SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended September 30, 2000.
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to __________.
COMMISSION FILE NUMBER 000-21571
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WORLD WIDE VIDEO, INC.
(Exact name of registrant as specified in its charter)
Colorado 54-1921580
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
102A North Main Street, Culpeper, VA 22701
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(Address of principal executive offices)
(540) 727-8010
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Registrant's telephone number, including area code:
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 registered pursuant to Section 12(g) of the Act:
Title of class
Common 100,000,000 Shares of Common
Stock, Par Value $.0001 Per
Share, 11,151,368
outstanding as of September
30, 2000
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TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business 1
Item 2. Properties 10
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 11
PART II
Item 5. Market For the Registrants Common Stock and
Related Stockholder Matters 11
Item 6. Selected Financial Data 12
Item 7. Management's Discussion and Analysis of Financial Condition
and Results Operations 13
Item 8. Financial Statements and Supplementary Data 15
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 32
PART III
Item 10. Directors and Executive Officers of the Registrant 32
Item 11. Executive Compensation 32
Item 12. Security Ownership of Certain Beneficial Owners and
Management 33
Item 13. Certain Relationships and Related Transactions 35
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
From 10-K 35
SIGNATURES 37
CONSENT OF ACCOUNTANT 38
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
World Wide Video, Inc. (the "Issuer" or "Company" or "WWV") was organized under
the laws of the Commonwealth of Virginia on July 16, 1997. There was no activity
on fiscal 1997. On April 9, 1998, the Company was reincorporated in the State of
Colorado. The Company designs and manufactures technology and products for the
video communication market. WWV is a development stage company designing and
developing custom ultra high speed and low cost hardware for the video
communication market. The initial product will be based on the International
Telecommunication Union (ITU) Standard, H.324, and will perform over normal
telephone lines. This technology allows for bi-directional audio, video, and
data over normal analog phone lines. Future products will support H.320 (for
ISDN, ATM, ADSL, Satellites) and H.323 (for ETHERNET and INTERNET). The key
portion of the Company's technology is being built around a series of new CoDec
(audio/video Compression/Decompression) technology. The Company's technology is
based on new and emerging custom chips, video compression algorithms, and
support technologies. The Company's technology is designed to produce faster,
smaller, and better performing video communication products at a lower cost than
is currently available in the market place. Furthermore, the company's
technology and products will be tailored (customized) to meet specific client
applications and market niches.
In anticipation of market introduction, the founders have developed several
versions of prototype products, written proprietary enabling software/firmware,
presented the products to large potential customers, developed an INTERNET WEB
Site (www.wwv-usa.com) and identified potential strategic partners/distributors
in the United States and other parts of the world.
In April 2000, WWV entered into a agreement with Advanced Medtronic, Inc. (AMTX)
of Austin Texas. The agreement calls for an equity investment of approximately
$13M over the next 12 months. At the time of this filing over $350K has been
received and an additional $5M is pledged by 12/31/2000. AMTX is a newly
capitalized company intending to concentrate on the home medical monitoring
area. In addition to the equity investment, WWV has a contract from AMTX for
over $5M in custom and standard products.
Several delays have occurred in World Wide Video's planned production schedule
due to lateness of key components (newly developed hardware chips, circuitry and
firmware) from large chip manufacturers and the deletion of some of the existing
chips. It appears that these component problems will be resolved shortly and
production for the first in a series of products is scheduled for spring of
2001. Only prototype products have been produced as of this filing. As of
September 30, 2000 the Company had no income. The Company has numerous clients
interested in its products. The Company also has obtained four custom product
contracts with three customers, in addition to the standard products discussed
below. These contracts are late due to the delays discussed above, but are in
process of being completed. The Company has over $3M in potential product
backlog. All orders and contracts are contingent upon an acceptable performance
of the production units. Marketing channels will include distributors in the
USA, Canada, South Africa, Australia, New Zealand, Malaysia, Singapore, Europe,
Asia, and South America. In addition, the Company plans to launch an E-COMMERCE
sales effort to directly sell some of its products to customers.
THE COMPANY BUSINESS
Substantially all of the Company's operations have been in connection with the
establishment of a new business. Those operations were restricted to design of
products and development of prototypes for custom designed contracts. Most of
that time was spent focusing on the design and development of new video
communication products for market introduction. Several delays have occurred, as
outlined above, but it appears that the issues are being resolved and production
should begin in the spring of 2001.
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The Company's products deliver high-speed audio, video and data information over
the plain old telephone system (POTS) lines. The market potential for video
communications includes 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 phone 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/surveillance, 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 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 also 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 communication
products will be able to talk to one another and provide a foundation for
massive 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. POTS
lines have a major cost advantage over digital lines as local calls are almost
free and most long distance calls range from $.04 to $.08 cents per minute.
Digital line rates range from approximately $.25 to $.75 cents per minute. The
Company's technology compresses video and data at a higher rate than any
competitor 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 presently available.
THE COMPANY PRODUCT LINES
Product Name: Centurion
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 product family provides the first complete integrated system
allowing data, audio and video surveillance from remote locations. 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 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 that provides one-way video
transmission for low cost surveillance applications. Both Centurion and
Spectator(TM) are designed to be compatible with future hardware and software
releases from WWV. Other Centurion 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). A high performance PCI computer card will support all
three ITU standards. A proprietary "Wavelet" runtime and still video compression
algorithm will be added to provide superior performance using either analog or
digital telephone lines.
Using standard telephone lines, the Centurion puts any site, no matter how
distant, within customer access. The unique 2-way video motion provides complete
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communication for virtually any surveillance or conferencing application. For
security monitoring, there will be fewer unknown false alarms. For monitoring
cash related activities, Centurion can provide an interface for POS (Point of
Sale) scanners. Centurion can control remotely situated pan-tilt-zoom (PTZ)
cameras as well as interface with 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 will be a series of custom products that allow health care
professionals to keep abreast of new procedures, consult on X-rays or other
visual documents, obtain health information by monitoring home-bound patients
and participate in conferences with specialists using normal analog telephone
lines (POTS). RAV(TM) Medical's transportable convenience can inexpensively
improve the quality of medical care that is provided to patients in remote areas
by linking them to experts at distant medical centers. The trend of HMOs and
insurance companies insisting on home recovery instead of in-hospital recovery
has opened a new market for the home monitoring of patients' vital signs. A
number of US and Japanese medical firms are providing vital sign monitors
connected to the phone network for checking patient conditions 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 businessperson. The system
is designed to provide the full range of typical multimedia computing functions
(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 to include 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:
Pentium III MMX/400 MHZ with 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 include Audio In, Audio Out, Headphone Out,
Video In, and S-Video Out
Software includes: Windows 2000 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
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conferencing. Using the H.324 protocol, the RAV(TM) Notebook video conferencing
has Microsoft Net Meeting and International Telecommunication Union's T.120
software that provides 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 simultaneous
video, audio, and data communication over POTS. The RAV(TM) STB uses the
industry H.324 standards and operates using a standard television and telephone,
and 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's 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.
Industry Overview
The hottest general growth area is in computer and communication systems
(perhaps as high as $100 billion over the next 5 years). Video communication is
one of the largest markets within those general areas. The Company's products
will address all of the major communication media like INTERNET, POTS, ETHERNET,
Satellite, ADSL, ISDN, ATM, Cellular, and etc. Areas like security, medical,
distance learning and video conferencing are all high growth potential. This
means that the Company is poised for a potential unbridled growth pattern.
Just for video conferencing, Frost & Sullivan of New York estimates that the
video conferencing market is worth $250 million and the video telephone market
alone is worth $210 million. Alternately, the market research firm Multi-Media
Research Group forecasts that both markets will total over $15 billion within
the next five years, as the video communication technology becomes more
commonplace. Frost and Sullivan reports that the video conferencing system
market is growing at a relatively fast pace. Four critical trends are allowing
vendors to meet the needs of the customer, and these same factors will continue
to drive the industry:
1. Technological advances affecting voice, data and video compression.
2. A sharp decrease in component prices.
3. Connectivity: the ability to call any location without special
equipment.
4. The adoption and widespread implementation of international
standards.
These factors will lead to a tremendous increase in the demand for Video
Conferencing systems, and revenues will continue to grow at a high rate. The
revenue growth rate for the years 1995 to 2002 is expected to be 43.2%. Because
the industry cuts across several markets, there have been a variety of entrants
ranging from large telecommunications and information systems companies to small
entrepreneurs.
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Over the next few years, the competition within the marketplace will increase
and market share will go to those companies that offer quality and convenience
at the lowest cost. According to industry experts, products will be competing
based on "user friendliness", the ability to share information easily, and, most
importantly, price.
WWV believes that video conferencing has already grown past group meetings into
the desktop segment of the market. Success in this market will depend on
improved quality and significant decreases in price. Eventually the market will
grow so that every desktop will be considered a "video phone".
Applied Business Telecommunications (ABTC) has compiled a comprehensive report
on desktop video conferencing. They estimate an installed base of almost 18,000
units as of Aug. 1999. The average growth rate over the last three years has
been approximately 60%; more than 2,000 companies have utilized video
conferencing to overcome competitive pressures and improve global
communications.
Personal Technology Research, cited in ABTC's report, believes that there will
be a trend in video conferencing to develop a comprehensive network
infrastructure between large groups, small groups and desktop systems,
particularly for specialized applications such as distance learning,
telecommuting and training. They see the four primary market segments emerging
in the first wave of desktop video conferencing within the next one to three
years. Those markets are:
1. Standards-based products enabling desktop video conferencing
between group systems and desktop computers/workstations.
2. General business computer-based applications enabling low cost
desktop video conferencing across multiple operating
systems and platforms via ISDN, switched digital services, LANs
and PSTN.
3. The "Video Phone" Market.
4. Video Communication via regular telephone lines and digital lines.
WWV agrees that the market potential for desktop video conferencing includes
every desktop computer in every business that needs to communicate, especially
as systems become more and more affordable. Eventually the market will grow to
include the home market. The number of individuals who need to communicate with
another location only limits the market size. 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 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 so too
will desktop video conferencing equipment become standard equipment.
Internet
The Internet has rapidly grown from a network connecting a limited number of
government, research and educational institutions to a global medium accessed by
millions of users to communicate and exchange information. Growth in the
Internet has been fueled by an increasing usage of personal computers at home
and in the workplace, improvements in the performance and speed of personal
computers and modems, improvements in network infrastructure, enhanced ease of
access to the Internet provided by service providers, consumer-oriented on-line
services and long-distance telephone companies, emergence of standards for
Internet navigation and information access, declining costs of Internet service
due to increased competition among access providers and increased awareness of
the Internet among businesses and consumers. Growth in Internet usage by
non-technical users in particular has also been fueled by the emergence of the
Web, which uses browser technology and simplifies the retrieval and transmission
of information.
As the Internet has become more accessible, functional and widely used by
consumers and businesses, its commercial potential has grown. The Internet is
emerging as a medium through which businesses can interactively inform, educate,
entertain and conduct business with millions of individuals. Thousands of
companies have created corporate Web sites that feature information about their
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product offerings and advertise employment opportunities. Through the Web,
Internet content providers are able to deliver timely, personalized content in a
manner not possible through traditional media. Internet content can be
continuously updated, and accessed by users at any time.
The next version of the Company's product will be INTERNET compatible. The
product is current running in prototype form and will improve to support initial
speeds up to 128Kbps and up to 384Kbps in the second version.
In additional to utilizing normal marketing distribution channels, the Company
also plans to launch an E-COMMERCE approach on its Web home Page
(www.wwv-usa.com) to directly sell some of its user oriented products.
SALES AND MARKETING
The Company has two employees focused on its sales, marketing and customer
service efforts worldwide. Company's sales and marketing plan is to concentrate
on:
1. Medium and Large OEM, Value Added Resellers, and Systems Integrators.
2. Medium and large clients for customized products.
3. National and International Distributors.
4. E-Commerce for standard products that can be sold directly to end users.
The Company plans to have distributors in the United States, Europe, Malaysia,
Asia, Canada, Australia, New Zealand, and Africa.
Products, Services, Markets, Methods of Distribution and Revenues. Digital
electronic products, based on audio/video compression, are presently the
principal products to be produced by the company. The Company has commenced
shipping some prototype products. The first production units are planned for
Spring of 2001. The security and medical markets appear very strong and growing.
Marketing and Advertising. Currently, marketing is by trade shows, word of mouth
and by Internet web page. A series of Press Releases are planned for the Spring
of 2001 in conjunction with various product launches.
Clients. The Company is still in the product development phase and has no
product sales to date. The Company has four custom product development contracts
signed from three clients. The contracts are late due to delays as discussed
previously. These contracts have a potential value over $1.7M during the first
year of production. There are also several more clients that have expressed
serious interest in additional custom products. In addition to the custom
contracts, the Company has a list of over 100 potential clients that have either
issued a purchased order, a no cost evaluation purchase order or have expressed
serious interest in the Company's standard products. The potential Client list
includes:
Custom Products:
1. Advance Medtronix, Inc.
2. Help Innovations, Inc. (2 products)
3. Access Family TV
Standard Products:
1. DataPower USA, Inc.
2. Boeing Information Services
3. Sewam
4. ABM IT
5. FBI
6. US Department of State
7. NR PTY LIMITED, Australia
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All potential sales, including Purchase Orders, Contract(s), No Cost POs and
Letters of Intent, are contingent upon the performance, availability and
acceptance of the prototype units. There is the possibility that the customer no
longer has the requirement for these types of products. Another issue could be
the customer's ability to pay for the production product. The company has had
several delays in completing the production units. As of 9/30/00, it appears
that the technical problems have been overcome and production units should be
shipped in the Spring of 2001. The Company has complete arrangements to
manufacture the production units subject to additional working capital
requirements.. In the opinion of management, there are no technical problems to
produce and satisfy the potential backlog of orders. Additional Working Capital
may be needed.
Once the Company starts to deliver product, it will initially be dependent upon
a single customer or a few customers. Over the first year after the start of the
production, the Company does not foresee any one client representing more than
10% of the total sales for that year.
The company does not have any government contracts at this time.
The video electronics industry is highly competitive. The Company faces
competition from a variety of large and small companies, both public and
private. Many of the competitive companies so engaged possess greater financial
and human resources than the Company and therefore have greater leverage in
acquiring prospective development and marketing personnel. Accordingly, a high
degree of competition in these areas is expected to continue. The markets for
video electronic products have increased dramatically in recent years and so
have the competitors in those markets. There is no assurance that the Company's
revenues, if any ever develop, will not be adversely affected by such factors.
VIDEO COMMUNICATION PRODUCT PRICING AND MARKET SHARE
The industry has been waiting for a video system that can offer high quality at
a reasonable price. So far no one has been able to do that, but WWV can and will
have the best opportunity in the industry to offer high quality at the lowest
price. WWV realizes that this will remain a major advantage, and it must keep
the R&D effort going to maintain market share. As with most new high technology,
the average industry price will continue to fall over the next decade. According
to PictureTel (the current industry leader for ISDN based solutions), video
conferencing prices are currently falling at 20% a year. Industry experts
predict that they will continue to do so at least until the year 2005.
WWV represents new technologies. Video communication systems have been available
for over ten years, but only now are offering affordable and high quality video
conferencing via existing desktop terminals. WWV's key competitive advantage
lies in the ability to:
1. Use any telephone line analog or digital, or use existing local
area networks (LANs) like ETHERNET, or wide area networks (WAN)
like INTERNET.
2. High performance, clearer and more frames per second at higher
resolution.
3. Requires less bandwidth than competitors. WWV's products will
continue to function at speeds as low as 9,600 baud as compared to
21,600 baud required by others.
4. Smaller size and a lower power requirement mean that WWV's
technology can be placed in more locations, like notebooks, inside
VCRs, TVs and automatic teller machines.
5. WWV's technology is uniquely applicable to many markets. WWV's
technology could compliment and compete with products in new
markets.
Because video communication is an embryonic industry, the market place for such
technology is still evolving. Unlike a computer or a piece of athletic
equipment, which have specific, statistically measurable user-populations, the
video communication user-population seems unlimited. In fact, as the
"information superhighway" develops and interactive multimedia becomes part of
the INTERNET, anyone who owns a PC or television and telephone could become an
end user.
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COMPETITION
The video conferencing industry is one that is based on research and
development, with new products being introduced into the market on a regular
basis. The market competes primarily on the basis of video and audio quality,
ease of use and price. Management believes that WWV's systems supersede
competition by offering a superior design and performance at a lower bill of
materials (BOM) price and in a smaller form factor (size). In the future,
competition will be based primarily on performance and features, as price will
reach a low plateau. Management believes that WWV will stay ahead of the
competition by concentrating its efforts on research and development and
improving the efficiency of WWV's designs. WWV also offers numerous technical
advantages, and one of these is the system's ability to use analog, digital and
wireless as a transport medium.
The POTS (Plain Old Telephone System) hardware based (DSP) solution is only
offered by two competitors at this time. Both are based on slower DSP based
systems. See Section 9.0 for a detailed competitive analysis.
WWV is using technology that compresses video and data at a higher rate than any
other company in the industry. The compression rate of video is about 3-4:1
better than our fastest competitors. This high rate of compression gives WWV a
tremendous advantage in frame rate and quality at any given bandwidth. This
advantage will initially be used to provide better products in the POTS area,
and the ISDN version products will quickly follow the POTS product. This means
that WWV's ISDN based products will provide the same quality over 2 ISDN
channels at a lower price than the current ISDN competitors can do today over 6
ISDN channels. (Two ISDN line charges versus 6 ISDN lines charges).
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 efforts 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's hardware
provides superior video quality using newer digital technology. In addition to
the quality of the video, WWV's 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 and C-Phone frame rate is slow (according to their advertising
-theoretical maximum is 15 SQCIF frames per second) and the minimum bandwidth is
19.2 Kbps. WWV's Centurion product is about 1/4 the physical size and requires
about 1/4 the power. The Centurion frame rate is better (theoretical maximum is
20 SQCIF 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.
WORKING CAPITAL NEEDS
The working capital needs of the company consist primarily of operating capital,
product development capital and marketing capital. These requirements may be met
by private placement of stock or loans or by the sale of working interests. The
Company will need to develop additional working capital for future operations
including setting up production lines. Presently, it has no definite source or
commitment for any additional funds.
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With the closeness of the first three different production units becoming a
reality, the Company has greatly improved the probability of more private funds
becoming available. Several companies and organizations have expressed interest
in investing. The Company is attempting to minimize the cash requirement needed
for the start of production for two custom contracts (2 of the initial three
production products) by requesting down payments, delivery order and accounts
payable financing. WWV has been able to negotiate extended payments to some of
its key electronic component product and contract manufacturers.
Based on the analysis of funds available and funds required to complete the
initial production of product and associated production costs, research and
development, the company decided to raise the additional required working
capital by a Regulation D Rule 506 offering of Class A preferred stock. In June
1999, WWV started the preferred offering, which closed on August 31, 2000. The
company sold 121,114 shares of preferred stock. The preferred offering consisted
of selling a unit for $6. A unit includes one preferred share and 2 preferred
warrants. The preferred warrants will be for $6 and must be executed within one
year of the offering closing date. There is a dividend of 6% per year payable
every 6 months. At the close of the preferred offering, WWV provided the option
to convert the preferred shares to common stock at a ratio of 2 common shares
for one preferred share.
SPONSORED RESEARCH AND DEVELOPMENT
The Company has no sponsored research and development contracts at this time.
INTELLECTUAL PROPERTY
All of the Product underlying hardware/firmware designs belong to the Company
and are protected by United States Copyright laws. The Company also has
developed unique chips that are not available in the general market place. All
of the User Interface and controlling software belongs to WWV and is
copyrighted. Also, only binary licenses will be sold in conjunction with the
products. The Company, in its hardware design, has used a variety of
anti-reversing techniques. Nevertheless, there can be no assurance that
copyright laws and other procedures will provide any competitive advantage to
the Company.
The Company has applied to the United States Patent and Trademark Office for the
registration of two trademarks. The two trademarks are "Spectator" and "RAV".
Approval for these trademarks is in the final phase, which is the publication of
them in the open literature. There is a high probability of approval for those
trademarks by the PTO. The Company also asserts common law protection on certain
names and marks that it has used in connection with its business activities.
The Company uses standard industry confidentially agreements in all of its
contracts and sub-contracts as protection from industrial espionage. Contractors
and sub-contractors are carefully screened and selected for trustworthiness
before being engaged. Nevertheless, technology protection is difficult if not
impossible to obtain.
GOVERNMENT REGULATION
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.
<PAGE>
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 registra
-tion statement.
(d) Other Industry Factors - None at the date of this regi-
stration statement.
EMPLOYEES
As of September 30, 2000, the Company had nine full time employees. The
Company's employees are not represented by a labor union or collective
bargaining agreement. The Company regards its employee relations as excellent.
COMPANY HISTORY
World Wide Video, Inc. (the "Issuer" or "Company" or "WWV") was organized under
the laws of the Commonwealth of Virginia on July 16, 1997. World Wide Video,
Inc. reincorporated under the corporate laws of the State of Colorado on April
9, 1998. From April 1998 - April 1999 the company raised over $900,000 via a
Regulation D, Rule 504. As part of the Rule 504, the Company completed the first
private placement of 200,000 shares consisting of common stock @ $.50 per unit
for operating capital. With the Offering Price amended on May 1, 1998, the
Company completed a second private placement consisting of 75,000 shares of
common stock @ $2.00 per unit for operating capital. The Offering Price was
amended again of July 1, 1998 to $2.75 per unit. The Company completed the final
private placement consisting of 233,987 shares of common stock @ $2.75 per unit
for operating capital in late 1998 and early 1999 and closed the Rule 504
Offering on April 6, 1999.
In August 1999, the Company filed a F-10SB with the SEC. In July 1999, the
Company started a Preferred Stock Offering, at $6 per unit, via Regulation D,
Rule 506, with the goal of raising $900,000. A unit includes one preferred share
and 2 preferred warrants. The preferred warrants will be for $6.00 and must be
executed within one year of the closing date. There is a dividend of 6% per year
payable every 6 months. The offering was closed on August 31, 2000. At this
time, WWV provided preferred shareholders the option to convert the preferred
shares to common stock at a ratio of 2 common shares for one preferred share.
The Company raised a total of approximately $727,000 through its offering of
preferred stock.
The Company was approved for trading by NASD in November, 2000 for the Over the
Counter Bulletin Board (OTC BB).
ITEM 2. PROPERTIES
Substantially all offices of the Company are located in leased premises.
The Company's principal office is located at 102A North Main Street, Culpeper,
Virginia, 22701. The Company leases the office space under three separate
leases. The first two are month to month leases with a combined rent of $2,000.
The third lease is for a one year term expiring in April 2001, with monthly rent
of $1,100.
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Company believes that it is not involved in any ongoing, pending or
threatened legal proceedings that could reasonably be expected to have a
material adverse effect on the Company's financial condition or operations.
The Company hereby discloses a possible dispute with an entity, Albemarle
Investments, Ltd., regarding a purported consulting arrangement under which
claims have been made for $45,000 and issuance of common shares totaling
500,000. The claim was received in the form of a letter directly from the
principal of Albemarle Investments, Ltd. and no other communication or no legal
action have occurred since receipt of the letter on September 14, 1998. The
Company disputes that any monies or shares are due and is prepared to assert
legal defense in the event any legal action should to be taken.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Not Applicable.
<PAGE>
<TABLE>
<CAPTION>
ITEM 6. SELECTED FINANCIAL DATA
<S> <C> <C> <C>
Year ended September 30,
2000 1999 1998
-------------- -------------- -------------
Statement of Operations Data:
Operating revenues $ - $ - $ -
Product development costs 586,009 769,728 373,928
General and administrative expenses 377,781 156,283 97,148
Total costs and expenses 963,790 926,011 471,076
Other income 2,909 5,124 2,750
Net loss before income taxes (960,881) (920,887) (468,326)
Income taxes - - -
Net loss (960,881) (920,887) (468,326)
Net loss per common share (.09) (.09) (.06)
Weighted average number of common and
common equivalent shares outstanding 11,081,362 10,558,840 7,556,726
Balance Sheet Data:
Current assets $ 245,543 $ 235,232 $ 273,756
Current liabilities 552,583 347,393 175,780
Total assets 416,493 297,537 343,056
Long-term liabilities - - -
Total stockholders' equity (deficit) (136,090) (49,856) 167,276
Dividends per common share - - -
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-K CONCERNING THE COMPANY'S BUSINESS
OUTLOOK OR FUTURE ECONOMIC PERFORMANCE; ANTICIPATED PROFITABILITY, GROSS
BILLINGS, COMMISSIONS AND FEES, EXPENSES OR OTHER FINANCIAL ITEMS; AND
STATEMENTS CONCERNING ASSUMPTIONS MADE OR EXCEPTIONS AS TO ANY FUTURE EVENTS,
CONDITIONS, PERFORMANCE OR OTHER MATTER ARE "FORWARD-LOOKING STATEMENTS" AS THAT
TERM IS DEFINED UNDER THE FEDERAL SECURITIES LAWS. FORWARD-LOOKING STATEMENTS
ARE SUBJECT TO RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE STATED IN SUCH STATEMENTS. SUCH RISKS,
UNCERTAINTIES AND FACTORS INCLUDE, BUT ARE NOT LIMITED TO, (I) THE UNCERTAIN
PRODUCT AVAILIBILITY IN A TIMELY MANNER, (II) PERFORMANCE, (III) THE UNCERTAIN
PRODUCT ACCEPTANCE BY THE CUSTOMER, (IV) COMPETITION, (V) THE COMPANY'S
ABILIBILTY TO RAISE THE NECESSARY FUNDS, (VI) UNKNOWN PARTS AND COMPOMENT
AVAILIBILITY, (VII) THE LOSS OF SERVICES OF CERTAIN KEY INDIVIDUALS COULD HAVE A
MATERIAL ADVERSE EFFECT ON THE COMPANY'S BUSINESS, FINANCIAL CONDITION OR
OPERATING RESULTS, (VIII) LITIGATION.
Overview
WWV is a development stage company designing and developing custom ultra high
speed and low cost hardware for the video communication market. As of September
30, 2000 the Company had no income. As a result of the ongoing product
development, the Company had a net loss of $960,881 for the year ended September
30, 2000. Several delays have occurred in the planned production schedule due to
lateness of key components (newly developed hardware chips, circuitry and
firmware) from large chip manufacturers and the deletion of some of the existing
chips. Now it appears that these component problems will be resolved shortly and
production for the first in a series of products is scheduled for spring of
2001. The Company has not started production of any of its products as of this
filing. The Company has clients from around the world interested in its
products. The Company has entered into an agreement that will assist it in
meeting the demands for its products. The investor manufactures medical
equipment and has signed an agreement to invest a total of $13,019,400 in WWV
for its video capabilities in the medical monitoring market. Such an alliance
would immediately open markets in the United States and several South American
Countries where this partner has established clients. Another strategic
investor/partner has signed a letter of intent to raise $2.5 million for
marketing/manufacturing with the Company to penetrate the Canadian and Asian Rim
markets for WWV's POTS products. Even though the Company has a high level of
confidence that at least one of these investor/partner actions will materialize,
there is no assurance that either one will be carried through to fruition. Since
most of the world's population has virtually no access to the information
"superhighway" and is fortunate to have telephone service, the potential
international market for WWV's products is immeasurable. Even in the United
States, the accessibility of that information age technology has been
concentrated in the cities and metropolitan areas where various supporting
infrastructures exist. The rural and remote areas must rely heavily, if not
exclusively, upon other technological means, such as POTS, to access distant
medical or learning centers, etc.
The Company also has four custom product contracts in additional to the standard
products being developed. The AMTX contract is for a Home Monitor Device (Home
MD) and a PCI board. A prototype Home MD unit was shown to AMTX in December
2000. WWV hopes to delivery an advanced version by the end of February 2000. A
prototype for the PCI Board should be available in April. These units are
subject to testing and evaluation prior to final acceptance by the customer
before the start of the production contract. The Company does not anticipate any
non-resolvable issues that would cancel this contract. Another contract also
<PAGE>
involves medical monitoring and this contract is late due to the delays
discussed above but is in process of being completed. The enhanced
pre-production units for the home medical monitoring contract ($1M) were shipped
to the customer for evaluation and testing in Summer 2000. The customer
requirements may be changing. This process is not complete as of the date of
this filing. Final acceptance of the total contract is contingent upon the
performance of the product and the ability of the product to meet the new
requirements. It is unclear if this contract will be fulfilled. The fourth
contract is for a portable video conferencing system. This contract could be for
over 5,000 units. A new and enhanced version of the Centurion will be used. WWV
plan to deliver these units for evaluation in January 2001. Also, the Company
has identified over $1M in other potential product orders. All potential orders
and contracts are contingent upon evaluation and acceptable performance of the
pre-production units. (See the two Production Schedules below for appropriate
product timetables). The Company has potential distribution channels in the
United States, Canada, South Africa, Australia, New Zealand, Malaysia,
Singapore, Europe, Asia, and South America. In addition, the Company also plans
to launch an E-COMMERCE sales approach to directly sell some of its products. To
date, the Company has functioned on equity investments. Without continuing
investments or loans, the survivability of the Company is at risk.
Custom Product Schedule
Product R&D Cost Production Cost Production Date
---------------------- ----------------- ------------------- -------------------
AMTX HomeMD $10,000 $200,000 June 2001
---------------------- ----------------- ------------------- -------------------
AMTX PCI 5,000 50,000 May 2001
---------------------- ----------------- ------------------- -------------------
HELP (HIM) 20,000 40,000 February 2001
---------------------- ----------------- ------------------- -------------------
Family Access TV 20,000 50,000 April 2001
---------------------- ----------------- ------------------- -------------------
*Factors outlined in this document could impact the implementation of this
schedule.
Standard Product Schedule
Product R&D Cost Production Cost Production Date
-------------------------- ----------------- ----------------- -----------------
Centurion $50,000 $300,000 March 2001
-------------------------- ----------------- ----------------- -----------------
RAV PCI 50,000 50,000 July 2001
-------------------------- ----------------- ----------------- -----------------
Spectator 200,000 50,000 Aug 2001
-------------------------- ----------------- ----------------- -----------------
Centurion-ISDN/Internet 300,000 300,000 Sept 2001
-------------------------- ----------------- ----------------- -----------------
*Factors outlined in this document could impact the implementation of this
schedule.
RESULTS OF OPERATIONS
The year ended September 30, 2000 compared to the year ended September 30, 1999.
The Company had no sales for the years ended September 30, 2000 and 1999 due to
still being in the development stage.
Product development costs decreased to $586,009 for the year ended September 30,
2000 from $769,728 for the year ended September 30, 1999, an decrease of
approximately 24%. The primary cause for this overall decrease was a decrease in
subcontractor costs and other miscellaneous development costs. Salaries and
related costs increased to $368,264 for the year ended September 30, 2000, from
$181,791 for the year ended September 30, 1999. Subcontractor costs decreased to
$138,586, from $446,628, representing a decrease of 69%. These changes were due
to a shift from the use of subcontractors to employees for product development.
Product and development costs represented 61% of total expenses for the year
ended September 30, 2000, down from 83% for the previous year.
General and administrative expenses increased $221,498 to $377,781 for the year
ended September 30, 2000, representing an increase of 142%. This amount was 39%
of total expenses for the year, as compared to 17% for the year ended September
30, 1999. The increase in the percentage is attributable to increased office and
<PAGE>
marketing expenses due to the advancement of product development, as well as
increased professional fees. Office expenses increased to $90,223, from $38,971
for the year ended September 30, 1999 due in part to the increase in the number
of employees. Marketing also rose, from $32,827 to $53,803 for the year showing
an increase in promotion of the new product. Rent and utilities increased
$24,416 to $39,325, a 164% increase, due to the need for expanded facilities.
The year ended September 30, 1999 compared to the year ended September 30, 1998.
The Company had no sales for the years ended September 30, 1999 and 1998 due to
still being in the development stage.
Product development costs increased to $769,728 for the year ended September 30,
1999 from $373,928 for the year ended September 10, 1998, an increase of 106%.
The primary cause for this overall increase was increased salaries and
subcontractor costs. Salaries and related costs increased to $181,791 for the
year ended September 30, 1999, from $0 for the year ended September 30, 1998.
Subcontractor costs increased to $446,628, representing an increase of 127%.
These increases were due to increased pre-production efforts and the need for
additional personnel as the initial phases of the pre-production process begins.
Product and development costs represented 83% of total expenses for the year
ended September 30, 1999, up from 79% for the previous year.
General and administrative expenses increased $59,135 to $156,283 for the year
ended September 30, 1999, representing an increase of 61%. This amount was 17%
of total expenses for the year, as compared to 21% for the year ended September
30, 1998. The decrease in the percentage is attributable to increased costs
incurred in the product development area discussed above. The increase in
general and administrative expenses was primarily due to increased professional
fees (up to $29,937 from $2,700) related to required SEC filings as well as
increased overhead resulting from expanded activities and staff. Rent and
utilities increased $18,418 to $27,312, a 207% increase, due to the need for
expanded facilities. Marketing and sales expenses decreased from $58,981 to
$32,827 because the Company attended fewer trade shows during the year ended
September 30, 1999.
Liquidity and Capital Resources
The Company's principal capital requirements have been to fund design of
products, working capital and marketing of products being designed.
Net cash used in operating activities for the years ended September 30, 2000 and
1999 were $737,249 and $313,231, respectively. The increase in cash used in
operating activities in 2000 was primarily due to increased inventory and
increased employee expenses.
Net cash used in investing activities for the years ended September 30, 2000 and
1999 were $137,542 and $13,620, respectively. The increase in cash used in
investing activities was primarily the result of additional furniture and
equipment purchases.
Net cash provided by financing activities for the years ended September 30, 2000
and 1999 were $874,647 and $317,315, respectively. This increase resulted from
sales of common and preferred stock.
As of September 30, 2000, the Company owed salaries to officers and other
employees in the amount of $337,207, up from $210,000 as of September 30, 1999.
During the year ended September 30, 1999, the Company began repaying amounts due
to officers and expects to continuing reducing this debt during the year ended
September 30, 2001.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<PAGE>
WORLD WIDE VIDEO, INC.
A Development Stage Enterprise
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<PAGE>
WORLD WIDE VIDEO, INC.
(A Development Stage Enterprise)
FINANCIAL REPORT
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS 18
FINANCIAL STATEMENTS
Balance Sheets 19-20
Statements of Operations 21
Statements of Cash Flows 22-23
Statements of Stockholders' Equity 24
Notes To Financial Statements 25-31
<PAGE>
THOMPSON, GREENSPON & CO., P.C.
Certified Public Accountants
Management Consultants
INDEPENDENT AUDITOR'S REPORT
To the Stockholders
World Wide Video, Inc.
Culpeper, Virginia
We have audited the accompanying balance sheets of World Wide Video,
Inc., a development stage enterprise as of September 30, 2000 and 1999, and the
related statements of operations, cash flows and stockholders' equity for the
years ended September 30, 2000, 1999 and 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 audits.
We conducted our audits 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 audits provide 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) at September 30, 2000 and 1999, and the results of
its operations and its cash flows for the years ended September 30, 2000, 1999
and 1998, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Corporation will continue as a going concern. As discussed in Note 2 to the
financial statements, the Corporation has suffered continued losses that raise
substantial doubt about its ability to continue as a going concern during the
development stage. Management's plans in regard to these matters are also
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Thompson, Greenspon & Co., P.C.
Fairfax, Virginia
November 30, 2000
--------------------------------------------------
3930 Walnut Street, Fairfax, Virginia 22030-4790
(703) 385-8888 FAX (703) 385-3940
E-Mail Address - [email protected] Home Page Address - http://www.tgccpa.com
Member of American Institute of Certified Public Accountants
Division for CPA Firms
F-1
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
SEPTEMBER 30, 2000 AND 1999
<S> <C> <C>
2000 1999
------------ ------------
ASSETS
Current Assets
Cash and cash equivalents $ 18,644 $ 18,788
Inventories 180,143 119,290
Accounts receivable - other 25,648 8,033
Prepaid assets and fees 18,108 86,121
Deferred offering costs 3,000 3,000
----------- -----------
Total Current Assets 245,543 235,232
--------- ---------
Property and Equipment
Computer and equipment 118,168 20,866
Software 16,408 13,668
----------- -----------
Total Cost 134,576 34,534
Less accumulated depreciation (22,901) (7,129)
---------- ------------
Net Property and Equipment 111,675 27,405
--------- -----------
Other Assets
Technology licenses, net of accumulated amortization 58,125 33,750
Deposits 1,150 1,150
----------- -----------
Total Other Assets 59,275 34,900
---------- ----------
Total Assets $416,493 $297,537
======== ========
</TABLE>
The Notes to Financial Statements are an integral part of these statements
F-2
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Development Stage Enterprise)
BALANCE SHEETS CONTINUED
SEPTEMBER 30, 2000 AND 1999
<S> <C> <C>
2000 1999
------------ -----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses $ 132,556 $ 61,373
Due to officers and employees 337,207 210,000
Deferred revenue 67,500 75,000
Preferred dividend payable 15,320 1,020
------------- --------------
Total Current Liabilities 552,583 347,393
------------- ------------
Stockholders' Deficit
Common stock, par value $0.0001; 100,000,000 shares
authorized; 11,151,368 issued and outstanding
at September 30, 2000, and 11,011,368 issued
and outstanding at September 30, 1999 1,115 1,101
Preferred stock, 6% cumulative, par value $0.01;
10,000,000 authorized; 121,114 shares,
issued and outstanding at September 30, 2000;
23,500 shares issued and outstanding at September 30, 1999 1,211 235
Additional paid-in capital 2,238,694 1,339,041
Accumulated deficit during development stage (2,377,110) (1,390,233)
------------- ------------
Total Stockholders' Deficit (136,090) (49,856)
-------------- --------------
Total Liabilities and Stockholders' Deficit $ 416,493 $ 297,537
============= ============
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
<S> <C> <C> <C>
2000 1999 1998
--------------- ------------- --------------
Sales $ - $ - $ -
-------------- ------------ --------------
Product Development Costs
Salaries and benefits 368,264 181,791 -
Subcontractors 138,586 446,628 196,867
Other developmental costs 79,159 141,309 177,061
------------- ------------ -----------
Total Product Development Costs 586,009 769,728 373,928
------------ ------------ -----------
General and Administrative Expenses
Office 90,223 38,971 12,388
Marketing and sales 53,803 32,827 58,981
Professional services 89,378 29,937 2,700
Occupancy 39,325 14,909 5,903
Depreciation and amortization 28,897 14,765 8,614
Utilities and telephone 19,923 12,403 2,991
Insurance 17,487 62 -
Other 38,745 12,409 5,571
-------------- ------------- -------------
Total General and Administrative
Expenses 377,781 156,283 97,148
------------- ------------ ------------
Total Costs and Expenses (963,790) (926,011) (471,076)
Other Income 2,909 5,124 2,750
-------------- -------------- -------------
Loss before Income Taxes (960,881) (920,887) (468,326)
Income Taxes - - -
------------- ------------- ------------
Net Loss $ (960,881) $ (920,887) $ (468,326)
========== ========== ==========
Dividends, Preferred Stock 15,320 1,020 -
============= ============= ==============
Loss Available to Common Stockholders $ (976,201) $ (921,907) $ (468,326)
========== ========== ==========
Basic and Diluted Net Loss Per Share $ (0.09) $ (0.09) $ (0.06)
============== ============== ==============
Average Common and Common Equivalent
Shares Outstanding 11,081,362 10,558,840 7,556,726
========== ========== ===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
<S> <C> <C> <C>
2000 1999 1998
------------- ------------- -------------
Cash Flows from Operating Activities
Net loss $(960,881) $(920,887) $(468,326)
Noncash items included in net loss
Depreciation 15,772 4,765 2,364
Amortization 13,125 10,000 6,250
Contributed services - 350,310 -
Changes in assets and liabilities
Decrease (Increase) in
Inventory (60,853) 3,158 (122,448)
Accounts receivable - other (17,615) (5,599) (2,434)
Prepaid expenses 68,013 24,429 (104,700)
Increase (Decrease) in
Accounts payable 71,183 47,429 10,780
Preferred dividend payable 14,300 - -
Due to officers and employees 127,207 148,164 65,000
Deferred revenue (7,500) 25,000 50,000
------------ ------------ ------------
Net Cash Used by Operating Activities (737,249) (313,231) (563,514)
---------- ---------- ----------
Cash Flows from Investing Activities
Purchase of equipment and software (100,042) (13,120) (21,414)
Purchase of technology license (37,500) - (50,000)
Purchase of other assets - (500) (6,500)
------------ ------------ ------------
Net Cash Used by Investing Activities (137,542) (13,620) (77,914)
---------- ---------- -----------
Cash Flows from Financing Activities
Proceeds from sales of common stock 314,996 163,465 635,402
Deferred offering costs - 12,850 (15,850)
Proceeds from sales of preferred stock 585,647 141,000 -
Dividends paid (25,996) - -
Convertible loan - - 50,000
------------- ------------ -----------
Net Cash Provided by Financing Activities 874,647 317,315 669,552
----------- ---------- ----------
Net Increase in Cash and Cash Equivalents (144) (9,536) 28,124
Cash and Cash Equivalents, beginning of year 18,788 28,324 200
------------ ----------- -------------
Cash and Cash Equivalents, end of year $ 18,644 $ 18,788 $ 28,324
=========== ========== ==========
Non Cash Financing Activities
Dividends converted to preferred stock $ 34,637 $ 1,020 $ -
=========== ============ ============
Convertible loan satisfied by issuance of stock $ - $ 50,000 $ -
============ =========== ============
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
F-5
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
WORLD WIDE VIDEO, INC.
(A Development Stage Enterprise)
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
<S> <C> <C> <C> <C> <C>
Cumulative Additional
Common Preferred Paid in Accumulated
Shares Stock Par Capital Deficit Totals
------------ ---------- ------------- ------------- -------------- ------------
Balance, September 30, 1997 200 $ - $ - $ 200 $ - $ 200
Exchange of shares, issuance of new
shares, May 12, 1998 9,999,800 1,000 - (200) - 800
Sale of common stock at $.50 per share 200,000 20 - 99,980 - 100,000
Sale of common stock at $2.75 per share 168,737 17 - 384,585 - 384,602
Sale of common stock at $2.00 per share 75,000 7 - 149,993 - 150,000
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
---------- ------- ------- ------------ ------------ ------------
Sale of common stock at $2.75 per share 65,244 7 - 163,458 - 163,465
Loan converted to stock 250,000 25 - 49,975 - 50,000
Sale of cumulative Preferred stock at $6
per share - - 235 140,765 - 141,000
Contributed services 252,387 25 - 350,285 - 350,310
Dividend, cumulative Preferred shares - - - - (1,020) (1,020)
Net loss, year ended September 30, 1999 - - - - (920,887) (920,887)
----------- ----------- ---------- -------------- ------------ -----------
Balance, September 30, 1999 11,011,368 1,101 235 1,339,041 (1,390,233) (49,856)
---------- ------- ------- ------------ ------------ ------------
Sale of common stock at $2.25 per share 140,000 14 - 314,982 - 314,996
Sale of preferred stock at $6 per share - - 918 550,092 - 551,010
Contributed services - - - - - -
Dividends converted to stock - - 58 34,579 - 34,637
Dividend, cumulative preferred shares - - - - (25,996) (25,996)
Net loss, year ended September 30, 2000 - - - - (960,881) (960,881)
----------- ------- ------- ------------- ------------- ----------
11,151,368 $1,115 $1,211 $2,238,694 $(2,377,110) $(136,090)
========== ====== ====== ========== ============ ==========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
F-6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company and Purpose
World Wide Video, Inc. (the Company) was organized under the laws of
the Commonwealth of Virginia on July 16, 1997. On April 9, 1998, the
Company was reincorporated in the State of Colorado. The Company
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. 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 adopted
Statement of Position 98-5 which requires expensing of costs of
start-up activities, including organization costs, as incurred.
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.
Financial Instruments
The estimated fair value of cash and cash equivalents, accounts
receivable, accounts payable and accrued expenses and other liabilities
approximate their carrying amounts in the financial statements.
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 years ended
September 30, 2000, 1999, or 1998.
F-7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
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. Inventory consists principally of chipsets, which are
purchased from Analog Devices, Inc. The Company has no binding
commitments to purchase additional inventory.
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 year ended September 30, 2000 was $15,772
and for the year ended September 30, 1999 was $4,765 and $2,364 for the
year ended September 30, 1998.
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 three - five years.
Amortization expense for the year ended September 30, 2000 was $13,125
and for the year ended September 30, 1999 was $10,000, and $6,250 for
the year ended September 30, 1998.
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
License revenues are generally recognized upon delivery of the licensed
technology provided no significant future obligations exist and
collection is probable. Payments for nonrecurring engineering costs are
recognized upon acceptance of prototypes by the customer, provided no
significant future obligations exist and collection is probable.
F-8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
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 bases on the classification of the
related asset or liability. Deferred tax assets related to losses
accumulated during the development stage have been reduced by a
corresponding valuation allowance as of September 30, 2000 and 1999.
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. The Company had no retained
earnings when the S election was terminated.
Net Loss Per Share
Basic net loss per share is computed by dividing net loss available to
common stockholders (numerator) by the weighted average number of
common shares outstanding during the year (denominator). Diluted net
loss per share is computed using the weighted average number of common
shares of potential common shares outstanding during the year.
Potential common shares result from the assumed exercise, using the
treasury stock method, of outstanding convertible cumulative preferred
stock having a dilutive effect.
The numerators for each period presented are equal to the reported net
loss plus cumulative preferred dividends. Neither the preferred or
common warrants were included in the computations of net loss per share
because the effect on the calculations would be antidilutive.
2. Need for Additional Capital
The Company's continued existence is dependent upon its ability to
raise additional funds to complete products in development. In 1999 the
Company concluded a private securities offering, which it has raised
$798,067, net of offerings costs of $94,574. As of September 30, 2000,
the Company has raised $692,010 in a preferred stock offering. The
Company has also raised $315,000 through a private placement agreement.
(See Note 5). 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.
F-9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
3. Prepaid Expenses and Fees
Included in Prepaid Expenses at September 30 are the following:
2000 1999
---------- ---------
Deposit on inventory purchases $12,450 $18,390
Prepaid rent and commissions 5,312 5,850
Trade shows and other 346 6,381
Custom engineering support deposit - 20,000
Deposit on DataBeam license - 17,500
Prepaid marketing expenses - 18,000
--------- --------
$18,108 $86,121
======= =======
4. Other Assets
The Company acquired a technology license at a cost of $37,500, from
Databeam, Inc., that is being amortized over a period of three years,
the expected life of the agreement. The license agreement permits the
Company to use certain proprietary software products. The net carrying
value of the license at September 30, 2000 was $34,375.
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 expected life of the agreement. 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, 2000 was $23,750 and at
September 30, 1999, the carrying value was $33,750.
The Company sold non-exclusive rights to market World Wide Video, Inc.
products to U.S. Government military bases in exchange for 250,000
shares of DataPower USA, Inc. stock. The DataPower stock does not have
an attainable market value and therefore no value has been recorded.
5. Contributed Capital
In connection with the reincorporation of the Company, the original
stockholders received 10,000,000 shares of common stock.
In March 1998, the Company entered into an agreement in which they
agreed to provide 250,000 shares of common stock at $0.20 per share in
return for a convertible loan, provided certain conditions could be
satisfied. (See Note 6). The stock was issued in November 1998 in
satisfaction of the $50,000 loan.
In fiscal year 1998, the Company sold 200,000 shares of common stock at
$0.50 per share, and 75,000 shares at $2.00 per share.
F-10
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
5. Contributed Capital (continued)
In April 1998, the Company commenced a private offering in which
233,981 common shares at $2.75 per shares were sold. After deducting
costs of $95,300, the Company realized proceeds of $548,067. The
offering was concluded on April 6, 1999. In connection with this
offering, 70,274 warrants entitling the holder to purchase one share of
common stock at $2.75 were issued with the sale of the last 70,274
shares. For the year ended September 30, 1999, stock sale proceeds from
this offering amounted to $163,465 net of offering costs of $15,956.
For the year ended September 30, 1998, stock sale proceeds from this
offering amounted to $384,602 net of offering costs of $79,425
In July 1999, the Company commenced a private offering of 150,000
cumulative preferred shares at $6.00 per unit. Each unit included one
share of cumulative preferred stock and 2 warrants entitling the holder
to purchase a share of cumulative preferred stock at $6.00 per share.
The warrants must be executed by September 30, 2000. The preferred
stock earns a dividend at the rate of 6 percent per annum, payable
semi-annually. At the close of the private offering each cumulative
preferred share is convertible into 2 shares of common stock for a
two-year period ending September 30, 2001. The Board, at its
discretion, can redeem all preferred shares in exchange for three
shares of common stock for each share of preferred stock. The Company
raised $141,000 during the year ended September 30, 1999 with the
issuance of 23,500 shares. During the year ended September 30, 2000 the
Company raised $585,647 with the issuance of 976 shares.
In April, 2000 the Board of Directors of World Wide Video, Inc.
accepted an offer to sell 5,786,400 common shares for a total of
$11,769,400 to an outside investor, via a private placement. As of
September 30, 2000, 140,000 common shares, at $2.25 per share, have
been issued under this agreement. Completion of the agreement is
dependent upon the cash flow of the outside investor.
During fiscal 1999, the Company entered into several agreements in
which shares were exchanged for services. Stock so issued was valued at
the current sales price of common stock.
6. Convertible Debt
In March 1998, National Executive Trade, Inc. advanced the Company
$50,000 (non interest bearing) under an agreement that granted the
lender the exclusive right to manufacture and market products in Canada
until March 2008. Upon delivery of prototypes, the debt was convertible
to 250,000 shares of common stock. The agreement was assigned to
DataPower, Inc., a Canadian company. In November 1998, the parties
agreed that the prototypes were acceptable. At that time, the Company
agreed to issue 250,000 shares of its common stock in satisfaction of
the debt.
F-11
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
7. OPERATING LEASE
The Company leases office space in Culpeper, Virginia, under three
lease agreements. Two of the lease agreements are month-to-month with a
combined monthly rent is $2,000. The third lease agreement is for a
term of one year expiring April 30, 2001, monthly rent is $1,100.
Future minimum lease payments total $4,550 as of September 30, 2000.
Rent expense was $32,360, $8,062 and $1,950, respectively, for the
years ended September 30, 2000, 1999 and 1998.
8. Related Parties
A majority stockholder is a member of the Board of Directors of
DataPower, Inc. (See Notes 4, 5 and 6).
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
percent) 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 $18,000 under a product
marketing agreement. During the year ended September 30, 2000, the
prepayment was charged to expense.
The two majority stockholders have employment agreements, which
commenced January 1, 1999 and continue until December 20, 2004. The
agreements provide for annual salaries of $120,000. Of these amounts
$320,000 and $175,000 remains unpaid at September 30, 2000 and
September 30, 1999, respectively.
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 5
and 8). Other contracts require compensation in the form of stock.
Product Development
The Company entered into an agreement with Analog Devices, Inc. for
design and development of two videophone chipsets. The agreement
includes non-refundable commitment fees of $250,000 for each chipset
design, development and transfer. Implementation of the agreement is
dependent upon cash flow of the Company and approval of working
prototypes.
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. The Company has experienced delays in
completing contract requirements. The contract is in default.
The Company has deferred $17,500 in nonrecurring engineering payments
received in connection with product development contracts.
F-12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
10. Stock Options
The Company has granted stock options under a Stock Option Plan to key
employees for valuable services to the Company. Under the Plan a
maximum of 1,000,000 shares may be granted. The Company authorized
1,000,000 shares and granted 128,000 shares under the Plan. All options
have an eight year term from the exercise date. The following
summarizes the option activity under the Plan:
<TABLE>
<CAPTION>
<S> <C> <C>
Number of Shares Option Price
Outstanding, September 30, 1999 - $ -
Granted 128,000 .10
Exercised - -
Canceled or expired - -
--------- -------
Outstanding, September 30, 2000 128,000 $ .10
======= =======
The vesting period of the remaining options is as follows:
Vested and exercisable 10,000
September 30, 2001 32,000
September 30, 2002 32,000
September 30, 2003 32,000
September 30, 2004 22,000
--------
128,000
</TABLE>
No compensation costs have been recognized under the Plan and the
Company has elected the disclosure only provisions of SFAS No. 123. The
fair value of the options vested and exercisable are immaterial as of
September 30, 2000.
F-13
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Position
---- --- --------
John G. Perry 54 President, and Director
Frank A. Maas 55 Vice President of Engineering,
Secretary, Treasurer,
Chairman of the Board and Director
Ronald P. Cropper 53 Director
John G. Perry founded World Wide Video, Inc. of Virginia, in 1997, and World
Wide Video, Inc. of Colorado, in 1998, and has served as President and on the
Board of Directors since that time. Mr. Perry has a B.S. in Mathematics, 1967,
from Randolph-Macon College and a M.S. in Computer Science, 1976, from the
University of Maryland.
Frank A. Maas founded World Wide Video, Inc. of Virginia, in 1997, and World
Wide Video, Inc. of Colorado, in 1998, and has served as Vice President of
Engineering and as the Chairman of the Board of Directors since that time. Mr.
Maas has a B.S. in Electrical Engineering, 1967, from Case Institute of
Technology. Mr. Maas has over 35 years in computer and communication systems
research and over 10 years experience in video compression.
Ronald P. Cropper has served on the Board of Directors since 1998. Mr. Cropper
has a B.S. from Georgetown University, 1969, and participated in the Harvard
University Accelerated MBA Program. Mr. Cropper has received numerous awards and
has published articles relating to education and distance learning.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
Annual Long-term Other
Name Compensation Compensation Compensation
----------- ---------------- -------------- --------------
John Perry $120,000 None None
Frank Maas $120,000 None None
There have been no activities in these areas to date:
Retirement Plans
Termination Payments
Stock Options/SAR Grants
Aggregate/SAR Exercise and Fiscal Year-End Options/SAR Value
Long-Term Incentive Plan
Pension Plan
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
COMMON STOCK
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. There are no other entities that own over 5% of the
11,151,368 outstanding shares of Common Stock as of 9/30/00.
<TABLE>
<CAPTION>
Officers and Directors
<S> <C> <C> <C> <C>
Title Name of Amount Percent
of Beneficial Nature of of
Class Owner Beneficial Ownership Class
----- -------------------- -------------------- ----------- -------------
Common John G. Perry Founder, President, & Director 4,765,000 42.73%
14327 Smith Road
Culpeper, Virginia 22701
Common Frank A. Maas Founder, Vice President, & 5,000,000 44.84%
Chairman of the Board of Directors
808 Culpeper Avenue
Fredericksburg, Virginia 22405
Common Ronald Cropper Director 10,000 0.09%
POB 797053
Dallas, Texas 75379
------------ --------------
Officers and Directors as a group 9,775,000 91.40%
</TABLE>
<PAGE>
COMMON WARRANTS (non voting until exercised)
Officers and Directors
None
PREFERRED STOCK (closed 8/31/00, Regulation D Rule 506)
The following sets forth information with respect to the Company's Preferred
Stock beneficially owned by each Officer and Director, and by all Directors and
Officers as a group. All other entities that own over 5% of the 121,114
outstanding shares of Preferred Stock as of 9/30/00 are included.
Officers and Directors
Title Name of Title Amount Percent
of Beneficial Nature of of
Class Owner Beneficial Ownership Class
----- ------------- -------------------- ------------ ----------
None
----
Officers and Directors as a group - -
Other Entities
Preferred Joseph Daniel Investor 10,000 8.26%
Box 1148
Culpeper, Virginia 22701
Preferred Lionel Reilly Investor 6,105 5.04%
20620 Corral Road
Elkhorn, NE 68022
Preferred Fred Windhorst Investor 10,201 8.42%
16514 Safforn Circle
Omaha, NE 68136
Preferred John Warner Investor 8,334 6.88%
400 Madison St., Apt. 2201
Alexandria, VA 22314
----------- --------
Other Entries as a group
34,640 28.60%
PREFERRED WARRANTS (non voting until exercised - $6.00 per share expires
8/13/01)
Officers and Directors
Title Name of Title Amount Percent
of Beneficial Nature of of
Class Owner Beneficial Ownership Class
----- ------------- -------------------- --------- -------
None
--------- -------
Officers and Directors as a group
<PAGE>
- -
Other Entities
Warrants Joseph Daniel Investor 20,000 8.26%
Box 1148
Culpeper, Virginia 22701
Warrants Lionel Reilly Investor 12,210 5.04%
20620 Corral Road
Elkhorn, NE 68022
Warrants Fred Windhorst Investor 20,402 8.42%
16514 Safforn Circle
Omaha, NE 68136
Warrants John Warner Investor 16,668 6.88%
400 Madison St., Apt. 2201
Alexandria, VA 22314
-------- -------
Other Entries as a group
69,280 28.14%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None, except those covered in employment and subcontractor as discussed
elsewhere.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 10-K
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.
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS
The following documents are filed as a part of this report:
1. Audited Financial Statements: (See PART II ITEM 8)
2. Additional Financial Statement Schedules: None
3. SK Exhibits (See Below)
4. Supplemental Oil and Gas Information - None.
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)*
10.1.1 Agreement with National Executive Trade, Inc. (amended by 10.1.2)*
10.1.2 Agreement with Data Power, Inc.*
10.2 Share Exchange Agreement*
23.1 Consent of Accountant (See Below)
* Incorporated by reference to Exhibits to the Registration
Statement on Form 10-SB/A (SEC ACCESSION NUMBER: 0001072588-
99-000079) and as amended.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
December 20, 2000
WORLD WIDE VIDEO, INC.
/s/ John G. Perry
----------------------------------
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
<PAGE>
EXHIBIT 23.1
CONSENT OF ACCOUNTANT
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 November 30, 2000, in the
Form10-KSB of World Wide Video, Inc., as filed with the Securities and Exchange
Commission.
/s/ Thompson, Greenspon & Co., P.C.
Fairfax, Virginia
December 20, 2000
--------------------------------------------------
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
