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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
WorldWide Data, Inc.
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(Name of Small Business Issuer in its Charter)
Delaware 98-0185548
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
36 Toronto Street, Suite 250
Toronto, Ontario M5C 2C5
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (416) 304-0224
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class to be registered
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Securities to be registered under Section 12(g) of the Act:
Common Stock
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(Title of Class)
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(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Business.
(a) Business Development.
We were incorporated in Delaware on April 9, 1995. In February 1998,
we acquired all of the outstanding equity securities of WorldWide Online Corp.,
an Internet service provider located in Toronto and a company organized under
the laws of the Province of Ontario. Through our wholly-owned subsidiary
Worldwide Online, we provide individuals and businesses an array of e-business
solutions and services that enable enterprises to capitalize on the power of the
Internet to reach and support customers and markets.
(b) Business of Issuer.
Industry/Market Overview
Businesses today are using the Internet to create new revenue
opportunities by enhancing their interactions with new and existing customers.
Businesses are also using the Internet to increase efficiency in their
operations through improved communications, both internally and with suppliers
and other business partners. This emerging business use of the Internet
encompasses both business-to-business and business-to-consumer communications
and transactions.
The projected growth of these markets over the next five years is
dramatic, particularly in business-to-business e-commerce. Forrester Research,
an independent research firm, projects that the market for business-to-business
e-commerce will grow from $43 billion in 1998 to $1.3 trillion in 2003. In
comparison, Forrester Research projects that the market for business-to-consumer
e-commerce will grow from $8 billion to $108 billion over the same period. In
order to capitalize fully on the new opportunities presented by the Internet,
businesses demand Internet-based applications that process transactions and
deliver information far more effectively than static web pages.
The extensive reach of the Internet can enable growing enterprises to
compete effectively with larger competitors. However, growing enterprises face
significant challenges in their efforts to capitalize on the opportunities that
the Internet offers, including:
- The need to develop a comprehensive strategic understanding of how
Internet technologies can help a growing enterprise create an e-
business;
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- The need to implement and stay abreast of new and rapidly changing
technologies, frequently without the benefit of a substantial internal
information technology staff;
- Significant integration and interoperability issues caused by the
patchwork of legacy systems that businesses often implemented without
a focused information technology strategy;
- Greater budgetary constraints than large enterprises, making purchase
price, total cost of ownership and technological obsolescence key
issues; and
- The need to maintain significant technological infrastructure and to
support e-business applications.
We believe that the needs of small and growing enterprises will make
them a significant factor in the overall market for Internet services.
International Data Corporation, an independent research firm, defines Internet
services as the consulting, design, systems integration, support, management and
outsourcing services associated with the development, deployment and management
of Internet sites. International Data Corporation expects the market for these
services, which includes both growing and all other enterprises, to grow at a
five year compounded annual growth rate of 59% from $7.8 billion in 1998 to
$78.5 billion in 2003.
Large companies which provide services to assist businesses in using
information technology, including the Internet, have primarily focused their
service offerings on large enterprises, such as Fortune 500 companies, while
largely ignored small or growing enterprises and their unique needs. These
traditional service providers generally operate by deploying large numbers of
personnel to the client's site to conduct lengthy studies before proposing a
solution. We believe that this approach does not yield effective solutions
within the time and budgetary constraints of growing enterprises.
Small or growing enterprises need to get to market very quickly and
often face significant obstacles in capitalizing on the opportunities that the
Internet provides because of the technological complexity, cost of
implementation and support and scarcity of qualified professionals.
Accordingly, they increasingly demand a single source provider of strategy,
systems integration, hosting and support that is focused on their specific
needs.
The Worldwide Data Solution
We have specifically tailored our service offerings for small or
growing enterprises seeking rapid delivery of cost-effective, high value-added,
comprehensive solutions for their e-business initiatives. Our services consist
of (i) e-Business
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Consulting, (ii) Internet Solutions, (iii) Application Hosting, (iv) Providing
Internet Service and (v) Customer Support. By offering a seamless integration of
these services, we believe that we are a full service provider of e-business
solutions for small or growing enterprises. We enable our clients to overcome
the obstacles described above by combining high quality cost effective e-
business services with application hosting and Internet access to deliver
sophisticated e-business solutions and services that otherwise might be
unavailable to them.
From our inception in 1995 through 1998, our operating activities
primarily consisted of providing Internet access to individuals and small and
medium size businesses. Since 1998, however, the focus of our business and the
significant portion of our revenues has been derived from our e-Business
Consulting, Internet Solutions, Application Hosting and Customer Support
services.
Our services enable us to develop, build and maintain e-commerce
websites for our clients, and create revenue-generating programs for our clients
that attract consumers to their respective sites. In addition, we complement
these offerings with a call center and related services that provide customer
service and support.
Target Market
Our plan is to focus our service offerings on the needs of small and
medium-sized businesses. We believe that these businesses are becoming
increasingly reliant on Internet access to significantly enhance communications
with other offices, employees, customers and suppliers. We also believe that
the Internet enables such businesses to reduce operating costs, access valuable
information and reach new markets. As a result, we believe that small and
medium-sized businesses increasingly are utilizing the Internet for crucial
business needs such as sales, customer service and project coordination.
Internet use by this market is expected to grow substantially from its current
low level. Small and medium sized business customers are also increasingly
seeking a variety of advanced products and services to take full advantage of
the Internet and allow them to compete with larger corporations cost-
effectively.
PRINCIPAL SERVICES
e-Business Consulting
We advise our customers on the use of e-business solutions to reach
and support customers and markets. The goal of these solutions is typically the
achievement of a qualifiable, sustainable competitive advantage within a short
time frame. Our strategy services include analyzing the client's market,
business processes and existing technology infrastructure, evaluating both
packaged and custom alternative solutions and formulating recommendations for a
solution or strategy. We provide a road map that our
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client can implement immediately, as opposed to the type of high level advice
that requires additional strategy planning prior to being implementable.
Internet Solutions
We develop and implement e-business applications for high transaction
volume revenue generation activities. We both develop custom applications and
tailor packaged applications. We design our e-business applications to be
flexible and easily scalable. Clients require flexibility so that they can
easily integrate our solutions with their existing systems, upgrade solutions
for technological changes and respond to developments in how business is
conducted on the Internet. Scalability is critical to our clients because they
often experience very significant increases in transaction volumes within a
short time period.
Application Hosting
We host a variety of custom and package applications, including
customer relationship management applications, database applications, corporate
Web sites and complex transaction intensive e-business applications. Our
application hosting service enables clients to rent applications through payment
of a monthly service fee instead of incurring a large one-time, initial
investment. Our application hosting operations team provides active monitoring
and application level support for Internet-based applications 15 hours a day,
Monday through Friday and 8 hours a day on Saturdays and Sundays. These support
capabilities often reduce the client's need for a large information technology
staff.
Our service delivery infrastructure is designed to provide our clients
with a fast response time, reliability, scalability and security. Our
application hosting infrastructure is located in Toronto, Ontario. We currently
provide application hosting services to approximately 100 small to medium
companies.
Internet Service Provider
We provide subscribers with direct access to the Internet. As of
December 1999, we had approximately 2000 subscribers. Our business model is to
create high user density in greater Toronto, Ontario. Although our Internet
Service Provider division is no longer the division from which the Company
derives substantial revenue or the division for which the Company devotes
substantial resources, it complements the Company's Internet Solutions and e-
Business Consulting divisions. Our most popular service package provides
unlimited dial-up Internet access to individuals and businesses for $25.00 and
$50.00 a month, respectively. We also offer value-added services for additional
fees, including multiple e-mail boxes, personalized e-mail addresses and
personal Web sites. We provide subscribers with a full range of services
including
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dedicated high speed access (such as T-1, xDSL, ATM and ISDN service), web
hosting, server co-location and domain name registration and hosting.
Customer Support
Outstanding service and customer care are crucial to subscriber
acquisition, cost containment and retention in our industry. Our goal is to
attain customer satisfaction by providing superior systems and network
performance along with high quality service and technical support. Our Customer
Support department, which is open 15 hours-a-day, Monday through Friday and 8
hours-a-day on Saturday and Sunday, is structured to provide prompt, effective
and friendly support. We plan to implement 24 hour/7 day a week customer
support in the first quarter of 2000. All customer support representatives have
on-line capabilities to provide customer and technical support and order entry
to provide solutions for both in-house products as well as clients' web-based
applications.
Sales and Marketing
We offer our products and services through resellers and indirect
sales channels. We do not employ a direct sales force to target customers, and
we currently have no plans to hire a direct sales force. We employ reseller and
referral programs and enter into joint marketing agreements to market and
distribute our services. Resellers are persons or entities not directly
employed or affiliated with us who agree to market and sell our products. Our
reseller program offers resellers services-in-kind or commissions for each new
customer they bring to us. We have established reseller arrangements with
several Internet-related companies. Referral partners will receive a fee or
some other form of compensation for referring customers or customer leads to us.
Our referral partners will include organizations such as local computer
companies, information technology consultants, web page designers, advertising
agencies or other entities that do not generally sell Internet services
directly.
In addition, we have in the past periodically used direct mail and
newspaper and billboard advertising to market our services and products.
Clients
We focus our marketing and sales activities on small and growing
enterprises. The use and functionality of our services are applicable to a
variety of industries. Therefore, we provide our services to a number of types
of businesses. Our clients include, but are not limited to, high technology
firms, insurance brokers, traditional product/services firms, law firms and a
municipality.
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COMPETITION
The market for Internet access and related services is extremely
competitive. We face a high level of competition in all of our service areas.
Our competitors include consulting companies, Internet professional service
firms, systems integration firms, application hosting firms, web-hosting firms
and Internet service providers. Barriers to entry in most of our service areas
are low. Therefore, we expect additional competitors to develop.
We also believe that new competitors will continue to enter the
Internet access market. These new competitors may also include large computer
hardware and software companies, media and telecommunications entities and
companies that provide direct service to residential customers, including cable
television operators, wireless communication companies, local and long-distance
telephone companies and electric utility companies.
Almost all of our competitors are larger than us and have
substantially greater financial, technical, and operating resources than we do.
We cannot assure you of our survival in this intensely competitive environment.
We will need to distinguish ourselves by our technical knowledge, our
responsiveness to our target customers, our ability to market and sell
customized combinations of services within our markets and our capacity to offer
diverse Internet services.
PATENTS, TRADEMARKS AND SERVICEMARKS.
We do not currently hold patents, copyright marks or servicemarks on
any of our products, however, we may apply for such intellectual property right
protections if future conditions indicate that this would be in our best
interests.
GOVERNMENT APPROVAL AND REGULATIONS.
We are subject to certain federal, state and provincial laws and
regulations that are applicable to certain activities on the Internet.
Legislative and regulatory proposals under consideration by federal, state,
provincial local and foreign governmental organizations concern various aspects
of the Internet, including, but not limited to, online content, user privacy,
taxation, access charges, liability for third-party activities and jurisdiction.
Such government regulation may place our activities under increased regulation,
increase our cost of doing business, decrease the growth in Internet use and
thereby decrease the demand for our services or otherwise have a material
adverse effect on our business, results of operations and financial condition.
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COST AND EFFECTS OF COMPLIANCE WITH
ENVIRONMENTAL COMPLIANCE.
Our business is not subject to any specific federal, state or local
environmental laws, and, consequently, we have neither incurred any costs nor
has it been affected adversely or otherwise by any existing environmental laws.
EMPLOYEES.
We employ fifteen full-time individuals and have retained two
independent contractors on a temporary project-by-project basis. We are not a
party to any collective bargaining agreements, and we have never experienced a
work stoppage. We consider our relations with our employees to be good. We
believe that our success will in large part depend upon our ability to recruit
and retain qualified professional with a high degree of information technology
skills and experience needed to provide our sophisticated services.
(c) Reports to Security Holders.
By virtue of us filing this Registration Statement on Form 10-SB, we
are subject to the informational requirements of the Securities Exchange Act of
1934, as amended, and in accordance therewith file reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). This Form 10-SB, proxy statements and other information, as
amended, may be inspected without charge at the Securities and Exchange
Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C.
20549 or on the Commission's website at http://www.sec.gov. The public may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
We are a Delaware corporation and incorporated in 1995. In 1998, we
acquired all of the Common Stock of WorldWide Online Corp., an Internet Service
provider located in Toronto, Ontario and organized under the laws of the
Province of Ontario.
We are a full service provider of e-business solutions that allow
growing enterprises to capitalize on the power of the Internet to reach and
support customers and markets. Our five divisions consist of e-Business
Consulting, Internet solutions, providing Internet Service and Customer Support
and Application Hosting. From our inception in 1992 through 1998, our operating
activities primarily consisted of providing Internet access to individuals and
small business in our capacity as an Internet Service Provider (ISP). Prior to
1998, we derived no or limited revenues from application
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hosting, e-Business consulting or Internet Solution services. We believe, ho
wever, that application hosting, e-Business Consulting and Internet Solutions
Services will account for a significantly greater portion of our total revenues
in the future.
Historically, we have offered our services to clients primarily under
time and materials contracts. For these projects, we recognize revenues based
on the number of hours worked by consultants at a rate per hour agreed upon with
our clients. We have also performed some services under fixed-fee contracts.
We recognize revenues from fixed-fee contracts on a percentage of completion
method based on project hours worked.
We expect that the portion of our revenues attributable to fixed-fee
contracts will increase for 1999 and in the future.
Due to our use of fixed-fee contracts, our operating results may be
affected adversely by inaccurate estimates of costs required to complete
projects. Therefore, we employ a series of project review processes designed to
help provide accurate project cost and completion estimates, including a
detailed review at the end of each specified reporting period to determine
project percentage of completion to date.
We generally derive our initial pricing for a contract from our
internal cost and fixed-fee pricing model. This model helps our professionals
estimate pricing based on the scope of work and materials required. The model
also takes into account project complexity and technical risks.
We seek to mitigate our risks under fixed-fee contracts by providing
fixed-fee quotes for discrete phases of each project. Using this approach, we
are able to price more accurately the next phase of the engagement by virtue of
having greater knowledge of the client's needs and the project's complexity. We
reflect any loses on projects in process in the period in which they become
known.
We typically receive an advance payment from our strategy consulting
services clients upon contract signing, with additional payments required upon
our attainment of project milestones. Deferred revenues consist principally of
these advance payments. We recognize those payments upon performance of
services.
We price our application hosting contracts on a fixed-fee basis. We
recognize revenues from these contracts as services are completed each month.
In addition, we charge our application hosting clients a one time set-up fee,
which we recognize when set-up is complete. Pricing varies for each client
based on the prospective application to be hosted. Factors which determine
pricing generally include telecommunications bandwidth required, physical space
requirements in our leased hosting facilities and the technological complexity
of supporting the hosted application.
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To date, we have depended upon a few clients for the majority of our
revenues. This dependence on a small number of clients is primarily
attributable to the relatively limited range of services that we offered from
1995-1998. We expect our reliance on a small number of clients to decrease due
to our addition of application hosting capabilities and the continued growth of
our e-Business Consulting and Internet Solutions Services.
We believe that we have achieved a number of important accomplishments
since making the strategic decision in 1998 to expand our service offerings.
These accomplishments include:
. application hosting
. increased hiring
. e-Business Solutions
. increased customer support
We hope to build on theses accomplishments to become the leading full
service provider of business-to-business e-business solutions that enable
growing enterprises to increase their revenues and market share. We are seeking
to increase revenues in the near term by continuing to:
. Increase our sales and marketing efforts;
. Expand our professional staff; and
. Add to our existing application hosting infrastructure to increase
our capacity to provide application hosting services.
We will need to make significant expenditures in connection with all
of these activities. In particular, expanding our application hosting capacity
involves capital expenditures for equipment and software as well as costs for
leasing facilities to house that equipment. These capital expenditures will
result in significant depreciation and amortization expenses.
Our expense items include project personnel costs, sales and marketing
expense and general and administrative expenses:
. Projected personnel costs consist of payroll and payroll-related
expenses for personnel dedicated to client assignments;
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. Sales and marketing expenses consist primarily of salaries (including
sales commissions), consulting fees, trade show expenses, advertising
and the cost of marketing literature; and
. General and administrative expenses consist primarily of
administrative salaries, salaries, fees for professional services,
and other operating costs, such as rent.
Our revenues in the past were generated by the Company in its capacity
as an Internet Service Provider providing strategy and systems integration
solutions services. We developed and began implementation of our current
strategy to become a leading full service provider of Internet solutions for
businesses in late 1998. We began recognizing revenues from these services in
the first quarter of 1999. Because we are increasing our marketing and sales
strategy initiatives and are adding to our application hosting infrastructure,
we expect our revenue streams to increase.
Results of Operations
Year Ended December 31, 1999 as compared to Year ended December 1998
The Company had net sales from online services of $495,000 for the
year ended December 31, 1999 as compared to $338,000 for the year ended December
31, 1998. The increase of $157,000 (46%) is attributed to the change in
business mix from internet connection service to web page design maintenance and
e-business consulting.
Cost of sales for on-line services increased during the year ended
December 31, 1999 to $279,000 from $222,000 for the year ended December 31,
1998. The increase of $57,000 (26%) is attributed to an increase in personnel
costs due to the increased sales.
Cost of sales for aircraft leasing increased to $151,000 for the year
ended December 31, 1999 from $66,000 for the year ended December 21, 1998. The
net increase of $85,000 (129%) is attributable to the start of leasing
operations. However, the company recorded no depreciation on the aircraft
during 1999 due to its sale.
Selling general and administrative expenses remained approximately the
same at $417,000 for 1999 and 1998 as the company only had an increase in those
costs related to sales.
Year Ended December 31, 1999 as Compared to December 31, 1997
The Company had net sales of $338,000 for the year ended December 31,
1998 as compared to $332,000 for the year ended December 31, 1997. The increase
of $6,000 (1.8%) is attributable to increased internet usage by customers.
There were no sales from aircraft leasing.
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Costs of sales for aircraft leasing during 1998 was $66,000. Although
the company had no related sales the company recorded $38,000 in depreciation
expense and incurred $28,000 in maintenance and repair expense on the newly
acquired aircraft.
Selling general and administrative expense increased to $417,000 from
$169,000 for the year ended December 31, 1998 as compared to 1997, an increase
of $248,000 (46%). The net increase is attributable to goodwill of $78,000,
aircraft depreciation and maintenance of $70,000, $40,000 in expenses related to
the NASD inquiry and increased marketing costs of $60,000.
The Company had a net loss for the year ended December 31, 1998 of
$443,000 as compared to a net loss of $204,000 for the year ended December 31,
1997, an increase of $239,000 (117%). The increased loss is attributable to the
aforementioned increases in expenses.
Liquidity and Capital Resources
December 31, 1999 to December 31, 1998
At December 31, 1999 the Company had cash of $217,000 as compared to
$58,000 at December 31, 1998. During 1999, the Company completed stock sales
for $265,000, a debenture financing of $250,000 and sold the aircraft in the
aircraft leasing business for $680,000.
During the year ended December 31, 1999 WorldWide used cash of
$740,000 to reduce outstanding debt and $215,000 for operations.
December 31, 1998 to December 31, 1997
At December 31, 1998, the Company had cash of $58,000 as compared to
cash of $14,000 at December 31, 1997. During 1998, the Company completed equity
sales whereby it received net proceeds of approximately $1,000,0000. The
Company used $240,000 of the proceeds as part of the purchase price of 761395
Alberta Ltd an aircraft leasing company. The balance of the proceeds have been
used to reduce debt by $376,000 and for working capital $384,000.
WorldWide believes that its cash, cash flow from operations together
with the expected net proceeds from this offering will be sufficient to fund its
capital expenditures and working capital requirements for at least the next 12
months.
WorldWide may require additional capital in the future for the new
business activities related to its current and planned businesses, or in the
event it decides to make additional acquisitions or enter into joint ventures
and strategic alliances. Sources of additional capital may include cash flow
from operations, public or private equity and debt financings, bank debt and
vendor financings. However, we cannot assure
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you that WorldWide will be successful in producing sufficient cash flow or
raising debt or equity capital to meet its strategic business objectives or that
such funds, if available, will be available on a timely basis and on terms that
are acceptable to WorldWide. If WorldWide is unable to obtain such capital, it
may have to delay or curtail business operations. In addition, WorldWide may
increase the number of consulting projects it takes on, which in turn may
accelerate WorldWide's need for additional capital.
MARKET RISK
To date, we have not utilized derivative financial instruments or
derivative commodity instruments. We do not expect to employ these or other
strategies to hedge market risk in the foreseeable future.
Item 3. Description of Property.
We do not own any real property and lease all of our facilities. We
are located at 36 Toronto Street, Suite 250, Toronto, Ontario M5C 2C5. The
premises measures approximately 3,200 square feet and is used for the Company's
general office and administrative purposes and is the location from which the
Company provides customer support and application hosting services to our
clients. The initial term of the lease commenced in September 1995 and expires
on August 31, 2000. We believe that the above referenced properties are
acceptable for our current operating needs.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table, based upon information known to us, sets forth
certain information regarding beneficial ownership of our Common Stock as of
March 31, 2000 by (i) each person who is known by us to beneficially own more
than five percent of our Common Stock; (ii) each of our officers and directors;
and (iii) all executive officers and directors as a group. Except as otherwise
indicated, the persons named in the table have sole voting and investment power
with respect to all shares beneficially owned, subject to community property
laws where applicable. As of March 31, 2000, there were 3,763,100 ] shares of
Common Stock issued and outstanding. Each share of Common Stock is entitled to
one vote per share.
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<TABLE>
<CAPTION>
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Name and Address Number of Shares of Percent
of Beneficial Owner the Company's Common Stock of Class
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<S> <C> <C>
Romeo Colacitti 135,000 3.5%
42 Leosmith Drive
Aurora, Ontario
Canada
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BC Trust 120,000 3.1%
36 Toronto Street, Suite 250
Toronto, Ontario
Canada M5C 2C5
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Bronson B. Conrad 120,000 3.1%
36 Toronto Street, Suite 250
Toronto, Ontario
Canada M5C 2C5
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A-Z Professional Consultants Inc. 300,000 7.9%
268 W. 400
Salt Lake City, UT 84101
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Bournemouth Capital Corp. 225,000 5.9%
Saffrey Square Suite 103A
Bay Street & Bank Lane
Nassau NP The Bahamas
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Finnish Investment Limited 225,000 5.9%
Saffrey Square Suite 103A
Bay Street & Bank Lane
Nassau NP The Bahamas
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Bridgewater Capital Corp. 225,000 5.9%
Saffrey Square Suite 103A
Bay Street & Bank Lane
Nassau NP The Bahamas
- ---------------------------------------------------------------------------------------------------------------
Alpha Securities Ltd. 225,000 5.9%
P.O. Box N8318
Charlotte Street
Nassau The Bahamas
- ---------------------------------------------------------------------------------------------------------------
David A. Rapaport, as Escrow Agent2 400,000 5.0%
333 Sandy Spring's Circle
Suite 230
Atlanta, GA 30328
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Name and Address Number of Shares of Percent
of Beneficial Owner the Company's Common Stock of Class
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
KEW International Ltd. 225,000(3) 5.6%
P.O. Box N. 8303
NASSAU - The Bahamas
- ---------------------------------------------------------------------------------------------------------------
Sunnyview International Ltd. 225,000(3) 5.6%
P.O. Box N. 8303
NASSAU - The Bahamas
- ---------------------------------------------------------------------------------------------------------------
Goldcoast International 225,000(3) 5.6%
P.O. Box N. 8303
NASSAU - The Bahamas
- ---------------------------------------------------------------------------------------------------------------
JBS Holdings Ltd 225,000(3) 5.6%
3369 Amboy Road
Staten Island, NY 10506
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Somu Holdings Ltd. 825,000 23.1%
32 Upper Fitzwilliam Street
Dublin 2 Ireland
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Officers and Directors 455,000(4) 10.7%
as a Group (2 persons)
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
_______________________
(1) The shares of our common stock are beneficially owned by Bronson B. Conrad,
our President, Secretary, Treasurer and Sole Director. Mr. Conrad holds
the shares for the benefit of certain our employees' benefit of certain
employees of the Company. The BC Trust is not a formal trust, and,
consequently, there is no appointed trustee.
(2) Includes 400,000 shares of our Common Stock held in escrow for the benefit
of Generation Capital Associates and 25,000 shares of our Common Stock
underlying warrants to purchase our Common Stock held by Generation. In
connection with a financing transaction which closed on September 30, 1999,
the Company issued to Generation convertible debentures in the aggregate
principal amount of $250,000 for $250,000. The debentures are convertible
into our Common Stock at any time after September 30, 1999. Pursuant to
the terms of the transaction, we issued 400,000 shares of our Common Stock,
which represent the share underlying the convertible debentures to an
escrow agent. The debenture shares held by the escrow agent represent the
shares that Generation is entitled to under the convertible debentures'
conversion provisions. The price at which the convertible debentures are
converted shall be the average closing bid price of our Common Stock quoted
by Nasdaq level III for a five-day trading period ending on the date prior
to the date set fort on Generation's conversion notice times (x) 60% (the
"Multiplier"). The Multiplier is subject to being decreased in the event
we do not register the debenture shares under the Securities Act. In
connection with the above referenced financing transaction, we issued
Generation 25,000 cashless exercise warrants to purchase 25,000 shares of
our Common Stock exercisable at $2.50 for five years until September 30,
2004. The Generation warrant has a value of $250.00 ($0.01 per warrant).
The shares are issuable upon the exercise of the Generation warrant.
Although 400,000 of such shares are held in escrow for the benefit of
Generation in connection with a convertible debenture financing transaction
which closed on September 30, 1999, and such 425,000 shares held in escrow
for the benefit of
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Generation represent approximately 11.2% of our issued and outstanding
Common Stock, the terms of the convertible debentures provide that in no
event shall the holder(s) of the convertible debentures and/or the
Generation warrant be permitted to convert any debenture or exercise the
Generation warrant to the extent that such conversion or exercise would
cause any such holder to be the beneficial owner of more than 5% of our
then outstanding Common Stock as determined in accordance with Section
13(d) of the Securities and Exchange Act of 1934. Accordingly, the number
of shares of Common stock set forth in the table for Generation exceeds the
number of shares of our Common Stock that Generation could own beneficially
at any given time through its ownership of the convertible debentures and
warrants. In that regard, the beneficial ownership of Generation set forth
in the table is not determined in accordance with Rule 13d-3 under the
Securities and Exchange Act of 1934.
(3) Represents shares underlying our Class B Warrants. The Warrant entitled
the holder to purchase one share of our Common Stock at a price of $1.50
per share at any time between April 15, 1999 and April 5, 2001.
(4) Includes 150,000 owned by Bronson B. Conrad which are held for the benefit
of certain of our employees.
Item 5. Sole Director, Executive Officers, Promoters and Control Persons.
The following table sets forth-certain information regarding directors
and executive officers of the Company:
Name Age Position
- ---- --- --------
Bronson B. Conrad 55 President, Secretary, Treasurer and Sole
Director
Romeo Colacitti 38 Chief Executive Officer
Romeo Colacitti, the Company's Chief Executive Officer, is the
brother-in-law of Bronson B. Conrad, the Company's President, Secretary,
Treasurer and Sole Director.
BUSINESS EXPERIENCE
BRONSON B. CONRAD. Since incorporation in 1995, Mr. Conrad has served
as our President, Secretary and Treasurer and the sole director. Mr. Conrad was
the co-founder of, and from 1988 to 1994, served as the Chairman of the Board of
Directors of All-Quotes, Inc., a provider of electronically distributed
financial information. Mr. Conrad served as All-Quotes' Treasurer and Secretary
from 1993 to 1994. From 1988 through 1993, Mr. Conrad served as the President
of All-Quotes. He was the co-founder of National Hav-Info Ltd. ("Hav-Info"), a
former electronic distributor of financial information in Canada, and from March
1985 until October 1988 he was the Chief Executive Officer and Chairman of the
Board of Hav-Info.
ROMEO COLACITTI. Since July of 1999, Mr. Colacitti has served as our
Chief Executive Officer. From April 1998 to the present, Mr. Colacitti has
served as
16
<PAGE>
the President of our wholly owned subsidiary Worldwide Online. From October 1995
to March 1998, Mr. Colacitti served as the Vice President and General Manager of
Worldwide Online. Prior to joining WorldWide Online Corp. in October of 1995,
Mr. Colacitti served as a business executive with Bell Canada.
Item 6. Executive Compensation.
The following table sets forth the annual and other compensation of
our Chief Executive Officer. No other executive officer had a total salary and
bonus, which exceeded US$ 100,000 for the reported period.
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name Other Stock
Principal Position Year Salary Compensation Option
Romeo Colacitti 1998 CDN$ 80,000 N/A N/A
Chief Executive Officer 1999 CDN$100,000 N/A N/A
</TABLE>
COMPENSATION OF THE COMPANY'S SOLE DIRECTOR
Our sole director does not receive a salary or fees for serving as a
director, nor does he receive any compensation for being on committees. We may
decide to compensate our sole director in the future.
Item 7. Certain Relationships and Related Transactions.
Romeo Colacitti, our Chief Executive Officer, is the brother-in-law of
Bronson B. Conrad, our President, Secretary, Treasurer and Sole Director.
On December 31, 1998, our Company loaned US$177,685 to AmCan Mining
Limited, a British Columbia corporation, for which Bronson B. Conrad, our
President, Secretary, Treasurer and Sole Director, serves as Chairman and Chief
Executive Officer. The loan is evidenced by a promissory note. The note is
payable on demand and bears interest at a rate of 10% per annum. The note is
personally guaranteed by Mr. Bronson B. Conrad.
On February 27, 1998, our Company, Bridgewater Capital Corp.
("Bridgewater") and Bronson B. Conrad ("Conrad"), our President, Secretary,
Treasurer and Sole Director, (Conrad, together with Bridgewater, the "WWOC
Shareholders" entered into a Share Exchange Agreement whereby we exchanged
1,500,000 shares of our Common Stock with the WWOC Shareholders for an aggregate
of 1,500,000 shares of Common Stock of Worldwide Online in the amounts and
proportions as set forth below:
17
<PAGE>
<TABLE>
<CAPTION>
Seller No. of WWOC No. of Worldwide Data, Inc. Shares
- ------ ------------------ ----------------------------------
Shares Exchanged Received
------------------ --------
<S> <C> <C>
Conrad 1 1
Bridgewater 1,500,000 1,500,000
</TABLE>
Subsequently, in March of 1998, Bridgewater distributed 1,275,000 of
its shares of our common stock to certain persons and entities, including but
not limited to, Bronson B. Conrad, Romeo Colacitti and the BC Trust. The number
of shares received by Messrs. Conrad and Colacitti and the BC Trust in
connection with Bridgewater's distribution is as follows:
Name Number of Shares Received
- ---- -------------------------
Bronson B. Conrad 150,000
Romeo Colacitti 135,000
BC Trust 150,000
With respect to the 150,000 distributed by Bridgewater to the BC
Trust, Bronson B. Conrad, our President, Secretary, Treasurer and Sole Director
beneficially owns such shares and holds the shares for the benefit of certain
employees of our Company. The BC Trust is not a formal trust, and,
consequently, there is no appointed trustee.
In November 1998, in order to partially finance the purchase of all of
the issued and outstanding common stock of 761395 Alberta Ltd. (the "761395
Alberta Common Stock"), an Alberta corporation which is wholly-owned by Bronson
B. Conrad, the President, Secretary, Treasurer and Sole Director of the Company,
and which had as its sole asset, an aircraft, we issued and sold pursuant to a
certain Stock Purchase Agreement between us and CBC Holdings, Inc., a Bahamian
corporation, 240,000 shares of our Common Stock to CBC Holdings, Inc. for $1.00
per share.
In a related transaction, also in November, 1998, we purchased all of
the issued and outstanding shares of the 761315 Alberta Common Stock pursuant to
a certain Stock Purchase Agreement dated November 17, 1998, between Bronson B.
Conrad, 761395 Alberta Ltd. and our Company, whereby we purchased the 761395
Alberta Common Stock for a purchase price of US$627,000. To effect payment of
the purchase price, we (i) delivered US$240,000 of such purchase price to
Bronson B. Conrad immediately following the execution of the Stock Purchase
Agreement; (ii) executed and delivered to Mr. Conrad a promissory note in the
principal amount of US$189,631.58 and (iii) assumed a certain $350,000 CDN
Promissory Note from 761395 Alberta Ltd. and Bronson B. Conrad payable to
Textron Financial Corporation (Canada), an Ontario corporation.
18
<PAGE>
Item 8. Legal Proceedings.
We are not currently involved in any pending legal proceeding and it
is not aware of any material legal proceeding threatened against it.
Item 9. Market for Common Equity and Related Stockholder Matters.
Since 1996, our Common Stock has traded on the Over-the-Counter
Electronic Bulletin Board maintained by the National Association of Securities
Dealers under the symbol "WWDI". Before that date, there was no established
public trading market for the Common Stock. There is no assurance that the
Common Stock will continue to be quoted or that there will be any liquidity for
our Common Stock. Trading in our Common Stock is episodic. The following table
sets forth the range of high and low bid quotations for the Company's Common
Stock on the Over-the-Counter Electronic Bulletin Board for each quarter of
1997, 1998 and 1999.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Quarter Low Bid $ High Bid $
- ------------------------------------------------------------------------
<S> <C> <C>
1st Qtr. 1997 .16 .38
- ------------------------------------------------------------------------
2nd Qtr. 1997 .16 .38
- ------------------------------------------------------------------------
3rd Qtr. 1997 .13 .91
- ------------------------------------------------------------------------
4th Qtr. 1997 .09 .25
- ------------------------------------------------------------------------
1st Qtr. 1998 1.50 7.00
- ------------------------------------------------------------------------
2nd Qtr. 1998 7.25 9.25
- ------------------------------------------------------------------------
3rd Qtr. 1998 4.38 7.03
- ------------------------------------------------------------------------
4th Qtr. 1998 6.63 8.25
- ------------------------------------------------------------------------
1st Qtr. 1999 6.00 7.50
- ------------------------------------------------------------------------
2nd Qtr. 1999 4.63 5.50
- ------------------------------------------------------------------------
3rd Qtr. 1999 2.50 3.88
- ------------------------------------------------------------------------
4th Qtr. 1999 3.00 3.13
- ------------------------------------------------------------------------
</TABLE>
The high and low information was obtained from Track Data, a fee-based
provider of financial information.
In January 1999, NASD Regulation, Inc. commenced an inquiry with
respect to trading in our Common Stock and has requested information from us.
We have fully cooperated with NASDR Regulation, Inc. in providing such
information.
Item 10. Recent Sales of Unregistered Securities.
In connection with the Financial Advisory Agreement dated January 31,
2000, between our company and A-Z Professional Consultants, Inc., our company
retained A-Z Consultants, Inc. to provide us with advice with respect to
possible
19
<PAGE>
mergers, acquisitions, strategic partnerships and similar arrangements,
we issued A-Z Consultants, Inc. 300,000 restricted shares of our common stock as
compensation for services rendered under the Agreements. We have had various
sales of unregistered securities. In issuing unregistered shares, we relied on
the exemption from registration provisions as promulgated under Section 4(2) of
the Securities Act of 1933, as amended (the "Act"), or Rule 504 of Regulation D
promulgated under the Act for issuer transactions not involving a public
offering (as defined). Principals of each transaction were aware and
represented that they were taking the shares for investment purposes and not
with the view to distributing the same and further represented that they were
aware of the restricted nature of the securities and that the same could not be
transferred or resold absent a Registration Statement, in effect for the same or
an exemption therefrom, or otherwise sold in reliance on Rule 144.
In connection with a financing transaction which closed on September
30, 1999, we issued to Generation Capital Associates convertible debentures in
the aggregate principal amount of $250,000 for $250,000. The debentures are
convertible into our Common Stock at any time after September 30, 1999.
Pursuant to the terms of the transaction, we issued 400,000 shares of our Common
Stock, which represent the shares underlying the convertible debentures the
("Debenture Shares") to an escrow agent. The debenture shares held by the
escrow agent represent the shares that Generation is entitled to under the
convertible debentures' conversion provisions. The price at which the
convertible debentures are converted shall be the average closing bid price of
the Company's Common Stock quoted by Nasdaq level III for a five-day trading
period ending on the date prior to the date set forth on Generation's conversion
notice times (x) 60% (the "Multiplier"). The Multiplier is subject to being
decreased in the event the Company does not register the debenture shares under
the Securities Act. Also, in connection with the financing transaction which
closed on September 30, 1999, the Company issued to Generation 250,000 cashes
exercise warrants to purchase 25,000 shares of our Common Stock exercisable at
$2.50 for five years until September 30, 2004. The Generation warrant has a
value of $250.00 ($0.01 per warrant). The shares of our Common Stock are
issuable upon the exercise of the GCA Warrants. Although 400,000 of such shares
are held in escrow for the benefit of Generation in connection with a
convertible debenture financing transaction which closed on September 30, 1999,
and such 400,000 shares held in escrow for the benefit of GCA, together with the
GCA Warrants, represent approximately 11.2% of the Company's issued and
outstanding Common Stock, the terms of the convertible debentures provide that
in no event shall the holder(s) of the convertible debentures and/or the GCA
Warrants be permitted to convert any debenture or exercise the GCA Warrants to
the extent that such conversion or exercise would cause any such holder to be
the beneficial owner of more than 5% of the then outstanding Common Stock of the
Company as determined in accordance with Section 13(d) of the Securities and
Exchange Action of 1934. Accordingly, the number of shares of Common Stock set
forth in the table for Generation exceeds the number of shares of our Common
Stock that Generation could own beneficially at any given time
20
<PAGE>
through its ownership of the convertible debentures and warrants. In that
regard, the beneficial ownership of Generation set forth in the table is not
determined in accordance with Rule 13d-3 under the Securities and Exchange Act
of 1934.
Pursuant to a Purchase Agreement dated March 19, 1999, we sold
Montaque Securities International Ltd., a Bahamian corporation 200,000 shares of
the our Common Stock at a purchase price of $1.00 per share.
Pursuant to a Purchase Agreement dated April 6, 1999, we sold Montaque
Securities International Ltd. 65,000 shares of our Common Stock at a purchase
price of $1.00 per share.
Pursuant to Purchase Agreement dated November 17, 1998, the Company
sold to CBC Holdings, Inc., a Bahamian corporation 240,000 shares of the
Company's Common Stock at a purchase price of $1.00 per share. We effected the
transaction with CBC Holdings, Inc. to partially finance the purchase of all of
the outstanding common stock of 761395 Alberta Ltd., an Alberta corporation,
which is wholly owned by Bronson B. Conrad, the President, Secretary and
Treasurer of our company.
Pursuant to Purchase Agreement dated February 27, 1998, we sold to
Gold Coast International Ltd., a Bahamian corporation 5,000 Units at a purchase
price of $5.00 per Unit. Each Unit consisted of one share of our Common Stock,
22 Class A Warrants (each to purchase one share of our Common Stock on or before
July 31, 1998 at an exercise price of $1.50) and 45 Class B Warrants (each to
purchase a share of our Common Stock at any time after April 5, 1999 but before
April 5, 2001 at an exercise price of $1.00. Gold Coast International Ltd.
exercised its Class A Warrants and purchased 110,000 shares of our Common Stock
underlying such warrants.
Pursuant to Purchase Agreement dated February 27, 1998, we sold to
Sunnyview International Ltd., a Bahamian corporation 5,000 Units at a purchase
price of $5.00 per Unit. Each Unit consisted of one share of our Common Stock,
22 Class A Warrants (each to purchase one share of our Common Stock on or before
July 31, 1998 at an exercise price of $1.50) and 45 Class B Warrants (each to
purchase one share of our Common Stock at any time after April 5, 1999 but
before April 5, 2001 at an exercise price of $1.00. Sunnyview International
Ltd. exercised a portion of its Class A Warrants and purchased 55,000 shares of
our Common Stock underlying such warrants.
Pursuant to Purchase Agreement dated February 27, 1998, we sold to KEW
Holdings Ltd., a Bahamian corporation 5,000 Units at a purchase price of $5.00
per Unit. Each Unit consisted of one share of our Common Stock, 22 Class A
Warrants (each to purchase one share of our Common Stock on or before July 31,
1998 at an exercise price of $1.50) and 45 Class B Warrants (each to purchase
one share of the Company's Common Stock at any time after April 5, 1999 but
before April 5, 2001 at an exercise
21
<PAGE>
price of $1.00. KEW Holdings Ltd. exercised its Class A Warrants and purchased
110,000 shares of our Common Stock underlying such warrants.
Pursuant to Purchase Agreement dated February 27, 1998, the Company
sold to JBS Holdings Ltd., a Bahamian corporation 5,000 Units at a purchase
price of $5.00 per Unit. Each Unit consisted of one share of our Common Stock,
22 Class A Warrants (each to purchase one share of our Common Stock on or before
July 31, 1998 at an exercise price of $1.50) and 45 Class B Warrants (each to
purchase one share of the Company's Common Stock at any time after April 5, 1999
but before April 5, 2001 at an exercise price of $1.00. JBS Holdings Ltd..
exercised a portion of its Class A Warrants and purchased 55,000 shares of our
Common Stock underlying such warrants.
In connection with a Share Exchange Agreement dated as of February 27,
1998 by and among our Company, Bridgewater Capital Corp. ("Bridgewater") and
Bronson B. Conrad ("Conrad") (Conrad, together with Bridgewater, the "WWOC
Shareholders"), the Company exchanged 1,500,000 shares of our Common Stock with
the WWOC Shareholders for an aggregate of 1,500,000 shares of Common Stock of
WWOC in the amounts and proportions as set forth below:
<TABLE>
<CAPTION>
Seller No. of Worldwide No. of World Wide Data, Inc.
- ----- Online Shares Exchanged Shares Received
----------------------- ---------------
<S> <C> <C>
Conrad 1 1
Bridgewater 1,500,000 1,500,000
</TABLE>
Item 11. Description of Securities
The authorized capital stock of our Company consists of 10,000,000
shares of Common Stock, $0.001 par value and 10,000 shares of Preferred Stock,
$0.01 par value.
Holders of our Common Stock are entitled to one vote per share held of
record on all maters requiring a vote of shareholders, including the election of
directors. There is no right to cumulative voting in the election of directors,
accordingly, holders of more than fifty percent (50%) of our Common Stock, if
any, who vote for elections of directors can elect one hundred percent (100%) of
our directors if they so choose. Subject to the prior rights of holders of
Preferred Stock and any contractual restrictions against the payment of
dividends, the holders of our Common Stock are entitled to receive dividends on
a pro-rata basis when, if and as declared by the Board of Directors out of funds
legally available therefore. Upon liquidation or dissolution, each outstanding
share of our Common Stock will be entitled to share equally in the assets of our
Company legally available for distribution to shareholders after the payment of
all debts, liabilities, and other obligations, including
22
<PAGE>
the preferences of any outstanding share of Preferred Stock. Shares of Common
Stock are not redeemable, have no conversion rights and carry no preemptive or
other rights to subscribe to or purchase additional shares in the event of a
subsequent offering. All outstanding shares of our Common Stock are duly
authorized and validly issued, fully paid and non-assessable and free of
preemptive rights.
In addition, our Company's Certificate of Incorporation provides that
our Company may, without further action by our Company's stockholders, issue
shares of Preferred Stock in one or more series. The Board of Directors of our
Company is authorized to established from time to time the number of shares to
be included in any such series and to fix the relative rights and preferences of
the shares of any such series, including without limitation dividend rights,
dividend rate, voting rights, redemption rights and terms, liquidation
preferences and sinking fund provisions. The Board of Directors of our Company
may authorize and issue Preferred Stock with voting or conversion rights that
could adversely affect the voting power or other rights of the holders of our
Common Stock. In addition, the issuance of Preferred Stock could have the
effect of delaying or preventing a change in control of our Company. No shares
of our Preferred Stock have been issued.
Warrants
Our Company's Class B Warrants entitle the holder to purchase one
share of common stock at a price of $1.50 at any time between April 15, 1999 and
April 5, 2001. The warrants may be exercised upon surrender of the Warrant
Certificate during the exercise period to our Company, together with a duly
completed Notice of Exercise and full payment of an amount equal to the purchase
price times the number of Warrants to be exercised. The Class B Warrant holders
do not have the rights or privileges of holders of our Common Stock.
The Generation warrants entitle the holder to purchase 25,000 shares
of our Common Stock exercisable at $2.50 for five years until September 30,
2004. The Generation warrant has a value of $250.00 ($0.01 per warrant). The
Generation warrant holders do not have the rights or privileges of holders of
our Common Stock.
Debentures
We have issued convertible debentures in the aggregate principal
amount of $250,000 for $250,000. The price at which the convertible debentures
are converted shall be the average closing bid price of our Common Stock quoted
by Nasdaq level III for five day trading period ending on the date prior to the
date set forth on the conversion notice relating to such convertible debentures
times 60% (the "Multiplier"). The Multiplier is subject to being decreased in
the event we do not register the shares underlying the convertible debentures
under the Securities Act. Holders of the
23
<PAGE>
debentures do not have the rights or privileges of holders of our Common Stock.
The convertible debentures mature on September 30, 2000 and the unconverted
principal balance and any accrued and unpaid interest shall be due and payable
on such date. The maturity date of the convertible debentures automatically
extends for up to eighteen one-month periods, unless the purchaser or any
subsequent holder notifies us in writing not less than 10 days prior to any
expiration that the convertible debenture will not be extended.
Item 12. Indemnification of Directors and Officers.
We are permitted to indemnify our directors and officers in accordance
with and as limited by our Certificate of Incorporation, By-laws and Delaware
and federal law.
The relevant provisions in our Certificate of Incorporation and By-
laws may have the effect of reducing the likelihood of derivative litigation
against directors and may discourage or deter stockholders or management from
bringing a lawsuit against directors for breach of their fiduciary duty, even
though such an action, if successfully, might otherwise have benefited the
company and our stockholders. However, we believes the relevant provisions of
our By-laws and Certificate of Incorporation are necessary to attract and retain
qualified persons as directors and officers.
For liabilities against directors and officers arising under the
federal securities laws, the Securities and Exchange Commission has stated that,
in its opinion, indemnification of directors and officers for such liabilities
is against public policy and is therefore unenforceable.
Item 13. Financial Statements.
Our audited balance sheet for the period at December 31, 1998 and the
Audited Statements of Operations, Stockholders' Equity and Statements Cash Flows
for the years ended December 31, 1998 and 1997 are submitted herewith. The
index setting forth the page numbers for the foregoing Financial Statements is
found under "Item 15 Financial Statements, Accompanying Notes and Exhibits."
Item 14. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure.
None.
24
<PAGE>
Item 15. Financial Statements, Accompanying Notes and Exhibits.
(a) Index to Financial Statements
<TABLE>
<CAPTION>
Financial Statements Page
-------------------- ----
<S> <C>
Independent Auditors' Report F2
Consolidated Balance Sheet as of December 31, 199 and 1998 F3
Consolidated Statements of Operations for the Two Years Ended F4
December 31, 1999 and 1998
Consolidated Statements of Changes in Shareholders' Equity F5
Consolidated Statements of Cash Flows for the Two Years Ended F6
December 31, 1999 and 1998
Notes to Consolidated Financial Statements` F7-F16
</TABLE>
(b) Exhibit Table - The following exhibits are filed as part of the
Registration Form 10-SB General Registration Statement
Exhibit Description of Exhibit
------- ----------------------
3.1 Certificate of Incorporation of the Company *
3.2 Bylaws of the Company. *
4.1 Warrant Certificate issued to Gold Coast for *
225,000 warrants to purchase common stock of the
Company, dated February 27, 1998.
4.2 Warrant Certificate issued to Sunnyview for *
225,000 warrants to purchase common stock of the
Company, dated February 27, 1998.
4.3 Warrant Certificate issued to Kew for 225,000 *
warrants to purchase common stock of the Company,
dated February 27, 1998.
4.4 Warrant Certificate issued to JBS for 225,000 *
warrants to purchase common stock of the Company,
dated February 27, 1998
25
<PAGE>
Exhibit Description of Exhibit
------- ----------------------
10.1 Convertible Debenture of WorldWide Data, Inc. (the *
"Company") in the amount of $50,000 issued to
Generation Capital Associates ("GCA") dated
September 30, 1999.
10.2 Financing Terms Agreement by and between the *
Company and GCA dated September 20, 1999.
10.3 Warrant Certificate for 25,000 shares of common *
stock of the Company issued to GCA dated September
27, 1999.
10.4 Escrow Agreement by and between the Company and *
GCA dated September 20, 1999.
10.5 Purchase Agreement by and between the Company and *
Montague Securities International Ltd., dated
April 6, 1999.
10.6 Purchase Agreement by and between the Company and *
Montague Securities International Ltd., dated
March 19, 1999.
10.7 Purchase Agreement by and between the Company and *
CBC Holdings, Inc., dated November 17, 1998.
10.8 Stock Purchase Agreement by and among the Company, *
Bronson B Conrad and 761395 Alberta ("Alberta")
Ltd., dated November 17, 1998.
10.9 Aircraft Securities Agreement by and between the *
Company and Alberta dated March 10, 1998.
10.10 Stock Exchange Agreement by and between the *
Company, Bridgewater Capital Corp. and Conrad,
dated February 27, 1999.
10.11 Purchase Agreement by and between the Company and *
Gold Coast International Ltd. ("Gold Coast") dated
February 27, 1998.
10.12 Purchase Agreement by and between the Company and *
Sunnyview International Ltd. ("Sunnyview") dated
February 27, 1998.
10.13 Purchase Agreement by and between the Company and *
KEW Holdings ("Kew") dated February 27, 1998.
10.14 Purchase Agreement by and between the Company and *
JBS Holdings Ltd. ("JBS") dated February 27, 1998.
26
<PAGE>
Exhibit Description of Exhibit
------- ----------------------
10.15 Guaranty of Bronson B. Conrad to WorldWide Data, *
Inc. relating to US$177,685 Promissory Note.
10.16 Advisory Agreement between the Company and A-Z *
Professional Consultants, Inc., dated January 31,
2000.
20.1 Promissory Note for $189,631.58 by and between the *
Company and Conrad dated November 17, 1998.
20.2 Promissory Note for CDN $350,000 by and between *
761395 Alberta Ltd, Bronson B. Conrad and Textron
Financial Corporation.
20.3 Promissory Note for US$177,685 by and between Am *
Can Minerals Limited, WorldWide Data, Inc.
23.1 Consent of Kempisty & Company, Certified Public *
Accountants.
24.1 Power of Attorney *
27 Financial Data Schedule (b) Financial Statement *
Schedules
________________________
* Incorporated by reference to the Registrant's SB-1 filed March 21, 2000.
27
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Company caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
WORLDWIDE DATA, INC.
By: /s/ Romeo Colacitti
___________________________
Name: Romeo Colacitti
Title: Chief Executive Officer
Date: April 4, 2000
______________________
* Print the name and title of each signing officer under his or her signature.
28
<PAGE>
WORLDWIDE DATA, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1999
INDEX
-----
PAGE
----
INDEPENDENT AUDITORS' REPORT F2
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1999 AND 1998 F3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE TWO YEARS ENDED
DECEMBER 31, 1999 AND 1998 F4
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY F5
CONSOLIDATED STATEMENTS CASH FLOWS FOR THE TWO YEARS ENDED
DECEMBER 31, 1999 AND 1998 F6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F7-F16
F1
<PAGE>
KEMPISTY & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS, P.C.
- -------------------------------------------------------------------------------
15 MAIDEN LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 -
FAX (212) 513-1930
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Worldwide Data, Inc.
We have audited the consolidated balance sheets of Worldwide Data, Inc. as of
December 31, 1999 and 1998 and the related consolidated statements of
operations, shareholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Worldwide Data, Inc. as of
December 31, 1999 and 1998 and the results of its' operations and cash flows for
the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 12 conditions
exist which raise substantial doubt about the Company's ability to continue as a
going concern unless it is able to generate sufficient cash flows to meet its
obligations and sustain its operations. Management's plan regarding these
matters is also described in Note 12. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Kempisty & Company
Certified Public Accountants PC
New York, New York
March 2, 2000
F2
<PAGE>
WORLDWIDE DATA, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
---- ----
ASSETS
------
CURRENT ASSETS:
<S> <C> <C>
Cash $ 216,993 $ 58,374
Accounts receivable (net of allowances of bad debts
of $10,368 for 1999) 47,065 43,524
Prepaid expenses 9,412 8,191
-------------- ---------------
TOTAL CURRENT ASSETS 273,470 110,089
PROPERTY AND EQUIPMENT (net of accumulated
depreciation of $130,899 and $136,869 in 1999 and 1998) 81,753 433,685
GOODWILL (net of accumulated amortization of $168,639
and $78,157 in 1999 and 1998) 751,209 1,022,039
OTHER ASSETS:
Organization expense 1,380 2,761
Deposit receivable 7,327 6,889
Loan and receivables from affiliates 177,685 123,570
-------------- ---------------
TOTAL ASSETS $ 1,292,824 $ 1,699,033
============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Debenture payable $ 250,000 $ -
Accounts payable and accrued expenses 139,355 109,454
Accrued interest payable 2,002 3,345
Current portion of long-term debt (Note 8) 34,563 71,518
Short-term loan from officer (Note 7) - 189,631
Deferred income 4,404 8,123
-------------- ---------------
TOTAL CURRENT LIABILITIES 430,324 382,071
PAYABLE TO OFFICER (NOTE 3) 55,185 344,336
LONG TERM DEBT (NOTE 8) - 191,802
COMMITMENTS AND CONTINGENCIES (NOTE 6)
SHAREHOLDERS' EQUITY
Common stock $.001 par value 10,000,000 shares
authorized; 3,487,500 and 2,822,500 shares issued and
outstanding at 12/31/99 and 12/31/98 respectively (Note 11) 3,088 2,823
Preferred stock $.01 par value 10,000 shares authorized;
issued and outstanding, none -
Additional paid-in capital 2,532,260 2,267,525
Deficit (1,740,372) (1,491,569)
Translation adjustment 12,339 2,045
-------------- ---------------
TOTAL SHAREHOLDERS' EQUITY $ 807,315 $ 780,824
-------------- ---------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,292,824 $ 1,699,033
============== ===============
</TABLE>
See Notes to Financial Statements
F3
<PAGE>
WORLDWIDE DATA, INC.
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the Year Ended
December 31,
1999 1998
---- ----
Sales revenues:
<S> <C> <C>
Online services $ 495,448 $ 338,069
Aircraft leasing 63,859 -
------------- -------------
559,307 338,069
Cost of sales:
Online services 278,508 221,920
Aircraft leasing 150,954 66,460
------------- -------------
429,462 288,380
Gross profit 129,845 49,689
Goodwill expense 104,009 78,157
Selling, general and administrative expenses 417,469 416,877
------------- -------------
521,478 495,034
Loss from operations (391,633) (445,345)
Other income and expenses
Gain from sale of aircraft 119,822 -
Interest income 23,008 2,187
------------- -------------
Income (loss) before taxes (248,803) (443,158)
Provision for income taxes - -
------------- -------------
Net income (loss) $ (248,803) $ (443,158)
============= =============
Basic and diluted income (loss) per share $ (0.08) $ (0.20)
============= =============
Basic and diluted average shares outstanding 3,026,568 2,246,308
============= =============
</TABLE>
See Notes to Financial Statements.
F4
<PAGE>
WORLDWIDE DATA, INC.
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
Year ended December 31, 1999
<TABLE>
<CAPTION>
Common Stock Additional
($.001) Par Value Paid-In Translation
Shares Amount Capital (Deficit) Adjustments Total
------ ------ ------- --------- ----------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1998 622,500 $ 623 $ 349,877 $ (1,048,411) $ (3,564) $ (701,475)
Stock issued to acquire
Worldwide Online 1,500,000 1,500 918,348 - - 919,848
Sale of units 20,000 20 99,980 - - 100,000
Exercise of warrants 440,000 440 659,560 - - 660,000
Sale of common stock 240,000 240 239,760 - - 240,000
Net Income (Loss) - - - (443,158) - (443,158)
Translation adjustment - - - - 5,609 5,609
-------------- ------- ------------- -------------- ----------- ------------
Balance December 31, 1998 2,822,500 2,823 2,267,525 (1,491,569) 2,045 780,824
Sale of common stock 265,000 265 264,735 - - 265,000
Net Income (Loss) - - - (248,803) - (248,803)
Translation adjustment - - - - 10,294 10,294
-------------- ------- ------------- -------------- ----------- ------------
Balance December 31, 1999 3,087,500 $ 3,088 $ 2,532,260 $ (1,740,372) $ 12,339 $ 807,315
============== ======= ============= ============== =========== ============
</TABLE>
See Notes to Financial Statements
F5
<PAGE>
WORLDWIDE DATA, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For the Year Ended
December 31,
1999 1998
---- ----
Operating Activities
- --------------------
<S> <C> <C>
Net (loss) $ (248,803) $ (443,158)
Adjustments to reconcile net income or (loss)
to net cash used by operating activities:
Depreciation and amortization 131,707 149,312
Bad debt expense 12,610 -
Gain on sale of aircraft (119,822) -
Changes in operating assets and liabilities (net
of acquired companies):
Accounts receivable (13,909) (38,418)
Prepaid expenses (1,221) (4,012)
Accounts payable & accrued expenses 29,901 (3,043)
Accrued interest payable (1,343) 448
Deferred income (3,719) 8,123
------------- -------------
Net cash used by operating activities (214,599) (330,748)
Investing Activities (net of acquired companies):
- -------------------------------------------------
Purchase of Alberta Ltd net of cash acquired - (239,499)
Purchase of property and equipment (28,125) (2,935)
Sale of aircraft 680,000 -
Loans to affiliates (54,115) (123,570)
------------- -------------
Net cash provided (used) by investing activities 597,760 (366,004)
Financing Activities (net of acquired companies):
- -------------------------------------------------
Sale of common stock 265,000 240,000
Sale of common stock units - 100,000
Exercise of common stock warrants - 660,000
Loan payments (260,760) (39,886)
Debenture loan 250,000 -
Paydown of officer loan and payable (478,782) (218,755)
------------- -------------
Net cash (used) provided by financing activities (224,542) 741,359
------------- -------------
Increase in cash 158,619 44,607
Cash at beginning of period 58,374 13,767
------------- -------------
Cash at end of period $ 216,993 $ 58,374
============= =============
Supplemental Disclosures of Cash Flow Information:
Cash paid during year for:
Interest $ 49,773 $ 28,162
============= =============
Income taxes $ - $ -
============= =============
Non-cash transactions:
On February 26, 1998 the Company issued 1,500,000 shares of common stock for the 85% of
Worldwide On-line Corp common stock it did not own (Note 5).
On November 17, 1998 the Company issued a $189,631 face value 10% demand note as
part of the consideration given to acquire 100% of 761395 Alberta Ltd. (Notes 3 and 5).
</TABLE>
See Notes to Financial Statements.
F6
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 1- ORGANIZATION AND OPERATIONS
Worldwide Data, Inc., ("WDI") was incorporated in the State of
Delaware on February 27, 1995.
On August 16, 1995 Worldwide Online Corp. ("the Company" and "WWOL")
was incorporated in Ontario, Canada. On February 26, 1998 Worldwide
Data, Inc. exchanged 1,500,000 shares of the Company's common stock
for the 85% of Worldwide Online Corp. common stock it did not already
own. (See Note 5)
Worldwide Online creates intranets/extranets for corporations, designs
and develops corporate web sites and databases, and creates
client-specific applications.
During 1999, Worldwide Online added application hosting and e-business
consulting to its service offerings.
On November 17, 1998 WDI acquired all the outstanding shares of 761395
Alberta Ltd., a Canadian company in the aircraft leasing business.
(Note 3 and 5)
In August, 1999 761395 Alberta Ltd sold the aircraft that was used for
the leasing business and currently has no operations.
Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
---------------------
The consolidated financial statements include the accounts of
Worldwide Data, Inc. and all of its subsidiaries. All significant
intercompany transactions and balances have been eliminated in
consolidation.
For accounting purposes, the 1998 acquisition of WWOL has been treated
as an acquisition of WDI by WWOL and as a recapitalization of WWOL.
The historical financial statements prior to February 26, 1998 are
those of WWOL giving effect to the acquisition as if the acquisition
took place on August 16, 1995.
Foreign Currency Translation
----------------------------
The Company has determined that the local currency of its Canadian
subsidiaries is the functional currency. In accordance with Statement
of Financial Accounting Standard No. 52, "Foreign Currency
Translation" ("SFAS No. 52") the assets and liabilities denominated in
foreign currency are translated into U.S. dollars at the current rate
of exchange existing at period-end and revenues and expenses are
translated at average monthly exchange rates. Related translation
adjustments are reported as a separate component of shareholders'
equity, whereas, gains or losses resulting from foreign currency
transactions are included in results of operations.
F7
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and Cash Equivalents
-------------------------
For purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less at
acquisition to be cash equivalents.
Depreciation and Amortization
-----------------------------
The cost of furniture and equipment is depreciated over the estimated
useful lives of the related assets. The cost of leasehold improvements
is amortized over the lesser of the length of the related lease or the
estimated useful life of the assets. Depreciation is computed on a
straight line basis for financial reporting purposes and on an
accelerated basis for income tax purposes. For income tax purposes,
leasehold improvements are amortized in accordance with Internal
Revenue Service regulations.
Goodwill
--------
The goodwill recorded by the Company in connection with its
acquisitions is being amortized on a straight line basis over ten
years.
Organization Costs
------------------
Costs incurred in connection with the organization of the Company are
amortized over five years beginning with the commencement of
operations.
Income Taxes
------------
The Company previously adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes", ("SFAS No.109")
which requires the asset and liability method of accounting for income
taxes. Enacted statutory tax rates are applied to temporary
differences arising from the differences in financial statement
carrying amounts and the tax basis of existing assets and liabilities.
Due to the uncertainty of the realization of income tax benefits,
(Note 9), the adoption of SFAS 109 had no effect on the financial
statements of the Company.
Net Loss per Common Share
-------------------------
Net loss per common share is based on the weighted average number of
common shares outstanding during the period presented. Fully diluted
loss per share has not been disclosed as it is anti-dilutive. The
weighted average number of common shares outstanding used in the
computation of net loss per share has been adjusted to give effect for
the 1 for 10 reverse stock split discussed in Note 11.
F8
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Concentration of Credit Risk
----------------------------
Financial instruments which potentially subject the Company to
significant concentrations of credit risk consist principally of cash
investments at commercial banks and receivables from officers and
directors of the Company. Cash and cash equivalents are temporarily
invested in interest bearing accounts in financial institutions, and
such investments may be in excess of insurance limits.
Reverse Stock Split
-------------------
The Company's Board of Directors effected a 1 for 10 reverse stock
split of its common stock $.001 par value on February 12, 1998. All
share and per share amounts in the accompanying financial statements
have been retroactively adjusted to reflect this stock split.
Comprehensive Income
--------------------
Effective January 1, 1998 the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130"). SFAS No. 130 requires an entity to report comprehensive
income and its components and increases financial reporting
disclosures. This standard has no impact on the Company's financial
position, cash flows or results of operations since the Company's
comprehensive income is the same as its reported net income for both
1999 and 1998.
Note 3- RELATED PARTY TRANSACTIONS
761395 Alberta Ltd.
-------------------
In November, 1998 the Company acquired 100% of the outstanding common
stock of 761395 Alberta Ltd. from the president of the Company for
$240,000 plus a $189,631.58 ten percent (10%) demand note. The demand
note was repaid in April, 1999. (See Notes 5 and 11)
F9
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 3- RELATED PARTY TRANSACTIONS (continued)
<TABLE>
<CAPTION>
Payable to Officer December 31,
------------------ 1999 1998
---- ----
<S> <C> <C>
Bronson Conrad, President $ 55,185 $ 344,336
The payable to officer is unsecured, non-interest bearing and has no specific terms
of repayment.
Loans and receivables from affiliates December 31,
------------------------------------- 1999 1998
---- ----
Receivables $ 11,204 $ 16,110
Loans 166,481 107,460
-------------- ---------------
Total $ 177,685 $ 123,570
============== ===============
</TABLE>
Receivables from affiliates for occupancy costs or services rendered
in the ordinary course of business represent amounts due from
companies that are controlled by the Chairman of the Board of
Directors or his family.
Loans to affiliate represents amounts due from AMCAN Minerals Limited,
a company controlled by the Chairman of the Board. The loan bears
interest at ten percent per annum and the loan repayment is guaranteed
by the Chairman.
Note 4- PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Property and equipment consists of the following: December 31,
1999 1998
---- ----
<S> <C> <C>
Aircraft $ 0 $ 384,849
Furniture and fixtures 28,346 26,402
Computer equipment 181,435 155,255
Leasehold improvements 2,871 4,048
-------------- ---------------
212,652 570,554
Less accumulated depreciation and amortization (130,899) (136,869)
-------------- ---------------
$ 81,753 $ 433,685
============== ===============
</TABLE>
Note 5- ACQUISITIONS
WDI owned 15% of Worldwide Online Corp until February, 1998 when it
acquired the remaining 85% of the common stock of the Company. The
combination was accounted for using the purchase method. The purchase
price for the common stock was 1,500,000 unregistered shares of the
Company's common stock, valued at $150,000. The resulting goodwill of
$919,848 is being amortized over ten (10) years. The acquisition was
recorded as a reverse merger.
F10
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 5- ACQUISITIONS (continued)
In November 1998, the Company acquired 100% of 761395 Alberta
Ltd., ("Alberta Ltd") an aircraft leasing company, from the
president of the Company. (See Notes 3 and 11) The combination
was accounted for using the purchase method. The resulting
goodwill of $180,348 is being amortized over ten (10) years. In
August, 1999 Alberta Ltd sold its aircraft and currently has no
operations. As part of the aircraft sale, the Company expensed
the balance of goodwill against the profit on the sale of the
aircraft.
Note 6- COMMITMENTS AND CONTINGENCIES
Leases
------
The Company entered into a lease agreement for office space
which expires in the year 2000. Also, the Company entered into a
sublease arrangement with a related party whereby approximately
50% of the Company's rent and certain fixed expenses are
reimbursed to the Company. Rent expense for the Company for 1999
was approximately $18,000. Remaining commitments under this
lease mature as follows:
Year ending
December 31, Amount
------------ ------
2000 $ 23,775
==================
Other
-----
The Market Regulation Division of the National Association of
Securities Dealers, Inc. has commenced an inquiry regarding the
trading of the Company's stock. The Company is unable to predict
the outcome of this matter.
Note 7- SHORT-TERM BORROWINGS
Debenture Payable
-----------------
On September 30, 1999, the Company issued to Generation Capital
Associates ("GCA") convertible debentures in the aggregate
principal amount of $250,000 for $250,000. The debentures are
convertible into the Company's Common Stock at any time after
September 30, 1999. Pursuant to the terms of the transaction,
the Company issued 400,000 shares of The Company's common stock,
which represents the shares underlying the convertible
debentures ("Debenture Shares") to an escrow agent. The
Debenture Shares held by the escrow agent represent the shares
GCA is entitled to under the conversion provisions of the
convertible debentures. The price at which the convertible
debentures are converted shall be the average closing bid price
of the Company's common stock quoted by Nasdaq Level III for a
five-day trading period ending on the date prior to the date set
forth on GCA's conversion notice times (x) 60% (the
"Multiplier"). The Multiplier is subject to being decreased in
the event the Company does not register the Debenture shares
under the Act by specific dates.
F11
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 7- SHORT-TERM BORROWINGS (continued)
<TABLE>
<CAPTION>
Short-term borrowings consisted of the following: December 31, December 31,
1999 1998
---- ----
10% Demand note payable to the president
<S> <C> <C>
of the Company $ - $ 189,631
Debenture payable 250,000 -
------------------ ------------------
$ 250,000 $ 189,631
================== ==================
At December 31, 1999 and 1998 the carrying value of short-term
borrowings approximated fair values.
Note 8- LONG-TERM DEBT
Long-term debt consists of the following at: December 31, December 31,
1999 1998
---- ----
12% term loan due February 10, 2003 $ - $ 198,325
Floating rate term loan due December 17, 2000 34,563 64,995
------------------ ------------------
34,563 263,320
Less current portion 34,563 71,518
------------------ ------------------
$ 0 $ 191,802
================== ==================
</TABLE>
The 12% term loan requires monthly principal and interest
payments of $7,785.56 Cdn (approximately $5,060.00 US) to
maturity. The loan is secured by the Company's aircraft and
engines. The loan payments are currently being paid for by the
Company's President. In August, 1999 the Company sold the
aircraft and paid off the 12% term loan due February 10, 2003.
The floating rate (bank's prime plus 3%, currently 9 3/4%) term
loan requires monthly principal payments of approximately $2,708
plus interest to maturity.
At December 31, 1999 and 1998 the carrying values of long-term
borrowings approximated their fair values.
F12
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 9- INCOME TAXES
The provision (benefit) for income taxes consisted of the
following (in thousands):
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998
---- ----
Current:
<S> <C> <C>
Federal tax expense $ (76,000) $ (136,000)
State tax expense (25,000) (40,000)
Deferred:
Federal tax expense 76,000 136,000
State tax expense 25,000 40,000
---------------- ----------------
$ - $ -
================ ================
A reconciliation of differences between the statutory U.S. federal income tax rate and the
Company's effective tax rate follows:
Year ended December 31,
1999 1998
---- ----
Statutory federal income tax 34% 34%
State income tax-net of
federal benefit 6% 6%
Valuation allowance -40% -40%
---------------- ----------------
0% 0%
================ ================
The components of deferred tax assets and liabilities were as
follows:
December 31,
1999 1998
---- ----
Deferred tax assets:
Net operating loss carryforwards $ 541,000 $ 440,000
---------------- ----------------
Total deferred tax assets 541,000 440,000
Valuation allowance (541,000) (440,000)
---------------- ----------------
Net deferred tax assets $ - $ -
================ ================
</TABLE>
F13
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 9- INCOME TAXES (continued)
SFAS No, 109 requires a valuation allowance to be recorded
when it is more likely than not that some or all of the
deferred tax assets will not be realized. At December 31,
1999, a valuation allowance for the full amount of the net
deferred tax asset was recorded because of continuing losses
and uncertainties as to the amount of taxable income that
would be generated in future years.
The Company recognized losses for the years ended December
31, 1999 and 1998. The amount of available additional net
operating loss carry forwards are approximately $250,000 for
1999 $350,000 for 1998, $150,000 for 1997, $500,000 for 1996
and $142,000 for 1995. The net operating loss carry forwards,
if not utilized, will expire in the years 2001 through 2019.
Note 10- FAIR VALUE OF FINANCIAL INSTRUMENTS
The following estimated fair value amounts have been
determined using available market information and appropriate
valuation methodologies. However, considerable judgement is
necessarily required in interpreting market data to develop
the estimates of fair value.
Accordingly, the estimates presented herein are not
necessarily indicative of the amounts that the Company could
realize in a current market exchange. The use of different
market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.
<TABLE>
<CAPTION>
December 31, 1999
Carrying Amount Fair Value
--------------- ----------
Assets:
<S> <C> <C>
Cash $ 216,993 $ 216,993
Accounts receivable, net 47,065 47,065
</TABLE>
The carrying amounts of cash and accounts receivable are a
reasonable estimate of their fair market value.
F14
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999
Note 11-- SHAREHOLDERS' EQUITY
Common Stock
------------
On February 12, 1998 the Company effected a one for ten reverse stock
split of its common stock and changed the par value of the common
stock from $.0001 per share to $.001 per share. All references to
number of shares, except shares authorized, and to per share
information in the consolidated financial statements have been
adjusted to reflect the stock split on a retroactive basis.
On February 26, 1998 the Company exchanged 1,500,000 shares of its
common stock $.001 par value for 1,500,000 shares of Worldwide Online
Corp. stock on a share for share basis.
On February 27, 1998 the Company sold to unrelated third parties,
under Rule 504 of the Securities and Exchange Act of 1933, as
amended, for net proceeds of $100,000, 20,000 units consisting of one
share of common stock $.001 par value, twenty-two (22) class A
warrants, each warrant to purchase one share of the Company's common
stock for $1.50 per share on or before March 30, 1998, and forty-five
(45) class B warrants, each to purchase a share of the Company's
common stock at any time after April 5, 1999 and expiring on April 5,
2001 for one dollar ($1.00) per share.
On November 17, 1998 the Company sold to an unrelated third party,
under Rule 504 of the Securities and Exchange Act of 1933, as
amended, 240,000 $0.001 par value shares at one dollar ($1.00) per
share, for net proceeds of $240,000. The proceeds of this offering
were used to pay for the acquisition of 761395 Alberta Ltd. (See
Notes 3 and 5)
Stock sales under Securities and Exchange Commission Rule 504 of
Regulation D:
On March 21, 1999 the Company sold 200,000 shares of $.001 par value
common stock in a private placement for net proceeds to the Company
of $200,000. Approximately $190,000 of the proceeds was used to
complete the acquisition of 761395 Alberta Ltd., a company owned by
the President of World Wide Data, Inc.
On April 6, 1999 the Company sold 65,000 shares of $.001 par value
common stock in a private placement for net proceeds of $65,000 for
working capital.
On September 30, 1999 as part of the sale of the convertible
debenture (Note 7), the Company issued 400,000 shares of common stock
to be held in escrow in the event of the exercise of the convertible
debenture. These shares while issued are not considered outstanding.
F15
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999
Note 11 -- SHAREHOLDERS' EQUITY (continue)
Warrants
In connection with the debenture financing on September 30, 1999
(Note 7) the Company issued 25,000 cashless warrants to purchase the
Company's common stock at $2.50 per share until September 30, 2004.
During 1998 all 440,000 class A warrants issued as part of the
February 27, 1998 unit sale were exercised for $660,000 net proceeds
to the Company. The 900,000 class B warrants issued as part of the
same unit sale remain outstanding as of December 31, 1999.
The per share exercise price of the outstanding warrants at December
31, 1999 are as follows:
<TABLE>
<CAPTION>
Exercise Year of
Shares Price Expiration
------ -------- ----------
<S> <C> <C>
900,000 $1.00 2001
25,000 $2.50 2004
</TABLE>
The following is a summary of warrant transactions:
<TABLE>
<CAPTION>
Year ended
December 31,
-----------------
1999 1998
------- ---------
<S> <C> <C>
Outstanding at beginning of period..................... 900,000 --
Issued as part of unit sale............................ -- 1,340,000
New warrants issued.................................... 25,000 --
Exercised during the period............................ -- (440,000)
------- ---------
Outstanding and eligible for exercise.................. 925,000 900,000
======= =========
</TABLE>
Note 12-- GOING CONCERN MATTERS
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As
shown in the financial statements for the years ended December 31,
1999 and 1998, the Company incurred losses of $248,803 and $443,158,
respectively, and has not made a profit in any year since its
inception. These factors among others may indicate that the Company
will be unable to continue as a going concern for a reasonable
period of time.
The financial statements do not include any adjustments relating to
the recoverability and classification of liabilities that might be
necessary should the Company be unable to continue as a going
concern. The Company's continuation as a going concern is dependent
upon its ability to generate sufficient cash flow to meet its
obligations on a timely basis and to obtain additional financing or
refinancing as may be required to ultimately attain profitability.
The Company is also actively pursuing additional equity financing
through stock sales (Note 11) and the exercise of its outstanding
warrants.
F16
<PAGE>
EXPERTS
The audited balance sheets of the Company as at December 31, 1999 and 1998
and the audited Statements of Operations, Statements of Stockholders' Equity and
Statements of Cash Flows for the years ended December 31, 1999 and 1998 have
been included herein and in the Registration Statement in reliance upon the
report, appearing elsewhere herein, of Kempisty & Company Certified Public
Accountants, P.C., independent certified public accountants, and upon the
authority of said firm as experts in accounting and auditing.
