UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Amendment No. 1 to Form 10-QSB)
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: May 1, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period _________________________to__________________________
Commission File Number: 0-25002
TELEHUBLINK CORPORATION
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(Exact Name of Small Business Issuer as Specified in Its Charter)
DELAWARE 59-3200879
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(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
24 NEW ENGLAND EXECUTIVE PARK
BURLINGTON, MA 01803
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(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number: (781) 229-1102
N/A
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(Former Name, Former Address, and Former Fiscal Year, if Changed Since
Last Report)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: At June 18, 1999, there were
17,873,442 shares outstanding of common stock, $.01 par value per share.
Transitional Small Business Disclosure Format (check one): [ ] Yes [X] No
<PAGE>
TELEHUBLINK CORPORATION
INDEX
FORM 10-QSB/A
(Amendment No. 1)
PART I. FINANCIAL INFORMATION PAGE
------------------------------ ----
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets May 1, 1999 (unaudited)
and January 30, 1999 ................................................. 3
Condensed Consolidated Statements of Operations for the Thirteen
Weeks Ended May 1, 1999 (unaudited)................................... 4
Condensed Consolidated Statements of Cash Flows for the Thirteen
Weeks Ended May 1, 1999 (unaudited)................................... 5
Notes to Condensed Consolidated Financial Statements .................... 6
Item 2. Management's Discussion and Analysis or Plan of Operation ....... 9
PART II. OTHER INFORMATION
---------------------------
Item 2. Change in Securities and Use of Proceeds ...................... 13
Item 4. Submission of Matters to a Vote of Security Holders ........... 13
Item 6. Exhibits and Reports on Form 8-K .............................. 14
SIGNATURES .............................................................. 15
* This amended Form 10-QSB is being filed to reflect the restatement of certain
previously reported financial information as more fully described in Note 5 of
Notes to Condensed Consolidated Financial Statements and certain portions of
Part I-Item 2-Management's Discussion and Analysis or Plan of Operation and
Exhibit 27-Financial Data Schedule have been amended to reflect the restatement.
The remaining information in this amended Form 10-QSB has not been updated to
reflect any changes in information that may have occurred subsequent to the date
of the reporting period to which the Form 10-QSB relates. For more recent
information regarding the Company and current developments, reference is made to
the Company's Form 10-KSB as filed on July 19, 2000.
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TELEHUBLINK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MAY 1, JANUARY 30,
ASSETS 1999 1999
(AS RESTATED, SEE NOTE 5)
------------------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,762 $ --
Accounts receivable 179,103 20,030
Prepaid expenses and other current assets 54,363 87,579
----------- -----------
Total current assets 236,228 107,609
PROPERTY AND EQUIPMENT, net 234,980 204,791
OTHER ASSETS 18,807 27,195
----------- -----------
Total assets $ 490,015 $ 339,595
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 136,805 $ 17,910
Accrued expenses 146,474 44,508
Accrued merger costs 365,000 --
Equipment Loan 210,346 202,866
----------- -----------
Total current liabilities 858,625 265,284
----------- -----------
Total liabilities 858,625 265,284
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock 178,734 130,114
Additional paid-in capital 1,568,753 167,419
Deferred compensation (109,000) --
Accumulated deficit (2,007,097) (223,222)
----------- -----------
Total stockholders' equity (deficit) (368,610) 74,311
----------- -----------
Total liabilities and stockholders' equity (deficit) $ 490,015 $ 339,595
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
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TELEHUBLINK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
MAY 1, 1999
(AS RESTATED, SEE NOTE 5)
-------------------------
<S> <C>
Sales $ 320,832
Cost of sales 202,149
------------
Gross profit 118,683
------------
Operating expenses:
Stock-based charges 1,745,190
Selling, general and administrative expenses 170,355
------------
Total operating expenses 1,915,545
------------
Operating loss (1,796,862)
Other income (expense):
Interest expense (1,399)
Interest and other income 14,386
------------
$ (1,783,875)
============
Basic and diluted net loss per share $ (0.10)
============
Weighted average common shares of common stock outstanding
used in computing basic and diluted net loss per share 17,631,219
============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
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TELEHUBLINK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
MAY 1, 1999
(AS RESTATED, SEE NOTE 5)
-------------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,783,875)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 10,886
Stock-based charges 1,745,190
Changes in operating assets and liabilities:
Accounts receivable (159,073)
Prepaid expenses and other current assets 27,325
Other assets 8,388
Accounts payable 123,538
Accrued expenses (100,237)
-----------
Net cash used in operating activities (127,858)
-----------
CASH FLOWS FROM INVESTING ACTIVITY:
Purchase of property and equipment (42,074)
-----------
Net cash used in investing activity (42,074)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 165,214
Proceeds from equipment loan 7,480
-----------
Net cash provided by financing activities 172,694
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,762
CASH AND CASH EQUIVALENTS, beginning of period --
-----------
CASH AND CASH EQUIVALENTS, end of period $ 2,762
===========
SUPPLEMENTAL DISCLOSURE INFORMATION:
Cash paid during the period for interest $ 1,399
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Net liabilities assumed on reverse merger with WAW (note 2) $ 569,451
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
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TELEHUBLINK CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MAY 1, 1999
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements of
Telehublink Corporation (the "Company") have been prepared in accordance
with the instructions to Form 10-QSB and do not include all of the
information and notes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
considered necessary for a fair presentation have been included. These
unaudited interim financial statements should be read in conjunction with
the Company's Annual Report on Form 10-KSB for the fiscal year ended
January 29, 2000 filed on July 19, 2000.
The unaudited consolidated condensed financial statements have not been
examined by independent accountants in accordance with generally accepted
auditing standards, but in the opinion of management, such financial
statements include all adjustments, consisting only of normal recurring
adjustments, necessary to summarize fairly the Company's financial
position and results of operations.
(2) MERGER WITH WHAT A WORLD
On February 4, 1999, What A World!, Inc. ("WAW"), a publicly-held "shell
company," acquired all the issued and outstanding capital stock of Tele
Hub Link Corporation ("TeleHub") (the "Company"), a privately-held
company organized under the laws of the Province of Ontario, Canada,
engaged in the business of providing teleservices. Pursuant to a Share
Purchase Agreement dated December 21, 1998, WAW acquired all the issued
and outstanding common stock of TeleHub in exchange for an aggregate of
13,011,339 shares of WAW common stock (or 3.9252318 shares of WAW's
common stock for each share of TeleHub common stock) and, as a result
thereof, TeleHub became a wholly owned subsidiary of WAW. In addition, in
connection with the TeleHub transaction, WAW amended its Certificate of
Incorporation in order to change its legal name to TeleHubLink
Corporation.
For accounting purposes, this transaction has been treated as a reverse
acquisition. TeleHub has been deemed the acquiring enterprise for
financial statement purposes, as it received a majority of the voting
interests in the combined enterprise. The SEC staff has taken the
position that a business combination between an operating enterprise and
a "shell company" in which the shell company is the issuer of securities
and the operating enterprise is determined to be the acquiring enterprise
for financial statement purposes, the transaction should be treated for
financial statement purposes as an issuance of securities by the
operating enterprise. Therefore, the tangible net liabilities of WAW at
the date of the transaction of approximately $207,288 have been recorded
at their fair value with an offset credit to paid-in capital and the
operations of WAW are reflected in the operations of the combined
enterprise from the date of acquisition. In addition, the 1999 financial
statements have been retroactively restated to reflect the number of
shares
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TeleHub received in the business combination. Costs related to this
transaction of approximately $362,163 have been charged directly to
paid-in capital.
Two directors and principal shareholders of WAW prior to the acquisition
were also shareholders of TeleHub owning, directly and indirectly,
approximately 13% of the outstanding common shares.
(3) STOCK OFFERING
On February 4, 1999, the Company amended its Certificate of Incorporation
to increase the number of authorized shares of its common stock to
50,000,000.
On February 5, 1999, the Company consummated a private placement
financing arrangement pursuant to which it issued 2,593,979 shares of its
common stock at between $.06 and $.09 per share for an aggregate of
$165,214. Proceeds of the financing were used to fund working capital
requirements of the Company and for general corporate purposes. The
Company relied upon the exception provided by Section 4 (2) of the
Securities Act of 1933 in connection with the issuance and sale of its
common stock. In connection with this transaction, the Company recorded a
stock-based compensation charge of $1,728,390 for the difference between
the fair value of the Company's common stock issued and the cash proceeds
received.
(4) EMPLOYMENT CONTRACT
In February 1999, the Company entered into an employment agreement with
its President and Chief Executive Officer. The employment agreement
includes severance or change in control provisions that provide for
compensation of the greater of two-years base salary or $500,000. Under
the employment agreement, the President and Chief Executive Officer was
granted options to acquire 500,000 shares of the Company's common stock
of which 50% vested immediately and the remaining 50% vest upon
completion of the first full year of employment. The employment agreement
also provides for accelerated vesting of stock options in the event the
Company's common stock meets certain market performance levels.
(5) RESTATEMENT
The consolidated financial statements for the thirteen weeks ended May 1,
1999 and May 2, 1998 have been restated to reflect various adjustments to
the previously reported financial statements. The following table sets
forth the impact on the consolidated statements of operations and
consolidated balance sheet:
7
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<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTEEN WEEKS ENDED
MAY 1, 1999 MAY 2, 1998
----------------------------- ------------------------
AMOUNT AMOUNT
PREVIOUSLY AS RESTATED PREVIOUSLY AS RESTATED
REPORTED REPORTED
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Statement of Operations:
Revenue $ 337,165 320,832 -- --
Cost of revenue 202,149 202,149 -- --
Gross profit 118,683 118,683 -- --
Stock-based charges -- 1,745,190 -- --
Selling, general and administrative 165,955 170,355 17,385 --
expenses
Other income (expense) 12,987 12,987 1,005 --
Net loss (34,285) (1,783,875) (16,380) --
Basic and diluted net loss per share -- (.10) (.01) --
Balance Sheet:
Cash and cash equivalents 2,762 2,762
Total assets 570,015 490,015
Accumulated deficit (277,470) (2,007,097)
Total stockholder's equity (deficit) 75,902 (368,610)
</TABLE>
The amounts shown as previously reported for the thirteen weeks ended May
1, 1999 and May 2, 1998 are as reported in the Company's previously filed
Form 10-QSB. The previously filed 10-QSB for the quarter ended May 1,
1999 compared the current operating results of the Company to the prior
operating results of WAW. As discussed in note 2, and as a result of the
reverse merger, TeleHub has been deemed the acquiring enterprise,
therefore for financial reporting purposes; the first quarter results of
fiscal 1998 (May 2, 1998) should have been TeleHub's operating results
and not WAW's operating results. Because TeleHub began its operations on
July 31, 1998, there are no operating results to present for the first
quarter ended May 2, 1998. Adjustments to the consolidated financial
statements for the quarter ended May 1, 1999 reflect
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<PAGE>
fourth quarter charges recorded by the Company and are reflected in the
Company's fiscal 2000 Form 10-KSB filed on July 19, 2000. A summary of
the significant adjustments that impacted the previously reported first
quarter results is as follows:
o To record a non-cash stock-based compensation charge of $1,728,390,
for the difference between the fair value of the Company's common
stock and the proceeds received in connection with the Company's
private placement of common stock in February 1999.
o To record non-cash stock-based compensation charges of $16,800 in
connection with the granting of stock option to employees and
consultants.
o To write-off capitalized costs of $80,000 in connection with the
merger with WAW directly to additional paid-in-capital (see note 2).
o To record a liability for vacation time of $4,400 earned by
employees.
(6) STOCK OPTIONS
In February 1999, the Company granted to Mr. Patrick Thomas, Chief
Operating Officer and a director of the Company, time-based options to
acquire an aggregate of 150,000 shares of common stock and
performance-based options to acquire an aggregate of 50,000 shares of
common stock, and granted to Mr. John DeLuca, a Vice President and
director of the Company, time-based options to acquire an aggregate of
250,000 shares of Common Stock and performance-based options to acquire
an aggregate of 50,000 shares of common stock. All of such options are
exercisable at a price of $.06 per share. The time-based options vest in
equal installments on each of the first three anniversaries of the date
of grant and the performance-based options are subject to vesting based
on the Company's having met certain performance criteria.
(7) SUBSEQUENT EVENTS
On May 13, 1999, the Company entered into a letter of intent to acquire
all of the outstanding shares of wirelessEncryption.com, a privately-held
company which is currently in the process of developing advanced
ultra-secure signal processing technology for wireless and Internet
communications as well as other data transmissions, and on May 20, 1999,
the Company entered into a letter of intent to acquire Web Trafic Inc., a
privately held company that provides Internet e-commerce opportunities to
small and medium sized businesses. There can be no assurance that either
acquisition will be completed or, if completed, that either acquisition
would generate meaningful revenues or profits for the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
TeleHubLink Corporation (formerly known as What A World!, Inc.)(the
"Company") was incorporated under the laws of the State of Delaware in July
1993. Until May 1997, the Company operated as a mall-based specialty retailer of
a wide assortment of products, which targeted customers having an active
interest in nature, the environment, education, wildlife, the outdoors and
science. In May 1997, the Company sold substantially all of its assets to
Natural Wonders, Inc. for cash in the amount of $517,795 plus the assumption by
Natural Wonders, Inc. of specified liabilities (the "1997 Sale"). The
completion of the 1997
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<PAGE>
Sale terminated the Company's specialty retail operations. For the period May
1997 through February 3, 1999, the Company had no operating business and sought
to serve as a vehicle to effect an acquisition, whether by merger, exchange of
capital stock, acquisition of assets or other similar business combination. On
February 4, 1999, the Company acquired all the issued and outstanding capital
stock of Tele Hub Link Corporation ("TeleHub"), a privately held company
organized under the laws of the Province of Ontario, Canada, that is engaged in
the business of providing teleservices. Pursuant to a Share Purchase Agreement
dated as of December 21, 1998 (as amended, the "Share Purchase Agreement")
between the Company, TeleHub and the shareholders of TeleHub (the "TeleHub
Shareholders"), the Company acquired from the TeleHub Shareholders all of the
issued and outstanding capital stock of TeleHub in exchange for an aggregate of
13,011,339 shares (the "Shares") of common stock, par value $.01 per share
("Common Stock"), of the Company (or 3.9252318 shares of the Company's Common
Stock for each share of TeleHub common stock) and, as a result thereof, TeleHub
became a wholly owned subsidiary of the Company (the "TeleHub Transaction"). In
addition, in connection with the TeleHub Transaction, the Company amended its
Certificate of Incorporation in order to change its name from What A World!,
Inc. to TeleHubLink Corporation. As a result of the 1997 Sale and the TeleHub
Transaction, the Company currently operates as a holding company, the principal
asset of which is its 100% ownership interest in TeleHub. Accordingly, the
business of the Company is currently conducted primarily through TeleHub.
PLAN OF OPERATION
Since the consummation of the TeleHub Transaction, the Company, through its
wholly-owned subsidiary TeleHub, has been engaged in the business of providing
call center teleservices, including both inbound and outbound teleservices. The
Company has not generated any meaningful revenues since the consummation of the
TeleHub Transaction, and although the Company currently anticipates that in the
second quarter of fiscal 1999 it may recognize limited profits for the first
time since the 1997 Sale, there can be no assurance of such or that such profit,
if any, would be significant.
The Company is seeking to continue the development of its multi-service
call center "HUB" concept, pursuant to which the Company would act as a central
focus for businesses to outsource typical non-core functions and capitalize on
the network to be established by the Company. In this connection, the Company
offers or proposes to offer the following services: providing call center
teleservices, including inbound and outbound call center activities in
connection with sales, marketing, customer support and product support; selling
local and long distance telecom services; and selling certain cellular and PCS
telephone services. In addition, the Company is also seeking to expand its
operations by servicing the Internet market, and are in the early stages of
establishing a structure to address the emerging Internet "e-commerce" market.
In this connection, TeleHub has formed a new Internet division, which is engaged
in selling client advertisements to Internet malls, facilitating the creation of
web sites for its clients and providing e-commerce fulfillment services, and is
currently in discussions regarding possible acquisitions of certain
Internet-related businesses. On May 13, 1999, the Company entered into a letter
of intent to acquire all of the outstanding shares of wirelessEncryption.com, a
privately-held company, which is currently in the process of developing advanced
ultra-secure signal processing technology for wireless and Internet
communications as well as other data transmissions, and on May 20, 1999, the
Company entered into a letter of intent to acquire Web Traffic Inc., a privately
held company that provides Internet e-commerce opportunities to small and medium
sized businesses. There can be no assurance that either such acquisition will be
completed or, if completed, that either acquisition would generate meaningful
revenues or profits for the Company. In addition, in the event the Company
completes either or both of such acquisitions, the Company will be required to
obtain additional financing in order to fund the development and operational
costs of the companies so acquired. There can also be no assurance that the
Company will be successful in implementing its "HUB" concept or developing its
teleservices operations or Internet-related businesses.
The Company's long-term strategy is to provide comprehensive
telecommunication-based solutions to facilitate its clients' marketing, sales
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and other business objectives. Through relationships with clients and strategic
alliances, and its combination of proposed teleservices activities, the Company
intends to provide its clients with a multi-service call center or "HUB" that
will link clients with their ultimate customers and other organizations across
various complementary industries. In addition, as part of this strategy, the
Company will also seek to introduce its clients to the emerging "e-commerce"
market and to thereby expand its business by providing various Internet services
to its clients.
The Company's proposed plan of operation and prospects will be largely
dependent on the Company's ability to successfully establish and equip
additional call centers on a timely and cost effective basis; hire and retain
skilled technical, marketing and other personnel; successfully expand into the
Internet market and attract and retain significant numbers of clients.
The following discussion relates to the Company for the period ended May 1,
1999 and accordingly reflects the results of operations or activities of
TeleHub, which became a wholly owned subsidiary of the Company upon consummation
of the TeleHub Transaction on February 4, 1999.
RESULTS OF OPERATIONS (Restated)
As discussed in note 2 to the condensed consolidated financial statements,
as a result of the reverse merger between WAW and TeleHub, TeleHub has been
deemed the acquiring enterprise for financial reporting purposes. Because
TeleHub began its operations on July 31, 1998, there are no operating results to
present for the previous fiscal quarter ended May 2, 1998.
THIRTEEN WEEKS ENDED MAY 1, 1999
Net sales for the thirteen weeks ended May 1, 1999 (the "First Quarter of
Fiscal 2000") increased by approximately $320,832 from zero solely because the
Company was not operating during the comparable time period in 1998. The sales
were generated from the Canadian call center business.
Gross profit for the First Quarter of Fiscal 2000 was $118,683 or 37.0% of
sales, as compared with $0 for the First Quarter of Fiscal 1999. The increase is
solely because the Company was not operating during the comparable period fiscal
in 1999.
Stock-based charges for the First Quarter of Fiscal 2000 were $1,745,190.
These non-cash charges were the result of the issuance of the Company's common
stock and stock options at below fair market value. In February 1999, the
Company recorded a stock-based compensation charge of approximately $1.7 million
relating to the sale of its common stock. The non-cash charge reflects the
difference between the price paid and the market value of the stock. The Company
also recorded approximately $16,000 in stock-based compensation charges relating
to stock option grants to certain employees and outside third parties during the
quarter.
Selling, general and administrative expenses ("SG&A") increased to
approximately $170,355 in the First Quarter of Fiscal 2000 from zero because the
Company was not operating during the comparable period time period in fiscal
1999. The primary components of SG&A are rent, salaries (including commissions
and fringe benefits), consulting fees, depreciation, travel and promotion, and
corporate overhead expenses (including primarily professional fees, insurance
and administrative salaries).
No provision for income taxes has been recorded for the First Quarter
of Fiscal 2000 as the Company has incurred net operating losses for tax
purposes. The Company has established a full valuation allowance against its
deferred tax assets because we believe it is more likely than not the tax
benefits may not be realized under the criteria established by SFAS. No. 109.
11
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LIQUIDITY AND CAPITAL RESOURCES (Restated)
The Company had working capital deficits of approximately $(622,397) and
$(157,675) at May 1, 1999 and January 30, 1999, respectively. Since the TeleHub
Transaction, the Company's primary ongoing capital requirements have been and
are anticipated to be for funding its operations and exploring and developing
opportunities in the call center teleservices industry and in expanding its
business into servicing the Internet market.
In February 1999, the Company consummated a private placement pursuant to
which it issued 2,593,979 shares of Common Stock and received proceeds of
$165,214. The proceeds were used primarily for working capital and continued
expansion of the Company's operations, including the acquisition of 30
additional workstations and the hiring of additional employees. The Company is
not presently generating enough cash flow to support its current corporate
overhead expenses, and is currently seeking additional financing to fund such
expenses, although there can be no assurance that such financing will be
obtained. If the Company's cash flow proves to be insufficient to fund
operations and the Company is not able to obtain additional financing, the cash
available to the Company would not satisfy its contemplated cash requirements
for exploring and developing future opportunities in the call center industry.
In that event, the Company would be required to revise its plans, including
making significant reductions in operating costs.
As described above, the Company is currently seeking additional financing,
and the Company anticipates that it will continue to seek additional financing
from several sources, including private placements of debt and/or equity
securities, in order to fund its business expansion plans, including funding
acquisition opportunities which may arise, and to provide short term working
capital. There can be no assurance that additional financing will be available
to the Company on commercially reasonable terms, or at all. Any inability to
obtain additional financing could have a materially adverse effect on the
Company, including possibly requiring the Company to significantly curtail, and
possibly causing the Company to cease, its operations. In addition, any equity
financing may involve substantial dilution to the interests of the Company's
then existing stockholders. Further, there can be no assurance that the Company
will achieve profitability or positive cash flow.
During the First Quarter of Fiscal 2000, the Company did not maintain any
lines of credit or cash borrowings to finance its capital requirements, except
for an equipment loan.
FORWARD-LOOKING STATEMENTS
Certain statements in the foregoing discussion of financial condition and
the results of operations, or elsewhere in this document, represent
"forward-looking" statements as defined in the Private Securities Litigation
Reform Act of 1996. Such statements involve matters that are subject to risks
and uncertainties, as a result of which actual future results or events may
differ materially depending on a variety of factors.
The Company's future operations are subject to various risk factors,
including the following: the limited funds currently available to the Company
may not be adequate for the Company to pursue its business objectives, and there
is no assurance funds will be available from any source and, if not available,
the Company will be required to limit its operations to those that can be
financed from existing funds; TeleHub has a limited operating history and there
can be no assurance that any of its future activities will be profitable; as a
holding company, the Company's success will depend on the operations, financial
condition and management of TeleHub and any other companies which the Company
may acquire, and in the event the Company does not have the resources or is
otherwise unable to diversify its operation into a number of areas, the Company
may become subject to economic fluctuations within a particular business or
industry and thereby increase the risks associated with its operations; TeleHub
may be unable to successfully complete acquisitions of assets or complementary
companies which are necessary to expand its business, and may be unable to
12
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integrate into its operations any such businesses or assets acquired by it;
TeleHub is a start-up company and, as such, may become subject to the problems,
expenses, difficulties, complications and delays that are frequently encountered
by a company establishing a new business; TeleHub may be unable to secure
teleservices contracts with clients or generate revenues under any such
contracts it does secure; TeleHub may be unable to successfully develop and
utilize its acquired infrastructure and develop databases to perform
teleservices for its clients and may be unable to successfully implement
marketing and sales methods for its services or expand into new areas, including
Internet and "e-commerce" related businesses; TeleHub may be unable to acquire
and implement quality telecommunications and computer technology and end user
database and software products necessary for its operations; TeleHub may be
unable to respond to changing technological developments and acquire and
implement new equipment and systems to meet changing customer needs on a timely
and cost-effective basis; TeleHub may be unable to adequately ensure that its
operations will not be adversly impacted by the Year 2000 Issue; TeleHub's
inability to obtain adequate local or long distance telephone service, or any
interruption in such service or rate increases relating thereto, could
materially adversely affect TeleHub's business, results of operations and
financial condition; TeleHub may not be able to procure, hire and train on a
timely basis a sufficient labor force of qualified employees or independent
contractors in connection with an increase, if any, in the volume of its
teleservices business; TeleHub's failure to retain the service of its key
employees or its failure to retain additional qualified management personnel to
support its planned growth could have a material adverse effect on TeleHub; the
teleservices industry is highly competitive and is characterized by low barriers
to entry and rapid growth, and TeleHub may not be able to compete effectively
against its current competitors or future competitors, many of whom may be
substantially larger and better capitalized than TeleHub; and any changes to
existing Canadian or U.S. federal, provincial or state laws or regulations
governing TeleHub's business, or any additional laws or regulations, could limit
TeleHub's current or future activities or could significantly increase TeleHub's
cost of compliance.
UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems that use certain dates in 1999 to represent something other than a date.
The effects of the Year 2000 Issue may be experienced before, on, or after
January 1, 2000, and, if not addressed, the impact on operations and financial
reporting may range from minor errors to significant systems failure which could
affect an entity's ability to conduct normal business operations. The Company
recognizes the need to ensure that its operations will not be adversely impacted
by software failures caused by the advent of the Year 2000. While the Company
intends to obtain assurance from its program suppliers and independently assess
acquired computer programs regarding Year 2000 Issue computer risks, the systems
on which the Company relies may be adversely impacted by software failures
caused by the advent of the Year 2000. It is not possible to be certain that all
aspects of the Year 2000 Issue affecting the Company, including those related to
the efforts of customers, suppliers, or other third parties, will be fully
resolved.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In February 1999, the Registrant consummated a financing arrangement
pursuant to which it issued 2,593,979 shares of Common Stock for an aggregate of
$165,214. Proceeds of the financing were used to fund working capital
requirements of the Registrant and for general corporate purposes. The
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Registrant relied upon the exception provided by Section 4(2) of the Securities
Act of 1933 in connection with the issuance and sale of such shares.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a Special Meeting of Stockholders duly held on February 4, 1999, the
Company proposed, and the shareholders approved, (i) the Share Purchase
Agreement between the Company, TeleHub, and the shareholders of TeleHub and the
TeleHub Transaction contemplated thereby and (ii) the amendment of the Company's
Certificate of Incorporation to increase the number of shares of the Company's
authorized Common Stock to 50,000,000 shares and to change the name of the
Company from What A World!, Inc. to TeleHubLink Corporation. Each of the
foregoing proposals was approved by the affirmative vote of shareholders holding
1,203,243 of the 2,118,125 share outstanding on the record date for such Special
Meeting. No shareholders voted against the proposals, and there were no
abstentions.
In addition, Stanley Young, Bruce W. Young, David B. Cornstein, Patrick
Thomas, and John DeLuca were elected directors of the Company to serve until the
next annual meeting of stockholders and until their successors are elected and
qualified. At the meeting, votes were cast as follows:
NAME VOTES FOR VOTES WITHHELD
------------------ --------- --------------
Stanley Young 1,203,243 -0-
Bruce W. Young 1,203,243 -0-
David B. Cornstein 1,203,243 -0-
Patrick Thomas 1,203,243 -0-
John DeLuca 1,203,243 -0-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
11 Statement re Computation of Per Share Earnings (not
required because the relevant computations can be
clearly determined from material contained in the
financial statements included herein).
27 Financial Data Schedule (For SEC Use Only)
(b) Reports on Form 8-K:
The Company filed with the Securities and Exchange
Commission on February 19, 1999 a Current Report on Form
8-K and filed on April 20, 1999 a Current Report on Form
8-K/A, both regarding the consummation of the
acquisition by the Company of the TeleHub Transaction.
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TeleHubLink Corporation.
Date: July 24, 2000 By: /s/ BRUCE W. YOUNG
------------------------
Bruce W. Young
President
Date: July 24, 2000 By: /s/ DOUGLAS MILLER
------------------------
Douglas Miller
Vice President Finance
(Principal Financial and
Accounting Officer)
