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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20540
FORM S-4/A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
WWBROADCAST.NET INC.
--------------------
(Exact name of registrant as specified in its charter)
WYOMING
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(State or other jurisdiction of incorporation or organization)
7370
----
(Primary Standard Industrial Classification Code Number)
98-0226032
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(I.R.S. Employer Identification Number)
SUITE 2200 - 885 WEST GEORGIA STREET, VANCOUVER,
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BRITISH COLUMBIA, V6C 3H1, (604) 687-9931
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(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
CLARK, WILSON, SUITE 800 - 885 WEST GEORGIA STREET, VANCOUVER, BRITISH COLUMBIA,
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V6C 3H1, (604) 687-5700
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
NOT APPLICABLE
---------------
(Approximate date of commencement of proposed sale
of the securities to the public)
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box:
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
<PAGE>
CALCULATION OF REGISTRATION FEE
Title of Each Amount to be Proposed Maximum Proposed Maximum Amount of
Class of Registered Offering Price Aggregate Registration
Securities to Per Unit Offering Price Fee
Common Shares,
no par value 500 Not Applicable(1) Not Applicable(2) $0.11
($Cdn0.08)
Note: Specific details relating to the fee calculation shall be furnished in
notes to the table, including references to provisions of Rule 457 ( 230.457 of
this chapter) relied upon, if the basis of the calculation is not otherwise
evident from the information presented in the table.
(1) Shares of Common Stock outstanding on July 14, 1999, the record date for
the repurchase offer being made herein.
(2) Calculated in accordance with Rule 457(c) of the Securities Act of 1933,
as amended. Estimated for the sole purpose of calculating the registration fee
and is based upon the average of the bid and asked price of $Cdn0.625 per Common
Shares of the Company on July 13, 2000, as reported on the Canadian Venture
Exchange under the symbol "WW.U". This price has been converted to U.S. dollars
at the exchange rate in effect on July 13, 2000.
<PAGE>
REGISTRATION STATEMENT DATED ________, 2000
wwbroadcast.net inc.
SUITE 2200 - 885 WEST GEORGIA STREET, VANCOUVER,
BRITISH COLUMBIA, V6C 3H1
REPURCHASE OFFER
(500 SHARES OF COMMON STOCK WITHOUT PAR VALUE)
On July 14, 1999, we transferred our corporate domicile from the Province of
British Columbia to the State of Wyoming. Our corporate affairs are now governed
by the laws of Wyoming. Since we did not file a registration statement in
connection with this transfer, we may have violated the Securities Act of 1933.
Accordingly, we now offer to repurchase 500 shares of our common stock resulting
from a two-for-one consolidation of certain shares of our common stock
outstanding on July 14, 1999, at a cash price of Cdn$0.66 ($0.46) per share,
plus interest, for a total repurchase amount Cdn $300.00 ($230.00), plus
interest. We are making this offer only to U.S. persons who owned our common
stock on July 14, 1999.
THIS REPURCHASE OFFER WILL EXPIRE ON __________________________.
We do not make any recommendation about whether shareholders should accept or
reject the repurchase offer. Whether or not you accept this offer, you may still
have the right to sue us for our failure to file a registration statement under
the Securities Act in connection with the transfer to Wyoming and otherwise not
complying with any applicable state or Canadian securities laws.
If you want us to repurchase your shares, please complete the repurchase
agreement accompanying this registration statement and return it as follows:
wwbroadcast.net inc., Suite 2200 - 885 West Georgia Street, Vancouver, British
Columbia, V6C 3H1, Attention: Corporate Secretary. Your completed form must be
accompanied by any wwbroadcast.net inc. common stock certificates that you
possess. If you do not possess any wwbroadcast.net inc. common stock
certificates, you must provide other documentation as specified in the
repurchase agreement.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
THERE ARE A NUMBER OF RISKS THAT YOU SHOULD CONSIDER IN CONNECTION WITH THIS
REPURCHASE OFFER. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
THIS REGISTRATION STATEMENT HAS NOT BEEN APPROVED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAVE
THESE ORGANIZATIONS DETERMINED THAT THIS REGISTRATION STATEMENT IS ACCURATE OR
COMPLETE. IT'S ILLEGAL FOR ANYONE TO TELL YOU OTHERWISE.
The date of this registration statement is _____________, 2000.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Summary
1
Risk Factors
3
(a) Risks Related to Our Repurchase Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) "Penny Stock" Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(d) Limited Operating History. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(e) History of Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(f) Quarterly Operating Results Subject to Fluctuation . . . . . . . . . . . . . . . . . . . . 7
(g) Acceptance of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(h) Dependence upon Continued Growth in the use of the Internet and of Streaming Media Content 8
(i) Reliance upon Technology and Computer Systems. . . . . . . . . . . . . . . . . . . . . . . 8
(j) Response to Technological Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(k) Dependence upon Providers of Streaming Media Products. . . . . . . . . . . . . . . . . . . 10
(l) Relationships with Content Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(m) Uncertain Ability to Manage Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(n) Need for Additional Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(o) Generating Revenues from Advertising and Alliances . . . . . . . . . . . . . . . . . . . . 11
(p) Marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(q) Security Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(r) Dependence upon Key Personnel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(s) Current or Proposed Government Regulation. . . . . . . . . . . . . . . . . . . . . . . . . 12
(t) Liability for Website Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(u) Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(v) Limited Protection for Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . 13
(w) Misappropriation of Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . 14
(x) Misappropriation of Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(y) Insider Control of Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(z) Volatility of Stock Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(aa) Effect of Shares Eligible for Public Sale . . . . . . . . . . . . . . . . . . . . . . . . 15
Repurchase Offer
16
Voting Securities "Principal Holders of Voting Securities"
20
Directors and Executive Officers
21
Executive Compensation
23
Certain Relationships and Related Transactions
26
wwbroadcast.net inc.
26
Legal Proceedings
32
Market Price of and Dividends on the Registrant's Common Equity
32
Management Discussions and Analysis
33
<PAGE>
Plan of Operation
38
Legal Matters
38
Experts
38
Where you can find more information
38
Financial Statements and Exhibits
38
Undertakings
39
Signatures
40
</TABLE>
<PAGE>
SUMMARY
To better understand our share repurchase offer, you should carefully read
this entire document and the documents which we have referred you to. We
have included page references to direct you to more complete descriptions of
the topics presented in this summary.
Our principal business is the operation of an Internet portal website and
various subsidiary websites designed to aggregate, distribute and market
streaming media content over the Internet to a global audience.
THE REPURCHASE OFFER (PAGE 18)
We are offering to repurchase all shares of our common stock resulting from a
two-for-one consolidation of those shares of our common stock which were held by
U.S. shareholders of record on July 14, 1999, at a cash price of Cdn$0.66
($0.46) per share, plus interest. This offer will expire on . The repurchase
price is based on the pre-consolidation closing price of our common stock
(Cdn$0.33; $0.23) on the Vancouver Stock Exchange on June 30, 1998, the date of
the shareholder vote approving our change of domicile to Wyoming.
We are making this repurchase offer because we may have been required under the
Securities Act of 1933 to file a registration statement with the Securities and
Exchange Commission when we changed our domicile from British Columbia to
Wyoming in July 1999. Since we did not file a registration statement, we may
have inadvertently violated certain federal and state securities laws. If you
qualify to accept the repurchase offer, but have already sold your shares at a
price below the repurchase price, you are entitled to receive cash in the amount
of that difference.
As a Canadian company, we made the disclosures required by Canadian law when we
sought shareholder approval for our move to Wyoming. All of our shareholders
got the benefit of disclosure in accordance with the applicable Canadian
requirements, which we believe are substantially similar to U.S. requirements.
However, when we changed our domicile from Canada to the U.S., our U.S.
shareholders may have been entitled to claim that we were presenting them with a
new investment decision, and that the disclosure and proxy solicitation
materials provided to them should have been registered in accordance with the
Securities Act of 1933. Accordingly, we are making this offer only to U.S.
persons who owned shares of our common stock on July 14, 1999.
Even though we are making this repurchase offer, we have not concluded that we
did not comply with applicable federal and state securities laws, and we are not
waiving any applicable statutes of limitation. To date, no shareholder has
sought repurchase of any shares by us.
If you want us to repurchase your shares, please see "Repurchase Offer," below,
and the repurchase agreement accompanying this registration statement, for
instructions on how to respond to this repurchase offer.
LEGAL RIGHTS OF REPURCHASE OFFEREES AND CONSEQUENCES OF ACCEPTANCE OR
NON-ACCEPTANCE (PAGE 18)
We are making the repurchase offer to protect us from any future repurchase
liability, although our liability may survive and may not be limited by the
repurchase offer. If you are a U.S. person and owned shares of our common stock
on July 14, 1999, you could require us to buy those shares from you at the
market price at the time of such shareholder approval, subject to adjustment to
reflect the two-for-one share consolidation of our common stock, or make up the
difference to you if you have since sold your shares at a lower price.
<PAGE>
MATERIAL TAX CONSEQUENCES (PAGE 21)
Tax matters are often complicated and the tax consequences to you from the
repurchase will depend in part on the facts of your own situation. You should
consult your tax advisors, as you think appropriate, for a full understanding of
the tax consequences to you from the repurchase. In general, though, if we
repurchase your shares, you would be subject to tax on the excess, if any, of
what we pay you now for your shares over what you originally paid for them. If
you have already sold your shares for a lower price than our repurchase offer
price, and we reimburse you for the difference, you would be subject to tax on
the excess, if any, of the total amount of our reimbursement to you plus what
you sold the shares for, over what you originally paid for the shares.
WWBROADCAST.NET COMMON STOCK
On July 14, 1999 we had 15,918,107 outstanding shares of common stock.
Effective November 15, 1999, we caused all of our fully-paid, issued and
outstanding shares of common stock to be consolidated, such that for each two
common shares of us previously held by a shareholder, the shareholder received
one share after consolidation. Subsequent to the November 15, 1999 share
consolidation, we have issued a total of 4,355,000 shares of common stock,
including 3,000,000 shares issued in consideration of our acquisition of High
Tech Venture Capital Inc. As at June 30, 2000, we had 12,314,054 outstanding
shares of common stock. We do not have any other class of shares. All
information regarding our shares and per share information contained in this
documents is disclosed on a post-consolidation basis.
Our common shares are traded on the Canadian Venture Exchange under the symbol
"WW.U".
We have never declared cash dividends on our common stock and do not anticipate
doing so in the foreseeable future.
RISK FACTORS
You should read the risk factors described under the heading "Risks Related To
Our Repurchase Offer" to help you understand some of the risks we face in
connection with our repurchase offer. You should also read the other risk
factors so you understand more clearly the risks of your investment in us.
RISKS RELATED TO OUR REPURCHASE OFFER
We may have violated U.S. securities laws by not filing a registration
statement in connection with our move to Wyoming. If an exemption from the
registration requirements did not exist in connection with our transfer to
Wyoming, persons who were our shareholders at that time, including non-U.S.
shareholders, could possibly require us to repurchase their shares, or they
could possibly sue us.
We are making this repurchase offer to U.S. shareholders only. If all our
U.S. shareholders of record as of July 14, 1999, accept the repurchase offer,
we would need to pay them approximately Cdn$330.00 (or approximately $230.00,
based on exchange rates as at the date of the shareholder approval of the
transfer of domicile), plus interest. If our U.S. shareholders refuse to accept
the remedy offered in this repurchase offer, or if we cannot complete the
repurchase offer, they could sue us, alleging violations of U.S. securities
laws.
Our non-U.S . shareholders may be able to compel us to repurchase their
shares as well, if they successfully sue us for violating U.S. securities
laws in connection with our move to Wyoming. If our non-U.S. shareholders are
able to compel us to purchase their shares as well, and all of the U.S.
shareholders accept the repurchase offer, we would need to pay those
shareholders approximately Cdn$3,978,025, which amounts to approximately
$2,772,563, based on the rate of exchange on June 30, 1998, plus interest.
This could make us insolvent or require us to obtain additional financing,
the availability of which cannot be assured. If we have
<PAGE>
to delay payments, we would have to pay interest on the amounts due, which would
increase the total amount we would have to pay and further strain our cash
position.
Even if we complete the repurchase offer, all of our shareholders, including
our U.S. shareholders, could still sue us, alleging violations of United States
securities laws. Our repurchase offer is not an admission by us of any
violation of any U.S. securities laws.
"PENNY STOCK" RULES
Our common stock would be classified as "penny stock" under United States
securities laws. These laws impose special rules on broker-dealers trading in
penny stocks that are not applicable to other stocks. If broker-dealers find
these requirements too burdensome and therefore are less willing to deal in
penny stocks, this might limit market activity for all penny stocks, including
our common stock. This could limit your ability to sell your stock in us when
you want and at a satisfactory price.
The laws relating to penny stocks were changed in 1990 because of alleged abuses
in the penny stock market. The new laws require broker-dealers who sell penny
stocks to meet potentially burdensome requirements. For example, a broker-dealer
selling a penny stock must:
- give the customer written information about the market for penny stocks
including a discussion of how those stocks are traded, and the risks of the
penny stock market. This information must also describe the broker-dealer's
duties to the customer and let the customer know about his or her rights and
remedies if the broker-dealer violates these duties; and
- give penny stock customers written monthly account statements that list
their holdings and estimated market values.
If broker-dealers find these requirements too burdensome, the willingness of
broker-dealers to deal in penny stocks such as ours may be limited, possibly
resulting in a less active market which could lower the value of your investment
in our common stock.
WE ARE SUBJECT TO COMPETITORS WITH GREATER RESOURCES AND BETTER NAME RECOGNITION
Many of our competitors, most notably Realguide.com, Windows Media and Yahoo
Broadcast.com, are substantially larger than us and have significantly greater
financial resources and marketing capabilities than we have, together with
better name recognition. It is possible that new competitors may emerge and
acquire significant market share. Competitors with superior resources and
capabilities may be better able to utilize such advantages to market their
website, products and services better, faster and/or cheaper than we can.
Increased competition from future or existing competitors will likely impair our
ability to establish and maintain market share. If we are unsuccessful in
generating sufficient traffic to our websites to attract business advertisers,
it is unlikely that we will be able to generate sufficient advertising revenues
to sustain operations. We anticipate that we will be in a position to commence
charging fees for advertising once we register at least 500,000 "page views" per
month by visitors to our websites. We are currently averaging approximately
150,000 page views per month.
NO ASSURANCES AS TO OUR ABILITY TO PROVIDE COMPELLING PRODUCTS AND SERVICES
Our ability to compete successfully will require us to develop and maintain a
technologically advanced website and to provide superior products and services,
attract and retain highly qualified personnel and build a significant customer
base. In addition, we must provide sufficiently compelling and entertaining
content to generate users, support advertising intended to reach such users and
attract business and other organizations
<PAGE>
seeking Internet broadcasting and distribution services. There are no
assurances that we will be able to achieve these objectives, particularly since
the marketability of our products and services will be subject to consumer
tastes and preferences which are beyond our control.
NO ASSURANCES THAT OUR PRODUCTS AND SERVICES WILL REMAIN COMPETITIVE WITH OTHER
TECHNOLOGIES
Our websites and products and services will compete directly with other existing
and subsequently developed products using competing technologies. There can be
no assurance that our competitors will not succeed in developing or marketing
technologies, websites, services and products that are more effective and
commercially desirable than those developed or marketed by us or that would
render our websites, products and services non-competitive. (See "Description
of Business - Competition" for further information)
LIMITED OPERATING HISTORY IN PROVIDING INTERNET SERVICES
On March 9, 2000 we activated our portal website on the Internet, thereby giving
us the ability to aggregate, distribute and market streaming media on the
Internet. (See "wwbroadcast.net inc. - Business of the Company" for further
information.) As such, we have a limited operating history on which to base an
evaluation of our business and prospects. Our prospects must be considered in
light of the risks, uncertainties, expenses and difficulties frequently
encountered by companies in their early stages of development, particularly
companies in new and rapidly evolving markets similar to those faced by us.
Some of these risks and uncertainties relate to our ability to:
- attract and maintain a large base of users;
- develop and introduce desirable services and original content to users;
- establish and maintain strategic alliances with content providers and
streaming media providers;
- establish and maintain relationships with these providers;
- establish and maintain relationships with advertisers and advertising
agencies;
- respond effectively to competitive and technological developments;
- build an infrastructure to support our business;
- provide compelling and unique content to Internet users;
- successfully market and sell advertising;
- effectively develop new and maintain existing relationships with
advertisers, content providers, business customers and advertising agencies;
- continue to develop and upgrade our technology and network infrastructure;
- respond to competitive developments;
- successfully introduce enhancements to our existing products and services
with a view to addressing new technologies and standards; and
- attract, retain and motivate qualified personnel.
<PAGE>
We cannot be sure that we will be successful in addressing these risks
and uncertainties and our failure to do so may impair our ability to capture
market share and generate revenues. In addition, our operating results are
dependent to a large degree upon factors outside of our control, including
the availability of compelling content and the development of broadband networks
to support multimedia streaming.
HISTORY OF LOSSES
(a) Lack of Revenues
We currently do not generate any revenues from our business operations, and our
ability to generate revenues in the future is uncertain. Our short and
long-term prospects depend upon establishing and maintaining strategic alliances
with content providers and affiliates in order to build memberships that will
generate a demand for advertising. We anticipate that a significant portion of
our revenues, if any, will be derived from advertising. Accordingly, our
success is highly dependent on such alliances and we may never generate
significant revenues if we fail to establish such alliances. Any adverse
developments in streaming media technology could have an adverse affect on our
ability to generate revenues. As our business evolves, we expect to introduce a
number of new services. With respect to both current and future services, we
expect to significantly increase our marketing and operating expenses in an
effort to increase our user base, enhance our image and support our
infrastructure. In order for us to make a profit, our revenues will need to
increase significantly to cover these and other future costs. Even if we become
profitable, we may not sustain or increase our profits on a quarterly or annual
basis in the future.
(b) Difficulties In Continuing As A Going Concern
We have not achieved profitability and expect to continue to incur net losses
for the foreseeable future and we cannot give assurances that we will achieve
profitability. We have incurred net losses of approximately $3,108,231 to
December 31, 1999, and further net losses of $520,974 between January 1, 2000 to
June 30, 2000. Since inception of our new business on July 1, 1999 we have
incurred losses of $779,215 to June 30, 2000. Our auditor's report on our 1999
financial statements contains additional comments that indicate that, due to
recurring losses and negative cash flows, substantial doubt about our ability to
continue as a going concern exists. Our financial statements do not include any
adjustments due to this uncertainty.
QUARTERLY OPERATING RESULTS SUBJECT TO FLUCTUATION
Even if we commence generating revenues from operations, which cannot be
assured, our quarterly operating results may fluctuate significantly as a result
of a variety of factors beyond our control, including:
- the cost of acquiring, and the availability of, content;
- the demand for our services;
- the demand for Internet advertising;
- seasonal trends in Internet advertising placements;
- advertising cycles for, or the addition or loss of, individual
advertisers;
- the level of traffic on our websites;
- the amount and timing of capital expenditures and other costs relating to
the expansion of our operations;
<PAGE>
- price competition or pricing changes in Internet broadcasting services,
such as business services, and in Internet advertising ;
- the seasonal nature of the content accessible from our network, such as
sporting and other seasonal events;
- technical difficulties or system downtime;
- costs associated with acquiring or integrating efficient technologies to
meet our needs;
- the introduction of new products or services by us or by our competitors;
- our ability to successfully integrate operations and technologies from
acquisitions; and
- general economic conditions, as well as economic conditions specific to
the Internet, such as electronic commerce and online media.
Generally, advertising sales in television are lower in the first and third
calendar quarters of each year, and advertising expenditures fluctuate
significantly with economic cycles. Depending on the extent to which the
Internet is accepted as an advertising medium, seasonal and cyclical variations
in the level of Internet advertising expenditures could become more pronounced
than they currently are. We expect our Internet advertising sales generally to
follow the quarterly trends of traditional media advertising.
ACCEPTANCE OF THE COMPANY BY INTERNET CONSUMERS, ADVERTISERS AND CONTENT
PROVIDERS
Our success is dependent upon achieving significant market acceptance of our
websites and services by Internet consumers, advertisers and content providers.
Failure to achieve and maintain such market acceptance would seriously harm the
viability of our business.
We cannot guarantee that Internet consumers, advertisers or content providers
will accept streaming media technology or even the Internet, as a replacement
for traditional sources of live and archived audio and video programming.
Market acceptance of streaming media technology depends upon continued growth in
the use of the Internet generally and, in particular, as a source of multimedia
programming for consumers. The Internet may not prove to be a viable channel for
these services because of inadequate development of necessary infrastructure,
such as reliable network backbones, or complimentary services, such as
high-speed modems and security procedures for the transmission of live and
archived audio and video programming, the implementation of competitive
technologies, government regulation or other reasons.
DEPENDENCE UPON CONTINUED GROWTH IN THE USE OF THE INTERNET AND OF STREAMING
MEDIA CONTENT
Our business is new and rapidly evolving, and may be adversely affected if
Internet usage, and in particular usage of multimedia information and
entertainment, does not continue to grow.
Conversely, if Internet usage does continue to grow substantially, our
infrastructure may be unable to support the high demands associated with such
growth. Specifically, the ability of the Internet to deliver high quality video
content, as well as the reliability and performance of the video content, may
decline, which may adversely affect us.
RELIANCE UPON TECHNOLOGY, COMPUTER SYSTEMS AND INTERNET SERVICE PROVIDERS
<PAGE>
The performance, reliability and availability of our websites and network
infrastructure are critical to our ability to attract and retain users,
advertisers and content providers. Our business may be seriously harmed if
users cannot access our websites 24 hours a day, seven days per week. If users
have any problems accessing us, this would decrease traffic flow to our
websites, and thereby decrease the potential for advertising revenues. (See
"Description of Business - streaming Media Technology" for further information.)
Our business is highly dependent upon our computer and software systems. In
addition, the users of our websites depend on Internet service providers and
other website operators for access to our websites. Possible causes of access
problems therefore include:
- the temporary or permanent loss of our equipment or systems, through
casualty, operating malfunction or otherwise;
- outages or other problems that may be experienced by Internet service
providers and other website operators; and
- slower access or system failures due to increased traffic on our websites
or on the Internet.
A large portion of our network infrastructure is currently located at a single
facility. Our systems and operations are therefore vulnerable to damage or
interruption from fire, flood, power loss, telecommunications failure and
similar events. We have only limited redundant facilities and systems and no
formal disaster recovery plan. Moreover, we do not currently carry sufficient
business interruption insurance to compensate for losses that may occur.
DIFFICULTIES IN RESPONDING TO TECHNOLOGICAL CHANGE
Our market is characterized by rapid technological developments, frequent new
product introductions and evolving industry standards. If we fail to rapidly
respond to technological developments, our business could be adversely affected.
The emerging character of these products and services and their rapid evolution
will require us to:
- effectively use leading technologies;
- continue to develop our technological expertise; and
- enhance our current services and continue to improve the performance,
features and reliability of our network infrastructure.
Changes in network infrastructure, transmission and content delivery methods and
underlying software platforms and the emergence of new broadband technologies,
such as xDSL and cable modems, could dramatically change the structure and
competitive dynamic of the market for streaming media solutions. In particular,
technological developments or strategic partnerships that accelerate the
adoption of broadband access technologies or advancements in streaming and
compression technologies may require us to expend resources to address these
developments. In addition, the widespread adoption of new Internet technologies
or standards could require substantial expenditures to modify or adapt our
websites and services.
DEPENDENCE UPON PROVIDERS OF STREAMING MEDIA PRODUCTS
We rely on providers of streaming media products, such as RealNetworks and
Microsoft, to provide our users with streaming media software. In the future,
we may need to acquire licenses from such streaming media companies to meet our
future needs. Through links provided by us, users are currently able to
download electronically copies of Apple Quicktime and Microsoft's Windows Media
Player software. If providers of streaming media products substantially
increase user fees charged to users for the use of their products, or
<PAGE>
begin charging users for copies of their player software, such actions could
result in decreased traffic to our websites, thereby decreasing the potential
for advertising revenues.
DEPENDENCE UPON RELATIONSHIPS WITH CONTENT PROVIDERS
Our future success depends upon our ability to aggregate and deliver compelling
content over the Internet. We do not create our own content. Rather, we rely on
third party content providers, such as television stations and cable networks,
businesses and other organizations, universities, film producers and
distributors for compelling and entertaining content.
We have a limited number of relationships with content providers, and
significantly rely upon the personal contacts of our President, Kirk Exner, and
our Advisory Board to maintain our existing relationships and to develop new
relationships. Our success depends significantly on our ability to maintain
these existing relationships with these content providers and to build new
relationships with other content providers. We cannot ensure that we will be
able to maintain such relationships and continue to obtain the necessary
content.
Further, our relationships with certain of our content providers are
nonexclusive, and many of our competitors offer, or could offer, content that is
similar to or the same as that obtained by us from such nonexclusive content
providers. Such direct competition could adversely affect our business. Any
inability to effectively manage our relationships with content providers may
result in decreased traffic on our websites and, as a result, decreased
potential for advertising revenues, which could adversely affect our business.
UNCERTAIN ABILITY TO ACHIEVE, MANAGE OR SUSTAIN GROWTH
It may be necessary for us to grow in order to remain competitive (see "Risk
Factors-Competition"). Our ability to grow is dependent upon a number of
factors including, but not limited to, our ability to hire, train and assimilate
management and other employees, the adequacy of our financial resources, our
ability to identify and efficiently provide new services as our customers may
demand in the future and our ability to adapt our systems to accommodate our
expanded operations. In addition, there can be no assurance that we will be
able to achieve necessary expansion or that we will be able to manage
successfully such expanded operations. Failure to manage growth effectively and
efficiently could have an adverse effect on our ability to acquire sufficient
market share and remain competitive.
NEED FOR ADDITIONAL FINANCING DUE TO LACK OF REVENUES
We have limited capital resources and currently do not generate any revenues
from operations (refer to "Management's Discussion and Analysis" for further
information). Our ability to continue in business depends upon our continued
ability to obtain financing. There can be no assurance that any such financing
would be available upon terms and conditions acceptable to us, if at all. The
inability to obtain additional financing in a sufficient amount when needed and
upon acceptable terms and conditions could have a material adverse effect upon
us. Although we believe that we can raise financing sufficient to meet our
immediate needs, we will require funds to finance our development and marketing
activities in the future. There can be no assurance that such funds will be
available or available on terms satisfactory to us. If additional funds are
raised by issuing equity securities, further dilution to existing or future
stockholders is likely to result. If adequate funds are not available on
acceptable terms when needed, we may be required to delay, scale-back or
eliminate our promotional and marketing campaign or our development programs.
Inadequate funding also could impair our ability to compete in the marketplace
and could result in our dissolution.
DEPENDENCE UPON GENERATING REVENUES FROM ADVERTISING
Our future success depends on an increase in the use of the Internet as an
advertising medium. Although we have not to date generated any revenues from
advertising, we plan to derive a substantial amount of our revenues from the
sale of advertisements and sponsorships on our websites. If the market for
Internet
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advertising and sponsorships fails to develop or develops more slowly than
expected, we may not be able to generate the revenues required to continue our
operations or to become profitable.
Advertising on the Internet is new and rapidly evolving and cannot yet be
compared with the traditional advertising market to gauge its effectiveness. As
a result, there is significant uncertainty about the demand and market
acceptance for Internet advertising. We cannot predict how our potential
advertising customers and sponsors will ultimately react to Internet advertising
and sponsorship as compared to traditional advertising media and sponsorship
opportunities. This makes it difficult to project our future advertising and
sponsorship rates and revenues.
In addition, widespread adoption or increased use by Internet users of "filter"
software programs which limit or remove advertising from their desktops or the
adoption of this type of software by Internet access providers could have a
materially adverse effect on the viability of advertising on the Internet and on
our ability to generate revenues.
INCREASING MARKETING EXPENDITURES
We have not incurred significant advertising, sales and marketing expenses to
date. To increase awareness for our websites, we expect to spend significant
amounts on advertising, sales and marketing in the future. If our marketing
strategy is unsuccessful, we may not be able to recover these expenses or
increase our revenues. We will be required to develop a marketing and sales
campaign that will effectively demonstrate the advantages of our websites,
services and products. To date, our marketing and selling experience with
respect to our websites is very limited. We may also elect to enter into
agreements or relationships with third parties regarding the promotion or
marketing of our websites, products and services. There can be no assurance
that we will be able to establish adequate sales and marketing capabilities,
that we will be able to enter into marketing agreements or relationships with
third parties on financially acceptable terms or that any third parties with
whom we enter into such arrangements will be successful in marketing and
promoting our websites and services.
SECURITY RISKS ASSOCIATED WITH INTERNET ACCESS
Our network (and those of our content providers) may be vulnerable to
unauthorized access, computer viruses and other disruptive problems. A party
who is able to circumvent security measures could misappropriate proprietary
information or cause interruptions in our Internet operations. Internet service
providers have in the past experienced, and may in the future experience,
interruptions in service as a result of the accidental or intentional actions of
Internet users, current and former employees or others. We may be required to
expend significant capital or other resources to protect us against the threat
of security breaches or to alleviate problems caused by such breaches.
DEPENDENCE UPON KIRK EXNER
Our key personnel is limited at present to Kirk Exner, our President. The loss
of the services of Mr. Exner and other employees, for any reason, may have a
materially adverse effect on our prospects. Although we believe that the loss
of any of our management or other key employees (apart from Mr. Exner) will not
have a material adverse impact upon us, there can be no assurance in this
regard, nor any assurance that we will be able to find suitable replacements.
In addition, competition for personnel is intense, making it difficult to find
highly skilled employees with appropriate qualifications. Furthermore, we do
not maintain "key man" life insurance on the lives of any of our management or
other key employees of us. To the extent that the services of any key employee
of us become unavailable, we will be required to retain other qualified persons.
However, there can be no assurance that we will be able to employ qualified
persons upon acceptable terms.
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CURRENT OR PROPOSED GOVERNMENT REGULATION
Although there are few laws and regulations directly applicable to the Internet,
it is likely that new laws and regulations will be adopted in the United States
and elsewhere governing issues such as music licensing, broadcast license fees,
copyrights, privacy, pricing, sales taxes and characteristics and quality of
Internet services. It is possible that governments will enact legislation that
may be applicable to us in areas such as content, network security, encryption
and the use of key escrow, data and privacy protection, electronic
authentication or "digital" signatures, illegal and harmful content, access
charges and retransmission activities.
The adoption of restrictive laws or regulations could slow Internet growth or
expose us to liability associated with content available on our websites. The
application of existing laws and regulations governing Internet issues such as
property ownership, libel, defamation, content, taxation and personal privacy is
also uncertain. The majority of such laws were adopted before the widespread
use and commercialization of the Internet and, as a result, do not contemplate
or address the unique issues of the Internet and related technologies.
Any new law or regulation pertaining to the Internet, or the application or
interpretation of existing laws, could decrease demand for our websites and
services, increase our cost of doing business or otherwise have a material
adverse effect on our success and continued operations. Laws and regulations
may be adopted in the future that address Internet-related issues, including
online content, user privacy, pricing and quality of products and services. The
growing popularity and use of the Internet has burdened the existing
telecommunications infrastructure in many areas, as a result of which local
exchange carriers have petitioned the FCC to regulate Internet service providers
in a manner similar to long distance telephone carriers and to impose access
fees on the Internet service providers. We cannot guarantee that the United
States, Canada or foreign nations will not adopt legislation aimed at protecting
Internet users' privacy. Any such legislation could restrict a user's access to
us and therefore negatively affect our business. Moreover, it may take years to
determine the extent to which existing laws governing issues like property
ownership, libel, negligence and personal privacy are applicable to the
Internet.
LIABILITY FOR WEBSITE INFORMATION
We may be subjected to claims for negligence, copyright, patent, trademark,
defamation, indecency and other legal theories based on the nature and content
of the materials that we broadcast. Such claims have been brought, and
sometimes successfully litigated, against Internet content distributors. In
addition, we could be exposed to liability with respect to the content or
unauthorized duplication or broadcast of content. Although we have applied for
general liability insurance, such insurance may not cover potential claims of
this type or may not be adequate to indemnify us for all liability that may be
imposed. In addition, when users access our websites they must agree to certain
terms and conditions governing the use of our websites which limit our
liability. Any imposition of liability that is not covered by insurance or is
in excess of insurance coverage could adversely affect our business.
While the current law generally states that entities like us, which provide
interactive computer services, shall not be treated as the publisher or speaker
with respect to third party content they distribute, the scope of the law's
definition and limitations on liability have not been widely tested in court.
Accordingly, we may be subject to such claims. Our media and general liability
insurance may not cover all potential claims of this type or may not be adequate
to indemnify us for any liability that may be imposed. Any liability not covered
by indemnification or insurance or in excess of indemnification or insurance
coverage could adversely affect our business.
INTELLECTUAL PROPERTY
We have applied for, but have not yet received, trademark protection in
Canada and the United States for "OneWorld, OneNetwork", "wwbroadcast.net",
"wwbc.net", worldwide broadcast network", "wwbroadcast.net", and "wwbc".
In addition, we have secured the registration of the domain names
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"wwbc.net", "wwbusiness.net", "wwbroadcast.net", "worldwidebroadcast.net",
"wwcomedy.net", "wwdrama.net", "weducation.net", "wwfamily.net",
"wwfashion.net", "wwgames.net", "wwhealth.net", "wwkids.net", "wwmovies.net",
"wwmusic.net", "wwnews.net", "wwsports.net" and "wwtravel.net" with Network
Solutions, Inc. (Internet).
LIMITED PROTECTION FOR INTELLECTUAL PROPERTY
While we are investigating the possibilities of patent, copyright and trademark
registration and protection for our intellectual property, no such protection
has yet been granted except as referred to above. There is no assurance that
such registration or protection will be available, and therefore we may have
little or no protection for our intellectual property assets, which comprise our
main business assets.
Our portal Website (as defined below under "wwbroadcast.net inc. - Business of
the Company") operates under the domain name "wwbc.net". We have Content
Websites (as defined below under "wwbroadcast.net inc. - Business of the
Company") operated under each of the other domain names listed above. Our
efforts to protect this intellectual property may not be adequate. Unauthorized
parties may infringe upon or misappropriate our network or other proprietary
information. In the future, litigation may be necessary to protect and enforce
our intellectual property rights or to determine the validity and scope of our
intellectual property, which could be time consuming and costly. We could also
be subject to intellectual property infringement claims as the numbers of
competitors grows. These claims, even if not meritorious, could be expensive
and divert our attention from our continued operations. If we become liable to
any third parties for such claims, we could be required to pay a substantial
damage award or to develop comparable non-infringing intellectual property and
systems.
MISAPPROPRIATION OF INTELLECTUAL PROPERTY
Our actions to protect our trademarks and other proprietary rights may be
inadequate. In addition, it is possible that we could become subject to
infringement actions based upon content we may provide from third parties. Any
of these claims, with or without merit, could subject us to costly litigation
and the diversion of our financial resources and technical and management
personnel. Further, if such claims are successful, we may be required to change
our trademarks, alter the content of our websites and pay financial damages.
Despite our efforts to protect our proprietary rights from unauthorized use or
disclosure, parties may attempt to disclose, obtain or use our solutions or
technologies.
If third parties prepare and file applications in the United States that claim
trademarks used or registered by us, we may oppose those applications and be
required to participate in proceedings before the United States Patent and
Trademark Office to determine priority of rights to the trademark, which could
result in substantial costs. An adverse outcome in litigation or privity
proceedings could require us to license disputed rights from third parties or to
cease using such rights. Any litigation regarding our proprietary rights could
be costly and divert our attention, result in the loss of certain of our
proprietary rights, require us to seek licenses from third parties and prevent
us from selling our services, any one of which could adversely affect our
business.
MISAPPROPRIATION OF PROPRIETARY RIGHTS
We may not be able to prevent misappropriation of our proprietary information
and agreements entered into by us for that purpose may not be enforceable. It
might be possible for a third party to copy or otherwise obtain and use our
proprietary information without authorization. The laws of some countries may
afford us little or no effective protection of our intellectual property.
INSIDER CONTROL OF COMMON STOCK
As of July 31, 2000, directors and executive officers beneficially owned
approximately 51% of our outstanding common stock. As a result, these
stockholders, if they act as a group, will have a significant influence on all
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matters requiring stockholder approval, including the election of directors and
approval of significant corporate transactions. Such control may have the
effect of delaying or preventing a change in control.
VOLATILITY OF STOCK PRICE
The trading price of our common stock has been and may continue to be subject to
wide fluctuations. Trading prices of our common stock may fluctuate in response
to a number of factors, many of which are beyond our control. In addition, the
stock market in general, and the market for Internet-related and technology
companies in particular, has experienced extreme price and volume fluctuations
that have often been unrelated or disproportionate to the operating performance
of such companies. The trading prices of many technology companies' stocks have
recently been at historical highs and reflected price earnings ratios
substantially above historical levels. There can be no assurance that such
trading prices and price earnings ratios will be achieved again. These broad
market and industry factors may adversely affect the market price of the common
stock, regardless of our operating performance.
In the past, following periods of volatility in the market price of a company's
securities, securities class-action litigation has often been instituted. Such
litigation, if instituted, could result in substantial costs and a diversion of
management's attention and resources.
EFFECT OF SHARES ELIGIBLE FOR PUBLIC SALE
As of July 31, 2000, there were 12,314,054 common shares issued and outstanding.
As of July 31, 2000, 3,319,195 of these shares were held in escrow. Under
applicable regulatory requirements, 1,070,000 shares issued pursuant to a
private placement of units which closed January 26, 2000 will be restricted from
trading for a one year period ending November 30, 2000. Under applicable
regulatory requirements, 225,000 shares issued pursuant to a second private
placement of units that closed on April 11, 2000 will be restricted from trading
for a one year period expiring January 27, 2001. Furthermore, as at August 31,
2000, 1,077,000 shares are issuable upon the exercise of options, and 647,500
issuable upon the exercise of warrants. Sales of a large number of shares could
have an adverse effect on the market price of our common stock. Any sales by
these stockholders could adversely affect the trading price of our common stock.
FORWARD LOOKING STATEMENTS
This registration statement contains statements that plan for, or anticipate,
the future. We believe that some of these statements are "forward-looking"
statements. Forward-looking statements include statements about our future,
statements about future business plans and strategies, and most other statements
that are not historical in nature. In this registration statement,
forward-looking statements use words like "anticipate," "plan," "believe,"
"expect" and "estimate." However, because forward-looking statements involve
future risks and uncertainties, there are factors, including those discussed
below, that could cause actual results to differ materially from those expressed
or implied. We have attempted to identify the major factors that could cause
differences between actual and planned or expected results, but we may not have
identified all of those factors. You therefore should not place undue reliance
on forward-looking statements.
Such estimates, projections or other "forward-looking statements" involve
various risks and uncertainties as outlined below. We caution readers that
important factors in some cases have affected and, in the future, could
materially affect actual results and cause actual results to differ materially
from the results expressed in any such estimates, projections or other
"forward-looking statements". In evaluating us, our business and any investment
in us, readers should carefully consider our ability to:
- provide access to unique and compelling streaming media content to
Internet users;
- successfully market and sell advertising;
- effectively develop new and maintain existing relationships with
advertisers, content providers and business customers;
- continue to develop and upgrade our technology and network infrastructure;
- respond to competitive developments;
- successfully enhance existing services to address new technology and
standards; and
-attract, retain and motivate qualified personnel.
<PAGE>
REPURCHASE OFFER
BACKGROUND
On July 14, 1999 we transferred our corporate domicile from the Province of
British Columbia to the State of Wyoming. Our corporate affairs are now governed
by the laws of Wyoming. In all other material respects we remained the same. In
order to make the transfer, we had to solicit proxies as required by Canadian
corporate and securities law. The shareholder vote for the transfer was
6,981,485 votes in favour (0 votes against and 0 abstentions), which represented
50.2% of the issued and outstanding shares at the time of the shareholder vote.
A transfer of corporate domicile such as we made does not involve the
organization of a new corporation or any internal change in the transferring
corporation. The only change is that the corporation's affairs become governed
by the law of the new jurisdiction, in this case Wyoming. As required by British
Columbia law, we gave those of our shareholders who wished to dissent from the
transfer a right at that time to have their shares redeemed in cash. No
shareholders exercised that dissent right.
We did not file a registration statement under the Securities Act of 1933 when
we transferred to Wyoming. Our failure to file a registration statement may
have been a violation of the Securities Act of 1933. Because we may have
violated the Securities Act of 1933, we are offering to repurchase our shares
from all U.S. persons who were shareholders of record of our common stock as of
July 14, 1999. This group of shareholders, which excludes persons who acquired
shares of our common stock after July 14, 1999, is referred to as "repurchase
offerees" in this registration statement. Repurchase offerees who want us to
repurchase their shares must complete and return the repurchase agreement
accompanying this registration statement as Attachment A. Even though we are
making this repurchase offer, we have not concluded that we violated any
applicable federal and state securities laws, and we are not waiving any rights.
We are making this offer only to U.S. persons who were shareholders of record of
our common stock on July 14, 1999. This is because we, as a Canadian company,
made required disclosures in compliance with Canadian law when we sought
shareholder approval for our transfer to Wyoming. All of our shareholders got
the benefit of disclosure in accordance with Canadian requirements, which we
believe are substantially similar to U.S. requirements. However, when we
changed our domicile from Canada to the U.S., our U.S. shareholders may have
been entitled to claim that we were presenting them with a new investment
decision and that the shareholder disclosure materials should have been
registered in accordance with the Securities Act of 1933.
REPURCHASE PRICE
We will pay Cdn$0.66 ($0.46), plus interest, for each share we repurchase. The
repurchase price is based on the pre-consolidation closing price of our common
stock (Cdn$0.33; $0.23) on the Vancouver Stock Exchange on June 30, 1998, the
date of the shareholder vote approving our transfer to Wyoming. The U.S. dollar
price is based on the rate of exchange on that date. Persons who accept the
repurchase offer but disposed of their shares before the offer was made at a
price below the repurchase price are entitled to receive cash in the amount of
the difference, after necessary adjustments to reflect the two-for-one
consolidation of our common stock in November 1999.
In this document, we use the plain "$" sign to refer to United States dollars,
and "Cdn$" to refer to Canadian dollars.
<PAGE>
LEGAL RIGHTS OF REPURCHASE OFFEREES AND CONSEQUENCES OF ACCEPTANCE OR
NON-ACCEPTANCE
Under federal and state securities laws, the sale of securities must either be
registered or exempt from registration. These laws may also require registration
of securities where no sale is involved, as, for example, if a company asks our
shareholders to exchange their shares for other securities, since the
shareholder is being asked to make an investment decision. In the case of our
transfer from British Columbia to Wyoming, our shareholders were arguably
presented with an investment decision concerning whether they wished to own
shares in a British Columbia or Wyoming corporation. If there is no exemption
from registration, a corporation's unregistered sale of securities, including an
exchange such as we effectively made with our shareholders in July 1999, may
then be a violation of federal and state securities laws.
One of the remedies of a repurchase offeree for this possible violation is to
bring an action against us for repurchase of their shares within the time
specified under applicable law. If successful, a repurchase offeree receives an
amount per share equal to the share price at the time of the deemed exchange
less any distributions made with respect to the shares; or, if the repurchase
offeree previously sold the shares, that person receives the repurchase price to
be paid for the shares less the proceeds received upon sale.
Although the repurchase offer is being made only to U.S. persons who held our
shares on July 14, 1999, it is possible that non-U.S. persons may also be able
to exercise these remedies.
Under federal law, an action for repurchase must be brought within one year of
the issuance of the shares in violation of the registration provisions, but in
no event more than three years after the shares were offered to investors. For
purposes of this registration statement, the one-year period begins on the date
we became a Wyoming corporation. State statutes of limitation vary, depending on
the jurisdiction.
We are making this repurchase offer in an attempt to shield ourselves from
future civil liability for repurchase. Under many state statutes, this
repurchase offer, if carried out in compliance with the applicable statutes,
ends civil liability for repurchase, regardless of whether shareholders accept
the repurchase offer.
To the extent claims are not time-barred, we may not be able to shield ourselves
from liability under federal securities laws because the SEC has taken the
position that liability under federal law is not avoided because a potentially
liable person makes a registered repurchase offer. Repurchase offerees, as well
as the other persons who held our shares on July 14, 1999, may bring a lawsuit.
According to the SEC, repurchase offerees who do not accept the repurchase
offer, as well as the other persons who held our shares on July 14, 1999, may be
able to sue us for repurchase, but any such lawsuit may be subject to the
defenses described above.
MATERIAL TAX CONSEQUENCES
The following summary is a general discussion of material U.S. federal income
tax consequences of accepting the repurchase offer. The consequences to each
repurchase offeree will vary, depending in part on the circumstances and status
of the repurchase offeree. Generally, repurchase offerees who transfer their
shares to us in exchange for the price paid by the repurchase offeree for the
shares will realize gain equal to the excess of:
- the aggregate amount paid by us to the repurchase offeree for the shares,
over
- the price originally paid by the repurchase offeree for those shares.
If the repurchase offeree previously sold the shares, the repurchase offeree who
accepts the repurchase offer will realize gain in an amount equal to the excess,
if any, of:
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- the sale price received by the repurchase offeree plus the aggregate
amount paid by us to the repurchase offeree for such shares, over
- the price originally paid by the repurchase offeree for the shares.
Shareholders must recognize any gain realized as a result of accepting the
repurchase offer. There is no direct authority, however, regarding the character
of the gain for federal income tax purposes. Nevertheless, under general federal
income tax principles, repurchase offerees who hold their shares as a capital
asset on the date of the exchange or, in the case of a prior sale of shares,
repurchase offerees who held their shares as a capital asset on the date of the
prior sale or exchange, should be entitled to report gain recognized as a result
of accepting the repurchase offer as a distribution in redemption of, or in
exchange for, the shares, subject to the provisions and limitations of Section
302 of the Internal Revenue Code of 1986.
This discussion concerning federal income tax matters does not address all
potentially relevant federal income tax matters, or the consequences to persons
who, because of their circumstances or status are subject to special federal
income tax treatment. The discussion does not address state, local or foreign
tax issues, and is not intended as tax advice to any person. Consequently,
repurchase offerees are urged to consult their own tax advisors as to the
specific tax consequences to them of accepting the repurchase offer, including
tax reporting requirements, the application and effect of federal, state, local,
foreign and other tax laws, and the implications of any changes in the tax laws.
REPURCHASE OFFER
We are offering the repurchase offerees the right to sell their shares to us.
Repurchase offerees who accept the repurchase offer can exchange their shares
for cash in the amount of the repurchase price, plus interest, less the amount
of any income or distributions in cash or kind, received on the shares.
Repurchase offerees who accept the repurchase offer but disposed of their shares
for less than the repurchase price paid can receive cash in the amount of that
difference, with necessary adjustments to reflect the two-for-one consolidation
of our common stock in November 1999.
The repurchase offer will end at _____ p.m. local time, Vancouver, B.C., on
________________________ . Accordingly, repurchase offerees will have twenty
business days to respond to the repurchase offer. Repurchase offerees who have
not previously disposed of their shares may accept the repurchase offer only by:
- completing the repurchase agreement accompanying this registration
statement, and
- returning it to us by ____ p.m. on , together with the certificates and
documents evidencing the shares (unless held by a nominee), as adjusted to give
effect to any distributions paid with respect to the shares, properly endorsed
for transfer.
Even if the nominee holding shares delivers those shares, as required by the
repurchase agreement, we must receive the repurchase agreement by .
Repurchase offerees who have previously disposed of their shares may accept the
repurchase offer only by completing the repurchase agreement accompanying this
registration statement, and furnishing written evidence as to number of shares
sold, date of sale, and sale price per share, and returning the repurchase
agreement to us by _____ p.m. on _________________________.
Any repurchase offeree who fails to return a signed repurchase agreement or, if
required, fails to tender the shares by the date required in the repurchase
agreement will be considered to have rejected the repurchase offer.
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We will decide all questions about the validity, form, eligibility, including
time of receipt, and acceptance of the repurchase agreement. Our decision will
be final and binding. We reserve the absolute right to reject any or all
repurchase agreements improperly completed, or if our counsel believes their
acceptance would be unlawful. We also reserve the right to waive any
irregularity in the repurchase agreement. Our interpretation of the terms and
conditions of the repurchase agreement, including the instructions in the
repurchase agreement, will be final and binding.
We will pay the purchase price to repurchase offerees who accept the repurchase
offer as soon as possible after we receive the repurchase agreement and the
certificates and/or documents evidencing the shares.
Repurchase offerees who elect not to accept the repurchase offer do not have to
respond to the repurchase offer. Repurchase offerees who do not respond to the
repurchase offer will continue to be the owners of their shares and will hold
such shares subject to the restrictions which were in effect at the time of
their issuance.
Other Terms and Conditions
If we receive such a large number of repurchase acceptances, or are otherwise
required to shares, so that we could not immediately pay all shareholders
without making us insolvent under applicable law, we may elect to delay payment
or pay some shareholders in instalments to avoid making us insolvent. We will
not have to immediately make repurchases that could constitute insolvency
distributions under applicable law. Management and our auditors will make all
necessary determinations about possible insolvency.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES
As at July 14, 1999, we had 7,959,053 issued and outstanding fully paid and
non-assessable common shares without par value, each share carrying the right to
one vote.
On August 27, 1999, we entered into the Asset Purchase Agreement with High Tech
Venture Capital Inc., pursuant to which we acquired all rights in and to High
Tech Venture Capital Inc.'s business of developing an Internet portal website
and creating channels to provide streaming media content under the name
"Worldwide Broadcast Network". Concurrent to the acquisition, a name change (to
our current name) and a two-for-one share consolidation were made effective,
such that for every two shares of capital stock previously held by a
shareholder, the shareholder received one share of capital stock after
consolidation. Under the Asset Purchase Agreement, we paid to High Tech Venture
Capital Inc. the sum of Cdn$70,000.00 and issued to it 3,000,000
post-consolidated common shares.
As at July 31, 2000, we had 12,314,054 common shares issued and outstanding. We
have no other classes of voting securities.
To the knowledge of our management, as at July 31, 2000 no person beneficially
owns more than five percent of any class of our voting securities other than as
set forth below. The following table shows the total amount of any class of our
voting securities owned by each of our executive officers and directors and by
our executive officers and directors, as a group, as at July 31, 2000, and, as
to a specific person, shares issuable pursuant to the conversion or exercise, as
the case may be, of currently exercisable or convertible debentures, share
purchase warrants and stock options.
The shares indicated as being beneficially owned by Gregg J. Sedun include
1,069,195 shares held by 513815 BC Ltd., a private company controlled by Mr.
Sedun, as well as 142,250 shares of the total 284,500 shares held by Sedun De
Witt Capital Corp. The shares indicated as being beneficially owned by David
DeWitt include the balance of the 142,250 shares held by Sedun De Witt Capital
Corp. Sedun DeWitt Capital Corp. is a company owned equally by Alison Sedun and
Marianne De Witt who are married to, respectively, Mr. Sedun and Mr. DeWitt.
Mr. Sedun and Mr. DeWitt are the directors of Sedun DeWitt Capital Corp. Each
of Mr. Sedun and Mr. Dewitt also hold stock options to purchase up to 197,500 of
our common shares and 75,000 share purchase warrants which are not reflected in
the table.
The shares indicated as being beneficially owned by Kirk Exner include 3,000,000
shares held by High Tech Venture Capital Inc., a company which is controlled by
Mr. Exner. Mr. Exner also holds stock options to acquire 400,000 of our common
shares which are not reflected in the table
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP PERCENTAGE OF CLASS
==================================== ========================================= ====================
<S> <C> <C>
Kirk E. Exner
210-1122 Mainland Street
Vancouver, BC, Canada. . . . . . . . 3,000,000 24.36%
Gregg J. Sedun
2200-885 West Georgia Street
Vancouver, BC, Canada. . . . . . . . 2,314,219 18.79%
David De Witt
2200-885 West Georgia Street
Vancouver, BC, Canada. . . . . . . . 962,524 7.82%
------------------------------------ ----------------------------------------- --------------------
<PAGE>
Directors and Officers as a group. . 6,276,743 50.97%
==================================== ========================================= ====================
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table and text sets forth the names and ages of all of our
directors, executive officers and significant employees, as at July 31
2000. All of the directors serve until the next Annual General Meeting of
shareholders and until their successors are elected and qualified, or until
their earlier death, retirement, resignation or removal. Subject to any
applicable employment agreement, executive officers serve at the discretion of
the Board of Directors, and are appointed to serve until the first Board of
Directors meeting following the annual meeting of shareholders. Also provided is
a brief description of the business experience of each director, executive
officer and significant employee during the past five years and an indication
of directorships held by each director in other companies subject to the
reporting requirements under the federal securities laws.
Directors, executive officers and other significant employees:
<TABLE>
<CAPTION>
POSITION HELD DATE FIRST
NAME WITH THE COMPANY AGE ELECTED OR APPOINTED
<S> <C> <C> <C>
July 14, 1999 (Director)
Kirk E. Exner. Director, President and Chief Executive Officer 33 November 15, 1999 (President) June 19, 2000, (CEO)
Gregg J. Sedun Director 42 June 23, 1997 (Director)
David De Witt. Director 48 June 23, 1997
Marcel deGroot Secretary 27 June 19, 2000
============== ================================================ ========== ==================================================
</TABLE>
The backgrounds and experience of our directors, executive officers and other
significant employees are as follows:
Kirk E. Exner
Mr. Exner holds a Bachelor of Science degree from the University of British
Columbia in Vancouver, British Columbia, Canada, and a Masters in Business
Administration from York University in Toronto, Ontario, Canada. Mr. Exner's
responsibilities include developing our business plan/model, recruiting the
required management team, technology partner/champion and securing the venture
capital required for the expansion plan. Mr. Exner was previously employed in
Corporate Finance at Golden Capital Securities, a full-service boutique
brokerage firm based in Vancouver, British Columbia, which specialized in early
stage high technology finance. While at Golden Capital Securities, he
brokered/financed a number of private and public technology companies, including
iwave.com, BCY Ventures and Softcare Electronic Commerce. Mr. Exner also
co-published the Golden Capital Micro-Cap Tech Stock Report that attained an
annual rate of return in excess of 100% on a portfolio of Canadian public
companies. Prior to Golden Capital Securities, Mr. Exner managed his own
consulting firm, dedicated to high technology corporate development. Over a
five year period, he was involved with numerous corporate development projects
and financings including Family Ware International and CyberActive Technologies.
<PAGE>
Gregg J. Sedun
Mr. Sedun graduated from the University of Manitoba in 1982 with a Bachelor of
Law degree, and practised securities law in Vancouver, British Columbia from
1983 until 1997. He was a partner in the law firm Rand Edgar Sedun, and later
became a founding partner of De Witt Sedun, a firm focusing exclusively on
securities law, where he practised until his retirement from law in 1997. Mr.
Sedun is a co-founder and director of several public companies and Sedun De Witt
Capital Corp., a private venture capital company. He was one of the founding
directors of the internationally known mining company Diamond Field Resources
Inc., which was purchased by Inco Ltd. in a $4.2 billion transaction. In
addition, Mr. Sedun is an original financier and director of Softcare EC.com
Inc., a business-to-business e-commerce software company with operations across
North America.
David De Witt
Mr. De Witt was a founding partner of De Witt Sedun, a firm focused exclusively
on securities law, as well as a co-founder and director of Sedun De Witt Capital
Corp., a private venture capital company. Mr. De Witt graduated from the
University of British Columbia with a Bachelor of Commerce degree in 1975 and a
Bachelor of Law degree in 1978, and practised corporate and securities law until
his retirement from practice in 1997. He is a director and/or officer of a
number of private and public companies. Mr. De Witt was Corporate Secretary and
a Director of Arequipa Resources Ltd. prior to its takeover by Barrick Gold
Corporation at a valuation of $1.2 billion. In addition, Mr. De Witt is an
original financier, and currently serves on the Board of Directors of,
NeuroVir.Inc., a private biotechnology company with offices in San Diego,
California and Vancouver, British Columbia.
Marcel deGroot
Mr. deGroot graduated from the University of British Columbia in 1996 with a
Bachelor of Commerce degree. From May 1996 until October 1999 he worked for the
Vancouver office of Grant Thornton where he obtained the Chartered Accountant
designation. Since November of 1999 to present Mr. deGroot has worked as a
consultant for us and Sedun De Witt Capital Corp., a private venture capital
company.
There are no arrangements or understandings between any two or more directors or
executive officers, pursuant to which he/she was selected to be a director or
executive officer, other than agreements arising from the Asset Purchase
Agreement dated August 27, 1999, between us, High Tech Venture Capital Inc. and
Kirk Exner as referred to herein.
None of our directors, executive officers, promoters or control persons have
been involved in any of the following events during the past five years:
1. any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
3. being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or
4. being found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.
<PAGE>
EXECUTIVE COMPENSATION
We are required to set out particulars of compensation paid to the following
persons:
(a) our chief executive officer during the most recently completed fiscal
year;
(b) each of our four most highly compensated executive officers who were
serving as executive officers at the end of the most recently completed fiscal
year and whose total salary and bonus exceeds $100,000 per year; and
(c) any additional individuals for whom disclosure would have been provided
under (b) except that the individual was not serving as one of our executive
officers at the end of the most recently completed fiscal year.
Compensation was paid to our executive officers and directors as follows:
Kirk E. Exner - President and Director
In accordance with an asset purchase agreement between us, High Tech Venture
Capital Inc. and Mr. Exner dated August 27, 1999 (the "Asset Purchase
Agreement"), Mr. Exner has entered into an employment agreement with us for a
term of one year, pursuant to which Mr. Exner is paid a monthly salary of
Cdn$7,000.00 in his capacity as our President. The Asset Purchase Agreement
also provides for the granting of stock options for 300,000 shares at an
exercise price of Cdn$0.66 per share. Under the Asset Purchase Agreement, Mr.
Exner was paid Cdn$10,500.00 to December 31, 1999. The compensation under the
employment agreement represents all compensation paid to Mr. Exner.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
Name . . . . . Other Securities
and. . . . . . Annual Restricted Underlying All
Principal. . . Compen- Stock Options/ LTIP Other
Position . . . Year Salary ($) Bonus($) sation ($) Awards ($) SARs (#) Payouts ($) Compensation ($)
-------------- ---- ----------- ------ -------- ----------- ---------- --------------- ----------------
PRESIDENT(1)
KIRK EXNER 1999 Cdn$10,500 nil nil nil 300,000 nil nil
FORMER
PRESIDENT(2)
DAVID DE WITT 1999 nil nil nil nil nil nil nil
FORMER
PRESIDENT(3)
GREGG SEDUN 1999 nil nil nil nil nil nil nil
1998 nil nil nil nil nil nil nil
1997 nil nil nil nil 97,500 nil nil
FORMER
PRESIDENT(4)
ZHIANG NING 1997 nil nil nil nil nil nil nil
<FN>
Notes:
-----
(1) Mr. Exner was appointed President on November 15, 1999.
<PAGE>
(2) Mr. De Witt served as President from July 14, 1999 until November 15, 1999.
(3) Mr. Sedun served as President from June 23, 1997 until July 14, 1999.
</TABLE>
None of our executive officers have received annual salary and bonus in excess
of $100,000.
The only grants of stock options or stock appreciation rights made during the
fiscal year ended 1999 to our executive officers and directors was the grant of
300,000 options to Kirk Exner pursuant to the Asset Purchase Agreement.
To date, we have granted 1,077,000 stock options to employees and consultants,
pursuant to our stock option plan.
We have no formal plan for compensating our directors for their service in their
capacity as directors although such directors have received from time to time
and are expected to receive in the future options to purchase common shares as
awarded by the Board of Directors or (as to future options) a Compensation
Committee which may be established. Directors are entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred in connection with
attendance at meetings of the Board of Directors. The Board of Directors may
award special remuneration to any director undertaking any special services on
our behalf, other than services ordinarily required of a director. Other than
as indicated below, no director received and/or accrued any compensation for his
services as a director, including committee participation and/or special
assignments.
There are no management agreements with any of our directors or executive
officers, other than those referred to herein.
Other than as discussed above, we have no plans or arrangements in respect of
remuneration received or that may be received by our executive officers to
compensate such officers in the event of termination of employment (as a result
of resignation, retirement, change of control) or a change of responsibilities
following a change of control, where the value of such compensation exceeds
$60,000 per executive officer.
There are no arrangements or plans in which we provide pension, retirement or
similar benefits for directors or executive officers. Other than the management
agreements and advisory agreements discussed herein, we have no material bonus
or profit sharing plans pursuant to which cash or non-cash compensation is or
may be paid to our directors or executive officers, except that stock options
have been and may be granted at the discretion of the Board of Directors or a
committee thereof.
LONG-TERM INCENTIVE PLANS -- AWARDS IN MOST RECENTLY COMPLETED FISCAL YEAR
We have no long-term incentive plans in place and therefore there were no awards
made under any long-term incentive plan to any Executive Officers during our
most recently completed fiscal year. A "Long-Term Incentive Plan" is a plan
under which awards are made based on performance over a period longer than one
fiscal year, other than a plan for options, SARs (Stock Appreciation Rights) or
restricted share compensation.
AGGREGATED OPTIONS AND STOCK APPRECIATION RIGHTS EXERCISED DURING THE MOST
RECENTLY COMPLETED FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES
No incentive stock options or stock appreciation rights were exercised during
the last fiscal year by any of our named executive officers. No stock
appreciation rights were held by any of our named executive officers as at the
end of our most recently completed fiscal year. Our President, Kirk Exner, held
300,000 incentive stock options as of December 31, 1999, exercisable at a price
of Cdn$0.66 per share. These options were not in-the-money on that date. The
following table summarizes the foregoing information:
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the Money
Options/SARs Options/SARs at
at FY-End ($) FY-End ($)
Shares Acquired on Exercisable/ Exercisable/
Name. . . . . . . . . Exercise (#) Value Realized ($) Unexercisable Unexercisable
--------------------- ------------------- ------------------- -------------- -------------
Kirk Exner. . . . . . Nil Nil 300,000 options Nil
(exercisable)
</TABLE>
COMPENSATION OF DIRECTORS
As previously noted, we have no standard arrangement to compensate directors for
their services in their capacity as directors except for the granting from time
to time of incentive stock options in accordance with the policies of the
Canadian Venture Stock Exchange. During the last fiscal year, we did not grant
our directors incentive stock options, except for the 300,000 incentive stock
options granted to Kirk Exner. These options are exercisable up to the close of
business on July 14, 2004.
All of the existing stock options are non-transferable and terminate on the
earlier of the expiration date or the 30th day after the date on which the
director, officer or employee, as the case may be, terminates his position with
us. If a director is forced to resign or is removed by special resolution, or if
a senior officer or other employee is fired for cause, his options expire on the
day of removal or firing.
The outstanding options will be adjusted if we consolidate, subdivide or
similarly change our share capital.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
We have no committee that performs the function of a compensation committee.
None of our officers or directors serve on a committee making compensation
decisions of any other entity. directors generally participate in
compensation-related matters.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no transactions, or proposed transactions, which have materially
affected or will materially affect us in which any director, executive officer,
or beneficial holder of more than 10% of the outstanding common stock, or any of
their respective relatives, spouses, associates or affiliates has had or will
have any direct or material indirect interest, except as follows:
Commencing December 1, 1997, we entered into a Management Advisory Agreement
with Sedun De Witt Capital Corp, a company owned and controlled by Alison Sedun
and Marianne De Witt (each as to 50%). Alison Sedun and Marianne De Witt are
married to, respectively, Gregg Sedun and David De Witt, both of whom serve on
our board of directors and are directors of Sedun De Witt Capital Corp. In
consideration of the services provided, Sedun De Witt Capital Corp. was paid
Cdn$5,000.00 per month.
Total Payments made to Sedun De Witt Capital Corp. pursuant to the Management
Advisory Agreement are as follows:
1999: Cdn$ 47,500.00
1998: Cdn$ 60,000.00
1997: Cdn$ 5,000.00
Total: Cdn$ 112,500.00
The Management Advisory Agreement was terminated on November 15, 1999 at which
time a new corporate advisory agreement took effect pursuant to the above-noted
Asset Purchase Agreement.
Under the terms of the Asset Purchase Agreement, we will pay Sedun De Witt
Capital Corp. Cdn$10,000.00 per month for a term of 12 months in consideration
for which Sedun De Witt Capital Corp. will provide us with advisory services
relating to general corporate development, financial matters, raising additional
capital, strategic planning and other matters relating to the financial affairs
of us. Sedun De Witt Capital Corp. agreed to reduce its monthly fee to
Cdn$5,000.00 per month up to January 31, 2000. Since January 31, 2000 we have
paid Sedun De Witt Capital Corp. Cdn$10,000.00 per month pursuant to the terms
of our agreement with them.
While we believe that the foregoing transactions were fair to us and in our best
interests, we did not approach any disinterested third parties with the view to
soliciting competing bids for their services. Accordingly, we have no way of
determining whether the transactions are subject to terms no less favorable to
us than those that we could have obtained from disinterested third parties.
WWBROADCAST.NET INC.
DESCRIPTION OF BUSINESS
Introduction
We operate "wwbroadcast.net", an Internet website designed to gather, aggregate,
distribute and market streaming media content over the Internet. On the
Internet, streaming media content consists of live and archived audio and video
programs which are accessible to users of the Internet. Our offices are
located at 210-1122 Mainland Street, Vancouver, British Columbia, V6B 5L1. The
telephone number is (604) 608-0884 and the facsimile number is (604) 608-0824.
Except as otherwise indicated, all information in this registration statement
has been restated to give effect to the two-for one stock consolidation of our
common stock referred to below and elsewhere in this registration
<PAGE>
statement. Our consolidated financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.
Business Development of Issuer During Last Three Years
We were incorporated under the laws of the Province of British Columbia on June
24, 1986 under the name "Belcarra Resources Ltd.". We changed our name to
"Belcarra Motors Corp." on October 12, 1994, and to "Predator Ventures Ltd." on
September 10, 1997. We transferred our corporate domicile to the State of
Wyoming effective July 14, 1999 and, on September 9, 1999, we filed Articles of
Amendment which increased our authorized capital from 100,000,000 common shares
with no par value to unlimited common shares with no par value.
On November 16, 1999, we changed our name to "wwbroadcast.net inc." to reflect
our new business which we had commenced on July 1, 1999, when we began seeking a
suitable Internet-based business for acquisition. Prior to commencing our new
business, we had been relatively inactive, having sold the underlying assets of
our previous business effective March 31, 1997.
On December 3, 1999, we were registered as an extra-provincial company under the
Company Act of British Columbia.
In furtherance of our new business, on August 27, 1999, we entered into an Asset
Purchase Agreement with High Tech Venture Capital Inc., pursuant to a Letter of
Intent dated July 9, 1999. Under the terms of the Asset Purchase Agreement we
acquired all rights in and to High Tech Venture Capital Inc.'s business of
developing an Internet portal and creating channels to provide streaming media
content under the name "Worldwide Broadcast Network". The assets that were
acquired included the ownership of a number of domain names relevant to the
implementation of our business model. The consideration for the acquisition was
Cdn$70,000.00 and the issuance of 3,000,000 of our common shares. Concurrent to
the acquisition, we effected a name change (to our current name) and a
two-for-one share consolidation. As a result of the share consolidation, each
of our shareholders received one share of common stock for every two shares of
common stock previously held.
Business of the Company
We are a gatherer, aggregator, distributor and marketer of streaming media
content on the Internet. Through our "streaming" media portal website, wwbc.net
(the "Website"), which became operational on March 9, 2000, we provide an
interface between users of multimedia enabled personal computers (or certain
other Internet-attached devices) and various content providers on the Internet,
thereby giving such users access to live and archived audio and video programs.
The first phase of development work on our Website, including initial testing,
was completed in January 2000 by SunCommerce Corporation. High Tech Venture
Capital Inc. had entered into a website development agreement with SunCommerce
Corporation prior to our acquisition of certain of High Tech Venture Capital
Inc.'s assets pursuant to the Asset Purchase Agreement dated August 27, 1999.
At the time of the agreement, SumCommerce Corporation operated as a website
development firm with offices in Vancouver, British Columbia, Canada and
Seattle, Washington. It specialized in developing professional websites that
are integrated with customized e-commerce back-end database systems.
Our Website offers users a gateway to various subsidiary content distribution
websites ("Content Websites"). The Content Websites allow users to access
selections of live and archived audio and video programming over the Internet,
organized by information or entertainment categories. The following Content
Websites are currently accessible to our users:
- wwbusiness.net
<PAGE>
- wwcomedy.net
- wwdrama.net
- wweducation.net
- wwfamily.net
- wwkids.net
- wwgames.net
- wwfashion.net
- wwgames.net
- wwhealth.net
- wwmovies.net
- wwmusic.net
- wwnews.net
- wwsports.net
- wwtravel.net
Each of these Content Websites are generally descriptive of the category of
information or entertainment content that is accessible through it.
Aggregation of Streaming Media Content
Our Website is designed to gather, aggregate, distribute and market streaming
media content over the Internet. At present, independent Internet web
developers are developing proprietary, broadcast-capable content. We aggregate
such content and organize it for users in a manner that we believe facilitates
access to such content in a user-friendly manner.
The streaming media content accessible through our network is otherwise
available over the Internet to users with appropriate multimedia enabled
personal computers or other equipment. However, such users must generally seek
such content out on the Internet by, for example, using traditional search
engines. We search for suitable streaming media content that we believe will be
of interest to Internet users and aggregate them under our various Content
Websites. The Content Websites reflect certain information and entertainment
categories or groupings that we believe will help a user focus his or her search
quickly and easily. Once the user selects a Content Channel, his or her search
is focused even further by logical subcategories.
Our goal is to increase the profile of our Website as a destination for Internet
users seeking streaming media content in the categories represented by the
Content Websites, and to provide a platform for multimedia content providers and
advertisers seeking to reach online audiences. We hope that our corporate
structure, and our ability to aggregate content and establish content
partnerships, will enable further development of our network. In order to
encourage traffic to our websites, we currently do not charge advertising or any
other fees to our Affiliates or to any users who visit our network. We
anticipate introducing certain fees and charges once the average number of "page
views" recorded for visitors to our websites have increased from the current
level of 150,000 page views per month to at least 500,000 page views per month,
which is the minimum level which we feel will be commercially acceptable to
businesses that may wish to use our services as an advertising platform. Based
on our experience since our websites came on line on March 9, 2000, we
anticipate we will reach 500,000 page views per month some time in the fourth
quarter of 2000.
We are in the process of developing the systems necessary for increased
aggregation and distribution of streaming media content. In addition, we have
been establishing affiliate relationships with content providers and alliances
with streaming media service companies. We currently provide content to users
by one of two methods. A content provider can become an "Affiliate" by entering
into an agreement with us by which they will be able to provide their content
through our Content Websites. Alternatively, we provide users with direct
access to content that we have aggregated and have identified as content which
users may find desirable. Such content is made available on the Internet by
content providers with whom we have no relationship, and we
<PAGE>
have removed our links to such content as requested to do so by such providers.
We do not currently charge any fees to, and we are not charged any fees by, any
content providers, including Affiliates.
We have an alliance with Interactive Netscaping Systems Inc. ("INSINC"). The
relationship includes the access to INSINC's T3 Internet infrastructure and
direct hosting of our server system. INSINC is a provider of streaming-media
technology and delivers Internet broadcasting solutions to clients. As well,
INSINC is involved in broadcasting live and archived audio and video content on
the Internet in association with our content provider and affiliate,
mediaontap.com (formerly DENtv and DENradio). INSINC provides broadcasting
services through our Real Networks streaming server system and an AT&T-based
asynchronous transfer mode backbone (single high speed transmission of data,
audio and video). Our relationship with INSINC will ideally allow us access to
the technological infrastructure required to implement our business plan over
the initial stages of our development.
Since May 24, 2000 we have been involved in an informal cooperative marketing
arrangement with ENTERA INC., a private company based in California, through
which we hope to be introduced to a broadened range of streaming media content
providers. ENTERA INC. is a developer of Internet content delivery technology
for content providers and other internet providers, hosts and broadcasters.
Effective July 26, 2000 we have entered into a cooperative marketing partnership
with istreamtv.com, a private company based in New York through which we hope to
be introduced to additional streaming media content providers. istreamtv.com
provides encoding services and develops streaming media content delivery
technologies for content providers, Internet service providers, Web hosts,
Internet broadcasters, corporate enterprises, and other content developers and
distributors.
Effective August 17, 2000 we have entered into a strategic alliance agreement
with ProWebCast, Inc., a private company based in Florida through which we hope
to be introduced to additional streaming media content providers. ProWebCast,
Inc. produces and webcasts weekly programs, online presentations of
made-for-television shows, press conferences, trade shows, concerts, product
announcements and special events.
Content Websites for Distribution
We intend to market our services by emphasizing our various Content Websites,
and thereby raise the profile of our entire network. In other words, we will
seek to enhance the worldwide brand name through our approach to content
aggregation.
Once we have established sufficient market acceptance of our services, which
cannot be assured, we are planning to establish joint ventures with existing
streaming media content providers, multimedia/Web development organizations, and
traditional broadcasting companies.
Content Aggregator/Provider Hybrid
We plan to evolve from a pure content aggregator to a content
aggregator/provider hybrid by developing and delivering programs in association
with our various Affiliates and streaming media partners. Eventually we hope to
be able to facilitate the broadcasting of programs and events over our network
to users who can view and listen to such broadcasts uninterrupted while
continuing to perform other tasks on their computer. In addition, we intend to
refine our network to allow advertisers to target specific users.
Competition
The market for Internet content, products, services and advertising is new,
rapidly evolving and intensely competitive. We will potentially compete with
many providers of website content, information services and products, as well as
with traditional media and promotional efforts, for audience attention and
advertising, and sponsorship expenditures. We will be in direct competition for
users, advertisers and content providers with a
<PAGE>
diverse group of businesses, including other websites, Internet portals,
Internet broadcasters, videoconferencing companies, audioconferencing companies,
general online services, advertising networks and traditional media, including
local television stations and networks. Our competition currently includes
Channelseek.com, Yack.com, Scour.net, Streamsearch.com, Realguide.com, Windows
Media and Yahoo Broadcast.com. Many of these websites offer streaming media
programming. Despite our attributes, there are no assurances that we will be
able to compete successfully or that the competitive pressures faced by us will
not adversely affect our business. We expect competition to intensify in the
future. Barriers to entry are not significant, and current and new competitors
may be able to launch new websites at a relatively low cost. We expect
competition for members, users and advertisers, as well as competition in the
electronic commerce market, to increase significantly.
Business Strategy
Our objective is to secure a prominent position in Internet broadcasting by
aggregating, distributing and marketing comprehensive audio and video
programming over the Internet. Key elements of our business strategy include:
EXPAND GLOBAL PROGRAMMING CONTENT by ideally providing access to comprehensive
audio and video programming on the Internet. Our objective is to secure
streaming media content produced by various content providers. Potential
content providers include: television and radio stations, networks and
ownership groups, production studios (audio, film, animation, etc), record
labels and dedicated Internet broadcasting businesses.
ENHANCE BRAND AWARENESS to maximize our broadcast audience. To do so, we intend
to co-brand our programming with large and small content providers in addition
to providing access to our programming directly through our various operating
Content Websites. It is intended that these affiliate relationships will allow
our partner to present its programming content through co-linking on wwbc.net
and the applicable Content Website.
PENETRATE THE BROADCASTING SUPPORT SERVICES MARKET to enable businesses and
other organizations to improve communication with, and disseminate information
to, customers, suppliers, and the general public. We hope that our content
network, combined with the local and global reach of the Internet, will allow
our programming Affiliates and streaming media partners to access customers
internationally. We intend to implement broadcasting services by developing
strategic alliances (preferred partnerships) with streaming media service
providers on a geographically expansive basis.
EXPAND NETWORK INFRASTRUCTURE through the acquisition and deployment of
additional network equipment, bandwidth and broadcast scaling technologies both
internally and through our various technology partners. We believe that the
quality of, and demand for, Internet video broadcasts will continue to improve
as broadband Internet access technologies such as DSL (DIGITAL Subscriber Line)
and high-speed cable modems become more commonly available.
CAPTURE AND DEVELOP EMERGING REVENUE OPPORTUNITIES as user demand increases and
technological developments become more widely adopted. We intend to develop
opportunities to capture revenue growth that includes pay-per-view applications,
fee-based programming partnerships and electronic commerce opportunities.
Advertising
We currently have the ability to bundle Web and traditional media advertising
for our clients. In addition, we offer advertisers the ability to insert
streaming commercials within Affiliate programming content. Assuming we succeed
in our plan to evolve from a pure content aggregator to a content
aggregator/provider hybrid, we intend to offer comprehensive audio and video
programming that can target specific audiences and
<PAGE>
demographics. Additionally, we intend that our multimedia advertising packages
will be capable of incorporating custom audio and video applications such as
interstitial ads, channel and event sponsorship and multimedia advertisements,
in addition to traditional banner advertisements.
Once we have achieved sufficient market acceptance of our services, which cannot
be assured, we plan to sell advertising packages targeted to specific audiences
and demographics. We intend to:
OFFER MULTIMEDIA AND TRADITIONAL BANNER ADVERTISEMENTS to advertisers, enabling
them to integrate audio and video into their text and graphics banner and
placement advertisements.
OFFER INTERSTITIAL ADVERTISEMENTS WITH GUARANTEED CLICK-THRUS to advertisers
enabling them to incorporate audio and video content ads into audio and video
content. Audio or video interstitial advertisements are streaming media
advertisements that are typically inserted at the lead of selected programming,
lasting from 15 to 30 seconds, that play prior to the audio or video content
that has been selected by the user.
OFFER NETWORK, CHANNEL AND EVENT SPONSORSHIPS to advertisers to sponsor one or
more of our programming networks, Content Websites or specific events; enabling
advertisers to brand sections of the Worldwide Broadcast Network. Sponsorship
may involve the rotating and permanent placement of buttons, logos and website
links, banner advertisements, multimedia advertisements and features within the
parent website and networks.
OFFER TRADITIONAL MEDIA ADVERTISING RESELLING, allowing Internet companies to
sell these advertising spots to traditional radio and television advertisers.
Through co-operative advertising relationships, we hope to receive on-air
inventory of radio or television ad spots.
Marketing
Our limited marketing efforts to date have been to promote the Website, our
networks, and the available audio and video programming. We intend to utilize
traditional media for marketing and promotional purposes, including radio,
television and print advertisements. Further, we also intend to utilize online
marketing, advertisements and newsletters. We believe that we will have to
depend, in part, on the services of professional website marketing companies
experienced in the marketing and development of Internet brand names. We intend
our future marketing efforts to be focused in the following areas:
RADIO AND TELEVISION content providers typically grant a certain amount of
commercial spot inventory. The commercial spots that we will hopefully receive
as part of our radio and television content distribution activities will be used
by us for promotion of our programming and services.
PRINT AND OTHER MEDIA publications will ideally be utilized by us, in exchange
for the distribution of Internet broadcasts. We also intend to advertise in
targeted trade magazines including Broadcasting, Cable and Online periodicals.
ONLINE MARKETING in the form of an exchange of banner advertisements with other
websites. We intend to use these opportunities to highlight our content and
drive traffic through our network. We will attempt to extend our brand
awareness on the Web by requiring that our logo be placed prominently on the Web
pages of broadcast Affiliates.
NEWSLETTERS AND EVENT ALERTS to promote content offerings on the Website. We
distribute free newsletters via e-mail. In addition, we intend to utilize event
alerts via email to alert our members to select broadcasting events.
<PAGE>
Technology and Computer Systems
The markets in which we compete are characterized by rapidly changing
technology, evolving technological standards in the industry, frequent new
websites, services and products and changing consumer demands. Our future
success will depend on our ability to adapt to these changes and to continuously
improve the performance, features and reliability of our service in response to
competitive services and products and the evolving demands of the marketplace,
which we may not be able to do. In addition, the widespread adoption of new
Internet, networking or telecommunications technologies or other technological
changes could require us to incur substantial expenditures to modify or adapt
our services or infrastructure, which might impact our ability to become or
remain profitable.
Our websites utilize sophisticated and specialized network and computer
technology. We anticipate that it will be necessary to continue to invest in
and develop new and enhanced technology on a timely basis to maintain our
competitiveness. Significant capital expenditures may be required to keep our
technology up to date. Investments in technology and future investments in
upgrades and enhancements to software for such technology may not necessarily
maintain our competitiveness.
Services based on sophisticated software and computer systems often encounter
developmental delays, and the underlying software may contain undetected errors
that could cause system failures when introduced. Any system error or failure
causing interruption in the availability of content or an increase in response
time could result in a loss of potential or existing business services, users,
advertisers or content providers, and if sustained or repeated, could reduce the
attractiveness of our websites to these individuals and entities. In addition,
because our advertising revenues will be directly linked to the number of
advertisements delivered by us to users, system interruptions that result in the
unavailability of or slow response times to the websites would reduce the number
of advertisements delivered, thereby reducing revenues.
Conversely, a sudden, significant increase in traffic to our websites could
strain the capacity of the software, hardware and telecommunications systems
utilized by us, possibly leading to slower response times or system failures.
Our operations are dependent upon the receipt of timely feeds from the content
providers, and any failure or delay in the transmission or receipt of the feeds
could disrupt our operations.
Streaming Media Technology
Acceptance of streaming media technology depends on the success of our
advertising, promotional and marketing efforts and our ability to continue to
provide access to high-quality streaming media programming to the users of our
websites. To date, we have not spent any significant amounts on marketing and
promotional efforts. To increase awareness of our websites, we expect to spend
an increasing amount of funds on promotion, marketing and advertising in the
future. If these expenditures fail to develop an awareness of streaming media,
such expenditures may never be recovered and we may be unable to generate future
revenues. In addition, even if awareness of streaming media technology
increases, we may not be able to increase or maintain the number of members of
our websites.
As noted, our success is dependent on the market acceptance of streaming media
technology. Early streaming media technology suffered from poor audio quality,
and current video streaming is of lower quality than television broadcasts. In
addition, congestion over the Internet may interrupt audio and video streams,
resulting in unsatisfying user experiences. In order to receive streaming media
adequately, users should have multimedia personal computers (commonly called
"PCs") with particular microprocessor requirements and at least 56 kbps Internet
access and streaming media software. Typically, users electronically download
such software at their own cost and install it on their PCs. Installations of
this type do require a certain level of technical expertise that many users will
not possess. In addition, to receive streaming media over corporate
"intranets", the intranets may need to be reconfigured. Widespread adoption of
streaming media technology depends on overcoming these obstacles, improving
video and audio quality and educating customers and users
<PAGE>
in the use of streaming media technology. If streaming media technology fails
to achieve broad commercial acceptance or if our acceptance is delayed, our
business could be adversely affected.
Government Regulation
The Child Protection Act and Child Online Privacy Protection Act (the "COPA")
were enacted in October, 1998. Among other things, COPA imposes civil and
criminal penalties on persons distributing material harmful to minors over the
Internet to persons under the age of 17, or collecting personal information from
children under the age of 13. While we do not currently distribute the types of
materials or collect or disclose personal information prohibited by COPA, future
legislation similar to COPA may affect us, specifically the content of the
programming offered on our websites.
On October 28, 1998, the "Digital Millennium Copyright Act" ("DMCA") affecting
the performance of sound recordings by certain subscription and nonsubscription
transmission services was enacted. The DMCA permits statutory licenses for the
performance of sound recordings and for the making of ephemeral recordings to
facilitate transmissions. Under these statutory licenses, we will be required to
pay licensing fees for the performance of sound recordings by us in original and
archived programming and through retransmissions of radio broadcasts. The DMCA
does not specify the rate and terms of the statutory licenses, which will be
determined either through voluntary inter-industry negotiations or arbitration.
Advisory Board
On November 8, 1999, we established an Advisory Board to provide recommendations
to the Board of Directors with respect to the development of our business. Erik
Newton, Director of Advertising for MP3.com and Hugh Dobbie, President and CEO
of Interactive Netcasting Systems, were appointed to the Advisory Board for a
twelve month term. On January 4, 2000, Mike Donald of Concord National Inc.
joined the Advisory Board, also for a twelve month term.
On March 29, 2000 Russell Braun, formerly General Manager of RealNetworks Inc.,
and Richard Roberts, President of Palazzo deMix, Inc., were also appointed to
the Advisory Board.
Russell Braun is an independent Internet technology professional and recently
completed an assignment as Vice President of Development at 2Way Corporation, a
company that develops business feedback software tools for the Internet. From
1997 to 1999, Mr. Braun was General Manager at RealNetworks where he managed a
team of 40 and was responsible for leading the development of RealNetworks video
streaming product line for the Internet (Real G2 Player and Server products).
Mr. Braun also managed RealNetworks' Strategic Product Division creating new
Internet products in co-operation with strategic partners including Sun
Microsystems, SGI, Hewlett Packard and IBM. Prior to RealNetworks, Mr. Braun
was the Director of Engineering at Nintendo of America (1990-1997) where he
managed all engineering operations for North America and created Nintendo's
Multimedia Network Platform for vertical markets which has successfully been
installed in over 600,000 sites. Prior to Nintendo, Mr. Braun held management
roles in Marketing and Engineering at Data I/O Corporation and was a Systems
Engineer at Boeing Aerospace Corporation where he designed Spacecraft-Space
Shuttle communication systems.
Richard Roberts, is the President of Palazzo deMix, a multi-disciplinary
communications design firm specializing in film, video, web development, print,
branding, and live events. Mr. Roberts began his career in television as the
Art Director for WCVE-TV, a PBS affiliate in Virginia and continued his work in
television as an Art Director with a PBS affiliate in Washington DC, an NBC
Station in Dallas, and a FOX affiliate in Seattle. In 1989, Mr. Roberts founded
Palazzo deMix and leveraged his television experience into a number of mediums,
including the Web and interactive multimedia. His creative solutions have
resulted in awards that include an Emmy award. He has been recognized as one of
the "Top 100" Multimedia Producers in the U.S. by AV Video & Multimedia Producer
magazine and was featured on the cover of the January 1999 issue.
<PAGE>
The Advisory Board's mandate is to, among other things, apply their collective
knowledge to assist us in the operation of our business, assist the Board
members with the selection of potential directors of us, senior management
personnel and future advisors for the Advisory Board, assist in the development
of our business collaborations with others as required and promote the interests
and goodwill of us and our business.
Mr. Newton joined MP3.com as the Director of e-commerce prior to that company's
high profile public offering in the United States. MP3.com, a San Diego based
company, is a leading source of digital music downloaded from the Internet. Mr.
Newton is a key member of MP3.com's marketing team, and managed the
implementation of successful affiliate/content syndication programs and various
customer acquisition and retention programs. Prior to MP3.com, Mr. Newton was
the Business Development Manager for Browser Software Distribution at Netscape
Communications Corporation, and brings over 10 years of marketing experience to
us.
Mr. Dobbie is the founder, President and CEO of Interactive Netcasting Systems
("INSINC"), a leading streaming-media services provider based in Burnaby,
British Columbia, Canada. INSINC owns and operates a complete Internet
broadcasting production facility which is used to broadcast live and archived
radio, TV and Internet programs through our content site. INSINC, founded in
1997, is an internationally recognized private company, and Mr. Dobbie is widely
considered to be a pioneer in the streaming media industry.
Mr. Donald is an original founder of HomeGrocer.com (a grocery and delivery
service available over the Internet) and chairman of Concord National Inc., one
of Canada's largest food brokerage firms. He is also chairman of the executive
board of the Canadian Food Brokers Association and an active member of the World
Entrepreneurs Organization, an extension of the Young Entrepreneurs
Organization.
HomeGrocer.com, based in Seattle, Washington, is the fastest growing online
grocery services company in the United States. To date, HomeGrocer.com has
completed financings, including its initial public offering, of approximately
$390 million in order to support its aggressive growth and expansion throughout
the U.S this year. Lead investors in the private round of financings include
Amazon.com, Kleiner Perkins Caufield & Byers, Hummer Winblad Venture Partners
and The Barksdale Group.
Employees
As at the date hereof, we engage seventeen people. This consists of eight
consultants (including our President) and nine employees. Of the employees and
consultants, three are employed in business development, three are employed in
corporate development, two are employed in on-line marketing, one is employed in
media relations/business development, and eight are employed in web development.
Description of Property
Our offices are located at 210-1122 Mainland Street, Vancouver, British
Columbia, Canada. We lease this office space on a month-to-month basis at a
rental of approximately Cdn$3,020.00 per month plus a pro-rated proportion of
various operating expenses, utilities, real estate, business and water taxes.
The total monthly lease charges paid by us are Cdn$4,900.00. This facility
consists of our office and administration area and houses all of our operations.
LEGAL PROCEEDINGS
We do not know of any material, active or pending legal proceedings against us;
nor are we involved as a plaintiff in any material proceeding or pending
litigation. There are no proceedings in which any of our directors, officers or
affiliates, or any registered or beneficial shareholder, is an adverse party or
has a material interest adverse to us.
<PAGE>
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
Our common stock is listed and posted for trading on the Canadian Venture
Exchange under the symbol WW.U. The Canadian Venture Exchange was formed by the
merger of the Vancouver Stock Exchange and the Alberta Stock Exchange effective
as of November 29, 1999. Prior to that date, our common stock was listed and
posted for trading on the Vancouver Stock Exchange. The following table sets
forth the reported high and low sale prices for our common stock on the Canadian
Venture Exchange and the Vancouver Stock Exchange for the periods indicated.
The Company halted trading on July 12, 1999 at a closing price of Cdn$0.33 per
share pursuant to the requirements of the Vancouver Stock Exchange as a result
of the announcement of the acquisition of the assets of High Tech Venture
Capital Inc. Trading resumed on November 18, 1999 following the receipt of
regulatory approval for the acquisition. The Company resumed trading under its
current symbol of ww.u.
<TABLE>
<CAPTION>
QUARTER HIGH LOW
------------------------------------ --------- ---------
<S> <C> <C>
INTERIM PERIOD ENDING JUNE 30, 2000
January 1, 2000 - March 31, 2000 . . $ 3.80 $ 0.50
------------------------------------ --------- ---------
April 1, 2000 - June 30, 2000. . . . $ 0.50
--------- ---------
FISCAL YEAR ENDING DECEMBER 31, 1999
January 1, 1999 - March 31, 1999 . . Cdn$0.28 Cdn$0.25
------------------------------------ --------- ---------
April 1, 1999 - June 30, 1999. . . . Cdn$0.45 Cdn$0.31
--------- ---------
July 1, 1999 - September 30, 1999. . N/A N/A
--------- ---------
October 1, 1999 - December 31, 1999. $ 0.80 $ 0.55
--------- ---------
FISCAL YEAR ENDING DECEMBER 31, 1998
January 1, 1998 - March 31, 1998 . . Cdn$0.50 Cdn$0.41
------------------------------------ --------- ---------
April 1, 1998 - June 30, 1998. . . . Cdn$0.42 Cdn$0.33
--------- ---------
July 1, 1998 - September 30, 1998. . Cdn$0.31 Cdn$0.25
--------- ---------
October 1, 1998 - December 31, 1998. Cdn$0.24 Cdn$0.15
==================================== ========= =========
</TABLE>
Our shares of common stock are in registered form. Computershare Investor
Services Inc., formerly known as Montreal Trust Company of Canada, is the
registrar and transfer agent for the common stock.
<PAGE>
We have not declared any dividends since incorporation and do not anticipate
that we will do so in the foreseeable future. It is our present intention to
retain future earnings, if any, for use in our operations and the expansion of
our business.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The discussion following and elsewhere in this registration statement includes
certain forward-looking statements. Such forward-looking statements are subject
to material risks, uncertainties and contingencies, many of which are beyond our
control. For discussion of important risk factors that could cause actual
results to differ materially from the forward looking statements, see "Risk
Factors". The risk factors include but are not limited to: certain risks
associated with our repurchase offer, "Penny Stock" rules, our competition, our
limited operating history, our history of losses, the fact that our quarterly
operating results are subject to fluctuation, market acceptance of our company,
our dependence on continued growth in the use of the Internet and of streaming
media content, our reliance on technology and computer systems, our ability to
respond to technological change, our dependence upon providers of streaming
media products, our relationships with content providers, our ability to manage
growth, risks associated with generating revenues from advertising and
alliances, marketing risks, seasonal and cyclical patterns, security risks, our
dependence on key personnel, government regulation, potential liability for
website information, limited protection of intellectual property, risk of
misappropriation of intellectual property or other proprietary rights, insider
control of common stock, stock price volatility and effect of shares eligible
for public sale. Forward-looking statements which are subject to material
risks, uncertainties and contingencies include, in particular, statements made
as to plans to: enhance our "worldwide" brand name through our approach
to content aggregation, evolve from a pure content aggregator to a content
aggregator/provider hybrid, expand global programming content, enhance brand
awareness, penetrate the broadcasting support services market, expand our
network infrastructure, and capture and develop emerging revenue opportunities.
Forward-looking statements also include statements as to the market opportunity
presented by markets targeted by us, our ability to aggregate and deliver
compelling content over the Internet, our anticipated sources of capital, and
competitive and technological developments. We cannot assure that the future
results covered by the forward looking statements will be achieved.
The following discussion should be read in conjunction with our historical
Financial Statements and Notes thereto included in this registration statement
following the signature page beginning on page F-1. As a result of our transfer
into Wyoming, we adopted U.S. GAAP and restated prior years figures to be in
accordance with U.S. GAAP.
GOING CONCERN
Our Financial Statements contained in this registration statement have been
prepared on a going concern basis, which assumes that we will be able to realize
our assets and discharge our obligations in the normal course of business. We
incurred net losses from operations for the six months ended June 30, 2000, for
the year ended December 31, 1999 and for the period from the inception of our
new business as of July 1, 1999 to December 31, 1999 of $520,974, $284,940 and
$258,241, respectively. The Goods and Services Tax receivable indicated in our
Financial Statements is in regards to tax paid by us for which we qualify for a
refund in the amount of $37,866 as at June 30, 2000. We do not expect to earn
significant revenues over the next six months to one year, and we are planning
to incur marketing, consulting, legal and accounting, financing and
administrative expenses in the approximate amount of $600,000 during the balance
of this year. We anticipate that we will continue to experience losses from
operations during the foreseeable future since we do not currently generate any
revenue from operations, and we may not have sufficient working capital to
sustain operations until December 31, 2000. Our auditors' report on our 1999
financial statements contains additional comments that indicates that due to
recurring losses and negative cash flows, substantial doubt exists as to our
ability to continue as a going concern. Since December we have identified
and received funding of $760,000 from two private placements. We have been
spending the funds on development of our business. We are in discussions to
obtain further financing to continue operations sufficient to meet budgeted
liabilities through December 31,
<PAGE>
2000. Additional financing requirements will sought at a later date. There can
be no assurances that such equity or other financing will be available, or
available on terms acceptable to us. If additional financing is not then
available, we intend to reduce operations to a sustainable level unti any such
financing is obtained. We believe that we will be able to continue operations,
although it may be at a reduced level for the next year. See "Current
Capital Resources and Liquidity."
Our Financial Statements included in this registration statement have been
prepared without adjustments that would be necessary if we become unable to
continue as a going concern and are therefore required to realize upon our
assets and discharge our liabilities in other than the normal course of
operations.
GENERAL
We were incorporated under the laws of the Province of British Columbia on June
24, 1986 under the name "Belcarra Resources Ltd.". We changed our name to
"Belcarra Motors Corp." on October 12, 1994, and to "Predator Ventures Ltd." on
September 10, 1997. We were continued to the State of Wyoming effective July
14, 1999 and, on September 9, 1999, we filed Articles of Amendment which
increased our authorized capital from 100,000,000 common shares with no par
value to unlimited common shares with no par value.
On November 16, 1999, we changed our name to "wwbroadcast.net inc." to reflect
our new business which we had commenced on July 1, 1999, when we began seeking a
suitable Internet-based business for acquisition. Prior to commencing our new
business, we had been relatively inactive, having sold the underlying assets of
our previous business effective March 31, 1997.
In furtherance of our new business, on November 15, 1999, we acquired all rights
in and to High Tech Venture Capital Inc.'s business of developing an Internet
website and Content Websites to aggregate, distribute and market a selection of
streaming media programming (that is, live or archived audio and video
programming) via the Internet under the name "Worldwide Broadcast Network". The
acquisition was effected pursuant to an Asset Purchase Agreement dated August
27, 1999 with High Tech Venture Capital Inc., which had been preceded by a
Letter of Intent dated July 9, 1999. Concurrent with the acquisition, we
effected the name change to our current name, as well as a 2 for 1 share
consolidation, such that each of our shareholders received one share of our
common stock after consolidation for every two shares of common stock previously
held by the shareholder.
Our Website became operational on March 9, 2000. The Website has various
Content Websites, through which users with multimedia enabled personal computers
or certain other Internet-attached devices can access Internet links to various
providers of streaming media programming, organized by logical categories and
subcategories to facilitate searches for such programming in a convenient and
user-friendly manner. Each of the Content Websites have been registered as
domain names with Network Solutions Inc. We believe that this positions us to
provide an attractive advertising platform for businesses seeking to target
specific users with rich, compelling advertisements via the Internet. Our
business is currently limited to aggregating streaming media content programming
developed and posted on the Internet by various providers. Eventually, we plan
to develop and offer our own programming.
We are in the still in the initial development stage of our new business, and
are currently focusing on building market acceptance for our services. We
currently do not charge advertising or any other fees to our Affiliates who are
linked to our Website or Content Websites or to any visitors to our network, as
we are concentrating on increasing the number of users who visit our network,
and we do not have any other sources of operating revenue. We anticipate
introducing certain advertising fees in the fourth quarter of 2000, provided
that the number of "page views" registered by visitors to our websites has
increased to at least 500,000 per month, the minimum level which we feel
will be commercially acceptable to businesses that may wish to use our services
as an advertising platform. We are currently averaging approximately 150,000
page views per month.
Results of Operations
<PAGE>
We have included in this registration statement financial statements for the six
months ended June 30, 2000 and 1999 (unaudited), the period from July 1, 1999
(being the date of inception of our new business) to June 30, 2000 (unaudited),
the years ended December 31, 1999 and 1998, and the period from July 1, 1999 to
December 31, 1999. Since we commenced our new business as of July 1, 1999, the
historical financial data contained in these financial statements for the period
prior to that date does not provide a meaningful basis for comparison between
years or periods. Nor is such data helpful for ascertaining significant trends
in the Corporation's financial condition and results of operations. Therefore,
the discussion will focus on explaining the results for the period or year
without substantial analysis of comparing periods or years against the results
of comparative periods or years.
Year ended December 31, 1998
During the year ended December 31, 1998, we were reviewing business
opportunities but otherwise relatively inactive. We incurred $61,395 in
expenses, consisting of management fees paid to related parties (see "Certain
Relationships and Related Transactions" for further information), legal and
accounting expenses, regulatory filing fees, and general and administrative
expenses.
Our expenses during the year ended December 31, 1998 were partially offset by
interest income of $2,047, for a net loss of $59,348 and a loss per share of
$0.01.
Year ended December 31, 1999
We incurred a net loss of $284,940 for the year ended December 31, 1999,
resulting in a loss per share of $0.04. The loss was attributable primarily to
operating expenses of $284,557, with the balance consisting of interest expenses
of $383.
During the period from July 1, 1999 to December 31, 1999, the period in which we
began development of our new business, we incurred a net loss of $258,241.
Most of the increase in our operating expenses during the year ended December
31, 1999 over 1998 resulted from the acquisition and development of our new
business with effect from July 1, 1999. Of the $284,557 in operating expenses
incurred during 1999, $255,661 were incurred in the six month period following
the commencement of our new business. The $28,896 in operating expenses
incurred in the first six months of 1999 was attributable to general and
administrative expenses.
During the period from July 1, 1999 to December 31, 1999, we incurred $67,337 in
consulting fees, $41,183 in depreciation and amortization expenses in relation
to the assets acquired from High Tech Venture Capital Inc., $4,106 in marketing
and promotion expenses related to our new business, $80,877 in professional
fees, and $11,405 in general and administrative expenses. These expenses were
in addition to $40,456 in management fees paid to related parties during this
period (see "Certain Relationships and Related Transactions" for further
information).
Six Month Period ended June 30, 2000
We incurred a net loss of $520,974 for the six-month period ended June 30, 2000,
resulting in a loss per share of $0.02. This loss reflects operating expenses
for the period of $521,259, consisting of $112,394 in consulting fees, $37,330
in depreciation and amortization expenses, $135,008 in marketing expenses,
$6,110 in regulatory filing fees, $15,306 in investor and media relations fees,
$24,091 in rent fees, $31,665 in wages and benefits, $63,583 in professional
fees, $29,619 in general and administrative expenses, and $66,153 in management
fees paid to related parties (see "Certain Relationships and Related
Transactions" for further information).
<PAGE>
The foregoing expenses reflect the general increase in expenses that has
resulted from the development of our new business, particularly in the form of
consulting, marketing, and professional fees, and wages and benefits expenses.
From the date of the date of commencement on our new business on July 1, 1999 to
June 30, 2000, we incurred operating expenses totalling $776,920, consisting of
$179,731 in consulting fees, $78,513 in depreciation and amortization expenses,
$15,306 in investor and media relations fees, $24,091 in rent, $31,665 in wages
and benefits, $140,354 in marketing expenses, $16,407 in regulatory filing fees,
$144,460 in professional fees, $39,784 in general and administrative expenses,
and $106,609 in management fees paid to related parties. The consulting fees
consisted primarily of fees paid to consultants to develop, activate and
maintain our Website and Content Websites, and to search for and screen
streaming media programming content on the Internet for inclusion in our Content
Websites.
BALANCE SHEETS
Total cash and cash equivalents as at June 30, 2000, December 31, 1999 and
December 31, 1998 were, respectively, $186,262, $206,516 and $80,455. Working
capital as at June 30, 2000, December 31, 1999 and December 31, 1998 were,
respectively, $181,334, $131,418 and $22,052.
The increase in cash and working capital between 1998 and 1999 was largely
attributable to $267,415 received by us upon the exercise of certain outstanding
common share purchase warrants by the holders of such warrants, and $221,753
received by us in December, 1999 in connection with a private placement of
units. The private placement closed on January 26, 2000 following receipt of
final regulatory approval of the private placement. We were entitled under the
terms of the underlying subscription agreements to treat all subscription
proceeds received by us in advance of the closing as interest-free loans pending
closing. Pursuant to the private placement we issued 1,070,000 units at a price
of $0.50 per unit for total proceeds of $535,000. Each unit consisted of one
common share and one two-year share purchase warrant. Each warrant is
exercisable at a price of $0.75 per share during the first year and $1.00 in the
second year.
The increase in cash and working capital between 1999 and June 30, 2000 was
attributable in part to the receipt of the balance of the subscription proceeds
($313,247) under the private placement referred to above, which closed on
January 26, 2000. Also, we received additional subscription proceeds during the
period in connection with a further private placement of 225,000 units at a
price of $1.00 per unit for total proceeds of $225,000. These units were issued
closing on April 11, 2000 Each unit consisted of one common and half (1/2) a
non-transferable two-year share purchase warrant. Each full warrant is
exercisable at $1.50 per share during the first year and $2.00 in the second
year. The private placement proceeds were offset by expenses incurred during
the continued development of the business.
Equipment and intangible assets totalled $211,597 as at December 31, 1999 as
compared to nil as at December 31, 1998. The increase in equipment and
intangible assets between 1998 and 1999 resulted from our acquisition of High
Tech Venture Capital Inc.'s assets, and the development of our Website and
Content Websites. Equipment and intangible assets increased to $232,334 between
December 31, 1999 and June 30, 2000 due to the purchase of office equipment for
$58,067 amortization and depreciation expenses of $37,330, which was partially
offset by amortization and depreciation expenses of $37,330.
Total share capital as at June 30, 2000, December 31, 1999 and December 31, 1998
was, respectively, $4,004,956, $3,223,728 and $2,845,343. The increases in
share capital reflect shares issued pursuant to the private placements referred
to above, and to the issuance of shares of the 3,000,000 shares to High Tech
Venture Capital Inc. pursuant to the Asset Purchase Agreement dated August 27,
1999 at a deemed aggregate issue price of $101,633.
STOCK OPTIONS
<PAGE>
On January 5, 2000 we issued 360,000 incentive stock options to our directors
and the members of our Advisory Board. The options are exercisable at $0.62 per
share for a period of five years for the directors and one year for the Advisory
Board members.
On January 21, 2000 we issued 80,000 incentive stock options to certain
employees. These options have expired unexercised.
On February 4, 2000 we issued 100,000 incentive options to a consultant, but
these options were subsequently cancelled on August 30, 2000 as the consultancy
was terminated by mutual agreement.
On March 20, 2000, we issued 24,000 incentive stock options to certain employees
and consultants. The options are exercisable at $1.83 per share, vest over 18
months and have a term of three years.
On March 29, 2000 we issued 40,000 incentive stock options to the members of our
Advisory Board. The options are exercisable at $1.85 per share, vest over a
one-year period and have a term of three years.
On August 21, 2000, we issued 345,000 incentive stock options to certain
employees and consultants. Of these options 12,000 have expired. The remaining
12,000 options vest over a period of 18 months, are exercisable at $0.62 per
share and have a five-year term.
CURRENT CAPITAL RESOURCES AND LIQUIDITY
Since 1997 our capital resources have been limited. We currently do not
generate revenue from our business operations, and to date have relied on the
sale of equity and related party loans for cash required for our operations.
Our most recent private placements of units are described above under the
heading "Balance Sheets". There can be no assurances that any outstanding
common share purchase warrants or incentive stock options will be exercised.
Our working capital or cash flows are not sufficient to fund ongoing operations
and commitments. Our ability to settle our liabilities as they come due and to
fund our commitments and ongoing operations is dependant upon our ability to
obtain additional financing by way of debt, equity or other means. There can be
no assurances that we can obtain such additional financing on terms reasonably
acceptable to us or at all. The lack of capital may force us to curtail our
operating activities and potential investment activities.
We do not currently have any commitments for material capital expenditures over
the near or long term, and none are presently contemplated over normal operating
requirements. However, as discussed above under the heading "Going Concern", we
expect to incur marketing, consulting, legal and accounting, financing and
administrative expenses in the approximate amount of $600,000 over the balance
of this year.
PLAN OF OPERATION
As discussed above under the heading "Management's Discussion and Analysis", we
currently do not charge advertising or any other fees to our Affiliates who are
linked to our Website or Content Websites or to any visitors to our network, as
we are concentrating on increasing the number of users who visit our network,
and we do not have any other sources of operating revenue. As a result, we have
incurred net losses from operations from the inception of our new business as of
July 1, 1999 to December 31, 1999 of $258,241, and for the six months ended June
30, 2000 of $521,974, and we anticipate that we will continue to experience
losses from operations during the foreseeable future.
We anticipate introducing certain advertising fees in the fourth quarter of
2000, provided that the number of "page views" registered by visitors to our
websites has increased to at least 500,000 per month, the minimum level which we
feel will be commercially acceptable to businesses that may wish to use our
services as an advertising platform. We are currently averaging approximately
150,000 page views per month. We
<PAGE>
anticipate that we may be able to generate up to $500,000 in advertising
revenues within the next year (See "Description of Business - Advertising" for
further information concerning advertising revenues).
We are planning to incur marketing, consulting, legal and accounting, financing
and administrative expenses in the approximate amount of $600,000 during the
balance of this year, and we expect to incur additional marketing, consulting,
legal and accounting, financing and administrative expenses in the approximate
amount of $800,000 during the first six months of next year. These anticipated
expenses may be broken down as follows:
<TABLE>
<CAPTION>
EXPENSE JUNE TO DECEMBER, 2000 JANUARY TO JUNE, 2001
---------------------------- ----------------------- ----------------------
<S> <C> <C>
Marketing. . . . . . . . . . $ 250,000 $ 440,000
----------------------- ----------------------
Staffing . . . . . . . . . . $ 200,000 $ 240,000
----------------------- ----------------------
Legal and Accounting . . . . $ 100,000 $ 60,000
----------------------- ----------------------
Financing and Administrative $ 50,000 $ 60,000
---------------------------- ----------------------- ----------------------
</TABLE>
The above expenses represent our anticipated ongoing working capital needs to
promote market acceptance of our services, fund our day-to-day operational
expenses and our on-going regulatory compliance costs. We do not anticipate
incurring any material research and development expenses during the next 12
months, nor do we anticipate any significant changes to the number of our
employees.
We may not have sufficient working capital to sustain operations until December
31, 2000. Our ability to settle our liabilities as they come due and to fund
our commitments and ongoing operations is dependant upon our ability to obtain
additional financing by way of debt, equity or other means. We anticipate that
we will have to seek such financing in the approximate amount of $300,000 no
later than the fourth quarter of this year, likely by way of a private placement
of units similar to the private placements effected by us in January and April
of 2000 (See "Management Discussion and Analysis" for further information
concerning the private placements). There can be no assurances that we can
obtain such additional financing on terms reasonably acceptable to us or at all.
LEGAL MATTERS
The validity of our shares of common stock issued as of our transfer from
British Columbia to Wyoming will be passed upon for us by Hathaway, Speight &
Kunz, LLC.
EXPERTS
Our consolidated financial statements as of December 31, 1999 and 1998, and for
the years ended December 31, 1999 and 1998 and the period from July 1, 1999
(inception of new business) to December 31, 1999, included in this registration
statement, have been so included in reliance on the report of KPMG LLP,
independent chartered accountants, appearing elsewhere herein, and upon the
authority of said firm as experts in accounting and auditing. The report of
KPMG LLP contains an explanatory paragraph that states that the Company's
recurring losses and negative cash flows from operations raise substantial doubt
about its ability to continue as a going concern. The financial statements do
not include any adjustments that might result from this uncertainty.
WHERE YOU CAN FIND MORE INFORMATION
<PAGE>
We intend to file annual, quarterly and special reports and other information
with the SEC. You may read and copy any document filed by us, including the
registration statement and its exhibits and schedules, at the SEC's public
reference room, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information about its public reference room.
These SEC filings are also available to the public at the SEC's website at
"www.sec.gov."
FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
The Financial Statements listed below are filed as part of this registration
statement on Form S-4 following the signature page hereof beginning on page F-1.
Financial Statements for the Company For The Six Months Ended June 30, 2000
(Unaudited) And Period From The Date Of Inception of New Business On July 1,
1999 to June 30, 2000:
Balance Sheets
Statements of Operations
Statements of Stockholders' Equity
Statements of Cash Flows
Notes to Financial Statements
Financial Statements for the Company For The Three Months Ended March 31, 2000
And 1999 (Unaudited) And Period From The Date Of Inception of New Business On
July 1, 1999 to March 31, 2000:
Balance Sheets
Statements of Operations
Statements of Stockholders' Equity
Statements of Cash Flows
Notes to Financial Statements
Financial Statements for the Company For Year Ended December 31, 1999 And For
The Year Ended December 31, 1998 And Period From The Date Of Inception of New
Business On July 1, 1999 to December 31, 1999:
Independent Auditors' Report by KPMG LLP
Balance Sheets
Statements of Operations
Statements of Stockholders' Equity
Statements of Cash Flows
Notes to Financial Statements
Exhibits
The following Index lists the exhibits required by Item 601 of Regulation S-B.
<TABLE>
<CAPTION>
INDEX OF EXHIBITS
Description Exhibit
Number
<PAGE>
<S> <C>
Articles of Incorporation (3)
Opinion from counsel regarding legality of securities (5)
(a) Opinion from Hathaway, Speight & Kunz, LLC (including the consent of such firm) 5.1
(b) Opinion from Campney & Murphy 5.2
Material Contracts (10)
(a) Letter Agreement between the Company, High Tech Venture Capital Inc., Sedun Dewitt 10.1
Capital Corp. and Kirk Exner, dated July 9,1999
(b) Asset Purchase Agreement between the Company, High Tech Venture Capital Inc., and 10.2
Kirk Exner, dated as of August 27, 1999
(c) Stock Option Plan of the Company, dated July 12, 1999 10.3
(d) Consulting Agreement between the Company and Investor Direct Consulting Group
Ltd, made effective February 21, 2000 10.4
(e) Letter Agreement between the Company and Kim Cathers, dated February 4, 2000 10.5
(f) Communication/Design Agreement between the Company and Chatham Creative Inc.,
dated February 24, 2000 10.6
(g) Services Development Agreement between High Tech Venture Capital Inc. and
Suncommerce Corporation dated July 9, 1999 10.7
(h) Mutual Non-Disclosure and Co-operative Marketing Partnership Agreement between
the Company and Entera Inc. 10.8
(i) Letter Agreement between the Company and istreamtv.com dated July 26, 2000 10.9
(j) Letter Agreement between the Company and ProWebCast, Inc. dated August 17, 2000 10.10
(k) Request for Repurchase 10.11
Consents (23)
(a) Consent of KPMG LLP, independent auditors 23.1
(b) Consent of Campney & Murphy 23.2
(c) Consent of Hathaway, Speight & Kunz, LLC (included as part of Exhibit 5 hereto)
</TABLE>
UNDERTAKINGS
The undersigned registrant hereby undertakes to respond to requires for
information that is incorporated by reference into the registration statement
pursuant to Items 4, 10(b), 11, or 13 of this Form within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Vancouver, Province of
British Columbia, on July 20, 2000.
wwbroadcast.net inc.
(Registrant)
/s/ Kirk Exner
By Kirk Exner, President, Director and CEO
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated
/s/ Kirk Exner /s/ David De Witt
Kirk Exner David De Witt
President, Director and CEO Director
(Principal Executive Officer)
July 20, 2000 July 20, 2000
/s/ Marcel de Groot
Marcel de Groot
Secretary (Principal Financial Officer)
July 20, 2000
<PAGE>
Financial Statements of
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited)
Six month period ended June 30, 2000 and 1999
Period from July 1, 1999 (inception of new
business) to June 30, 2000
<PAGE>
<TABLE>
<CAPTION>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited - prepared by management)
Balance Sheets
June 30, December 31,
2000 1999
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . $ 186,262 $ 206,516
Good and Services Tax receivable. . . . . . . . . . . . . . 37,866 13,677
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . 3,482 3,464
Total current assets. . . . . . . . . . . . . . . . . . . . 227,610 223,657
Equipment (note 3). . . . . . . . . . . . . . . . . . . . . 83,838 28,388
Intangible assets (note 4). . . . . . . . . . . . . . . . . 148,496 183,209
Total assets. . . . . . . . . . . . . . . . . . . . . . . . $ 459,944 $ 435,254
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities. . . . . . . . . . $ 46,276 $ 92,239
Total current liabilities . . . . . . . . . . . . . . . . . 46,276 92,239
Subscriptions received in advance of issuance of shares . . - 221,753
Total liabilities . . . . . . . . . . . . . . . . . . . . . 46,276 313,992
Stockholders' equity:
Common stock, no par value, authorized 100,000,000 shares;
issued 12,314,054 at June 30, 2000 and 10,979,054
at December 31, 1999 (note 5) . . . . . . . . . . . . . . . 4,004,956 3,223,728
Additional Paid-in Capital. . . . . . . . . . . . . . . . . 47,109 -
Deficit before inception of new business (note 1) . . . . . (2,849,990) (2,849,990)
Deficit accumulated during the development stage (note 1) . (779,215) (258,241)
Accumulated other comprehensive income:
Cumulative translation adjustment . . . . . . . . . . . . . (9,192) 5,765
413,668 121,262
Subsequent event (note 9)
Total liabilities and stockholders' equity. . . . . . . . . $ 459,944 $ 435,254
See accompanying notes to financial statements.
ON BEHALF OF THE BOARD:
/s/ Kirk Exner. . . . . . . . . . . . . . . . . . . ./s/ David De Witt
Director Director
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited)
Statements of Operations
Period from
July 1, 1999
(inception of new
Six Month Period ended business) to
June 30, June 30,
2000 1999 2000
<S> <C> <C> <C>
Operating expenses:
Depreciation and amortization . . . . . . . $ 37,330 $ - $ 78,513
Consulting fees . . . . . . . . . . . . . . 112,394 - 179,731
Marketing . . . . . . . . . . . . . . . . . 135,008 - 140,354
Filing fees . . . . . . . . . . . . . . . . 6,110 - 16,407
Investor and media relations. . . . . . 15,306 - 15,306
Management fees to related parties (note 6) 66,153 19,448 106,609
General and administrative. . . . . . . . . 29,619 3,937 39,784
Professional fees . . . . . . . . . . . . . 63,583 5,590 144,460
Rent. . . . . . . . . . . . . . . . . . . . 24,091 24,091
Wages and Benefits. . . . . . . . . . . . . 31,665 31,665
(521,259) 28,976 776,920
Loss from operations. . . . . . . . . . . . (521,259) (28,976) (776,920)
Interest income (expense), net. . . . . . . 285 2,277 (2,295)
Net loss for the period . . . . . . . . . . $ 520,974 $ (26,699) $ (779,215)
Loss per common share, basic and diluted. . $ (.05) $ (0.04) $ (0.08)
Weighted average number of common shares
outstanding, basic and diluted. . . . . . . 11,109,310 6,150,826 9,285,558
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited)
Statements of Stockholders' Equity
Deficit Deficit
accumulated Accumulated
Additional Prior to During
Common Shares Paid-In Development Development
Shares Amount Capital Stage Stage
-------------- ------------- ------------ ------------- ------------
Note (1) Note (1)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998 . . . . . . . . . . . 6,959,054 $ 2,845,343 - $ (2,823,291) -
Issuance of common stock on
exercise of warrants. . . . . . . . . . . . . 1,000,000 267,415 - - -
Issuance of common stock on
exercise of stock options . . . . . . . . . . 5,000 1,003 - - -
Net loss . . . . . . . . . . . . . . . . . . . . - - - (26,699) -
------------------------------------------------ -------------- ------------- ------------ ------------- -------------
Balance, June 30, 1999 (inception
of new business). . . . . . . . . . . . . . . 7,964,054 3,113,761 - (2,849,990) -
Issuance of common stock for
intangible assets . . . . . . . . . . . . . . 3,000,000 101,633 - - -
Issuance of common stock on
exercise of stock options . . . . . . . . . . 15,000 8,334 - - -
Net loss . . . . . . . . . . . . . . . . . . . . - - - - (258,241)
Adjustment to cumulative
translation account . . . . . . . . . . . . . - - - - -
Balance, December 31, 1999 . . . . . . . . . . . 10,979,054 3,223,728 - (2,849,990) (258,241)
Issuance of common stock on
private placement . . . . . . . . . . . . . . 1,295,000 760,000 - - -
Issuance of common stock on
Exercise of options . . . . . . . . . . . . . 30,000 14,728 - - -
Issuance of common stock for
services. . . . . . . . . . . . . . . . . . . 10,000 6,500
Consultant stock option
compensation expense. . . . . . . . . . . . . - 47,109 - -
Net loss . . . . . . . . . . . . . . . . . . . . - - - (520,974)
Adjustment to cumulative
translation account . . . . . . . . . . . . . - - - - -
Balance, June 30, 2000 . . . . . . . . . . . . . 12,314,054 $ 4,004,956 $ 47,109 $ (2,849,990) $ (779,215)
------------------------------------------------ -------------- ------------- ------------ ------------- -------------
See accompanying notes to financial statements.
Cumulative Total Comprehensive
Translation Stockholders' Income
Adjustment Equity (loss)
--------------- ---------- -------------
<S> <C> <C> <C>
Balance, December 31, 1998 . . . . . . . . . . . - $ 22,052 (59,348)
Issuance of common stock on
exercise of warrants. . . . . . . . . . . . . - 267,415
Issuance of common stock on
exercise of stock options . . . . . . . . . . - 1,003
Net loss . . . . . . . . . . . . . . . . . . . . - (26,699) (26,699)
------------------------------------------------ --------------- ---------- ---------
Balance, June 30, 1999 (inception
of new business). . . . . . . . . . . . . . . - 263,771
Issuance of common stock for
intangible assets . . . . . . . . . . . . . . - 101,633
Issuance of common stock on
exercise of stock options . . . . . . . . . . - 8,334
Net loss . . . . . . . . . . . . . . . . . . . . - (258,241) (258,241)
Adjustment to cumulative
translation account . . . . . . . . . . . . . 5,765 5,765 5,765
Balance, December 31, 1999 . . . . . . . . . . . 5,765 121,262 (279,175)
Issuance of common stock on
private placement . . . . . . . . . . . . . . - 760,000
Issuance of common stock on
Exercise of options . . . . . . . . . . . . . - 14,728
Issuance of common stock for
services 6,500
Consultant stock option
compensation expense. . . . . . . . . . . . . - 47,109
Net loss . . . . . . . . . . . . . . . . . . . . - (520,974) (520,974)
Adjustment to cumulative
translation account . . . . . . . . . . . . . (14,957) (14,957) (14,957)
Balance, June 30, 2000 . . . . . . . . . . . . . $ (9,192) $ 413,668 $ (815,106)
------------------------------------------------ --------------- ---------- ----------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited)
Statements of Cash Flows
Period from
July 1, 1999
(inception of new
Six Month Period ended business) to
June 30, June 30,
2000 1999 2000
<S> <C> <C> <C>
Cash flow from operating activities:
Net loss for the period. . . . . . . . . . . . . $ (520,974) $ (26,699) $(779,215)
Items not affecting cash:
Depreciation and amortization. . . . . . . . . . 37,330 - 78,513
Consultant stock option compensation . . . . 47,109 - 47,109
Changes in operating assets and liabilities:
Amounts receivable . . . . . . . . . . . . . . . (24,189) 411 (36,516)
Prepaid expenses . . . . . . . . . . . . . . . . (18) - (3,482)
Accounts payable and accrued liabilities . . . . (45,963) 909 43,537
--------- ------- ---------
Net cash used in operating activities. . . . . . (506,705) (25,379) (650,054)
Cash flow from investing activities:
Payable to Related Parties . . . . . . . . . . . - (59,227)
Purchase of equipment. . . . . . . . . . . . . . (58,067) - (91,807)
Purchase of intangible assets. . . . . . . . . . - - (117,407)
Net cash used in investing activities. . . . . . (58,067) (59,227) (209,214)
Cash flow from financing activities:
Proceeds from the issuance of common
shares . . . . . . . . . . . . . . . . . . . . . 781,228 268,412 789,560
Payable to related parties . . . . . . . . . . . - - -
Subscriptions received in advance of
issuance of shares . . . . . . . . . . . . . . . (221,753) -
Net cash provided by financing activities. . . . 559,475 268,412 789,560
Increase (decrease) in cash and cash equivalents (5,297) (183,812) (69,708)
Effect of exchange rate changes on foreign
currency denominated cash balances . . . . . . . (14,957) (2,770) (13,443)
Cash and cash equivalents, beginning of period . 206,516 80,455 269,413
Cash and cash equivalents, end of period . . . . $ 186,262 $ 267,037 $ 186,262
Supplemental disclosure:
Interest paid (received) net . . . . . . . . . . $ (285) $ 2,277 $ 2,295
Income taxes . . . . . . . . . . . . . . . . . . - - -
Non-cash transactions:
Issuance of common stock for
services . . . . . . . . . . . . . . . . . . . . 6,500 - 6,500
Issuance of common stock for
assets . . . . . . . . . . . . . . . . 101,633
</TABLE>
See accompanying notes to financial statements.
<PAGE>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited - prepared by management)
Notes to Financial Statements
Three month periods ended June 30, 2000 and 1999
Period from July 1, 1999 (inception of new business) to June 30, 2000
1. NATURE OF DEVELOPMENT STAGE ACTIVITIES AND OPERATIONS:
Predator Ventures Ltd. was incorporated on June 24, 1986 in British Columbia,
Canada. The Company had no substantive operations as at July 1, 1999 when the
new business venture was started.
On July 1, 1999, the Company began development of a web portal offering vertical
content through multiple branded channels. These vertically branded channels
will offer a selection of live and on demand audio and video programming via the
internet. As the Company has not generated revenue from its principal planned
operations, for financial reporting purposes, the Company is considered to be in
the development stage and these financial statements are of a development stage
enterprise.
On July 14, 1999, the Company entered into an agreement with High Tech Venture
Capital Inc. to purchase domain names and a business plan together with all
rights and title to the concept of creating vertically branded channels.
Consideration paid by the Company totalled Cdn. $220,000 consisting of Cdn.
$70,000 in cash and 3,000,000 post-consolidation common shares having a value of
Cdn. $0.05 per share. The stock issued under the above transaction is held in
escrow and is subject to release in equal annual installments on approval of the
Canadian Venture Exchange ("CDNX") (see note 6(a)). This agreement closed on
November 15, 1999. As part of the agreement, the Company:
(a) redomiciled its corporate charter from British Columbia, Canada, to
Wyoming, United States of America in 1999;
(b) executed a two for one stock consolidation on November 15, 1999;
(c) changed the name of the Company to wwbroadcast.net inc. on November 15,
1999; and
(d) agreed to pay certain development and administrative costs related to
the website.
These financial statements have been prepared on a going concern basis in
accordance with United States generally accepted accounting principles. The
going concern basis of presentation assumes the Company will continue to operate
for the foreseeable future and will be able to realize its assets and discharge
its liabilities and commitments in the normal course of business. Certain
conditions, described below, currently exist which raise doubt upon the validity
of this assumption. These financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
<PAGE>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited - prepared by management)
Notes to Financial Statements
Three month periods ended June 30, 2000 and 1999
Period from July 1, 1999 (inception of new business) to June 30, 2000
1. NATURE OF DEVELOPMENT STAGE ACTIVITIES AND OPERATIONS (CONTINUED):
The Company's future operations are dependent upon the market's acceptance of
its services. There can be no assurance that the Company will be able to secure
market acceptance. As of June 30, 2000, the Company is considered to be a
development stage enterprise as the Company has not generated any revenue, is
continuing to develop its new business, and has experienced negative cash flow
from operations. Operations have been financed primarily by the issuance of
common stock and financing from related parties. The Company may not have
sufficient working capital to sustain operations until December 31, 2000.
Additional debt or equity financing will be required from existing shareholder
or third parties and may not be available on reasonable terms or on any terms at
all. It is management's intention to continue to pursue market acceptance of
its products and to identify equity funding sources until such time as there is
sufficient operating cash flow to fund operating requirements. If additional
financing is not available, the Company intends to reduce operations to a
sustainable level until any such financing is obtained. In the opinion of
management, the Company will be able to continue operations, although it may be
at a reduced level for the next year.
2. SIGNIFICANT ACCOUNTING POLICIES:
(a) Basis of presentation:
These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States and generally apply
measurement concepts that are consistent, in all material respects, with those
established in Canada except as explained in note 11. The financial statements
also separately disclose the operations, equity transactions and cash flows
since inception of its new business on July 1, 1999 (note 1).
The financial information as at June 30, 2000 and for the six month periods
ended June 30, 2000 and 1999 is unaudited, however, such financial information
reflects all adjustments, consisting solely of normal recurring adjustments,
which are, in the opinion of management, necessary for a fair presentation to
the results for the periods presented.
(b) Use of estimates:
The preparation of financial statements in accordance with generally accepted
accounting principles requires that management make estimates and reasonable
assumptions which impact the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the balance
sheets, and the reported amounts of revenues and expenses during the reporting
periods. Actual amounts may differ from these estimates.
(c) Cash and cash equivalents:
The Company considers all short-term investments with a maturity at the date of
purchase of three months or less to be a cash equivalents.
(d) Equipment:
Equipment is recorded at cost. Depreciation is subject to the half year rule in
the year of acquisition, and is provided for at the following annual rates:
<PAGE>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited - prepared by management)
Notes to Financial Statements
Three month periods ended June 30, 2000 and 1999
Period from July 1, 1999 (inception of new business) to June 30, 2000
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Estimated
Asset Basis Useful Life
Computer Hardware and Software straight-line method 3 years
Leasehold Improvements straight-line method 3 years
Office Equipment straight-line method 5 years
(e) Intangible assets:
Intangible assets, which consists of domain names, license rights and website
development costs, are amortized on a straight-line basis over a period of three
years representing the estimated period of future benefits.
(f) Impairment of long-lived assets:
The Company monitors the recoverability of long-lived assets, including
equipment and intangible assets, based on estimates using factors such as
current market value, future asset utilization, business climate and future
undiscounted cash flows expected to result from the use of the related assets.
The Company's policy is to record an impairment loss in the period when it is
determined that the carrying amount of the asset may not be recoverable.
(g) Foreign currency:
Effective July 1, 1999, the Company adopted the United States dollar as its
reporting currency.
Canadian operations, which have the Canadian dollar as the functional currency,
are translated to United States dollars as follows: assets and liabilities are
translated at the exchange rate at the balance sheet date. Revenues and
expenses are translated at the average rate for the period. Exchange gains and
losses resulting from the translation are excluded from the determination of
income and reported as the cumulative translation adjustment in stockholder's
equity.
Other exchange gains and losses arising on the settlement of foreign currency
denominated monetary items are included in the statement of operations.
(h) Stock-based compensation:
The Company applies the intrinsic value-based method of accounting prescribed by
Accounting Principles Board ("APB") Opinion No. 25 "Accounting for Stock Issued
to Employees", and related interpretations, in accounting for its fixed stock
option plan. As such, compensation expense would be recorded on the date of
grant only if the current market price of the underlying stock exceeds the
exercise price. Options granted to other than employees and directors are
measured at their fair value at the date of grant. Compensation expense for
options is recognized over the vesting period.
<PAGE>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited - prepared by management)
Notes to Financial Statements
Three month periods ended June 30, 2000 and 1999
Period from July 1, 1999 (inception of new business) to June 30, 2000
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(i) Income taxes:
Income taxes are accounted for under the asset and liability method. Current
taxes are recognized for the estimated income taxes for the current period.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and the benefit of operating loss and tax credit carry forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
A valuation allowance is recorded for deferred tax assets when it is more likely
than not that such deferred tax assets will not be realized.
(j) Loss per share:
Basic loss per share is calculated based on the weighted average number of
common shares outstanding during the periods. Excluded from the weighted
average number of common shares are 1,069,195 common shares (December 31, 1999 -
1,069,195) held in escrow which are released based on financial performance
criteria (note 6(a)).
Diluted loss per share is computed using the weighted average number of common
and potentially dilutive commons shares outstanding during the period. As the
Company has a net loss in each of the periods presented, basic and diluted net
loss per share are the same. Excluded from the calculation of diluted loss per
share are 907,000 stock options (1999 - 242,500) and 647,500 (1999 - 1,000,000)
share purchase warrants.
(k) Comparative figures:
Certain comparative figures have been reclassified and restated to conform with
the presentation adopted in the current period.
3. EQUIPMENT:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
Accumulated Net book Net book
Cost depreciation value value
<S> <C> <C> <C> <C>
Computer hardware and software $ 70,098 $ 10,903 $ 59,195 $ 28,388
Leasehold Improvements . . . . 14,535 1,211 13,324
Office Equipment . . . . . . . 11,915 596 11,319 -
------------- ------------------- -------- ----------
$ 96,548 $ 12,710 $ 83,838 $ 28,388
4. INTANGIBLE ASSETS:
June 30, December 31,
2000 1999
Accumulated Net book Net book
Cost depreciation value value
Intangible assets. . . . . . . $ 213,835 $ 65,339 $148,496 $183,209
</TABLE>
<PAGE>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited - prepared by management)
Notes to Financial Statements
Three month periods ended June 30, 2000 and 1999
Period from July 1, 1999 (inception of new business) to June 30, 2000
5. STOCKHOLDERS' EQUITY:
(a) Escrowed stock:
At June 30, 2000, 3,319,195 (December 31, 1999 - 1,069,195) common shares
outstanding were held in escrow. 1,069,195 (December 31, 1999 - 1,069,195) of
these shares are releasable from escrow on satisfaction of certain predetermined
tests set out by the CDNX related to the generation of positive cash flow from
operations.
The remaining escrowed stock of 2,250,000 (December 31, 1999 - 2,250,000) relate
to the acquisition of vertically branded channels and will be released in three
increments of 750,000 common stock on each of November 15, 2000, November 15,
2001 and November 15, 2002.
Stock not released from escrow within 10 years of the date of their issuance
will be cancelled. Pursuant to the escrow agreements, holders of the stock may
exercise all voting rights attached thereto except on a resolution to cancel any
of the stock, and have waived their rights to receive dividends or to
participate in the assets and property of the Company on a winding-up or
dissolution of the Company.
(b) Stock options and stock-based compensation:
At June 30, 2000 the Company's Board of Directors has granted stock options to
certain employees and directors to buy an aggregate of 907,000 shares of common
stock of the Company at prices ranging between $0.21 and $1.85. Stock options
are granted with an exercise price equal to the stock's market value at the date
of grant. All stock options have terms of one to five years and vest over
periods of zero to 18 months.
A summary of the status of the Company's stock options at June 30, 2000 and 1999
and changes during the three month periods ended on those dates is presented
below:
<TABLE>
<CAPTION>
6. STOCKHOLDERS' EQUITY (CONTINUED):
2000 1999
----------------- -----------------
Weighted average Weighted average
Options exercise price Options exercise price
<S> <C> <C> <C> <C>
Outstanding, beginning of period 545,000 $ 0.37 242,500 $ 0.26
Granted. . . . . . . . . . . . . . 604,000 1.03 - -
Exercised. . . . . . . . . . . . . (30,000) 0.49 - -
Expired/cancelled. . . . . . . . . (212,000) 1.47 - -
Outstanding, end of period . . . . 907,000 $ 0.55 242,500 $ 0.26
Options exercisable. . . . . . . . 851,000 $ 0.47 242,500 $ 0.26
</TABLE>
<TABLE>
<CAPTION>
(b) Stock options and stock-based compensation (continued):
The following table summarizes information about stock options outstanding at June 30, 2000:
Options outstanding Options exercisable
--------------------------------------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number Number
Range of . . . outstanding at Weighted Weighted exercisable at Weighted
exercise . . . June 30, average remaining average June 30, average
prices . . . . 2000 contractual life exercise price 2000 exercise price
$0.21 to $0.50 495,000 3.61 years $ 0.36 495,000 $ 0.36
$0.62 360,000 3.03 years 0.62 300,000 0.62
1.83 to $1.85 52,000 2.75 years 1.85 6,000 1.83
</TABLE>
<PAGE>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited - prepared by management)
Notes to Financial Statements
Three month periods ended June 30, 2000 and 1999
Period from July 1, 1999 (inception of new business) to June 30, 2000
As the exercise price is not materially different from the market price of the
Company's common stock on the date of grant, no compensation expense has been
recognized for its stock options in these financial statements.
(c) Stock consolidation:
In 1999, the Company authorized a two for one stock consolidation of the
Company's common stock. All share and per share information has been adjusted
for periods presented to reflect the stock consolidation.
(d) Share rescission offer:
In connection with the Company's redomiciliation described in note 1, the
Company will be required to make an offer to repurchased commons hares held by
U.S. person who were shareholders at July 14, 1999 for cash consideration of Cdn
$0.66 per share. It is estimated that this repurchased offer will relate to 500
common shares.
8. RELATED PARTY TRANSACTIONS:
During the period, the Company paid management fees and rent of $75,224 (1999 -
$19,449) to companies controlled by one or more directors or officers. The fees
were paid pursuant to the following agreements:
(a) A Management Advisory Agreement with Sedun De Witt Capital Corp., a
company owned and controlled by the spouses of two officers and directors. In
consideration of the services provided, Sedun De Witt Capital Corp. was paid Cdn
$5,000 per month.
(b) Total payments made to Sedun De Witt Capital Corp pursuant to the
Management Advisory Agreement were as follows:
2000 Cdn$ $ 55,000
1999 Cdn$ $ 47,500
1998 Cdn$ $ 60,000
1997 Cdn$ $ 5,000
(c) The Management Advisory Agreement was terminated on November 15, 1999 at
which time a new corporate advisory agreement took effect pursuant to the Asset
Purchase Agreement.
(d) Under the terms of the Asset Purchase Agreement, the Company will pay
Sedun De Witt Capital Corp Cdn $10,000 per month for a term of 12 months in
consideration for which Sedun De Witt Capital Corp will provide the Company with
advisory services relating to general corporate development, financial matters,
raising additional capital, strategic planning and other matters relating to the
financial affairs of the Company. Sedun De Witt Capital Corp agreed to reduce
its monthly fee to Cdn $5,000 per month up to January 31, 2000.
8. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT:
(a) Fair values:
<PAGE>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited - prepared by management)
Notes to Financial Statements
Three month periods ended June 30, 2000 and 1999
Period from July 1, 1999 (inception of new business) to June 30, 2000
The carrying amounts of cash, amounts receivable, accounts payable and accrued
liabilities and subscriptions received in advance of the issuance of shares
approximate their fair values due to their ability for prompt liquidation or
short-term to maturity.
(b) Foreign currency risk:
Foreign currency risk is the risk to the Company's earnings that arises from
fluctuations in foreign currency exchange rates, and the degree of volatility of
these rates. The Company does not yet have any sales, and accordingly, foreign
exchange risk is not yet considered by management to be a material risk at June
30, 2000.
9. INCOME TAXES:
During 1999, the Company redomiciled from Canada to the United States. All loss
carry forwards previously accumulated in Canada expired when the Company
redomiciled.
10. SUBSEQUENT EVENT:
Subsequent to June 30, 2000, the following capital transaction occurred:
Stock Option Grant:
On August 21, 2000, the Company granted 345,000 incentive stock options to
certain of its employees and consultants. The options vest over a period of 18
months and are exercisable at a price of US$0.62 per share for a period of five
years.
11. CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES:
These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States ("US GAAP") which differ in
certain respects with accounting principles generally accepted in Canada
("Canadian GAAP"). Material measurement differences to these financial
statements are as follows:
<TABLE>
<CAPTION>
(a) Statement of operations:
2000 1999
<S> <C> <C>
Net loss, US GAAP . . . . . . . . $520,974 $26,699
Net loss, Canadian GAAP . . . . . $473,865 $26,699
Net loss per share, Canadian GAAP $ 0.04 $ 0.01
</TABLE>
(b) Loss per share:
Under Canadian GAAP, the calculation of net loss per share includes contingently
returnable stock such as stock held in escrow that are described in note 6(a).
(c) Development stage enterprise:
Under US GAAP, a Company which is in the process of devoting substantially all
of its efforts to establish a new business and for which planned operations have
not yet commenced or there is no significant revenue therefrom, is required to
disclose additional information from inception or change in business to the
current period end. The financial statements disclose the accumulated deficit
during the development stage and the operations, changes in equity
<PAGE>
WWBROADCAST.NET INC.
(A Development Stage Enterprise)
(Expressed in U.S. dollars)
(Unaudited)
Notes to Financial Statements, page 8
Six month periods ended June 30, 2000 and 1999
Period from July 1, 1999 (inception of new business) to June 30, 2000
and cash flows during the development stage. No similar disclosure is required
under Canadian GAAP.
