UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): April 23, 2004
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VIDEOLOCITY INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in its Charter)
Nevada 33-2310-D 87-0429154
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1762-A Prospector Avenue, Park City, Utah 84060
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (435) 615-8338
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Item 9. Regulation FD Disclosure.
On April 23, 2004, Videolocity International, Inc. caused to be mailed
to its shareholders a letter containing the following information:
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VIDEOLOCITY INTERNATIONAL, INC.
To Our Shareholders,
Employees, Consultants and Partners:
As FY 2002 began, we anticipated an improvement in Videolocity's business. We
expected market conditions to improve with the global financial crisis
tempering, and the downturn in technology related industries bottoming and
growth starting again. We expected our Research and Development to continue its
growth and lead the Company to revenue and profitability. Additionally, we
expected our restructuring of management throughout 2002 to yield results with
the closing of much needed funding. These events did not prove to be true, and
Videolocity's results fell short of expectations over the last few years.
In total, net losses for FY 2003 were approximately $1,989,000, a decrease of
approximately 36 percent versus FY 2002. Losses were $0.33 per diluted share in
FY 2003 and $0.61 per diluted share in FY 2002. Losses for the first quarter of
FY 2004 were $0.06 per diluted share versus $0.12 per diluted share for the same
quarter in the previous year. The company has accumulated approximately
$6,640,000 in loss carry forwards from inception through FY 2003. As the Company
progresses towards the recording of revenues and, ultimately, towards
anticipated profitability, these loss carry forwards can be utilized to offset
income taxes.
The technology and telecommunications industries started their recovery in late
2003, with the last quarter of 2003 improving slowly and the first quarter of
2004 growing at increasing rates. Videolocity's segment followed this trend with
access to lease capital for the commercial deployment of the Digital
Entertainment System (DES) and projected revenues as the year unfolds. The
Company anticipates that the Hospitality segment will generate incremental
operating income on a substantial revenue increase from the deployment of the
DES into Hotels and Casino Resorts during FY 2004. This anticipated
profitability increase is evidence of the success of our FY 2002 restructuring
program and improved technology from our recent Research and Development.
We anticipate that Videolocity's Hospitality, Healthcare and Residential
segments will be favorably impacted by the market's increased demands for the
interactive delivery of Video-on-Demand (VOD) and other digital content as well
as the continuing growth of broadband service. Broadband is the fastest growing
area in the telecommunications industry, and Videolocity has a clear path in the
adoption of VOD and other services. We anticipate that revenues for
Videolocity's segments will grow as the Company executes technology transfer
licenses for the delivery of the DES into all identified market segments. The
anticipated license opportunity will greatly decrease the Company's capital
expenses and provide operating revenue that will fund the continued Research and
Development of emerging technologies and a residual revenue stream that will
build shareholder value.
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We have made strategic additions to our Intellectual Properties and trade
secrets that better position the Company for additional market opportunities
over the next several years. Videolocity is currently enhancing, manufacturing
and marketing the DES and developing other related digital technologies from its
office in Park City, Utah. The Company is discussing several funding options and
anticipates closing within the next three months. This would allow us to move
forward with the execution of the Company's business plan. Videolocity has a
strong competitive advantage in the delivery of VOD and other digital content,
along with very promising opportunities in the residential market. As we enter
the second quarter of 2004, the outlook is much brighter than the recent past.
We will begin to visit our strategic approach to the future every quarter; and,
with the addition of a few updates, our strategies will be shared with each of
you. We will focus our core technologies, as well as complimentary technologies
that - when combined with funding - should create value added systems for our
customers and returns to each of you. We will focus on key customer segments
that exhibit attractive growth characteristics and require our technologies to
ensure success. Again, these segments include Hospitality, Healthcare and
Residential. We will focus on customers' needs and applying our technologies to
meet those needs, working directly with customers worldwide.
The markets upon which we focus are all experiencing strong growth trends that
should last for the next several years and over that period Videolocity will
focus on the next generation of technologies for the emerging markets to come.
We thank each of you for the long-standing support and look forward to sharing
the strong returns that the Company and its technologies are positioned to
provide.
Sincerest regards,
/s/ Robert E Holt
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Robert E Holt
President & CEO
This letter contains statements that constitute "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act and Section 27A
of the Securities Act. Readers are cautioned not to put undue reliance on such
forward-looking statements. Such forward-looking statements are not guarantees
of future performance and involve risks and uncertainties.
Certain factors may cause actual results to differ materially from those
contained in the forward-looking statements, including but not limited to: the
development and/or acceptance of new products, the impact of competition on the
Company's products and/or pricing, and the success of the Company's systems.
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SIGNATURES
Pursuant to the requirements 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.
Date: April 23, 2004 VIDEOLOCITY INTERNATIONAL, INC.
By: /S/ ROBERT E. HOLT
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Robert E. Holt, President
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