UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES ACT OF 1934 FOR THE FISCAL YEAR ENDED
May 31, 1996
COMMISSION FILE NUMBER: 0-19796
INTERACTIVE TECHNOLOGIES CORPORATION, INC.
(Exact name of registrant as specified in charter)
Wyoming 98-0120805
(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation)
104 SOUTH HARBOR CITY BOULEVARD
SUITE A
MELBOURNE, FLORIDA 32901
(Address of Principal Executive Offices)
Registrant's telephone number including area code: 407-953-4811
Securities Registered Under Section 12(b) of the Exchange Act: NONE
Securities Registered Under Section 12(g) of the Exchange Act: COMMON
STOCK, $0.01 PAR VALUE.
Check whether the Registrant: (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 Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes_X_ No___
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B in this form, and no disclosure will 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. _X_
The Registrant's operating revenues for its most recent fiscal year
were: $56,532.
The aggregate market value of voting stock held by non-affiliates of
the Registrant, based on the average of the closing bid and asked prices of the
Registrant's Common Stock in the NASDAQ market as reported by NASDAQ on May
31,1996, was approximately $30,095,220. Shares of voting stock held by each
officer and director and by each person who owns 5% or more of the outstanding
voting stock have been excluded in that such persons may be deemed to be
affiliates. This determination of affiliate status is not necessarily
conclusive.
As of May 31, 1996, 11,742,044 shares of Common Stock, $0.01 par value,
were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
LOCATION OF EXHIBIT INDEX
The index of exhibits is contained in PART IV, Item 13 herein on page number
________
TABLE OF CONTENTS
PART I:
Item 1. Description of Business
Item 2. Description of Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II:
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Item 6. Management's Plan of Operation
Item 7 Financial Statements
Item 8 Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
PART III:
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16(a) of the
Exchange Act
Item 10. Executive Compensation
Item 11. Security Ownership of Certain Beneficial Owners and
Management
Item 12. Certain Relationships and Related Transactions
PART IV:
Item 13. Exhibits, and Reports on Form 8-K
SIGNATURES
PART I
Item 1. Description of Business.
a. Business Development.
Interactive Technologies Corporation, Inc. (the Company) was
incorporated in the state of Wyoming on August 8, 1991. At that time, the
Company was engaged in the business of exploiting its rights under a license
(the "License") granted by CST Entertainment Imaging, Inc. ("CST"), which gave
the Company the exclusive right to use CST's coloring process to convert to
color black-and-white film and videotape, including black-and-white theatrical
films and television programs, produced for distribution in Europe. The Company
also had exclusive right to use CST's technology to provide digital special
visual effects for new film and video productions produced for distribution
primarily in the European territory. The Company ceased this effort on October
18, 1995.
On October 20, 1995, the Company entered into an agreement to acquire
assets of Syneractive, Inc. (SI), a Florida Corporation. SI's assets included
intellectual property consisting of a television production and a trademark
known as Rebate TV(TM), a marketing and sales medium for a wide variety of
products and services. They also included license rights from the Federal
Communications Commission (FCC) to operate interactive and data service systems
in the Charleston -North Charleston, SC, and Melbourne-Titusville- Palm Bay, FL
metropolitan areas.
The Company issued 5,700,000 shares of common stock to its current sole
director and officer in exchange for these assets of SI.
In May, 1996, the Company closed an agreement for the acquisition of
television studios, post production facilities, satellite links and remote
production equipment located in Princeton, N.J. The Company acquired a fully
operational studio and post production facility and C and Ku Band Satellite
Links from Studiolink Corporation in exchange for $1.1 million dollars.
The acquisition was made under a lease purchase agreement in the amount
of $1,100,000.00. This amount is payable monthly (with payments calculated as
this principal with interest amortized over the lease period at a rate of 11%
interest per annum) on a lease purchase basis over five
years beginning May 1, 1996 to Studiolink Corporation, the seller of the
equipment. The Company has the option to purchase the equipment at the end of
the term for a nominal sum. Studiolink Corporation is unrelated to the Company.
The Company provided additional collateral under the lease of 250,000 common
shares.
The equipment was used previously to make available television
production, post production and satellite uplink services on a limited basis to
consumers of such services and to process business of the private owner of the
Studiolink Corporation.
The Company expects to utilize these facilities in the production and
distribution of its own television shows as well as to offer these services to
users throughout the television and broadcast industry. The Company has agreed
to take over the existing facility at 13 Rozel Road, Princeton, New Jersey and
expand it to 9,934 square feet under lease. The Company expects to begin
operating this as a new business without depending upon previous business.
On April 9, 1996, the Company formed a wholly owned subsidiary,
Satellite Network Television, (SNT), a Nevada corporation, to enhance the
Company's television programming, production and broadcasting capabilities, and
vertically integrate certain of the broadcast activities involved in the
television programming segments of its business. The Company has acquired rights
to a FCC license and owns the antenna and other equipments necessary to provide
satellite uplink for television broadcasting.
The Company's Principal Executive Offices are located at 104 South
Harbor City Boulevard, Suite A, Melbourne, Florida 32901, and its telephone
number is (407) 953-4811.
b. Business of Registrant.
(1) Principal Products or Services and Their Markets.
Interactive Technologies Corporation, Inc. ("ITC") is a developer and
producer of television, interactive television and interactive digital media
programming. These programs are developed in various interactive formats for
cable, broadcast and direct broadcast satellite television and for Internet
distribution.
Programming. ITC's principal interactive programming product is its
Rebate TV(TM) program. Rebate TV(TM) is a marketing and sales network which airs
one half-hour of programming a day on WIRB/Channel 56 in the central Florida
market which serves a population of 2,176,100. Rebate TV(TM) first aired April
15, 1996, and has been on the air daily since that time. The Company expects
later network growth to see distribution via communications satellite to cable
television headends and other local distribution systems across the country.
Rebate TV(TM) is a television program which incorporates interactive
media and computer data management to allow the retail vendors to communicate
their message to the consumer, to allow the consumer to verify his or her
purchase, and to receive a cash rebate from the Company.
The television program which airs one half hour a day, seven days a
week is divided into 14 one minute retail information segments which are
utilized by advertisers to provide information about their company and a brief
description of the cash rebate offered to the consumer. The balance of the
program consists of information segments, rebate reviews and instructional
segments. Retailers represent a broad spectrum of business including grocery
chains, furniture stores, tire service stores, retail banks, restaurants, car
dealers and various specialty businesses.
The consumer, after watching Rebate TV(TM), shops at one or more of the
participating retailers and makes a purchase of items of product or in dollar
amounts which carry the rebate offered by each particular retailer, (i.e. a $5
rebate on a purchase of $50 or more, or $10 rebate on the purchase of a brake
package, etc.) The consumer then goes home and calls the toll free telephone
number, 1-888-2REBATE, which connects him to the Company's computer data base,
and he then registers the Rebate TV(TM) number on the bottom of the receipt. At
the end of the month, the Company sends a check to the Rebate TV(TM) customer
for a total of all rebates processed during that month. These rebates are in
addition to coupons or other promotional offers by the vendor. Rebate TV(TM) had
approximately 4,000 subscribers by the end of the fiscal year.
The Company collects point-of-sale information from the vendors who
participate in Rebate TV(TM), and processes that data along with Rebate TV(TM)
customer call-in data, then credits rebates to customer accounts as they are
verified. The Company manages escrow accounts for retail vendors so that rebates
are transferred to a general customer escrow fund as they are credited, and
issues checks at the end of each month to Rebate TV(TM) customers.
The Company receives revenues of two types from Rebate TV(TM). First,
retail vendors pay an initial production fee to the Company for the production
of the information segment that becomes part of the television show. Secondly,
the retail vendors pay the company a transaction fee based upon verified sales.
The amount of the transaction fee varies with the type of retailer and the
frequency of purchase of its products, i.e. the transaction fee for a automobile
sale is much higher than a grocery store because of the size and frequency of
purchase.
Rebate TV(TM) is designed to utilize existing communication
technologies for consumer responses - it now uses the telephone and the Internet
as return links. However, it is also designed to easily accommodate the emerging
interactive television systems as they come into use, such as Interactive Video
and Data Services (IVDS) and Interactive Television (via fiber optic cable/
telephone cable etc.)
PROGRAM MARKET EXPANSION
The Company's roll out plan provides for Rebate TV(TM) to open in the
Atlanta market following the Orlando market. The Company has hired a General
Manager for the Atlanta office who began with the Company on April 1, 1996. The
Company's plan also includes the completion of an interface for Interactive
Video and Data Services (IVDS) return links during the next 12 months.
Overall, during the next 18-36 months, the Company's plan calls for the
market expansion of Rebate TV(TM). The program is scheduled to expand into 25 of
the top national markets within three years from the date of first broadcast.
The Company expects to hire as many as 50 additional employees over the next 24
months to support the operation of this programming and to continue to develop
and refine the programming as the Company adds markets for these services.
PROGRAM DEVELOPMENT
The Company's research and development efforts consumed the technical
efforts of the Company from October 1995 through the airing of Rebate TV(TM) on
April 15, 1996, and involved two basic areas: the television programming for the
shows, and the data management and computer interface development efforts for
the interaction with the retailers and the consumers. None of this expense will
be borne directly by the retailers or the consumers, but will be recouped
through profits as the Company expands its markets.
Development of Rebate TV(TM) basic programming by ITC has been done
during the fiscal year with Century III at Universal Studios, Florida.
Established in 1976, Century III has serviced a widely diverse client base with
high production values utilizing the latest and finest in production and
post-production hardware. This includes local, regional, national and
international projects for all four broadcast television networks, national
cable networks such as Nickelodeon and HBO, major independent producers,
advertising agencies and major corporate and governmental organizations such as
Digital Equipment Corporation, Harris Corporation, General Electric, NCR, AT&T,
Kodak, Polaroid, Walt Disney World, Harcourt Brace Jovanovich, FPL Group,
Westinghouse, McDonnell Douglas, Martin Marietta, Reebok, International and
NASA. The creative director for Rebate TV(TM) is Michael Hamilton who has
designed, directed and produced such
television series as "Magnum P.I., "Simon & Simon", "Wings" and "The Twilight
Zone". His commercial experience includes such clients as Cadillac(TM), Texaco,
Coca Cola(TM), Heineken, American Airlines, Donna Karan, Elizabeth Arden, QVC,
Business Technology Management and the Family Channel.
The computer development efforts related to Rebate TV(TM) were done at
the Company's engineering offices in Melbourne, Florida, where the hardware and
software designs and specifications were developed, tested and implemented
during the current fiscal year, to:
o manage the large amounts of data and transactions involved in
collecting and verifying
sales information from the Rebate TV(TM) retailers;
o calculate the rebates, record the credits, and issue the
checks to the consumer;
o accommodate and record the telephone rebate requests, and
provide automated participation information to the public.
ITC looks to Rebate TV(TM) to attract its share of the Communications
Industry end-user market estimated to be $189.3 billion by 1998. Interactive
digital media is projected to remain the fastest growing category in the
industry.1
Internet Access. ITC's Internet home pages for use with Rebate TV(TM)
allow viewers to access the program's data base through the Internet. It allows
them to view the status of their accounts, enter vendor rebate claims, and later
will allow viewers to access a variety of products and services associated with
Rebate TV(TM) which the Company expects to include. The Company's home page is
located at http://www.INET-USA.com/RTV.
Network Operations. ITC is in development and production of its own
television channel and is scheduled to distribute its Rebate TV(TM) video
programming in this format to customers. The Company's distribution plan
currently provides for distribution of this programming started in the central
Florida markets to expand from there. Overall, during the next 18-
- - --------------------------
1. The Veronicas, Shudder & Associates Communications Industry Forecast,
July 1994
36 months, the Company's plan calls for the Rebate TV(TM) to expand into 25 of
the top national markets within three years from the date of first broadcast.
The Company expects to hire as many as 50 additional employees over the next 24
months to support the operation of this programming and to continue to develop
and refine the programming as the Company adds markets for these services. The
Company currently maintains a sales office in Atlanta, GA, and has announced a
on-air date for that market of January 6, 1997. In addition, plans include the
exploitation of the Company's wholly-owned subsidiary, SNT's, satellite uplink
capabilities to expand it's programming to a potentially worldwide market.
Satellite Network Television (SNT). The company formed Satellite
Network Television, Inc. (SNT) a Nevada
corporation, to operate its facilities in Princeton, New Jersey. These
facilities consist of three basic
segments:
Studio Operations: Complete studio and control room facilities
including studio cameras, XY
lighting, preset lighting board and recording facilities.
Post Production: Equipped Video and audio edit rooms for on and off
line edits. 3-D Graphics and
Paintbox edit rooms, voice over and audio facilities and control equipment.
Satellite Links: Fully redundant C band and Ku band satellite
uplinks and downlinks with support and
playback equipment.
These facilities were acquired to provide the Company the ability to
completely produce and distribute its own programming in-house. However, the
Company operates this facility as a full-service studio and broadcast facility
available to the business community and realizes revenues from providing
contract services from its facilities and from remote sports and general subject
broadcasts. (These include such services as video conferencing, and television
and video program production for educational, commercial and corporate videos.)
The Company began major renovations to these facilities in May, 1996, and has
been operating at a reduced level during renovations. The renovations are
scheduled to be complete in September of 1996.
Interactive Video and Data Services. As part of ITC's commitment
to the evolution of interactive
television, its Federal Communications
Commission Interactive Video and Data Services (IVDS) radio station licenses in
the Charleston-North Charleston, SC, and Melbourne-Titusville-Palm Bay, FL
service areas represent an additional enhancement to the Company's programming
distribution. These licenses have a duration of an initial five years, and are
renewable if all conditions of the license are met. IVDS, a two way
communications system, will allow viewers to take an active role in systems
delivered through broadcast television, cable television, wireless cable, direct
broadcast satellite or other future television delivery methods. IVDS is
regulated as a personal radio service under the rules of the FCC which has
allocated spectrum in the 218-219 MHz range for its use. IVDS systems are
designed to operate with a hand-held remote control device that controls the
interactive set top device on the subscriber's television set. A viewer would
interact with the TV station through a radio signal using an IVDS frequency.
The Company has purchased equipment for its Charleston-North
Charleston, SC license, which is at the date of this report in transit to
Melbourne, Florida, and will be stored until the Company is ready for
installation in Charleston. The Company has under contract the sale of 90% of
this ownership of this license and equipment and has reserved rights to provide
programming to this license area when it is in operation.
The Company is reviewing alternative uses and equipment proposals for
its Melbourne-Titusville-Palm Bay, FL license and expects to proceed to install
a system for this license within the next 24 - 36 months.
Although ITC will run its Rebate TV(TM) and other programs on its own
service area systems, the programs it develops are intended for use on various
interactive delivery systems and are not specific to Interactive Video and Data
Services systems. They are marketed to all of these various delivery systems.
For broadcast of Rebate TV(TM) programming the Company currently uses and plans
to use standard video media distribution methods such as cable, broadcast
stations, wireless cable and direct broadcast satellite. Although the Company
has designed its programs to utilize an IVDS return link (a "return link" is the
method by which data is sent from the consumer or viewer back to the originator
of the program), they are also designed to accommodate other return links such
as the telephone. The Company has purchased equipment and software to provide a
telephone return link as an interim return link for its own license areas as
well as other areas where it is providing programming, to be utilized where IVDS
is not available; until the installation an operation of the IVDS equipment as a
return link is completed as well as for use with non subscribers to IVDS.
Intellectual Content. The Company has developed a plan for the
accumulation and sale of intellectual content. This content takes several forms,
including completed television and video programming, both developed and
produced by the Company and by third parties; property rights to written scripts
and publications for the purpose of producing or having produced television or
motion picture products; and program ideas, concepts and designs.
This plan commenced during the last month of the fiscal year. In
addition to the Rebate TV(TM) programs, the company has filed and had accepted
Trademark applications with the United States Patent and Trademark Office for
"Rebate TV" and for "DEAL! DEALS! DEALS!" (a direct shopping program which the
Company has produced).
The Company has produced in conjunction with Nightwing Entertainment
Group, Inc./Petsville USA a series of direct sale pet product shows which it
expects to air during the 4th quarter of 1996 and beyond.
Subsequent to the end of the fiscal year, the Company acquired movie
and television rights for one year to Special Treatment a novel currently in
print.
The Company through its SNT subsidiary currently has in development and
preproduction a series of Bowling Tournament shows produced in conjunction with
the New Jersey Bowling Proprietors Association scheduled to air fourth quarter
of 1996 and/or first quarter of 1997.
The Company has in addition under this plan a number of projects
under consideration and review. To
date, revenue from these activities has been limited to the Rebate TV(TM)
television program, and to a limited
showing of its DEAL! DEALS! DEALS! program. There is associated with each
of these shows and projects a lead
time or advance period necessary for development and scheduling.
In addition, the company may elect to sell
outright or resell any of these properties.
The Company does not expect to receive material revenues from these
projects other than Rebate TV(TM) program until calendar year 1997.
As of May 31, 1996, the Company has 12 ITC and 5 SNT employees, all of
which are full-time.
The Company's fiscal year runs from June 1 to May 31 of each year.
Item 2. Description of Properties.
The Company currently has executive and engineering offices at 104
South Harbor City Boulevard, Suite A, Melbourne, Florida; programming and media
offices at Century III at Universal Studios, 2000 Universal Studios Plaza, Suite
100, Orlando, Florida; and marketing offices at 228 Park Avenue North, Suite J,
Winter Park, Florida, and 111 Chickering Parkway Roswell, Georgia. In addition,
the Satellite Network Television (SNT) facilities are located at 13 Rozel Road,
Princeton, New Jersey.
The Melbourne facility consists of 1,250 square feet of office and
engineering space, and is leased from The Network Group, for a term of one year,
with automatic renewal for an additional 12 months unless either Landlord or
Tenant is notified in writing by the other party at least 60 days prior to
termination date. Monthly lease payments are $1,250.00 plus applicable Florida
sales tax.
The Company's Century III office at Universal Studios consists of
approximately 250 square feet of office space and use of common areas. The cost
of
this space is included in invoicing for production work Century III is
performing for the Company.
The Winter Park facility consists of 1080 square feet of office space.
It is leased from Williams-Builder Partnership for a term of two years with
monthly base lease payments of $1,301.40, plus applicable Florida sales tax, and
pro rata common area maintenance fees estimated to be approximately $200 per
month.
The Roswell office currently exists at the residence of the General
Manager in the Atlanta area, for which the Company neither compensates nor
reimburses. The Company anticipates a requirement for a corporate sales and
administrative office in Atlanta within six months.
The SNT facility consists of 7,050 square feet of television studio,
and 1,783 square feet of office and administrative space for which the Company
pays a minimum monthly rent of $9,572.50, plus electric, for Year 1, and
$10,948.75, plus electric, for Years 2 - 5 of a five year lease. The SNT
facility is leased from LLB Realty, L.L.C./Keller, Dodds and Woodworth, Inc.
Additional square footage in the facility is available, and the Company
plans to expand to a total of 9,934
square feet for its use.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
The Company did not submit any matters to a vote of the security
holders during its fiscal year June 1,
1995 through May 31, 1996.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
a. Market Information
Interactive Technologies, Inc. common shares are traded on the National
Association of Securities Dealers Automated Quotation Systems (NASDAQ) SmallCap
Market under the symbol "ITNL". The Company's shares were traded on the NASDAQ
exchange beginning April 30, 1996. High and low quotes for the last quarter of
the Company's fiscal year when the shares began trading on NASDAQ were:
High Low
Fiscal Year 1996 4th Quarter 5 4 7/8
Prior to being traded on the NASDAQ exchange, the Company's common
shares were traded in the "over-the-counter" or "Bulletin Board" market. The
following quotes represent the quarterly high and low quotes available through
the quarter ending 12/29/95. These quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not represent actual
transactions: Fiscal Year 1996
High Low
Quarter Ending 3/29/96 4 3/4 3 7/8
Quarter Ending 12/29/95 4 2 1/2
Prior to the quarter ending 12/29/95 of the Company's FY 96, and during
the previous FY 95, to the best of the Company's knowledge, no trading occurred
in the Company's common stock.
b. Holders
As of August 5, 1996, there were approximately 941 record holders of
the Company's Common Stock.
c. Dividends
The Company has never paid any cash dividends on its Common Stock and
has no present intent to pay any cash dividends in the foreseeable future. The
declaration of cash dividends will depend on future earnings, if any, the
financial needs of the Company, and other pertinent factors. Further, the
declaration of dividends will be at the discretion of the Company's Board of
Directors.
Item 6. Management's Plan of Operation.
a. Plan of Operation
The Company had no significant revenues from operations over the
previous two fiscal years. It began generating revenue from operations at the
end of the development period for Rebate TV(TM) during the last quarter of FY
95, and at the same time began realizing revenues from SNT operations.
The Company's primary show, "Rebate TV" began to air for one half hour
twice daily, seven days a week April 15, 1996 at 6:30 and 9:00 p.m. on Paxson
Broadcasting's WIRB/Channel 56 serving the central Florida market, and continues
to air. The Company expects to receive revenues from these operations and from
its SNT operations over the coming year.
The Company acquired $1,040,800 in working capital during the past
fiscal year, through loans and private stock sales. The Company believes that it
can meet its cash requirements during the first quarter of the fiscal year but
expects to require additional funds over the next 12 months for the expansion
and addition of markets for its product and for operations. Although the Company
currently has no written commitments for additional funds, it believes that it
can raise additional cash required from private sources.
The Company continually accumulates data in the operation of its Rebate
TV(TM), and examines this data with regard to indicated changes in its
programming. The Company expects to continue research and development of its
products based upon the collection of this data.
Item 7. Financial Statements
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
By unanimous consent of the Board of Directors of the Company on
November 10, 1995, the Registrant engaged the accounting firm of Turner, Stone &
Company of Dallas, Texas as independent accountants for the Registrant for the
fiscal year beginning June 1, 1995, and voted to excuse the accounting firm of
Lumsden & McCormick from further service to the Company after the completion of
its work on the audit for the Registrant for the fiscal year ending May 31,
1995. During the previous two fiscal years ending May 31, 1995, there were no
disagreements with Lumsden & Company on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure or any
reportable events.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
ComplianceWith Section
16(a) of the Exchange Act.
a. Directors and Executive Officers.
The following table sets forth the names, ages and positions of the
directors and executive officers of the Company as of May 31, 1996. A summary of
the background and experience of each of these individuals is set forth after
the table.
The directors and executive officers are:
NAME AGE POSITION
Perry Douglas West 49 Chairman, Chief Executive Officer
Robert J. Poe 42 Chief Operating Officer
The Board of Directors currently consists of two Directors, each
holding office for a term of one year.
Perry Douglas West joined the Company in October 1995, and is
Chairman and Chief Executive Officer of
the Company. Mr. West co-
founded American Financial Network in July of l985. Headquartered in Dallas,
Texas, American Financial Network operated a national computerized mortgage loan
origination network. Mr. West served as Executive Vice President/Director and
General Counsel of this public company from 1985 to 1991. Mr. West has practiced
law in Florida since 1974, representing various business institutions in the
financial, computer, natural resources and general business industries and
international transactions. He was graduated with a Bachelor of Arts degree from
The Florida State University in l968 and with a Juris Doctorate degree from The
Florida State University, College of Law in l974.
Robert J. Poe joined the Company as Director of Program Development and
Director in November 1995 and is a veteran of the broadcast industry. Mr. Poe
founded a marketing, media and management consulting firm in 1993, and has been
involved in the genesis of numerous successful broadcasting and entertainment
undertakings, including the WMMO Radio Station in Orlando, Florida, and the
Orlando Magic Professional Basketball Team. He serves on the East Central
Florida Regional Planning Council as a gubernatorial appointee and he is on the
Board of Directors of the Florida Association of Broadcasters. Mr. Poe has
served as president of the National Association of State Radio Networks and
president of the Orlando Radio Broadcasters Association.
b. Significant Employees.
George C. Clark, Ph.D, joined the Company in November 1995 as Director
of Systems Development. He was previously a Senior Scientist in the Advanced
Technology Department in the Electronics Systems Sector of Harris Corporation,
headquartered in Melbourne, Florida from 1964 through 1994. During his tenure at
Harris, Dr. Clark conducted advanced research and development in antennas,
electronic communications systems, statistical communication theory, error
correction coding, computer-aided design of electronic circuits and systems,
object oriented programming methodologies, and modeling of transportation
systems. He also served as Director of the Advanced Technology Department at
Harris, co-authored a graduate level text book on error correction coding, spent
two years as a Visiting Scientist at the MIT Laboratory for Computer Science,
and taught many undergraduate courses in Electronic Engineering, Artificial
Intelligence and in Signal and Systems Theory. Dr. Clark holds a Bachelor of
Science degree in Electrical Engineering from the Massachusetts Institute of
Technology in 1959, a Masters Degree in Physics from the University of Miami in
1961 and a Ph.D. degree in Electrical Engineering from Purdue University in
1965.
Dr. Clark managed the development of the computer software and hardware
systems that form the infrastructure to the operations of Rebate TV(TM), and his
absence from the Company would have an initial adverse effect on operations.
Michael Hamilton joined the Company in April 1996 as Executive Vice
President, Production, in charge of all creative operations and new program
development for the Company. Mr. Hamilton is an entertainment industry veteran,
whose recent credits include developing a Movie of the Week for the ABC network,
a feature in conjunction with Jason Alexander's Daeson Productions, and
transactional programming for QVC. He also designed and directed such television
series as Wings, Murder She Wrote, The Twilight Zone and Magnum P.I., with
experience extending to commercial clients such as Donna Karan, Cadillac(TM) and
Coca-Cola(TM). His absence from the Company would have an initial adverse effect
on programming operations.
c. Family Relationships.
None.
Item 10. Executive Compensation.
Perry Douglas West, Chairman and Chief Executive Officer of the Company
has no employment agreement in force as of May 31, 1996, and receives no current
compensation. Mr. West has agreed to defer compensation and compensation issues
until a future date.
Robert J. Poe, Chief Operating Officer has an employment agreement
with the Company effective November
1, 1995, with an initial term of ten years. Mr. Poe's agreement calls for him
to receive a base salary of $12,500
per month for the first twelve calendar months of his contract. In addition he
is to receive 5% of the gross
profits from the operation of the Company's Rebate TV(TM) television
programming, as well as other programming
brought into the Company by Mr. Poe.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
a. Security Ownership of Certain Beneficial Owners.
The Company knows of no persons or groups being the beneficial owner of
more than 5% of the Company's Common Shares.
b. Security Ownership of Management.
The following table sets forth information with respect to the share
ownership of Common Stock, par value $0.01, of the Company by its officers and
directors, both individually and as a group, who are the beneficial owner of
more than 5% of the Company's Common Shares.
- - ----
(1) (2) (3) (4)
Title of Class Name Amount and Percent of
Address of Nature of Class3
Beneficial Beneficial
Owner1 Ownership2
- - ------------------------------------------------------------------------------
Common Perry Douglas West 5,700,000 48.54
1270 Orange Avenue
Suite A
Winter Park, FL 32789
All Directors and Officers 5,728,600 48.78
as a group
NOTES
1 Each person has sole voting and investment power with respect to the
shares indicated as owned beneficially by each person.
2 Except as other wise noted, all shares listed are owned both of
record and beneficially. 3 Based upon 11,742,044 shares of Common Stock
outstanding as of May 31, 1996.
c. Changes in Control.
Pursuant to an Asset Purchase Agreement ("Asset Purchase Agreement")
signed on October 20, 1995, among Interactive Technologies Corporation, Inc., a
Wyoming corporation ("Registrant"), Syneractive, Inc., a Florida corporation,
and Perry Douglas West, the Registrant purchased certain assets in exchange for
5,214,464 shares of the Registrant's common stock and agreed to purchase
additional assets for an additional 485,536 shares of the Registrant's common
stock.
Control of the registrant after this transaction was in the hands of
Perry Douglas West who previously owned approximately 47.82% of the outstanding
common stock and owned 50.04% of the outstanding common stock after the
completion of the acquisition of additional assets pursuant to the Asset
Purchase Agreement.
Prior to the transaction, no single shareholder held more than 10% of
the common stock. The directors and officers of the Registrant as a whole owned
l8.69% of the outstanding common stock of the Registrant prior to the
transaction.
Resolutions were delivered at closing electing Perry Douglas West as
Chairman of the Board of Directors and Chief Executive Officer of the
Registrant. At that time Morton J. Glickman resigned as Chairman and Director of
the Board of Directors.
Item 12. Certain Relationships and Related Transactions.
On October l8, l995 the Registrant entered into a Purchase Agreement
("Purchase Agreement") with Jayhead Investments, Ltd. for the sale of a certain
joint venture interest with CST Entertainment Imaging, Inc. in which the
Registrant had contributed its license to colorize black and white film and
videotape and other related features in certain European countries, the terms of
which are set forth in that certain license agreement, as amended, granted by
CST Entertainment Imaging, Inc. to Exergon, S.A., and subsequently assigned to
the Registrant and all proceeds due therefrom. This asset has been written off
of the Registrant's books and carries no value in the Registrant's financial
statements.
This Purchase Agreement provided for the exchange of this asset for the
satisfaction of $701,865 in debt owed by the Registrant to Jayhead Investment,
Ltd., a company which is controlled by a former Director and Officer of the
Company. This interest has been assigned subject to necessary third party
approval and the indebtedness forgiven.
On October 20, 1995, the Registrant executed the purchase of certain
asset pursuant to a Asset Purchase Agreement ("Asset Purchase Agreement") signed
on October 20, 1995 among Interactive Technologies Corporation, Inc., a Wyoming
corporation ("Registrant"), Syneractive, Inc., a Florida corporation and Perry
Douglas West, the Registrant purchased certain assets in exchange for 5,214,464
shares of the Registrant's common stock and has agreed to purchase additional
assets for an additional 485,536 shares of the Registrant's common stock.
The assets purchased consist primarily of all right title and interest
in and to a video program concept and design created for interactive television
known as "Rebate TV(TM)", certain engineering reports and data, contract
receivables and cash in the approximate amount of $50,000 plus equipment
deposits in the amount of $43,875.
The additional assets which the Registrant agreed to purchase upon the
approval of the transfer by the Federal Communications Commission include
Federal Communications Commission Radio Station Licenses for Interactive Video
and Data Services radio service in service areas 137 and 90. These licenses are
subject to amounts due over the period of the licenses (five years) to the
Federal Communications Commission of $540,000 for service area 137 and $232,000
for service area 90. In addition, the license for service area 90 is subject to
a contract agreement which gives a third party the right to purchase, subject to
the retention of an interest in the nature of a 10% royalty, up to 90% of this
license for $500,000. These assets also include the rights to a contract for the
purchase of certain radio station equipment for the license area 90. These are
assets and do not include any current operations. The Registrant has placed the
net value of the total of these assets at $5,700,000.
Perry Douglas West is now Chief Executive Officer, and Director of the
Company.
PART IV
Item 13. Exhibits and Reports on Form 8-K.
The information provided in Item 1(a) above, Business Development,
regarding the acquisition of television studios, post production facilities,
satellite links and remote production equipment located in Princeton, N.J., was
filed on Form 8K dated May 21, 1996, which is herein incorporated by reference.
The information provided in Item 11 (c) above, Change in Control, and
Item 12, Certain Relationships and Related Transactions, was filed on Form 8K
dated November 3, 1995, and amended on Form 8K/A dated December 12, 1995, which
is herein incorporated by reference.
The information provided in Item 8 above, Changes In and Disagreements
With Accountants on Accounting and Financial Disclosure, was filed on Form 8K
dated November 13, 1995, and amended on Form 8K/A dated November 28, 1995, which
is herein incorporated by reference.
EXHIBIT INDEX
Exhibit Page
3.0 Charter and By-Laws *
10.0 Material Contracts
10.1 ITC lease with The Network Group, Inc. for Melbourne, Florida
office and engineering space, dated October 25, 1996 (P)
10.2 ITC lease with Williams-Builder Partnership for Winter Park,
Florida office space, dated March 21, 1996 (P)
10.3 ITC Equipment Lease Agreement with Studiolink Corporation,
dated March 27, 1996 (P)
10.4 ITC Employment Agreement with Chief Operating Officer/Director
Bob Poe, dated November 1, 1995 (P)
10.5 Satellite Network Television lease with LLB Realty,
L.L.C./Keller, Dodds & Wentworth for Princeton, New Jersey
television studio and production facility, dated March 1996
(P)
21.0 Subsidiaries of the Registrant
21.1 Satellite Network Television Corporate Charter/By-Laws,
filed April 9, 1996 (P)
* This exhibit was previously filed as an exhibit to the Registrant's Form 10
filed January 14, 1992 and is herein incorporated by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Interactive Technologies Corporation, Inc.
by: _________________________________________
Perry Douglas West, Chief Executive Officer
by: _________________________________________
Joseph N. Dambro, Director of Finance
Dated: August ____, 1996
