SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 18, 2000
ONE WORLD ONLINE.COM, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
0-31771 87-0411771
(Commission file number) (IRS employer identification no.)
4778 North 300 West, Suite 200, Provo, Utah 84604
(Address of principal executive offices) (Zip code)
(801) 852-3540
(Registrant's telephone number, including area code)
This document contains a total of 10 pages.
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Item 5. Other Events.
The following highlights and updates the current operations and
prospects of One World Online.com, Inc.
Special Caution About Forward Looking Statements
This report contains statements about the future, sometimes referred to
as "forward-looking" statements. Forward-looking statements are typically
identified by the use of the words "believe," "may," "will," "should," "expect,"
"anticipate," "estimate," "project," "propose," "plan," "intend," and similar
words and expressions. One World Online intends the forward-looking statements
to be covered by the safe harbor provisions for forward-looking statements
contained in Section 27A of the Securities Act and Section 21E of the Exchange
Act. Statements that describe One World Online's future strategic plans, goals,
or objectives are also forward-looking statements.
Overview
One World Online.com, Inc. is implementing and refining a business
model to build an Internet community that combines the power of relationship
marketing with a loyalty incentive rebate in "Shopping Dollars" that are earned
as products and services are purchased. To date, most of One World Online's
revenues have been derived from initiating its relationship marketing
organization and providing Internet-related services to consumers. One World
Online anticipates that, in the future, an increasing portion of its revenues
will be derived from the sales to consumers of proprietary products and products
offered by affiliated retailers. One World Online continually reviews and
updates the products and services it sells as well as the details of its
Shopping Dollars loyalty incentive program.
One World Online has built and seeks to enhance an online community
valued by its members through a relationship marketing model based on
independent representatives called Internet Marketing Consultants, or IMCs. One
World Online IMCs introduce new customers to the Internet and e-commerce market
by offering a one-stop source for Internet solutions and access to Internet
shopping. These IMCs share in the revenues of the One World Online Internet
community under One World Online's unique relationship marketing model.
One challenge of online shopping is that of creating customer loyalty
in a cyberworld where customers move from one web retailer to the next with a
click of their mouse. One World Online is seeking to use the collective power of
uniting individuals through relationship marketing and loyalty incentives called
Shopping Dollars. For example, One World Online matches the current monthly
charge of $21.95 for its ISP services, Shopping Dollar-for-dollar, by crediting
22.00 Shopping Dollars to the customer's personal Shopping Dollar account. As a
result, One World Online advertises that its ISP customers receive their ISP
service "virtually free" every month. One World Online products, such as One
World Online Connect ISP service, eMarketing sites, and web hosting, are
eligible for up to a 100% Shopping Dollars rebate. Shopping Dollars may then be
redeemed for retail priced products in the One World Online Member Store.
One World Online's community members also earn loyalty rebates in
Shopping Dollars on purchases of One World Online proprietary products as well
as on purchases from online affiliate retailers such as BordersBooks.com,
NordstromRack.com, DisneyStore.com, Dell, Walmart.com, and approximately 70
others. One World Online is constantly expanding its proprietary products on
which it currently awards up to 100% of the retail price in Shopping Dollars.
This effort is designed to attract new customer purchases and increase the
portion of One World Online's revenues derived from proprietary product sales.
One World Online is also constantly adding and removing the affiliate merchants
at which its members can earn Shopping Dollars. A customer can currently earn up
to 50% of the purchase price in Shopping Dollars from products sold by affiliate
retailers.
One World Online believes its customers will become more loyal to One
World Online through the value offered by its products, services, affiliates
merchant program, and Shopping Dollar program. One World Online's goal is to
generate customer enthusiasm and loyalty as a customer earns and redeems free
Shopping Dollars. Currently, One World Online offers over 1,100 items in its
exclusive Member Store that can be purchased by redeeming Shopping Dollars. One
World Online continually reviews the services it provides, rates charged, and
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Shopping Dollars awarded to update its product and service offerings, consider
competitive factors, and provide appropriate loyalty incentives.
Marketing Strategy
One World Online's market strategy is to provide value to:
o the customer through person-to-person service and our unique
Shopping Dollars program;
o product suppliers and affiliated retailers through an extended
community of loyal consumers;
o stockholders by building long term profitability and growth;
and
o the world community through a founding principle of charitable
service.
Relationship Marketing
To expand One World Online's subscriber and member base, One World
Online instituted a relationship marketing program in the first quarter of 1999
as an approach within the Internet service provider, virtual community, loyalty
incentive, and web site development and hosting industries. The program is
designed to establish and expand a network of independent entrepreneurs called
Internet Marketing Consultants, or IMCs, to sell One World Online's products and
services. In general, each IMC is paid a commission for selling One World
Online's products and services, plus a residual commission on the subsequent
purchase of products by shoppers introduced to the One World Online community by
the IMC. IMCs are also paid a commission on the purchases made by customers of
other IMCs that are in an IMC's organization. One World Online believes that
using IMCs to sell its products and services assists One World Online in
lowering its cost of customer acquisition, reduces variable technical support
costs by using IMCs to aid in the set-up and maintenance of new customers, and
reduces customer turnover as the result of the customer's loyalty to his or her
IMC.
One World Online believes its IMC opportunity is particularly well
suited for individuals who possess strong sales skills and are motivated by the
prospect of supplementing their sources of income under a flexible work
schedule. One World Online primarily encourages its IMCs to increase the number
and volume of purchases by its customers rather than merely establish additional
IMCs. IMCs are not required to purchase significant amounts of product
inventory. The amount of the commission paid to an IMC sponsor in connection
with the sale of a product or service varies according to the product purchased
and the sponsor rank within the relationship marketing organization. As the
program continues to expand and mature, the total amount of commission One World
Online pays to IMCs for each sale will increase. However, One World Online
believes that such commissions are less than the costs for new customer
acquisitions through traditional sales and marketing activities. One World
Online's relationship marketing program is also more advantageous than other
sales and marketing activities used to sell web-related products such as banner
ads and traditional print, television and radio advertising--because One World
Online does not pay customer acquisition costs to IMCs until after the sale is
made.
Products and Services
A. Internet Related Products and Services
1. The One World Online Community Membership Shopping Dollars Loyalty
Incentive Program
The One World Online Community Membership consists of shopping,
information, education, and entertainment areas. The One World Online Community
Membership shopping feature is built upon the "Spend Your Money Twice" loyalty
incentive program. This incentive pays up to a 100% Shopping Dollar rebate of
what a member may spend on One World Online's proprietary products and up to a
50% Shopping Dollar rebate for products purchased from over 70 online affiliate
merchants such as BordersBooks.com, NordstromRack.com, DisneyStore.com, Dell,
Walmart.com, and numerous other top quality online retailers. One World
Online's proprietary products, One World Online's list of affiliates merchants
and the products offered by affiliates change frequently. Community members
receive access to a number of services, including valuable product offers, up to
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eight e-mail accounts, a personal web page, and news. One World Online regularly
reviews and revises the benefits provided to community members. The current
price for a One World Online Community Membership is $49.95 per year, which
price may be changed at the discretion of One World Online. Currently, ePassport
holders and One World Online Connect ISP customers each receive their first
year's membership free as part of their ePassport Benefits Package or ISP
service.
One World Online products carry with them a Shopping Dollar rebate of
up to 100% of the purchase price. These products include the ePassport Benefits
Package, ISP monthly service, Invitation Only products, other proprietary retail
products sold in the One World Online community store, the IMC eMarketing Site
(both creation and monthly hosting) and e-commerce sites (both creation and
monthly hosting). Shopping Dollars are redeemable in the Member Store within the
One World Online community for high margin, retail priced products. One World
Online believes its Shopping Dollars program will build customer loyalty leading
to increased sales by giving customers a greater incentive to purchase products
that accrue Shopping Dollars. One World Online also believes the process of
redeeming Shopping Dollars in the One World Online exclusive Member Store will
help customers feel more comfortable buying online with One World Online and its
affiliate merchants.
Although the Member Store is primarily a redemption center for
customers to redeem their accrued Shopping Dollars, it is also a potential
revenue center for One World Online. The product selection is diverse, with
prices ranging from less than 20 Shopping Dollars to a wide selection of
products that are priced for hundreds of Shopping Dollars. If a customer does
not have enough Shopping Dollars to purchase their item of choice, they can
still receive the value from their Shopping Dollars by redeeming them for the
product they want, and paying the difference in US Dollars. This will
potentially lower the overall cost of the Shopping Dollar program and is
currently a unique benefit of One World Online's Shopping Dollar redemption
model.
Although One World Online reserves the contractual right to terminate
this program at any time, termination of the program would have a material
adverse effect on One World Online and its relationship with its customers and
independent IMCs. There is no guarantee that One World Online's Shopping Dollar
program will be successful.
The One World Online Community information, education, and
entertainment areas are represented by a Learning Center, web search utilities,
news, arcade, horoscopes, weather, e-mail, Internet Radio Channels, a regular
shopping area, and a Member Store. For instance, the Learning Center includes
over 400 online courses as well as a library of books available at no cost. The
web search capability is powered by Northern Light Technology, Inc.'s patented
classification technology that displays results in "search folders." These areas
and services provide an environment where individuals can obtain and share
information and ideas, and where they have input regarding new community
features and goals. One World Online regularly revises the products and services
it makes available to community members.
2. ePassport Benefits Package
In August 2000, One World Online launched a new benefits package under
the name "ePassport" to communicate the value of the One World Online Community
and the value of Shopping Dollars to a broad consumer market. ePassport
purchasers receive many benefits such as:
o a free, one-year membership to the One World Online community
(a $49.95 value), which includes the ability to participate in
One World Online's "Spend Your Money Twice" Shopping Dollars
loyalty incentive program;
o eligibility to purchase One World Online's "Invitation Only"
line of products (which are described below);
o eligibility to participate in the OWOL Online Wireless "Earn
While you Talk" Cell Phone Plan in which a customer can earn
up to 25% of the wireless charges in Shopping Dollars. The
wireless service is provided on the Sprint PCS(R) Network;
o eligibility to purchase the ePassport Travel Club book
containing coupons for free air travel and over $6,000 in
savings on trips, cruises, airfare, movies and entertainment
for only 25 Shopping Dollars;
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o eligibility to win a cruise for two in drawings that are held
twice per month;
o eligibility to purchase a monthly bonus buy and participate in
other online discounts and coupons totaling at least $1,500 in
savings;
o family members of ePassport holders are eligible to apply for
an annual $5,000 college scholarship;
o a paid one-year, ten-issue subscription to Success Magazine
published by Success Publishing, Inc.; and
o several free online courses and eligibility to purchase
additional online course groups for only 100 Shopping Dollars
(each course groups contains between 35 and 120 individual
courses).
Purchasers of the ePassport are credited with 125 Shopping Dollars, the
full purchase price, that can be spent in One World Online's Member Store. This
is the basis for One World Online's advertisement that the purchase of the
ePassport is "virtually free" to the customer.
One World Online sells ePassports wholesale to its IMCs for $100, who
in turn resell them for $125 either online from an IMC's personal eMarketing
Site or directly in a person-to-person sale.
3. OWOL Online Connect
One World Online provides national ISP service pursuant to its
agreements with nationwide Internet service providers PSINet and a subsidiary of
IKANO Communications, Inc. Through these arrangements, One World Online can
provide its customers with over 2,300 local access numbers that cover
approximately 92% of the United States population. One World Online currently
awards Shopping Dollars in an amount equal to the fee it charges for unlimited,
national ISP service. Currently One World Online charges $21.95 per month for
ISP services and awards the customer 100 Shopping Dollars on the initial ISP
signup (with a three month commitment) and 22 Shopping Dollars each month.
One World Online pays a significant portion of the revenue it receives
for ISP service to its IMCs for having brought the ISP subscriber to One World
Online. These payments are in the form of one-time, bonus payments and monthly,
shared revenue payments. One World Online believes that its ISP compensation
program significantly advances the marketing efforts of its other products,
including sales of ePassport Benefits Packages, Invitation Only Products,
proprietary products and sales through affiliate merchants.
4. IMC eMarketing and e-Commerce Web Site Creation, Sales, and Hosting
One World Online sells a variety of web site solutions via its IMCs,
including the IMC eMarketing Web Site, which helps IMCs build their One World
Online business. The IMC eMarketing Web Site contains a host of marketing
content and presentations that are updated and improved frequently to help IMCs
attract new retail customers and sell products to these customers. Currently,
the Invitation Only products are only sold on IMC eMarketing Web Sites. The IMC
eMarketing Site also sells ePassport Benefits Packages and the One World Online
Connect ISP service. In addition, each site supports the IMC in his or her
efforts to expand their business by attracting new IMCs and managing the IMC's
One World Online business. Each IMC eMarketing Web Site includes a domain
selected by the IMC and is semi-customizable. One World Online receives
significant revenues based on the sale of IMC eMarketing Sites, as well as the
monthly hosting charges. One World Online expects its sales will be come
primarily for the sale of products to customers as opposed to recruitment of
IMCs.
One World Online also offers a premier e-commerce web site marketed as
a "Full-Solution E-Commerce Web Site." Full-solution e-commerce web sites are
industry specific sites developed by One World Online. The term "full-solution"
refers to the web site's capacity to fill a substantial portion of a small
business's e-commerce and information needs. Web site templates are designed for
real estate brokers and companies, small business entrepreneurs, and medical
professionals. In addition to initial charges, One World Online receives
revenues for monthly hosting.
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One World Online also provides other web development services,
including domain name registration and programming services.
B. Community Membership Shopping
One World Online is seeking to increase the proportion of its revenue
derived from sales of products to community Members. One World Online offers its
Community Members access to Internet shopping for a wide range of products
offered by affiliate retailers such as BordersBooks.com, NordstromRack.com,
DisneyStore.com, Dell, Walmart.com, and approximately 70 others. One World
Online expects that it will increase the number and variety of affiliate
retailers as its membership increases. Generally, One World Online receives a
commission on all purchases from affiliate retailers, and awards Shopping
Dollars for a portion of the sale price as designated by One World Online.
Shopping Dollars may be redeemed only for One World Online's select
products offered at its online Member Store. Currently, One World Online offers
over 1,100 items for Shopping Dollar redemption. One World Online determines the
amount of Shopping Dollars awarded on each transaction based on the net
commission received from the affiliate retailer and cost of goods sold in the
Member Store to ensure a positive gross margin on virtually every transaction.
"Invitation Only" Product Line. On December 6, 2000, One World Online
introduced a line of Invitation Only proprietary products that are currently
sold only to ePassport holders. One World Online believes that the Invitation
Only product line will become a significant part of achieving its goal of
redirecting at least $100 of consumer spending each month to One World Online.
The Invitation Only line of products are a select group of quality, proprietary
products that both: a) are competitively priced for the customer and b) contain
sufficient margins for One World Online to permit significant commissions for
its IMCs and still rebate a significant amount of Shopping Dollars (currently
50% of the purchase price) to the consumer.
The initial group of Invitation Only products includes the following
product lines:
o Nature's VitaSource(TM) whole-food nutritional supplements are
formulated specially for Nature's VitaSource by Douglas Grant
and are exclusively distributed by One World Online. Mr. Grant
has significant experience in the formulation of nutritional
products, has trained thousands of health professionals
throughout the United States on the subject of nutrition, and
acts as nutritional advisor to many NBA players and top
athletes from other sports.
o Nature's SpaSelect(TM) line offers a wide selection of
personal care items, including skin care, hair, bath and body,
and specialty treatment products, that are distributed under
the Nature's SpaSelect(TM) label and are exclusively
distributed by One World Online. One World Online believes
that what sets this line apart from competitors is that the
products are formulated with 15% to 99% pure aloe vera.
o First Harvest line of good tasting soups and entrees that are
significant sources of vitamins and minerals. All meals can be
conveniently prepared simply by boiling water and simmering
for 20-30 minutes, or cooking in the microwave. No mixing of
ingredients or following recipes is required.
One World Online intends to expand and improve the Invitation Only line
of proprietary products over time by increasing the number of product categories
and expanding the products offered in each category. Moreover, One World Online
continuously reviews the products it offers, pricing, and the Shopping Dollars
awarded to update its product offerings, consider competitive factors, and
provide appropriate loyalty incentives.
Strategic Relationships
One World Online believes that establishing complementary strategic
relationships are key to its growth. One World's current strategic relationships
include the following:
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o PSINet and an IKANO Communications, Inc. subsidiary offer
local telephone numbers through which subscribers can access
the Internet in large metropolitan service areas and broad
segments of the U.S.
o Netsurfer, Inc. provides One World Online customized ISP
subscriber acquisition and management software.
o One World Online uses the services of industry-leading
companies that facilitate partnering relationships between
e-commerce companies. Through these companies, One World
Online has access to hundreds of potential top online
retailers from which One World Online can choose potential
affiliate merchants.
o One World Online has established relationships with several
wholesalers and manufacturers for the products that One World
Online offers in its Member Store and other proprietary
products that it sells on the One World Online community. One
World Online also has several relationships with manufacturers
for the private labeling of certain products, including some
of the Invitation Only products. Instead of manufacturing its
own retail products, One World Online seeks to resell
existing, quality products from proven manufacturers and
wholesalers. Where possible, One World Online has established
relationships with wholesalers where products are virtually
fulfilled, thus eliminating the necessity to stock inventory
for these products resulting in improved inventory turn
ratios.
One World Online intends to continue to increase and improve its
strategic alliances to expand the number and variety of products and services it
provides, increase and improve the benefits to the One World Online community
members, and improve incentives to its IMCs and members.
Government Regulation of Direct Selling and Network Marketing Activities
Direct selling activities are regulated by various governmental
agencies. These laws and regulations are generally intended to prevent;
fraudulent or deceptive schemes, often referred to as "Pyramid," "Ponzi," or
"chain sales" schemes, that promise quick rewards for little or no effort,
require high entry costs, use high pressure recruiting methods (with recruiting
being the primary focus), and/or do not involve legitimate products. Generally,
these laws are directed at ensuring that product sales ultimately are made to
customers and that advancement within such sales organizations is based on sales
of the enterprise's products, rather than recruitment in such organizations or
other nonretail sales-related criteria. Where required by law, One World Online
attempts to obtain approval of its network marketing system, or where such
approval is not required or available, the favorable opinion of independent
counsel, as deemed necessary, as to regulatory compliance.
The Federal Trade Commission and state attorneys general regulate the
network or relationship marketing system of One World Online. One World Online
remains subject to the risk that, in one or more of its present or future
markets, its marketing system or the conduct of certain of its independent IMCs
could be found not to be in compliance with applicable laws and regulations.
Failure by One World Online or its independent IMCs to comply with these laws
and regulations could have a material adverse effect on One World Online in a
particular market or in general. Any or all of such factors could adversely
affect the way One World Online does business and could affect One World
Online's ability to attract potential and customers or to enter new markets.
One World Online's Value to the World Community
One of the objectives of the founders of One World Online was to use
One World Online's success as a catalyst for community improvement. To this end,
the founders created the One World Online Charitable Foundation ("OWOCF") and
the One World Online University and endowed these organizations with shares of
common stock of One World Online. OWOCF also receives the benefit of the first
distributor position that is frontline to One World Online in its relationship
marketing organization. This means that OWOCF receives a monthly payment from
One World Online based on the sales of the IMCs below the OWOCF position. These
payments could be as much as 22% of the shared revenue paid out to the
independent IMCs of One World Online, however, the actual percentage paid to
OWOCF will likely be significantly less in any given month.
OWOCF has provided support to the National Kidney Foundation of Utah,
Special Olympics, and HELP International's Microcredit Program in Honduras. A
primary focus of the OWOCF is support of the "Quest for the
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'Gift of Life' Foundation," which is committed to saving lives by increasing the
availability of transplant organs and tissue.
Financial Highlights
The following summary financial information should be read in
conjunction with One World Online's financial statements included in its
quarterly report on form 10-Q for the quarter ended September 30, 2000
(unaudited), and its annual report on Form 10-KSB for the fiscal year ended June
30, 2000.
<TABLE>
<CAPTION>
Three Months Years Ended
Ended Sept. 30 June 30
-------------------------- --------------------------
2000 1999 2000 1999
------------ ------------ ------------- ------------
(in thousands, except per share amounts)
Statement of Operations Data
<S> <C> <C> <C> <C>
Revenue.............................................. $ 1,458 $ 318 $ 2,169 $ 460
Cost of sales........................................ 306 402 1,045 245
------------ ------------ ------------- ------------
Gross margin...................................... 1,152 (84) 1,124 215
Distributor incentives............................... 599 117 932 142
Selling, general and administrative expenses......... 2,231 1,159 6,695 1,786
Other income (expense) .............................. (32) 42 (183) 44
------------ ------------ ------------- ------------
Loss before income taxes.......................... (1,710) (1,318) (6,686) (1,669)
Income tax benefit................................... - - - -
------------ ------------ ------------- ------------
Net loss.......................................... $ (1,710) $ (1,318) $ (6,686) $ (1,669)
============ ============ ============= ============
Loss per common share--basic and diluted.............. (0.11) (0.09) (0.43) (0.26)
Weighted average shares outstanding.................. 15,794 15,475 15,523 6,400
Balance Sheet Data
Working Capital (deficit) ........................... $ (928) $ 1,798 $ (483) $ 3,285
Total assets......................................... 2,003 2,822 1,940 4,157
Total liabilities.................................... 3,762 236 3,125 253
Accumulated deficit.................................. (10,215) (2,987) (8,505) (1,669)
Total stockholders' equity (deficit)................. (1,759) 2,586 (1,185) 3,904
</TABLE>
To date, One World Online has focused primarily on initiating its IMC network,
increasing its customer/member base, developing its Shopping Dollar rebate
loyalty program, adding ISP customers, developing its line of IMC eMarketing and
e-commerce web sites, building the One World Online Community and related
software, building a high-performance, scaleable hardware infrastructure, hiring
capable personnel, developing its marketing plan, developing technology and
e-commerce solutions and raising capital.
Operating Trends
One World Online's revenues continue to grow. As revenues grow, One
World Online estimates that its cost of sales as a percentage of revenue will
continue to decline. One World Online expects that, in the future, cost of sales
and distributor expenses will generally fluctuate with sales. To date, sales
have been comprised primarily of revenues from IMC eMarketing web site creation
and hosting, sales of ePassport Benefits Packages, and ISP service. One World
Online will look to the One World Online.com Community Membership and Shopping
Dollars rebate program, Invitation Only product sales, commissions from retail
sales at affiliate merchants, and other services and consumer product sales for
future sales revenues.
Selling, general, and administrative costs are likely to increase due
to Shopping Dollar expense associated with One World Online's loyalty incentive
program and payroll costs as increased personnel are required.
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Liquidity and Capital Resources
Since inception, One World Online has financed its operations primarily
through the private placement of its common stock and debt securities.
One World Online's capital requirements depend on numerous factors,
including market acceptance of One World's web site, technical services, online
community, ISP service, and product sales. Capital requirements also depend on
the amount of resources needed for its product development programs.
As of September 30, 2000, One World had an estimated $863,026 in
Shopping Dollar obligations that comprise part of One World Online's reported
accrued liabilities. One World is also highly dependent on its IMCs' ability to
market its products and services. For the foreseeable future, One World expects
to experience an increase in its capital expenditures and operating expenses
consistent with the growth of its operations and staffing. There can be no
assurance, however, that One World Online will continue to grow, or that its
products and services will be accepted by the market place.
One World Online has borrowing arrangements in place to borrow an
aggregate of $2,000,000 under convertible loan arrangements with an affiliate.
As of December 11, 2000, $1,300,000 remained available for drawdown under these
arrangements.
One World Online had $738,000 in cash and cash equivalents as of
September 30, 2000. One World Online believes that existing funds, funds
available under its borrowing arrangements, and anticipated revenues will be
sufficient to support its operations through March 2001. Currently, One World
Online requires cash to fund its continuing operations, product inventory,
Shopping Dollar redemptions, technology upgrades and other working capital
needs. One World Online estimates that it will require between approximately
$2.0 and $3.0 million in capital from external sources to fund its ongoing
requirements between March and December 2001. One World Online may attempt to
accelerate the implementation of its business model by raising capital in
addition to the required $2.0 to $3.0 million. One World Online expects to
generate sufficient revenue from operations to cover its estimated cash
requirements beginning in mid 2001. As in the past, in order to obtain its
required capital, One World Online will rely principally on the sale of
securities, either to unaffiliated parties or to its officers, directors, and
principal stockholders.
One World Online has no firm commitments to obtain additional
financing, and there can be no assurance that additional financing will be
available on commercially reasonable terms, or at all. Any inability to obtain
additional financing will have a material adverse effect on One World Online,
including possibly requiring One World Online to significantly curtail or cease
its operations.
One World Online's Projected Growth
One World Online's goals for growth are based on its plan to increase
the amount and proportion of revenue derived from ongoing retail product sales
to its members. In order to accomplish this growth, One World Online will seek
to expand substantially its network of IMCs and help them increase their
customers' volume of purchases of One World Online's proprietary products as
well as products from affiliate retailers. One World Online believes that the
relationship marketing model it is developing will support accelerating growth
as its IMC network gains critical mass.
Based on these assumptions and assumed accelerating growth of One World
Online's relationship marketing model, in September 2000 One World Online
targeted revenue of approximately $17.1 million with a loss of about $2.6
million for the fiscal year ended June 30, 2001, as compared to revenue of $2.2
million and a $6.7 million loss for the last fiscal year. As the accelerating
growth of One World Online's relationship marketing model continues, One World
Online believed it could attain revenue of over $80.0 million, with net profit
of almost $11.0 million, in the fiscal year ending June 30, 2002.
At this time, however, One World Online believes that for the quarter
ending on December 31, 2000, it will not achieve the revenues targeted in the
September 2000 proforma. Revenues for this quarter are now anticipated to
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be substantially less than targeted because, among other factors, One World
Online's Invitation Only product launch was delayed by approximately one month,
IMC growth has been less than expected, and the rate of new customer acquisition
has been less than expected. The full impact of these factors on future revenues
and related profits or losses cannot be measured at this time.
One World Online's ability to achieve its revenue, earnings, and other
financial performance targets is dependent on a number of factors, including its
ability to:
o increase the portion of revenues derived from retail sales of
proprietary and affiliate's products to supplement its current
revenue;
o maintain a roster of retail affiliates that provide an array
of goods its members and prospective members want at prices
its members and prospective members are willing and able to
pay;
o price the products and services it offers, and the related
Shopping Dollars awarded, so that it remains competitive while
providing effective Shopping Dollar loyalty incentives;
o recruit, retain, incentivize, and support a growing number of
independent IMCs to sell One World Online's products and
services;
o structure the Shopping Dollars loyalty program to provide
benefits attractive to members, while managing financial
exposure and risk;
o develop, introduce, and support an array of new One World
Online proprietary products, services, and features that will
attract new IMCs and customers and increase merchandise sales;
o effectively compete in One World Online's highly competitive
industry that is dependent on the success of independent IMCs;
o comply with all federal and state regulations and laws
relating to the sale of One World Online's products, including
but not limited to complying with regulation and laws relating
to direct sales and network marketing;
o obtain significant additional funding to continue operations
and execute One World Online's business plan; and
o recruit and retain an effective and productive management,
technical, and related support staff to provide the services
its IMCs and members require.
One World Online cannot assure that it will be able to achieve its revenue,
earnings, and other financial performance targets. In addition, sales and other
revenues may not commence and/or continue as anticipated due to delays or
otherwise. As a result, One World Online's actual results for future periods
could differ materially from those anticipated or projected.
Please refer to "Management's Discussion and Analysis or Plan of
Operation" and specifically the discussion under "Risk Factors" that is found in
One World Online's Annual Report on Form 10-KSB for the year ended June 30,
2000, for more details.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ONE WORLD ONLINE.COM, INC.
Date: December 18, 2000 By /s/ David N. Nemelka
------------------------------
David N. Nemelka
President, Chief Executive
Officer and Director
10
