SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File No. 33-5524-01
----------
W-WAVES USA, INC.
-----------------
(formerly Arrow Management, Inc.)
(Exact name of Registrant as specified in its charter)
NEVADA 87-04637339
- ------------------- ------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Les Tours Triomphe
2500, Boulevard Daniel-Johnson Blvd.
Suite 1108
Laval (Quebec)
CANADA H7T 2P6
- ----------------------------------------- --------
(Address of principal executive offices) (Postal Code)
Registrant's telephone number, including area code (450) 686-6993
---------------
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed 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
requirements for the past 90 days. [X] Yes [ ] No
Indicate by check 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-K or any amendment to this
Form 10-K. [X]
As of March 31, 2000, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $14,611, 287.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class ___ Outstanding as of March 31,2000
-------------------------- ------------- -------------------------------
$.001 PAR VALUE CLASS A COMMON STOCK 11,030,700 SHARES
----------
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
------
ITEM 1. BUSINESS.
Arrow Management, Inc., (now renamed W-WAVES USA, Inc.) the "Company") was
incorporated under the laws of Nevada on January 14, 1988. The Company was
formed to look for investments, business opportunities and assets in any
industry. Initially the Company determined to acquire assets and properties in
real estate development, specifically the area of Idaho Falls, Idaho.
In furtherance of its determination to acquire real properties for
development, on September 30, 1993, the Company entered into an agreement with
the principals of Panorama Industries, Inc. ("Panorama") to issue 5,250,700
shares of its common stock to acquire 99.45% of the outstanding stock of
Panorama, an affiliated Nevada corporation, which owned real properties near
Idaho Falls, Idaho and other areas in Idaho. In December, 1996, the Company
determined that it was unable to complete the acquisition of 460,000 shares of
Panorama stock due to the failure of certain Panorama shareholders to complete
the terms of the acquisition. This reduced the shares of the Company issued to
acquire Panorama to 4,790,700 shares and the Company's ownership of Panorama to
90.73%.
An Agreement and Plan of Reorganization (the "Agreement") was made and
entered into by and among Arrow Management, Inc., a Nevada corporation (the
"Company"), Capital General Corporation, a Utah Corporation ("CGC") and W-Waves
USA Inc., a Delaware corporation ("Waves") and the shareholders of Waves ("Waves
Shareholders"). Pursuant to the Agreement, on November 19, 1999 the Company
transferred its entire interest, 4,790,700 shares of common stock, in its
subsidiary, Panorama Industries, Inc., a Nevada corporation to CGC in exchange
for 3,094,700 shares of common stock of the Company. The Company then
distributed the 3,094,700 shares together with 5,450,00 additional shares issued
by the Company from its authorized shares, a total of 8,544,700 shares of $.001
par value common stock of the Company, to Waves Shareholders in exchange for
100% of the issued and outstanding common stock of Waves.
The transaction effected pursuant to the Agreement was exempt from the
registration requirements of the Securities Act of 1933 by virtue of the Section
4(2) thereof.
Following this transaction, the former Waves Shareholders owned 77.5% of
Arrow Management, Inc. and Arrow Management was re-named W-WAVES USA, Inc.
As a result of this transaction the Company became the owner of audio
technology developed by Waves. This technology consists of a circuit which
allows the post-amplification conversion of a conventional stereophonic signal
directed to two-speaker enclosures into an ambisonic signal directed to
five-speaker enclosures. This technology can be directly installed into
manufacturers' radios, televisions, video cassette recorders, computers, and
other devices employing stereophonic sound signals, and is currently the subject
of a pending patent application.
W-WAVES USA, Inc. operates primarily through two subsidiaries, White Wolf
Canada, Inc. and Radison Aconstique Inc., a subsidiary of White Wolf. Both are
engaged in complementary aspects of audio and video research and engineering.
Each company has its own administrative and laboratory facilities. Together the
office facilities total approximately 2,000 sq. ft. The laboratory and
manufacturing facilities total approximately 20,000 sq. ft. W-WAVES, White Wolf
(Canada), Inc. and Radison employ a total of 9 persons with an additional 20
persons under contract.
ITEM 2. PROPERTIES.
See "Item 1" above. The Company also utilizes space on a rent-free basis
in the office of one of its principal shareholders, Bear Bay Holding Canada, Inc
which is the sole owner of two of the principal shareholders of the Company.
This arrangement is expected to continue until such time as the Company becomes
sufficiently developed to necessitate its relocation. The Company has no
agreements with respect to the maintenance or future acquisition of office
facilities.
ITEM 3. LEGAL PROCEEDINGS.
There are no pending legal proceedings involving the Company or its
subsidiaries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The only matter submitted to the Company's security holders for a vote
during the fiscal year ended December 31, 1999 was the change of the Company's
name from Arrow Management Inc. to W-WAVES USA, Inc.
.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.
A trading market for the Company's $.001 par value common stock commenced
on December 8, 1999 on NASD Bulletin Board under the symbol AWMG.
The high and low sales prices of such common stock since trading commenced and
through March 31, 2000 are set forth below.
<TABLE>
<CAPTION>
FISCAL YEAR HIGH SALES PRICE LOW SALES PRICE
<S> <C> <C> <C>
1999. . . . Fourth Quarter 2.8124 2.0625
2000. . . . First Quarter 4.00 2.687
</TABLE>
As of March 31, 2000, there were 471 record holders of the Company's common
stock and there were 11,030,700 shares outstanding. The Company has not
previously declared or paid any dividends on its common stock and does not
anticipate declaring any dividends in the foreseeable future. The aggregate
market value held by non-affiliates on March 31, 2000 was $14,611,287 USD.
ITEM 6. SELECTED FINANCIAL DATA.
THE COMPANY AND SUBSIDIARIES*
-----------------------------
SUMMARY OF OPERATIONS
---------------------
DECEMBER 31
-----------
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Total Assets . . . . . . . . . 2,124,851 2,060,428 617,513 630,357
Revenues . . . . . . . . . . . 2,335 424,561 0 0
Operating Expenses . . . . . . 7,118 23,290 8,983 1,975,111
Net Earnings (Loss). . . . . . 065,620 1,492,918 11,826 (1,960,141)
Per Share Data Earnings (Loss) .01 .27 .00 (.33)
Average Shares Outstanding . . 5,580,700 5,580,700 5,580,700 5,930,700
<FN>
* Includes Panorama Industries, Inc. through 12/31/98
* Includes W-WAVES USA and Subsidiaries but not Panorama as of 12/31/99
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
Prior to the acquisition of the shares of W-WAVES USA, INC. on November 19,
1999 the Company had not engaged in any regular business operations other than
owning real estate and the collection of notes receivable from third parties.
The plan of reorganization implemented in November 1999 removed from the
Company all of the assets of its former Panorama Industries, Inc., subsidiary
and substituted the assets of W-WAVES USA, Inc. As of December 31, 1999 these
assets totalled $ __________ and consisted mainly of
_________________________________________. During the last two fiscal years the
Company through its recently acquired W-WAVES assets was primarily engaged in
research and development for three basic audio technology products on which the
Company expended approximately $800,000 in 1999 and $500,000 in 1998. The
Company expects to continue this emphasis on research and development.
Since White Wolf and Radisson, the two subsidiaries of W-WAVES USA are both
early stage research and development companies which have been engaged in
operations for only a limited period of time, and since the principal assets of
the Company prior to November 1999 were primarily real property and financial
instruments, any comparison of year to year operations would be meaningless.
LIQUIDITY AND CAPITAL REVENUES
Prior to November 1999, the Company had no need for additional capital as
it had more than ample capital available for its limited operations.
The businesses acquired by the Company through the acquisition of W-WAVES
USA will require substantial capital for their future growth. For example, in
1998 and 1999 the subsidiaries of W-WAVES USA required infusions of $800,000 and
$500,000 respectively for expenditures on research and development.
Management anticipates that substantial additional funds will be required
to bring the Company's products to market but that the needed capital will be
available on reasonable terms.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company has no market risk sensitive instruments or market risk
exposures.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
On May 2, 2000 the Company retained the services of Andersen Andersen
& Strong, L.C., certified public accountants of Salt Lake City, Utah to serve as
its independent auditor. There were no disagreements with the former auditor,
Smith & Co.; the decision to change auditors was a business decision made by the
board of directors of the Company.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table shows the positions held by the Company's officers
and directors prior to November 19, 1999. Directors are appointed and serve
until the next annual meeting of the Company's stockholders, and until their
successors have been elected and have qualified. The officers were appointed to
their positions, and continue in such positions, at the discretion of the
directors.
NAME AGE POSITION
Krista Nielson 37 President, Director
Sasha Belliston 27 Secretary/Treasurer, Director
KRISTA NIELSON, has been a director of the Company since inception.
In addition to her management position with the Company, she has been since 1986
an officer and director of Capital General Corporation, a Utah-based financial
consulting firm, and has been involved in the organization and promotion of
various shell companies. Ms. Nielson received a Business degree from Salt Lake
Community College in 1987. She serves as an officer and/or director in the
following private corporations: Yeaman Enterprises, Inc. and Universal
Associates, Inc., family holding companies, Four Star Ranch, Inc., a farmland
development company, and Visual Impact Corporation, a financial consulting
company. Ms. Nielson devotes her time primarily to her role as President of
Capital General and to the financial consulting activities in which Capital
General engages.
SASHA BELLISTON, has been a director of the Company since April,
1997, and in addition to her management position with the Company, she has been
Vice President of Capital General since April, 1997. For the past five years,
Ms. Belliston had devoted her time primarily as a cosmetologist and homemaker.
Ms. Belliston serves as an officer and/or director in the following private
corporations: Yeaman Enterprises, Inc. and Universal Associates, Inc, family
holding companies, Four Star Ranch, Inc., a farmland development company, Argon
Financial Corporation and Public Financial Corporation, investment companies.
Ms. Belliston dedicates her time primarily to her role as President of Four Star
Ranch and the farming activities in which Four Star engages.
The management of Capital General was in the past essentially the same
as that of the Company and, as the Company's largest shareholder in the past,
Capital General exerted considerable influence in the election of the Company's
officers and directors. Capital General is a private venture capital and
financial consulting firm, incorporated in Utah in 1971. Capital General is a
closely held corporation with eight shareholders and is not an investment
company under the Investment Companies Act of 1940. A majority of the stock of
Capital General is owned by Yeaman Enterprises, Inc., a private corporation
which is, in turn, owned by the adult children of the family of David R. Yeaman
(formerly an officer and director of the Company, Capital General and Yeaman
Enterprises, Inc.) Sasha Belliston, Mr. Yeaman's daughter, is the principal
shareholder of Yeaman Enterprises; Krista Nielson is also an officer and
director of Yeaman Enterprises, Inc. Capital General ceased being a controlling
shareholder of the Company on November 19, 1999.
Each of the above directors of the Company is a director of Saber
Capital, Inc., Longhorn, Inc., and Micro-Economics, Inc. which are companies
subject to the requirements of Section 15(d) of the Exchange Act. None of the
directors are directors or officers of any other company with a class of
securities registered pursuant to Section 12 of the Exchange Act or the
requirements of Section 15(d) of such Act or any company registered as an
investment company under the Investment Company Act of 1940.
In 1993 Krista Nielson was ordered to permanently cease and desist
from committing or causing further violations of Section 17(a) of the Securities
Act and Section 10(b) of the Exchange Act and Rules 10b-5 and 12b-20 thereunder.
On November 19, 1999 Krista Nielson and Sasha Belliston resigned their
positions as directors and officers of the Company and appointed the following
persons in their place to serve until the next annual meeting of the
shareholders and/or directors as the case may be.
Name Age Position
- ---- --- --------
Victor Lacroix 38 President and Director
Gilles Charest 46 Secretary and Director
VICTOR LACROIX has for the last five years been the principal executive
---------------
officer of Bear Bay Holding Canada, Inc. Bear Bay is a private investment firm
that concentrates primarily on early stage (venture capital) investments in high
technology. Mr. Lacroix is a graduate of the University of Montreal.
GILLES CHAREST, is also a graduate of the University of Montreal and
---------------
is a member of the Canadian Institute of Chartered Accountants, the Order of
Chartered Accountants of the Province of Quebec, and the Canadian Comprehensive
Auditing Foundation. For the last five years he has been the managing director
of the Company's principal subsidiaries and currently serves as Secretary and
Director of W-WAVES USA, Inc.
ITEM 11. EXECUTIVE COMPENSATION.
The Company has made no arrangements for the remuneration of its
officers and directors, except that they will be entitle to receive
reimbursement for actual, demonstrable out-of-pocket expenses, including travel
expenses if any, made on the Company's behalf. No remuneration has been paid to
the Company's officers or directors prior to the filing of this Form 10-K.
There are no agreements or understandings with respect to the amount or
remuneration that officers and directors listed above are expected to receive in
the future.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
The following table sets forth, as of March 31, 2000, information
regarding the beneficial ownership of shares by each person known by the Company
to own five percent or more of the outstanding shares, by each of the directors
and by the officers and directors as a group.
<TABLE>
<CAPTION>
Name and address Amount of
------------------------------------ -----------------------------
Title of class of beneficial owner beneficial ownership of class Percent
- -------------------------------------- ------------------------------------ ----------------------------- --------
<S> <C> <C> <C>
Common Stock . . . . . . . . . . . . . Bear Bay Management (Caribbean) Inc. 3,000,000 27.20%
3 Lowland Heights
Christ Church
Barbados, W.I
Common Stock . . . . . . . . . . . . . Bear Bay Europe (Luxembourg) S.A. 800,000 7.25%
12 Rue Leon Thyes
L-2636, Luxembourg
Common Stock . . . . . . . . . . . . . Capital CVS Lt e 1,600,000 14.50%
17, Rue Des Camelias
Blainville, Quebec
CANADA J7C-4T2
Common Stock . . . . . . . . . . . . . 9082-8369 Quebec, Inc. 1,600,000 14.50%
3730 Blvd. Cremazie Est
Suite 501
Montreal, Quebec
CANADA
Common Stock . . . . . . . . . . . . . Corinne Lewin 900,000 8.16%
Chateau Perigord
6, Lacets St-Leon
MC 98000, Monaco
Common Stock . . . . . . . . . . . . . Chippawa Trade Limited 700,000 6.34%
P.O. Box 107
Oceanic House
Duke Street
Grand Turk
Turks and Caicos Islands, B.W.I.
Common Stock . . . . . . . . . . . . . Hallsbury Enterprises Ltd. 650,000 5.89%
R.G. Solomon Arcade
Suite 11
Charlestown, Nexis
West Indies
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
Name Amount of
--------------------------------------- -----------------------------
Title of class of beneficial owner beneficial ownership of class Percent
- ---------------------------- --------------------------------------- ----------------------------- --------
<S> <C> <C> <C>
Common Stock . . . . . . . . Victor Lacroix 3,800,000* 34.45%
President and Director
Common Stock . . . . . . . . Gilles Charest 1,600,000** 14.50%
Secretary and Director
Common Stock . . . . . . . . (All Officers and 5,400,000 48.95%
Directors as a Group)
<FN>
*Since Mr. Lacroix is the Chief Executive Officer of Bear Bay Holding Canada which controls Bear Bay
Management and Bear Bay Europe, Mr. Lacroix beneficially owns a total of 3,800,000 shares.
**Mr. Charest's beneficial ownership derives from his ownership of 50% of Capital CVS Lt e.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
No officer, director, nominee for election as a director, or associate
of such officer, director or nominee is or has been in debt to the Company
during the last fiscal year.
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
Financial Statements and Financial Statement Schedules.
Financial Statements - December 31, 1999 and 1998.
<PAGE>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1999
INDEX
-----
A. FINANCIAL STATEMENTS
---------------------
AUDITOR'S REPORT
TO THE SHAREHOLDERS OF ARROW MANAGEMENT, INC. AND SUBSIDIARY
<PAGE>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
DECEMBER 31 DECEMBER 31
1999 1998
<S> <C> <C>
CURRENT
Cash in bank . . . . . . . . . . . . . . . . . . . . $ 27,197 $ 682,740
Current portion of note receivable - related company --- 40,901
Accounts receivable 19,752 ---
Accrued interest receivable --- 32,110
Inventory 37,686 ---
Prepaid expenses 1,346 ---
Loan receivable - other 1,744 ---
------------ ---------------
87,725 755,751
--------------- ---------------
CAPITAL ASSETS 82,407 ---
------------ ---------------
OTHER
Real estate --- 30,000
Note receivable - related party --- 1,000,000
Long-term portion of contracts receivable --- 329,500
Deferred income taxes --- 9,000
Goodwill 165,928 ---
Deferred opening costs 574,983 ---
Deferred research costs 210,887 ---
Trade, marks, patents 2,154 ---
Advances on royalties 9,373 ---
Incorporation fees 1,215 ---
------------ ---------------
964,540 1,368,500
--------------- ---------------
$ 1,134,672 $ 2,124,251
=============== ===============
</TABLE>
<PAGE>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
LIABILITIES
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31
1999 1998
<S> <C> <C>
CURRENT
Accrued expenses payable . . . . . . . $ 102,564 $ (582)
Income taxes payable 1,561 ---
Balance of sale payable 131,242 ---
Loan payable - related corporations 776,619 ---
------------ ------------
1,011,986 (582)
----------- ------------
LONG TERM
Loan payable - other 21,760 ---
Loan payable - building loan 30,755 ---
------------ ------------
52,515 ---
----------- ------------
OTHER
Minority interest in subsidiary --- 196,000
Preferred shares of subsidiary company 157,850 ---
------------ ------------
157,850 196,000
----------- ------------
STOCKHOLDERS' EQUITY
Common stock $.001 par value:
Authorized - 50,000,000 shares
Issued - 11,030,700 shares
Outstanding 11,030,700 shares 11,031 5,581
Additional paid-in capital. . . . . . . 631 2,375,667
Deficit accumulated during
development stage. . . . (99,341) (452,415)
------------- -----------
(87,679) 1,928,833
---------------- -----------
$ 1,134,672 $ 2,124,251
================ ============
</TABLE>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
1/14/88
YEAR ENDED YEARS ENDED (DATE OF INCEPTION)
DECEMBER 31 DECEMBER 31 TO
1999 1998 1997 12/31/99
--------- ----- ------- ---------
<S> <C> <C> <C> <C>
NET SALES $ 14,422 --- --- 14,422
COST OF SALES 10,880 --- --- 10,880
------------ --------- --------- ----------
GROSS PROFIT 3,542 --- --- 3,542
------------ --------- --------- ----------
EXPENSES 99,187 --- --- 99,187
------------ --------- --------- ----------
INCOME (LOSS) BEFORE
OTHER INCOME (95,645) --- --- (95,645)
------------ --------- --------- ----------
OTHER INCOME
Gain (loss) from operations of
former subsidiary . . . . . . 24,938 65,620 1,492,918 (427,477)
Gain on disposition of
subsidiary (Note 4) 423,781 --- --- 423,781
------------ --------- --------- ----------
TOTAL OTHER INCOME. . . . . . . 448,719 65,620 1,492,918 (3,696)
------------ --------- --------- ----------
NET INCOME (LOSS) . . . . . . . . $ 353,074 65,620 1,492,918 (99,341)
========= ========= ========== =========
Net income (loss) per weighted
average common shares
outstanding . . . . . . . . . . .03 .01 .27
============ ========= =========
Weighted average number of
Common shares outstanding used
to compute net income (loss). . . 11,030,700 5,580,700 5,580,700
============ ========= =========
</TABLE>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING
PAR VALUE $.001 PAID-IN TREASURY
DEVELOPMENT
SHARES AMOUNT CAPITAL STOCK STAGE
----------- -------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C>
Balances at 1/14/88 (Date of inception) 0 $ 0 $ 0 $ 0 $ 0
Issuance of common stock (restricted)
at $.002 per share, 1/14/88 . . . . . . 1,000,000 1,000 1,000
Acquisition of subsidiary (1) . . . . . 5,250,700 5,251 (3,251) (1,960)
Net loss for period . . . . . . . . . . (1,960)
----------- -------- ----------- -------- -----------
Balances at 12/31/88. . . . . . . . . . 6,250,700 6,251 (2,251) 0 (3,920)
Net loss for year . . . . . . . . . . . (20)
----------- -------- ----------- -------- -----------
Balances at 12/31/89. . . . . . . . . . 6,250,700 6,251 (2,251) 0 (3,940)
Net loss for year . . . . . . . . . . . (20)
----------- -------- ----------- -------- -----------
Balances at 12/31/90. . . . . . . . . . 6,250,700 6,251 (2,251) 0 (3,960)
Assets acquired by subsidiary . . . . . 4,420,000
Minority interest adjustment. . . . . . (12,000)
Net loss for year . . . . . . . . . . . (20)
----------- -------- ----------- -------- -----------
Balances at 12/31/91. . . . . . . . . . 6,250,700 6,251 4,405,749 0 (3,980)
Debentures canceled . . . . . . . . . . (2,000,000)
Assets acquired by subsidiary . . . . . 1,600,000
Minority interest adjustment. . . . . . (8,000)
Net loss for period . . . . . . . . . . (891)
----------- -------- ----------- -------- -----------
Balances at 12/31/92. . . . . . . . . . 6,250,700 6,251 3,997,749 0 (4,871)
Minority interest adjustment. . . . . . (2,000)
Net loss for period . . . . . . . . . . (16,763)
----------- -------- ----------- -------- -----------
Balances at 12/31/93. . . . . . . . . . 6,250,700 6,251 3,995,749 0 (21,634)
Net loss for period . . . . . . . . . . (41,004)
----------- -------- ----------- -------- -----------
Balances at 12/31/94. . . . . . . . . . 6,250,700 6,251 3,995,749 0 (62,638)
Trade and media credits canceled
(Note 7). . . . . . . . . . . . . . . . (320,000) (320) (1,446,432)
Minority interest adjustment. . . . . . 19,000
Net loss for period . . . . . . . . . . (1,960,141)
----------- -------- ----------- -------- -----------
Balances at 12/31/95. . . . . . . . . . 5,930,700 5,931 2,568,317 0 (2,022,779)
Reissuance of erroneously canceled
shares during 1995 (Note 7) . . . . . . 110,000 110 (110)
Cancellation of previously issued
shares related to acquisition of
subsidiary (Note 4) . . . . . . . . . . (460,000) (460) 460
Minority interest adjustment. . . . . . (54,000)
Net income for year . . . . . . . . . . 11,826
----------- -------- ----------- -------- -----------
Balances at 12/31/96. . . . . . . . . . 5,580,700 5,581 2,514,667 0 (2,010,953)
Minority interest adjustment. . . . . . (134,000)
Net income for year . . . . . . . . . . 1,492,918
----------- -------- ----------- -------- -----------
Balances at 12/31/97. . . . . . . . . . 5,580,700 5,581 2,380,667 0 (518,035)
Minority interest adjustment. . . . . . (5,000)
Net income for year . . . . . . . . . . 65,620
----------- -------- ----------- -------- -----------
Balances at 12/31/98. . . . . . . . . . 5,580,700 5,581 2,375,667 0 (452,415)
Disposition of subsidiary . . . . . . . (2,374,667) (2,885)
Issuance of treasury stock
as a result of reorganization . . . . . 2,885
Issuance of 5,450,000 shares as a
a result of reorganization. . . . . . . 5,450,000 5,450 (339)
Net income for year . . . . . . . . . . 353,074
----------- -------- ----------- -------- -----------
Balances at 31/12/99. . . . . . . . . . 11,030,700 $ 11,031 $ 661 $ 0 $ (99,341)
=========== ======== =========== ======== ===========
<FN>
(1) Acquisition actually occurred on September 30, 1993, but is reflected
earlier under the pooling of interests method of accounting
</TABLE>
<PAGE>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINICPLES
The company's accounting policies reflect current accounting practices and
conform to generally accepted accounting principles. The following policies are
considered to be significant.
ACCOUNTING METHOD:
-------------------
The accompanying financial statements have been prepared on the accrual
method using generally accepted accounting principles applicable to a going
concern which contemplates the realization of assets and the liquidation of
liabilities in the normal course of business. All assets are listed at
historical cost as adjusted for asset impairment.
REVENUE RECOGNITION:
---------------------
Revenue is recognized upon completion of sales, including adequate payment
arrangements to reasonably assure collection of related receivables, if any.
DIVIDEND POLICY:
-----------------
The company has not yet adopted any policy regarding payment of dividends.
INCOME TAXES:
--------------
The Company utilizes the liability method of accounting for income taxes as set
forth in Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" (SFAS 109). Under the liability method, deferred taxes are
determined based on the difference between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect in the years
in which the differences are expected to reverse. An allowance against deferred
assets is recorded when it is more likely than not that such tax benefits will
not be realized.
BASIS OF PRESENTATION:
------------------------
The consolidated financial statements include the accounts of the Company
and Panorama Industries, Inc. ("Panorama"), a subsidiary owned 90.73% by the
Company through November 19, 1999. All significant intercompany transactions
and balances have been eliminated. On November 19, 1999, the Company divested
itself of the Panorama subsidiary. The consolidated financial statements include
the accounts of the Company and W-Waves USA Inc. (Delaware company). White
Wolf Audio Video Electronics Systems Inc., Radison Acoustique Ltee, and X-D LAB
R&D Inc. all these corporations are subsidiaries of Arrow Management Inc.
<PAGE>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINICPLES (CONT'D)
EARNINGS (LOSS) PER SHARE:
-----------------------------
Earnings (loss) per share are computed by dividing net income (loss) by the
weighted average common shares outstanding during each period.
FAIR VALUE OF FINANCIAL INSTRUMENTS:
----------------------------------------
The carrying amount of cash and accrued expenses approximate fair value due
to the short maturity periods of these instruments. The fair value of
$1,370,401 in notes receivable at December 31, 1998, based on the present value
of the receivable at interest rates of 8% and 9%, is $1,135,603.
ESTIMATES:
----------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues,
and expenses during the reporting period. Estimates also affect the disclosure
of contingent assets and liabilities at the date of the financial statements.
Actual results could differ from these estimates.
CASH AND CASH EQUIVALENTS:
-----------------------------
For financial statement purposes, the Company considers all highly liquid
investments with an original maturity of three months or less when purchased to
be cash equivalents.
CONCENTRATION OF CREDIT RISK:
--------------------------------
The Company maintains deposits in excess of federally insured limits.
Statement of Financial Accounting Standards No. 105 identifies these items as a
concentration of credit risk requiring disclosure, regardless of the degree of
risk. The risk is managed by maintaining all deposits in high quality financial
institutions.
The Company requires collateral to support notes and contracts receivable.
Management considers the real property pledged as security for its notes and
contracts to be reasonable in the circumstances.
<PAGE>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - DEVELOPMENT STAGE COMPANY AND BUSINESS ACTIVITY
The Company was incorporated under the laws of the State of Nevada on January
14, 1988 and has been in the development stage since incorporation. The company
acquired a substantial amount of land through its acquisition of Panorama (See
Notes 4 and 6). The Company held real estate for investment and possible future
development and sales. On November 19, 1999, the Company's assets were divested
and all operations ceased. The Company may acquire interests in various other
business opportunities which, in the opinion of management, will provide a
profit to the Company. Additional external financing or other capital may be
required to proceed with any business plan which may be developed by the
Company. At approximately the same time that the Company divested itself of its
Panorama subsidiary, it entered into a plan of reorganization with W-Wave USA,
Inc. (A Delaware corporation) (Wave) to issue the 3,094,700 shares of treasury
stock and an additional 5,450,000 previously unissued shares to acquire 100% of
the outstanding stock of Wave.
NOTE 3 - CAPITALIZATION
On the date of incorporation, the Company sold 1,000,000 shares of its common
stock to Capital General Corporation for $2,000 cash for an average
consideration of $.002 per share. The Company's authorized common stock
consists of 50,000,000 shares at $.001 per value.
NOTE 4 - ACQUISITION OF SUBSIDIARY
On September 30, 1993, the Company issued 5,250,700 shares of its common stock
to acquire 99.45% of the outstanding stock of Panorama, an affiliated company.
Panorama became a subsidiary of the Company. The transaction has been accounted
for under the pooling-of-interests method of accounting. Therefore, the
financial statements have been restated as if the Companies had been
consolidated for all periods presented. In December, 1996, the Company canceled
350,000 shares of its common stock held for issuance to a shareholder of
Panorama. As a result of this transaction, Arrow's ownership of Panorama was
reduced from 99.45% to 90.73%. On November 19, 1999, the Company exchanged its
interest in Panorama for 3,094,700 of its own shares returned to treasury stock.
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real property. Office services are
provided, without charge, by Capital General Corporation. Such costs are
immaterial to the financial statements, and, accordingly, have not been
reflected therein. The officers and directors of the Company are involved in
other business activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity becomes available,
such persons may face a conflict in selecting between the Company and their
other business interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 6 - NET OPERATING LOSS CARRYOVER
The Company had a net operating loss carryover of $2,000 at December 31, 1999,
that if not used will expire as follows:
Company's
Year Ended Expiration Date Loss
- ----------- ---------------- ----------
December 31, 1988 December 31, 2003 $ 1,950
December 31, 1989 December 31, 2004 10
December 31, 1990 December 31, 2005 10
December 31, 1991 December 31, 2006 10
December 31, 1992 December 31, 2007 20
----
$ 2,000
=========
Due to the Company's activities as a development stage company, there is not a
sufficient basis for making an estimate of future income.
<PAGE>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
SCHEDULE OF EXPENSES
<TABLE>
<CAPTION>
1/14/88
YEAR ENDED YEARS ENDED (DATE OF INCEPTION)
DECEMBER 31 DECEMBER 31 TO
1999 1998 1997 12/31/99
- ----------------------------- ----------- --------- -------- ----------
<S> <C> <C> <C> <C>
EXPENSES
Secretarial service 14,449 --- --- 14,449
Consultations 1,494 --- --- 1,494
Travel expenses 7,804 --- --- 7,804
Telephone 6,055 --- --- 6,055
Supplies 301 --- --- 301
Rent 6,899 --- --- 6,899
Office expenses 1,320 --- --- 1,320
Professional fees 33,038 --- --- 33,038
Insurance 764 --- --- 764
Repairs and maintenance 768 --- --- 768
Interest and bank charges 1,354 --- --- 1,354
Interest and long term debt 429 --- --- 429
Amortization 9,028 --- --- 9,028
Moving costs 7,980 --- --- 7,980
Taxes and licenses 6,456 --- --- 6,456
Foreign exchange 1,048 --- --- 1,048
----------- --------- -------- ------
99,187 --- --- 99,187
- ----------------------------- ----------- --------- -------- ------
</TABLE>
REPORTS ON FORM 8-K.
A) A report on Form 8-K was filed during the fourth quarter of 1999.
That report is incorporated by reference. The financial statements called for
in that report are filed as part of this annual report on Form 10-K.
<PAGE>
------
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
W-WAVES USA, INC.
(formerly Arrow Management, Inc.)
Date: May _____, 2000 By:
_______________________________________
Victor Lacroix, President and Director
Pursuant to the requirements of the Securities 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.
Date: May ____, 2000 By:
_______________________________________
Victor Lacroix, President and Director
Date: May ____, 2000 By:
_______________________________________
Gilles Charest, Secretary and Director
