<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended JUNE 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from _______, 19___ to ______, 19___.
Commission File Number: 33-35580-D
INSTANT VIDEO TECHNOLOGIES, INC.
(Exact Name of Small Business Issuer
as Specified in its Charter)
DELAWARE 84-1141967
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
500 SANSOME STREET, SUITE 503
SAN FRANCISCO, CALIFORNIA 94111
Address of Principal Executive Offices, Including Zip Code
(415) 391-4455
(Issuer's Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
[X] YES [ ] NO
There were 9,230,527 shares of the Issuer's $.00001 par value common stock
outstanding as of August 6, 1999
<PAGE> 2
INSTANT VIDEO TECHNOLOGIES, INC.
FORM 10-Q
June 30, 1999
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION.............................................................................3
ITEM 1. FINANCIAL STATEMENTS...........................................................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK....................................12
PART II - OTHER INFORMATION...............................................................................13
ITEM 1. LEGAL PROCEEDINGS.............................................................................13
ITEM 2. CHANGES IN SECURITIES.........................................................................13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES...............................................................13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........................................14
ITEM 5. OTHER INFORMATION.............................................................................14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..............................................................14
SIGNATURES................................................................................................15
INDEX TO EXHIBITS.........................................................................................16
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INSTANT VIDEO TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
June 30, 1999 and December 31, 1998
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 484,483 $ 2,212,141
Accounts receivable 50,000 --
Prepaid expenses and other current assets 56,327 26,053
Receivable - Series B Convertible Preferred Stock -- 810,000
------------ ------------
Total current assets 590,810 3,048,194
Property and equipment, net 531,273 184,616
Other assets 17,337 16,812
------------ ------------
Total assets $ 1,139,420 $ 3,249,622
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ -- $ 22,736
Accounts payable 601,558 252,044
Accrued expenses 129,017 181,484
Deferred revenue 50,000 --
------------ ------------
Total current liabilities 780,575 456,264
Stockholders' equity:
Preferred stock, $.00001 par value, 20,000,000 shares
authorized:
Series A, 2,020,000 and 2,025,000 shares issued and
outstanding in 1999 and 1998, respectively 20 20
Series B, 2,476,609 shares issued and outstanding in 1999
and 1998 25 25
Common stock, $.00001 par value, 100,000,000 shares
authorized; 9,230,527 and 7,940,966 shares issued and
outstanding in 1999 and 1998, respectively 92 79
Additional paid-in capital 28,986,275 27,251,399
Accumulated deficit (28,627,567) (24,458,165)
------------ ------------
Total stockholders' equity 358,845 2,793,358
------------ ------------
Total liabilities and stockholders' equity $ 1,139,420 $ 3,249,622
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE> 4
INSTANT VIDEO TECHNOLOGIES, INC.
Condensed Consolidated Statements of Operations
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------------- ---------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue $ -- $ 15,000 $ -- $ 15,000
Costs and expenses:
Research and development 467,656 161,648 928,558 249,958
Sales and marketing 1,118,909 128,085 1,567,727 173,140
General and administrative 1,034,691 537,773 1,704,092 886,878
------------ ------------ ------------ ------------
Total costs and expenses 2,621,256 827,506 4,200,377 1,309,976
------------ ------------ ------------ ------------
Loss from operations (2,621,256) (812,506) (4,200,377) (1,294,976)
Other income (expense):
Interest expense (1,395) (417,181) (1,760) (417,296)
Other, net 25,748 -- 32,735 (153,750)
------------ ------------ ------------ ------------
Total other income (expense), net 24,353 (417,181) 30,975 (571,047)
------------ ------------ ------------ ------------
Net loss (2,596,903) (1,229,687) (4,169,402) (1,866,023)
Accumulated deficit, beginning of period (26,030,664) (9,415,656) (24,458,165) (8,779,320)
------------ ------------ ------------ ------------
Accumulated deficit, end of period $(28,627,567) $(10,645,343) $(28,627,567) $(10,645,343)
============ ============ ============ ============
Basic and diluted net loss per common share $ (0.28) $ (0.21) $ (0.47) $ (0.32)
============ ============ ============ ============
Shares used in per share computation 9,229,705 5,813,142 8,884,253 5,813,142
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements
<PAGE> 5
INSTANT VIDEO TECHNOLOGIES, INC.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(4,169,402) $(1,866,023)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 74,529 21,457
Amortization of notes payable discount -- 415,484
Interest expense issued with debt -- 137,500
Stock option compensation 191,089 297,708
Changes in operating assets and liabilities:
Increase in accounts receivable (50,000) --
(Increase) decrease in prepaid expenses and other current assets (30,274) 10,350
Decrease in receivable - Series B Convertible Preferred Stock 810,000 --
(Increase) decrease in other assets (525) 757
Increase in accounts payable 349,514 194,137
(Decrease) increase in accrued expenses (52,467) 9,464
Decrease in accrued interest -- (16,437)
Increase in deferred revenue 50,000 --
----------- -----------
Net cash used in operating activities (2,827,536) (795,603)
Cash flows from investing activities:
Purchases of property and equipment, net (421,186) (40,938)
----------- -----------
Net cash used in investing activities (421,186) (40,938)
Cash flows from financing activities:
Proceeds from sale of common stock -- 310,000
Exercise of stock options 6,300 --
Proceeds from debt -- 1,175,000
Exercise of warrants for common stock 1,537,500 --
Repayment of debt (22,736) (561,073)
----------- -----------
Net cash provided by financing activities 1,521,064 923,927
----------- -----------
(Decrease) increase in cash and cash equivalents (1,727,658) 87,386
Cash and cash equivalents, beginning of period 2,212,141 20,551
----------- -----------
Cash and cash equivalents, end of period $ 484,483 $ 107,937
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements
<PAGE> 6
INSTANT VIDEO TECHNOLOGIES, INC.
Condensed Consolidated Statements of Cash Flows, Continued
For the Six Months Ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
----- ------
<S> <C> <C>
Supplemental disclosure of cash flow information:
Cash paid for interest $ 913 31,894
===== ======
Supplemental schedule of non-cash financing activities:
In a series of cashless exercises, a financial
institution exercised 250,000 warrants to purchase
226,140 shares of the Company's common stock at $1.00
per share during 1999. This same institution also exercised 31,250 warrants
to purchase 26,122 shares of the Company's common stock at $1.60 per share
During 1999, a contractor received 499 shares for
services resulting in $4,054 compensation expense to
the Company
During 1999, and 1998, the Company granted stock
options to various consultants and employees, which
resulted in compensation expense of $26,447 and
$156,850 respectively
During 1999, 5,000 shares of Series A convertible Preferred Stock
was converted to 5,000 shares of common stock
During 1999, a vendor was granted options to purchase
36,000 shares of common stock resulting in stock option
compensation expense of $160,588
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE> 7
INSTANT VIDEO TECHNOLOGIES, INC.
Notes to Condensed Consolidated Financial Statements
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
Instant Video Technologies, Inc. ("IVT" or the "Company") is an
independent provider of client/server network software for the delivery
of video and audio information over networks. IVT's Burstware(R) suite
of software products enables companies to transmit video and audio files
at faster-than-real-time speed. The result is full-motion video and
CD-quality audio to the end-user. The Company's software incorporates
its portfolio of patented intellectual property to achieve this result.
BASIS OF PRESENTATION
The accompanying financial statements include the accounts of Instant
Video Technologies, Inc. and its wholly-owned subsidiary, Explore
Technology, Inc. All significant intercompany transactions and accounts
have been eliminated in consolidation.
INTERIM FINANCIAL INFORMATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions for
Form 10-Q and Article 10 of Regulation S-X. In the Company's opinion,
the financial statements include all adjustments, consisting of normal
recurring adjustments, which the Company considers necessary to fairly
state the Company's financial position and the results of operations and
cash flows. The balance sheet at December 31, 1998, has been derived
from the audited financial statements at that date but does not include
all of the necessary informational disclosures and footnotes as required
by generally accepted accounting principles. The accompanying financial
statements should be read in conjunction with the financial statements
and notes thereto included with the Company's 1998 annual report on Form
10-KSB and other documents filed with the Securities and Exchange
Commission. The results of the Company's operations for any interim
period are not necessarily indicative of the results of the Company's
operations for any other interim period or for a full fiscal year.
(2) NET LOSS PER SHARE
Basic and diluted net loss per share is computed using the weighted
average number of common shares outstanding. Because their effects would
be anti-dilutive, stock options to acquire 4,262,083 and 4,351,616
shares at weighted average prices of $2.62 and $2.64 respectively, and
warrants to acquire 703,263 and 710,765 shares of common stock at a
weighted average exercise price of $1.60 for each period, respectively
have been excluded from the computation of diluted earnings per share
for the three and six month periods ended June 30, 1999.
<PAGE> 8
(3) COMPREHENSIVE INCOME
The Company has no component of comprehensive income other than its
reported amounts of net loss applicable to holders of common stock.
(4) SEGMENT DISCLOSURES
The Company has adopted the provisions of Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information". The Company operates in one
segment.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Certain information in this Report includes forward-looking statements within
the meaning of applicable securities laws that involve substantial risks and
uncertainties including, but not limited to, market acceptance of the Company's
products and new technologies, the sufficiency of financial resources available
to the Company, economic, competitive, governmental and technological factors
affecting the Company's operations, markets, services, and prices, and other
factors described in this Report and in prior filings with the Securities and
Exchange Commission. The Company's actual results could differ materially from
those suggested or implied by any forward-looking statements as a result of such
risks. The Company's headquarters is located in San Francisco, California, with
offices in several domestic metropolitan areas. The Company expects to continue
to increase its sales offices in 1999 with additional locations in the United
States and Europe.
The Company's prospects must be considered and evaluated in light of the risks,
operating and capital expenditures required, and uncertainty of economic
conditions that may impact its customers. Emerging companies are characterized
by a high degree of market and financial risk and investors should take this
into account in their evaluation of financial results and future prospects. To
achieve and sustain profitability, the Company must successfully launch, market,
and establish its software products, successfully develop new products and
services, meet the demands of its customers, respond quickly to changes in its
markets, attract and retain qualified employees, and control expenses and cash
usage.
The Company believes that period-to-period comparisons of its operating results,
including its revenues, cost of sales, gross margins, expenses, and capital
expenditures may not necessarily provide meaningful results and should not be
relied upon as indications of future performance. The Company does not believe
that its historical growth rates are indicative of future growth or trends.
<PAGE> 9
The Company has incurred significant losses since its inception, and as of June
30, 1999, it had an accumulated deficit of $28,627,567. There can be no
assurance that the Company will achieve or sustain profitability and the Company
believes that it will continue to incur net losses in 1999.
Results of Operations
Six month periods ended June 30, 1999 vs. 1998
The Company had no revenue nor cost of revenue for the six months ended
June 30, 1999 compared with $15,000 revenue for the same period in 1998. The
Company released the commercial version of its Burstware(R) suite of products
this year, and has shipped evaluation copies to potential customers.
During the six months ended June 30, 1999 expenses increased to
$4,200,377 as compared to $1,309,976 during the six months ended June 30, 1998.
This $2,890,401 increase was a result of an overall expansion in business
activity, including growth in the research and development, sales and marketing
departments.
The $678,600, or 271% increase in Research & Development expenditures,
resulted from the ramp-up in preparation for the commercial release of the
product. The Quality Assurance and Release Management Department was established
to support subsequent releases. Personnel were added to complete documentation
of the product releases. Major development activities began in the areas of
player scripting, incorporation of a database for replication, and various other
features to be included in subsequent releases.
The $1,394,587 or 805% increase in Sales & Marketing was primarily a
result of the commercial release of the Company's Burstware(R) product suite.
The Company has initiated a targeted marketing campaign including print, radio
and billboard advertising, public relations, collateral development, as well as
presence at major trade shows. The Company believes that these media will allow
the Company to reach specific vertical markets cost-effectively, to support the
efforts of the direct sales force, and to generate publicity for the Company as
a whole.
The program's objectives are to build brand awareness, facilitate name
recognition, educate the market, generate sales leads and develop relationships
with technology partners, systems integrators and resellers. These expenditures
will continue as part of an overall plan to build upon and expand the brand
awareness the Company has created in the marketplace.
Sales expenditures have increased as a result of the expansion of the
Company's sales force in conjunction with the launch of the Burstware suite of
products. The company currently has sales offices in Southern California,
Virginia, Colorado, Michigan, New York and Florida. The Company has also
partnered with The EMS Group to develop sales and marketing channels in Europe.
The Company incurred a $817,214, or 92% increase in General and
Administrative Expense which resulted from additional personnel and space to
support the increased research, development, sales and marketing activities.
<PAGE> 10
The Company had a net loss from operations of $4,200,377 during the six
months ended June 30, 1999, as compared to $1,294,976, a 224% increase over the
same six months in 1998. The increased loss resulted from the increased
expenditures discussed above. Other income (expenses), net was $30,975, as
compared to $571,047 net expense for the six months ended June 30, 1999 and
1998, respectively. This $602,022 increase was principally due to the decrease
in interest expense associated with debt converted to equity or that was retired
during 1998.
Quarters ended June 30, 1999 vs. 1998
The Company had no revenue nor cost of revenue for the three months
ended June 30, 1999 compared with $15,000 revenue for the same period in 1998.
The Company released the commercial version of its Burstware(R) suite of
products this year, and has shipped evaluation copies to potential customers.
Costs and expenses during the three months ended June 30, 1999, totaled
$2,621,256 as compared to $827,506 during the three months ended June 30, 1998.
The increased costs were primarily related to increased personnel, as well as a
targeted advertising campaign. The $1,793,750 increase was due to a $306,008, or
189% increase in Research & Development expenditures, a $990,824 or 774%
increase in Sales & Marketing, as well as a $496,918, or 92% increase in General
and Administrative Expense.
The Company had a net loss from operations of $2,621,256 during the
three months ended June 30, 1999, as compared to $812,506, a 223% increase over
the same three months in 1998. The increased loss resulted from the increased
expenditures discussed above. Net other income (expense) was $24,353, as
compared to $417,181 net expense for the three months ended June 30, 1999 and
1998, respectively. This $441,534 decrease was principally due to the decrease
in interest expense associated with debt converted to equity or that was retired
during 1998.
Changes in Financial Condition
As of June 30, 1999, the Company had a working capital deficiency of
$189,765 as compared to working capital of $2,591,930 at December 31, 1998. This
$2,781,695 decrease was due to a $2,457,384 reduction in current assets, an
increase in current liabilities of $324,311. These uses of current assets were
partially offset by the $1,537,500 proceeds from the exercise of warrants to
purchase the Company's common stock and the $810,000 collection of a receivable
relating to the exercise of warrants related to Series B Preferred Stock.
Net cash used in operating activities totaled $2,827,536 during the six
months ended June 30, 1999, as compared to net cash used in operating activities
of $795,603 during the six months ended June 30, 1998.
Net cash used in investing activities during the six month period ended
June 30, 1999 totaled $421,186 as compared to $40,938 during the six month
period ended June 30, 1998.
Cash flow provided by financing activities during the six month period
ended June 30, 1999 totaled $1,521,064 as compared to $923,927 during the same
period in 1998. This increase was primarily as a result of $1,537,500 proceeds
from the exercise of warrants to purchase common stock associated with the
Company's Class A Preferred Stock.
<PAGE> 11
The Company retired a $22,736 note during the six months ended June 30,
1999, while it retired $561,073 in debt during the six months ended June 30,
1998.
Subsequent to June 30, 1999, the Company received $2,520,000 in exchange
for notes payable convertible to the Company's common stock. These notes are due
on or before December 31, 1999, but are expected to be converted to common stock
prior to that maturity date.
Liquidity
IVT received a "going concern" opinion from its independent auditors in 1998.
Although the Company has been successful in its fundraising efforts to meet
prior operating requirements, there can be no guarantee that the Company will be
successful in future fundraising efforts. At the time of this report IVT had
insufficient cash reserves and receivables necessary to meet forecast operating
requirements for the next twelve to eighteen months. In the event the Company
were to be unsuccessful in its fundraising it would be required to significantly
reduce cash outflows through the reduction of marketing and sales, development,
capital, and administrative expenditures resulting in decreased potential
revenue and potential profitability.
Year 2000 Issues
The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the application year. Programs or products
that have time-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. In addition, the year 2000 is a leap year, which
may also lead to incorrect calculations, functions or systems failure. As a
result, this year, computer systems and software used by many companies may need
to be upgraded to comply with such Year 2000 requirements. In 1998, the Company
began a project to determine if any actions were required regarding date-related
effects to: (i) the Company's software products; (ii) the Company's internal
operating and desktop computer systems and non-information technology systems;
and (iii) the readiness of the Company's third-party vendors and business
partners.
The Company has formed a team consisting of operations, development, marketing,
and finance members to determine the impact of Year 2000 and to take corrective
action. As of February 1999, the Company had completed testing of its suite of
Burstware(R) software products and has found no known Year 2000 issues. The
Company has also tested its internal operating and desktop hardware and software
and has found that all its software is Year 2000 compliant and appears to have
no known Year 2000 issues. The Company has also confirmed with its third-party
vendors and business partners to ensure that their software and hardware will
not impact IVT operations. At this time, the Company knows of no known Year 2000
issues or problems with its vendors, or business partners.
The majority of the costs associated with this project are not incremental to
the Company, but represents a reallocation of existing resources. The Company
believes that modifications deemed
<PAGE> 12
necessary will be made on a timely basis and does not believe that the cost of
such modifications will have a material effect on the Company's operating
results. To date, the Company's costs related to the year 2000 issues have not
been material, and the Company does not expect the aggregate amount spent on the
year 2000 issue to be material. In addition, the Company is in the process of
evaluating the need for contingency plans with respect to year 2000
requirements. The necessity of any contingency plan must be evaluated on a
case-by-case basis and may vary considerably in nature depending on the year
2000 issue it may address.
The Company's expectations as to the extent and timeliness of modifications
required in order to achieve year 2000 compliance is a forward-looking statement
subject to risks and uncertainties. Actual results may vary materially as a
result of a number of factors, including, among others, those described above in
this section. There can be no assurance that unexpected delays or problems,
including the failure to ensure year 2000 compliance by systems or products
supplied to the Company by third parties, will not have an adverse effect on the
Company, its financial performance and results of operations. In addition, the
Company cannot predict the effect of the year 2000 issues on its customers or
other third party business partners or the resulting effect on the Company. As a
result, if such third parties do not take preventative and/or corrective actions
in a timely manner, the year 2000 issue could have an adverse effect on their
operations and accordingly have a material adverse effect on the Company's
business, financial condition and results of operations. Furthermore, the
Company's current understanding of expected costs is subject to change as the
project progresses and does not include the cost of internal software and
hardware replaced in the normal course of business whose installation otherwise
may be accelerated to provide solutions to year 2000 compliance issues.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company's exposure to market risk is minimal as the Company has no
investments in the market.
<PAGE> 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
No change from legal proceedings reported in the Company's December 31,
1998 Form 10KSB.
Item 2. Changes in Securities.
Since January 1, 1999, the Company has sold unregistered securities as
follows:
During the six months ended June 30, 1999, the holders of the Company's
Series A (formerly Series F) Convertible Preferred Stock exercised
warrants issued with that stock to purchase 1,025,000 shares of the
Company's common stock at $1.50 per share, resulting in cash proceeds of
$1,537,500.
In a series of cashless exercises, a financial institution exercised
250,000 warrants to purchase 226,140 shares of the Company's common
stock at $1.00 per share. This same institution also exercised 31,250
warrants to purchase 26,122 shares of the Company's common stock at
$1.60 per share.
Two employees received options to purchase 9,621 shares of common stock
at prices of $2.19 and $2.91 per share in exchange for services
rendered, resulting in compensation expense of $26,448 to the Company.
A contractor received 499 shares of common stock for services resulting
in $4,054 of compensation expense to the Company.
A vendor received options to purchase 36,000 shares of common stock at
$9.72 per share in exchange for services, resulting in compensation
expense of $160,588 to the Company.
Options to purchase 6,800 shares of the Company's common stock were
exercised by employees at an average price of $0.93 per share, resulting
in $6,300 proceeds to the Company.
A holder of Series A, (formerly Series F) Convertible Preferred Stock
converted 5,000 shares of that stock into 5,000 shares of common stock.
Item 3. Defaults upon Senior Securities
None
<PAGE> 14
Item 4. Submission of Matters to a Vote of Security Holders
On April 14, 1999, the Company's stockholders adopted the 1998 and 1999
stock option plans by written consent. Additionally, the stockholders
voted to increase the aggregate number of shares issuable under the
1992, 1998 and 1999 plans.
Item 5. Other Information
Effective April 15, 1999, Eric Hall resigned as Interim Chief Financial
Officer. On May 11, 1999, the Company's Board of Directors appointed
Charles Swan as Interim Chief Financial Officer. The Company is
searching for a permanent Chief Financial Officer.
Acquisition of Time Shift TV - See Exhibit 29
Subsequent to June 30, 1999, the Company has received $2,520,000 in
exchange for notes payable convertible into the Company's common stock.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION LOCATION PAGE NO
- ------- ----------- -------- -------
<S> <C> <C> <C>
27 Financial Data Schedule Attached
99 Press release relating to the acquisition Attached
of Time Shift TV
</TABLE>
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter ended June 30, 1999.
<PAGE> 15
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
INSTANT VIDEO TECHNOLOGIES, INC.
Date: August 6, 1999 By: /s/ Richard Lang
-------------------------------------
Richard Lang, Chairman,
Chief Executive Officer and President
By: /s/ Charles Swan
-------------------------------------
Chief Financial Officer
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule
99 Press release relating to the acquisition
of Time Shift TV
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
CONSOLIDATED BALANCE SHEETS AND UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE QUARTER
ENDED JUNE 30, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 484,483
<SECURITIES> 0
<RECEIVABLES> 50,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 590,810
<PP&E> 667,373
<DEPRECIATION> 136,100
<TOTAL-ASSETS> 1,139,420
<CURRENT-LIABILITIES> 780,575
<BONDS> 0
0
45
<COMMON> 92
<OTHER-SE> 358,708
<TOTAL-LIABILITY-AND-EQUITY> 1,139,420
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,621,256
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,395
<INCOME-PRETAX> (2,596,903)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,596,903)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,596,903)
<EPS-BASIC> (0.28)
<EPS-DILUTED> (0.28)
</TABLE>
<PAGE> 1
EXHIBIT 99
Press Release
FOR IMMEDIATE RELEASE
For more information, please contact:
Pat Meier
Pat Meier Associates P.R.
415.392.4200
[email protected]
or
Suzanne Lentz
415.391.4455 ext. 237
[email protected]
INSTANT VIDEO TECHNOLOGIES, INC. (IVDO) ACQUIRES TIMESHIFT-TV INC.
TIMESHIFT-TV TECHNOLOGY COMPLEMENTS BURSTWARE(R)
SAN FRANCISCO, CALIFORNIA, AUGUST 3, 1999: Instant Video Technologies (OTC:
IVDO) www.burst.com, today announced that it has acquired Delaware-based
Timeshift-TV, Inc., developer of digital video technology that allows users to
personalize their TV viewing experience by adding VCR functionality to live
broadcasts.
This marks the first acquisition by Instant Video Technologies, enabling the
company to add time-shifted, real-time broadcasting capabilities to its
intellectual property assets. IVT currently holds patents relating to
Faster-Than-Real-Time(TM) delivery of video and audio over networks--the
technology underlying IVT's Burstware(R) software. It is IVT's intention to
incorporate aspects of Timeshift-TV's intellectual property into upcoming
releases of Burstware(R).
"Timeshift-TV's technology puts control over broadcast television scheduling in
the hands of the viewer," said IVT Chairman and CEO, Richard Lang. "The
technology dovetails well with IVT's Faster-Than-Real-Time video and audio burst
technology by giving users full, VCR-like control in conjunction with IP network
video delivery. We believe the combination of time-shift functionality and
Burstware(R) software will also have particular relevance in set-top box
implementations". According to Lang, Timeshift-TV's technology, which uses only
digital recording media instead of tapes, provides "always-on" cyclical
buffering that lets users choose a program already in progress and watch it from
the beginning, while the show continues to be recorded. Viewers can pause and
skip forward or backwards within a broadcast. Timeshift-TV can record several
adjacent channels simultaneously or record a group of channels specially
selected by the user.
<PAGE> 2
According to Lang, the technology underlying Timeshift-TV's intellectual
property originated several years before the emergence of other digital TV
technologies available today. "IVT intends to leverage important features that
distinguish Timeshift-TV's technology from other digital VCR technologies to tap
into new markets and applications," said Lang.
Timeshift-TV, Inc. was acquired in a stock-only transaction from Richard Lang,
current Chairman and CEO of IVT, as well as other persons affiliated with IVT.
Lang and the other parties were not employed by IVT at the time they formed
Timeshift-TV. IVT's board of directors unanimously approved IVT's acquisition of
Timeshift-TV. Timeshift-TV holds assets, including intellectual property, in the
area of time-shifted real-time broadcasting, which IVT plans to integrate into
its advanced video and audio delivery solutions. IVT also plans to license the
Timeshift-TV intellectual property to other parties for various applications.
For more information on IVT or Burstware(R), visit the company's web site at
http://www.burst.com.
Instant Video Technologies, Inc., headquartered in San Francisco, California is
a leading developer of burst-mode video and audio delivery software for networks
and content providers. IVT's Burstware(R) enables high-quality
Faster-Than-Real-Time(TM) delivery of full motion video and CD quality audio
over networks of all types. BurstwareO is a trademark of Instant Video
Technologies, Inc.
This news release contains forward-looking statements relating to the future
performance of Instant Video Technologies, Inc. and the success of its products,
and relating to the success of its relationship with Timeshift-TV Inc.. These
forward-looking statements are subject to certain risks and uncertainties, and
actual results may differ materially. These risks and uncertainties are detailed
from time to time in IVT's filings with the Securities and Exchange Commission
(SEC).
