ITEM 1. DESCRIPTION OF BUSINESS
World Wide Video, Inc. (the "Issuer" or "Company" or "WWV") was organized under the laws of the Commonwealth of Virginia on July 16, 1997. There was minimal activity in fiscal 1997. On April 9, 1998, the Company was reincorporated in the State of Colorado. The Company designs and manufactures technology products for the video communication market. The primary focus is the security, surveillance, and medical monitoring products based on unique video compression technology. WWV is a development stage company designing and developing custom ultra high speed and low cost hardware. The initial product has been based on the International Telecommunication Union (ITU) Standard, H.324, and will perform over normal telephone lines. This technology allows for bi-directional audio, video, and data over normal analog phone lines. Future products will support H.320 (for ISDN, ATM, ADSL, Satellites) and H.323 (for ETHERNET and INTERNET). The key portion of the Company's technology is being built around a series of new CoDec (audio/video Compression/Decompression) technology. The Company's technology is based on new and emerging custom chips, video compression algorithms, and support technologies. The Company's technology is designed to produce faster, smaller, and better performing video communication products at a lower cost than is currently available in the market place. In addition, WwV has video storage compression systems that will monitor locally and in unattended mode for a month or more. Furthermore, the company's technology and products will be tailored (customized) to meet specific client applications and market niches.
In anticipation of market introduction, the founders have developed several versions of prototype products, written proprietary enabling software/firmware, presented the products to large potential customers, developed an INTERNET WEB Site (www.wwv-usa.com) and identified potential strategic partners/distributors in the United States and other parts of the world.
Several delays have occurred in World Wide Video's planned production schedule due to lateness of key components (newly developed hardware chips, circuitry and firmware) from large chip manufacturers and the deletion of some of the existing chips. By Spring 2001, World Wide Video had produced a limited number of centurions, DVB's, and AVM's. These units were either sold or loaned for evaluation units to potential customers, and used by World Wide Video for demonstration purposes. As of September 30, 2001 the Company had minimal income. The Company has numerous clients interested in its products. Marketing channels will include distributors in the USA, Canada, South Africa, Australia, New Zealand, Malaysia, Singapore, Europe, Asia, and South America. In addition, the Company plans to launch an E-COMMERCE sales effort to directly sell some of its products to customers online.
World Wide Video products have been delivered to the following:
South Africa Canada Denmark Germany England Malaysia Italy Several locations within the United States
During the year, WWV has attended several trade shows and also has given numerous private demonstrations. World Wide Video, Inc. has been successful receiving visibility through media outlets and press releases this year.
The Company Business
Substantially all of the Company's operations have been in connection with the establishing a series of products based on video compression to penetrate the selected market areas. Those operations were restricted to design of products and development of prototypes for custom designed contracts. Most of that time was spent focusing on the design and development of new video communication products for market introduction. Several delays have occurred due to technical issues and the inability for the company to raise sufficient financial resources. Hopefully, it appears that these issues can be resolved and production can occur in Spring 2002.
The Company's products deliver high-speed audio, video and data information over the plain old telephone system (POTS) lines. The market potential for video communications includes every desktop computer, home computer and every business that needs to communicate, especially as video systems become more and more affordable. Multimedia Research Group forecasts that the videophone and video conferencing markets will total over $15 billion within the next five years, as the video technology becomes more common place. The Company's technology is designed to provide video telephony for the individual user (home), small to large businesses, the security/surveillance, and tele-medicine markets. WWV expects the market growth of these systems to be similar to that of the modem. At first modems were only used by highly paid business people who traveled extensively and needed to connect to their office computer while they were away. Now most computer users use modems to hook to the "Internet," to access electronic bulletin boards and to conduct research. Modems have become standard equipment for most computers, and video may also become standard equipment.
The International Telecommunication Union H.324 standard permits video, voice and data to be shared simultaneously over a simple telephone modem connection. It is the first standard to specify interoperability over a single analog phone line. Because of the H.324 standard, the next generation of video communication products will be able to talk to one another and provide a foundation for massive market expansion.
The Company's products operate over traditional, business and residential copper wire telephone systems commonly referred to as Plain Old Telephone Systems (POTS). POTS represent over 87% of the world's present telephone networks. POTS lines have a major cost advantage over digital lines as local calls are almost free and most long distance calls range from $.04 to $.08 cents per minute. Digital line rates range from approximately $.25 to $.75 cents per minute. The Company's technology compresses video and data at a higher rate than any competitor in the industry at this time. This gives the Company a tremendous advantage in frame rate and quality, which has been one of the limiting factors on widespread acceptance of the technology. The Company's products will provide video service at a new plateau in availability, video quality and at a lower cost than is presently available.
The Company Product Lines
Product Name: Centurion Target Markets: Security and Surveillance
This is a major market segment for the Company's technology. Surveillance and security information consisting of data, control, audio and high quality video images can be transmitted over POTS between cities, states, and countries or across the world.
The Centurion product family provides the first complete integrated system allowing data, audio and video surveillance from remote locations. Centurion is a small self-contained hardware module that does not require a PC. At 6.25"W x 10"L x 1.75"H and 5 watts of power, it is the smallest compression/decompression (codec) available to OEM designers and end-users. The Centurion product
family supports the International Telecommunication Union (ITU) H.324 standard for low bandwidth video over normal (analog) telephone lines.
The Centurion provides one-way video transmission for low cost surveillance applications. The Centurion is designed to be compatible with future hardware and software releases from WWV. Other Centurion family products, in the development stage, will support the ITU standards such as H.320 (for ISDN, ATM, T.1) and H.323 (for Internet and Ethernet). A high performance PCI computer card will support all three ITU standards. A proprietary "Time Critical Quantification" runtime and still video compression algorithm will be added to provide superior performance using either analog or digital telephone lines.
Using standard telephone lines, the Centurion puts any site, no matter how distant, within customer access. The unique 2-way video motion provides complete communication for virtually any surveillance or conferencing application. For security monitoring, there will be fewer unknown false alarms. For monitoring cash related activities, Centurion can provide an interface for POS (Point of Sale) scanners. Centurion can control remotely situated pan-tilt-zoom (PTZ) cameras as well as interface with security alarm equipment and other devices to verify a triggered alarm.
Product Name: Home MD(TM) Target Markets: Remote Audio/Video/Data Tele-Medicine, Home Care Medical Monitoring, Doctor and Nursing Facilities, Private Care
The Home Medical Display (HOME MD(TM)) system is designed to be placed in a home environment. The Home MD has been crafted as a very low cost and easily installable Home Medical Displaying system. The Home MD is a TV monitor with tuner that includes medical equipment interfaces that connect to WWV's Remote Audio/Video (RAV(TM)) technology. The medical interface accepts any FDA approved and physician selected medical monitor that supports collected data transfer. This permits a homebound patient to have meaningful medical care review over normal telephone lines with a health care provider. Both the patient and the health care provider have simultaneous audio and video connections using the TV and real-time data transfer of the collected medical information. The system uses the H.324 Standards for audio and video transmission over analog phone circuits.
Product Name: DVB(TM) Target Markets: Digital Video Bank , Security and Surveillance
The Digital Video Bank (DVB(TM)) combines the newest technologies to provide the latest in audio-video storage, video quality, and a frame rate (images per second) that exceed other alternatives such as a time lapse VCR. Say goodbye to changing and archiving tapes, poor image quality, and the need to have a separate system for searching recorded video. Under normal operating conditions of twenty-four hours and 7.5 frames per second, the DVB will store a minimum of thirty days of high-quality compressed video and audio at a resolution of 320 x 240 pixels. At the end of this period, the DVB will begin overwriting the oldest stored video. This overwriting loop continues indefinitely. The DVB measures 2.75" x 7.3" x 12.8".
Product Name: RAV(TM) PCI Target Markets: Video Communication (computer based) over POTS
The RAV(TM) PCI board is a low cost; high quality alternative to dedicated video conferencing systems. It can be used for commercial applications as diverse as desktop video conferencing and tele-medicine to consumer personal use. The RAV(TM) PCI is a standard half sized board that plugs into a PCI bus slot in a personal computer (PC). It can be utilized for both consumer and business video communications. It comes with software that is loaded into the PC and has a simple user interface. The RAV(TM) PCI installed in a workstation can make industry standard H.324 videophone calls to any computer already using Intel's
ProShare software. The RAV(TM) PCI will also support white boarding, file transfers and application sharing using the T.120 standard.
Industry Overview
The hottest general growth area is in computer and communication systems (perhaps as high as $100 billion over the next 5 years). Video communication is one of the largest markets within those general areas. The Company's products will address all of the major communication media like INTERNET, POTS, ETHERNET, Satellite, ADSL, ISDN, ATM, Cellular, and etc. Areas like security, medical monitoring, distance learning and video conferencing are all high growth potential. This means that the Company is poised for a potential unbridled growth pattern.
There has been a note worthy positive impact on the security and surveillance market since the unfortunate terrorist attacks on the World Trade Center and Pentagon in September of 2001. WWV has received calls from customers indicating their desire and availability of funds to purchase and evaluate WWV's products. WWV is working with other groups to provide a low cost solution to crime and drug problems in rural areas. One customer is partnering with WWV to provide "cop cams" in police vehicles to monitor all events in and around an officer's vehicle. The United States Border Patrol has purchased WWV's DVB for monitoring the southern borders of our country.
Just for video conferencing, Frost & Sullivan of New York estimates that the video conferencing market is worth $250 million and the video telephone market alone is worth $210 million. Alternately, the market research firm, Multi-Media Research Group forecasts that both markets will total over $15 billion within the next five years, as the video communication technology becomes more commonplace. Frost and Sullivan reports that the video conferencing system market is growing at a relatively fast pace. Four critical trends are allowing vendors to meet the needs of the customer, and these same factors will continue to drive the industry:
1. Technological advances affecting voice, data and video compression. 2. A sharp decrease in component prices. 3. Connectivity: the ability to call any location without special equipment. 4. The adoption and widespread implementation of international standards.
These factors will lead to a tremendous increase in the demand for Video Conferencing systems, and revenues will continue to grow at a high rate. The revenue growth rate for the years 1995 to 2002 is expected to be 43.2%. Because the industry cuts across several markets, there have been a variety of entrants ranging from large telecommunications and information systems companies to small entrepreneurs.
Over the next few years, the competition within the marketplace will increase and market share will go to those companies that offer quality and convenience at the lowest cost. According to industry experts, products will be competing based on "user friendliness", the ability to share information easily, and, most importantly, price.
WWV believes that video conferencing has already grown past group meetings into the desktop segment of the market. Success in this market will depend on improved quality and significant decreases in price. Eventually the market will grow so that every desktop will be considered a "video phone". Applied Business Telecommunications (ABTC) has compiled a comprehensive report on desktop video conferencing. They estimate an installed base of almost 18,000 units as of Aug. 1999. The average growth rate over the last three years has been approximately 60%; more than 2,000 companies have utilized video conferencing to overcome competitive pressures and improve global communications.
Personal Technology Research, cited in ABTC's report, believes that there will be a trend in video conferencing to develop a comprehensive network infrastructure between large groups, small groups and desktop systems, particularly for specialized applications such as distance learning, telecommuting and
training. They see the four primary market segments emerging in the first wave of desktop video conferencing within the next one to three years. Those markets are:
1. Standards-based products enabling desktop video conferencing between group systems and desktop computers/workstations. 2. General business computer-based applications enabling low cost desktop video conferencing across multiple operating systems and platforms via ISDN, switched digital services, LANs and PSTN. 3. The "Video Phone" Market. 4. Video Communication via regular telephone lines and digital lines.
WWV agrees that the market potential for desktop video conferencing includes every desktop computer in every business that needs to communicate, especially as systems become more and more affordable. Eventually the market will grow to include the home market. The number of individuals who need to communicate with another location only limits the market size. WWV expects the market growth of these systems to be similar to that of the modem. At first modems were only used by highly paid business people who traveled extensively and needed to connect to their office computer while they were away. Now most computer users use modems to hook to the "INTERNET", to access electronic bulletin boards and to conduct research. Modems have become standard equipment for most computers, and so too will desktop video conferencing equipment become standard equipment.
Internet
The Internet has rapidly grown from a network connecting a limited number of government, research and educational institutions to a global medium accessed by millions of users to communicate and exchange information. Growth in the Internet has been fueled by an increasing usage of personal computers at home and in the workplace, improvements in the performance and speed of personal computers and modems, improvements in network infrastructure, enhanced ease of access to the Internet provided by service providers, consumer-oriented on-line services and long-distance telephone companies, emergence of standards for Internet navigation and information access, declining costs of Internet service due to increased competition among access providers and increased awareness of the Internet among businesses and consumers. Growth in Internet usage by non-technical users in particular has also been fueled by the emergence of the Web, which uses browser technology and simplifies the retrieval and transmission of information.
As the Internet has become more accessible, functional and widely used by consumers and businesses, its commercial potential has grown. The Internet is emerging as a medium through which businesses can interactively inform, educate, entertain and conduct business with millions of individuals. Thousands of companies have created corporate Web sites that feature information about their product offerings and advertise employment opportunities. Through the Web, Internet content providers are able to deliver timely, personalized content in a manner not possible through traditional media. Internet content can be continuously updated, and accessed by users at any time.
The next version of the Company's product will be INTERNET compatible. The product is current running in prototype form and will improve to support initial speeds up to 128Kbps and up to 384Kbps in the second version.
In additional to utilizing normal marketing distribution channels, the Company also plans to launch an E-COMMERCE approach on its Web home Page (www.wwv-usa.com) to directly sell some of its user oriented products.
Sales and Marketing
The Company has key personnel and experienced manufacturer representatives focused on its sales, marketing and customer service efforts worldwide. Company's sales and marketing plan is to concentrate on:
1. Medium and Large OEM, Value Added Resellers, and Systems Integrators. 2. Medium and large clients for customized products. 3. National and International Distributors. 4. E-Commerce for standard products that can be sold directly to end users.
The Company plans to have distributors in the United States, Europe, Malaysia, Asia, Canada, Australia, New Zealand, and Africa.
Products, Services, Markets, Methods of Distribution and Revenues. Digital electronic products, based on audio/video compression, are presently the principal products to be produced by the company. The Company has commenced shipping limited production and some prototype products. The first production units were shipped in Spring of 2001. The security, surveillance, and medical markets appear very strong and growing. Based on the initial product shipments, enhancements and customization are under way. The new enhanced products should ship in spring of 2002. These products will be more marketable and provide better profit margins than those shipped this year.
Marketing and Advertising. WWV attended several trade shows along with holding private showings and demonstrations to potential new customers. WWV was the focus of several media articles including USA Today, Airport Magazine, Barrons, World Investor link, Wall Street Reporter and CEO Cast. Currently, marketing is by trade shows, word of mouth and by Internet web page. A series of Press Releases are planned in conjunction with various product launches in Spring of 2002.
Clients. The Company has shipped a limited number of production products and some prototypes of others during this year. WWV is in the process of enhancing the products to make them more maketable and profitable. Some products have been sold and others have been used for evaluation purposes by potential customers and for marketing purposes. WWV is in discussion with several clients (see list below) for custom products. Some of these companies have spoken with WWV about the potential for several hundred to several thousand units over the next couple of years. There are also several more clients that have expressed serious interest in additional custom products. In addition to the custom contracts, the Company has a list of over 100 potential clients that have either issued a purchase order, a no cost evaluation purchase order or have expressed serious interest in the Company's standard products. The potential Client list includes:
Custom Products:
1. Advance Medtronix, Inc. 2. Taxi Cab Fleet 3. Foreign Governments 4. Template Health Systems 5. SEMCO 6. SDS 7. International Medical Distributor 8. Security Contractor in Washington D.C.
Standard Products:
1. DataPower USA, Inc. 2. United States Border Patrol 3. Sewam 4. ABM IT 5. FBI 6. US Department of State 7. NR PTY LIMITED, Australia 8. C & P Video 9. RMASA 10. Access Family TV
11. US Army 12. NRL 13. Trivett's Family Furniture
All potential sales, including Purchase Orders, Contract(s), No Cost POs and Letters of Intent, are contingent upon the performance, availability and acceptance of the prototype units. There is the possibility that the customer no longer has the requirement for these types of products. Another issue could be the customer's ability to pay for the production product. The company has had several delays in completing the production units. As of September 30, 2001, it appears that the technical problems have been overcome and production units should be shipped in the Spring of 2002. The Company has complete arrangements to manufacture the production units subject to additional working capital requirements. In the opinion of management, there are no technical problems to produce and satisfy the potential backlog of orders. Additional Working Capital may be needed.
Once the Company starts to deliver product, it will initially be dependent upon a single customer or a few customers. Over the first year after the start of the production, the Company does not foresee any one client representing more than 10% of the total sales for that year.
The company does not have any government contracts at this time.
The video electronics industry is highly competitive. The Company faces competition from a variety of large and small companies, both public and private. Many of the competitive companies so engaged possess greater financial and human resources than the Company and therefore have greater leverage in acquiring prospective development and marketing personnel. Accordingly, a high degree of competition in these areas is expected to continue. The markets for video electronic products have increased dramatically in recent years and so have the competitors in those markets. There is no assurance that the Company's revenues, if any ever develop, will not be adversely affected by such factors.
Video Communication Product Pricing and Market Share
The industry has been waiting for a video system that can offer high quality at a reasonable price. So far no one has been able to do that, but WWV can and will have the best opportunity in the industry to offer high quality at the lowest price. WWV realizes that this will remain a major advantage, and it must keep the R&D effort going to maintain market share.
As with most new high technology, the average industry price will continue to fall over the next decade. According to PictureTel (the current industry leader for ISDN based solutions), video conferencing prices are currently falling at 20% a year. Industry experts predict that they will continue to do so at least until the year 2005.
WWV represents new technologies. Video communication systems have been available for over ten years, but only now are offering affordable and high quality video conferencing via existing desktop terminals. WWV's key competitive advantage lies in the ability to: 1. Use any telephone line analog or digital, or use existing local area networks (LANs) like ETHERNET, or wide area networks (WAN) like INTERNET. 2. High performance, clearer and more frames per second at higher resolution. 3. Requires less bandwidth than competitors. WWV's products will continue to function at speeds as low as 9,600 baud as compared to 21,600 baud required by others. 4. Smaller size and a lower power requirement mean that WWV's technology can be placed in more locations, like notebooks, inside VCRs, TVs and automatic teller machines. 5. WWV's technology is uniquely applicable to many markets. WWV's technology could compliment and compete with products in new markets.
Because video communication is an embryonic industry, the market place for such technology is still evolving. Unlike a computer or a piece of athletic equipment, which have specific, statistically measurable user-populations, the video communication user-population seems unlimited.
In fact, as the "information superhighway" develops and interactive multimedia becomes part of the INTERNET, anyone who owns a PC or television and telephone could become an end user.
Competition
The video conferencing industry is one that is based on research and development, with new products being introduced into the market on a regular basis. The market competes primarily on the basis of video and audio quality, ease of use and price. Management believes that WWV's systems supersede competition by offering a superior design and performance at a lower bill of materials (BOM) price and in a smaller form factor (size). In the future, competition will be based primarily on performance and features, as price will reach a low plateau. Management believes that WWV will stay ahead of the competition by concentrating its efforts on research and development and improving the efficiency of WWV's designs. WWV also offers numerous technical advantages, and one of these is the system's ability to use analog, digital and wireless as a transport medium.
The POTS (Plain Old Telephone System) hardware based (DSP) solution is only offered by two competitors at this time. Both are based on slower DSP based systems. See Section 9.0 for a detailed competitive analysis.
WWV is using technology that compresses video and data at a higher rate than any other company in the industry. The compression rate of video is about 3-4:1 better than our fastest competitors. This high rate of compression gives WWV a tremendous advantage in frame rate and quality at any given bandwidth. This advantage will initially be used to provide better products in the POTS area, and the ISDN version products will quickly follow the POTS product. This means that WWV's ISDN based products will provide the same quality over 2 ISDN channels at a lower price than the current ISDN competitors can do today over 6 ISDN channels. (Two ISDN line charges versus 6 ISDN lines charges).
WWV recognizes that the competition in this industry is intense. There are only two H.324 hardware based codec manufacturers. Both have focused on the consumer video conferencing market. The POTS industry players are 8x8, Inc. (see below for more details) and to a lessor degree C-Phone, Inc. They have directed their marketing efforts toward the home video phone environment. The home-based conferencing market competes mainly on price. WWV has identified that video communication is most valuable to businesses, not home users.
The WWV marketing approach will be directed toward industries that need remote monitoring, as in security and surveillance, and quality video conferencing. Industry applications such as the security market are more dependent upon acceptable video quality and video performance. World Wide Video's hardware provides superior video quality using newer digital technology. In addition to the quality of the video, WWV's initial products will be priced equal to or less than the competition.
8x8, Inc. (formerly IIT) is the main competitor to WWV. 8x8 has been in the business of selling video compression chips for about ten years. About four years ago, they were producing a consumer POTS Set-Top-Box, which is a H.324 codec with a built-in camera to be used with a standard TV for video display and audio. The 8x8 and C-Phone frame rate is slow (according to their advertising - -theoretical maximum is 15 SQCIF frames per second) and the minimum bandwidth is 19.2 Kbps. WWV's Centurion? product is about 1/4 the physical size and requires about 1/4 the power. The Centurion? frame rate is better (theoretical maximum is 20 SQCIF frames per second) and the minimum bandwidth required is 9.6 Kbps. About a year ago 8x8 starting developing POTS based security products using the same chip designs. They have not made much progress again for the same reasons. Recent 8x8 announcements indicate that they may be leaving the consumer POTS area and that now 8x8 is concentrating on industrial/commercial markets.
Working Capital Needs
The working capital needs of the company consist primarily of operating capital, product development capital and marketing capital. These requirements may be met by private placement of stock or loans or
by the sale of working interests. The Company will need to develop additional working capital for future operations including setting up production lines. Presently, it has no definite source or commitment for any additional funds.
With the closeness of the first three different production units becoming a reality, the Company has greatly improved the probability of more private funds becoming available. Several companies and organizations have expressed interest in investing. The Company is attempting to minimize the cash requirement needed for the start of production for two custom contracts (2 of the initial three production products) by requesting down payments, delivery order and accounts payable financing. WWV has been able to negotiate extended payments to some of its key electronic component product and contract manufacturers.
Based on the analysis of funds available and funds required to complete the initial production of product and associated production costs, research and development, the Company decided to raise the additional required working capital by a Regulation D Rule 506 offering of Class A preferred stock. In June 1999, WWV started the preferred offering, which closed on August 31, 2000. The company sold 121,114 shares of preferred stock. The preferred offering consisted of selling a unit for $6. A unit includes one preferred share and 2 preferred warrants. The preferred warrants expired on September 30, 2001. There is a dividend of 6% per year payable every 6 months. At the close of the preferred offering, WWV provided the option to convert the preferred shares to common stock at a ratio of 2 common shares for one preferred share.
Sponsored Research and Development
The Company has no sponsored research and development contracts at this time.
Intellectual Property
All of the Product underlying hardware/firmware designs belong to the Company and are protected by United States Copyright laws. The Company also has developed unique chips that are not available in the general market place. All of the User Interface and controlling software belongs to WWV and is copyrighted. Also, only binary licenses will be sold in conjunction with the products. The Company, in its hardware design, has used a variety of anti-reversing techniques. Nevertheless, there can be no assurance that copyright laws and other procedures will provide any competitive advantage to the Company.
The Company has applied to the United States Patent and Trademark Office for the registration of two trademarks. The two trademarks are "Spectator" and "RAV". Approval for these trademarks is in the final phase, which is the publication of them in the open literature. There is a high probability of approval for those trademarks by the PTO. The Company also asserts common law protection on certain names and marks that it has used in connection with its business activities.
The Company uses standard industry confidentially agreements in all of its contracts and sub-contracts as protection from industrial espionage. Contractors and sub-contractors are carefully screened and selected for trustworthiness before being engaged. Nevertheless, technology protection is difficult if not impossible to obtain.
Government Regulation
Compliance with Environmental Laws and Regulations
The operations of the Company are subject to local, state, and national laws and regulations in the USA. To date, compliance with these regulations by the Company has had no material effect on the Company's operations, capital, earnings, or competitive position, and the cost of such compliance has not been material. The Company is unable to assess or predict at this time what effect such regulations or legislation could have on its activities in the future.
(a) State and Local Regulation - None.
The Company cannot determine to what extent future operations and earnings of the Company may be affected by new legislation, new regulations or changes in existing regulations at state or local level.
(b) National Regulation - None.
The Company cannot determine to what extent future operations and earnings of the Company may be affected by new legislation, new regulations or changes in existing regulations at a national (U.S.) level.
(c) Environmental Matters - None at the date of this registration statement.
(d) Other Industry Factors - None at the date of this registration statement.
Employees
As of September 30, 2001, the Company had four full time employees. The Company's employees are not represented by a labor union or collective bargaining agreement. The Company regards its employee relations as excellent.
Company History
World Wide Video, Inc. (the "Issuer" or "Company" or "WWV") was organized under the laws of the Commonwealth of Virginia on July 16, 1997. World Wide Video, Inc. reincorporated under the corporate laws of the State of Colorado on April 9, 1998. From April 1998 - April 1999 the company raised over $900,000 via a Regulation D, Rule 504. As part of the Rule 504, the Company completed the first private placement of 200,000 shares consisting of common stock @ $.50 per unit for operating capital. With the Offering Price amended on May 1, 1998, the Company completed a second private placement consisting of 75,000 shares of common stock @ $2.00 per unit for operating capital. The offering price was amended again of July 1, 1998 to $2.75 per unit. The Company completed the final private placement consisting of 233,987 shares of common stock @ $2.75 per unit for operating capital in late 1998 and early 1999 and closed the Rule 504 Offering on April 6, 1999.
In July 1999, the Company filed aSB with the SEC. In July 1999, the Company started a Preferred Stock Offering, at $6 per unit, via Regulation D, Rule 506, with the goal of raising $900,000. A unit includes one preferred share and 2 preferred warrants. The preferred warrants expired September 30, 2001. There is a dividend of 6% per year payable every 6 months. The offering was closed on August 31, 2000. At this time, WWV provided preferred shareholders the option to convert the preferred shares to common stock at a ratio of 2 common shares for one preferred share. The Company raised a total of approximately $727,000 through its offering of preferred stock.
In April, 2000 the Board of Directors of World Wide Video, Inc. accepted an offer to sell 5,786,400 common shares for a total of $11,769,400 to an outside investor, via a private placement. As of September 30, 2001, 326,400 common shares, at $2.25 per share, have been issued under this agreement. Completion of the agreement is dependent upon the cash flow of the outside investor.
During 2001 the Company raised $246,700 thru a private offering sale of 3,592,500 shares of common stock. During fiscal 2001 and 2000, the Company entered into several agreements in which shares were exchanged for services. Stock issued was valued at the current sales price of common stock.
The Company was approved for trading by NASD in November, 2000 for the Over the Counter Bulletin Board (OTC BB).
ITEM 2.
ITEM 2. PROPERTIES
Substantially all offices of the Company are located in leased premises.
The Company's principal office is located at 102A North Main Street, Culpeper, Virginia, 22701. The Company leases the office space under three separate leases. All three leases are month to month leases with a combined rent of approximately $3,100 plus utilities.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Company believes that it is not involved in any ongoing, pending or threatened legal proceedings that could reasonably be expected to have a material adverse effect on the Company's financial condition or operations.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS
NASD approved the Company for trading of WWV's common stock in November 2000 for the Over the Counter Bulletin Board (OTCBB). On January 18, 2001 WWV started trading on the OTCBB with the ticker symbol "WWVD".
The following table sets forth, for the periods indicated, the high and low sale prices per share for the Common Stock as reported by the NASD's OTCBB:
As of September 30, 2001, there were 17,590,761 Common shares outstanding and 100,000,000 authorized. There were 70,724 Common warrants @ $2.75 with an expiration date of 12/5/01.
As of September 30, 2001, there were 121,114 Preferred shares issued with 10,000,000 Preferred shares authorized. Preferred shares are not publicly traded. Dividends are being accrued at the rate of 6%. There were no Preferred warrants.
On September 28, 2001, the last reported close price of the Common Stock as reported by the NASD's OTCBB was $ 0.50. As of September 30, 2001, there were 81 holders of record of Common Stock. There are no dividends being paid for Common Stock.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-K CONCERNING THE COMPANY'S BUSINESS OUTLOOK OR FUTURE ECONOMIC PERFORMANCE; ANTICIPATED PROFITABILITY, GROSS BILLINGS, COMMISSIONS AND FEES, EXPENSES OR OTHER FINANCIAL ITEMS; AND STATEMENTS CONCERNING ASSUMPTIONS MADE OR EXCEPTIONS AS TO ANY FUTURE EVENTS, CONDITIONS, PERFORMANCE OR OTHER MATTER ARE "FORWARD-LOOKING STATEMENTS" AS THAT TERM IS DEFINED UNDER THE FEDERAL SECURITIES LAWS. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE STATED IN SUCH STATEMENTS. SUCH RISKS, UNCERTAINTIES AND FACTORS INCLUDE, BUT ARE NOT LIMITED TO, (I) THE UNCERTAIN PRODUCT AVAILIBILITY IN A TIMELY MANNER, (II) PERFORMANCE, (III) THE UNCERTAIN PRODUCT ACCEPTANCE BY THE CUSTOMER, (IV) COMPETITION, (V) THE COMPANY'S ABILIBILTY TO RAISE THE NECESSARY FUNDS, (VI) UNKNOWN PARTS AND COMPOMENT AVAILIBILITY, (VII) THE LOSS OF SERVICES OF CERTAIN KEY INDIVIDUALS COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY'S BUSINESS, FINANCIAL CONDITION OR OPERATING RESULTS, (VIII) LITIGATION.
Overview
WWV is a development stage company designing and developing custom ultra high speed and low cost hardware for the video communication market. As of September 30, 2001 the Company had minimal income. As a result of the ongoing product development, the Company had a net loss of $783,195 for the year ended September 30, 2001. Several delays have occurred in the planned production schedule due to lateness of key components (newly developed hardware chips, circuitry and firmware) from large chip manufacturers and the deletion of some of the existing chips. Now it appears that these component problems will be resolved shortly and production for the first in a series of products is scheduled for Spring of 2002. The Company has not started production of any of its products as of this filing. The Company has clients from around the world interested in its products. The Company has entered into an agreement that will assist it in meeting the demands for its products. Since most of the world's population has virtually no access to the information "superhighway" and is fortunate to have telephone service, the potential international market for WWV's products is immeasurable. Even in the United States, the accessibility of that information age technology has been concentrated in the cities and metropolitan areas where various supporting infrastructures exist. The rural and remote areas must rely heavily, if not exclusively, upon other technological means, such as POTS, to access distant medical or learning centers, etc.
Result of Operations
The year ended September 30, 2001 compared to the year ended September 30, 2000
The Company had no sales for the years ended September 30, 2001 and 2000 due to still being in the development stage. The Company sold some peripheral items as well as some prototype units for testing purposes, resulting in income in the amount of approximately $87,000 for the year ended September 30, 2001. This was an increase of approximately $84,000 from September 30, 2000, due to the Company's progress in product development. The Company expects to begin production for the first in a series of products during Spring 2002.
Product development costs decreased to $508,659 for the year ended September 30, 2001 from $586,009 for the year ended September 30, 2000, a decrease of approximately 13%. The primary cause for this overall decrease was a decrease in subcontractor costs and other miscellaneous development costs. Salaries and related costs increased to $481,537 for the year ended September 30, 2001, from $368,264 for the year ended September 30, 2000. Subcontractor costs decreased to $24,334, from $138,586, representing a decrease of 82%. These changes were due to a shift from the use of subcontractors to employees for product development. Product and development costs represented 58% of total expenses for the year ended September 30, 2001, down from 61% for the previous year.
General and administrative expenses decreased $15,635 to $362,146 for the year ended September 30, 2001. This amount was 42% of total expenses for the year, as compared to 39% for the year ended
September 30, 2000. This decrease was attributable to the decrease in working capital which required the Company reduce overall expenses for the year ended September 30, 2001. Office expenses decreased from $90,223 in 2000 to $68,933 in 2001. Marketing and sales expenses also decreased from $53,803 to $39,995 for the year, which was representative of the Company's effort to focus on completion of the development of its products. Occupancy and utility expenses increased $6,971 to $66,219, a 12% increase, resulting from the expansion of its facilities during the year ended September 30, 2000. Likewise, insurance expense increased $10,493 due to the increase of employees and the addition of facilities in the prior year. Depreciation and amortization expense increased to $48,126 for the year ended September 30, 2001, up from $28,897 the year before. This increase was attributable to recognizing a full year's depreciation on assets placed in service during the year ended September 30, 2000.
The year ended September 30, 2000 compared to the year ended September 30, 1999.
The Company had no sales for the years ended September 30, 2000 and 1999 due to still being in the development stage.
Product development costs decreased to $586,009 for the year ended September 30, 2000 from $769,728 for the year ended September 30, 1999, and decrease of approximately 24%. The primary cause for this overall decrease was a decrease in subcontractor costs and other miscellaneous development costs. Salaries and related costs increased to $368,264 for the year ended September 30, 2000, from $181,791 for the year ended September 30, 1999. Subcontractor costs decreased to $138,586, from $446,628, representing a decrease of 69%. These changes were due to a shift from the use of subcontractors to employees for product development. Product and development costs represented 61% of total expenses for the year ended September 30, 2000, down from 83% for the previous year.
General and administrative expenses increased $221,498 to $377,781 for the year ended September 30, 2000, representing an increase of 142%. This amount was 39% of total expenses for the year, as compared to 17% for the year ended September 30, 1999. The increase in the percentage is attributable to increased office and marketing expenses due to the advancement of product development, as well as increased professional fees. Office expenses increased to $90,223, from $38,971 for the year ended September 30, 1999 due in part to the increase in the number of employees. Marketing also rose, from $32,827 to $53,803 for the year showing an increase in promotion of the new product. Rent and utilities increased $24,416 to $39,325, a 164% increase, due to the need for expanded facilities.
Liquidity and Capital Resources
The Company's principal capital requirements have been to fund design of products, working capital and marketing of products being designed.
Net cash used in operating activities for the years ended September 30, 2001 and 2000 were $221,043 and $737,249, respectively. The decrease in cash used in operating activities in 2001 was primarily due to lack of working capital.
Net cash used in investing activities for the years ended September 30, 2001 and 2000 were $3,419 and $137,542, respectively. The decrease in investing activities was due to the decrease in purchases of property and equipment during the year ended September 30, 2001.
Net cash provided by financing activities for the years ended September 30, 2001 and 2000 were $227,590 and $874,647, respectively. This decrease was due to the decline in the amount of stock sold for cash during the year ended September 30, 2001.
As of September 30, 2001, the Company owed salaries employees in the amount of $63,562. The Company also owed salaries and other amounts to officers in the amount of $543,133 as of September 30, 2001, up from $328,000 as of September 30, 2000. The Company has begun repaying back salaries due to employees during the year ended September 30, 2002, as working capital is obtained.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
WORLD WIDE VIDEO, INC. A Development Stage Enterprise
YEARS ENDED SEPTEMBER 30, 2001 AND 2000
WORLD WIDE VIDEO, INC. (A Development Stage Enterprise)
FINANCIAL REPORT YEARS ENDED SEPTEMBER 30, 2001 AND 2000
CONTENTS
Page ----
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS 17
FINANCIAL STATEMENTS
Balance Sheets 18-19
Statements of Operations 20
Statements of Cash Flows 21
Statements of Stockholders' Equity 22
Notes To Financial Statements 23-28
INDEPENDENT AUDITOR'S REPORT
To the Stockholders World Wide Video, Inc. Culpeper, Virginia
We have audited the accompanying balance sheets of World Wide Video, Inc., a development stage enterprise as of September 30, 2001 and 2000, and the related statements of operations, cash flows and stockholders' equity for the years ended September 30, 2001, 2000 and 1999. 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 audits.
We conducted our audits in accordance with generally accepted auditing standards in the United States of America. Those standards require that we plan and perform the audits 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 our audits provide 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 World Wide Video, Inc. (a Colorado Corporation) at September 30, 2001 and 2000, and the results of its operations and its cash flows for the years ended September 30, 2001, 2000 and 1999, in conformity with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming that the Corporation will continue as a going concern. As discussed in Note 2 to the financial statements, the Corporation has suffered continued losses that raise substantial doubt about its ability to continue as a going concern during the development stage. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Fairfax, Virginia January 8, 2002
WORLD WIDE VIDEO, INC. (A Development Stage Enterprise)
BALANCE SHEETS SEPTEMBER 30, 2001 AND 2000
The Notes to Financial Statements are an integral part of these statements.
WORLD WIDE VIDEO, INC. (A Development Stage Enterprise)
STATEMENTS OF OPERATIONS YEARS ENDED SEPTEMBER 30, 2001, 2000 AND 1999
The Notes to Financial Statements are an integral part of these statements.
STATEMENTS OF CASH FLOWS YEARS ENDED SEPTEMBER 30, 2001, 2000 AND 1999
The Notes to Financial Statements are an integral part of these statements.
STATEMENTS OF STOCKHOLDERS' EQUITY YEARS ENDED SEPTEMBER 30, 2001, 2000 AND 1999
The Notes to Financial Statements are an integral part of these statements.
WORLD WIDE VIDEO, INC. (A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 AND 2000
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company and Purpose
World Wide Video, Inc. (the Company) was organized under the laws of the Commonwealth of Virginia on July 16, 1997. On April 9, 1998, the Company was reincorporated in the State of Colorado. The Company intends to design and manufacture technology and products for the video telephony market. The principal activities of the Company since inception have been raising capital, conducting research and product development. The Company conducts its operations from offices in Culpeper, Virginia.
The accounting and reporting policies of World Wide Video, Inc. conform with generally accepted accounting principles and reflect practices appropriate to a development stage enterprise. These policies are summarized below.
Development Stage Enterprise
Substantially all of the Company's operations have been in connection with the establishment of a new business. The Company has adopted Statement of Position 98-5 which requires expensing of costs of start-up activities, including organization costs, as incurred.
Financial Statement Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Due to their prospective nature, actual results could differ from those estimates.
Financial Instruments
The estimated fair value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other liabilities approximate their carrying amounts in the financial statements.
Cash and Cash Equivalents
The statements of cash flows classify changes in cash or cash equivalents (short-term, highly liquid investments readily convertible into cash with a maturity of three months or less) according to operating, investing or financing activities.
There were no income taxes or interest paid during the years ended September 30, 2001, 2000, or 1999.
WORLD WIDE VIDEO, INC. (A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 AND 2000
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Inventory
Inventory, which consists primarily of raw materials, is stated at the lower of cost or market, with cost being determined on a first-in, first-out basis. Inventory consists principally of chipsets, which are purchased from Analog Devices, Inc. The Company has no binding commitments to purchase additional inventory.
Property and Equipment
Property and equipment are recorded at cost and depreciated over their estimated useful lives.
Leases which meet certain specified criteria are accounted for as capital assets and liabilities, and those not meeting the criteria are accounted for as operating leases.
Expenditures for maintenance, repairs, and improvements which do not materially extend the useful lives of property and equipment are charged to earnings. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation or amortization is removed from the accounts, and the resulting gain or loss is reflected in earnings.
Depreciation expense for the year ended September 30, 2001 was $24,523 and for the year ended September 30, 2000 was $15,772 and $4,765 for the year ended September 30, 1999.
Technology Licenses
The Company capitalizes technology licenses. Technology licenses are carried at cost less accumulated amortization. Amortization is taken on the straight line basis over three - five years.
Amortization expense for the year ended September 30, 2001 was $22,150 and for the year ended September 30, 2000 was $13,125, and $10,000 for the year ended September 30, 1999.
Deferred Offering Costs
Deferred offering costs represent costs incurred in connection with raising capital. Upon completion of an offering, the amount of the proceeds credited to additional paid in capital is reduced by the deferred offering costs. Should an offering be unsuccessful, these costs are charged to expense.
Deferred Revenue
License revenues are generally recognized upon delivery of the licensed technology provided no significant future obligations exist and collection is probable. Payments for nonrecurring engineering costs are recognized upon acceptance of prototypes by the customer, provided no significant future obligations exist and collection is probable. Other income in 2001 includes forfeited deposits by potential customers.
WORLD WIDE VIDEO, INC. (A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 AND 2000
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
The Corporation utilizes the liability method for accounting for income taxes. The liability method accounts for deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to differences between financial statement amounts and tax bases of assets and liabilities. The resulting deferred income tax liabilities are adjusted to reflect changes in tax laws and rates.
Temporary differences consist of the difference in financial statement and income tax bases for accounting for start up and organizational costs. Deferred income taxes related to an asset or liability are classified as current or noncurrent bases on the classification of the related asset or liability. Deferred tax assets related to losses accumulated during the development stage have been reduced by a corresponding valuation allowance as of September 30, 2001 and 2000.
Net Loss Per Share
Basic net loss per share is computed by dividing net loss available to common stockholders (numerator) by the weighted average number of common shares outstanding during the year (denominator). Diluted net loss per share is computed using the weighted average number of common shares of potential common shares outstanding during the year. Potential common shares result from the assumed exercise, using the treasury stock method, of outstanding convertible cumulative preferred stock having a dilutive effect.
The numerators for each period presented are equal to the reported net loss plus cumulative preferred dividends. Neither the preferred or common warrants were included in the computations of net loss per share because the effect on the calculations would be antidilutive.
2. NEED FOR ADDITIONAL CAPITAL
The Company's continued existence is dependent upon its ability to raise additional funds to complete products in development and bring the products to market. In the past three years the Company has raised capital through a variety of private securities offerings of both preferred and common stock. Management's course of action to raise additional funds will be through similar private offerings or public offerings, which in Management's opinion will provide sufficient capital resources to complete current product development and initial product marketing.
WORLD WIDE VIDEO, INC. (A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 AND 2000
3. PREPAID EXPENSES AND FEES
Included in Prepaid Expenses at September 30 are the following:
4. OTHER ASSETS
The Company acquired a technology license at a cost of $37,500, from Databeam, Inc., that is being amortized over a period of three years, the expected life of the agreement. The license agreement permits the Company to use certain proprietary software products. The net carrying value of the license at September 30, 2001 was $21,875 and at September 30, 2000 was $34,375.
The Company has acquired a technology license at a cost of $50,000, from Analog Devices, Inc., that is being amortized over a period of five years, the expected life of the agreement. The license agreement permits the Company to use certain proprietary reference designs and software in the development of video telephony products. The net carrying value of the license at September 30, 2001 was $13,750 and at September 30, 2000, the carrying value was $23,750.
The Company sold non-exclusive rights to market World Wide Video, Inc. products to U.S. Government military bases in exchange for 250,000 shares of DataPower USA, Inc. stock. The Datapower stock does not have an attainable market value and therefore no value has been recorded.
5. CONTRIBUTED CAPITAL
In connection with the reincorporation of the Company, the original stockholders received 10,000,000 shares of common stock.
In April 1998, the Company commenced a private offering in which 233,981 common shares at $2.75 per shares were sold. After deducting costs of $95,300, the Company realized proceeds of $548,067. The offering was concluded on April 6, 1999. In connection with this offering, 70,274 warrants entitling the holder to purchase one share of common stock at $2.75 were issued with the sale of the last 70,274 shares.
WORLD WIDE VIDEO, INC. (A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 AND 2000
5. CONTRIBUTED CAPITAL (continued)
In July 1999, the Company commenced a private offering of 150,000 cumulative preferred shares at $6.00 per unit. The preferred stock earns a dividend at the rate of 6 percent per annum, payable semi-annually. At the close of the private offering each cumulative preferred share is convertible into 2 shares of common stock for a two-year period ending September 30, 2001. The Board, at its discretion, can redeem all preferred shares in exchange for three shares of common stock for each share of preferred stock. The Company raised $141,000 during the year ended September 30, 1999 with the issuance of 23,500 shares. During the year ended September 30, 2000 the Company raised $585,647 with the issuance of 976 shares.
In April, 2000 the Board of Directors of World Wide Video, Inc. accepted an offer to sell 5,786,400 common shares for a total of $11,769,400 to an outside investor, via a private placement. As of September 30, 2001, 326,400 common shares, at $2.25 per share, have been issued under this agreement. Completion of the agreement is dependent upon the cash flow of the outside investor.
During 2001 the Company raised $246,700 thru a private offering sale of 3,592,500 shares of common stock. During fiscal 2001 and 2000, the Company entered into several agreements in which shares were exchanged for services. Stock so issued was valued at the current sales price of common stock.
6. OPERATING LEASE
The Company leases office space in Culpeper, Virginia, under three lease agreements. Two of the lease agreements are month-to-month with a combined monthly rent is $2,000. The third lease agreement is for a term of one year expiring April 30, 2002, monthly rent is $1,100. Future minimum lease payments total $7,700 as of September 30, 2001. Rent expense was $42,522, $32,360 and $8,062, respectively, for the years ended September 30, 2001, 2000 and 1999.
8. RELATED PARTIES
The two majority stockholders have employment agreements, which commenced January 1, 1999 and continue until December 20, 2004. The agreements provide for annual salaries of $120,000. Of these amounts $509,450 and $320,000 remains unpaid at September 30, 2001 and September 30, 2000, respectively.
WORLD WIDE VIDEO, INC. (A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 AND 2000
9. COMMITMENTS AND CONTINGENCIES
The Company has entered into several agreements and contracts in connection with the raising of capital.
Raising Capital
The Company has engaged several consultants to assist in the effort to raise additional capital. Certain of these contracts require payment of fees calculated as a percentage of completed transactions (see Notes 5 and 8). Other contracts require compensation in the form of stock.
10. STOCK OPTIONS
The Company has granted stock options under a Stock Option Plan to key employees for valuable services to the Company. Under the Plan a maximum of 1,000,000 shares may be granted. The Company authorized 1,000,000 shares and granted 231,000 shares under the Plan. All options have an eight year term from the exercise date. The following summarizes the option activity under the Plan:
No compensation costs have been recognized under the Plan and the Company has elected the disclosure only provisions of SFAS No. 123. The fair value of the options vested and exercisable are immaterial as of September 30, 2001 and 2000.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Position - ---- --- -------- John G. Perry 56 President, and Director Frank A. Maas 57 Vice President of Engineering, Secretary, Treasurer, Chairman of the Board and Director Ronald P. Cropper 55 Director
John G. Perry founded World Wide Video, Inc. of Virginia, in 1997, and World Wide Video, Inc. of Colorado, in 1998, and has served as President and on the Board of Directors since that time. Mr. Perry has a B.S. in Mathematics, 1967, from Randolph-Macon College and a M.S. in Computer Science, 1976, from the University of Maryland.
Frank A. Maas founded World Wide Video, Inc. of Virginia, in 1997, and World Wide Video, Inc. of Colorado, in 1998, and has served as Vice President of Engineering and as the Chairman of the Board of Directors since that time. Mr. Maas has a B.S. in Electrical Engineering, 1967, from Case Institute of Technology. Mr. Maas has over 35 years in computer and communication systems research and over 10 years experience in video compression.
Ronald P. Cropper has served on the Board of Directors since 1998. Mr. Cropper has a B.S. from Georgetown University, 1969, and participated in the Harvard University Accelerated MBA Program. Mr. Cropper has received numerous awards and has published articles relating to education and distance learning.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
Annual Long-term Other Name Compensation Compensation Compensation - --------------- ------------- ------------ ------------ John Perry $120,000 None Auto Allowance Frank Maas $120,000 None None
There have been no activities in these areas to date:
Retirement Plans Termination Payments Stock Options/SAR Grants Aggregate/SAR Exercise and Fiscal Year-End Options/SAR Value Long-Term Incentive Plan Pension Plan
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
COMMON STOCK
The following sets forth information with respect to the Company's Common Stock beneficially owned by each Officer and Director, and by all Directors and Officers as a group. There are no other entities that own over 5% of the 17,590,761 outstanding shares of Common Stock as of 9/30/01.
Officers and Directors
COMMON WARRANTS (non voting until exercised)
Officers and Directors
None
PREFERRED STOCK (closed 8/31/00, Regulation D Rule 506)
The following sets forth information with respect to the Company's Preferred Stock beneficially owned by each Officer and Director, and by all Directors and Officers as a group. All other entities that own over 5% of the 121,114 outstanding shares of Preferred Stock as of 9/30/01 are included.
Officers and Directors
PREFERRED WARRANTS (none)
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None, except those covered in employment and subcontractor as discussed elsewhere.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 10-K
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Colorado Corporation Act and Company by-laws offer protection by way of indemnification to any officer, director or employee of the Company. The indemnification extends to expenses, including attorney's fees, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with an action, suit or proceeding if the party acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Company and with respect to any criminal proceeding if the party had no reasonable cause to believe the conduct was unlawful.
The general effect of the above indemnification provisions allow the employees, directors, and officers of the Company to function and engage in the day to day business activities of the Company knowing the Company will offer protection against the threat or event of litigation subject to the limitations that said individual must exercise good faith and reasonableness.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 or Securities Exchange Act of 1934 may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
FINANCIAL STATEMENTS AND EXHIBITS
The following documents are filed as a part of this report:
1. Audited Financial Statements: (See PART II ITEM 8)
2. Additional Financial Statement Schedules: None
3. SK Exhibits (See Below)
4. Supplemental Oil and Gas Information - None.
SK EXHIBITS
3.1 Articles of Incorporation of World Wide Video, Inc. (Colorado)*
3.2 Bylaws of World Wide Video, Inc. (Colorado)*
3.3 Articles of Incorporation of World Wide Video, Inc. (Virginia)*
3.4 Bylaws of World Wide Video, Inc. (Virginia)*
10.1.1 Agreement with National Executive Trade, Inc. (amended by 10.1.2)*
10.1.2 Agreement with Data Power, Inc.*
10.2 Share Exchange Agreement*
23.1 Consent of Accountant (See Below)
* Incorporated by reference to Exhibits to the Registration Statement on Form 10-SB/A (SEC ACCESSION NUMBER: 0001072588-99-000079) and as amended.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
January 11, 2001
WORLD WIDE VIDEO, INC.
/s/ John G. Perry ---------------------------------- John G. Perry, President
Directors:
/s/ Frank A. Maas ------------------------------------- Frank A. Maas, Secretary and Director
/s/ John G. Perry ------------------------------------ John G. Perry, Director
/s/ Ronald Cropper ------------------------------------ Ronald Cropper, Director
EXHIBIT 23.1
CONSENT OF ACCOUNTANT
THOMPSON, GREENSPON & CO., P.C. Certified Public Accountants Management Consultants
To the Board of Directors World Wide Video, Inc. Culpeper, Virginia
We hereby consent to the use of our report, dated January 11, 2002, in the Form10-KSB of World Wide Video, Inc., as filed with the Securities and Exchange Commission.
/s/ Thompson, Greenspon & Co., P.C.
Fairfax, Virginia December 20, 2002
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3930 Walnut Street Fairfax, VA 22030-4790 (703) 385-8888 FAX (703) 385-3940
E-Mail Address - tgc@tgccpa.com Home Page Address - http://www.tgccpa.com