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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-KSB/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
COMMISSION FILE NO. 0-20598
_____________________
DEFINITION, LTD.
(Name of small business issuer as specified in its charter)
NEVADA 75-2293489
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Idendtification No.)
4625 W. Nevso Drive, Suite 2 89103
Las Vegas, Nevada (Zip Code)
(Address of principle executive offices)
Registrant's telephone number, including area code: (702) 257-2367
Securities Registered under Section 12(b) of the Exchange Act: None
Securities Registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value, traded on the OTC Electronic Bulletin Board
Preferred Stock $0.01 par value per share
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
for the past 90 days. Yes [ ] No [ X ]
Indicate by check by mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. []
Registrant's revenues for its most recent fiscal year were $234,373.
Aggregate market value of Common Stock, $0.001 par value, held by non-
affiliates of the registrant as of August 13, 1999: $13,345,233. Number of
shares of Common Stock, $0.001 par value, outstanding as of August 13, 1999:
11,832,429.
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ANNUAL REPORT ON FORM 10-KSB
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
PAGE
PART I ----
Item 1. Business................................................ 3
Item 2. Properties.............................................. 8
Item 3. Legal Proceedings....................................... 8
Item 4. Submission of Matters to a Vote of Security Holders..... 8
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters..................................... 8
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 9
Item 7. Financial Statements.................................... 10
Item 8. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure................................ 10
PART IV
Item 9. Directors and Executive Officers of the Registrant...... 10
Item 10. Executive Compensation.................................. 11
Item 11. Security Ownership of Certain Beneficial Owners and
Management.............................................. 11
Item 12. Certain Relationships and Related Transactions.......... 12
PART V
Item 13. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K................................................ 12
2
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PART I
Item 1. Business
Definition, Ltd. (the "Company") was incorporated in 1989 under the name
"Stone Grill International, Inc.", under the laws of the State of Nevada.
The authorized capital stock of the Corporation consists of 50,000,000 shares
of Common Stock, $0.001 par value per share and 5,000,000 shares of
Preferred Stock, $0.01 par value per share.
The Company currently engages in commerce through enhanced communications.
The Company intends to become a leader in all phases of high technology
communications media, television, wireless telephone/fax/Internet service,
television advertising, computer hardware and software, and travel services.
There is, of course, no assurance that the Company will be successful in
its business.
The Company has two subsidiaries: (1) Definition Technologies, Inc., (DTI),
a Texas corporation, operates a community (low-power) television station
transmitting from West Palm Beach, Florida, WINQ-TV (WINQ) Channel 19.
WINQ also operates as a traditional television station, deriving revenues
through sales of advertising time; (2) Interactive Systems, Inc. (ISI),
(a Nevada Corporation), through which the Company owns a real estate condo.
No other activities are performed through this subsidiary.
Business Development
References to the "Company" include, WINQ-TV, DTI and ISI, unless the
context indicates otherwise.
WINQ-TV, Through is subsidiary, DTI, the Company operates a community (low
power) television station, transmitting from West Palm Beach, Florida,
WINQ-TV Channel 19. The transmitter has an effective radius of approximately
25 miles, and a household audience of approximately 260,000 homes in a
population area containing approximately 1,000,000 people. WINQ-TV operates
under a permit granted by the Federal Communications Commission. WINQ-TV
broadcasts 24 hours a day, offering a broad line of programming, which
includes catalog sales, infomercials, movies and sitcoms. The Company's
signal is carried by the local cable operator. WINQ-TV sells television
broadcast time and advertising time, produces infomercials and arranges for
their production by third parties. Additionally, the Company makes
duplicates of, and edits, film from its film library for sale of footage,
documentaries, movies, newsreels and educational film.
Industry History of Community Television. Community, or low power,
television is a relatively new broadcasting category created by the FCC in
the early 1980s. Community television stations, with their narrow geographic
coverage, usual unaffiliated status and local programming focus, are becoming
a more important part of the current broadcasting mix. While able to cover,
on average, only between five and 20 miles with their signals, community
television stations have been able to expand greatly their coverage by having
their signals included in local and regional cable systems. Entry into the
community television industry requires substantially less capital than entry
into the high-power television industry. There are currently approximately
1,700 community television stations licensed by the FCC, with approximately
the same number of applications for new licenses now pending with the FCC.
Community television stations may be either affiliated with one of the
national networks (ABC, NBC, CBS, FOX, UPN or WB) or may be independent. The
Company does not anticipate that its community television station will become
a network affiliate.
3
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Programming. Lacking a national network affiliation, independent community
television stations, in general, depend heavily on independent third parties
for programming. Programs obtained from independent sources consist
primarily of syndicated television shows, many of which have been shown
previously on a network, and syndicated feature films, which were either made
for network television or have been exhibited previously in motion picture
theaters (most of which films have been shown previously on network and
cable television). Syndicated programs are sold to individual stations to be
broadcast one or more times. Independent television stations generally have
large numbers of syndication contracts; each contract is a license for a
particular series or program that usually prohibits licensing the same
programming to other television stations in the same market. A single
syndication source may provide a number of different series or programs.
Licenses for syndicated programs are often offered for cash sale or on a
barter or cash-plus-barter basis to stations. In the case of a cash sale,
the station purchases the right to broadcast the program or a series of
programs, and sells advertising time during the broadcast. The cash price
of such programming varies, depending on the perceived desirability of the
program and whether it comes with commercials that must be broadcast (a
cash-plus-barter basis). Bartered programming is offered to stations without
charge, but comes with a greater number of commercials that must be
broadcast, and, therefore, with less time available for sale by the station.
Recently, the amount of bartered and cash-plus-barter programming broadcast
industry-wide has increased substantially.
WINQ-TV has, to date, relied on the use of its film library and the use of a
third party's film library free-of-charge, rather than acquiring programming
from third parties. It can be expected that this method of programming will
continue as the Company's Internet Video Streaming business matures. It is
contemplated that WINQ-TV would, at some time in the future, employ a
broadcast format featuring segments of 5 to 15 minutes in length, ranging
from abridged movies to documentaries to standard commercials to
infomercials, some of which can be expected to be produced by the Company and
to promote products being marketed by the Company.
Business Strategy. It is the Company's current intention for WINQ-TV's
programming to evolve over the next two years. That is, the Company expects
that WINQ-TV would, in the future, employ a broadcast format featuring
segments of 5 to 15 minutes in length, ranging from abridged movies to
documentaries to standard commercials to infomercials, some of which can be
expected to be produced by the Company and to promote products being marketed
by the Company.
Regulation
Community (Low Power) Television
General Television broadcasting operations are subject to the jurisdiction of
the FCC under the Communications Act. The Communications Act empowers the
FCC, among other things, to issue, revoke or modify broadcast licenses, to
assign frequencies, to determine the locations of stations, to regulate the
broadcasting equipment used by stations, to establish areas to be served, to
adopt such regulations as may be necessary to carry out the provisions of the
Communications Act and to impose certain penalties for violation of its
regulations. The Company's currently operating community television station,
as well as any future stations, is subject to a wide range of technical,
reporting and operational requirements imposed by the Communications Act and
by FCC rules and policies.
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The Communications Act provides that a license may be granted to any
applicant if the public interest, convenience and necessity will be served
thereby, subject to certain limitations, including the requirement that the
FCC allocate licenses, frequencies, hours of operation and power in a manner
that will provide a fair, efficient and equitable distribution of service
throughout the United States. Television licenses generally are issued for
five-year terms. Upon application, and in the absence of a conflicting
application that would require the FCC to hold a hearing, or questions as to
the licensee's qualifications, television licenses have usually been renewed
for additional terms without a hearing by the FCC. An existing license
automatically continues in effect once a timely renewal application has been
filed until a final FCC decision is issued.
Under existing FCC regulations governing multiple ownership of broadcast
stations, a license to operate a television or radio station generally will
not be granted to any party (or parties under common control) if such party
directly or indirectly owns, operates, controls or has an attributable
interest in another television or radio station serving the same market or
area. The FCC, however, is favorably disposed to grant waivers of this rule
for certain radio station, television station combinations in the top 25
television markets, in which there will be at least 30 separately owned,
operated and controlled broadcast licenses, and in certain other
circumstances.
FCC regulations further provide that a broadcast license will not be granted
if that grant would result in a concentration of control of radio and
television broadcasting in a manner inconsistent with the public interest,
convenience or necessity. FCC rules generally deem such concentration of
control to exist if any party, or any of its officers, directors or
shareholders, directly or indirectly, owns, operates, controls or has an
attributable interest in more than 12 television stations, or in television
stations capable of reaching, in the aggregate, a maximum of 25% of the
national audience. This percentage is determined by the DMA market ranking
of the percentage of the nation's television households considered within
each market. Because of certain limitations of the UHF signal, however, the
FCC will attribute only 50% of a market's DMA reach to owners of UHF stations
for the purpose of calculating the audience reach limits. The Company will
not approach such limits for the foreseeable future. To facilitate minority
group participation in radio and television broadcasting, the FCC will allow
entities with attributable ownership interests in stations controlled by
minority group members to exceed the ownership limits.
The FCC's multiple ownership rules require the attribution of the licenses
held by a broadcasting company to its officers, directors and certain of its
shareholders, so there would ordinarily be a violation of FCC regulations
where an officer, director or such a shareholder and a television broadcasting
company together hold interests in more than the permitted number of stations
or more than one station that serves the same area. In the case of a
corporation controlling or operating television stations, such as the
Company, there is attribution only to shareholders who own 5% or more of the
voting stock, except for institutional investors, including mutual funds,
insurance companies and banks acting in a fiduciary capacity, which may own
up to 10% of the voting stock without being subject to such attribution,
provided that such entities exercise no control over the management or
policies of the broadcasting company.
5
<PAGE>
The FCC has recently begun a proceeding to consider liberalization of the
various TV ownership restrictions described above, as well as changes (not
all of which would be liberalizing in effect) in the rules for attributing
the licenses held by an enterprise to various parties. The Company is unable
to predict the outcome of these proceedings.
The Communications Act and FCC regulations prohibit the holder of an
attributable interest in a television station from having an attributable
interest in a cable television system located within the coverage area of
that station. FCC regulations also prohibit the holder of an attributable
interest in a television station from having an attributable interest in a
daily newspaper located within the predicted coverage area of that station.
The Communications Act limits the amount of capital stock that aliens may
own in a television station licensee or any corporation directly or
indirectly controlling such licensee. No more than 20% of a licensee's
capital stock and, if the FCC so determines, no more than 25% of the capital
stock of a company controlling a licensee, may be owned or voted by aliens or
their representatives. Should alien ownership exceed this limit, the FCC may
revoke or refuse to grant or renew a television station license or approve
the assignment or transfer of such license.
The Communications Act prohibits the assignment of a broadcast license or the
transfer of control of a licensee without the prior approval of the FCC.
Legislation was introduced in the past that would impose a transfer fee on
sales of broadcast properties. Although that legislation was not adopted,
similar proposals, or a general spectrum licensing fee, may be advanced and
adopted in the future. Recent legislation has imposed annual regulatory fees
applicable to the Company.
The foregoing does not purport to be a complete summary of all of the
provisions of the Communications Act or regulations and policies of the FCC
thereunder. Reference is made to the Communications Act, such regulations
and the public notices promulgated by the FCC.
Other Regulations. The Federal Trade Commission, among other regulatory
agencies, imposes a variety of requirements that affect the business and
operations of broadcast stations. From time to time, proposals for
additional or revised requirements are considered by the FCC, numerous other
Federal agencies and Congress. The Company is unable to predict future
Federal requirements or what impact, if any, any such requirements may have
on the Company's television station.
Competition
Community (Low Power) Television. Community television stations compete for
advertising revenue in their respective markets, primarily with other
broadcast television stations and cable television channels, and compete with
other advertising media, as well. Such competition is intense. In addition,
competition for programming and management personnel is severe. The Company
expects that WINQ-TV will continue to be able to operate successfully in such
an environment, although there is no assurance that such will be the case.
Employees
The Company employs approximately twenty persons at its television station,
and three persons at corporate headquarters, all of whom are officers of the
Company. Currently, the Company contracts with outside parties for other
services required to be performed by the Company, as needed.
6
<PAGE>
Risk Factors
Continued Control by Existing Management-The Company's management currently
owns a substantial stake in the Company's outstanding Common Stock.
Accordingly, new shareholders will lack an effective vote with respect to the
election of directors and other corporate matters.
Dependence on Executive Officers-The Company is highly dependent on the
services of its officers. Attracting and retaining qualified personnel is
critical to the Company's business plan. No assurances can be given that the
Company will be able to retain or attract such qualified personnel or agents.
Should the Company be unable to attract and retain qualified personnel
necessary, the ability of the Company to implement its business plan
successfully would be limited.
Potential Fluctuations in Quarterly Results-The Company's operating results
have varied on a quarterly basis during its limited operating history, and
the Company expects to experience significant fluctuation in future quarterly
operating results. Such fluctuations have been and may in the future be
caused by numerous factors, many of which are outside of the Company's
control. The Company believes that period to period comparisons of its
results of operations will not necessarily be meaningful and should not be
relied upon as an indication of future performance. Also, if is likely that
in some future quarter or quarters, the Company's operating results will be
below the expectations of public market analysts and investors. In such an
event, the price of the Company's Common Stock would be materially and
adversely affected.
Risks Concerning Community (Low Power) Television
Competition. Community (low power) television stations compete for
advertising revenue in their respective markets, primarily with other
broadcast television stations and cable television channels, and compete with
other advertising media, as well. Such competition is intense. In addition,
competition for programming and management personnel is severe. Nevertheless,
the Company expects that WINQ-TV will continue to be able to operate
successfully in such an environment, although there is no assurance that such
will be the case.
Government Regulation. Television broadcasting operations are subject to the
jurisdiction of the FCC under the Communications Act. The Communications Act
empowers the FCC to issue, revoke or modify broadcast licenses, to assign
frequencies, to determine the locations of stations, to regulate the
broadcasting equipment used by stations, to establish areas to be served, to
adopt such regulations as may be necessary to carry out the provisions of the
Communications Act and to impose certain penalties for violation of its
regulations. The Company's television station is subject to a wide range of
technical reporting and operational requirements. There is no assurance that
the Company will be able to comply with such requirements in the future.
Similarly, the FTC, among other regulatory agencies, imposes a variety of
requirements that affect the business and operations of broadcast stations.
Proposals for additional or revised requirements are considered from to time
by the FCC, other regulatory agencies and Congress. The Company is unable
to predict what new or revised Federal requirements may result from such
consideration or what impact, if any, such requirements might have upon the
operation of a television station operated by the Company.
7
<PAGE>
Item 2. Properties
The Company's properties are functionally grouped. It holds, through DTI,
significant properties in the form of television equipment, cameras, sets,
recorders, transmitters, receivers, microwave dishes, monitors, splicers,
film and film libraries. Such assets are located at 1334 South Killian
Drive, Unit 4, Lake Park, Florida. DTI owns the facilities it occupies,
consisting of approximately 6,500 square feet of office space, television
station infrastructure and storage areas, including a sound stage utilized
in making infomercials and live and recorded television programming. It
owns its office furniture, fixtures, computer system and internal telephone
network.
The Company also has a mortgage payable on a real estate condo through ISI in
Lake Park, Florida.
The Company owns a significant film library of 104 one-hour programs and 350
half-hour programs, consisting of certain copyrighted programs,
documentaries, music blocks, educational programming and other productions
and film footage.
Item 3. Legal Proceedings
The Company is not currently engaged in any legal proceeding, nor, to the
Company's knowledge, is any suit or other legal action pending or threatened,
other than various claims and lawsuits arising in the normal course of
business.
Item 4. Submission of Matters to Vote of Security Holders
No matters were submitted to a vote of the Company's security holders during
the fourth quarter of the fiscal year ended December 31, 1998.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
(a) Market Information
The Common Stock of the Company is traded on the OTC Electronic Bulletin
Board under the symbol "DFNL"'. The range of high and low bid quotations
for each quarterly period during the years ended December 31, 1997 and 1998,
and the quarter ended March, 31, 1999 and June 30, 1999, as reported by the
OTC Electronic Bulletin Board, is set forth in the table below:
<TABLE>
<CAPTION>
Quarter Ended High Low
------------- ------ ------
<S> <C> <C>
March 31, 1997 $ 0.50 $0.3125
June 30, 1997 $ 0.10 $0.11
September 30, 1997 $ 0.25 $0.31
December 31, 1997 $ 0.28 $0.31
March 31, 1998 $ 0.38 $0.41
June 30, 1998 $ 0.26 $0.29
September 30, 1998 $ 0.095 $0.10
December 31, 1998 $ 0.04 $0.045
March 31, 1999 $ 1.125 $1.18
June 30, 1999 $ 1.06 $1.34
</TABLE>
8
<PAGE>
On August 12, 1999, the last reported bid and asked prices for the Company's
Common Stock, as reported by the OTC Electronic Bulletin Board, were $1.125
and $1.375 per share, respectively. Such quotations reflect inter-dealer
prices, without retail markup, retail markdown or commission, and may not
represent actual transactions.
(b) Holders
As of August 12, 1999, there were approximately 1,200 stockholders of record
of the Company's Common Stock.
(c) Dividends
The Company has never paid a dividend and does not anticipate paying any
dividends in the foreseeable future. It is the present policy of the Board
of Directors to retain the Company's earnings, if any, for the development of
the Company's business.
Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with the financial
statements and notes thereto included in Item 7 of this Form 10-KSB. Except
for the historical information contained herein, the discussion in this
annual report on Form 10-KSB contains certain forward-looking statements
that involve risk and uncertainties, such as statements of the Company's
plans, objectives, expectations and intentions. The cautionary statements
made in this document should be read as being applicable to all related
forward-looking statements wherever they appear in this document. The
Company's actual results could differ materially from those discussed here.
Factors that could cause differences include those discussed below in "Risk
Factors", as well as discussed elsewhere herein.
(1) Results of Operations
The Company continues to operate its TV Station with revenues for 1998 of
$234,373 compared with revenues in 1997 of $205,798, an increase of $28,575
or 14%. Revenues remain constant as the Company continues to develop its
business.
General and Administrative costs increased from $1,014,728 in 1997 to
$2,150,980 in 1998, an increase of $1,136,252, or 112%. Consulting and other
professional fees increased from $360,725 in 1997 to $1,374,566, an increase
of $1,013,841, or 281%. The increase is primarily attributable to costs
associated with business development of advertising and marketing programs,
public relations, and legal and accounting services, resulting from Company's
attempt to inquire into the possible acquisition or merger with other similar
lines of business.
(2) Liquidity and Capital Resources
At December 31, 1998, the Company had a negative working capital of $221,621,
as compared to a negative working capital at December 31, 1997 of $40,865.
The increase is a result of an increase in payables due to a lack of working
capital and an increase of sources of funds from related parties to help fund
the Company's ongoing expenses.
During 1998, the Company used $284,609 of net cash from operating activities
as compared to $22,716 in 1997 primarily to fund ongoing operating expenses.
The Company used $49,109 of working capital funds during 1998 and $36,816
during 1997 to purchase television, video, and related equipment to support
its television station operations. To raise money for ongoing business
development, the Company obtained $200,000 during 1998 from the sale of
common stock and was advanced $164,383 from related parties. Management
intends to seek additional funding from private or public equity investments
to meet the increased working capital needs in the next 12 months. The
Company's future funding requirements will depend upon numerous factors,
including the Company's ability to acquire and successfully run newly
acquired companies.
9
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(3) Year 2000
The Year 2000 issue arose because many existing computer programs use only
the last two digits to refer to a year. Therefore, these computer programs
do not properly recognize a year that begins with 20 instead of 19. If not
corrected, many computer applications could fail or create erroneous results.
Management is in the process of evaluating the Company's exposure to date-
sensitive computer software programs that may not operate subsequent to 1999,
in order to implement a course of action to minimize costs and disruption of
normal business operations in the year 2000. However, because there is no
guarantee that all systems of outside vendors, or other entities affecting
the Company's operations, will be year 2000 compliant, the Company is
susceptible to consequences of the year 2000 issue.
Item 7. Financial Statements
See Item 13 (a) (1). Consolidated Financial Statements for the years ended
December 31, 1997 and 1996. F-1 to F-14
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
None.
PART III
Item 9. Directors and Executive Officers of the Registrant
Directors and Executive Officers
The following table sets forth the names of the current officers and
directors of the Company:
Name Age Position
---- --- --------
Donna Anderson 61 President and CEO
Charles Kiefner 60 Chairman and Secretary
No family relationships exist among the officers and directors of the Company.
Compensation of Directors
During the fiscal year ended December 31, 1998, the Company had no standard
or other arrangement pursuant to which directors of the Company were
compensated for any services as a director or for committee participation or
special assignments.
Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who beneficially own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater-than-ten-percent shareholders
are required by regulation of the Securities and Exchange Commission to
furnish the Company with copies of all Section 16(a) forms which they file.
The Company believes that none of the reports required to be made under
Section 16(a) have been filed by the persons required to file such reports.
The Company has received assurances from the persons required to file such
reports that all required reports will be filed as soon as possible.
10
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Item 10. Executive Compensation
No executive of the Company received compensation, in total salary or bonus,
exceeding $100,000 during each of the last three fiscal years.
Employment Contracts and Termination of Employment and Change-in-Control
Agreements-The Company does not have any written employment contracts with
respect to any of its executive officers. The Company has no compensatory
plan or arrangement that results or will result from the resignation,
retirement or any other termination of an executive officer's employment
with the Company and its subsidiaries or from a change in control of the
Company or a change in an executive officer's responsibilities following a
change-in-control.
Option/SAR Grants in Last Fiscal Year-The Company did not grant any options to
any person during the fiscal year ended December 31, 1998. The Company has
never granted any stock appreciation rights ("SARs"), nor does it expect to
grant any SARs in the foreseeable future.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of August 12, 1999,
with respect to the beneficial ownership of the Company's Common Stock (1)
by the Company's officers and directors, (2) by shareholders known to the
Company to own five percent or more of the Company's Common Stock, and
(3) by all officers and directors of the Company, as a group. On August 12,
1999, there were approximately 11,862,429 shares of Common Stock issued and
outstanding.
<TABLE>
<CAPTION>
Number of Shares
Name and Address of of Common Stock
5% Beneficial Owners, Beneficially Owned Percent of
Officers and Directors at August 12, 1999 Class(1)
---------------------- ------------------ ----------
<S> <C> <C>
Charles Kiefner 5,489,500 46%
238 Wilshire Blvd., Ste 149
Casselberry, FL 32707
Elmer Jones 1,050,000 9%
238 Wilshire Blvd., Ste 149
Casselberry, FL 32707
Orville Baldridge 1,431,000 12%
238 Wilshire Blvd., Ste 149
Casselberry, FL 32707
William B. Turner 1,110,000 9%
429 Seaview Avenue
Palm Beach, FL 33480-4109
Donna Anderson 1,200,000 10%
4625 W. Nevso Drive, Suite 2
Las Vegas, NV 89103
_______________________
All Officers and Directors
as a Group (5 persons) 6,689,500 56%
</TABLE>
11
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Item 12. Certain Relationships and Related Transactions
The Company has engaged in no transaction required to be described herein.
Item 13. Exhibits
(a)(1) Financial Statements
Independent Auditors' Report.................................F-1
Consolidated Balance at December 31, 1998 and 1997...........F-2 F-3
Consolidated Statement of Operations for the Years Ended
December 31, 1998 and 1997................................F-4
Consolidated Statement of Stockholders' Equity for the
Years Ended December 31, 1998 and 1997....................F-5 F-6
Consolidated Statement of Cash Flows for the Years Ended
December 31, 1998 and 1997................................F-7 F-8
Notes to Financial Statements................................F-9 F-14
27. Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on this 8th day of
October, 1999.
DEFINITION, LTD.
/s/ Donna Anderson
By: ____________________
Donna Anderson
President and CEO
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Donna Anderson President and CEO October 8, 1999
12
<PAGE>
(a)(1)
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . . . F-1
Consolidated Balance Sheet at December 31, 1998 and 1997 . . . . F-2 F-3
Consolidated Statement of Operations For the Years Ended
December 31, 1998 and 1997 . . . . . . . . . . . . . . . . . . F-4
Consolidated Statement of Changes in Stockholders' Equity
For the Years Ended December 31, 1998 and 1997 . . . . . . . F-5 F-6
Consolidated Statement of Cash Flows For the Years Ended
December 31, 1998 and 1997 . . . . . . . . . . . . . . . . . F-7 F-8
Notes to the Consolidated Financial Statements . . . . . . . . . F-9 F-14
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Definition, Ltd.
Las Vegas, Nevada
We have audited the consolidated balance sheet of Definition, Ltd. (the
Company), as of December 31, 1998 and 1997, and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the consolidated financial position of the Company at December 31,
1998 and 1997, and the consolidated results of their operations and their
consolidated cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Clancy and Co., P.L.L.C.
Phoenix, Arizona
August 9, 1999
F-1
<PAGE>
<TABLE>
<CAPTION>
DEFINITON, LTD.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998 AND 1997
ASSETS 1998 1997
------ ---- ----
<S> <C> <C>
Current Assets
Cash and Cash Equivalents $ 31,144 $ 1,990
Property and Equipment (Note 2)
Broadcast Resource Library 2,985,536 2,985,536
Computer, Production and Broadcast
Equipment 310,508 261,398
Building and Improvements 469,153 469,153
--------- ---------
3,765,197 3,716,087
Less Accumulated Depreciation (2,525,834) (1,996,179)
--------- ---------
Property and Equipment, Net 1,239,363 1,719,908
Other Assets
Prepaid Airtime (Note 3) 146,250 0
--------- ---------
Total Assets $ 1,416,757 $ 1,721,898
========= =========
<CAPTION>
The accompanying notes are an integral part of these financial statements.
F-2
LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1997
------------------------------------ ---- ----
<S> <C> <C>
Current Liabilities
Mortgage Payable, Current
Portion (Note 4) $ 1,847 $ 1,655
Accounts Payable, Trade 62,835 17,500
Payroll Tax Liabilities 23,700 23,700
Due to Related Party (Note 5) 164,383 0
------- ------
Total Current Liabilities 252,765 42,855
Long-Term Liabilities
Mortgage Payable, Noncurrent
Portion (Note 4) 76,777 78,480
------- -------
Total Liabilities 329,542 121,335
Stockholders' Equity
Preferred Stock: Authorized $0.01
Par Value, 5,000,000 Shares;
Issued and Outstanding, None None None
Common Stock: Authorized $0.001
Par Value, 50,000,000 Shares;
Issued and Outstanding, 25,098,580
and 7,773,512 Shares at December 31,
1998 and 1997 25,099 7,774
Additional Paid In Capital 12,713,205 11,090,530
Retained Earnings (Deficit) (11,651,089) (9,497,741)
---------- ---------
Total Stockholders' Equity 1,087,215 1,600,563
---------- ---------
Total Liabilities and Stockholders'
Equity $ 1,416,757 $ 1,721,898
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
DEFINITION, LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998 AND 1997
Year Ended Year Ended
December 31, December 31,
1998 1997
------------ -----------
<S> <C> <C>
Revenues $ 234,373 $ 205,798
Cost of Revenues 224,415 63,441
------- -------
Gross Profit 9,958 142,357
Operating Expenses
General and Administrative 2,150,980 1,014,728
--------- ---------
Operating Loss (2,141,022) (872,371)
Other Expense
Write-Off, Investment in Joint
Venture (Note 6) 0 (2,000,000)
Interest Expense (12,326) (6,614)
--------- ---------
Total Other Expense (12,326) (2,006,614)
--------- ---------
Net Loss Available to Common Stockholders $ (2,153,348) $(2,878,985)
========= =========
Basic Loss Per Common Share $ (0.17) $ (0.38)
========= =========
Basic Weighted Average Common
Shares Outstanding 12,801,913 7,601,011
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
DEFINITION, LTD.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
Additional Retained
Preferred Stock Common Stock Paid In Earnings
Shares Amount Shares Amount Capital (A Deficit) TOTAL
------ ------ ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 0 $ 0 5,203,512 $ 5,204 $ 8,711,100 $ (6,618,756) $ 2,097,548
Issuance of Common Stock
For Consulting Services
Rendered, February 3, 1997 640,000 640 255,360 256,000
Issuance of Common Stock
For Investment in Joint
Venture, February 3, 1997 1,340,000 1,340 1,998,660 2,000,000
Issuance of Common Stock
For Services Rendered,
February 28, 1997 40,000 40 15,960 16,000
Issuance of Common Stock
For Legal Services Rendered,
June 3, 1997 250,000 250 49,750 50,000
Issuance of Common Stock
For Legal Services Rendered,
September 3, 1997 300,000 300 59,700 60,000
Net Loss, Year Ended
December 31, 1997 (2,878,985) (2,878,985)
------- ------ --------- ------ -------- ---------- ---------
Balance, December 31, 1997 0 0 7,773,512 7,774 11,090,530 (9,497,741) 1,600,563
Issuance of Common Stock
For Cash, March 5, 1998 20,000 20 19,980 20,000
Cancellation of Shares
Issued For Legal Services
on September 3, 1997 (300,000) (300) (59,700) (60,000)
Issuance of Common Stock
For Legal Services Rendered,
April 1, 1998 600,000 600 209,400 210,000
Issuance of Common Stock
For Legal Services Rendered,
April 14, 1998 900,000 900 314,100 315,000
<CAPTION>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
DEFINITION, LTD.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
Additional Retained
Preferred Stock Common Stock Paid In Earnings
Shares Amount Shares Amount Capital (A Deficit) Total
------ ------ ---------- ------ ------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of Common Stock
For Services Rendered,
May 5, 1998 325,000 325 194,675 195,000
Issuance of Common Stock
For Cash, May 15, 1998 30,000 30 29,970 30,000
Issuance of Common Stock
For Services Rendered,
July 16, 1998 1,000,000 1,000 49,000 50,000
Issuance of Common Stock
For Cash, July 30, 1998 50,000 50 49,950 50,000
Issuance of Common Stock
For Cash, September 9, 1998 50,000 50 49,950 50,000
Issuance of Common Stock
For Cash, September 30, 1998 50,000 50 49,950 50,000
Issuance of Common Stock
For Services Rendered,
October 15, 1998 11,500,000 11,500 563,500 575,000
Issuance of Common Stock
For Services Rendered,
November 9, 1998 100,000 100 4,900 5,000
Issuance of Common Stock
For Services Rendered,
November 23, 1998 3,000,000 3,000 147,000 150,000
Fractional Shares 68
Loss, Year Ended
December 31, 1998 (2,153,348) (2,153,348)
----- ------- ----------- ------ --------- ---------- ---------
Balance, December 31, 1998 0 $ 0 25,098,580 $25,099 $12,713,205 $ (11,651,089) $1,087,215
===== ======= =========== ====== ========== ========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
DEFINITION, LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
DECEMBER 31, 1998 AND 1997
Year Ended Year Ended
December 31, December 31,
1998 1997
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities
Net Loss $ (2,153,348) $ (2,878,985)
Adjustments to Reconcile Net Loss to
Net Cash Used in Operating Activities
Depreciation and Amortization 529,654 477,043
Other Noncash Items 48,750 0
Common Stock Issued for Services 1,245,000 382,000
Write-off, Investment/Loss From
Joint Venture 0 2,000,000
Bad Debt Expense 0 46,600
Changes in Assets and Liabilities
(Increase) Decrease in Accounts
Receivable, Other 0 5,626
Increase (Decrease) in Accounts
Payable, Trade 45,335 (55,000)
--------- ---------
Total Adjustments 1,868,739 2,856,269
--------- ---------
Net Cash Used In Operating Activities (284,609) (22,716)
Cash Flows From Investing Activities
Purchase of Property and Equipment (49,109) (36,816)
--------- ----------
Net Cash Flows Used In Investing Activities (49,109) (36,816)
Cash Flows From Financing Activities
Principal Payment on Mortgage Payable (1,511) (1,629)
Proceeds From the Issuance of Common Stock 200,000 0
Advances From Related Party 164,383 0
-------- --------
Net Cash Provided By (Used In)
Financing Activities 362,872 (1,629)
-------- --------
Increase (Decrease) in Cash and
Cash Equivalents 29,154 (61,161)
Cash and Cash Equivalents, Beginning of Year 1,990 63,151
------- -------
Cash and Cash Equivalents, End of Year $ 31,144 $ 1,990
======= =======
<CAPTION>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
DEFINITION, LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998 AND 1997
Year Ended Year Ended
December 31, December 31,
1998 1997
----------- -----------
Supplemental Disclosure of Cash Flow Information:
<S> <C> <C>
Cash paid for:
Interest $ 11,242 $ 6,614
Income taxes $ 0 $ 0
<CAPTION>
Supplemental Schedule of Noncash Investing and
Financing Activities:
<S> <C> <C>
Issuance of Common Stock for Services Rendered $ 1,245,000 $ 382,000
Exchange of Common Stock for Investment
in Joint Venture $ 0 $2,000,000
Issuance of Common Stock for Prepaid Airtime $ 195,000 $ 0
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE>
DEFINITION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 1 - ORGANIZATION
Definition, Ltd. (the "Company") was incorporated in 1989 under the name
"Stone Grill International, Inc.", under the laws of the State of Nevada.
The authorized capital stock of the Corporation consists of 50,000,000 shares
of Common Stock, $0.001 par value per share and 5,000,000 shares of Preferred
Stock, $0.01 par value per share.
The Company currently engages in commerce through enhanced communications.
The Company intends to become a leader in all phases of high technology
communications media, television, wireless telephone/fax/Internet service,
television advertising, computer hardware and software, and travel services.
There is, of course, no assurance that the Company will be successful in its
business.
The Company has two subsidiaries: (1) Definition Technologies, Inc., (DTI)
a Texas corporation, operates a community (low-power) television station
transmitting from West Palm Beach, Florida, WINQ-TV (WINQ) Channel 19. WINQ
also operates as a traditional television station, deriving revenues through
sales of advertising time; (2) Interactive Systems, Inc. (ISI) (a Nevada
Corporation), through which the Company owns a real estate condo. No other
activities are performed through this subsidiary.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Principles of Consolidation
The Company consolidates its wholly owned subsidiaries DTI and ISI. All
significant intercompany transactions and balances have been eliminated in
consolidation. The purchase method of accounting is used for joint ventures.
See Note 5.
B. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting.
C. Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three
months or less when acquired to be cash and cash equivalents.
D. Revenue Recognition
Revenues are recognized as services are performed.
E. Property and Equipment
The cost of property, plant and equipment, stated at cost, is depreciated
over the estimated useful lives of the assets, ranging from five to thirty-
nine years. Depreciation
F-9
<PAGE>
DEFINITION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
expense charged to operations during 1998 and 1997 was $529,654 and $477,043,
respectively.
Expenditures for repairs and maintenance are charged to the expense as
incurred.
F. Earnings/Loss Per Share of Common Stock
Basic earnings or loss per share has been computed based on the weighted
average number of common shares. All earnings or loss per share amounts in
these financial statements are basic earnings or loss per share as defined by
SFAS No. 128, "Earnings Per Share." Diluted weighted average shares
outstanding exclude the potential common shares from warrants and stock
options because to do so would have been antidilutive.
G. Use of Estimates
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those estimates
and assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues
and expenses. Actual results could vary from the estimates that were assumed
in preparing the financial statements.
H. Income Taxes
The Company accounts for income taxes under the provisions of SFAS No. 109,
"Accounting for Income Taxes." Under SFAS No. 109, deferred tax liabilities
and assets are determined based on the difference between the financial
statement and tax bases of assets and liabilities, using enacted tax rates in
effect for the year in which the differences are expected to reverse. See
Note 6.
I. Capital Structure
The Company has implemented SFAS No. 129, "Disclosure of Information about
Capital Structure," effective January 1, 1998, which established standards
for disclosing information about an entity's capital structure. The
implementation of SFAS No. 129 had no effect on the Company's financial
statements.
J. Comprehensive Income
The Company has implemented SFAS No. 130, "Reporting Comprehensive Income,"
effective January 1, 1998, which requires companies to classify items of
other comprehensive income by their nature in a financial statement and
display the accumulated balance of other comprehensive income separately
from retained earnings and additional
F-10
<PAGE>
DEFINITION, LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
paid in capital in the equity section of a statement of financial position.
The implementation of SFAS No. 130 had no effect on the Company's financial
statements.
K. Business Segment Information
The Company implemented SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," on January 1, 1998. The Company
operates in one industry segment, that being the television and media
industry. The Company does not have any significant customers or
concentration of credit risk.
L. Presentation
Certain accounts from prior years have been reclassified to conform with the
current year's presentation.
M. Pending Accounting Pronouncements
It is anticipated that current pending accounting pronouncements will not
have an adverse impact on the financial statements of the Company.
N. Financial Statement Presentation
Due to the change in classification of some accounts, the financial
statements may be presented slightly different than in the previous year.
NOTE 3 - PREPAID AIRTIME
On May 6, 1998, the Company issued 325,000 shares of common stock at $0.60
per share, or $195,000, to Omni-Lingual Broadcasting Corp. in exchange for
airtime of The Ed Taxin Show for the period from October 1, 1997 to
February 26, 1999. As of December 31, 1998, 15/60 of the airtime has
elapsed. The balance represents prepaid airtime at December 31, 1998 of
$146,250. See Note 8.
NOTE 4 - MORTGAGE PAYABLE
On January 29, 1995, ISI purchased an office condominium located in Lake
Park, Florida, which it purchased for $105,000. The consideration given was
approximately $21,000 cash and a note payable to a financial institution for
$84,000. The note is payable in monthly installments of approximately $867,
including interest at an initial rate of 11%. The interest rate is adjustable
on March 1, 2000 and is calculated using the Average Weekly Yield of United
States Treasury Securities adjusted to a constant maturity of one year plus
3.5%. The minimum interest rate for the life of the loan will be 11% and the
F-11
<PAGE>
DEFINITION, LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 4 - MORTGAGE PAYABLE (CONTINUED)
maximum interest rate for the life of the loan will be 17.0%. Additionally,
the lender has a call option during a 30-day period commencing on the tenth
anniversary of the loan whereby the entire unpaid balance can be called as
due and payable within 90 days of the date that the lender exercises the call
option. The loan is secured by the office condominium and the guarantee of
the Company.
Future maturities of mortgages payable for the year ended
December 31 follows:
1999 $ 1,847
2000 $ 2,061
2001 $ 2,299
2002 $ 2,565
2003 and thereafter $ 69,852
NOTE 5 - RELATED PARTY TRANSACTIONS
From time to time, certain related parties advance monies to fund the
operating expenses of the Company as needed. At December 31, 1998, the
Company was indebted to certain related parties in the amount of $164,383,
bearing no interest, and due on demand.
In October 1995, the Company entered into a three year agreement with an
unrelated third party corporation to provide investment banking and financial
consulting services. The agreement requires an initial payment of $36,000 in
1995 and a payment of $3,000 per month during the second and third years of
the agreement. Further, the agreement grants the consultant warrants to
acquire 200,000 shares of the Company's common stock at a price of $3.0625
per share within five years.
In November 1995, the Company entered into a one year agreement with an
unrelated third party corporation to provide investment banking and financial
consulting services. The agreement grants the consultant a five year option
to acquire 100,000 shares of the Company's common stock at a price of $3.0625
per share.
NOTE 6 - INVESTMENTS IN JOINT VENTURES
On February 3, 1997, the Company issued 1,340,000 shares of common stock for
a total value of $2,000,000 in exchange for an investment in a joint venture.
The contract, dated December 31, 1996, was for the acquisition of a 49%
interest in World Wide Internet Business Centres, J.V. The Company
exchanged 1,340,000 shares of the $0.001 par value common stock valued at
$2,000,000. The joint venture was formed to develop, establish and operate
twenty-six, or more, business operations to be known as "World Wide Internet
Business Centres". On December 31, 1997, the Company had abandoned its
efforts with the joint venture and wrote off the investment of $2,000,000.
F-12
<PAGE>
DEFINITION, LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 7 - INCOME TAXES
The deferred tax consequences of temporary differences in reporting items for
financial statement and income tax purposes are recognized, as appropriate.
Realization of the future tax benefits related to the deferred tax assets is
dependent on many factors, including the Company's ability to generate taxable
income within the net operating loss carryforward period. Management has
considered these factors in reaching its conclusion as to the valuation
allowance for financial reporting purposes. The income tax effect of
temporary differences comprising the deferred tax assets and deferred tax
liabilities on the accompanying balance sheet is a result of the following:
Deferred Tax Asset 1998 1997
- ------------------ ---- ----
Net Operating Loss Carryforwards $ 1,722,467 $ 994,520
Valuation Allowance (1,722,467) (994,520)
--------- -------
Net Deferred Tax Asset $ 0 $ 0
At December 31, 1998, the Company has available net operating loss
carryforwards of approximately $5,200,00 for tax purposes to offset future
taxable income, which expire principally in the year 2012.
Pursuant to the Tax Reform Act of 1986, annual utilization of the Company's
net operating loss carryforwards may be limited if a cumulative change in
ownership of more than 50% is deemed to occur within any three-year period.
NOTE 8 - SUBSEQUENT EVENTS
1) Common Shares Outstanding - On January 8, 1999, the Board of Directors
approved a 20:1 reverse stock split at $0.001 par value (no affect to par
value) reducing the outstanding shares at December 31, 1998, of 25,098,580
to 1,254,929. As of the date of issuance of these financial statements, the
Company has issued a total of 10,607,500 additional shares of common stock,
increasing the total outstanding number of common shares to 11,862,429.
2) Mediation Settlement - On January 13, 1999, the Company went to mediation
in the case of Robert Crawford vs. Definition, Ltd. and Charles Kiefner,
President, filed in U.S. District Court, Eastern District of Missouri, suing
for damages in excess of $400,000 relating to a purchase of stock under an
agreement made with the Company's former president. An agreement was reached
whereby the Company agreed to issue 30,000 shares of restricted common stock
and pay $20,000 cash, by March 30, 1999. The Company has satisfied the
requirements in full.
3) Prepaid Airtime - On February 23, 1999, Omni-Lingual Broadcasting Corp.
(Omni) and the Company mutually agreed to cancel the airtime agreement.
Omni agreed to return the original 325,000 shares of common stock issued and
the Company agreed to issue
F-13
<PAGE>
DEFINITION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 8 - SUBSEQUENT EVENTS (CONTINUED)
92,083.34 shares of common stock representing 17/60 of the airtime used.
Issuance of the shares is scheduled to take place after August 12, 1999.
4) Letter of Intent - On June 10, 1999, the Company signed a letter of
intent with "Golden Leaf Tobacco," a Pennsylvania corporation, a celebrity
driven Internet entertainment product site and a cigar and accessory
distribution operation importing and serving approximately 500 stores in the
northeast United States, for the purchase of all of its assets. Closing
shall take place upon the completion of an Asset Acquisition Agreement or
sixty days, whichever comes first.
5) Disposal of Subsidiary - Effective July 1, 1999, the Company has sold its
television subsidiary operations, Definition Technologies, Inc., to one of
its stockholders, due to the financial drain on the parent Company. Lack of
capital has precluded efforts to move the station and purchase a new antenna
and other necessary equipment to position the station as planned.
6) Corporate Headquarters Relocation - On June 30, 1999, the Company
relocated its headquarters to Las Vegas, Nevada.
F-14
