPSON,
GREENSPON
& Co., P.C.
Certified Public Accountants
Management Consultants
INDEPENDENT AUDITOR'S REPORT
To the Shareholders
World Wide Video, Inc.
A Colorado Corporation
Culpeper, Virginia
We have audited the accompanying balance sheet of World Wide Video, Inc. (a
Colorado Corporation), a development stage enterprise, as of September 30, 1998,
and the related statement of operations and retained earnings and cash flows
from July 16, 1997, inception through September 30, 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 audits 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 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 World Wide Video, Inc. (a
Colorado Corporation), as of September 30, 1998, and the results of its
operations and its cash flows from July 16, 1997, inception, through September
30, 1998, in conformity with generally accepted accounting principles.
Fairfax, Virginia
January 21, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Colorado corporation)
(A Development Stage Enterprise)
BALANCE SHEET
SEPTEMBER 30, 1998
1998 1997
---- ----
---------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets $ $
Cash and cash equivalents 28,324 200
Inventories 122,448 -
Prepaid assets and fees 107,134 -
---------------------------------------------------
Total Current Assets 257,906 200
---------------------------------------------------
Property and Equipment
Computer and equipment 7,746 -
Software 13,668 -
---------------------------------------------------
Total Cost 21,414 -
Less accumulated depreciation (2,364) -
---------------------------------------------------
Net Property and Equipment 19,050 -
---------------------------------------------------
Other Assets
Technology license, net of 43,750 -
amortization
15,850 -
Deferred offering costs
650 -
Deposits
5,850 -
Prepaid rent, non-current
---------------------------------------------------
Total Other Assets 66,100 -
---------------------------------------------------
TOTAL ASSETS $ 343,056 $ 200
===================================================
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
Prepared by THOMPSON, GREENSPON & CO., P.C.
F-3
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Colorado corporation)
(A Development Stage Enterprise)
LIABILITIES AND STOCKHOLDERS' EQUITY
FROM JULY 16, 1997, INCEPTION, THROUGH SEPTEMBER 30, 1998
1998 197
-----------------------------------------------
<S> <C> <C>
Current Liabilities
Accounts payable $ 75,780 $ -
Deferred revenue 50,000 -
Convertible loan 50,000 -
-----------------------------------------------
Total Current Liabilities 175,780 -
-----------------------------------------------
Stockholders' Equity
Common stock, par value $0.0001;
100,000,000 shares
1,044 200
authorized; 10,443,737 issued and
outstanding
Preferred stock, par value $0.01;
10,000,000 shares authorized; no
shares issued or outstanding
Additional paid-in capital
Accumulated deficit during - -
development stage
634,558 -
(468,326) -
-----------------------------------------------
Total Stockholders' Equity 167,276 200
-----------------------------------------------
Total Liabilities and Stockholders' $343,056 $200
Equity
===============================================
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Colorado corporation)
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1998 AND
FROM JULY 16, 1997, INCEPTION, THROUGH
SEPTEMBER 30, 1998 AND 1997
July 16, 1997, July 16, 1997,
Year Ended Inception to Inception, to
September September 30, September 30,
30,
1997 1998
1998
<S> <C> <C> <C>
Sales $- $- $-
-----------------------------------------------------------------------------------
Product Development Costs
Subcontractors 196,867 - 196,867
Other development costs 177,061 - 177,061
-----------------------------------------------------------------------------------
Total Product Development Costs 373,928 - 373,928
-----------------------------------------------------------------------------------
General and Administrative Expenses
Marketing and sales 54,615 - 54,615
Office 12,388 - 12,388
Depreciation and amortization 8,614 - 8,614
Printing 4,366 - 4,366
Occupancy 5,903 - 5,903
Utilities and telephone 2,991 - 2,991
Other 8,271 - 8,271
-----------------------------------------------------------------------------------
Total General & Administrative
Expenses
97,148 - 97,148
-----------------------------------------------------------------------------------
Total Costs and Expenses (471,076) - (471,076)
Other Income 2,750 - 2,750
-----------------------------------------------------------------------------------
Loss before Income Taxes (468,326)
Income Taxes -
-----------------------------------------------------------------------------------
Net Loss ($468,326) $- ($468,326)
===================================================================================
Net Loss Per Share ($0.06) $- ($0.06)
===================================================================================
Average Common and Common Equivalent
Shares Outstanding
7,556,726 - 7,556,726
===================================================================================
</TABLE>
The Notes to Financial Statements are an Integral Part of This Statement.
F-5
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1998 AND
FROM JULY 16, 1997, INCEPTION, THROUGH
SEPTEMBER 30, 1998 AND 1997
July 16, 1997, July 16, 1997,
Year Ended Inception, to Inception, to
September 30, September 30, September 30,
1997 1997
1998
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales $- $- $-
---------------------------------------------------------------------------------------
Product Development Costs
Subcontractors 196,867 - 196,867
Other development costs 177,061 - 177,061
---------------------------------------------------------------------------------------
Total Product Devel. Costs 373,928 - 373,928
---------------------------------------------------------------------------------------
General & Admin. Expenses
Marketing & sales 54,615 - 54,615
Office 12,388 - 12,388
Depreciation & amortization 8,614 - 8,614
Printing 4,366 - 4,366
Ocupancy 5,903 - 5,903
Utilitites & telephone 2,991 - 2,991
Other 8,271 - 8,271
---------------------------------------------------------------------------------------
Total General & Admin. Expenses 97,148 - 97,148
---------------------------------------------------------------------------------------
Total Costs & Expenses (471,076) - (471,076)
Other Income 2,750 - 2,750
---------------------------------------------------------------------------------------
Loss before Income Taxes (468,326) - (468,326)
Income Taxes - - -
---------------------------------------------------------------------------------------
Net Loss ($468,326) $- ($468,326)
=======================================================================================
Net Loss Per Share ($0.06) $- ($0.06)
=======================================================================================
Average Common & Common Equivalent
Shares Outstanding
7,556,726 - 7,556,726
=======================================================================================
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
F-6
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Colordo Corporation)
(A Development Stage Enterprise)
STATMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1998 AND
FROM JULY 16, 1997, INCEPTION, THROUGH
SEPTEMBER 30, 1998 AND 1997
July 16, 1997, July 16, 1997,
Year Ended Inception, to Inception, to
September 30, September 30, September 30,
1998 1997 1998
---------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating
Activities
Net loss ($468,326) $- ($468,326)
Noncash items included in
net loss
Depreciation 2,364 - 2,364
Amortization 6,250 - 6,250
Changes in assets &
liabilities
(Increase) in
Inventory (107,134) - (122,448)
Prepaid expenses (122,448) - (107,134)
Increase in
Accounts payable 75,780 - 75,780
Deferred revenue 50,000 - 50,000
---------------------------------------------------------------------------
Net Cash Used During
Development Stage
(563,514) - (563,514)
---------------------------------------------------------------------------
Cash Flows from Investing
Activities
Purchase of equipment &
software
(21,414) - (21,414)
Purchase of technology
license
(50,000) - (50,000)
F-7
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colordo Corporation)
(A Development Stage Enterprise)
STATMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1998 AND
FROM JULY 16, 1997, INCEPTION, THROUGH
SEPTEMBER 30, 1998 AND 1997
Continued
Purchase of other assets (22,350) - (22,350)
---------------------------------------------------------------------------
Net Cash Used by Investing
Activities
(93,764) - (93,764)
---------------------------------------------------------------------------
Cash Flows from Financing
Activities
Proceeds from Common Stock 635,402 200 635,602
Convertible Loan 50,000 - 50,000
---------------------------------------------------------------------------
Net Cash Provided by
Financing Activities
685,402 200 685,602
---------------------------------------------------------------------------
Net Increase in Cash & Cash
Equivalents
28,124 200 28,324
Cash & Cash Equivalents,
beginning of period
200 -
---------------------------------------------------------------------------
Cash & Cash Equivalents, end
of period
$28,324 $200 $28,324
===========================================================================
</TABLE>
The Notes to Financial Statements are an Integral Part of these Statements.
F-8
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Colordo Corporation)
(A Development Stage Enterprise)
STATMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1998 AND
FROM JULY 16, 1997, INCEPTION, THROUGH
SEPTEMBER 30, 1998 AND 1997
Accumulated
Deficit During
Development
Stage
Additional Paid
in Capital
Shares Common Stock Totals
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Issuance of share capital to
Founders, July 16, 1997
200 $- $200 $- $200
Net loss, period ended September
30, 1997
- - - - -
--------------------------------------------------------------------------------------------
Balance Sheet September 30, 1997 200 - 200 - 200
Exchange of shares, issuance of
new hsares, May 12, 1998
9,999,800 1,000 (200) - 800
Sale of common Stock, April 3
through September 8, 1998
443,737 44 634,558 - 634,602
Net loss, year ended September 30,
1998
- - - (468,326) (468,326)
--------------------------------------------------------------------------------------------
Balance, September 30, 1998 10,443,737 $1,044 $634,558 ($468,326) $167,276
============================================================================================
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
F-9
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company and Purpose
World Wide Video, Inc. was organized under the laws of the Commonwealth of
Virginia on July 16, 1997. World Wide Video, Inc. was organized under the laws
of the State of Colorado on April 9, 1998. On May 12, 1998, the Companies
adopted a plan of reorganization in which the Virginia corporation was merged
into the Colorado corporation. The surviving Company, World Wide Video, Inc. (a
Colorado Corporation), intends to design and manufacture technology and products
for the video telephony market. The principal activities of the Company since
inception have been raising capital, conducting research and product
development. The Company conducts its operations from offices in Culpeper,
Virginia.
The accounting and reporting policies of World Wide Video, Inc. (the Company)
conform with generally accepted accounting principles and reflect practices
appropriate to a development stage enterprise. These policies are summarized
below.
Development Stage Enterprise
Substantially all of the Company's operations have been in connection with the
establishment of a new business. The Company has elected early adoption of
Statement of Position 98-5 which permits expensing of costs of start-up
activities, including organization costs, as incurred.
Method of Accounting
The financial statements are presented on the accrual basis of accounting.
<PAGE>
Financial Statement 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 disclosures of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenue and expenses during the reporting period. Due to
their prospective nature, actual results could differ from those estimates.
Cash and Cash Equivalents
The statements of cash flows classify changes in cash or cash equivalents
(short-term, highly liquid investments readily convertible into cash with a
maturity of three months or less) according to operating, investing or financing
activities.
There were no income taxes or interest paid during the period ended September
30, 1998.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Inventory
Inventory, which consists primarily of raw materials, is stated at the lower of
cost or market, with cost being determined on a first-in, first-out basis.
Property and Equipment
Property and equipment are recorded at cost and depreciated over their estimated
useful lives.
Leases which meet certain specified criteria are accounted for as capital assets
and liabilities, and those not meeting the criteria are accounted for as
operating leases.
Expenditures for maintenance, repairs, and improvements which do not materially
extend the useful lives of property and equipment are charged to earnings. When
property or equipment is sold or otherwise disposed of, the cost and related
accumulated depreciation or amortization is removed from the accounts, and the
resulting gain or loss is reflected in earnings.
Depreciation expense for the period ended September 30, 1998 was $2,364.
Technology Licenses
The Company capitalizes technology licenses. Technology licenses are carried at
cost less accumulated amortization. Amortization is taken on the straight line
basis over five years.
<PAGE>
Amortization expense for the period ended September 30, 1998 was $6,250.
Deferred Offering Costs
Deferred offering costs represent costs incurred in connection with raising
capital. Upon completion of an offering, the amount of the proceeds credited to
additional paid in capital is reduced by the deferred offering costs. Should an
offering be unsuccessful, these costs are charged to expense.
Deferred Revenue
The Company has deferred recognition of revenue from licenses sold until
marketable products are available for sale.
Income Taxes
The Corporation utilizes the liability method for accounting for income taxes.
The liability method accounts for deferred income taxes by applying enacted
statutory rates in effect at the balance sheet date to differences between
financial statement amounts and tax bases of assets and liabilities. The
resulting deferred income tax liabilities are adjusted to reflect changes in tax
laws and rates.
Temporary differences consist of the difference in financial statement and
income tax bases for accounting for start up and organizational costs. Deferred
income taxes related to an asset or liability are classified as current or
noncurrent based on the classification of the related asset or liability.
Prior to April 1, 1998, the Corporation, with the consent of its stockholders,
had elected S corporation status under Section 1372 of the Internal Revenue Code
and similar sections of the state income tax laws. On April 1, 1998, the Company
terminated its S election and is now subject to corporate income tax rates.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
2. NEED FOR ADDITIONAL CAPITAL
The Company's continued existence is dependent upon its ability to raise
additional funds to complete products in development. The Company is concluding
a private securities offering in which it has raised $635,602, net of offerings
costs of $78,624 to date. Additional funds will be raised through similar
private offerings, which in Management's opinion, will provide sufficient
capital resources to complete current product development and initial product
marketing.
3. PREPAID ASSETS AND FEES
Included in Prepaid Expenses is $50,000, which is on deposit with Analog
Devices, Inc., the Company's principal supplier of raw materials, for custom
engineering support in connection with product development. The Company also has
$15,000 on deposit with the same vendor for raw materials to be delivered in the
next year. Prepaid product marketing costs of $16,000 are expected to be
expensed in the next year. The Company also has $8,900 in deposits on equipment
and inventory and $7,800 in prepaid rent.
4. INVENTORY
Inventory consists principally of raw materials, chipsets, which are purchased
from Analog Devices, Inc.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
5. OTHER ASSETS
The Company has acquired a technology license at a cost of $50,000, from Analog
Devices, Inc., that is being amortized over a period of five years. The license
agreement permits the Company to use certain proprietary reference designs and
software in the development of video telephony products. The net carrying value
of the license at September 30, 1998 was $43,750.
In connection with a private securities offering, the Company has deferred costs
of $15,850 associated with certain filing requirements that are expected to be
completed in the near future. These charges will be netted against proceeds of
the offering when filings are completed.
6. CONTRIBUTED CAPITAL
In connection with the reorganization of the Company, the original stockholders
received 10,000,000 shares of common stock in exchange for their shares of a
predecessor corporation. After the reorganization, the Company sold 200,000
shares of common stock at $0.50 per share, 75,000 shares at $2.00 per share, and
168,737 shares at $2.75 per share, in a private offering of securities. After
deducting costs of $78,624, the Company has realized proceeds of $635,602.
Additional costs of $15,850 have been deferred until completion of certain
filings.
7. CONVERTIBLE DEBT
A Canadian company has advanced the Company $50,000 (non interest bearing) under
an agreement to develop products. The agreement granted the Canadian corporation
an exclusive option to market these products for a specified term. In addition,
the debt is convertible to 250,000 shares of common stock upon achievement of
certain milestones. At that time, the Company would contribute 250,000 shares of
its stock and the Canadian Corporation would forgive the debt.
<PAGE>
8. OPERATING LEASE
The Company leases office space in Culpeper, Virginia, under a two-year lease
agreement commencing July 7, 1998 and expiring July 6, 2000. Monthly rent is
$650. The rent for the leased premises is $15,600 for the term of the lease,
which the Company prepaid. The Company has made a security deposit of $650.
Rent expense was $1,950, for the period ended September 30, 1998.
9. RELATED PARTIES
A Director of the Company has been engaged to assist in the raising of capital.
He is compensated on the basis of a percentage (from 2 to 5 per cent) of the
completed transaction. During the period ended September 30, 1998, he was paid
$23, 435 under this contract. In addition, the same Director has been prepaid $
16,000 under a product marketing agreement. The two majority stockholders have
agreements to provide services. During the period ended September 30, 1998, they
earned $180,000 under these agreements, of which $65,000 remains unpaid at
September 30, 1998.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
10. COMMITMENTS AND CONTINGENCIES
The Company has entered into several agreements and contracts in connection with
the raising of capital and product development.
Raising Capital
The Company has engaged several consultants to assist in the effort to raise
additional capital. Certain of these contracts require payment of fees
calculated as a percentage of completed transactions (see Notes 6 and 9). Other
contracts require compensation in the form of stock. No stock compensation has
been earned as of September 30, 1998.
Product Development
Under an agreement to develop certain products, the Company has deferred revenue
of $50,000 pending achievement of contract milestones. Successful completion of
contract milestones will result in additional payments of up to $50,000.
Several other product development arrangements are in negotiation.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
Interim Financial Statements
for Period Ended
March 31, 1999
(Unaudited)
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
Balance Sheet (unaudited)
For Period Ended December 31, 1998
ASSETS December 31, September 30,
1998 1998
<S> <C> <C>
CURRENT ASSETS
Cash $ 4,039 -
Inventory 131,570 28,324
Accounts Receivable 37,323 122,448
Prepaid 86,900 107,134
-------------------------- -------------------------
Total Current Assets $259,832 257,906
PROPERTY AND EQUIPMENT
Computer Software $ 13,668 7,746
Computer and Equipment 7,746 13,668
Less Accumulated Depreciation (2,364) (2,364)
-------------------------- -------------------------
NET PROPERTY & EQUIPMENT 19,049 19,050
OTHER ASSETS
Technology Licenses $ 43,750 43,750
Deferred Charges 5,000 15,850
Deposits 650 650
Prepaid Rent-Non-Current 5,850 5,850
TOTAL OTHER ASSETS $ 55,250 66,100
-------------------------- -------------------------
TOTAL ASSETS $ 334,131 $ 343,056
====================== =========================
LIABILITIES
Accounts Payable $ 99,882 $ 75,780
Deferred Revenue 77,000 50,000
Salary Payable 60,000 50,000
-------------------------
TOTAL LIABILITIES $236,882 175,780
<PAGE>
WORLD WIDE VIDEO, INC.
Balance Sheet (unaudited)
For Period Ended December 31, 1998
Continued
Stockholders Equity
Common stock, par value
$0.0001; 100,000,000
shares authorized;
10,443,737 issued or
outstanding @ Sept.
30, 1998 0 1,044
and 10,911,365 issued and
outstanding @ March 31,
1999 authorized;
Preferred stock, par value 1,091
$0.01; 10,000,000 shares; no
shares issued or outstanding
Additional Paid-In Capital $ 777,257 634,558
Accumulated deficit during
developement stage
(676,145) (468,326)
-------------------------- -------------------------
Total Stockholders' Equity
$97,271 $167,276
-------------------------- -------------------------
Total Liabilities & Shareholders' $ 334,131 $ 343,056
========================== =========================
Equity
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
World Wide Video, Inc.
(A Development Stage Company)
Statement of Operations (unaudited)
Quarter Ended 03-31-99
Three Months Three Months
Ended Ending
March 31, March 31,
1999 1998
----------------------------------------------------------
<S> <C> <C>
SALES
Income $ 2,189 0
Sales 876 4,500
Cost of Goods Sold (750) 3,931
-------------------------- -------------------------
TOTAL SALES 2,315 569
COSTS
PRODUCT DEVELOPMENT COSTS
Subcontractors 686 20,00
Contract Expense 8,400 -
TOTAL PRODUCT DEVELOPMENT COSTS 9,086 20,000
GENERAL & ADMIN. EXPENSES
Slaries 60,000 -
Marketing 9,156 -
Office 40,700 20
TOTAL GENERAL & ADMIN. EXPENSES
TOTAL COSTS & EXPENSES 91,344 23
OTHER INCOME 100,830 20,023
NET INCOME (98,515) (19,454)
Net income (lossI) (.01) .00
Per share
Weighted Average Shares
Outstanding 10,443,737 7,392,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
World Wide Video, Inc.
(A Development Stage Company)
Statement of Operations (unaudited)
Quarter Ended 03-31-99
Six Months Six Months
Ended March Ended March 31,
31, 1999 1998
<S> <C> <C>
REVENUE
Income $2,189 $0
Sales 8,373 4,500
Costs of Goods Sold 1,750 3,931
------------------------------------------------------------------
NET SALES 8,812 569
Product Development Costs
Subcontractors 61,286 20,000
Contract Expense 16,675 0
TOTAL PRODUCT DEVELOPMENT COSTS 77,961 20,000
------------------------------------------------------------------
GENERAL & ADMIN EXPENSES
Salaries 60,000 0
Trade Show 0 0
Marketing Sales 6,989 0
Office 71,682 23
------------------------------------------------------------------
TOTAL GENERAL & ADMIN EXPENSES 138,671 23
TOTAL COSTS & EXPENSES 216,632 20,023
------------------------------------------------------------------
NET INCOME ($207,820) ($19,454)
Net income (loss) per share (.02) .00
Weighted average number of common shares 10,668,737 7,556,726
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
World Wide Video, Inc.
(A Development Stage Company)
Statement of Cash Flows
(unaudited)
Three Months Ending Three Months Ending
Mar. 31, 1999 Mar. 31, 1998
----------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) ($207,820) ($19,454)
Noncash items included in
net loss
0 0
Depreciation
0 0
Amortization
Changes in assets and
liabilities
(Increase) Decrease in 0 0
Inventory
(103,246) 0
Accounts receivable
85,125 0
Prepaid expenses
Increase (Decrease) in
Accounts payable 31,086 (46,800)
Net cash used during 61,102 41,995
----------------------------------- -----------------------------------
development stage
(133,758) (4,802)
Cash Flows from Financing
Activites
0 0
Proceeds from Sales of
Common Stock
137,792 2
Loan 0 0
Net Cash Provided by
Financing Activities
137,792 2
Net Decrease in Cash & 4,039 (24,254)
Cash Equivalents
Cash at Beginning of 0 0
Period
============================================================================
Cash at End of Period 4,039 (24,254)
============================================================================
</TABLE>
The Notes to Financial Statements are an Integral part of this Statement.
<PAGE>
<TABLE>
<CAPTION>
World Wide Video, Inc.
(A Development Stage Company)
Statement of Cash Flows
(unaudited)
Three Months Ending Three Months Ending
Mar. 31, 1999 Mar. 31, 1998
----------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) ($105,698) ($19,454)
Noncash items included in net loss 0 0
Depreciation 0 0
Amortization 0 0
Changes in assets and liabilities 0 0
(Increase) Decrease in Inventory 7,582 0
Inventory 0 0
Accounts receivable (29,492) 0
Prepaid expenses and other assets 1,950 (46,800)
Increase (Decrease) in Accounts Payable 38,453 41,998
----------------------------------------------------------------
Net cash used during development stage (78,021) (4,802)
Cash flows from Financing Activities 0 0
Proceeds from sales of Common Stock 75,298 2
Loan 0 0
----------------------------------------------------------------
Net Cash provided by financing activities 75,298 2
Net Decrease in Cash & Cash Equivalents (2,723) (24,254)
Cash at Beginning of Period 6,782 0
================================================================
Cash at End of Period 4,039 (24,254)
================================================================
</TABLE>
The Notes to Financial Statements are an Integral part of this Statement.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company and Purpose
World Wide Video, Inc. was organized under the laws of the Commonwealth of
Virginia on July 16, 1997. World Wide Video, Inc. was organized under the laws
of the State of Colorado on April 9, 1998. On May 12, 1998, the Companies
adopted a plan of reorganization in which the Virginia corporation was merged
into the Colorado corporation. The surviving Company, World Wide Video, Inc. (a
Colorado Corporation), intends to design and manufacture technology and products
for the video telephony market. The principal activities of the Company since
inception have been raising capital, conducting research and product
development. The Company conducts its operations from offices in Culpeper,
Virginia.
The accounting and reporting policies of World Wide Video, Inc. (the Company)
conform with generally accepted accounting principles and reflect practices
appropriate to a development stage enterprise. These policies are summarized
below.
Development Stage Enterprise
Substantially all of the Company's operations have been in connection with the
establishment of a new business. The Company has elected early adoption of
Statement of Position 98-5 which permits expensing of costs of start-up
activities, including organization costs, as incurred.
Method of Accounting
The financial statements are presented on the accrual basis of accounting.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
Financial Statement 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 disclosures of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenue and expenses during the reporting period. Due to
their prospective nature, actual results could differ from those estimates.
Cash and Cash Equivalents
The statements of cash flows classify changes in cash or cash equivalents
(short-term, highly liquid investments readily convertible into cash with a
maturity of three months or less) according to operating, investing or financing
activities.
There were no income taxes or interest paid during the period ended March 31,
1999.
Inventory
Inventory, which consists primarily of raw materials, is stated at the lower of
cost or market, with cost being determined on a first-in, first-out basis.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
Property and Equipment
Property and equipment are recorded at cost and depreciated over their estimated
useful lives.
Leases which meet certain specified criteria are accounted for as capital assets
and liabilities, and those not meeting the criteria are accounted for as
operating leases.
Expenditures for maintenance, repairs, and improvements which do not materially
extend the useful lives of property and equipment are charged to earnings. When
property or equipment is sold or otherwise disposed of, the cost and related
accumulated depreciation or amortization is removed from the accounts, and the
resulting gain or loss is reflected in earnings.
Technology Licenses
The Company capitalizes technology licenses. Technology licenses are carried at
cost less accumulated amortization. Amortization is taken on the straight line
basis over five years.
Deferred Offering Costs
Deferred offering costs represent costs incurred in connection with raising
capital. Upon completion of an offering, the amount of the proceeds credited to
additional paid in capital is reduced by the deferred offering costs. Should an
offering be unsuccessful, these costs are charged to expense.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
Deferred Revenue
The Company has deferred recognition of revenue from licenses sold until
marketable products are available for sale.
Income Taxes
The Corporation utilizes the liability method for accounting for income taxes.
The liability method accounts for deferred income taxes by applying enacted
statutory rates in effect at the balance sheet date to differences between
financial statement amounts and tax bases of assets and liabilities. The
resulting deferred income tax liabilities are adjusted to reflect changes in tax
laws and rates.
Temporary differences consist of the difference in financial statement and
income tax bases for accounting for start up and organizational costs. Deferred
income taxes related to an asset or liability are classified as current or
noncurrent based on the classification of the related asset or liability.
Prior to April 1, 1998, the Corporation, with the consent of its stockholders,
had elected S corporation status under Section 1372 of the Internal Revenue Code
and similar sections of the state income tax laws. On April 1, 1998, the Company
terminated its S election and is now subject to corporate income tax rates.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
2. NEED FOR ADDITIONAL CAPITAL
The Company's continued existence is dependent upon its ability to raise
additional funds to complete products in development. The Company is concluding
a private securities offering in which it has raised $635,602, net of offerings
costs of $78,624 to date. Additional funds will be raised through similar
private offerings, which in Management's opinion, will provide sufficient
capital resources to complete current product development and initial product
marketing.
3. PREPAID ASSETS AND FEES
Included in Prepaid Expenses is $50,000, which is on deposit with Analog
Devices, Inc., the Company's principal supplier of raw materials, for custom
engineering support in connection with product development. The Company also has
$15,000 on deposit with the same vendor for raw materials to be delivered in the
next year. Prepaid product marketing costs of $16,000 are expected to be
expensed in the next year. The Company also has $8,900 in deposits on equipment
and inventory and $7,800 in prepaid rent.
4. INVENTORY
Inventory consists principally of raw materials, chipsets, which are purchased
from Analog Devices, Inc.
5. OTHER ASSETS
The Company has acquired a technology license at a cost of $50,000, from Analog
Devices, Inc., that is being amortized over a period of five years. The license
agreement permits the Company to use certain proprietary reference designs and
software in the development of video telephony products. The net carrying value
of the license at December 31, 1998 was $43,750.
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
5. OTHER ASSETS (cont'd)
In connection with a private securities offering, the Company has deferred costs
of $15,850 associated with certain filing requirements that are expected to be
completed in the near future. These charges will be netted against proceeds of
the offering when filings are completed.
6. CONTRIBUTED CAPITAL
In connection with the reorganization of the Company, the original stockholders
received 10,000,000 shares of common stock in exchange for their shares of a
predecessor corporation. After the reorganization, the Company sold 200,000
shares of common stock at $0.50 per share, 75,000 shares at $2.00 per share, and
168,737 shares at $2.75 per share, in a private offering of securities. After
deducting costs of $78,624, the Company has realized proceeds of $635,602.
Additional costs of $15,850 have been deferred until completion of certain
filings.
7. CONVERTIBLE DEBT
A Canadian company has advanced the Company $50,000 (non interest bearing) under
an agreement to develop products. The agreement granted the Canadian corporation
an exclusive option to market these products for a specified term. In addition,
the debt is convertible to 250,000 shares of common stock upon achievement of
certain milestones. At that time, the Company would contribute 250,000 shares of
its stock and the Canadian Corporation would forgive the debt.
8. OPERATING LEASE
The Company leases office space in Culpeper, Virginia, under a two-year lease
agreement commencing July 7, 1998 and expiring July 6, 2000. Monthly rent is
$650. The rent for the leased premises is $15,600 for the term of the lease,
<PAGE>
WORLD WIDE VIDEO, INC.
(A Colorado Corporation)
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
8. OPERATING LEASE (Cont'd)
which the Company prepaid. The Company has made a security deposit of $650. Rent
expense was $1,950, for the period ended December 31, 1998.
9. COMMITMENTS AND CONTINGENCIES
The Company has entered into several agreements and contracts in connection with
the raising of capital and product development.
Raising Capital
The Company has engaged several consultants to assist in the effort to raise
additional capital. Certain of these contracts require payment of fees
calculated as a percentage of completed transactions (see Notes 6 and 8). Other
contacts require compensation in the form of stock. No stock compensation has
been earned as of March 31, 1999.
Product Development
Under an agreement to develop certain products, the Company has deferred revenue
of $50,000 pending achievement of contract milestones. Successful completion of
contract milestones will result in additional payments of up to $50,000.
Several other product development arrangements are in negotiation.
EXHIBIT 3.2
BYLAWS OF WORLD WIDE VIDEO, INC.
(COLORADO)
<PAGE>
BY-LAWS
of
WORLD WIDE VIDEO, INC.
a Colorado Corporation
ARTICLE I
The initial principal office of the Corporation shall be in Wheat
Ridge, Colorado. The Corporation may have offices at such other places within or
without the State of Colorado as the Board of Directors may from time to time
establish.
ARTICLE II
CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Whenever the vote of
stockholders at a meeting thereof is required or permitted to be taken in
connection with corporate action, by any provisions of the statutes of the
Certificate of Incorporation, the meeting and vote of stockholders may be
dispensed with, if all the stockholders who should have been entitled to vote
upon the action if such meeting were held, shall consent in writing to such
corporate action being taken.
ARTICLE III
Board of Directors
Section 1. GENERAL POWERS. The business of the Corporation shall be managed
by the Board of Directors, except as otherwise provided by statute or by the
Certificate of Incorporation.
Section 2. NUMBER AND QUALIFICATIONS. The Board of Directors shall
consist of up to three (3) members. Except as provided in the Certificate of
Incorporation, this number can be increased only by the vote or written consent
of the holders of ninety (90) percent of the stock of the Corporation
outstanding and entitled to vote. The current number of Directors shall be
determined by the Board of Directors at its annual meeting. No Director need be
a stockholder.
Section 3. ELECTION AND TERM OF OFFICE. The Directors shall be elected
annually by the stockholders, and shall hold office until their successors are
respectively elected and qualified.
Election of Directors need not be by ballot.
<PAGE>
Section 4. COMPENSATION. The members of the Board of Directors shall be
paid a fee of $10.00 for attendance at all annual, regular, special and
adjourned meetings of the Board. No such fee shall be paid any director if
absent. Any director of the Corporation may also serve the Corporation in any
other capacity, and receive compensation therefor in any form. Members of
special or standing committees may be allowed like compensation for attending
committee meetings.
Section 5. REMOVAL AND RESIGNATIONS. The stockholders may, at any
meeting called for the purpose, by vote of two-thirds of the capital stock
issued and outstanding, remove any directors from office, with or without cause;
provided however, that no director shall be removed in case the vote of a
sufficient number of shares are cast against his removal, which if cumulatively
voted at any election of directors would be sufficient to elect him, if
cumulative voting is allowed by the Articles of Incorporation.
The stockholders may, at any meeting, by vote of a majority of such
stock represented at such meeting accept the resignation of any director.
Section 6. VACANCIES. Any vacancy occurring in the office of director
may be filled by a majority of the directors then in office, though less than a
quorum, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and qualified, unless
sooner displaced.
When one or more directors resign from the Board, effective at a future
date, a majority of the directors then in office, including those who have so
resigned, shall have powers to fill such vacancy or vacancies, the vote thereon
to take effect when such resignation or resignations become effective.
ARTICLE IV
Meetings of Board of Directors
Section 1. REGULAR MEETINGS. A regular meeting of the Board of
Directors may be held without call or formal notice immediately after and at the
same place as the annual meeting of the stockholders or any special meeting of
the stockholders at such places within or without the State of Colorado and at
such times as the Board may by vote from time to time determine.
Section 2. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be held at any place whether within or without the State of Colorado at any time
<PAGE>
when called by the President, Treasurer, Secretary or two or more directors.
Notice of the time and place thereof shall be given to each director at least
three (3) days before the meeting if by mail or at least twenty-four hours if in
person or by telephone or telegraph. A waiver of such notice in writing, signed
by the person or persons entitled to said notice, either before or after the
time stated therein, shall be deemed equivalent to such notice. Notice of any
adjourned meeting of the Board of Directors need not be given.
Section 3. QUORUM. The presence, at any meeting, of one-third of the total
number of directors, but in no case less than two (2) directors, shall be
necessary and sufficient to constitute a quorum for the transaction of business
except as otherwise required by statute or by the Certificate of Incorporation,
the act of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. In the absence of a quorum,
a majority of the directors present at the time and place of any meeting may
adjourn such meeting from time to time until a quorum be present.
Section 4.a. CONSENT OF DIRECTORS IN LIEU OF MEETING. Unless otherwise
restricted by the Certificate of Incorporation, any action required or permitted
to be taken at any meeting of the Board of Directors or any committee thereof
may be taken without a meeting, if prior to such action a written consent
thereto is signed by all members of the Board or committee, and such written
consent is filed within the minutes of the Corporation.
b. The Board of Directors may hold regular or special meetings
by telephone conference call, provided that any resolutions adopted shall be
recorded in writing within 3 days of such telephone conference, and written
ratification of such resolutions by the directors shall be provided within 10
days thereafter.
ARTICLE V
Committees of Board of Directors
The Board of Directors may, by resolution passed by a majority of the
whole Board, designate one or more committees, each committee to consist of two
or more of the directors of the Corporation, which, to the extent provided in
the resolution, shall have and may exercise the powers of the Board of Directors
in the management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
<PAGE>
The committees of the Board of Directors shall keep regular minutes of
their proceedings and report the same to the Board of Directors when required.
ARTICLE VI
Officers
Section 1. NUMBER. The Corporation shall have a President, one or more
Vice Presidents, a Secretary and a Treasurer, and such other officers, agents
and factors as may be deemed necessary. One person may hold any two offices
except the offices of President and Vice President and the offices of President
and Secretary.
Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATION. The officers
specifically designated in Section 1 of this Article VI shall be chosen annually
by the Board of Directors and shall hold office until their successors are
chosen and qualified. No officer need be a director.
Section 3. SUBORDINATE OFFICERS. The Board of Directors from time to
time may appoint other officers and agents, including one or more Assistant
Secretaries and one or more Assistant Treasurers, each of whom shall hold office
for such period, have such authority and perform such duties as are provided in
these By-Laws or as the Board of Directors from time to time may determine. The
Board of Directors may delegate to any office the power to appoint any such
subordinate officers, agents and factors and to prescribe their respective
authorities and duties.
Section 4. REMOVALS AND RESIGNATIONS. The Board of Directors may at any
meeting called for the purpose, by vote of a majority of their entire number,
remove from office any officer or agent of the Corporation, or any member of any
committee appointed by the Board of Directors.
The Board of Directors may at any meeting, by vote of a majority of the
directors present at such meeting, accept the resignation of any officer of the
Corporation.
Section 5. VACANCIES. Any vacancy occurring in the office of President,
Vice President, Secretary, Treasurer or any other office by death, resignation,
removal or otherwise shall be filled for the expired portion of the term in the
manner prescribed by these By-Laws for the regular election or appointment to
such office.
<PAGE>
Section 6. THE PRESIDENT. The President shall be the chief executive
officer of the Corporation and, subject to the direction and under the
supervision of the Board of Directors, shall have general charge of the
business, affairs and property of the Corporation, and control over its
officers, agents and employees. The President shall preside at all meetings of
the stockholders and of the Board of Directors at which he is present. The
President shall do and perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these By-Laws or by the
Board of Directors.
Section 7. THE VICE PRESIDENT. At the request of the President or in
the event of his absence or disability, the Vice President, or in case there
shall be more than one Vice President, the Vice President designated by the
President, or in the absence of such designation, the Vice President designated
by the Board of Directors, shall perform all the duties of the President, and
when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the President. Any Vice President shall perform such other
duties and may exercise such other powers as from time to time may be assigned
to him by these By-Laws or by the Board of Directors, or the President.
Section 8. THE SECRETARY. The Secretary shall:
a. Record all the proceedings of the meetings of the
Corporation and directors in a book to be kept for that
purpose;
b. Have charge of the stock ledger (which may, however, be
kept by any transfer agent or agents of the Corporation
under the direction of the Secretary), an original or
duplicate of which shall be kept at the principal office
or place of business of the Corporation in the State of
Colorado;
C. Prepare and make, at least ten (10) days before every election of directors,
a complete list of the stockholders entitled to vote at said election, arranged
in alphabetical order;
d. See that all notices are duly given in accordance with the provisions of
these By-Laws or as required by statute;
e. Be custodian of the records of the Corporation and the Board of Directors,
and of the seal of the Corporation, and see that the seal is affixed to all
stock certificates prior to their issuance and to all documents, the execution
of which on behalf of the Corporation under its seal have been duly authorized;
<PAGE>
f. See that all books, reports, statements, certificates and the other documents
and records required by law to be kept or filed are properly kept or filed; and
g. In general, perform all duties and have all powers incident to the office of
Secretary and perform such other duties and have such powers as from time to
time may be assigned to him by these By-Laws or by the Board of Directors or the
President.
Section 9. THE TREASURER. The Treasurer shall:
a. Have supervision over the funds, securities, receipts, and disbursements of
the Corporation;
b. Cause all monies and other valuable effects of the Corporation to be
deposited in its name and to its credit, in such depositories as shall be
selected by the Board of Directors or pursuant to authority conferred by the
Board of Directors.
c. Cause the funds of the Corporation to be disbursed by checks or drafts upon
the authorized depositories of the Corporation, when such disbursements shall
have been duly authorized;
d. Cause to be taken and preserved proper vouchers for all monies disbursed;
e. Cause to be kept at the principal office of the Corporation correct books of
account of all its business and transactions;
f. Render to the President or the Board of Directors, whenever requested, an
account of the financial condition of the Corporation and of his transactions as
Treasurer;
g. Be empowered to require from the officers or agents of the Corporation
reports or statements giving such information as he may desire with respect to
any and all financial transactions of the Corporation; and
h. In general, perform all duties and have all powers incident to the office of
Treasurer and perform such other duties and have such power as from time to time
may be assigned to him by these By-Laws or by the Board of Directors or
President.
Section 10. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Assistant
Secretaries and Assistant Treasurers shall have such duties as from time to time
may be assigned to them by the Board of Directors or the President.
<PAGE>
Section 11. SALARIES. The salaries of the officers of the Corporation
shall be fixed from time to time by the Board of Directors, except that the
Board of Directors may delegate to any person the power to fix the salaries or
other compensation of any officers or agents appointed in accordance with the
provisions of Section 3 of this Article VI. No officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
Corporation.
Section 12. SURETY BOND. The Board of Directors may secure the fidelity of
any or all of the officers of the Corporation by bond or otherwise.
ARTICLE VII
Execution of Instruments
Section 1. EXECUTION OF INSTRUMENTS GENERALLY. All documents or
writings of any nature shall be signed, executed, verified, acknowledged and
delivered by such officer or officers or such agent of the Corporation and in
such manner as the Board of Directors from time to time may determine.
Section 2. CHECKS, DRAFTS, ETC. All notes, drafts, acceptances, checks,
endorsements, and all evidence of indebtedness of the corporation whatsoever,
shall be signed by such officer or officers or such agent or agents of the
Corporation and in such manner as the Board of Directors from time to time may
determine. Endorsements for deposit to the credit of the Corporation in any of
its duly authorized depositories shall be made in such manner as the Board of
Directors from time to time may determine.
Section 3. PROXIES. Proxies to vote with respect to shares of stock of
other corporations owned by or standing in the name of the Corporation may be
executed and delivered from time to time on behalf of the Corporation by the
President or Vice President and the Secretary or Assistant Secretary of the
Corporation or by any other person or persons duly authorized by the Board of
Directors.
ARTICLE VIII
Section 1. CERTIFICATES OF STOCK. Every holder of stock in the Corporation
shall be entitled to have a certificate, signed in the name of the Corporation
by the Chairman or Vice President of the Board of Directors, the President or a
Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary
<PAGE>
or an Assistant Secretary of the Corporation, certifying the number of shares
owned by him in the Corporation; provided, however, that where such certificate
is signed by a transfer agent or an assistant transfer agent or by a transfer
clerk acting on behalf of the Corporation and a registrar, the signature of any
such Chairman of the Board of Directors, President, Vice President, Treasurer,
Assistant Treasurer, Secretary, or Assistant Secretary may be facsimile. In case
any officer or officers who shall have signed, or whole facsimile signature or
signatures shall have been used thereon, any such certificate or certificates
shall cease to be such officer or officers of the Corporation, whether because
of death, resignation or otherwise, before such certificate or certificates
shall have been delivered by the Corporation, such certificate or certificates
may nevertheless be adopted by the Corporation and be issued and delivered as
though the person or persons who signed such certificate or certificates, or
whose facsimile signature or signatures shall have been used thereon, had not
ceased to be such officer or officers of the Corporation, and any such delivery
shall be regarded as an adoption by the Corporation of such certificate or
certificates.
Certificates of stock shall be in such form as shall, in conformity to
law, be prescribed from time to time by the Board of Directors.
Section 2. TRANSFER OF STOCK. Shares of stock of the Corporation shall only
be transferred on the books of the Corporation by the holder of record thereof
or by his attorney duly authorized in writing, upon surrender to the Corporation
of the certificates for such shares endorsed by the appropriate person or
persons, with such evidence of the authenticity of such endorsement, transfer,
authorization and other matters as the Corporation may reasonably require, and
accompanied by all necessary stock transfer tax stamps. In that event, it shall
be the duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction on its books.
Section 3. RIGHTS OF CORPORATION WITH RESPECT TO REGISTERED OWNERS.
Prior to the surrender to the Corporation of the certificates for shares of
stock with a request to record the transfer of such shares, the Corporation may
treat the registered owner as the person entitled to receive dividends, to vote,
to receive notifications, and otherwise to exercise all the rights and powers of
an owner.
Section 4. CLOSING STOCK TRANSFER BOOK. The Board of Directors may close
the Stock Transfer Book of the Corporation for a period not exceeding fifty (50)
days preceding the date of any meeting of the stockholders or the date for
<PAGE>
payment of any dividend or the date for the allotment of rights or the date when
any change or conversion or exchange of capital stock shall go into effect or
for a period of not exceeding (50) days in connection with obtaining the consent
of stockholders for any purpose. However, in lieu of closing the Stock Transfer
Book, the Board of Directors may fix in advance a date, not exceeding fifty (50)
days preceding the date of any meeting of stockholders or the date for the
payment of any dividend or the date for the allotment of rights, or the date
when any change or conversion or exchange of capital stock shall go into effect,
or a date in connection with obtaining such consent, as a record date for the
determination of the stockholders entitled to notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights or to exercise the rights in
respect of any such change, conversion or exchange of capital stock, or to give
such consent, and in such case such stockholders, and only such stockholders as
shall be stockholders of record on the date so fixed shall be entitled to such
notice of, and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid.
Section 5. LOST, DESTROYED AND STOLEN CERTIFICATES. Where the owner of
a Certificate for shares claims that such certificate has been lost, destroyed
or wrongfully taken, the Corporation shall issue a new certificate in place of
the original certificate if the owner (a) so requests before the Corporation has
notice that the shares have been acquired by a bona fide purchaser; (b) files
with the Corporation a sufficient indemnity bond; and (c) satisfies such other
reasonable requirements, including evidence of such loss, destruction, or
wrongful taking, as may be imposed by the Corporation.
ARTICLE IX
Dividends
Section 1. SOURCES OF DIVIDENDS. The directors of the Corporation,
subject to any restrictions contained in the statutes and Certificate of
Incorporation, may declare and pay dividends upon the shares of the capital
stock of the Corporation either (a) out of its new assets in excess of its
capital, or (b) in case there shall be no such excess, out of its net profits
for the fiscal year then current or the current and preceding fiscal year.
<PAGE>
Section 2. RESERVES. Before the payment of any dividend, the directors
of the Corporation may set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper purpose, and the
directors may abolish any such reserve in the manner in which it was created.
Section 3. RELIANCE ON CORPORATE RECORDS. A director shall be fully
protected in relying in good faith upon the books of account of the Corporation
or statements prepared by any of its officials as to the value and amount of the
assets, liabilities and net profits of the Corporation, or any other facts
pertinent to the existence and amount of surplus or other funds from which
dividends might properly be declared and paid.
Section 4. MANNER OF PAYMENT. Dividends may be paid in cash, in property,
or in shares of the capital stock of the Corporation at par.
ARTICLE X
Seal
The Corporate seal, subject to alteration by the Board of Directors,
shall be in the form of a circle and shall bear the name of the Corporation and
shall indicate its formation under the laws of the State of Colorado. Such seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
<PAGE>
ARTICLE XI
Fiscal Year
Except as from time to time otherwise provided by the Board of
Directors, the fiscal year of the Corporation shall be the calendar year.
ARTICLE XII
Amendments
Section 1. BY THE STOCKHOLDERS. Except as otherwise provided in the
Certificate of Incorporation or in these By-Laws, these By-Laws may be amended
or repealed, or new By-Laws may be made and adopted by a majority vote of all
the stock of the Corporation issued and outstanding and entitled to vote at any
annual or special meeting of the stockholders, provided that notice of intention
to amend shall have been contained in the notice of meeting.
Section 2. BY THE DIRECTORS. Except as otherwise provided in the
Certificate of Incorporation or in these By-Laws, these By-Laws, including
amendments adopted by the stockholders, may be amended or repealed by a majority
vote of the whole Board of Directors at any regular or special meeting of the
Board, provided that the stockholders may from time to time specify particular
provisions of the By-Laws which shall not be amended by the Board of Directors.
ARTICLE XIII
Indemnification
The Board of Directors hereby adopt the provision of C.R.S. 7-3-101 S
(as it may be amended from time to time) relating to Indemnification and in
corporate such provisions by this reference as fully as if set forth herein.
EXHIBIT 3.3
ARTICLES OF INCORPORATION OF
WORLD WIDE VIDEO, INC.
(VIRGINIA)
<PAGE>
ARTICLES OF INCORPORATION
OF
WORLD WIDE VIDEO, INC.
The undersigned incorporator desires to form a stock corporation under the
provisions of Chapter 9 of Title 13.1 of the 1950 Code of Virginia, as amended,
and to that end sets forth the following:
1. The name of the corporation is World Wide Video, Inc.
2. The corporation is authorized to issue one class of common stock of
5,000 shares.
3. The address of the initial registered office of the corporation is
14327 Smith Road, Culpeper, Virginia 22701. The name of the County in which the
initial registered office is located is Culpeper County. The name of its initial
registered agent is John G. Perry, who is a resident of Virginia, whose business
office is the same as the registered office of the corporation, and who is a
director of the corporation.
4. The Board of Directors of the corporation shall consist of two
members until the number is changed by amendment to the bylaws of the
corporation.
5. The initial members of the Board of Directors are John G. Perry and
Frank A. Maas.
In witness whereof, the undersigned executes these Articles of
Incorporation as incorporator this 14th day of July, 1997.
/s/ W. M. Scaife, Jr.
--------------------------------
W. M. SCAIFE, JR., Incorporator
<PAGE>
COMMONWEATH OF VIRGINIA
STATE CORPORATION COMMISSION
Richmond July 16, 1997
This is to Certify that the certificate of incorporation of
WORLD WIDE VIDEO, INC.
Was this day issued and admitted to record in this office and that the said
corporation is authorized to transact its business subject to all Virginia laws
applicable to the corporation and its business. Effective date: July 16, 1997
State Corporation Commission
-----------------------------------
Clerk of the Commission
EXHIBIT 3.4
BYLAWS OF WORLD WIDE VIDEO, INC.
(VIRGINIA)
<PAGE>
BY-LAWS
OF
WORLD WIDE VIDEO, INC.
ARTICLE I - STOCKHOLDERS' MEETINGS
Section 1. Annual Meeting: The annual meeting of the stockholders shall
be held each year, on such business day and at such place and hour as may be
provided in the notice of meeting, for the purpose of election of Directors and
for the transaction of such other business as may properly come before the
meeting. Notice of the time and place of the annual meeting of stockholders
shall be given by mailing a notice thereof to each stockholder of record at
least ten days and not more than sixty days prior to said meeting, postage
prepaid, addressed to his last known post office address.
Section 2. Other Meetings: Special meetings of stockholders may be
called by the Chairman of the Board of Directors, the President or by the Board
of Directors. Notice of such special meetings shall be given in the same manner
as is provided in the case of annual meetings and such meetings shall be at such
place as may be provided in the notice of the meeting. Notwithstanding the
foregoing, notice of a meeting of the stockholders to act on an amendment to the
Articles of Incorporation, a plan of merger or share exchange, a proposed sale,
lease, exchange or disposition of all or substantially all of the corporation's
property or the dissolution of the corporation shall be given not less than
twenty-five calendar days before the date of such meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
<PAGE>
postage prepaid, addressed to the stockholder at his address as it appears on
the stock transfer books of the corporation at the close of business on the
record date established by resolution of the Board of Directors for such meeting
pursuant to Section 3 of this Article.
Section 3. Fixing the Record Date: The stockholders entitled to notice
of or to vote at any meeting of the stockholders, or the stockholders entitled
to receive payment of a dividend are the stockholders of record at the close of
business on the date before the date on which notice of the meeting is mailed or
the date on which the resolution of the Board of Directors declaring such
dividend is adopted, as the case may be.
Section 4. Quorum and Voting: Unless otherwise provided by law, a
majority of the outstanding shares entitled to vote represented in person or by
proxy shall constitute a quorum at a meeting of stockholders and if a quorum is
present, the affirmative vote of the majority of the shares represented at the
meeting and entitled to vote on the subject matter shall, unless otherwise
provided by law, be the act of the stockholders. Each stockholder shall be
entitled to one vote in person, or by proxy, for each share entitled to vote
standing in his name on the books of the Corporation. Cumulative voting by
stockholders at meetings or for any other purpose is prohibited.
Section 5. Conduct of Meetings: The President shall preside over all
meetings of the stockholders. The Secretary of the Corporation shall act as
Secretary of all the meetings if he is present and if not present, the Chairman
<PAGE>
of the meeting shall appoint a Secretary of the meeting. The stockholders may
take actions without meetings pursuant to ss.13.1-657 of the Code of Virginia.
ARTICLE II - BOARD OF DIRECTORS
Section 1. Number, Election and Terms: The management and control of
the business of the Corporation shall be vested in a Board of Directors,
consisting of one person. The number of Directors may be increased or decreased
from time to time by amendment of these By-Laws adopted by the stockholders. The
Board of Directors shall be elected at the annual meeting of the stockholders
and any special meeting held in lieu thereof. Directors shall hold office until
removed, or until the next annual meeting of the stockholders, or until their
successors are elected.
Section 2. Removal and Vacancies: The stockholders at any meeting, by a
vote of the holders of a majority of all the shares of Common Stock at the time
outstanding and having voting power, may remove any Director and fill the
vacancy. Any vacancy in the Board of Directors caused by resignation, death or
otherwise, may be filled by the remaining Directors at a special meeting called
for that purpose, or by the stockholders at any regular or special meeting held
prior to the filling of such vacancy by the Board as above provided. The person
so chosen as Director shall hold office until removed, or until the next annual
meeting of stockholders, or until his successor is elected.
<PAGE>
Section 3. Quorum: A majority of the number of Directors shall constitute a
quorum for the transaction of business. The act of the majority of the Directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
Section 4. Meetings and Notices: Meetings of the Board of Directors
shall be held at times fixed by resolution of the Board, or upon the call of the
President, or upon the call of a majority of the members of the Board. Notice of
any meeting not held at a time fixed by a resolution of the Board shall be given
to each Director at least 24 hours before the meeting by delivering such notice
to his residence or business address. Any such notice shall contain the time and
place of the meeting, but need not contain either the business to be transacted
or the purpose of any meeting. Meetings of the Board of Directors may be held
within or without the Commonwealth of Virginia, and meetings may be held without
notice if all the Directors are present or those not present waive notice before
or after the meeting. The Board of Directors may take actions without meetings
pursuant to ss.13.1-685 of the Code of Virginia.
ARTICLE III - OFFICERS
Section 1. Election, Removal and Duties: The Board of Directors,
promptly after its election each year, shall elect a President (who shall be a
Director) and shall also elect a Secretary, who nay be the same person as the
President, and may elect or appoint a Treasurer and one or more Vice-Presidents
or such other officers as it may deem proper. Any officer may hold more than one
<PAGE>
office. However, if the corporation has only one stockholder, such stockholder
may hold all offices. All officers shall serve for a term of one year and until
their respective successors are elected, but any officer may be removed
summarily with or without cause at any time by the vote of the majority of all
of the Directors. Vacancies among the officers shall be filled by the Directors.
The officers of the Corporation shall have such duties as generally pertain to
their respective offices and as are required by law as well as such powers and
duties as from time to time may be delegated to them by the Board of Directors.
ARTICLE IV - NOTICES
Section 1. Notice: Whenever the provisions of law, or of these By-Laws
require notice to be given to any stockholder, director or officer, such notice
shall be given in manner prescribed by said By-Laws, or in the absence of
By-Laws in such manner as prescribed by the laws of the State of Virginia.
Section 2. Waiver: A waiver of any notice in writing, signed by a
stockholder, director or officer, whether before or after the time stated in
said waiver for holding a meeting, shall be deemed equivalent to a notice
required to be given to any stockholder, director or officer.
ARTICLE V - STOCK CERTIFICATES
Section 1. Form: Certificates of stock shall be issued in numerical order
in such form as may be approved by the Board of Directors, and each stockholder
shall be entitled to a certificate or certificate s signed by the President and
<PAGE>
by the Secretary with the corporate seal impressed upon them, certifying to the
number of shares owned by him.
Section 2. Transfers: All transfers of stock of the Corporation shall be
made upon its books by surrender of the certificate for the shares transferred
accompanied by an assignment in writing by the holder.
Section 3. Replacements: In case of the loss, mutilation, or destruction of
a certificate of stock, a duplicate certificate may be issued upon such terms
not in conflict with law as the Board of Directors may prescribe.
Section 4. Registered Stockholders: Registered stockholders only shall
be entitled to be treated by the Corporation as the holders in fact of the stock
standing in their respective names, and the Corporation shall not be bound to
recognize any equitable or other claim to or interest in any share on the part
of any other person, whether or not it shall have express or other notice
thereof, except as expressly provided by these By-Laws or by the laws of
Virginia.
Section 5. Regulations: The Board of Directors shall have the power and
authority to make all such rules and regulations as it may deem expedient
concerning the issue, transfer, conversion and registration of certificates for
shares of the capital stock of the Corporation, not inconsistent with the laws
of Virginia, the Articles of Incorporation and these By-Laws.
<PAGE>
ARTICLE VI - SEAL
Section 1. Seal: The Corporate Seal of the Corporation shall be of such
size, shape, design and shall bear such words, numbers and inscription as may be
determined and adopted by resolution of the Board of Directors.
ARTICLE VII - AMENDMENT OF BY-LAWS
Section 1. Amendments: The power to alter, amend or repeal the By-Laws or
adopt new By-Laws shall be vested in the Board of Directors except as stated in
Article II, Section 1.
Section 2. Vote by Directors: Any alteration, amendment or repeal of
these By-Laws or adoption of new By-Laws by the Board of Directors shall be by a
majority of the whole Board of Directors at any regular or special meeting.
ARTICLE VIII - CHECKS, NOTES AND DRAFTS
Section 1. Signatures: Checks, notes, drafts and other orders for the
payment of money shall be signed by such person or persons as the Board of
Directors from time, to time may authorize. The signature of any such person may
be a facsimile when authorized by the Board of Directors.
ARTICLE IX - INDEMNIFICATION
Section 1. Indemnification: Each person now or hereafter a director or
Officer of the Corporation (and his heirs, executors and administrators) shall
be indemnified by the corporation against all claims, liabilities, judgments,
settlements, costs and expenses, including all attorney's fees, imposed upon or
<PAGE>
reasonably incurred by him in connection with or resulting from any action,
suit, proceeding or claim to which he is or may be made a party, by reason of
his being or having been a director or officer of the Corporation (whether or
not a director or officer at the time such costs or expenses are incurred by or
imposed upon him), except in relation to matters as to which he shall have been
finally adjudged in such action, suit or proceeding to be liable for gross
negligence or willful misconduct in the performance of his duties as such
director or officer. In the event of any other judgment against such director or
officer or in the event of a settlement, the indemnification shall be made only
if the Corporation shall be advised, in the case none of the persons involved
shall be or have been a director, by the Board of Directors of the Corporation,
and otherwise by independent counsel to be appointed by the Board of Directors,
that in its or his opinion such wilful misconduct in the performance of his
duty, and in the event of a settlement, that such settlement was or is in the
best interest of the Corporation. If the determination is to be made by the
Board of Directors, it may rely as to all questions of law on the advice of
independent counsel. Such right of indemnification shall not be deemed exclusive
of any rights to which he may be entitled under any ByLaw, agreement, vote of
shareholders, or otherwise.
Date: August 4, 1997 /s/ John G. Perry
------------------ --------------------------------
Director
Date: August 1, 1997 /s/ Frank A. Maas
------------------ --------------------------------
Director
ATTEST:
/s/ Frank A. Maas
- ----------------------------
Secretary
EXHIBIT 10.1
AGREEMENT WITH DATA POWER, INC.
<PAGE>
LICENSE AGREEMENT WORLD WIDE VIDEO, INC. DATAPOWER INC.
LICENSE AGREEMENT
This AGREEMENT is made this 31st day of August, 1998 between World Wide
Video, Inc. (WWV) a Colorado Corporation, (the "Company") having a place of
business at 102A North Main Street, Culpeper, VA 22701 and DataPower
("DataPower") Power"), a Colorado Corporation, (the "Promisor") of 101-1425 West
Pender Street, Vancouver, B. C. Canada V6G2S3.
WITNESSETH:
WHEREAS, WWV designs and manufactures leading edge technology and
products for the Video Telephony market as described in WWV Confidential
Business Plan dated June 5, 1997. (the "technology"); and
WHEREAS, DataPower desires to acquire the exclusive license to
manufacture, use, market and distribute the technology from WWV in accordance
with the terms and conditions of this Agreement;
NOW THEREFORE, in consideration of the premises, and the mutual
covenants and agreements set forth herein, and for good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of License.
(a) Subject to the terms and conditions set forth in this Agreement,
WWV hereby grants to DataPower the exclusive license, right and privilege to
manufacture, use, market and distribute the technology during the term hereof in
the Country of Canada. Furthermore, WWV grants to DataPower the rights of first
refusal for the exclusive license to manufacture, use, market and distribute the
technology for the regions of South Africa and Australia / New Zealand.
(b) WWV shall furnish to DataPower the technology's, copies of all
patents, registered designs, schematics, manufacturing information and drawings,
and marketing information including any previous sales information and current
sales information. All of the above shall be kept confidential by DataPower. Any
Breach of this clause shall be a reason to terminate this agreement.
(c) WWV shall cooperate fully with DataPower in its endeavors to
manufacture, use and market the technology in its exclusive territories.
<PAGE>
DataPower agrees to reimburse all reasonable costs connected with WWV support,
which will be agreed in writing by DataPower in conjunction with WWV
2. Term. Unless earlier terminated in accordance with the terms hereof, this
Agreement shall continue for the period commencing the date hereof and ending
March 15, 2008 and extend the term by mutual consent thereafter.
3. Consideration.
(a) Convertible Debenture. DataPower to date advanced $50,000 by way of
bridge finance to WWV. Upon delivery of 2 working prototypes DataPower,
the Debenture will be converted into 250,000 free trading shares of
WWV. Furthermore, WWV confirms that the company is in the process of
filing for approval to trade on the OTC-BB.
(b) Option to Purchase Additional Shares. WWV agrees to provide
DataPower an option to purchase an additional 500,000 free trading
shares for payment of $150,000 if such payment is made by September 23,
1998 or 15 business days after delivery of working prototypes,
whichever shall be the later.
Upon the signing of this License Agreement DataPower agrees that this
payment is in addition and not a part of the Royalty payments described
in number four (4) below. Further, WWV agrees to return, in full,
without interest, the $50,000 loan to secure the rights if WWV cannot
deliver working a United State's version of a commercial product to
DataPower within three months (3) of the signing of this agreement.
4. Royalties. Said payment shall be made quarterly within sixty days of the end
of each quarter. The royalty payments of 5% on wholesale sales of WWV's
products. Attached to the payment shall be the proper accounting, which may be
audited by WWV.
5. USA Marketing Rights. In consideration of the 250,000 of 144 shares in
DataPower, WWV grants DataPower the non-exclusive rights to market to the US
Government Military Bases.
6. First right to acquire the exclusive rights for South Africa. WWV agrees to
provide DataPower with the first rights to acquire the exclusive rights for
manufacturing, use, marketing and distribution of WWV products and technology
<PAGE>
for payment of $25,000 on or before December 30, 1998 and royalty payments of 5%
on wholesale sales of WWV's products.
7. First right to acquire the exclusive rights for Australia and New Zealand.
WWV agrees to provide DataPower with the first rights to acquire the exclusive
rights for manufacturing, use, marketing and distribution of WWV products and
technology for payment of $50,000 on or before January 30, 1999, and royalty
payments of 5% on wholesale sales revenues of WWV's products.
8. Termination.
(a) This Agreement shall terminate upon written notice at the
discretion of either party hereto in the event the other party shall
voluntarily or involuntarily enter bankruptcy, reorganization,
arrangement, receivership or any similar proceedings or declare itself
to be insolvent or bankrupt. If either party is involved in any of the
foregoing events, such party shall immediately notify the other in
writing of the occurrence of such event.
(b) Upon expiration or termination of this Agreement for any reason,
DataPower shall cease and terminate the use of the technology.
(c) Termination of this Agreement for any reason shall not release
either party of any liability accrued through the date of such
termination, nor effect in any way the survival of any claim arising
from any breach of any right, duty or obligation of any party hereto
accrued hereunder as of the date of such termination.
9. Indemnification. WWV agrees, for WWV's products produced by WWV, to
indemnify, defend and hold harmless DataPower from and against any and all
claims, losses, suits, damages, costs and liabilities relating to or arising
from its manufacture, distribution, use or sale of products using the technology
or the breach by WWV of any of its warranties or representations contained
herein. WWV will not be responsible for any changes made by DataPower to the
provided U.S. based product manufacturing information to meet jurisdictional,
territorial and other requirements.
9. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado as applied to residents of the
State of Colorado without regard to conflict of law principles.
<PAGE>
(b) WWV represents and warrants to DataPower that (i) WWV is the owner
of the technology, (ii) WWV has the right and authority to grant to
DataPower the license to use the technology in the manner provided for
herein (iii) the grant by WWV of the license provided for herein-does
not violate or conflict with any agreement, instrument or commitment,
or any law, rule, regulation, court order or proceeding, to which WWV
is a party or is bound.
11. Prior Agreements. This Agreement supersedes all prior Agreements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
LICENSOR:
WORLD WIDE VIDEO, Inc.
- -----------------------------
John G. Perry, President
LICENSEE:
DataPower, Inc.
- ------------------------------
Brian Harris, President
EXHIBIT 10.2
SHARE EXCHANGE AGREEMENT
<PAGE>
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT, made this 12th day of May, 1998 by and between Mr. John G.
Perry, an individual and Frank A. Maas, an individual being the sole
shareholders of World Wide Video, Inc., a Virginia corporation having its
principal offices at 14327 Smith Road, Culpeper, Virginia on the one hand
(hereinafter collectively referred to as the "Sellers"), and World Wide Video,
Inc. a Colorado corporation, having it's principal offices at 14327 Smith Road,
Culpeper, Virginia (hereinafter the "Buyer"),on the other hand. The Sellers and
Buyer are sometimes herein referred to as "Parties" and/or "Party."
R E C I T A L S
WHEREAS, Sellers are the owners and holders of all the issued and outstanding
capital stock of World Wide Video, Inc. a Virginia corporation (the "Company");
and
WHEREAS, Sellers are willing to sell, and Buyer is willing to buy, all of the
Sellers' shares in the Company for shares in the Buyer corporation;
IT, IS, THEREFORE, MUTUALLY AGREED, in consideration of the covenants and
representations herein contained:
Section 1. Agreement to Effect Tax-Free Merger.
Sellers and Buyer will adopt a plan of reorganization pursuant to the provisions
of the Internal Revenue Code, Section 368(a)(1)(B), and will take all necessary
steps to effectuate such a plan as soon as possible.
Section 2. Sellers' Agreement to Transfer Stock.
Sellers will transfer to the Buyer Two Hundred (200) shares of the Company's
Common Stock, said shares represent all of the issued and outstanding shares of
the Company.
Section 3. Buyer's Agreement to Deliver Stock.
For each share of stock of the Company so transferred, Buyer will issue and
deliver to each Seller individually fifty thousand (50,000) shares of fully paid
and nonassessable common stock in Buyer, evidenced by certificates of stock in
full compliance with all applicable laws, rules and regulations (including the
requirements of transfer agents, registrars, and the Stock Exchange on which the
shares of the Buyer will be listed for trading).
<PAGE>
Section 4. Warranties of Sellers.
Sellers hereby represent and warrant jointly and severally that:
a. The Company is duly organized and in good standing under the laws of
the State of Virginia; has the corporate powers to carry on its business as now
conducted; is duly qualified as a foreign corporation in good standing in each
state where such qualification is necessary; and has no subsidiaries nor any
interest in any firm, partnership or other corporation.
b. Copies of the Articles of Incorporation of the Company all
amendments thereto, the Company's Bylaws and all its minutes are contained in
its minute books as provided in Schedule "A" annexed hereto are correct.
c. The shares of the Company to be transferred hereunder constitute all
of its outstanding shares and it has issued and will issue no other shares.
There are no open options, contracts, calls, commitments or demands of any kind
relating to authorized but unissued stock of the Company. The shares of the
Company to be transferred hereunder are fully paid and nonassessable, free and
clear of all encumbrances, liens, claims, equities and liabilities of every
nature and Sellers will convey clear and unencumbered title thereto to the
Buyer.
d. The financial statements in Schedule "B" annexed hereto (and made
part hereof) all other financial statements prepared by the Company audits books
of account and records are true and correct. They have been prepared in
conformity with generally accepted accounting principles, correctly reflect
valid transactions and values and present a true and correct statement as of
their respective dates of the Company's financial condition. The Company has no
liabilities or obligations except those disclosed on the financial statements in
Schedule "B" those incurred in the normal and regular conduct of its business
since the date of said financial statements and those set forth in the written
contracts listed in Schedule "C" annexed hereto, the originals of which have
been exhibited to Buyer and initialed by both sides. There is no power of
attorney for any purpose now in force given by the Company to any person or
organization.
e. All assets set forth on the books of the Company are in existence,
in possession of the Company and are located at 14327 Smith Road, Culpeper,
Virginia. The Company has clear and unencumbered title to all of its property
including, without limitation, the property listed in Schedule "D" annexed
hereto, except for the encumbrances set forth after the description of each item
of property in said Schedule. All said assets are in good operating condition
and repair and in compliance with all zoning and building laws and all state and
<PAGE>
local ordinances; and there are no violations pending with respect thereto. All
accounts receivable and notes receivable of the Company are current and
collectible except to the extent that a reserve for bad debts has been
established on its books for such accounts and notes. The Company's patents,
patent applications, copyrights, trademarks and trade names are valid and in
good standing both in the United States and abroad.
f. All the parties with whom the Company has contractual arrangements
are complying therewith and none of them are in default; nor is the Company in
default under any contract or obligation. The Company has no purchase
commitments or contracts to be performed by it except as made in the ordinary
course of business and as disclosed to Buyer and except those set forth in
Schedule "C". No such commitments are in excess of the normal, ordinary and
usual requirements of the business of the Company or at a price in excess of
current market. No contract imposes a liability on the Company in excess of One
Hundred Thousand Dollars ($100,000.00 ) except those listed in Schedule "C". The
Company has no collective bargaining agreement with its employees except as set
forth in Schedule "C." The Company has no deferred compensation, bonus, profit
sharing, pension or retirement arrangement of any kind; nor is it now paying any
pension, deferred compensation or retirement allowance except as set forth in
Schedule "Ell annexed hereto. The Company has no contracts for the sale,
merchandising or distribution of its products except such as it may cancel on
notice of Thirty (30) days to the other contracting party.
g. Since the date of the balance sheet set forth in Schedule "B" there
has not been:
(i) Any event, condition or change materially and adversely
affecting the Company's business, including its relations with
its employees or any labor union;
(ii) Any loss, damage or destruction of the Company's property
except items covered by insurance for which claims are pending
as described in Schedule F annexed hereto;
(iii) Any declaration or payment of dividend or other
distribution with respect to the Company's stock nor has it
made any payment for redemption, purchase or acquisition of
its stock or agreed to do so; or
(iv) Any general increase in compensation or any declaration
or payment of any bonus to the Company's directors officers,
employees or agents, or any increase to any individual
employee exceeding Ten Thousand Dollars ($10,000) per year.
<PAGE>
h. The only directors and officers of the Company are:
Director and President: John G. Perry
Director, Vice-President
and Secretary-Treasurer: Frank A. Maas
The Company has no officer or other employee to whom it has paid more than ten
thousand Dollars ($10,000.00) during the year preceding the date of this
Agreement.
i. All income and other taxes of the Company have been paid or adequate
reserves therefor have been set up on the books of the Company. The
Federal income tax returns of all years to and including the calendar
year 1998 and the results of such audits are properly reflected in the
financial statements set forth in schedule "B". No litigation,
governmental investigation or proceeding is pending, threatened or in
prospect against the Company or with respect to any of the shares to be
transferred hereunder; and Sellers have no knowledge of any action
pending or threatened to change the zoning or building ordinances
affecting the Company's real property or any threatened or pending
condemnation of such property. The Company has taken all corporate
actions and filed all reports and returns required of it by law; and
has complied with all applicable state, Federal and local laws,
ordinances and regulations.
j. Sellers, the Company, its directors, officers, agents and employees
will disclose to Buyer all information known to them with respect to
the operations and finances of the Company, including, without
limitation, all information required to determine the tax basis of the
Company's property or necessary in any way to any tax liability of the
Company; and to that end Buyer may inspect, copy and reproduce any of
the Company's tax returns, accounting and other records. The statements
made and information given to Buyer relating to the transaction covered
by this Agreement are true and accurate and no material fact has been
withheld from Buyer; and Sellers have no knowledge of any development
or threatened developments that would have a materially adverse effect
on the Company's business.
Section 5. Restrictive Covenant.
For a period of three (3) years from date of closing the Seller will, without
the consent of Buyer, enter the employ of any person, firm or corporation
engaged in a business in the State of Colorado in competition with the present
business of the Company; nor will any of them engage or assist any one else to
<PAGE>
engage, directly or indirectly, as principal, agent, employee, shareholder,
officer or otherwise in any such business. For a breach of this covenant, Buyer
shall have the right to an injunction and damages.
Section 6. Stock Transfer Restriction on Shares Acquired by Sellers.
For a period of three (3) years from date of closing the Seller will not sell,
assign, or transfer or otherwise dispose of the shares of the Buyer corporation
which he will acquire hereunder except to trusts for the benefit of or as gifts
to members of the immediate family of any of the Sellers, or as security for a
loan, provided that the transferee or pledgee of such shares agrees by prior
written agreement to be bound by the provisions of this Section 6. Such
agreement must be examined and approved by Buyer or its counsel. As liquidated
damages for breach of this Section 6, sellers will pay Buyer fifty cents ($0,50)
per share for every share actually sold within said three (3) year period.
Section 7. Buyer's Right to Deliver Converted Stock.
If between the date hereof and the closing, there is a change in the condition,
capital or capital structure of the Buyer by virtue of which its common stock is
converted into other shares of its own or of another corporation, delivery of
such converted shares equivalent to the number of shares of common stock due to
the Sellers hereunder, shall be good delivery and due performance by Buyer under
this Agreement.
Section 8. Cooperation.
Sellers will deliver to Buyer, at and after closing, all orders, checks,
communications and information received by them or the Company relating to or
belonging to the Company. Sellers will execute upon request and deliver all
instruments, papers or documents and do all other acts that may be necessary or
desirable in the opinion of Buyer's counsel to perfect or record any right,
title or interest relating to the property of the Company or to the shares to be
transferred to the Buyer hereunder; or to aid in any legal proceeding relating
to any such matter. Unless the need therefor is due to any default of Sellers,
the expense involved shall be borne by Buyer.
Section 9. Warranties to Survive Closing.
The terms, conditions, warranties and representations of this Agreement shall
survive the closing. Buyer, however, shall be under a duty to make prompt
investigations; and, except for breaches of the restrictions set forth above in
<PAGE>
Sections 5 and 6, all claims which are not made within two (2) years of closing
shall be deemed waived.
Section 10. Buyer's Right to Rescind.
If any warranty or representation made herein by Sellers is breached, is untrue,
or if full information has not been disclosed by them to Buyer about the
Company, Buyer may rescind this Agreement in addition to any other legal
remedies that it may have. Notice of rescission shall be given to sellers in
writing. Within ten (10) days after receipt of such notice, Sellers shall return
to Buyer all consideration received by them under this Agreement and promptly
thereafter, Buyer will return to them the shares of stock in the Company
transferred to Buyer.
Section 11. Notices.
All notices shall be in writing and shall be served by registered or certified
mail directed to the addresses of the parties as herein above set forth. By due
notice any party may designate a different address.
Section 12. Entire Agreement.
This Agreement constitutes the entire contract of the parties concerning the
subject matter hereof and supersedes all previous negotiations, understandings
and agreements of the parties with reference hereto. Any change, termination or
attempted waiver of any of the provisions hereof shall be binding only if made
in writing and as regards the Buyer only if signed by an officer thereof.
Section 13. Counterparts.
Separate counterparts of this Agreement may be signed and together they shall
constitute one agreement.
Section 14. Broker and Broker's Commission.
Sellers represent and warrant that no Broker, finder, agent or similar
intermediary has acted for or on behalf of the Seller in connection with this
Agreement or the transactions contemplated hereby, and no broker, finder, agent
or similar intermediary is entitled to any broker's, finder's or similar fee or
other commission in connection therewith based on any agreement, arrangement or
understanding with the Seller or any action taken by the Seller.
<PAGE>
Section 15. Interim Provisions.
During the period between the execution of this Agreement and the closing:
a. Sellers will see to it that the Company will continue business in its normal
manner and among other things keep its insurance in effect, comply with all laws
and use its best efforts to retain the services and goodwill of its personnel
and good relations with its suppliers, dealers and customers.
b. Sellers will obtain such clearances as may be required from the Department of
Justice, Federal Trade Commission, Internal Revenue Service and other
governmental agencies as may be necessary; and will have the Buyer added as an
insured to the Company's existing insurance policies.
c. Sellers shall be obligated to prevent the Company from taking any
extraordinary action. Specifically, and without limitation, no increases or
bonuses shall be given to executives; no long-term contracts shall be entered
into; no declarations or dividends, amendments to the articles of incorporation
of bylaws, dispositions of property, creation of mortgages, liens or debts,
large capital outlays, redemption's of stock, mergers or consolidations, shall
be made.
d. Buyer shall have the option to terminate this contract if any of the
provisions of paragraph (b) or (c) immediately preceding are not complied with;
or if any injunction is issued against the transaction herein set forth; or if
any substantially adverse change occurs in the Company's business, in labor or
legislative matters affecting the Company, or in general business conditions; or
if there is substantial destruction, damage or loss of the Company's property.
Section 16. Closing.
The closing of this transaction shall take place at 10:00 AM on May 15th, 1998
or at such earlier date as the parties stipulate in writing.
At the closing Sellers shall deliver to Buyer:
Certificates for the stock described in Section 2 hereof, indorsed in blank with
all necessary documentary transfer tax stamps affixed and with signatures
guaranteed by a bank or trust company.
b. Resignations of directors and officers of the Company.
<PAGE>
c. General releases by the Sellers of all claims that they may have to the date
of closing against the Company or the Buyer or the directors, officers, agents
and employees of either of them.
d. Certified copies of consent of the shareholders of the Company to this
Agreement and of the resolution of its board of directors in favor of the
Agreement, if such consent or resolution is required by law or by the Company's
articles of incorporation or its bylaws.
e. The complete and correct corporate minute books, articles of incorporation,
bylaws and stock transfer books of the Company and its books of account,
records, correspondence, files, documents and all other papers necessary to
manage and operate the affairs of the Company.
f. All deeds, bills of sale, insurance policies, contracts, mortgages, leases,
assignments and all other documents pertaining to any property owned by the
Company or used in its operations; and assignments to the Company duly executed
by Sellers of all inventions, patents, patent applications, copyrights,
formulas, manufacturing methods, trade secrets and trademarks owned by the
Sellers or in which they may have any interest, relating to any product or
process used by the Company in its business.
g. Copies of resolutions of the board of directors of the Company certified by
its Secretary in the form specified by the banks or trust companies with which
the Company does business, revoking all prior authorizations and authorizing
only the following persons to sign checks, to deal with the bank accounts and to
have access to the safe deposit box of the Company.
h. Copies of the minutes of the board of directors of the company (and office
shareholders, if necessary), certified by its Secretary, electing officers and
directors of the company and appointing the following as its officers:
President, John G. Perry
Vice-President,
Secretary-Treasurer; Frank A. Maas
i. Agreements in writing by each of the present and previous officers and
directors of the Company that he or she will disclose to Buyer all trade secrets
relating to the products of, or processes used by, the Company; that he or she
will not by himself or herself or with others, use such trade secrets directly
or indirectly; and that he or she will transfer and assign to the Company all
inventions, patents, copyrights and patent applications in which he or she has
<PAGE>
any right, title or interest relating to any product of, or process used by, the
Company or relating to its business.
j. The written opinion of counsel for the Company that:
i. The company is duly organized and existing as a corporation in good
standing under the laws of the State of Virginia and duly qualified as
a foreign corporation in good standing in each state where such
qualification is necessary.
ii. All corporate and other proceedings required of the company have
been duly and properly taken; all reports and returns required to be
filed by it have been duly filed; and it has complied with all
applicable state, federal and local laws, to the best of counsel's
knowledge.
iii. Counsel has no knowledge of any claim against the Company or of
any litigation pending or threatened or in prospect against it; or of
any defects or limitations of the Company's title to any of its
property.
iv. The shares of the Company are validly issued to the Sellers, fully
paid and nonassessable, and the certificates held by them (to be
delivered to Buyer) represent all the issued and outstanding shares of
the Company; and that there are no restrictions by statute, in the
Company's articles of incorporation or amendments thereto, in its
bylaws, minutes, stock certificates or in any shareholders' agreement
that may limit the right or power of the Buyer with respect to said
shares or that may constitute a lien, claim or encumbrance or equity
therein.
v. Counsel has no knowledge of facts that may adversely affect the
prospective title of Buyer to said shares or of any claim against them.
k. With respect to real estate owned by the Company: policies of title insurance
running to the Company for each parcel for the fair market value of said
property as described in Schedule D a survey showing all improvements and
showing title to be marketable as described in said policies. The policies shall
be in standard form issued by a company duly qualified in the state where the
particular parcel is located. Estoppel certificates from each institution or
lender to whom the Company is indebted and from each holder of a lien on its
property.
<PAGE>
Section 17. Successors Bound.
This Agreement shall be binding and inure to the benefit of the respective
successors and assigns of the parties hereto. Any change or division of interest
of the Seller, caused in any manner, shall be reported to the Buyer by due
notice, stating the nature of the change or division and designating a specific
person and address for transmittal of notices and deliveries.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.
JOHN G. PERRY, an individual Seller
- -----------------------------------
John G. Perry, an individual
FRANK A. MAAS, an individual Seller
Frank A. Maas, an individual
<PAGE>
Schedule A "Company Organizational Documents"
Schedule "A "defines and discloses the Company's Organizational Documents. These
documents are attached and include: Articles of Incorporation of the Company
It's Bylaws It's Minutes
Schedule B "Financial Statements"
Schedule "B" defines and discloses the Company's financial statements.
Balance Sheet
Income Statement
Schedule C "Written Contracts"
Schedule "C" defines and discloses the Company's written contracts. These
include:
Schedule D "Property"
Schedule D defines and discloses the Property owned by Company
Schedule E Retirement Plans
None, the Company has no retirement Plans.
EXHIBIT 23.1
CONSENT OF ACCOUNTANT
<PAGE>
THOMPSON, GREENSPON & CO., P.C.
Certified Public Accountants
Management Consultants
To the Board of Directors
World Wide Video, Inc.
Culpeper, Virginia
We hereby consent to the use of our report, dated January 21, 1999, in the Form
10-SB of World Wide Video, Inc., as filed with the Securities and Exchange
Commission.
/s/ Thompson, Greenspon & Co., P.C.
Fairfax, Virginia
May 26, 1999
--------------------------------------------------
3930 Walnut Street Fairfax, VA 22030-4790 (703) 385-8888 FAX (703) 385-3940
E-Mail Address - [email protected] Home Page Address - http://www.tgccpa.com
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> SEP-30-1998 SEP-30-1998
<PERIOD-END> SEP-30-1998 DEC-31-1998
<CASH> 28,324 6,762
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 122,448 139,153
<CURRENT-ASSETS> 257,906 244,596
<PP&E> 21,414 21,414
<DEPRECIATION> (2,364) (2,364)
<TOTAL-ASSETS> 343,056 316,743
<CURRENT-LIABILITIES> 175,780 198,429
<BONDS> 0 0
0 0
0 0
<COMMON> 1,044 1,069
<OTHER-SE> 166,232 119,397
<TOTAL-LIABILITY-AND-EQUITY> 343,056 318,895
<SALES> 0 7,497
<TOTAL-REVENUES> 0 0
<CGS> 0 1,000
<TOTAL-COSTS> 373,928 68,875
<OTHER-EXPENSES> 97,148 49,286
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (468,326) (111,456)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (468,326) (114,456)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (468,326) (114,456)
<EPS-BASIC> (.06) (.01)
<EPS-DILUTED> (.06) (.01)
</TABLE>
