____________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
/X/ Filed by the Registrant
/ / Filed by a Party other than the Registrant
Check the Appropriate box:
/ / Preliminary Information Statement
/X/ Definitive Information Statement
VIS VIVA CORPORATION
- ------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
VIS VIVA CORPORATION
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(Name of Person(s) Filing Information Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14c-5(g).
/ / Fee computed on table below per Exchange Act Rule 14c-5(g) and 0-
11.
(1) Title of each class of securities to which transaction
applies: (i) Common Stock, par value $0.01 per share, of Vis Viva
Corporation (the "Common Stock"); and (ii) common stock, par value
$0.001 per share, of WideBand Corporation ("WideBand Common Stock").
(2) Aggregate number of securities to which transaction applies:
(i) 12,801,819 shares of the Common Stock and (ii) 12,801,819 shares of
WideBand Common Stock.
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
The only property to be distributed to security holders in the
transaction will be 12,801,819 shares of Vis Viva Common Stock in
exchange for the receipt, by the Registrant, of a like number of shares
of WideBand Common Stock. Pursuant to Exchange Act Rule 0-11(c)(1)(i),
the value of these shares is based upon the market value of the
securities to be received by the acquiring person, namely, the
Registrant, in this case 12,801,819 shares of WideBand Common Stock.
Pursuant to Exchange Act Rule 0-11(a)(4), the value of these shares,
which have no market is $5.00 per share.
(4) Proposed maximum aggregate value of transaction: $225,569.33.
(5) Total fee paid: $45.11
/ / Check box if any part of the fee is offset as provide by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously Paid: $45.11
(2) Form, Schedule or Registration Statement No. ___: Definitive
Information Statement on Schedule 14C
(3) Filing Party: Vis Viva Corporation
(4) Date Filed: January 25, 2000
____________________________________________________________________
VIS VIVA CORPORATION
124 South 600 East, Suite 100
Salt Lake City, Utah 84102
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 18, 2000
To the Shareholders of Vis Viva Corporation:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the Shareholders
(the "Special Meeting") of VIS VIVA CORPORATION, a Nevada corporation
(hereinafter the "Company" or "Vis Viva"), will be held at 124 South 600
East, Salt Lake City, Utah 84102 on February 18, 2000, at 10:00 o'clock
a.m., Mountain Standard Time, for the following purposes:
1. To consider and act upon a proposal to approve, authorize and
adopt (a) the Plan and Agreement of Merger ("Plan and Agreement") by and
between the Company and WideBand Corporation, a closely held Missouri
corporation ("WideBand") and (b) all of the related transactions
contemplated by the Plan and Agreement, including, among other things:
(i) to approve a recapitalization of the Company's 1,375,000 issued and
outstanding shares of common capital stock on the basis of a 1 for 7
reverse-split; (ii) subsequent to the reverse-split, the acquisition, by
the Company, of all of the issued and outstanding shares of WideBand
Corporation, a Missouri corporation, in exchange for the issuance by the
Company of an aggregate of 12,801,819 shares of Vis Viva Common Stock to
WideBand's Shareholders; (iii) to amend the Company's Articles of
Incorporation to change the name of the Company to "WideBand
Corporation," to increase the authorized common capital shares of the
Company from 15 million to 20 million shares, to change the par value of
the Company's shares to "no par value," and to otherwise streamline and
amend the corporate purposes of the Company to reflect that the Company
is authorized to engage in any lawful business activity recognized under
Nevada law; (iv) to approve the issuance of 55,000 post-split
"restricted" shares of the Company as finder's, agent's or consultant's
shares to be issued pursuant to the Plan and Agreement; (v) to elect Dr.
Roger E. Billings, Donald N. Fenn, Dr. Maria Sanchez, and Jack R. Coombs
as directors of the Company until the next annual meeting or until their
resignations are tendered and duly accepted by the Company; and
2. To transact such other business as may properly come before
the Special Meeting or any adjournment or postponement thereof.
The Board of Directors of the Company has fixed the close of
business on December 20, 1999, as the record date for the determination
of Shareholders entitled to notice of, and to vote at the Special
Meeting or any adjournments or postponements thereof (the "Record
Date"). Shares of Common Stock can be voted at the meeting only if the
holder is present at the meeting in person or by valid proxy.
Management is not soliciting proxies in connection with the Special
Meeting and Shareholders are requested not to send proxies to the
Company.
All stockholders are cordially invited to attend the Special
Meeting.
By Order of the Board of Directors,
ANGELO VARDAKIS
Secretary
Salt Lake City, Utah
January 25, 2000
____________________________________________________________________
VIS VIVA CORPORATION
124 South 600 East, Suite 100
Salt Lake City, Utah 84102
___________________________________
INFORMATION STATEMENT
___________________________________
SPECIAL MEETING OF STOCKHOLDERS February 18, 2000
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY
This Information Statement is first being furnished by Vis Viva
Corporation, a Nevada corporation (the "Company" or "Vis Viva") to
holders of the Company's common stock, par value $0.01 per share (the
"Vis Viva Common Stock), as of December 20, 1999 (the "Record Date") in
connection with a Special Meeting of the Shareholders of the Company
(the "Special Meeting") to be held at 124 South 600 East, Salt Lake
City, Utah 84102, February 18, 2000 at 10:00 a.m., local time. At the
Special Meeting, shareholders of the Company will consider and act upon
a proposal to approve, authorize and adopt an Agreement and Plan of
Merger dated September 6, 1999, as amended, (the "Plan and Agreement")
by and between the Company and WideBand Corporation, a Missouri
corporation, and related transactions and business contemplated thereby.
Subject to shareholder approval, the Plan and Agreement provides for,
among other things: (a) a one-for-seven (1 for 7) reverse split of the
1,375,000 shares of Vis Viva Common Stock issued and outstanding; (b)
subsequent to the reverse-split, the acquisition, by the Company, of all
of the issued and outstanding shares of WideBand Corporation, a Missouri
corporation, in exchange for the issuance by the Company of an aggregate
of 12,801,819 shares of Vis Viva Common Stock to WideBand's
Shareholders; (c) amendment of the Company's Articles of Incorporation
to change the Company's name to "WideBand Corporation," to increase the
number of authorized common capital shares from 15 million to 20
million, to change the par value of the Company's shares to "no par
value," and to otherwise streamline and amend the corporate purposes of
the Company to reflect that the Company is authorized to engage in any
lawful business activity recognized under Nevada law; (d) approval of
the issuance of 55,000 post-split "restricted" shares as compensation to
certain finders, agents or consultants; and (e) the election of certain
persons designated by WideBand to assume positions on the Board of the
Company until the next annual meeting or until their individual
resignations are tendered and duly accepted by the Company. Immediately
following the consummation of the Plan and Agreement, if consummated,
the shares of Vis Viva Common Stock owned by the current shareholders of
the Company will represent approximately 2% of the then issued and
outstanding shares of Vis Viva Common Stock.
The Plan and Agreement and other related matters are more fully
described herein, and a copy of the Plan and Agreement and any amendment
thereto is attached hereto as Exhibit "A". The Plan and Agreement is a
complex transaction. Shareholders of the Company should consider
carefully the matters discussed in this Information Statement. In
addition to being furnished to the holders of Vis Viva Common Stock,
this Information Statement may also be furnished to WideBand Corporation
and its Shareholders to provide them relevant information in connection
with any required actions or consents on the part of WideBand
Corporation to be delivered pursuant to the Plan and Agreement.
The Plan and Agreement and the amendments necessary to be made to
the Company's Articles of Incorporation have been approved by resolution
of the Company's Board of Directors and the written consent of the
holders of the majority of the Company's Common Stock. Such majority
approval and consent are sufficient under Nevada corporate law to
effectuate and complete the Merger and Share Exchange. Accordingly, the
Plan and Agreement and corollary Certificate Amendment Actions will not
be submitted to other shareholders of the Company for a vote and this
Information Statement is being furnished to shareholders solely to
provide them with the certain information in accordance with the
requirements of Nevada law and the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder, including
Regulation 14C.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY
OTHER THAN DULY AUTHORIZED OFFICERS OF THE COMPANY, NO PERSON IS
AUTORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER
THAN THOSE CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE COMPANY. THE DELIVERY OF THIS INFORMATION STATEMENT SHALL NOT UNDER
ANY CIRCUMSTANCE CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEROF, OR THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
_________________________________
THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF ANY OFFER TO BUY OR SELL ANY
SECURITIES OF THE COMPANY
_________________________________
The date of this Information Statement is January 25, 2000.
TABLE OF CONTENTS
Page
SUMMARY OF INFORMATION STATEMENT. . . . . . . . . . . . .10
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . 26
General . . . . . . . . . . . . . . . . . . . . . . . 26
Record Date . . . . . . . . . . . . . . . . . . . . . 29
Vote Required. . . . . . . . . . . . . . . . . . . . 29
THE MERGER AND SHARE EXCHANGE AND CONSEQUENCES THEREOF . . 30
Exchange of Shares. . . . . . . . . . . . . . . . . . 30
Background of the Merger and Share Exchange . . . . . 30
Reasons for the Merger and Share Exchange . . . . . . 32
Certificate Amendment Actions and Effect Thereof. . . 34
Interests of Certain Persons in the Merger and Share
Exchange. . . . . . . . . . . . . . . . . . . . . . 35
Principal Effects of the Merger and Share Exchange/
Change of Control . . . . . . . . . . . . . . . . . 35
Expenses of the Merger and Share Exchange . . . . . . 36
Closing and Closing Date. . . . . . . . . . . . . . . 36
Reverse Split of the Company's Shares and Reasons
Therefor. . . . . . . . . . . . . . . . . . . . . . 37
Change of Name of Company, Increase Authorized
Unissued Shares. . . . . . . . . . . . . . . . . . .37
Change of Fiscal Year End . . . . . . . . . . . . . . 38
Management of the Company's Business After the Merger
and Share Exchange. . . . . . . . . . . . . . . . . 38
Accounting Treatment. . . . . . . . . . . . . . . . . 38
Changes and Disagreements With Accountants. . . . . . 39
Dissenters' Rights of Appraisal . . . . . . . . . . . 39
Federal Income Tax Consequences and Absence of Any Tax
Opinion or Ruling from the IRS . . . . . . . . . . .40
Need for Regulatory Approval. . . . . . . . . . . . . 42
Absence of Any Material Contract or Arrangement
Between the Company and WideBand or Anyone
Affiliated with WideBand. . . . . . . . . . . . . . 42
Property Involved in Transaction. . . . . . . . . . . 42
THE PLAN AND AGREEMENT . . . . . . . . . . . . . . . . . . 43
Effective Date and Time of the Merger and Share
Exchange. . . . . . . . . . . . . . . . . . . . . . 43
Representations and Warranties. . . . . . . . . . . . 43
Conditions to the Merger and Share Exchange . . . . . 44
Certain Covenants . . . . . . . . . . . . . . . . . . 44
Approval of Finder's, Agent's, or Consultant's Fee
Shares to Be Issued in Connection with the Merger
and Share Exchange. . . . . . . . . . . . . . . . . 44
Absence of any Existing Stock Options or Stock Option
Plans. . . . . . . . . . . . . . . . . . . . . . . .45
Termination or Abandonment of Merger. . . . . . . . . 45
RISK FACTORS, INCLUDING QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK. . . . . . . . . . . . . . . . . . . . . . . . 46
Financial Condition Risk Factors. . . . . . . . . . . 46
High-Tech Business Risk Factors . . . . . . . . . . . 46
WideBand's Dependence On Key Personnel. . . . . . . . 47
Reliance On Certain Suppliers . . . . . . . . . . . . 48
Changing Market . . . . . . . . . . . . . . . . . . . 48
Competition . . . . . . . . . . . . . . . . . . . . . 48
Marketing . . . . . . . . . . . . . . . . . . . . . . 53
Backlog . . . . . . . . . . . . . . . . . . . . . . . 53
Collection of Accounts. . . . . . . . . . . . . . . . 53
Integration of Operations . . . . . . . . . . . . . . 53
Capital Requirements. . . . . . . . . . . . . . . . . 54
Dilution and Concentration of Share Ownership . . . . 54
VIS VIVA COMMON STOCK AND DIVIDEND POLICY. . . . . . . . . 54
WIDEBAND COMMON STOCK AND DIVIDEND POLICY. . . . . . . . . 55
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS56
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION OF VIS VIVA . . . . . . . . . . 59
Plan of Operation . . . . . . . . . . . . . . . . . . 59
Results of Operation, Revenues, Costs and Expenses. . 60
Liquidity and Capital Resources. . . . . . . . . . . . . . 60
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION OF WIDEBAND CORPORATION . . . . 61
Overview. . . . . . . . . . . . . . . . . . . . . . . 61
Results of Operation. . . . . . . . . . . . . . . . . 62
Revenues. . . . . . . . . . . . . . . . . . . . . . . 63
Gross Profit. . . . . . . . . . . . . . . . . . . . . 63
Selling, General, and Administrative Expenses . . . . 63
Research and Development . . . . . . . . . . . . . . 64
Other Income . . . . . . . . . . . . . . . . . . . . . . . 64
Liquidity and Capital Resources. . . . . . . . . . . . . . 64
BUSINESS OF VIS VIVA CORPORATION . . . . . . . . . . . . 65
General/Description of Business . . . . . . . . . . . 65
Description of Properties . . . . . . . . . . . . . . 66
Principal Products and Services . . . . . . . . . . . 67
Distribution Methods of Products or Services. . . . . 67
Competitive Business Conditions and Operating Risks . 67
Regulation and Need for Government Approval . . . . . 68
Legal Proceedings . . . . . . . . . . . . . . . . . . 68
Market Price of the Vis Viva's Securities During the
Last Two Years. . . . . . . . . . . . . . . . . . . 68
BUSINESS OF WIDEBAND CORPORATION . . . . . . . . . . . . 69
Background and History. . . . . . . . . . . . . . . . 69
Description of Business and Properties. . . . . . . . 69
Product Descriptions . . . . . . . . . . . . . . . . 74
Meeting Demand for Product/Depending on Suppliers . . 76
Overview of Industry. . . . . . . . . . . . . . . . . 77
Targeted Market Segments. . . . . . . . . . . . . . . 79
Marketing Strategies. . . . . . . . . . . . . . . . . 81
Backlog of Orders . . . . . . . . . . . . . . . . . . 82
Employees . . . . . . . . . . . . . . . . . . . . . . 82
Real Estate, Plant and Equipment, and Property Leases 82
Regulation. . . . . . . . . . . . . . . . . . . . . . 83
Future Development Plans, Needs, and Current Progress 83
Advertising Plans and Objectives. . . . . . . . . . . 84
Plans to Increase Manufacturing . . . . . . . . . . . 84
Risk Factors Involved in Failure to Achieve Certain
Objectives. . . . . . . . . . . . . . . . . . . . . 85
Technical Services and Support. . . . . . . . . . . . 85
Sales and Distribution. . . . . . . . . . . . . . . . 86
Significant Customers . . . . . . . . . . . . . . . . 86
Legal Proceedings . . . . . . . . . . . . . . . . . . 86
Use of Proceeds . . . . . . . . . . . . . . . . . . . 86
MANAGEMENT OF VIS VIVA CORPORATION . . . . . . . . . . . . 87
MANAGEMENT OF WIDEBAND CORPORATION . . . . . . . . . . . . 88
PERSONS TO ASSUME DIRECTORSHIPS OF WIDEBAND UPON COMPLETION
OF THE MERGER AND SHARE EXCHANGE. . . . . . . . . . . . . .89
COMPENSATION OF DIRECTORS AND OFFICERS OF VIS VIVA . . . . 89
Compensation Plans . . . . . . . . . . . . . . . . . 90
Compensation of Directors and Officers. . . . . . . . 90
Employment Contracts, Termination of Employment,
and Change-In-Control Arrangements . . . . . . . . 90
Executive Compensation . . . . . . . . . . . . . . . 91
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
OF WIDEBAND . . . . . . . . . . . . . . . . . . . . . . 91
Compensation Plans. . . . . . . . . . . . . . . . . . 92
Compensation of Directors . . . . . . . . . . . . . . 92
Employment Contracts, Termination of Employment, and
Change-In-Control . . . . . . . . . . . . . . . . . 92
Executive Compensation. . . . . . . . . . . . . . . . 92
SECURITY OWNERSHIP FOR CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF VIS VIVA. . . . . . . . . . . . . . . . . 93
SECURITY OWNERSHIP FOR CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF WIDEBAND CORPORATION. . . . . . . . . . . 94
DESCRIPTION OF THE CAPITAL STOCK OF VIS VIVA CORPORATION . 94
DESCRIPTION OF THE CAPITAL STOCK OF WIDEBAND CORPORATION . 95
CERTAIN INDEMNIFICATION AND LIABILITY PROVISIONS VIS VIVA. 96
CERTAIN INDEMNIFICATION AND LIABILITY PROVISIONS WIDEBAND. 96
TRANSFER AGENT AND REGISTRAR FOR THE COMPANY.. . . . . . . 96
ABSENCE OF PREEMPTIVE RIGHTS OR FIRST RIGHTS OF REFUSAL
RELATIVE TO WIDEBAND'S COMMON STOCK . . . . . . . . . . 97
PRINCIPAL ACCOUNTANTS. . . . . . . . . . . . . . . . . . . 97
YEAR 2000 COMPLIANCE BY WIDEBAND . . . . . . . . . . . . . 97
OTHER BUSINESS . . . . . . . . . . . . . . . . . . . . . . 98
FINANCIAL AND OTHER INFORMATION. . . . . . . . . . . . . . 99
SIGNATURE OF DIRECTOR AND OFFICER OF THE COMPANY . . . . . 99
DEFINITIONS OF TERMS . . . . . . . . . . . . . . . . . . .100
EXHIBITS TO INFORMATION STATEMENT. . . . . . . . . . . . .107
Exhibit A Plan and Agreement of Merger and any amendments
thereto
Exhibit B Audited Financial Statements of the Company for its
fiscal year ended June 30, 1999
Exhibit C Audited Financial Statements of WideBand Corporation
For Nine-Month Period Ended September 30, 1999 and for
the Twelve-Month Periods Ended December 31, 1998 and
December 31, 1997
Exhibit D Pro forma Condensed, Combined Financial Statements of
Vis Viva Corporation and WideBand Corporation for the
Period Ended September 30, 1999
Exhibit E Summary of Dissenters' Rights Provisions under Nevada
law
Exhibit F Form of Articles of Merger to be filed in both the
States of Missouri and Nevada
Exhibit G Form of Articles of Amendment to the Articles
of Incorporation of Vis Viva Corporation
SUMMARY OF INFORMATION STATEMENT
THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN INFORMATION CONTAINED
ELSEWHERE IN THIS INFORMATION STATEMENT. REFERENCE IS MADE TO, AND THIS
SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, THE MORE DETAILED INFORMATION
CONTAINED ELSEWHERE IN THIS INFORMATION STATEMENT AND THE EXHIBITS
ATTACHED HERETO. CROSS-REFERENCES IN THIS SUMMARY ARE TO CAPTIONS IN
THIS INFORMATION STATEMENT. STOCKHOLDERS OF THE COMPANY ARE URGED TO
READ AND CAREFULLY CONSIDER THIS INFORMATION STATEMENT IN ITS ENTIRETY,
PARTICULARLY THE MATTERS DISCUSSED IN THE SECTION ENTITLED "RISK
FACTORS."
THE SPECIAL MEETING
PURPOSE, TIME, DATE AND PLACE. This Information Statement is being
furnished to the shareholders of Vis Viva Corporation, a Nevada
corporation (the "Company" or "Vis Viva"), in connection with the
Special Meeting of the Shareholders of the Company to be held at 124
South 600 East, Salt Lake City, Utah 84102, on February 18, 2000, at
10:00 a.m., local time, and any adjournment or postponement thereof (the
"Special Meeting"). A copy of the Notice of the Special Meeting
accompanies this Information Statement. It is anticipated that the
mailing of this Information Statement will commence on or about January
26, 2000, more than 20 days in advance of the Special Meeting. The
purpose of the Special Meeting will be to consider and act upon a
proposal to approve, authorize and adopt a Plan and Agreement of Merger
(the "Plan and Agreement") dated September 6, 1999, and any amendments
thereto, by and between the Company and WideBand Corporation, a Missouri
corporation ("WideBand") and the related transactions contemplated
thereby, including the exchange of Vis Viva shares for all of the issued
and outstanding shares of WideBand (the "Merger and Share Exchange").
RECORD DATE. The Board of Directors of the Company has fixed the close
of business on December 20, 1999, as the record date (the "Record Date")
for the determination of stockholders entitled to receive notice of and
to vote at the Special Meeting. Only stockholders of record on the
Record Date will be entitled to vote at the Special Meeting or any
adjournments or postponements thereof. On the Record Date, 1,375,000
shares of the common stock of the Company, par value $0.01 per share
(the "Vis Viva Common Stock") held by approximately 168 holders of
record, were issued and outstanding and entitled to vote.
VOTE REQUIRED; CONSENT TO TRANSACTION BY MAJORITY IN ADVANCE OF SPECIAL
MEETING. The presence of a majority of the outstanding shares of Vis
Viva Common Stock entitled to vote at the Special Meeting is required
for a quorum at the Special Meeting. Abstentions will be counted as
represented for purposes of the determination of a quorum. Approval of
the Plan and Agreement and Share Exchange requires the affirmative vote
of the holders of a majority of the issued and outstanding shares of Vis
Viva Common Stock entitled to vote at the Special Meeting. Accordingly,
abstentions will have the effect of a vote cast against the Exchange
Agreement and the Share Exchange. Holders of Vis Viva Common Stock are
entitled to one (1) vote at the Special Meeting for each share of Vis
Viva Common Stock held of record on the Record Date. See"INTRODUCTION
Vote Required" and "SECURITY OWNERSHIP FOR CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF VIS VIVA CORPORATION." Regardless of the foregoing, a
majority of the Holders of Vis Viva Common Stock has already consented to
the transaction and approved the Plan and Agreement. Specifically, the
Company has obtained written consents from Vis Viva Shareholders
representing 805,975 shares or 58.6% of the 1,375,000 shares issued and
outstanding as of the Record Date. Though the transaction has been
approved by a majority of the shareholders, the remaining shareholders are
nonetheless welcome to attend the Special Meeting to vote their shares and
to have any questions they might have answered.
THE PLAN AND AGREEMENT OF MERGER AND SHARE EXCHANGE
GENERAL. The Plan and Agreement provides for the acquisition by the
Company of all of the issued and outstanding shares of the common
capital stock of WideBand in exchange for the issuance of 12,801,819
post-split shares of Vis Viva Common Stock. The shares of Vis Viva
Common Stock to be issued to the WideBand Stockholders will not be
subject to the one-for-seven reverse split of the Vis Viva Common Stock
described in the following paragraph because such reverse-split shall
have already occurred. If the Merger and Share Exchange is consummated,
WideBand Corporation, a Missouri corporation, will cease to exist by
operation of law, the name of the Company will be changed to "WideBand
Corporation," a Nevada corporation, and the existing WideBand
Stockholders will thereupon own and hold approximately 98% of the shares
of Vis Viva Common Stock then-issued and outstanding after the Merger
and Share Exchange.
THE MERGER OR EXCHANGE OF SHARES. Subject to the approval of the
stockholders of the Company, the Plan and Agreement contemplates that
the Company will acquire WideBand through the exchange of all of the
issued and outstanding shares of the capital stock of the WideBand in
exchange for 12,801,819 shares of Vis Viva Common Stock to be issued to
WideBand Stockholders. The Plan and Agreement provides that Vis Viva
will effect a one-for-seven reverse split of the Vis Viva Common Stock
pursuant to which each issued and outstanding share of Vis Viva Common
Stock will be reverse split and converted into one-seventh (.142857) of
an existing share of Vis Viva Common Stock (the shares of Vis Viva
Common Stock to be issued to WideBand Stockholders will not be subject
to the reverse split of the Vis Viva Common Stock). No fractional
shares of Vis Viva Common Stock will be issued in the Share Exchange.
If any holder of Vis Viva Common Stock, subsequent to the reverse split,
would otherwise be entitled to a fractional share of Vis Viva Common
Stock, the Company will round the number of shares of Vis Viva Common
Stock to be issued to such holder up to the nearest whole share. There
will be no cash payments in lieu of fractional shares. After the
reverse split contemplated herein, each issued and outstanding share of
the common stock, par value $.001 per share, of WideBand (the "WideBand
Common Stock") will be exchanged for one (1) share of post-split Vis
Viva Common Stock. See "THE MERGER AND SHARE EXCHANGE Exchange of
Shares" and " Reverse Split of the Company's Shares and Reasons
Therefor."
ADVANCE APPROVAL BY WRITTEN CONSENT OF A MAJORITY OF THE COMPANY'S
SHAREHOLDERS. Section 78.320 of the Nevada Revised Statutes (NRS)
titled "Stockholders' meetings: Quorum; Consent for actions taken
without a meeting" provides that the Company may approve the Merger and
Share Exchange by the consent of a majority of its shareholders. A
majority of the Company's shareholders has approved the Plan and
Agreement and the Share Exchange by written consent, including written
consent to the Certificate Amendment Actions described below. See
Exhibit "G" hereto. As such, a majority of the Company's shareholders
have determined that the Plan and Agreement and Share Exchange are fair
to, and in the best interests of, the Company and its stockholders. The
primary factors considered and relied upon by a majority of the
Company's shareholders in consenting to the transaction in writing in
advance of the Special Meeting are referred to in "THE MERGER AND SHARE
EXCHANGE Reasons for the Merger and Share Exchange." Accordingly, the
Company is not soliciting votes in this Information Statement but does
invite shareholders to attend the Special Meeting in which they are
encouraged to ask questions and vote their shares nonetheless.
The advance approval of the transaction by the consent of a majority of
the Company's shareholders should not be considered a recommendation to
any person. In particular, such approval should not be considered
advice to WideBand Stockholders.
CLOSING AND CLOSING DATE. The closing of the Merger and Share Exchange
(the "Closing") is anticipated to occur on or before February 29, 2000,
or on such other date as the Company and WideBand shall agree, provided
all conditions to the obligations of the parties to consummate the
Merger and Share Exchange have been met or otherwise waived. See
MERGER Closing and Closing Date" and "THE PLAN AND AGREEMENT Effective
Date and Time of the Merger and Share Exchange" and " Conditions to the
Merger and Share Exchange." The date on which the Closing occurs is
hereinafter referred to as the "Closing Date." The filing of Articles
of Merger setting forth the terms and conditions of the Merger (the
"Articles of Merger") with the Secretaries of the States of Missouri and
Nevada is expected to be made as soon as practicable after the approval
of the Plan and Agreement and Share Exchange by the Company's
stockholders at the Special Meeting and the receipt of all required
consents and approvals. Such date is the "Effective Date."
MANAGEMENT OF THE COMPANY'S BUSINESS AFTER THE MERGER AND SHARE
EXCHANGE. Following consummation of the Merger and Share Exchange,
WideBand will continue its business as that of the Company's. The
current directors of the Company will resign and certain persons more
fully described and identified below have been appointed to serve as
members of the Company's Board of Directors with terms expiring at the
Company's next annual meeting or until their individual resignations are
tendered to the Company and duly accepted. See "PERSONS TO ASSUME
DIRECTORSHIPS OF WIDEBAND UPON COMPLETION OF THE MERGER AND SHARE
EXCHANGE." The current officers of the Company will also resign and,
upon their election, the new directors of the Company will appoint
persons to serve as officers of the Company in accordance with the
procedures outlined in Nevada law and the Company's Articles of
Incorporation and Bylaws. The Company anticipates that certain of the
current officers of the WideBand will be appointed to serve as officers
of the Company following consummation of the Merger and Share Exchange.
See "PERSONS TO ASSUME DIRECTORSHIPS OF WIDEBAND UPON COMPLETION OF THE
MERGER AND SHARE EXCHANGE."
ACCOUNTING TREATMENT. The Merger and Share Exchange will be accounted
for under the "purchase" method of accounting in accordance with
generally accepted accounting principles. Due to the acquisition by
WideBand Stockholders of approximately 98% of the Vis Viva Common Stock,
the Merger and Share Exchange will be treated for accounting purposes as
a "reverse merger" wherein WideBand will be treated as the acquiring
company. See "THE MERGER AND SHARE EXCHANGE Accounting Treatment."
DISSENTERS' RIGHTS. Holders of shares of the Vis Viva Common Stock
shall be entitled to exercise dissenters' rights of appraisal under
Nevada Revised Statutes (NRS) Sections 78.471 through 78.502, titled
"Rights of Dissenting Shareholders," a summary of which is attached
hereto and the contents of which are incorporated herein by reference as
Exhibit "E." See "THE MERGER AND SHARE EXCHANGE Dissenters' Rights of
Appraisal."
FEDERAL INCOME TAX CONSEQUENCES. The Merger and Share Exchange is
intended to constitute a "reorganization" within the meaning of Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
"Code"). Holders of Vis Viva Common Stock will not receive cash or
stock in the Merger and Share Exchange and therefore, should not
recognize gain or loss in connection therewith, nor will the holders of
Vis Viva Common Stock recognize gain or loss as a result of the reverse
split of the outstanding shares of Vis Viva Common Stock as contemplated
by the Plan and Agreement. Assuming the Merger and Share Exchange
qualifies as a reorganization under the Code, holders of shares of
WideBand Common Stock generally should not recognize gain or loss upon
their receipt of shares of Vis Viva Common Stock. The aggregate tax
basis of shares of Vis Viva Common Stock received in the Merger and
Share Exchange should be the same as the aggregate tax basis of the
shares of WideBand Common Stock to be exchanged therefor, and the tax
holding period of shares of Vis Viva Common Stock received in the Share
Exchange should generally include the period during which shares of
WideBand Common Stock were held prior to the Merger and Share Exchange.
WideBand will continue to hold its assets with the same tax basis for
those assets that existed and which it held before the Share Exchange.
After consummation of the Merger and Share Exchange, the Company will
file its federal income tax returns as if it were in fact WideBand.
This is because, at such point, the two companies will be one in the
same with the Company having taken on the mantle of the survivor.
Nonetheless, the Company may be limited in its ability to offset certain
losses and/or deferred tax credits from periods prior to the Merger and
Share Exchange against Company income recognized in periods subsequent
to the Share Exchange. STOCKHOLDERS OF THE COMPANY AND WIDEBAND ARE
ENCOURAGED TO CONSULT WITH THEIR OWN TAX ADVISORS IN DETERMINING ANY
FEDERAL, STATE OR LOCAL TAX CONSEQUENCES OF THE TRANSACTIONS DESCRIBED
HEREIN. THIS INFORMATION STATEMENT IS IN NO WAY INTENDED TO BE A
COMPLETE DISCUSSION OF THE TAX CONSEQUENCES OF THE TRANSACTION TO EITHER
THE COMPANY OR WIDEBAND OR THE RESPECTIVE SHAREHOLDERS OF EITHER
COMPANY. See "THE MERGER AND SHARE EXCHANGE Federal Income Tax
Consequences."
THE PLAN AND AGREEMENT OF MERGER
EFFECTIVE DATE AND TIME OF THE SHARE EXCHANGE. The Share Exchange will
become effective upon confirmation of the filing of Articles of Merger
with the States of Missouri and Nevada. The Articles of Merger are
expected to be filed as soon as practicable after the satisfaction or
waiver of each of the conditions to consummation of the Merger and Share
Exchange, which is expected to occur as soon as practicable following
receipt of stockholder approval at the Special Meeting. See "THE PLAN
AND AGREEMENT Conditions to the Share Exchange" and " Termination."
CONDITIONS TO THE MERGER AND SHARE EXCHANGE. The obligations of Company
and WideBand to consummate the Merger and Share Exchange are subject to
the satisfaction or waiver of various conditions, including (i) approval
and adoption of the Plan and Agreement and the Share Exchange by
stockholders of both the Company and WideBand; (ii) receipt by the
Company and WideBand of legal opinions from counsel to the other party
in form and substance customary for transactions such as the instant
Merger and Share Exchange; and (iii) other customary closing conditions,
including, without limitation, the truthfulness and accuracy of the
parties' respective representations and warranties, the absence of any
material adverse change in the business condition of the respective
parties, confirmation that the consummation of the Merger and Share
Exchange and the transactions contemplated thereby will not violate any
law or regulation and will not result in the creation of any lien or
encumbrance on the respective properties of the Company or those of
WideBand, the receipt of all material third-party consents and
approvals, and the absence of any litigation which would have a material
adverse effect on the business condition of the respective parties.
See"THE PLAN AND AGREEMENT Conditions to the Merger and Share Exchange."
REPRESENTATIONS AND WARRANTIES. Under the Plan and Agreement, the
Company and WideBand have made a number of representations concerning
their respective capital structures, operations, financial conditions,
assets and properties (including intellectual properties), compliance
with laws and other matters. See "THE PLAN AND AGREEMENT OF
MERGER Representations and Warranties."
CERTAIN COVENANTS. Under the Plan and Agreement, the Company and the
WideBand have agreed to carry on their respective businesses in the same
manner as conducted prior to the execution of the Plan and Agreement, to
maintain existing or comparable insurance coverages, to perform their
respective obligations and duties under existing material contracts,
leases and instruments relating to their respective business conditions
and not to take certain actions (including changing their articles of
incorporation or bylaws, paying dividends, entering into material
transactions, modifying management compensation, incurring indebtedness,
selling or disposing of certain assets and similar actions) without the
prior written approval of the other party. The Company and the WideBand
have also agreed to take other customary actions to facilitate the
consummation of the Merger and Share Exchange. See "THE PLAN AND
AGREEMENT Certain Covenants."
TERMINATION. The Exchange Agreement may be terminated at any time prior
to the Effective Time, as amended, whether before or after approval by
the stockholders of the Company, (i) by mutual agreement of the Company
and WideBand; (ii) by the Company, or WideBand, if the Merger or Share
Exchange shall not have been consummated on or before February 29, 2000
or such later date as agreed to by the Company and WideBand; (iii) by
either party if either shall fail to comply in any material respect with
any covenant or agreement contained in the Plan and Agreement or if any
of the representations or warranties of either party shall be inaccurate
in any material respect. See "THE PLAN AND AGREEMENT Conditions to the
Merger and Share Exchange," " Termination" and "THE MERGER AND SHARE
EXCHANGE Expenses of the Merger and Share Exchange."
EXPENSES OF THE MERGER AND SHARE EXCHANGE. Except as described below,
whether or not the Merger and Share Exchange is consummated, the fees,
costs and expenses incurred by the Company and WideBand in connection
with the Plan and Agreement and the consummation or attempted
consummation of the Merger or Share Exchange, including fees and
expenses of legal counsel, will be borne by the party incurring such
fees, costs or expenses. In the event that the Plan and Agreement is
terminated as a result of a party's failure to comply in any material
respect with the covenants or agreements contained in the Plan and
Agreement or as a result of a materially inaccurate representation or
warranty made by a party, the party causing such termination shall bear
the fees, costs and expenses incurred by the other party or parties.
See "THE PLAN AND AGREEMENT Conditions to the Merger," " Termination"
and "THE MERGER AND SHARE EXCHANGE Expenses of the Share Exchange."
STOCK OPTION PLANS. Neither the Company nor WideBand has adopted any
stock option plan. No outstanding stock options currently exist to
acquire any shares of Vis Viva Common Stock. With respect to WideBand,
two individuals who are neither officers nor directors of WideBand
currently hold options to acquire a total of 100,000 Common Shares of
WideBand at an exercise price of $5.00 per share. All such options
expire by 2004.
RISK FACTORS. In considering whether to vote for the approval and
adoption of the Plan and Agreement and the Merger and Share Exchange,
holders of the Vis Viva Common Stock should carefully consider all of
the information contained in this Information Statement and, in
particular, the information set forth in the section below entitled
"RISK FACTORS."
SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
VIS VIVA HISTORICAL FINANCIAL INFORMATION. The following table sets
forth selected consolidated financial information with respect to the
Company for the periods indicated. This information should be read in
conjunction with "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF THE COMPANY" and the Consolidated
Financial Statements and related Notes of the Company attached hereto as
Exhibit "B". The selected financial information for the first quarter
ended September 30, 1999 and the fiscal years ended June 30, 1998 and
1999, is as follows:
Three months Fiscal Year
Ended Sept. 30, Ended June 30,
1999 1998 1999 1998
STATEMENTS OF OPERATIONS:
Gain or Loss from Operations (11,939) 2,878 52,939 26,919
Provision for income taxes -0- 0 ( 8,213) ( 1,616)
Net Gain or Loss (11,939) 2,878 44,726 25,303
Gain or Loss per common share (l) (.01) .00 .04 .02
BALANCE SHEET DATA:
Total assets 502,969 478,292 548,858 506,881
Long-term obligations -0- -0- -0- -0-
Net stockholders' equity 402,668 466,995 430,325 506,881
Cash Dividends -0- -0- -0- -0-
(1) The gain or loss per common share amounts are based upon the weighted
average number of shares of Vis Viva Common Stock issued and outstanding
(1,375,000 shares outstanding as of September 30, 1999).
WIDEBAND HISTORICAL FINANCIAL INFORMATION. The following table sets
forth selected financial information with respect to WideBand for the
periods indicated. This information should be read in conjunction with
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS OF WIDEBAND" and the Financial Statements and related
Notes of the WideBand attached hereto as Exhibit "C". The selected
financial information for the nine month period ended September 30,
1999, and for the twelve month periods ended December 31, 1998 and 1997,
has been derived from financial statements, which, in the opinion of
WideBand management, reflect all adjustments (consisting of only normal
recurring adjustments) considered necessary for a fair presentation of
the results of such interim period. Results of operations are not
necessarily indicative of results that may be expected for any other
annual or interim period.
Nine months Twelve months
Ended Sept. 30 Ended Dec. 31
1999 1998 1999 1998
STATEMENTS OF OPERATIONS:
Total revenues 175,089 188,596 258,146 210,553
Loss from operations (304,619)(135,279) (237,115)(552,947)
Loss before taxes (304,619)(135,279) (241,115)(554,001)
Net loss (304,619)(135,279) (241,115)(554,001)
Net loss per common share(l) (.02) (.01) (.02) (.04)
BALANCE SHEET DATA:
Total assets 649,296 308,197 337,745 298,346
Total long-term obligations -0- -0- -0- -0-
Total stockholders' equity 615,840 103,110 266,327 145,233
Cash Dividends -0- -0- -0- -0-
(l)The net income or loss per common share amounts are based upon
the weighted average number of shares of WideBand Common Stock
outstanding (12,732,946, 12,641,001, 12,642,137 and 12,619,814 shares
outstanding at September 30, 1999, September 30, 1998, December 31, 1998,
and December 31, 1997, respectively).
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION. The
following unaudited pro forma condensed combined financial information
of the Company has been derived from, or prepared on a basis consistent
with, the Audited Financial Statements and related Notes of Vis Viva
and the Audited Financial Statements and related Notes of WideBand
attached hereto as Exhibits "B" and "C", respectively, and should be
read in conjunction with such historical financial statements. The pro
forma financial information reflects the adjustments that will result
from the Merger and Share Exchange as if it had occurred as of the
beginning of the periods presented with respect to pro forma statements
of operations data and as of the balance sheet date with respect to pro
forma balance sheet data. The following pro forma financial information
is presented for analysis purposes only and does not purport to indicate
the results which actually would have been obtained if the Merger and
Share Exchange had been effectuated on the dates indicated, or of the
results which may be obtained in the future. See "UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS."
Nine Months Twelve Months
Ended Sept. 30 Ended Dec. 31
1999 1998
______ ______
STATEMENTS OF OPERATIONS:
Revenues 175,089 258,146
Loss from operations (330,676) (270,635)
Other Income 51,284 14,104
Loss before taxes (279,392) (256,531)
Net loss (283,176) (252,563)
Net loss per common share (.02) (.02)
BALANCE SHEET DATA:
Total assets 1,152,265 n/a
Total long-term obligations --- n/a
Total stockholders' equity 1,018,508 n/a
COMPARATIVE PER SHARE DATA
The following table sets forth certain historical per share data of the
Company and WideBand and combined per share data on an unaudited pro
forma basis, after giving effect to the Merger and Share Exchange as
contemplated under the Plan and Agreement as adjusted to reflect the
recapitalization through the Vis Viva one-for-seven reverse stock split
and the issuance of 12,801,819 shares of Vis Viva Common Stock in
exchange for all issued shares of the capital stock of WideBand. The
unaudited pro forma combined financial data are not necessarily
indicative of the operating results that would have been achieved had
the Merger and Share Exchange been in effect at the beginning of the
periods presented and should not be construed as representative of
future operations. This data should be read in conjunction with the pro
forma condensed combined financial statements and the separate
historical financial statements of Vis Viva and WideBand and the notes
thereto included elsewhere herein.
Nine Months Twelve Months
Ended Sept. 30 Ended Dec. 31
1999 1998
______ _____
Net Income (loss)
Vis Viva 21,443 (11,448)
Wide Band (304,619) (241,115)
Proforma Combined (283,176) (252,563)
Book Value
Vis Viva 402,668 477,436
Wide Band 615,840 266,327
Proforma Combined 1,018,508 743,763
Net Tangible Book Value
Vis Viva 304,510 441,914
Wide Band 555,555 210,906
Proforma Combined 860,065 652,820
Proforma Combined Per Wide Band share(1)
Weighted average shares
outstanding 12,929,376 12,838,567
Net Loss $ (0.02) $ (0.02)
Book Value $ 0.08 $ 0.06
Net tangible book value $ 0.07 $ 0.05
(1)For purposes of this calculation, an assumed blended exchange rate
of one share of Vis Viva Common Stock for each outstanding WideBand
share has been used. The assumed blended exchange rate is calculated
using an exchange rate of one share of Vis Viva Common Stock for each
of Vis Viva's seven shares outstanding, and one share of WideBand
Common Stock for each of WideBand's one share outstanding.
BUSINESS AND HISTORY OF THE COMPANY
The Company was incorporated in the State of Utah in 1980. In
approximately May of 1981, the Company undertook a public offering of
its shares in Utah in reliance on the intrastate exemption from
registration available under the Securities Act of 1933 (the "Act") and
Rule 147 promulgated thereunder by the Securities and Exchange
Commission.
Effective June 30, 1995, the Company changed its domicile to the State
of Nevada. In March 1996, the Company filed a Form 10-SB with the
Securities and Exchange Commission ("SEC" or "Commission") and
approximately 60 days later became a Section 12(g) "reporting company"
under the Securities Exchange Act of 1934 (the "Exchange Act"). Other
than what value it may have as a "publicly held" entity, the Company's
assets consist solely of corporate bonds and stock. The Company may be
known or referred to as a "blind pool" or "blank check company" in that
its purpose is and has been to use what capital it has raised for the
sole purpose of seeking out, locating and investigating potential merger
or other acquisition candidates. Reference is made to the Company's
previous Annual Reports on Form 10-KSB on file with the Commission and
available on the Commission's data base known as EDGAR, reports which
detail the Company's history, nature, purpose and activities. Such
information is most easily accessible via the Internet using the
Company's OTC Bulletin Board symbol "VISV".
BUSINESS OF WIDEBAND CORPORATION
A section titled "DEFINITIONS OF TERMS" is located at the end of this
document and before Exs. "A" through "G". Reference is made thereto for
assistance to the reader in understanding the description and nature of
WideBand's business.
BACKGROUND. WideBand Corporation ("WideBand") has developed a new
computer networking technology, which is marketed as "WideBand
Networking". The purpose of computer networking is to allow two or more
computers to share information. Eighty percent of networked computers
today utilize networking technology called Ethernet to provide this
connection.
WideBand Networking was developed as an alternative to Ethernet. The
packet structure of Ethernet and other similarities have been maintained
in WideBand's technology to assure compatibility with existing computers
and operating systems. However, WideBand has several important
enhancements that are intended to solve serious problems that have
developed in Ethernet systems over the past 15 years.
The most important features of WideBand Networking are:
1. Faster speed
2. Elimination of data collisions
3. Dual network delivery system
Each of these features is discussed in detail in a later section.
WideBand Networking was developed as a proprietary networking technology
for which several national and international patent applications have
been filed. Seven of the U.S. patent applications have already issued
and will help WideBand protect its ownership of the technology. It is
the strategy of the company to manufacture and market products based on
WideBand Networking while also licensing the technology to other
networking product manufacturers. It is intended that the primary
revenues to WideBand come from such licensing agreements and
arrangements. Towards this end, WideBand has assisted in the formation
of the WideBand Gigabit Networking Alliance (WGNA). WGNA is a not-for-
profit organization that manages the WideBand Networking technology open
standard.
Utilizing the original design developed by WideBand, nearly 70 companies
and organizations have joined together to participate in the process of
making the WideBand Networking technology a standard whereby products
manufactured by companies can operate together to accomplish successful
networking for the customer. The emergence of WideBand as an open
standard is an important step towards market acceptance of the
technology since today's users do not wish to be dependent on a single
supplier for their networking products. WideBand has been manufacturing
and shipping product to customers for over two years.
The current marketing thrust is directed towards the educational
community colleges, universities, and school districts. This market niche
was chosen because schools have a demand for sending multiple feeds of
high-quality video over their networks. The ability to send high-quality
video data over busy networks is built into WideBand. As a result, the
company is achieving some degree of success in penetrating this market.
It is anticipated that as the company expands, other markets will also be
approached as potential customers for WideBand Networking products.
HISTORY OF WIDEBAND. WideBand was incorporated in Missouri in 1994 to
develop and market products based on the high-performance networking
technology, which has been developed by Dr. Roger E. Billings.
Initially the company was named "Jacomo Corporation", after Lake Jacomo,
a beautiful landmark near the corporate headquarters. Though the Jacomo
name was well known in the western Missouri area, potential customers
had a difficult time pronouncing it and often assumed that it was a
Japanese company. For that reason, the company's name was changed to
"WideBand Corporation" in 1995.
WideBand obtained the manufacturing and marketing rights to the
networking technology under development by Dr. Billings in an exclusive
master licensing agreement, which also gives the company the right to
use the WideBand name which was trademarked by Dr. Billings.
The technology was initially unveiled in its prototype stage at Comdex in
1996, where potential customer response was positive.
In 1997, the company began shipping limited quantities of WideBand
Networking products to customers. These early products utilized
electronic components which were expensive but which allowed engineers to
make continual modifications and refinements to the equipment to resolve
problems encountered in the field.
In August of 1999, WideBand began to ship the first product that was not
based entirely on high-cost prototype components. At the same time, a
significant marketing effort was initiated with the goal of establishing
a nationwide organization of 100 dealers by year-end.
DESCRIPTION OF WIDEBAND'S BUSINESS AND PROPERTIES
Reference is made to the "Definition of Terms" section at the end of this
document.
WIDEBAND TECHNOLOGY OVERVIEW. WideBand Networking is a new technology
that has been developed to satisfy emerging needs for better performance
and higher bandwidth in networking products. It is a head-to-head
competitor with Ethernet, which is now 20 years old but still accounts
for 80 percent of all shipments of networking adapters worldwide.
Ethernet first emerged in the late 70's when the need to connect
personal computers into networks where information or data could be
shared between multiple users began to be in high demand. In the first
implementations of Ethernet, a single cable "snaked" around the
facility. Computers desiring to "be on the network" were each connected
to this single cable. Whenever any of the computers would transmit
information on the cable, the transmission could be "heard" by all of
the other computers.
In Ethernet, data is transmitted between computers in packets. Each
Ethernet packet is similar to a train with a header or engine, a trailer
like a caboose, and up to 15,000 characters of information like the
cargo. The header of each Ethernet packet contains a unique address of
the destination computer. Inside each computer is an Ethernet adapter
or interface module. The adapter receives all of the packets
transmitted on the local network segment, discarding all packets that
are not addressed to the particular user. When a packet addressed to
the local computer is detected, the adapter receives it from the network
and transfers the information or the data to the computer for further
processing.
At its inception, the Ethernet data rate of 10 million bits per second
was faster than data could be sent or received by any of the personal
computers on the market. In the ensuing years, however, computers
became faster and faster, enabling larger amounts of data to be sent
over the network at faster speeds or data rates. Consequently, networks
began to bog down under the heavy load of data transmissions, making
programs perform sluggishly or, in some cases, not at all.
One of the contributors to the slowing down of data over the Ethernet
network is a phenomenon that computer engineers refer to as a "data
collision". When two or more computers transmit a packet onto the
network at identically the same moment, the transmissions become garbled
and unintelligible at the destination. These "data collisions" consume
and waste substantial amounts of bandwidth on heavily loaded networks.
While standard Ethernet actually transmits data at the rate of 10
million bits per second, an actual data rate of just 2.5 million bits
per second is all that is available on heavily-loaded network segments.
To alleviate these problems, faster versions of Ethernet have been
developed. The most popular Ethernet technology on the market today is
called Fast Ethernet. It transmits at data rates of 100 Megabit per
second. The problem of data collisions continues to plague Fast
Ethernet installations, reducing the useful bandwidth to 25 Megabit per
second or less on congested networks. Furthermore, in order to maintain
the network's ability to detect collisions, it is necessary to limit the
total size of a network segment to a diameter of just 200 meters. This
number is referred to by engineers as the "collision domain diameter,"
which is down sharply from the 1000-meter collision domain diameter of
conventional Ethernet.
WIDEBAND NETWORKING. WideBand is a high-performance networking
technology that has been designed to remedy many of the problems
associated with conventional Ethernet while maintaining compatibility
with existing computer operating systems and programs.
NO COLLISIONS. One very important advantage of WideBand networks is the
elimination of data collisions, utilizing a proprietary method called
"buffered packet synchronization".
During the past 10 years, Ethernet installations have migrated away from
the single cable concept of the 1980's. Now Ethernet installations
consist of a central module known as a hub with cables going from the
hub to each of the computers in the network. The industry term for this
type of network design is a "star topology". The cabling utilized in
today's Ethernet installation is referred to as a Category 5 cable.
Category 5 cables meet minimum performance specifications and consist of
8 copper conductors that are installed inside a single jacket as four
twisted pairs. Twisted pairs are created by twisting two conductors in
a tightly wound spiral throughout the length of the cable. By twisting
each pair in this manner, interference from outside sources such as
radio waves, lightening, or even air conditioning compressors are
eliminated at the connection to the receiving amplifier. In
conventional Ethernet installations, one of the twisted pairs is used to
carry data from the personal computer to the network and a second
twisted pair is utilized to carry data in the other direction. The
other two pairs are idle.
Because network installations for the past ten years have migrated to
twisted pair cables, it is no longer necessary for data transmissions to
collide on the cable as was the case with the earlier coax
installations. This is true because each computer has a dedicated cable
connecting it to the hub at the center of the network. Maintaining the
topology of the earlier Ethernet design, the hub the box located in the
center of the network connecting all the computers together is the place
where the collisions now take place.
In the case of WideBand, if two or more computers transmit data
simultaneously over their Category 5 twisted pair cable, the "buffered
packet synchronization" feature forwards the first transmission detected
by the hub to the outbound channel where it is transmitted to all of the
connected computers on that segment. The second transmission detected
by the hub is stored temporarily in a local memory buffer until the
completion of the transmission of the first packet. Then the second
packet is immediately transmitted to the outbound network, even though
part of the packet is still arriving from the sending station. Instead
of a collision, this simple technique results in a concentrated stream
of packets being sent out to all the users on the network. In WideBand
Networking, the hub, which has these additional benefits or features, is
referred to as a "concentrator."
DUAL NETWORK. Unlike Ethernet, which utilizes only two pairs of a
Category 5 cable, WideBand utilizes all four pairs. One pair is used to
carry data from the computer to the network. Two pair are utilized to
carry data from the network back to the computer, and the fourth pair is
used for flow control and power distribution. This unique topology
provides some significant advantages.
In networks today, there are two somewhat incompatible types of data
that need to be transferred. The first is the conventional
client/server data, and the second is streaming or video data. In the
case of client/server data transfer, a user requests information from a
server and the server, then, loads that information onto the network as
fast as it can. Client/server data transmissions busy out the network
for very short intervals. Streaming data, on the other hand, loads the
network lightly but for an extended period of time. Each time the user
requires an additional image to be displayed, that image must be
transmitted over the network. If the image is not received over the
network on time, the video movie locks up until the next frame can be
received.
In WideBand, two separate networks are provided in one. Over one of the
twisted pairs, client/server data is delivered to the workstation. Over
the second twisted pair, streaming data such as high-quality video
movies and sound are transferred. By separating these two types of data
onto their own twisted pair, a network can simultaneously transfer over
100 high-quality video feeds even during periods of the heaviest
client/server traffic utilization. This dual network capability works
over the same cable and with a single network adapter in each machine.
It is a feature unique to WideBand Networking.
FAST DATA RATE. WideBand transfers data over three of the twisted pairs
in a Category 5 cable at a data rate of 333 million bits per second.
This data rate is 33 times faster than conventional Ethernet and 3.3
times faster than Fast Ethernet. The aggregate data rate for the three
twisted pairs thus totals 1 billion bits per second. The speed
advantage is further amplified by the fact that three separate pairs are
utilized to transfer the data, and there is no bandwidth lost as a
result of data collisions.
VIS VIVA COMMON STOCK AND DIVIDEND POLICY
The Vis Viva Common Stock is publicly held and is traded under the
symbol "VISV" in the United States over-the-counter market maintained by
the National Association of Securities Dealers, Inc. (the "NASD"). On
August 8, 1999, the last day prior to the public announcement of the
proposed Merger and Share Exchange, the high and low bid prices for the
Vis Viva Common Stock in the over-the-counter market, as reported by the
National Quotation Bureau, LLC. (the "NQB") were $0.25 and $0.125,
respectively. These prices reflect inter-dealer quotations without
retail markup, markdown or commissions and do not necessarily reflect or
represent actual transactions. As of August 8, 1999, approximately
494,975 of the 1,270,000 shares of Vis Viva Common Stock were
"restricted securities" as that term is defined under Rule 144 ("Rule
144") promulgated under the Securities Act of 1933, as amended. All of
the restricted shares then outstanding are currently eligible for sale
in reliance upon Rule 144, subject to certain volume and resale
restrictions. However, this figure does not include the additional
105,000 restricted shares issued to certain insiders on August 25, 1999,
as a result of the exercise of certain options to acquire the same at
$0.25 per share, an issuance bringing the total number of issued and
outstanding shares of the Company to 1,375,000.
The shares of Vis Viva Common Stock proposed to be issued in connection
with the Share Exchange will not be registered under the Securities Act,
and thus will be restricted securities. Restricted securities may not
be resold unless they are registered under the Securities Act or sold
pursuant to an applicable exemption from registration. Each certificate
representing Vis Viva Common Stock to be issued to WideBand Shareholders
in the Share Exchange will bear a restrictive legend conspicuously
identifying such restrictions on transfer. WideBand shareholders will
also be required to execute "investment letters" to the effect that they
are acquiring Vis Viva shares for investment and without a view to the
further distribution thereof.
The Company has never declared or paid dividends on the Vis Viva Common
Stock nor does it have any intention of doing so in the foreseeable
future. Instead, the Company intends to retain any future earnings for
use in its business. Whether WideBand and its principals intend to pay
or declare dividends to shareholders once the Merger and Share Exchange
is consummated is something to which current management of the Company
cannot opine.
WIDEBAND COMMON STOCK AND DIVIDEND POLICY
Shares of WideBand Common Stock are not publicly traded and no public
market exists therefor. As of the date of this Information Statement,
there were 12,801,819 shares of WideBand Common Stock issued and
outstanding. See "SECURITY OWNERSHIP FOR CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF WIDEBAND CORPORATION."
Dividends are payable on WideBand Common Stock when, as and if declared
by the Board of Directors of WideBand. WideBand has never declared or
paid dividends on WideBand Common Stock. Upon consummation of the
Merger and Share Exchange, any dividends paid or declared by WideBand
will be paid or declared by the Company and at the determination of the
then-Board of Directors. Upon completion of the Merger and Share
Exchange, existing holders of WideBand Common Stock will not be entitled
to receive dividends or any other distributions from WideBand as
WideBand, a Missouri corporation, will no longer exist by operation of
law.
VIS VIVA CORPORATION
124 South 600 East, Suite 100
Salt Lake City, Utah 84102
__________________________________________
INFORMATION STATEMENT
__________________________________________
SPECIAL MEETING OF SHAREHOLDERS
FEBRUARY 18, 2000
INTRODUCTION
General
This Information Statement is being furnished by Vis Viva Corporation, a
publicly held Nevada corporation (the "Company" or "Vis Viva"), to
holders of the Company's common capital stock, par value $0.01 per share
(the "Vis Viva Common Stock") for use in connection with a Special
Meeting of Stockholders of the Company to be held at 124 South 600 East,
Salt Lake City, Utah 84102 on February 18, 2000 at 10:00 a.m., Mountain
Standard Time, and at any adjournments or postponements thereof (the
"Special Meeting"). This Information Statement and the accompanying
Notice of Special Meeting are first being mailed to stockholders of the
Company on or about January 26, 2000.
The purpose of the Special Meeting is to consider and act upon a
proposal to approve, authorize and adopt an Agreement and Plan of Merger
dated September 6, 1999 and any amendments thereto (the "Plan and
Agreement") by and between the Company and WideBand Corporation
("WideBand") and all related transactions contemplated by the Plan and
Agreement. Subject to stockholder approval, the Plan and Agreement
provides for, among other things: (a) a recapitalization of the Company,
specifically, a one-for-seven reverse split of the 1,375,000 shares of
Vis Viva Common Stock currently issued and outstanding; (b) the
acquisition by the Company, after the 1-for-7 reverse-split, of all of
the issued and outstanding shares of the capital stock of WideBand in
exchange for the issuance by the Company of an aggregate of 12,801,819
shares of Vis Viva Common Stock to the WideBand Shareholders; (c) to
amend the Company's Articles of Incorporation to approve the name change
for the Company to "WideBand Corporation," to increase the authorized
common capital shares of the Company from 15 million to 20 million
shares, to change the par value of the Company's shares to "no par
value," and to otherwise streamline and amend the corporate purposes of
the Company to reflect that the Company is authorized to engage in any
lawful business activity recognized under Nevada law; (d) approval of
the 55,000 post-split finder's, agent's or consultant's fee shares to be
issued in connection with the transaction; and (e) the election of new
directors. See section below titled "Certificate Amendment Actions,"
including Ex. "G" hereto. Any other business lawfully brought before
the meeting will also be discussed.
Immediately following the consummation of the Merger and Share Exchange,
if consummated, the shares of Vis Viva Common Stock owned by the current
shareholders of the Company, including Jack Coombs and J. Michael
Coombs, will represent nearly 2% of the then issued and outstanding
shares of Vis Viva Common Stock.
The principal and perceived advantages and disadvantages of the
transaction to the Company, WideBand and their respective shareholders,
is discussed in the section below titled "Principal Effects of the
Merger and Share Exchange/Change of Control."
Stockholders of the Company should consider carefully the matters
discussed in this Information Statement. In addition to being furnished
to the holders of Vis Viva Common Stock, this Information Statement may
also be furnished to the WideBand Stockholders to provide them with
relevant information in connection with any required actions or consents
on the part of WideBand and WideBand Stockholders. Nonetheless, the
consent to the transaction on the part of a majority of the shareholders
of the Company hereinafter set forth should not be considered
recommendations or advice to WideBand or any WideBand Stockholder.
THE BOARD OF DIRECTORS HAS APPROVED AND RECOMMENDS APPROVAL OF, AND A
MAJORITY OF THE SHAREHOLDERS OF THE COMPANY HAS APPROVED THE PLAN AND
AGREEMENT AND THE CONSEQUENT MERGER AND SHARE EXCHANGE. ACCORDINGLY,
THEY BELIEVE THAT THE PLAN AND AGREEMENT AND THE SHARE EXCHANGE ARE FAIR
TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS. The
recommendation or view of the Board of Directors and a majority of the
Company's shareholders should not be considered or construed as a
recommendation to any person other than a stockholder of the Company.
In particular, such should not be considered advice to the stockholders
of WideBand.
The Board of Directors of the Company knows of no business that will be
presented for consideration at the Special Meeting other than the
matters described in this Information Statement.
The principal executive offices of the Company are located at 124 South
600 East, Suite 100, Salt Lake City, Utah 84102, and the Company's
telephone number is (801) 359-0833. Upon consummation of the Merger and
Share Exchange, the Company intends to consolidate its offices with the
offices of WideBand, located at 401 West Grand Avenue, Gallatin,
Missouri 64640. The Company's telephone number will become (660) 663-
3000.
Record Date
The Board of Directors has fixed the close of business on December 20,
1999, as the record date (the "Record Date") for the determination of
stockholders entitled to receive notice of and to vote at the Special
Meeting. Accordingly, only holders of Vis Viva Common Stock of record
on the books of the Company at the close of business on the Record Date
will be entitled to notice of and to vote at the Special Meeting. At
the close of business on the Record Date, there were 1,375,000 shares of
Vis Viva Common Stock issued and outstanding and entitled to vote at the
Special Meeting held by approximately 168 holders of record.
Vote Required
The presence of a majority of the outstanding shares of Vis Viva Common
Stock entitled to vote at the Special Meeting is required for a quorum.
A quorum is defined as what is necessary to have a lawfully held
meeting. Abstentions will be counted as represented for purposes of the
determination of a quorum. Were the number of shares of Vis Viva Common
Stock represented at the Special Meeting insufficient to constitute a
quorum, the Special Meeting would have to be adjourned and the Company's
management would be required to evaluate alternative methods of
obtaining approval of the Merger and Share Exchange, including
soliciting proxies in connection with a subsequent Special Meeting of
Shareholders called for the purpose of approving the Share Exchange.
Such an event will not occur, however, given the fact that the Company
has already obtained approval of the transaction by the written consent
of a majority of the Company's shareholders.
Approval of the Plan and Agreement and the Merger and Share Exchange
requires the affirmative vote of the holders of a majority of the issued
and outstanding shares of Vis Viva Common Stock entitled to vote at the
Special Meeting. Accordingly, abstentions will have the effect of a
vote cast against the Plan and Agreement and the Share Exchange.
Holders of Vis Viva Common Stock are entitled to one vote at the Special
Meeting for each share Common Stock held of record on the Record Date.
As of the date of this Information Statement, the Company, its officers
and directors, consisting of three persons, and one individual major
shareholder, owned or controlled, directly or indirectly, an aggregate
of approximately 805,975 shares of the Vis Viva Common Stock,
representing approximately 58.6% of the outstanding shares of the Vis
Viva Common Stock. See "SECURITY OWNERSHIP FOR CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT OF THE COMPANY." Each of the officers and
directors of the Company who own stock, including the Company's major
stockholder, has voted, by written consent, all shares owned by him in
favor of the Plan and Agreement and the consequent Merger and Share
Exchange.
THE MERGER AND SHARE EXCHANGE AND CONSEQUENCES THEREOF
The following information with respect to the proposed Merger and Share
Exchange is qualified in its entirety by reference to the complete text
of the Plan and Agreement of Merger, as amended, a copy of which is
attached to this Information Statement as Exhibit "A" and incorporated
by reference herein.
Exchange of Shares
The Plan and Agreement was entered into on September 6, 1999. On
October 27, 1999, the same was amended to extend the prospective Closing
Date to February 29, 2000. Pursuant to the Plan and Agreement, the
Company proposes to acquire WideBand through the exchange of all of the
issued and outstanding shares of the capital stock of WideBand for
12,801,819 shares of Vis Viva Common Stock to be issued to WideBand
Stockholders in the Share Exchange. At the Effective Time, (i) the
Company will effect a one-for-seven reverse split of the Vis Viva Common
Stock pursuant to which each issued and outstanding share of Vis Viva
Common Stock will be reverse split and converted into one-seventh
(.142857) of a share of Vis Viva Common Stock; (ii) in an effort to
avoid the administrative burdens associated with the issuance of
fractional shares, no fractional shares of Vis Viva Common Stock will be
issued in connection with the reverse split, nor will any cash payment
be paid in lieu of fractional shares, and instead, all fractional shares
will be rounded up to the nearest share; (iii) each share of the common
stock, par value $0.001, of WideBand Common Stock (the "WideBand Common
Stock") issued and outstanding immediately at the Effective Time will be
exchanged on a one-for one basis for the same number of shares of Vis
Viva Common Stock.
Upon consummation of the Merger and Share Exchange (including the
reverse split of the Vis Viva Common Stock), the WideBand Stockholders
will own 12,801,819 shares or approximately 98% of the then issued and
outstanding shares of Vis Viva Common Stock, and the holders the Vis
Viva Common Stock at the Effective Time will own approximately 251,430
shares or approximately 2% of the then issued and outstanding shares of
Vis Viva Common Stock.
Background of the Merger and Share Exchange
For approximately 18 years, the Company has acted as a "development
stage" or "blank check company" looking for a possible merger or other
acquisition candidate. The Company has had extremely limited resources.
Effective June 30, 1995, the Company's 1994 fiscal year end, the Company
held a shareholders' meeting and changed its domicile from the State of
Utah to the State of Nevada. Articles of Merger were then filed with
the Secretaries of State of both Utah and Nevada to legally effectuate
the same. In early 1996, the Company's Board of Directors determined
that the Company should further enhance its value as a potential
acquisition or merger candidate and therefore, the decision was made to
file a Form 10-SB with the Securities and Exchange Commission and become
a Section 12(g) "reporting company" under the Securities Exchange Act.
The Board's determination was based largely upon the Board's assessment
that the Company was unlikely to generate substantial income in the
future from mere securities investment activities. At the same time,
the Company was interested in merging or acquiring, by reverse-merger, a
closely held company with sufficient assets to qualify for listing on
NASDAQ. Without being a Section 12(g) "reporting company," the Board
concluded that effectuating a merger or other acquisition with a company
eligible for a NASDAQ listing would be highly unlikely.
In the period since becoming a Section 12(g) "reporting company," the
Board of Directors has considered a number of possible acquisitions, but
has elected not to pursue those acquisitions because of the Company's
limited resources or because of the belief of the Board of Directors
that the proposed acquisitions did not represent viable transactions in
the best interests of the Company's shareholders.
In late July 1999, representatives of the Company discussed with Dr.
Roger E. Billings, president, CEO and the major shareholder of WideBand,
the interest of WideBand and its shareholders in "going public." That
conversation was followed up by providing various information on the
Company to Dr. Billings and other representatives of WideBand. On or
about July 22, 1999, Mr. Donald F. Fenn, a director and the vice
president of WideBand, came to Salt Lake City and met with the Board of
Directors of the Company, including its major shareholder, Jack R.
Coombs. At that meeting Mr. Fenn provided an extensive introduction to
the operations and financial condition of WideBand and otherwise
responded to all the Company's questions posed about WideBand, its
business and operations. He also furnished extensive written material
on WideBand to the Company's representatives, including unaudited, in-
house financial information. Mr. Fenn further provided a written
proposed share exchange or business combination scenario between the
Company and WideBand based on various assumptions as to the value of
both companies.
On July 24, 1999, Messrs. J. Michael and Jack Coombs spoke with Dr.
Billings about the potential numbers involved in any proposed share
exchange. After such conversation, arrangements were made for
representatives of the Company to travel to Missouri to visit WideBand's
facilities and operations.
On July 26 and 27, 1999, two of the directors of the Company, along with
major shareholder Jack Coombs, visited and received an extensive tour of
WideBand's facilities and operations located in Blue Springs and
Gallatin, Missouri. There, they met with WideBand's officers, directors
and senior management and received from WideBand management a
presentation outlining the operations, financial condition and prospects
of WideBand. The directors of the Company then privately discussed the
information presented by WideBand management. After such, the parties
then met again and agreed upon the basic structure of a merger and share
exchange, all as set forth in the Memorandum of Intent between the
parties, a formal form of which was ultimately signed by the presidents
of both companies on August 9, 1999. This document was attached to and
filed with the Commission on a Form 8-K Current Report on or about
August 24, 1999.
The terms of the Memorandum of Intent were arrived at by valuing
WideBand at $63 million. The Company initially attempted to value
WideBand at no more than $30 million. However, evidence existed and was
presented that WideBand might be worth as much as $80 million. WideBand
representatives also pointed out that WideBand shares had been sold at
$5 per share and would not be sold at any lower price. In light of
this, the Company valued WideBand at $63 million. WideBand also has no
debt. Moreover, its products are fully developed and being sold.
Accordingly, it was on the basis of valuing WideBand at $63 million that
the share exchange numbers contained in the Memorandum of Intent were
derived.
The directors of both companies have executed corporate resolutions
authorizing each to pursue the transaction and otherwise formally
execute the Plan and Agreement of Merger. By adopting these
resolutions, both Boards have determined that the transaction is fair
and in the best interest of the shareholders of both companies. On
September 23, 1999, a complete copy of the Plan and Agreement of Merger
was filed with the Commission as an exhibit to the Company's Annual
Report on Form 10-KSB.
Reasons for the Merger and Share Exchange
In approving the Plan and Agreement and the transactions contemplated
thereby, the Company's Board of Directors considered a number of
factors. The principal factors considered include but are not limited
to the following:
(a) The fact that the Company was expressly designed and created
for the purpose of finding a company such as WideBand,
specifically (i) a company whose principals had invested their own
money in it; (ii) a company that had a history of being in
business as opposed to a so-called "start-up" business; (iii) a
company that had products developed and in the market; (iv) a
company whose principals were sophisticated in business matters;
(v) a company with little or no debt; (vi) a company that had
effectively emerged from the research and development stage; and
(vii) a company that appeared likely to continue operations after
consummation of a merger or other acquisition transaction with the
Company;
(b) The Board's evaluation of the Company's own business, future
prospects, financial condition and the limited nature of the
Company's current operations. In particular, the Board concluded
that the Company was unlikely to make substantial profits or
otherwise grow significantly from its investment in the securities
of other companies, including corporate bonds. Based upon the
Board's evaluation of the Company's business, financial condition
and operations, the Board concluded that the Company's existing
operations offered little potential for increasing stockholder
value;
(c) The Board's evaluation of the business, financial condition,
operating history, management, and prospects of WideBand and its
conclusion that the acquisition of the capital stock of WideBand
offered a realistic possibility of increasing Vis Viva stockholder
value. The Board's conclusion that the Merger and Share Exchange
offers a realistic possibility of increasing stockholder value was
based upon the following assessments: (i) WideBand has identified
and begun to exploit a market segment that offers significant
growth potential; (ii) WideBand management is actively involved in
the operation and development of WideBand's business; and (iii)
WideBand has unique properties in the computer networking industry
which stand to generate substantial profits once those products
and WideBand itself becomes more well known;
(d) The Board's determination that the number of shares of Vis
Viva Common Stock to be issued to WideBand Stockholders fairly
reflects the value of WideBand. The Board's determination was
based upon (i) of the value of the Company's principal financial
and non-financial assets (primarily the Company's cash,
investments, deferred tax assets, liquidity, and status as a
public company); (ii) the aggregate market value of the shares of
Vis Viva Common Stock (recognizing that the Vis Viva Common Stock
has experienced extremely limited trading activity during the past
several years); (iii) its evaluation of the current and forecasted
revenues and earnings of WideBand; (iv) its estimate of the value
of WideBand based upon revenues, earnings, projected growth and
market potential; and (v) its assessment of the relative and
potential value of WideBand's products in the computer networking
industry as a whole;
(e) In reaching its determination as to the viability of
WideBand's business and products, the Board of Directors did
consult with a professor of computer science at the University of
Utah who sat in on the meeting with Mr. Fenn described above. No
formal or written opinion with respect to his assessment of
WideBand was rendered. Instead, the professor informed the Board,
that, in his opinion, the products and inventions WideBand claimed
it had were possible and that if its products worked as indicated
or represented, there would seem to be no reason to believe that
there would not be a large market for such products. He further
indicated to the Board that the speed with which WideBand
represented its products could transmit data in comparison to the
so-called "Ethernet" was something for which there would be a
large if not huge market;
(f) In reaching its determination as to the terms of the Share
Exchange, the Board did not obtain an independent valuation of
WideBand, nor did the Company retain the services of an investment
banking firm or other third party to assess the fairness of the
consideration to be issued by the Company to the WideBand
Shareholders. The Board Members of the Company do not possess any
particular expertise in the area of business valuation. The
Board's analysis was based upon the factors described above,
utilizing the information available to the Board at the time of
its decision, and the final exchange ratio was determined through
arms-length negotiations between the Company and WideBand. The
Board did not rely on any single factor described above, assign
relative weights to the factors considered by it, or develop any
conclusion as to how any factor, taken alone, supported its
determination; and
(g) The risks associated with the business of WideBand that were
reviewed and considered by the Board are set forth below under the
heading "RISK FACTORS."
After considering each of the principal factors described above, the
Board of Directors determined that the Merger and Share Exchange was in
the best interests of the Company and its stockholders and that the
Company should proceed to effectuate the Merger and Share Exchange at
the earliest possible date. In view of the wide variety of factors
considered in connection with its evaluation of the Share Exchange, the
Board did not find it practicable or productive to assign relative
weights to or otherwise quantify each of the facts considered in
reaching its determination regarding the fairness of the Merger and
Share Exchange.
Certificate Amendment Actions to be Taken and Effect Thereof
The Company, as authorized by the necessary approvals of the Board of
Directors and the Majority Stockholders, has adopted resolutions
regarding amending the Company's Certificate or Articles of
Incorporation. These include but are not limited to (1) approving a
form of Articles of Merger by and between the Company and WideBand, a
form of which is attached hereto as Exhibit "F"; and (2) approving the
name change for the Company to "WideBand Corporation," increasing the
authorized common capital shares of the Company from 15 million to 20
million shares, changing the par value of the Company's shares to "no
par value," and otherwise streamlining and amending the corporate
purposes of the Company to reflect that the Company is authorized to
engage in any lawful business activity recognized under Nevada law. A
form of Articles of Amendment to the Articles of Incorporation of the
Company is attached hereto as Exhibit "G" (together referred to as the
"Certificate Amendment Actions"). Other aspects of the Plan and
Agreement require or involve shareholder approval but such do not
require amending the Company's Articles of Incorporation.
The Board of Directors of the Company (the "Board") has approved,
including the majority stockholders, who collectively owned
805,975shares or 58.6% of the 1,375,000 shares of Common Stock entitled
to vote, as of December 20 1999, have delivered written consents in lieu
of a Meeting of Shareholders approving the Certificate Amendment
Actions. Under Nevada law, the affirmative vote of the holders of a
majority of the outstanding Common Stock entitled to vote thereon is
required to approve the Certificate Amendment Actions. Such Certificate
Amendment Actions are sufficient to satisfy the applicable requirements
of Nevada law that such action be approved by the Shareholders.
Accordingly, shareholders of the Company will not be asked to take
further action on the Certificate Amendments at any future meeting.
The Certificate Amendment Actions will be effective on the date that a
Certificate of Amendment of the Articles of Incorporation with respect
to the Certificate Amendment Actions is filed with the Secretary of the
State of Nevada, along with Articles of Merger to be filed first with
the Secretary of the State of Missouri and then with the Secretary of
the State of Nevada. This filing will occur as soon as practicable
after the Special Meeting of Shareholders.
Interests of Certain Persons in the Merger and Share Exchange
To the knowledge of the Board of Directors, no shareholder of the
Company has any interest in the merger or exchange above and beyond that
of being a shareholder. Mr. Jack R. Coombs, the Company's principal and
majority shareholder, is expected to take a seat on the Board of
Directors of WideBand upon the Effective Date of the Merger and Share
Exchange for the sake of continuity of management. This fact, in and of
itself, does not give Mr. Coombs any extraordinary interest, personal or
otherwise, in the Merger and Share Exchange.
Principal Effects of the Merger and Share Exchange/Change of Control
The Merger and Share Exchange, if consummated, will materially affect
the Company, WideBand and their respective shareholders. Among other
effects, consummation of the merger and Share Exchange would result in
the following principal advantages to the Company, WideBand or their
respective shareholders: (i) the operating and financial results of the
Company will include those of WideBand and vice-versa; (ii) the WideBand
Stockholders will acquire over 98% of the Vis Viva Common Stock which
will be outstanding following the Merger and Share Exchange; (iii) the
Company's business will no longer be limited to passive participation as
an indirect investor in corporate bonds and stocks but will become the
business presently conducted by WideBand; (iv) the Company will be
positioned to pursue growth in the expanding and changing networking and
computer technology industry; (v) the Company's management will be
undertaken by individuals selected by the WideBand Stockholders based on
their knowledge and experience in computer networking systems and
products; (vi) as compared to the present resources of WideBand, the
Company will possess greater access to traditional capital markets and,
as determined appropriate by the Company's management, will be in an
improved position to raise additional capital to develop the business
and products of WideBand; (vii) the existing shareholders of WideBand
will have the prospect of greater investment liquidity for themselves;
and (viii) the Merger and Share Exchange will qualify as a
reorganization under Section 368(a)(1)(A) of the Internal Revenue Code
of 1954, as amended (the "Code"). The Merger and Share Exchange,
including the impact of the foregoing effects on the Company, WideBand
and their respective stockholders, is more fully described elsewhere in
this Information Statement, and a copy of the Plan and Agreement, as
amended, is attached hereto as Exhibit "A". See "THE MERGER AND SHARE
EXCHANGE Principal Effects of the Merger and Share Exchange," " Reasons
for the Share Exchange," " Management of the Company's Business After
the Share Exchange," "UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS," "BUSINESS OF THE COMPANY," and "BUSINESS OF WIDEBAND
CORPORATION."
The Merger and Share Exchange, if consummated, would result in the
following disadvantages to the Company, WideBand or their respective
stockholders: (i) the existing holders of Vis Viva Common Stock
experience immediate and substantial dilution, resulting in a reduction
in their collective interest in the Company from 100% to slightly less
than 2%; (ii) negotiation of the terms of the Merger and Share Exchange
has required significant management resources of the Company and
WideBand and consummation of the Merger and Share Exchange will require
additional management time and resources, which may disrupt the
operations of the Company, including the operations presently conducted
by WideBand, and may affect the operating results of both companies;
(iii) the "reverse acquisition" nature the Merger and Share Exchange may
limit the Company's ability to offset certain existing tax losses and
credits against the post-exchange income of the Company for periods
subsequent to the Merger and Share Exchange; (iv) the Company will
become a minor competitor in the computer networking industry, which is
highly competitive and subject to immediate and rapid change, and will
be forced to compete with larger information technology companies that
possess significantly greater resources and access to capital. Such
disadvantages are more fully described elsewhere in the Information
Statement. See "THE MERGER AND SHARE EXCHANGE Exchange of Shares,"
" Dissenters' Rights" and " Federal Income Tax Consequences" and "RISK
FACTORS."
Expenses of the Merger and Share Exchange
Except as described below, whether or not the Share Exchange is
consummated, the fees, costs and expenses incurred by the Company and
WideBand in connection with the Plan and Agreement and the consummation
or attempted consummation of the Share Exchange, including fees and
expenses of legal counsel, will be borne by the party incurring such
fees, costs or expenses. In the event that the Plan and Agreement is
terminated as a result of a party's failure to comply in any material
respect with the covenants or agreements contained in the Plan and
Agreement or as a result of a materially inaccurate representation or
warranty made by a party, the party causing such termination on such
account may bear the fees, costs and expenses incurred by the other
party or parties. See "THE PLAN AND AGREEMENT Conditions to the Merger
and Share Exchange" and " Termination."
Closing and Closing Date
The closing of the Merger and Share Exchange (the "Closing") is
anticipated to occur on or before February 29, 2000, or on such other
date as the Company and WideBand shall agree, provided that all
conditions to the obligations of the parties to consummate the Merger
and Share Exchange have been satisfied or waived, including (i) approval
and adoption of the Plan and Agreement by the stockholders of both the
Company and WideBand; (ii) receipt by the Company and WideBand of legal
opinions from counsel to the other party in form and substance customary
for transactions such as the Merger and Share Exchange; and (iii) other
customary closing conditions, including, without limitation, the
truthfulness and accuracy of the parties' respective representations and
warranties, the absence of any material adverse change in the business
condition of the respective parties, confirmation that the consummation
of the Merger and Share Exchange and the transactions contemplated
thereby will not violate any law or regulation and will not result in
the creation of any lien or encumbrance on the respective properties of
the Company or those of WideBand, the receipt of all material
third-party consents and approvals, and the absence of any litigation
which would have a material adverse effect on the business condition of
the respective parties. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date." The filing of Articles
of Merger setting forth the terms and conditions of the Merger and Share
Exchange (the "Articles of Merger") with the respective Secretaries of
State of the States of Missouri and Nevada is expected to be made as
soon as practicable after the approval of the Plan and Agreement and the
Merger and Share Exchange by the stockholders of the Company at the
Special Meeting and the receipt of all required consents and approvals.
See "THE PLAN AND AGREEMENT Effective Date and Time of the Merger and
Share Exchange" and " Conditions to the Merger and Share Exchange."
Reverse Split of Company Shares and Reasons Therefor
If the Merger and Share Exchange and the Plan and Agreement are approved
by the holders of Vis Viva Common Stock at the Special Meeting, at the
Effective Time the Company will effectuate a reverse stock split
pursuant to which each issued and outstanding share of Vis Viva Common
Stock will be reverse split and converted into one-seventh (.142857) of
a share of Vis Viva Common Stock; provided, however, that no fractional
shares of Vis Viva Common Stock will be issued in connection with the
Share Exchange. If any holder of Vis Viva Common Stock would otherwise
be entitled to a fractional share of Vis Viva Common Stock in connection
with the reverse split of the Vis Viva Common Stock, the Company will
round the number of shares to be issued to such holder up to the nearest
whole share. Under no circumstances will any be paid to any shareholder
in lieu of fractional shares.
Change of Name of Company to "Wideband Corporation," To Increase Its
Authorized But Unissued Shares, To Eliminate "Par Value," and To
Streamline The Company's Corporate Purpose in Its Articles
The Articles of Incorporation will be amended to change the name of the
Company from "Vis Viva Corporation" to "WideBand Corporation." The
Articles will also be amended to increase the currently authorized
common shares of 15 million to 20 million. This shall give the Company,
after the Merger and Share Exchange, the flexibility to raise more
investment capital without having to conduct another shareholders'
meeting and once again amend its Articles of Incorporation. The
Articles will also be amended to eliminate any par value per share of
the Company's common stock. This is because par value is an antiquated
accounting mechanism and the Company no longer sees any particular
reason in this day and age to maintain a $0.01 per share par value.
Lastly, Article 10 of the Company's Articles of Incorporation shall be
pared down or streamlined to provide that the Company is authorized to
engage in any corporate activity or action lawful under Nevada law. See
heading above titled "Certificate Amendment Actions." A copy of the
proposed amendments to the Articles of Incorporation is attached hereto
as Exhibit "G".
Change of Fiscal Year End
While Vis Viva has a year-end of June 30 and WideBand has a year-end of
March 31, the Plan and Agreement provides that the year-end of the
Company, after completion of the transaction, shall change and become
September 30. There are at least two reasons for this. First, WideBand
determined that it would be easier for it to have its year end just
prior to the calendar year end. Secondly, the financial information on
both companies attached hereto is as of September 30, 1999. September
30 thus provides a convenient starting point for the survivor in the
Merger and Share Exchange.
Management of the Company's Business After the Merger and Share Exchange
Following consummation of the Share Exchange, Vis Viva's business will
be that of WideBand and the Company shall continue as WideBand's
business and affairs currently exist. The current directors of the
Company will resign. Four (4) individuals designated by WideBand
Stockholders and one individual designated by the current Board of
Directors will be elected to serve as members of the Company's Board of
Directors with terms expiring at the Company's next annual meeting of
stockholders. The Board of Directors of the Company has designated Jack
R. Coombs, age 72, a private investor and the Company's major
stockholder, to serve as a director of the Company following
consummation of the Merger and Share Exchange. See "PERSONS TO ASSUME
DIRECTORSHIPS OF WIDEBAND UPON COMPLETI0N OF THE MERGER AND SHARE
EXCHANGE." At the same time, WideBand has designated Dr. Roger E.
Billings, Donald N. Fenn, and Dr. Maria Sanchez to serve as members of
the Company's Board of Directors upon completion of the Merger and Share
Exchange. The biographies or resumes of such persons are set forth in
the section below titled "MANAGEMENT OF WIDEBAND CORPORATION."
It is also anticipated that the current officers of the Company will
also resign and, upon their election, the new directors of the Company
will appoint persons to serve as officers of the Company in accordance
with the procedures outlined in Nevada law and the Company's Articles of
Incorporation and Bylaws. The Company anticipates that certain of the
current officers of WideBand will be appointed to serve as officers of
the Company following consummation of the Merger and Share Exchange.
See "MANAGEMENT OF WIDEBAND CORPORATION."
Accounting Treatment
The Merger and Share Exchange is intended to be accounted for under the
"purchase" method of accounting in accordance with generally accepted
accounting principles. For the reasons described below, the Merger and
Share Exchange will be treated for accounting purposes as a "reverse
merger" wherein WideBand will be treated as the acquiring company. The
treatment of the Share Exchange as a "reverse merger," even though the
Company will issue shares of Vis Viva Common Stock to WideBand
Stockholders, is due to the acquisition by WideBand Stockholders of what
amounts to approximately 98% of the outstanding shares of Vis Viva
Common Stock after consummation of the Merger and Share Exchange and the
expectation that, if the transaction is consummated, the existing
management of WideBand will become the management of the Company. Under
the purchase method of accounting, the net assets of the Company will be
recorded at their fair market value at the Closing Date and the
operating results of the Company prior to the Merger and Share Exchange
will not be included with the historical operating results of WideBand.
The Unaudited Pro Forma Condensed Combined Financial Statements
appearing elsewhere in this Information Statement are based upon certain
assumptions and allocate the purchase price to assets and liabilities
based upon preliminary estimates of their respective fair values. The
pro forma adjustments and combined amounts are included for
informational purposes only. If the Merger and Share Exchange is
consummated, the Company's financial statements will reflect effects of
acquisition adjustments only from the Effective Time. The actual
allocation of the purchase price may differ significantly from the
allocation reflected in the Unaudited Pro Forma Condensed Combined
Financial Statements. See "SELECTED HISTORICAL AND PRO FORMA FINANCIAL
INFORMATION" and "UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS."
Changes And Disagreements With Accountants
The Company has had no disagreements with its auditors or accountants.
In 1994, it changed auditors only because its contact person with its
former auditors moved out of state.
Dissenters' Rights of Appraisal
The Merger and Share Exchange creates dissenters' rights for the
stockholders of Vis Viva Common Stock under Nevada corporate law.
Holders of WideBand Common Stock are also entitled to assert dissenters'
rights in connection with the Merger and Share Exchange under Missouri
law. Those holders of Vis Viva Common Stock who elect to exercise such
dissenters' rights in accordance with Nevada law must comply with Nevada
law. If they act in accordance with those established procedures, they
will be entitled to have their shares purchased by the Company for cash.
Sections 78.471 through 78.502 of the Nevada Revised Statutes (NRS) set
forth the procedures to be followed if a shareholder desires to exercise
his or her dissenters' rights. In the event that a shareholder votes
against the proposal to approve the Merger and Share Exchange, that
shareholder may obtain payment of the fair value of the shares.
Pursuant to applicable provisions of the NRS, the shareholder must cause
the corporation to receive, before the vote is taken, written notice of
intent to demand payment for the shares if the proposed action is
effectuated, and that shareholder must not, at the same time, vote the
shares in favor of the proposal. Failure to follow this procedure will
result in the forfeiture of a shareholder's dissenter's rights. A
summary of the Nevada dissenters' rights statute is attached hereto as
Exhibit "E". Such summary is not intended to be complete or exhaustive.
Those shareholders wishing to invoke dissenters' rights should consult
their own counsel and Nevada law directly.
The Company will give a written dissenters' notice to all shareholders
that have elected to demand payment for the shares. The dissenters'
notice will be sent no later than ten (10) days after the effective date
of the corporate action creating the dissenters' rights. The
dissenters' notice will set a date by which the Company must receive the
payment demand. A shareholder's vote against, or failure to vote
against, the proposed action, without giving notice to the Company of
intent to demand payment, will constitute a waiver of any dissenters'
rights.
Federal Income Tax Consequences and Absence of Any Tax Opinion or Ruling
from the IRS
It is anticipated that the Merger will be treated as a tax-free
reorganization under Section 368(a)(1)(A) of the Internal Revenue Code
of 1954, as amended (the "Code"). Accordingly, no gain or loss will be
recognized by holders of Common Stock of the Company or by WideBand's
Shareholders as a result of the consummation of the Merger and Share
Exchange. Because Section 368(a)(1)(A) is a statutorily recognized tax-
free transaction under the Internal Revenue Code, neither the Company
nor WideBand determined that a tax opinion was necessary to be rendered
in connection with the transaction.
The following discussion summarizes certain of the federal income tax
consequences of the Share Exchange that are generally applicable to
holders of shares of the Vis Viva Common Stock and WideBand Common Stock
under the Code. This discussion does not deal with all federal income
tax considerations that may be relevant to particular stockholders of
the Company and WideBand in light of their particular circumstances,
such as stockholders who are dealers in securities, foreign persons,
tax-exempt entities or stockholders who acquired their shares in
connection with stock option or stock purchase plans or in other
compensatory transactions. In addition, the following discussion does
not address the tax consequences of transactions effectuated prior or
subsequent to or concurrently with the Merger and Share Exchange
(whether or not such transactions are in connection with the Merger and
Share Exchange), including without limitation, transactions in which
shares of Vis Viva Common Stock are acquired or shares of WideBand
Common Stock are disposed of. The following discussion is based upon
provisions of the Code, regulations, administrative rulings and judicial
decisions presently in effect to the best knowledge, belief and
information of the Company, all of which are subject to change (possibly
with retroactive effect) or to different interpretations. Furthermore,
no foreign, state or local tax considerations are addressed herein.
The Share Exchange is intended to constitute a "tax-free reorganization"
within the meaning of Section 368(a)(1)(A) of the Code. Assuming the
Merger and Share Exchange does so "qualify," the following tax
consequences will generally result (subject to the limitations and
qualifications referred to herein):
(a) No gain or loss should be recognized by holders of Vis Viva
Common Stock by virtue of the proposed one-for-seven reverse split
of the Vis Viva Common Stock or the Company's exchange of shares
of Vis Viva Common Stock for all of the issued and outstanding
shares of the capital stock of WideBand;
(b) No gain or loss should be recognized by holders of WideBand
Common Stock solely upon their receipt in the Merger or Share
Exchange of shares of Vis Viva Common Stock in exchange therefor;
(c) The aggregate tax basis of the shares of Vis Viva Common Stock
received in the Merger and Share Exchange should be the same as
the aggregate tax basis of shares of WideBand Common Stock
surrendered in exchange therefor;
(d) The tax holding period of the shares of Vis Viva Common Stock
received in the Share Exchange should include the period for which
the shares of WideBand Common Stock or surrendered in exchange
therefor were held, provided that the shares of WideBand Common
Stock are held as a capital asset at the time of the Share
Exchange;
(e) WideBand will continue to hold their assets with the same tax
basis for those assets that existed before the Merger and Share
Exchange; and
(f) The Company and WideBand will be filing one consolidated
federal income tax return but the Company may, however, be limited
in its ability to apply any carryforwards of pre-exchange net
operating losses, unused general business credits, if any,
corporate minimum tax credits or capital loss carryovers against
the post-exchange income of the Company from its previous
investments.
The parties have no intention of requesting a ruling from the Internal
Revenue Service ("IRS") in connection with the Merger and Share
Exchange. Qualification of the Merger and Share Exchange as a
"reorganization" will be subject to certain assumptions and
qualifications and will be based on the truth and accuracy of certain
representations made by the Company, WideBand and WideBand's
Stockholders.
Even if the Merger and Share Exchange qualifies as a "reorganization," a
recipient of shares of Vis Viva Common Stock would recognize gain to the
extent that such shares were considered to be received in exchange for
services or property (other than solely for shares of WideBand Common
Stock). All or a portion of any such gain commonly called "boot" may be
taxable as ordinary income. In addition, gain would have to be
recognized to the extent that a WideBand Stockholder was treated as
receiving (directly or indirectly) consideration other than shares of
Vis Viva Common Stock in exchange for his or her shares of WideBand
Common Stock. This does not appear applicable to this transaction.
A successful IRS challenge to the "reorganization" status of the Merger
and Share Exchange would result in WideBand Stockholders recognizing
gain or loss with respect to each share of WideBand Common Stock
surrendered equal to the difference between the holder's basis in such
surrendered share and the fair market value, as of the Effective Time,
of the share of Vis Viva Common Stock received in exchange therefor. In
such event, a stockholder's aggregate basis in the Vis Viva Common Stock
so received would equal its fair market value and the stockholder's
holding period for such stock would begin the day after the Share
Exchange.
THE FOREGOING IS ONLY A SUMMARY OF THE FEDERAL INCOME TAX CONSEQUENCES
AND IS NOT TO BE CONSTRUED AS TAX ADVICE. NO RULING FROM THE INTERNAL
REVENUE SERVICE AND NO OPINION OF TAX OR OTHER COUNSEL FOR EITHER THE
COMPANY OR WIDEBAND WITH RESPECT TO THE TAX CONSEQUENCES OF THE MERGER
HAVE BEEN OR WILL BE OBTAINED BY THE COMPANY. STOCKHOLDERS SHOULD
CONSULT THEIR OWN TAX ADVISERS OR TAX COUNSEL REGARDING THE TAX
CONSEQUENCES OF THE MERGER AND SHARE EXCHANGE.
Need for Regulatory Approval
Other than complying with its disclosure and filing obligations with the
Securities and Exchange Commission ("Commission" or "SEC"), there is no
state or federal regulatory agency that the Company is aware of which
has the power to prevent this transaction from closing or which would
otherwise have authority to approve this transaction in advance of
closing.
Absence of Any Material Contracts or Arrangements Between the Company
and WideBand or Anyone Affiliated with WideBand
The Board of Directors of the Company is not aware of any material
contract or other arrangement between the Company and WideBand or anyone
affiliated with WideBand.
Property Involved in the Transaction
Other than shares of each company to be exchanged, there is no property
to be transferred in the Merger or Share Exchange by and among the
various shareholders. The transaction solely contemplates an exchange
of stock of both companies with no "boot" or property being involved in,
or subject to, the transaction. See discussion above titled "FEDERAL
INCOME TAX CONSEQUENCES AND ABSENCE OF ANY TAX OPINION OR RULING FROM
THE IRS."
THE PLAN AND AGREEMENT
The following information with respect to the Plan and Agreement, as
amended, is qualified in its entirety by reference to the complete text
thereof, a copy of which is attached to this Information Statement as
Exhibit "A" and incorporated by reference herein.
Effective Date and Time of the Merger and Share Exchange
The Merger and Share Exchange will become effective upon confirmation of
the filing of the Articles of Merger with the appropriate regulatory
agencies of both the States of Missouri and Nevada. The Articles of
Merger are expected to be filed as soon as practicable after the
satisfaction or waiver of each of the conditions to consummation of the
Merger and Share Exchange, which is expected to occur as soon as
practicable following receipt of stockholder approval at the Special
Meeting. See " Conditions to the Share Exchange" and " Termination."
Representations and Warranties
Under the Plan and Agreement, the Company and WideBand have made a
number of representations and warranties to each other that are
customary for transactions of this nature. The Company has represented
and warranted, among other things, as to its due organization, its
possession of the authority necessary to enter into the Plan and
Agreement and consummate the Merger and Share Exchange, its
capitalization, its financial condition, its compliance with
governmental laws and regulations, the absence of material litigation,
the absence of defaults under material orders, judgments, agreements,
licenses and the like, and the absence of material adverse changes in
the Company's business since June 30, 1999, the date of its 1998 fiscal
year end. It is a condition to the obligations of WideBand to
consummate the Merger and Share Exchange that the Company's
representations and warranties be true and correct in all material
respects as of the date of the execution of the both the Plan and
Agreement and the Closing Date.
WideBand has made similar representations and warranties as to its due
organization, its possession of the authority necessary to enter into
the Plan and Agreement and to consummate the Merger and Share Exchange,
its capitalization, its financial condition, its compliance with
governmental laws and regulations, the absence of material litigation,
the absence of defaults under material orders, judgments, agreements,
licenses and the like, and the absence of material adverse changes in
its businesses since the date of execution of the Plan and Agreement.
It is a condition to the obligations of the Company to consummate the
Merger and Share Exchange that WideBand's representations and warranties
be true and correct in all material respects as of the date of both the
Plan and Agreement and the Closing Date.
WideBand Stockholders have, by means of filling out and executing
investor suitability questionnaires, made a series of representations
and warranties relating to their acquisition of the shares of Vis Viva
Common Stock in the Merger and Share Exchange. These representations
and warranties are intended to assure the Company of the suitability of
Vis Viva Common Stock for investment by WideBand Stockholders, the
ability of WideBand Stockholders to assess the risks associated with the
Merger and Share Exchange and the intentions of WideBand Stockholders to
hold the shares of Vis Viva Common Stock to be acquired by them in the
Merger and Share Exchange for investment purposes, and for their own
respective account(s), without a present view to the further
distribution of such shares.
Conditions to the Merger and Share Exchange
The obligations of the Company and WideBand to consummate the Merger and
Share Exchange are subject to the satisfaction or waiver of various
conditions contained in the Plan and Agreement, including: (i) approval
and adoption of the Plan and Agreement by the stockholders of both the
Company and WideBand, including the Certificate Amendment Actions
contemplated thereby; (ii) receipt by the Company and WideBand of legal
opinions from counsel to the other party in form and substance customary
for transactions such as the subject Merger and Share Exchange; and
(iii) other customary closing conditions, including without limitation,
the truthfulness and accuracy of the parties' respective representations
and warranties, the absence of any material adverse change in the
business condition of the respective parties, the confirmation that the
consummation of the Merger and Share Exchange and the transactions
contemplated thereby will not violate any law or regulation and will not
result in the creation of any lien or encumbrance on the respective
properties of the Company or WideBand, the receipt of all material
third-party consents and approvals, and the absence of any litigation
which would have a material adverse effect on the business condition of
the respective parties.
Certain Covenants
Under the Plan and Agreement, the Company and WideBand have agreed to
carry on their respective businesses in the same manner as conducted
prior to the execution of the Plan and Agreement, to maintain existing
or comparable insurance coverages, to perform obligations under material
contracts, leases and instruments relating to their respective business
conditions and not to take certain actions (including changing their
articles of incorporation or bylaws, declaring or paying dividends,
entering into material transactions, modifying material transactions,
modifying management compensation, incurring indebtedness, selling or
disposing of certain assets and similar actions) without the prior
written approval of the other party. The Company and the WideBand have
also agreed to take actions to facilitate the consummation of the Merger
and Share Exchange.
Approval of Finder's, Agent's, or Consultant's Fee Shares to Be Issued
in Connection with the Merger and Share Exchange
In connection with the Merger and Share Exchange, Coombs & Company, a
family partnership, and an affiliate of Jack Coombs, the Company's major
stockholder, and John Michael Coombs, an officer and director of the
Company, shall receive 40,000 and 15,000 post-split shares,
respectively, or a total of 55,000 "restricted" shares of Vis Viva
Common Stock upon Closing and the Effective Time. Such shares shall be
issued to such persons as a consultant's, agent's or finder's
compensation in connection with the Merger and Share Exchange. After
discussing the matter with the respective Boards of Directors of both
the Company and WideBand, it was determined that, because of their
knowledge and prior dealings in years past with Dr. Billings, both Jack
and J.M. Coombs have been instrumental in negotiating the terms and
conditions of the Merger and Share Exchange, without whose assistance
the transaction might not have otherwise been possible. The 55,000
"restricted" shares that Coombs & Company and J.M. Coombs shall receive
will, like the shares to be received by the WideBand Stockholders, be
imprinted with a similar or identical restrictive legend indicating that
the shares may not be sold or distributed in the absence of an effective
registration statement or exemption from registration. Moreover, the
recipients of such shares shall execute investment letters to such
effect.
WideBand has agreed in the Plan and Agreement that if and when it files
a registration statement with the Commission to register any of its
securities after the completion of the Merger and Share Exchange, it
will simultaneously register the subject 55,000 "restricted" shares.
WideBand has further agreed to register, if desired by the holders,
another 15,000 post-split "restricted" shares held by certain insiders
that were the subject of certain Company stock options exercised by such
individuals on August 25, 1999. Such agreement is termed "piggy back"
rights. WideBand has thus agreed to confer such "piggy back" rights in
connection with these 70,000 post-split "restricted" shares.
Absence of Any Existing Stock Options or Stock Option Plans
The Company has no stock option plans nor are there any outstanding
options of any kind to acquire any securities of the Company. What
stock options did exist were exercised on August 25, 1999. Reference is
made to the Company's Annual Report on Form 10-KSB filed on or about
September 23, 1999.
Termination or Abandonment of Merger
The Plan and Agreement, as amended, may be terminated at any time prior
to the Effective Time, whether before or after approval by the
stockholders of the Company, (i) by mutual agreement of the Company and
WideBand; (ii) by the Company or WideBand, if the Merger and Share
Exchange shall not have been consummated on or before February 29, 2000,
or such later date as approved by the Company and the WideBand; (iii) by
the Company if WideBand shall fail to comply in any material respect
with any covenant or agreement contained in the Plan and Agreement or if
any of the representations or warranties of WideBand shall be inaccurate
in any material respect; and (iv) by WideBand if the Company shall fail
to comply in any material respect with any covenant or agreement
contained in the Plan and Agreement or if any of the representations or
warranties of the Company shall be inaccurate in any material respect.
See " Conditions to the Share Exchange" and " Certain Covenants."
RISK FACTORS, INCLUDING QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
In addition to the other information provided in this Information
Statement, the following factors should be considered carefully in
evaluating the terms of the Plan and Agreement, as amended, and theShare
Exchange. These factors may be considered to be the most
substantial risks to a Vis Viva Stockholder in consummating the proposed
Plan and Agreement and in view of all facts and circumstances or which
otherwise arguably make the transaction one of high risk or speculative
(i.e., those factors which constitute the greatest threat that the
investment will be lost in whole or in part, or not provide an adequate
return).
Financial Condition Risk Factors
WideBand was recently formed, has no significant operating history, and
has yet to produce a profit. There is no assurance that it will ever be
profitable. As a new enterprise, it is likely to be subject to risks
management has not anticipated. WideBand has limited capital, and its
resources may not be sufficient for its needs. WideBand, in the short
term or the long term, may find itself unable to obtain adequate financing
to fund its operations.
WideBand is in a highly technical industry, which is characterized by
frequent introductions of new products that are often based on technical
advances. To remain competitive, WideBand must continue to improve its
present products, must develop new products, and must provide the
necessary service and support. WideBand may not be able to support its
continuing research and development needs.
The high speed networking industry is highly competitive, and WideBand
Corporation will be competing with a number of established companies
having much greater financial resources, experience, and market share than
WideBand.
A substantial amount of WideBand's assets are intangible in the form of
patents that have issued or are pending and protect the proprietary
WideBand technology.
High-Tech Business Risk Factors
Technology As WideBand takes its new technology to market, an
unsolvable technical problem could be discovered that could take weeks or
months to remedy, or could prove the technology, for all practical
purposes, worthless. Or, WideBand could discover an unforeseen
interoperability problem between WideBand products and the current LAN
infrastructure, causing loss of critical marketing and sales time while
corrections are made. Another interoperability problem in this case
between WideBand products and the products of other vendors could cause
prospective buyers to shy or steer away from adding WideBand to their
existing systems. On the other hand, WideBand technology could become
highly successful, and could then be duplicated and sold, diminishing the
royalties due WideBand.
Competitive Market WideBand is entering a highly competitive market and
may find that Gigabit Ethernet, or some similar competing technology,
could develop so quickly and be sold at such low prices as to push
WideBand out of the market. Similarly, a currently existing technology,
such as 100 Base-T Ethernet, could become so entrenched that WideBand
would not be able to pick up adequate market share to become profitable.
On the other hand, an overall slump could occur in the networking market,
causing a lack of demand for WideBand products while WideBand is in its
start-up or early marketing phase. Another risk would be a drop in
demand by the computing community for high-speed, increased bandwidth
capabilities at the workstation and in the backbone.
New Standard WideBand Corporation anticipates that WideBand technology
has the capability of becoming a networking standard, and is supporting
the efforts of WideBand Gigabit Networking Alliance (WGNA) to launch and
sustain the open WideBand Standard. WGNA consists of a group of companies
and individuals aiding in the development of, and committed to the support
of, the WideBand standard. It is possible, however, that WGNA may not be
able to develop adequate support to launch and sustain a new networking
standard. If WideBand networking does not become a standard, its general
acceptance in the marketplace will be greatly diminished, and it could
possibly be relegated to niche markets, thus reducing the revenues that
might otherwise be anticipated.
Manufacturing Capability As WideBand goes into its expansion phase and,
through an increased marketing effort, orders for product increase
sharply, WideBand may not be able to provide or procure adequate
manufacturing capacity to keep up with demand or to maintain adequate
manufacturing quality to insure customer satisfaction.
WideBand's Dependence On Key Personnel
WideBand has no key-man insurance on its key personnel, or a strategy in
place of obtaining comparable service in the event of their inability to
continue with WideBand.
WideBand's ability to operate successfully is dependent upon certain key
personnel such as Dr. Billings and on its ability to attract and retain
qualified technical personnel, all of whom are in great demand. WideBand
may not be able to attract other key management and technical personnel to
meet rapidly expanding operations caused by increasing demand.
The success of WideBand depends, in large part, on its ability to attract
and retain highly-qualified scientific, technical, managerial and
marketing personnel. WideBand has not entered into employment agreements
that require the services of their key personnel to remain with WideBand
for any specified period of time. The loss of the current key personnel
of WideBand could have a material adverse effect or impact on WideBand.
Competition for such personnel is intense, and there can be no assurance
that WideBand will be able to attract and maintain all personnel necessary
for the development and operation of its business. The loss of personnel
or an inability to attract, retain and motivate qualified personnel could
have a material adverse effect on the business, financial condition and
results of operations of WideBand.
Reliance On Certain Suppliers
WideBand is currently dependent on Cypress SemiConductor ("Cypress")
located in San Jose, California, a company that manufactures and supplies
the chips WideBand integrates into its products. In the event that
Cypress were to go out of business or for some other reason be unable to
continue to manufacture and sell such chips, it could take WideBand as
long as six months to re-tool such chips. WideBand is not aware that
Cypress is in any adverse financial condition of any kind or nature or
other hardship that would give WideBand any reason to believe that Cypress
either cannot or will not be able to continue to manufacture such chip.
Nonetheless, the immediate solution to this potential problem would be for
WideBand to keep at least a six-month inventory of the chips on hand. No
assurance can be given, however, that WideBand can or will do so. Another
longer-term solution would be to get at least one or more other chipmakers
ready, willing and able to take over for Cypress in the event that the
chips can no longer be obtained from it.
WideBand is not aware of any other suppliers whose demise or other
inability to provide product would materially affect it or its business.
Changing Market
The market for computer networking products and services is continually
changing. WideBand anticipates that the market for faster networking
products for servers and workstations will increase as networking as a
whole, and especially computer applications, become more sophisticated.
WideBand management has identified the markets for its Network
Concentrators and PCI-Adapters as promising growth potential for WideBand;
however, such potential is not yet proven and may not evolve or prove
sufficiently profitable. WideBand management anticipates that there is
and will continue to be significant competition for products in the
computer networking field, which may result in lower profit margins.
Competition
Having been a closely held and relatively new company, not many are well
aware of WideBand or its products. At the same time, the market for
computer products is competitive, evolving and subject to rapid
technological change. Many of the current and potential competitors of
WideBand have longer operating histories, greater name recognition, larger
installed customer bases, and significantly greater financial, technical
and marketing resources than does WideBand.
WideBand networking products must compete in the high-performance
networking sector of the computer industry. WideBand may not be able to
effectively compete against providers of general and/or specialized, high-
performance computer networking products.
The most important networking technologies in use today are Ethernet and
ATM. Ethernet is the king of the Local Area Network (LAN) with over 85
percent of all equipment installed worldwide based on this technology.
ATM, on the other hand, has gained dominance in the Wide Area Network
(WAN) arena.
WideBand products compete with numerous high-tech computer networking
companies that are manufacturing and marketing ATM and Ethernet
products, especially Fast Ethernet and Gigabit Ethernet the high-tech
end of the Ethernet technology. At present, WideBand has a competitive
advantage in that it has products that operate over copper cable at
gigabit speeds that are already shipping, while most Gigabit Ethernet
products operating over copper cable are not expected to begin shipping
until fourth quarter 99 to second quarter 2000. In addition, Gigabit
Ethernet products (1000 Mb/s) target server farms and network backbones
but primarily rely on standard Ethernet (10 Mb/s) or Fast Ethernet (100
Mb/s) for the desktop. WideBand gigabit products (1000 Mb/s) service
backbones, server farms, and the desktop, giving WideBand a greater
competitive edge.
However, while WideBand at present has a competitive advantage in
manufacturing and shipping gigabit products for the WAN and the LAN, it is
uncertain that it will be able to maintain its lead in this highly
competitive field against industry giants who have household names, large
budgets, and proven histories of manufacturing and selling networking
products.
In addition, Ethernet has just been made an IEEE industry standard,
whereas WideBand is an open standard de facto industry standard. There
may be potential customers who are uneasy about relying on a technology
that has not been ratified by a standards committee such as IEEE (even
though such a standard may not be technically optimal and Ethernet itself
began as a de facto standard). Such customers are looking for the
interoperability assurance of a committee-set standard. If such a mindset
is widespread among potential networking customers, sales of WideBand
products could be threatened.
An alliance of over 120 companies supports the Ethernet standard of
gigabit networking, and the IEEE standards committee has recently ratified
the copper version of the Gigabit Ethernet standard after ratifying the
fiber version last year. With such a major alliance of well-established
companies marketing and promoting Ethernet and ATM technologies, and the
ratification by a major standards committee, it will be difficult for
WideBand to break into these markets and to establish a foothold for its
new networking products.
It is WideBand's strategy to capitalize on the benefits of utilizing one
technology to cover both the LAN and the WAN, and to license its
proprietary networking technology to the well-established leaders in the
industry in return for a licensing fee or royalty. If WideBand fails to
license its technology, or to compete successfully in the market for
computer networking products, its revenues may decline. There is no
assurance that WideBand will be able to convince industry leaders to
incorporate this new technology into their products and customer
offerings.
The market for computer networking products poses significant competition
for WideBand from larger companies who market general and/or special
purpose networking products and have greater financial resources and name
recognition. Such companies as Hewlett-Packard, IBM, Cisco, 3Com, or
other networking product manufacturers, each of which is also a current
competitor by manufacturing and selling general and/or limited purpose
networking products, could also introduce networking products that include
the features and functionality currently provided by WideBand products at
lower prices. If these vendors offer lower cost networking products with
the features of WideBand products, coupled with the functionality of their
existing product lines, WideBand products could become obsolete. Even if
the standard features of these products were equivalent to WideBand's,
WideBand would face a substantial risk that a significant number of
customers would elect to pay a premium for similar functionality rather
than purchase products from a less well-known vendor.
WideBand will undoubtedly face competition in the future from numerous
emerging companies as well as established companies that have only
recently entered the computer networking market. To its knowledge,
WideBand's most significant competitors at this stage in its development
are 3 Com Corporation, Cisco Systems, Bay Networks and Extreme Networks.
Barriers to entry into the computer networking products market are relatively
low. Increased competition may negatively affect WideBand business and
future operating results by leading to price reductions, higher selling
expenses or a reduction in market share.
Competition comes from different sources. WideBand must compete effectively
against other current and future competitors to retain and expand its
customer base. If it fails to do so, its revenues could decline
substantially.
The principal factors that draw end users to a computer networking product
include:
need for the specific features of the networking product
ease of use
brand name
distribution and customer support and
total cost of ownership
To be competitive, WideBand must respond promptly and effectively to the
challenges of technological change, evolving standards and competitors'
innovations by continuing to enhance its products and sales channels. Any
pricing pressures or loss of market share resulting from its failure to
compete effectively could reduce its revenues.
WideBand revenues could be reduced if general purpose computer manufacturers
make acquisitions in order to join their extensive distribution capabilities
with the technology and development of smaller competitors' computer
networking products.
Hewlett-Packard, IBM, Sun Microsystems, and other computer manufacturers may
not only develop their own high-speed computer networking solutions, but they
may also acquire or establish cooperative relationships with other current
competitors, including smaller private companies. Because general purpose
computer manufacturers have significant financial and organizational
resources available, they may be able to quickly penetrate the computer
networking market by leveraging the technology and expertise of smaller
companies while utilizing their own extensive distribution channels. It is
expected that the computer networking industry will continue to consolidate.
For example, Packet Engines, a small computer networking startup, was
recently acquired by the large, international Alcatel Company. It is
possible that new competitors or alliances among competitors may emerge and
rapidly acquire significant market share.
WideBand products may become less attractive to customers if its products
become incompatible with other vendors' products or if other vendors bundle
their products with those of WideBand's competitors.
WideBand's ability to sell its products depends in part on their
compatibility with other vendors' software and hardware products. Developers
of these products may change their products so that they will no longer be
compatible with WideBand products. These other vendors may also decide to
bundle their products with other computer networking products for promotional
purposes. If that were to happen, WideBand's business and future operating
results could suffer if it were no longer able to offer commercially viable
products.
Computer networking products are subject to rapid technological change due to
better components, media, and engineering innovations. As a result, WideBand
products could be rendered obsolete by new technologies.
The computer networking market is characterized by rapid technological
change, frequent new product introductions and enhancements, uncertain
product life cycles, changes in customer demands and evolving industry
standards. WideBand products could be rendered obsolete if competitor
products based on new technologies are introduced or new industry standards
emerge. For example, sales of WideBand products may be limited if customers
widely adopt switched Ethernet or Gigabit Ethernet over fiber, and WideBand
products, which do not conform 100% to the popular Ethernet standard (i.e.
they do not have data collisions), fail to provide comparable functionality.
Client/server computing environments are inherently complex. As a result,
the life cycles of WideBand's computer networking products cannot accurately
be estimated. New products and product enhancements can require long
development and testing periods, which require hiring and retaining
increasingly scarce, technically competent personnel. Significant delays in
new product releases or significant problems in installing or implementing
new products could seriously damage WideBand's business. WideBand cannot be
certain that such delays in the future can be avoided.
The future success of WideBand depends upon its ability to enhance existing
products, develop and introduce new products, satisfy customer requirements,
and achieve market acceptance. It is not certain that WideBand will
successfully identify new product opportunities and develop and bring new
products to market in a timely and cost-effective manner.
Marketing
WideBand technology currently has a competitive advantage in that it provides
a high-speed solution utilizing current networking standards, it is
reasonably priced, and its products are already developed and shipping. In
spite of its competitive advantages, WideBand may not be able to develop a
successful marketing program to capitalize on the technology.
WideBand markets its products and services through resellers and
international Master Distributors. In addition, arrangements with third
parties, including hardware manufacturers and software developers, are
becoming an increasingly important part of WideBand's focus on providing
solutions to their customers and expanding distribution of their products.
The inability of WideBand to license its technology or establish strategic
relationships, or the loss of the services of its Master Distributors or
resellers, could have a material adverse effect on the business, its
financial condition, and its results of operations.
Backlog
In the event that demand was to substantially increase and WideBand were to
obtain an exorbitant number of orders, it could face serious backlog
problems. This has historically been true in the computer industry, an
industry known for large changes in demand. If and when prices for
components or demand for its products increase, the solution is for WideBand
to carry as much inventory on hand as it can afford. No assurance can be
given, however, that WideBand would be able to afford to maintain whatever
inventory is necessary to prevent a substantial backlog of orders,
particularly when no one can predict the extent to which demand or prices may
increase in the near future.
Collection of Accounts
Like any other business nowadays, WideBand's business similarly involves
certain account collection risks. Though WideBand does what it can to ensure
payment for its products, usually in advance of shipment, it cannot always be
certain that it will be timely paid or eventually paid on every order. In
addition, a distributor or reseller may default in timely payment of amounts
owing to WideBand. To date, all Master Distributors and resellers have been
sufficiently satisfied with WideBand's products, and WideBand has not had to
take legal or other action to collect from them.
Integration of Operations
Other than Dr. Billings, the current officers and directors of WideBand have
little or no experience in operating a public company. As a result, WideBand
will have to get used to regularly compiling the accounting and other
information necessary to generate the periodic reports that a Section 12(g)
"reporting company" must regularly file with the Commission. It is not
anticipated that the time and effort required to "get up to speed" in this
regard will have any material effect on WideBand's business or operations.
Pursuant to provisions of the Internal Revenue Code, the Company may be
limited in its ability to apply any carry-forwards of pre-exchange net
operating losses, unused general business credits, corporate minimum tax
credits, or capital loss carry-overs against the post-merger income of
WideBand.
Capital Requirements
WideBand plans to evaluate opportunities for the possible acquisition of, or
development of strategic relations with, other companies who may have
products or distribution channels that are compatible with the business
objectives of WideBand. In the event WideBand elects to pursue such
opportunities, additional capital in the form of equity or debt will likely
be required. There can be no assurance that capital sought by WideBand to
pursue such opportunities can be obtained on terms favorable to WideBand, if
at all. The failure of WideBand to obtain such financing could restrict its
ability to pursue the business opportunities described above.
Dilution and Concentration of Share Ownership
Following the consummation of the Merger and Share Exchange, holders of Vis
Viva Common Stock will hold approximately 2% of the issued and outstanding
capital stock of the post-exchange Company. This reduction of proportionate
share ownership from 100% to approximately 2% represents a significant and
substantial reduction in the relative equity interests of the pre-exchange
holders of the Vis Viva Common Stock and their corresponding voting rights
and rights with respect to the earnings and assets of the Company.
Furthermore, after the Effective Time, WideBand Stockholders will own
approximately 98% of the issued and outstanding Common Stock of the Company.
As a result, WideBand Stockholders will possess effective voting power as a
group to elect all of the Company's directors, to approve or veto matters
requiring stockholder approval and to control the management and affairs of
the Company. Such concentration of ownership may have the effect of
delaying, deferring or preventing a change in control or management of the
Company in the future. See "THE MERGER AND SHARE EXCHANGE Exchange of
Shares," "MANAGEMENT OF WIDEBAND Executive Officers, Key Employees and
Directors" and "SECURITY OWNERSHIP FOR CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF WIDEBAND."
VIS VIVA COMMON STOCK AND DIVIDEND POLICY
The Vis Viva Common Stock is traded in the United States over-the-counter
market maintained by the National Association of Securities Dealers, Inc.
("NASD") under the Bulletin Board symbol "VISV." From September 1997 through
June 30, 1999, the high and low bid prices for the Vis Viva Common Stock in
the over-the-counter market, as reported by the National Quotation Bureau,
LLC (the "NQB"), have been $0.25 and $0.0125, respectively. On August 8,
1999, the last day prior to the public announcement of the proposed Merger
and Share Exchange, the high and low bid prices for the Vis Viva Common
Stock, as reported by NQB, were $0.25 and $0.125, respectively. These prices
reflect interdealer quotations without retail markup, markdown or commissions
and do not necessarily represent actual transactions.
On the Record Date, the Company had 1,375,000 shares of Vis Viva Common Stock
issued and outstanding, held by approximately 168 holders of record
(including brokers and nominees holding shares of Vis Viva Common Stock for
multiple customers). Of the 1,375,000 shares of Vis Viva Common Stock issued
and outstanding as of the Record Date, 699,975 are "restricted securities" as
that term is defined under Rule 144 of the General Rules and Regulations of
the Commission. All restricted shares with the exception of 105,000 recently
issued, pre-split "restricted" shares are currently eligible for sale in
reliance upon the Rule, subject to certain volume and resale limitation
restrictions.
The shares of Vis Viva Common Stock proposed to be issued to WideBand's
shareholders in connection with the Merger and Share Exchange will not be
registered under the Securities Act, and thus will be restricted securities.
Restricted securities may not be resold unless they are registered under the
Securities Act or sold pursuant to an applicable exemption from registration.
Each certificate representing Vis Viva Common Stock issued in the Merger and
Share Exchange will be imprinted with a legend restricting transfer unless
and until an appropriate exemption from registration can be obtained.
The Company has never declared or paid dividends on the Vis Viva Common
Stock. Payment of dividends would be within the discretion of the Company's
Board of Directors and would depend, among other factors, on earnings,
capital requirements and the operating and financial condition of the
Company. At the present time the Company intends to retain any future
earnings for use in its business and therefore does not anticipate paying any
dividends on Vis Viva Common Stock in the foreseeable future.
The Share Exchange will not change the rights of the existing holders of
shares of Vis Viva Common Stock, except by diminishing their percentage
equity interest in the Company. Based solely on the number of shares of Vis
Viva Common Stock and the number of shares of WideBand Common Stock
outstanding prior to the Merger and Share Exchange, the Company will have
approximately 13,053,248 shares of Vis Viva Common Stock issued and
outstanding after consummation of the Merger and Share Exchange.
WIDEBAND COMMON STOCK AND DIVIDEND POLICY
Shares of WideBand Common are not publicly traded and no public market exists
therefor. As of the date of this document, there were a total of 12,801,819
shares of WideBand Common Stock issued and outstanding, a large portion of
which is owned and held by residents of countries other than the United
States. Also, options exist in favor of two non-affiliate individuals to
acquire 100,000 shares of WideBand Common Stock at an exercise price of $5.00
per share. If exercised, these options would bring in an additional $500,000
of capital to WideBand.
Dividends are payable on WideBand Common Stock when, as and if declared by
the Board of Directors of WideBand. WideBand has never declared or paid
dividends on WideBand Common Stock. Upon consummation of the Merger and
Share Exchange, the Company will become the sole stockholder of WideBand
shares and upon the filing of Articles of Merger with both the states of
Missouri and Nevada, WideBand, a Missouri corporation, shall cease to exist
by operation of law and its shares shall no longer be valid. Existing
holders of WideBand Common Stock will therefore not be entitled to receive
dividends or any other distributions from WideBand Corporation, a Missouri
corporation, because, upon consummation of the transaction, such corporation
and its shares will cease to exist by operation of law.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial information
shows the acquisition by the Company of all the outstanding shares of the
common stock of WideBand as contemplated under the Plan and Agreement. A
more full and complete presentation of this financial information is attached
hereto as Exhibit "D". The following summary information has been prepared
using the historical financial statements of the Company and the historical
financial statements of WideBand, and should be read in conjunction with the
Consolidated Financial Statements and related notes of the Company and the
Combined Financial Statements and related notes of WideBand attached hereto
as Exhibits "B" and "C", respectively. The pro forma financial information
reflects the adjustments that will result from the Merger and Share Exchange
as if it had occurred as of the beginning of the periods presented with
respect to pro forma statements of operations data and as of the balance
sheet date with respect to pro forma balance sheet data. The pro forma
financial data is provided for analysis purposes only and does not purport to
indicate the results that actually would have been obtained if the Merger and
Share Exchange had been effected on the dates indicated, or the results that
may be obtained in the future. Again, reference is made to Exhibit "D."
Because WideBand Stockholders will hold the controlling interest in the
combined entity, the Merger and Share Exchange is shown as a reverse
acquisition in which WideBand actually acquires the Company.
The pro forma financial information is based on the purchase method of
accounting for the Merger and Share Exchange. The pro forma adjustments are
described in the accompanying notes to the unaudited pro forma condensed
combined financial statements. The unaudited pro forma condensed combined
financial statements of income combine the results of WideBand for the period
ended September 30, 1999 and for Vis Viva Corporation for the period ended
September 30, 1999. The unaudited pro forma condensed combined balance
sheets show the combined positions as of September 30, 1999 and December 31,
1998.
WIDEBAND CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
For the Nine For the Year
Months Ended Ended December
September 30, 31, 1998
1999
REVENUES: $ 175,089 $ 258,146
COST OF SALES: 91,239 124,578
Gross profit 83,850 133,568
Operating Expenses
Selling and administrative expense 184,558 240,842
Research and development expense 229,968 163,361
Total Operating Expenses 414,526 404,203
Loss from operations (330,676) (270,635)
Other Income(Expense)
Interest income 45,307 58,763
Interest Expense (6,971) (16,925)
Gain (loss) on sales of securities 12,948 (27,734)
Net Other income(expense) 51,284 14,104
Net Income (loss) before income taxes (279,392) (256,531)
Income tax expense(Benefit) 3,784 (3,968)
Net income (loss) (283,176) (252,563)
Net income (loss) per
Common share (.02) (.02)
Weighted average number of common shares
used in per share calculations 12,732,946 12,838,567
Proforma Combined Balance Sheet Data:
Investments 378,004
Net equipment 408,649
Total assets 1,152,265
Total liabilities 133,757
Total shareholders' equity 1,018,508
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF VIS VIVA CORPORATION
Plan of Operation
Being classified as a "development stage" company, the Company has not
engaged in any material operations or had any revenues from operations since
its inception. Its income has been from investments made while looking for
potential merger or other acquisition candidates. The Company's plan of
operation for the next 12 months is to complete the WideBand merger and
continue the business operations of WideBand, or, if the WideBand transaction
is not completed, to continue to seek the acquisition of assets, properties
or businesses that may benefit the Company and its stockholders. As with the
WideBand merger, management anticipates that to achieve any such acquisition,
the Company will issue shares of its common stock as the sole consideration
for such acquisition.
Upon completion of the WideBand merger, as to which there can be no
assurance, the Company will take over WideBand's operations, and the plan of
operation of WideBand will become that of the Company. The Company will
timely file with the Commission periodic reports disclosing its plan of
operation following the completion of the WideBand merger.
If, for some unknown reason, the Company is unable to complete the WideBand
merger during the next 12 months, the Company's only foreseeable cash
requirements will relate to maintaining the Company in good standing and
preparing and filing its reports under Section 13 of the 1934 Act or the
payment of expenses associated with reviewing or investigating any potential
business venture, which the Company expects to pay from its cash resources.
As of June 30, 1999, its fiscal year end, it had no cash or cash equivalents;
payment of such expenses would likely require the Company to sell a small
portion of its investment portfolio, which was valued by the Company's
auditors at $418,999 at June 30, 1999. This figure included accrued
corporate bond interest receivable.
Results of Operation, Revenues, Costs and Expenses Fiscal Year Ended June 30,
1999 Compared to Fiscal Year ended June 30, 1998
Other than maintaining its good corporate standing in the State of Utah (and
following its change of domicile in the fiscal year ended June 30, 1995 in
the State of Nevada) and seeking the acquisition of assets, properties or
businesses that may benefit the Company and its stockholders, the Company has
had no material business operations in the two most recent fiscal years. The
Company identified WideBand as a potential merger candidate after the end of
the fiscal year.
The Company's assets consist primarily of holdings of corporate bonds, which
had a market value at June 30, 1999, and 1998, of $375,603 and $334, 661,
respectively. In addition, at June 30, 1999, the Company held corporate
stocks valued at $43,396, as compared to $20,748 at June 30, 1998. Total
assets on these dates were $548,858 and $506,881, respectively. Reference is
made to the Company's audited financial statements attached hereto in full as
Exhibit "B".
Net income to the Company, after provision for income taxes, increased to
$44,726 from $25,303 in the fiscal years ended June 30, 1999, and 1998,
respectively, due primarily to increased interest income from its investments
and decreased operating expenses in the fiscal year ended June 30, 1999, as
compared to the previous fiscal year. Reference is again made to the
Company's audited financial statements attached hereto as an Exhibit.
Liquidity and Capital Resources
During the fiscal year ended June 30, 1999, the Company's cash and cash
equivalents decreased from $90,738 to $0, due principally to increased
purchases of securities during the period. At June 30, 1999, the Company's
investments in securities were valued at $418,999, as compared to $355,409 at
June 30, 1998. Total stockholders' equity decreased to $430,325 at June 30,
1999 from $506,881 at June 30, 1998.
The Company's liquidity is provided by revenue from its investment in
securities. The Company has during the fiscal year ended June 30, 1999 been
able to generate sufficient cash to pay for its expenses even though many of
its investments, if sold on or before June 30, 1999, would have generated
capital losses and thus, generated net losses for the fiscal year.
The Company's negotiation of the Merger and Share Exchange and execution of
the Plan and Agreement resulted from the Company's pursuit of a merger or
other acquisition candidate an act fully within the definition of its
corporate purpose. Because of its nature as a "blind pool," "corporate
shell" or "blank check company," the Company has had no long term commitments
for capital expenditures other than what it might be able to afford to a
company such as WideBand.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION OF WIDEBAND
Overview
WideBand Corporation has set out to develop a new, high-speed networking
technology that will compete in the top end of the market with other high-
performance computer networking devices. As a start-up company, a
considerable amount of investment has been required to develop the initial
family of products, set up manufacturing facilities, and test the market's
acceptance of those products. WideBand's financial statements show losses
from operations because WideBand has been in the Start-up Phase, with low
sales volume and large amounts of money spent on product research and
development. Management expects this trend to continue into the year 2000.
The corporate objective is to create a family of advanced products that can
be marketed with adequate margins due to technological advantages and
features. With these products, it is the intention of WideBand to build a
sales organization and the brand recognition necessary to successfully
compete in today's competitive marketplace.
The final components of the initial family of products are expected to hit
the market by spring of the year 2000. Initially emphasis will be upon
regional test marketing to vertical market segments. Based on the success
and information gleaned from these studies, the sales campaigns will be
launched nationwide and internationally.
Substantial funding will be required by WideBand Corporation to finance the
completion of the initial research and development projects, and then to
launch the marketing studies and eventually the sales campaigns. It is
anticipated that these funds will be obtained through equity investments in
WideBand Corporation. Substantial loses are expected during these
developmental stages.
Results of Operation
The following table sets forth, for the periods indicated, selected
Statement
of Operations data and other selected financial information of WideBand,
expressed in dollars and as a percentage of combined revenues.
9 Months Ended 12 Months Ended
Sept. 30, Dec. 31,
1999 % 1998 % 1998 % 1997 %
Revenues 175,089 100.00 188,596 100.00 258,146 100.00 210,553 100.00
Cost of Sales 91,239 52.11 81,565 43.25 124,578 48.26 116,065 55.12
Gross Profit 83,850 47.89 107,031 56.75 133,568 51.74 94,488 44.88
Research and
development 229,968 131.34 128,358 68.06 163,361 63.28 315,144 149.67
Selling,
general, and
administrative
expenses 158,501 90.53 113,952 60.42 207,322 80.31 332,291 157.82
Loss from
operations (304,619)(173.98)(135,279)(71.73)(237,115)(91.85)(552,947)(262.62)
Other income
(expense) -0- -0- -0- -0- (4,000) (1.55) (1,054) (0.50)
Loss before
income taxes(304,619)(173.98)(135,279)(71.73)(241,115)(93.40)(554,001)(263.12)
Summary Statement
of Operations:
Revenues 175,089 100.00 188,596 100.00 257,146 100.00 210,553 100.00
Net loss (304,619)(173.98)(135,279)(71.73)(241,115)(93.77)(554,001)(263.12)
Net loss
per common
share (0.02) --- (0.01) --- (0.02) --- (0.04) ---
SUMMARY BALANCE SHEET:
Cash 83,902 12.92 23,310 7.56 71,256 21.09 13,276 4.45
Other current
assets 96,460 14.86 145,959 47.36 142,348 42.15 158,031 52.97
Fixed assets,
net of
accumulated
depreciation 408,649 62.94 87,150 28.28 68,720 20.35 84,056 28.17
Other asset
net of
amortization 60,285 9.28 51,778 16.80 55,421 16.41 42,983 14.41
Total assets 649,296 100.00 308,197 100.00 337,745 100.00 298,346 100.00
Total current
liabilities 33,456 5.15 205,087 66.54 71,418 21.15 153,114 51.32
Total long-term
liabilities --- --- --- --- --- --- --- ---
Total
stockholders'
equity 615,840 94.85 103,110 33.46 266,327 78.85 145,232 48.68
Total
liabilities
and
stockholders'
equity 649,296 100.00 308,197 100.00 337,745 100.00 298,346 100.00
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO 12 MONTHS ENDED DECEMBER 31,
1998
Revenues
Revenues were $258,146 for the twelve months ended December 31, 1998 and
$175,089 for the nine months ended September 30, 1999. It is anticipated
that sales will continue to remain flat until WideBand completes the
development of its initial family of products and launches its sales and
advertising campaigns.
Gross Profit
Gross profit as a percentage of revenues was 48% for the nine months ended
September 30, 1999 and 52% for the twelve months ended December 31, 1998.
During these periods, costs generally remained stable. The increased margin
percentage is attributable to the fact that some of the products are nearing
the completion of the developmental stages and are being manufactured with
ASIC technology rather than with the FPGA components used in the earlier
prototypes.
Application Specific Integrated Circuits (ASIC) are electronic chips that
contain special circuitry when manufactured that allow them to accomplish a
specific function or application. Since all of the functionality is
programmed into the chip when it is manufactured, there is a large tooling
cost before the first chip can be produced, but all subsequent chips are very
inexpensive and ready to be used on arrival from the silicone fabricator.
Field Programmable Gate Arrays (FPGA), on the other hand, have no up-front
tooling cost and can even have the functionality loaded into the chips at the
WideBand factory. This is important during the developmental stage because
the designs can be built and tested without making the large investment into
ASIC tooling. Needed changes and refinements can be easily and quickly made
to the FPGA whereas changes to an ASIC take months. Both chips are identical
on the outside, and fit into the same location on the WideBand circuit
boards. The problem with the FPGA is that each blank part is expensive. The
WideBand strategy is to develop and refine the products utilizing FPGA
technology. When the designs are tested and mature, they will be tooled into
an ASIC to reduce cost and programming labor at the factory.
WideBand products are just beginning to be migrated from FPGA to ASIC.
Margins are expected to continue to improve as more of the products are
transformed into the ASIC technology.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased from 80% to 91% of
revenues for the twelve months ended December 31, 1998 compared to the nine
months ended September 30, 1999. During 1999, a project was launched to
build the independent dealer organization marketing WideBand products.
Currently, the number of independent dealers marketing WideBand products
stands at 86, with a goal to expand that number to 100 by early 2000.
Investments in selling, advertising, and market development are expected to
increase substantially before revenues begin to rise.
Research and Development
WideBand incurred fairly substantial research and development costs during
the twelve months ended December 31, 1998 and the nine months ended September
30, 1999. As the initial family of products nears commercialization, larger
amounts of funding will be required to finalize and test designs. As the
development of the first set of products is nearing completion, work is
already underway on the next generation of products. The high performance
networking products industry is fast paced and competitive. In order to stay
vital, a serious commitment to the research and development of new products
will be required.
Other Income
Other income of WideBand consists primarily of interest income and the
result of issuances of its securities. Since its inception in 1994,
WideBand has raised approximately $2.15 million from the sales of its
securities.
Liquidity and Capital Resources
There has been no material change in accounts receivable during the nine
months ended September 30, 1999 compared to the twelve months ended December
31, 1998. During the most recent nine-month period there has been no change
in the sales terms of WideBand, nor has there been any significant change in
the number of days sales outstanding.
Historically, WideBand has financed its operations through the issuance of
securities. During the nine months ended September 30, 1999, and the twelve
months ended December 31, 1998, WideBand used cash in operating activities in
the amounts of $103,736 and $100,800 respectively, and generated cash of
$125,443 and $177,411 respectively from financing activities. For the same
periods, net cash increased $12,646 and $57,980, respectively.
Based on anticipated working capital requirements, WideBand management
believes that existing cash and cash equivalents, cash generated from
operations, and other financing alternatives, such as a secondary offering of
its securities, will be sufficient to finance the operations of the
post-exchange Company through the foreseeable future.
WideBand plans to evaluate opportunities for the license of its products as
well as the possible acquisition of, or development of strategic relations
with, other companies who may have products or distribution channels that are
compatible with the business objectives of WideBand. In the event WideBand
elects to pursue such opportunities, additional capital in the form of equity
or debt will likely be required.
BUSINESS OF VIS VIVA CORPORATION
General/Description of Business
The Company incorporates by reference its Annual Report on Form 10-KSB
filed with the Commission on September 23, 1999. Such Report contains
much of the information on the Company contained herein but in more
detailed form and that which follows is, in large part, an abbreviated
version of the information contained in such Annual Report. Such Annual
Report is publicly available and accessible on the Commission's database
known as "EDGAR" and can be accessed on the Internet via "sec.gov" with
the Company's stock symbol "VISV." Such information is also publicly
available through various Internet investment databases, providers and web
sites such as "Yahoo! Finance," among others.
The Company, Vis Viva Corporation, is a publicly held "development stage"
Nevada corporation originally incorporated in the State of Utah on September
11, 1980 as NRG Resources, Inc. As a result of name confusion, it soon
thereafter changed its name to "Vis Viva Corporation." In approximately May
of 1981, the Company undertook a public offering of its shares in Utah in
reliance on the intrastate exemption from registration under the Securities
Act of 1933 (the "Act"), including Rule 147 promulgated thereunder by the
Securities and Exchange Commission (the "Commission"). In such offering, it
raised $175,000 of capital. Other than seeking and investigating potential
assets, properties or businesses to acquire, and executing the Plan and
Agreement with WideBand, the Company has had no business operations by
definition since its inception in September 1980. To the extent that the
Company has sought the acquisition of assets, property or business that may
benefit the Company and its stockholders, the Company is essentially a
"blank check" company. By virtue of the way the Company raised its existing
capital, it may also be known or referred to as a "blind pool" or "shell
company." For accounting purposes, the Company is referred to as a
"development stage company." This is because, for accounting purposes, it
has not actually commenced business in any particular area or industry. For
this reason, the Company's audited financial statements disclose certain
financial information in summary fashion since the Company's inception in
1980.
The WideBand merger, or any other merger or acquisition transaction that the
Company may enter into, will require the Company to issue shares of its
common stock as the sole consideration for the acquisition. This may result
in substantial dilution of the shares of the current shareholders. Indeed,
based on the terms of the WideBand Merger and Share Exchange, existing
Common Stockholders will be diluted from 100% of the Company down to 2% of
the Company.
After several years of looking at potential merger and other acquisition
candidates without success, management considered dissolving the Company and
distributing its cash to the stockholders. As a result of such discussions,
Mr. Jack Coombs, an individual whose wife, Margaret Coombs, then-served as a
director and officer, agreed to buy the then-insiders' stock at $0.25 per
share and to additionally make the identical offer to the Company's
stockholders. This was done in 1992 by way of a tender offer. As a result
of such private purchases and tender offer, Mr. Coombs acquired the large
majority of his present stock position and thereby became the controlling
stockholder of the Company.
In 1995, Jack Coombs and Margaret Coombs resigned from the board of
directors and appointed their son, John Michael Coombs and a Mr. Terry S.
Pantelakis in their place and stead, persons who have served as directors
and officers since such date.
Effective June 30, 1995, the Company changed its domicile to the State of
Nevada. In March 1996, it filed a Form 10-SB with the Commission pursuant
to which it became a "reporting company" under Section 12(g) of the
Securities Exchange Act of 1934 ("the '34 Act"). The Company currently has
1,375,000 common capital shares issued and outstanding, 15 million shares
authorized, with no outstanding stock options or plans to acquire any
additional shares. The reason this number of issued and outstanding shares
does not correspond with the number therefor set forth in the balance sheet
of the attached audited financial statements of the Company for its 1998
fiscal year end is that on August 25, 1999, certain outstanding options to
acquire an additional 105,000 "restricted" shares at $0.25 per share were
exercised by three persons. This resulted in the Company receiving an
additional $26,250 in paid-in-capital, an amount also not reflected in the
attached audited financial statements for the Company's fiscal year end.
The Company has approximately 168 shareholders of record and its transfer
agent is Atlas Stock Transfer Corporation located in Murray, Utah.
Description of Properties
The Company's properties or assets consist of investments in securities that
are maintained in a single brokerage account. See the Company's audited
financial statements attached hereto and incorporated herein by reference.
Such financial statements for the Company's 1998 fiscal year ended June 30,
1999, reflect in excess of $430,000 in net worth or shareholders' equity, an
amount which excludes the $26,250 in cash which the Company has since
received in consideration for the exercise of certain stock options to
acquire 105,000 shares at $0.25 per share. The Company's net worth varies
and fluctuates depending upon the relative value of the securities situated
in its investment portfolio, the majority of which are corporate bonds.
There is not an active market for some of the investments made by the
Company and such particular investments are listed in the Company's
brokerage account from time to time as "unpriced."
Other than cash and its holdings of corporate stocks and bonds, the Company
has virtually no assets, property or business; its principal executive
office address and telephone number are the same business office address and
telephone number of its president, John Michael Coombs, and have been
provided at $1,319 and $1,819 for the years ended June 30, 1999, and June
30, 1998, respectively. Because the Company has had no business, its
activities during the fiscal year ended June 30, 1999, were limited to
keeping itself in good standing in the State of Nevada and preparing and
filing the appropriate annual and quarterly reports with the Commission and
otherwise investigating potential merger or other acquisition candidates.
These activities have consumed an insubstantial amount of management's time.
Principal Products and Services
The limited business operations of the Company, as of the date of this
Information Statement, involve those of a "blank check" company. The only
activities conducted by the Company during its fiscal year ended June 30,
1999, have been to manage its current assets and to seek out and investigate
the acquisition of any viable business opportunity by purchase and exchange
for securities of the Company or pursuant to a reorganization or merger
through which securities of the Company would be issued or exchanged.
In the event that the WideBand merger is completed, as to which there can be
no assurance, the Company will take over the operations of WideBand.
Distribution Methods of Products or Services
Upon the completion of the WideBand merger, as to which there can be no
assurance, WideBand's distribution methods of its computer networking
products will become the distribution methods of the Company. In the event
that the Company is unable to complete the WideBand merger, management will
seek out and investigate business opportunities through every reasonable
available fashion, including personal contacts, professionals, securities
broker-dealers, venture capital personnel, members of the financial
community and others who may present unsolicited proposals; the Company may
also advertise its availability as a vehicle to bring a company to the
public market through a "reverse" reorganization or merger.
Competitive Business Conditions and Operating Risks
If the Company is able to complete the WideBand merger, as to which there
can be no assurance, the Company will face the same competitive
environment currently faced by WideBand in connection with its computer
networking sales and operations. If the WideBand merger is not completed,
management believes that there are literally thousands of "blank check"
companies engaged in endeavors similar to those engaged in by the
Company though most lack any money or audited financial statements since
inception as does Vis Viva Corporation. Many of these "competitor"
companies, however, may have substantial current assets and cash reserves.
Competitors also include other publicly held companies whose business
operations have proven unsuccessful, and whose only viable business
opportunity is that of providing a public vehicle through which a private
entity may have access to the public capital markets. There is no
reasonable way to predict the competitive position of the Company or any
other entity in this regard; however, the Company, having virtually no
operating history, would likely be at a competitive disadvantage in
competing with entities which have recently completed IPO's and have
operating histories when compared with the extremely limited operating
history of the Company. This point may conceivably work the other way,
meaning that the Company may also be "cleaner" than competitors having
operating histories which are far more complex or which were not
successful and involve problems.
Regulation and Need for Government Approval
On the effectiveness of the Company's Registration Statement on Form 10-
SB, the Company became subject to Regulation 14A regarding proxy
solicitations, a rule promulgated by the Commission. Section 14(a) of the
1934 Act requires all companies with securities registered pursuant to
Section 12(g) thereof to comply with the rules and regulations of the
Commission regarding proxy solicitations outlined in Regulation 14A.
Matters submitted to stockholders of the Company at a special or annual
meeting thereof or pursuant to a written consent shall require the Company
to provide its stockholders with the information outlined in Schedules 14A
or 14C of Regulation 14; preliminary copies of this information must be
submitted to the Commission at least 10 days prior to the date that
definitive copies of this information are forwarded to stockholders.
The Company is also subject to the provisions of Section 13 of the 1934
Act. Under applicable rules and regulations promulgated by the Commission
pursuant to this Section, the Company is required to file (i) an annual
report on Form 10-KSB with the Commission within 90 days of the close of
each fiscal year (Reg. Sections 240.13a-1 and 249.130b) (such was done for
this last fiscal year on September 23, 1999); a quarterly report on Form
10-QSB within 45 days of the end of each of the first three quarters of
its fiscal year (Reg. Sections 240.13a-13 and 249.308b); and (iii) a
current report on Form 8-K within 15 days of the occurrence of certain
material events (e.g., changes in accountants, acquisitions or
dispositions of a substantial amount of assets not in the ordinary course
of business) (Reg. Sections 240.13a-11 and 249.308). In addition, annual
reports on Form10-KSB must be accompanied by audited financial statements
as of the end of the issuer's most recent fiscal year. Assuming the
Merger and Share Exchange with WideBand is consummated, the foregoing
filing and reporting obligations will automatically become the obligation
of WideBand and its management.
Legal Proceedings
The Company is not involved in any legal proceedings, either directly or
indirectly, nor is any officer or director involved in any litigation that
would have any effect or impact on the Company, directly or indirectly.
Market Price of Vis Viva's Securities During the Last Two Years
Bid
Quarter ending High Low
September 30, 1997 1/4 1/4
December 31, 1997 1/4 1/4
March 31, 1997 1/4 1/4
June 30, 1998 1/4 1/4
December 31, 1998 1/4 1/8
March 31, 1998 1/8 1/8
June 30, 1999 1/8 1/8
These bid prices were obtained from the National Quotation Bureau, LLC
("NQB") and do not necessarily reflect actual transactions, retail markups,
markdowns or commissions.
No assurance can be given that any "established public market" will develop
in the common stock of the Company, regardless of whether the Company is
successful in completing the WideBand Merger and Share Exchange or any other
acquisition, reorganization or merger deemed by management to be beneficial
for the Company, or if any such market does develop, that it will continue or
be sustained for any period of time.
BUSINESS OF WIDEBAND CORPORATION
A section titled "DEFINITIONS OF TERMS" is located at the end of this
document and before Exs. "A" through "G". Reference is made thereto for
assistance to the reader in understanding the description and nature of
WideBand's business.
Background and History
WideBand Corporation ("WideBand") is a Missouri corporation engaged in the
development, manufacture and marketing of LAN-integrated or high speed
computer network products. WideBand was incorporated in the State of
Missouri on September 23, 1994 as Jacomo Corporation. In 1995, its name was
changed to "WideBand Corporation." Its offices and manufacturing facilities
are located at 401 West Grand Avenue, Gallatin, MO 64640, telephone no. (660)
663-3000.
WideBand was created to develop and commercialize WideBand networking
technology. The initial funding for WideBand came from stock sales. Under
its Articles of Incorporation, WideBand is authorized to issue 50,000,000
shares of common stock, having a par value of $0.001 per share. As of
September 30, 1999, WideBand had 12,801,819 issued and outstanding common
shares, and had received $2.155 million in paid-in capital. It has no debt.
Two non-affiliated individuals possess options to acquire an aggregate of
100,000 additional shares at $5.00 per share. If and when exercised, these
options would bring in $500,000 in additional paid-in capital to WideBand.
All of these options expire by the year 2004 and a portion of such options
expires before such date. Accordingly, these options shall survive the
Closing. Dr. Roger E. Billings, the inventor of the WideBand technology and
the principal founder of WideBand, holds the controlling position in WideBand
Corporation.
Description of WideBand's Business and Properties
WideBand Corporation is in the business of developing, manufacturing,
licensing, and marketing computer networking products based on its patented
WideBand technology. The developmental program has been broken down into
three independent stages or phases.
Phase 1 WideBand II The first phase constitutes the development of a high-
performance networking technology in an attempt to leapfrog the current
evolutionary development and deployment of Ethernet. It is WideBand's
objective that its technology resolve difficulties in current Ethernet
installations resulting from inadequate bandwidth and from data collisions.
A further objective is to provide a secondary delivery mechanism, which will
greatly facilitate the distribution of multiple channels of high-performance
video throughout the network.
Though the products developed during Phase 1 utilize conventional Ethernet
packet structures for compatibility, WideBand's higher data rate and other
feature enhancements make the two technologies' hardware incompatible. It
is not possible to plug a conventional Ethernet adapter into a WideBand
Concentrator. Such an interface connection can only be accomplished via
expensive equipment such as a WideBand Ethernet Router.
It is intended that the technology developed during Phase 1 establish
WideBand Corporation and its technology in a respected leadership role
within the industry. For reasons that will become apparent during the
discussion of Phase 2, the initial WideBand technology developed under Phase
1 is referred to as WideBand II. Products based on this technology have
been developed by the Corporation and have been shipping to customers for
over two years. These products utilize three of the four pairs in a
Category 5 cable to carry data at a combined bit rate of 1 Gb/s. Taking
into consideration the overhead resulting from the 8B/10Bcoding scheme
utilized, the useful throughput over the three pairs is 800 Megabits per
second.
In WideBand II this data rate has been partitioned into three separate
segments corresponding to each of the twisted pairs in use. The first
segment, which utilizes cable pair 1, is used to carry digital information
from the user's computer to the network. Therefore, a user can upload data
onto the network at a maximum data rate of 267 Megabit per second. This
data rate exceeds the capacity of today's computers of transferring data
through the PCI bus to the network under the control of conventional
operating systems.
Cable pairs 3 and 4 are utilized to download information from the network to
the local computer. Cable pair 4 carries the conventional traffic from the
user's local segment at a maximum useful data rate of an additional 267
Megabit per second. Since WideBand II can receive data while simultaneously
transmitting data, the inbound and outbound channels have a combined
simultaneous usable data rate of 534 Mb/s. Cable pair 3 in WideBand II is
reserved for bringing WideCast data to the local workstation. WideCast data
is typically streaming video, audio, or data from a connection to the Wide
Area Networks such as the Internet. The feature of a second delivery
channel is the reason WideBand is sometimes referred to as a "dual network".
It is an important distinguishing feature between WideBand and all other
networking technologies. The WideCast channel has an additional useful
throughput of 267 Mb/s. With WideCast the user can download multiple
channels of full-motion, high-quality video without adding any traffic
burden to the Local Area Network.
WideBand II products manufactured by WideBand Corporation include network
adapters, which are circuit boards that plug into the user's computer
enabling the computer to be connected to a WideBand network. They also
include WideBand Concentrators, which are the equipment installed in the
center of a network to which cables are connected running to all of the
computers and servers on the segment. The Concentrators can be cascaded as
many times as necessary thereby enabling users to build networks of vast
numbers of attached workstations.
Phase 2 WideBand I During the year 2000, WideBand Corporation plans to
announce an entire new networking product line which will be referred to as
WideBand I. The WideBand I products will provide an interface between the
existing Ethernet world and the higher performance WideBand II products.
This will be accomplished through the development of a new piece of
equipment the WideBand Accelerator. The Accelerator is similar to a
WideBand Concentrator in that it utilizes Buffered Packet Synchronization to
eliminate data collisions and thereby increase the performance of the Local
Area Network. The Accelerator differs from the Concentrator, however, in
that it is designed to allow users to directly connect conventional Ethernet
adapters. The link channel on the Accelerator is designed to connect to a
WideBand II network, providing users with a way of interfacing their
existing equipment to WideBand without the significant front-end investment
of buying all new network adapters and concentrators. This will provide an
evolutionary process whereby users can upgrade their legacy equipment to
WideBand one step at a time.
One of the main drawbacks of Ethernet is that when a local segment becomes
heavily loaded with traffic, it begins to experience data collisions. Data
collisions waste bandwidth, causing the network load to increase and slowing
down and hampering data transmissions. WideBand's patented method of
eliminating data collisions on Local Area Networks is one of the greatest
advantages of WideBand II technology. By applying this same method to
Ethernet segments, much of the advantage of WideBand can be obtained without
the necessity of removing all of the Ethernet adapters from each computer.
The WideBand Accelerator can eliminate data collisions on Ethernet segments
just by plugging in each Ethernet computer. This will greatly remove
congestion in very heavily loaded Ethernet segments. Since the Accelerators
also have a WideBand II backbone, data flowing between users in one section
of the network with users in another section of the network will be
significantly improved.
Over the past five years, most of the Ethernet networking adapters marketed
throughout the world have been combo adapters of the 10/100 variety. These
adapters have the feature to be plugged either into an Ethernet network
operating at the conventional 10 Mb/s or into a Fast Ethernet segment
operating at 100 Mb/s. Furthermore, they have the additional capability of
operating in full duplex mode, which means they can transmit at 100 Mb/s at
the same time they are receiving at 100 Megabit per second.
Unfortunately for the computer industry, while most users have installed the
10/100 adapters, only a small percentage are actually utilizing the higher
data rates. Users purchased the 10/100 adapters preparing for future
performance expansion, but the cost of the network hubs and switches
operating at 100 Mb/s have been so prohibitive that most of these adapters
are still operating at the 10s Megabit half duplex data rate.
WideBand Corporation has identified the current market situation as a
tremendous opportunity for implementing WideBand I technology. By
definition, WideBand I is 100 Megabit per second Fast Ethernet operating
full duplex (transmitting and receiving at the same time) without
collisions. Users with the 10/100 Megabit cards installed, which are used
to operating on busy Ethernet segments with data rates as low as 2.5 Mb/s,
will be able to install the WideBand I Accelerator in their central wiring
closets, plug the cables from their conventional Ethernet hub into the
Accelerator, and see a jump in their data rate from 2.5 Mb/s up to 200 Mb/s,
which is the full duplex data rate without collisions. WideBand I is Fast
Ethernet operating at 200 Mb/s (full duplex mode) without collisions. When
combined with a WideBand II backplane and a few WideBand II adapters
installed in key servers, significant performance improvement is
anticipated.
While WideBand II Accelerators are compatible with existing Fast Ethernet
adapters of all brands, WideBand Corporation plans during the year 2000 to
launch a WideBand I networking adapter which will utilize 100 Megabit per
second Ethernet signaling, but which will add the additional feature of flow
control. This feature will keep computers from transmitting data onto the
network when it is already filled to capacity with data transmissions from
other users. It is the intention of WideBand Corporation to use this
enhanced feature to promote the marketing of these adapters.
Phase 3 WideBand III Work has already begun on a next generation WideBand,
which is expected to increase the data rate to levels which will be required
by future data processing equipment. WideBand III networking technology is
just now in its early stages of development in the laboratories at WideBand
Corporation. It is expected to appear in commercial products some time
after November 2001. Detailed information concerning data rates and feature
enhancements are still under development, and therefore not available at
this time.
It is anticipated that with the launch of WideBand III, a WideBand II
Accelerator product will be developed which will utilize WideBand III as a
backplane for higher speed transfers between groups of computers and
workstations. It will, therefore, be possible to build up networks
simultaneously utilizing components of WideBand I, WideBand II, and WideBand
III. Since the networking adapters for WideBand I include the conventional
Ethernet adapters already in use today, this technological approach will
extend the life of existing equipment for users while providing an
incremental path towards obtaining the enhancements and benefits of the
WideBand networking system.
Patent Protection WideBand Networking Technology on which WideBand's
products are based is protected by several patents and patents pending. The
patents are held by Dr. Roger E. Billings, WideBand Founder and President,
and inventor of the technology. WideBand Corporation has an exclusive
license to manufacture, market, and sub-license the technology of the
Billings' patents and patents pending. Under the terms of the Agreement,
WideBand is to pay a royalty equal to 1.5% of gross sales to Dr. Billings.
The duration of the Agreement is not limited.
WideBand has a standard Non-Disclosure Agreement that must be executed
before key elements of WideBand technology are disclosed.
WideBand U.S. and international patents and patents pending cover various
aspects of the WideBand technology including Buffered Packet Synchronization
- --the method utilized to eliminate collisions in Local Area Networks-- and
the dual network WideCast technology. The patents currently issued for the
WideBand technology are as follows:
WIDEBAND U.S. PATENTS
Patent # Issue Date Name
5,684,956 11/4/97 DATA TRANSMISSION SYSTEM WITH PARALLEL PACKET DELIVERY
ABSTRACT: A distributed data processing system
including a data server computer coupled to a
plurality of personal computers by a local area
network communication path and a second data
communication path independent of the local area
network communication path is provided.
Information stored in the data server computer
is periodically transmitted over the second data
communication path simultaneously to all of the
personal computers in the network. The personal
computers do not necessarily initiate data
requests over the local area network
communication path. Rather, certain preselected
information is continually transmitted to all of
the personal computers in broadcast fashion.
5,737,422 4/7/98 DISTRIBUTED DATA PROCESSING NETWORK
ABSTRACT: A distributed data processing network
including a method and apparatus for sending
secured data between a plurality of computers is
disclosed. The distributed data processing
network preferably includes a server computer,
a plurality of user computers, a communication
network coupling the server computer with the
user computers, and a plurality of security
circuits. The security circuits each include a
clock circuit, a linear feedback shift register,
a data encrypter/decrypter, and a password
randomizer that cooperate for sending secured
data between the server computer and any one of
the user computers without sending the user's
password to be sent over the network
communication path.
5,761,433 6/2/98 SYSTEM FOR COMMUNICATING DATA IN A NETWORK USING
BOTH A DAISY CHAIN LINK AND SEPARATE BROADCAST LINKS
ABSTRACT: A plurality of workstations are
sequentially connected to form a chain of
workstations in a network having two file
servers. The workstations generate data packets
for delivery to the file servers. A packet
assembly channel receives data packets from the
workstations and routes the received data
packets through the workstations to a
workstation broadcast unit. The workstation
broadcast unit broadcasts data packets from the
workstations to the file servers via a
workstation broadcast channel. Both of the file
servers receive data from the workstation
broadcast channel and generate data packets for
delivery to the workstations. A server
broadcast unit is connected to each of the file
servers and broadcasts data packets from the
file servers to the workstations on separate
server broadcast channels.
5,793,981 8/11/98 SYSTEM FOR COMMUNICATING DATA IN A NETWORK USING
BOTH A DAISY CHAIN LINK AND SEPARATE BROADCAST LINKS
ABSTRACT: The wide area network includes a
plurality of local area networks (LANs) in
communication with a remote source. Each of the
LANs includes a plurality of workstations. The
workstations generate data packets for delivery
to other workstations in the LAN. A packet
assembly channel receives data packets from the
workstations and routes the received data
packets through the workstations to a LAN
broadcast unit. The LAN broadcast unit
broadcasts data packets generated by the
workstations to each of the workstations via a
LAN broadcast channel. The remote source
generates data packets for delivery to the
workstations in each of the LANs. Each LAN has
a remote broadcast unit in communication with
the remote source for broadcasting data packets
from the remote source to the workstations in
that LAN on a remote broadcast channel.
Approved; METHODS AND APPARATUS FOR COMMUNICATING DATA IN
expected to COMPUTER NETWORKS WITH SEPARATE PACKET ASSEMBLY AND
issue shortly PACKET BROADCAST CHANNELS
ABSTRACT: A plurality of computers are
sequentially connected to form a chain of
computers in a network. Data packets from
computers are gathered and sequentially routed
through the chain of computers to a last
computer in the chain on a packet assembly
channel. Data packets routed through the last
computer are then broadcast to all the computers
in the network on a packet broadcast channel.
Each computer in the network is provided with a
network interface card to interface with the
packet assembly and broadcast channels. A
network hub configures the packet assembly and
broadcast channels route data packets generated
by the computers through the last computer and
to broadcast the data packets routed through the
last computer to the computers in the network.
Approved; A PACKET MERGING HUB SYSTEM FOR SEQUENTIALLY MERGING
expected to RECEIVED DATA IN A NETWORK HUB INTO DATA PACKETS
issue shortly BEFORE BROADCASTING TO A PLURALITY OF DESTINATION
COMPUTERS
ABSTRACT: A computer network includes a network
hub that connects a plurality of computers
together. Data packets generated by the
computers are sequentially merged into a stream
of data packets that is then broadcast to all of
the computers in the network. The network hub
includes a plurality of ports, each of which is
connected to a respective one of the computers,
receiving data packets generated by the
computer. The network hub also includes a
plurality of storage devices respectively
connected to the ports. Each of the storage
devices receives and temporarily stores the data
packets received by the port. A merging
processor is connected to each of the storage
devices and sequentially merges data packets
temporarily stored by the storage devices into
a stream of data packets. The stream of data
packets is then broadcast to each of the
computers in the network. The network hub may
communicate with each of the computers to
indicate the capacity status of the storage
device.
- ---- ---- Numerous international patents regarding the same
technology are currently pending.
Product Descriptions The products currently manufactured by WideBand
Corporation consist of network adapters, concentrators, fiber modules, and
other equipment required to build a WideBand network.
Network Adapters Network adapters are circuit board modules that
plug into a slot in the motherboard of conventional computers. On the
back of the adapter is a plug where the cable is connected, linking
the computer up to the WideBand network.
The Corporation manufactures six varieties of network adapters, each
with varying features designed for different applications. The
adapters with the "+" designation are those that provide the dual
network WideCast connection. The adapters without the "+" indication
do not support WideCast but are offered by the Corporation as a low
cost variety for users with small networks.
Network Concentrators The Concentrator is the heart of a WideBand
network. Cables coming from each of the individual computers and
servers must all be connected to the Concentrator in order to be part
of the network. Currently, two sizes of Concentrators are available
9 port and 4 port.
In addition to the regular ports, the WideBand Concentrators have two
additional connections. The first is the link port. A cable can be
connected from this port to another Concentrator, in which case the
two devices combine together to make one larger network. Unlimited
numbers of Concentrators can be connected together in this way,
providing connectivity for even the largest network requirements.
The second port is called the WideCast Channel. This is the port into
which video, streaming data, and/or input from wide area connections
including the Internet can be inserted into a WideBand network.
Fiber Modules WideBand utilizes conventional Category 5 cabling,
making it possible to install its technology in buildings already
wired for Ethernet without the necessity of completely rewiring the
building. Some users, however, require much longer distances between
portions of their network than the 100-meter limit associated with
Category 5 copper cables. For this reason, WideBand Corporation has
developed two sets of fiber optic modules.
In the fiber modules the computer data is transformed into pulses of
light, which are transmitted through long thin glass "wires". This
"light" method of transferring data provides users with other
advantages besides greater distances including the elimination of
electromagnetic interference and increased security.
WideBand Corporation currently manufactures two varieties of fiber
modules. The WideBand modules, which are made for multi-mode fiber,
can transfer data at distances of up to 3 kilometers. The modules
made for single-mode fiber can transfer data at distances up to 40
kilometers. Since there are no collisions in a WideBand network and
since the data rate of WideBand fiber is the same as WideBand copper,
it is possible for users to go from fiber to copper and from copper to
fiber as many times as necessary to construct their networks.
Below is a listing of the various WideBand II networking adapters and other
products currently offered by WideBand Corporation.
WIDEBAND PRODUCTS
Description Part # Price
PCI WideBand Network Adapter (Workstations) WB2-XP-Blue $ 199
PCI WideBand Network Adapter
(Workstations/Servers) WB2-XP-Red $ 249
PCI WideBand Network Adapter (Large Servers) WB2-XP-Gold $ 319
PCI WideBand Adapter + WideCast (Workstations) WB2-XP-Blue+ $ 299
PCI WideBand Adapter + WideCast
(Workstations/Servers) WB2-XP-Red+ $ 349
PCI WideBand Adapter Plus WideCast (Large Servers)WB2-XP-Gold+ $ 419
4 Port Concentrator WB-NC4C $ 995
9 Port Concentrator WB-NC9C $1,665
Multi-Mode Fiber Adapter Module WB-FLMA $ 725
Multi-Mode Fiber Concentrator Module WB-FLMC $ 725
Single Mode Fiber Adapter Module WB-FLSA $1,495
Single Mode Fiber Concentrator Module WB-FLSC $1,495
Meeting Demand for Product/Dependency on Suppliers
WideBand is prepared to meet expected demand for its products through a
combination of contract manufacturing relationships and internally developed
capacity. Presently, WideBand is fulfilling the purchasing and assembly
functions as well as packaging and shipping all products from its own
assembly facilities. However, WideBand anticipates that some of these
responsibilities will be assigned to contract manufacturers in the future.
WideBand builds all prototypes, assembles products to fill orders, and
programs Field Programmable Gate Arrays ("FPGAs") with in-house personnel and
equipment. Management believes that the FPGA programming function should be
performed in-house, as it encompasses one of the key proprietary technologies
responsible for WideBand's competitive position.
WideBand Corporation has established extensive quality control measures,
including a system of receiving inspection, diagnostic self-tests built into
the product and carried out on the factory floor, as well as a comprehensive
loop-back test and evaluation procedure to be carried out during final
inspection. These procedures insure that products shipped to customers under
WideBand name are reliable.
WideBand maintains an ongoing effort in research and development. Products
currently under development include new and faster copper versions, Internet
connection products, video interface products, and high-performance bus
products, as well as proprietary products to be announced at a later date.
WideBand maintains research and development teams in Blue Springs and
Gallatin, Missouri, and contracts specialty tasks to independent groups.
WideBand is currently dependent on Cypress Semiconductor to supply several
key electronic components that are used in WideBand products. This
dependency will continue until the functions performed by these components
are incorporated into the Application Specific Integrated Circuits (ASICs),
which are planned for later this year.
Currently, there are no major supply contracts in place.
Overview of Industry
Over the past decade, computer networking has been one of the fastest growing
segments of the computer industry. According to DataQuest, 99% of desktop
computers in U.S. offices had been networked by 1997, with enterprises
reporting an increase of 20% to 40% per year in the number of nodes they were
adding to networks. Now, with this increased use of client/server computing
and workgroup applications made possible through networks, bandwidth
requirements per customer are rising dramatically.
With the rapid growth in the use of LANs and WANs, client/server computing
has become the architecture of data processing systems. As LANs expand and
data processing tasks become more complex, these networks become congested,
resulting in poor performance and more complicated and costly installations.
Additionally, today's software applications require LANs with high data flow
capacity (bandwidth). Databases are becoming larger and more sophisticated,
and are being accessed by greater numbers of users. More importantly, a mass
migration toward applications involving high-resolution graphics, electronic
document transfer, video conferencing, and automated workflow is underway.
Couple these factors with the tidal wave of Internet applications, and the
combined effect creates bandwidth requirements per user that are growing at
an exponential rate.
Computer hardware manufacturer have responded with a diversity of new and
innovative products. Ethernet, the most popular networking system on the
market today, with an installed base of over 85% of all networks, increased
the data rate of its adapters from 10 Mb/s to 100 Mb/s, including a "combo"
adapter board supporting both 10 Mb/s and 100 Mb/s. These combo adapters
have gained in popularity and have become more affordable. (Ethernet
networks, however, continue to be somewhat limited by data collisions, which
can result in significant reductions in usable bandwidth. As a result,
actual performance is often well below the 100 Mb/s capacity.)
To address the further need for increased bandwidth, Ethernet proponents have
recently developed a new Ethernet standard Gigabit Ethernet, with data
rates to 1,000 Mb/s or 1 Gig. The fiber specification of the Gigabit
Ethernet standard was ratified by the Institute of Electrical and Electronic
Engineers (IEEE) standards committee in June of 1998 and the copper version
in June of 1999. WideBand Corporation has been a Steering Committee member
of the Gigabit Ethernet Alliance, an organization of vendors and
manufacturers formed to help bring about the new standard. WideBand
President, Dr. Roger E. Billings, also participated as a contributor in the
IEEE Standards Committee 802.3z, which developed the Gigabit Ethernet
Standard proposals.
Although WideBand shares the industry's current enthusiasm regarding Gigabit
Ethernet, it has carefully formulated a position regarding that technology
and the place it will probably play in future networking systems. Regarding
Gigabit Ethernet over fiber cable, Management feels that a large number of
customers will be reluctant to spend the time and money necessary to rewire
their networks with the relatively expensive fiber optic cable required to
deploy Gigabit Ethernet throughout the LAN. While Gigabit Ethernet over
copper cable was designed to pick up part of this market, and although the
copper standard for Ethernet is now in place, few vendors actually have
products ready, and those that are ready are largely untested. According to
a recent article in the trade press, "Although plenty of network operators
are looking forward to the cost savings promised by running the high-speed
LAN technology over existing cable plants, few if any have to date been able
to do so because products supporting the standard have not been available.
This despite the fact that the IEEE approved the specification for 1000BaseT
connections in June. . . . Networking products typically precede the
completion of standards; such was the case with the standards for Fast
Ethernet over copper and Gigabit Ethernet over fiber. However, implementing
the gigabit Ethernet over copper specifications in silicon has proved to be
difficult." (Paula Musich, PC Week, October 11, 1999.)
Shedding some light on the problem, Colin Mick, an industry consultant and
Gigabit Ethernet over copper proponent observed, "We learned, to our sorrow,
that implementation was on the bleeding edge of state of the art. . . . The
design is solid, but getting everything to work is more of a task than the
[silicon vendors] thought." (Paula Musich, PC Week, October 15, 1999).
These difficulties in implementing the copper standard are limiting Gigabit
Ethernet implementation to the backbone component of the network, at least
for the near term.
Thus, WideBand Management sees Gigabit Ethernet over fiber optic cable as a
backbone technology competing with ATM (Asynchronous Transfer Mode). ATM has
historically claimed the domain of the wide area connection (city to city),
but, according to Internet Week, ATM is difficult to interoperate with other
networking technologies, making it much less desirable for the network
backbone. "ATM will undoubtedly stay around as a WAN technology, but unless
things improve drastically on the usability side, the curtain may be dropping
on ATM enterprise backbone solutions." (Oliver Rist, InternetWeek, October
11, 1999.) The current considerable support given by customers to Gigabit
Ethernet over fiber, its ease of installation and integration, indicate that
it will garner a significant percent of the network backbone market. As for
ATM, its exceptional features such as its fault tolerance, its reliability,
its cell-based traffic and dynamic routing capabilities, as well is little if
any distance limitations, make it a first class WAN connector.
Since the implementation of the standard for Gigabit Ethernet over copper
seems to be somewhat stalled, Management feels there is an added opportunity
for the WideBand technology to become established as the gigabit horizontal
copper technology of choice this in addition to WideBand's features of
eliminating the data collisions and collision domain diameters that plague
Ethernet, operating over existing installations of Category 5 cable,
enhancing network performance with dual data channels, and having a product
that is already shipping.
An opportunity for rapid market penetration exists for products that can
deliver needed bandwidth at a reasonable cost while protecting the customers'
investment in existing network technology, including cabling. WideBand
Management feels that WideBand is in a position to take advantage of this
opportunity.
Competitive Position The foremost technologies competing with WideBand in
the
high-speed networking market are Gigabit Ethernet and Fast Ethernet, with ATM
for the most part relegated to the wide area domain of the network.
Fast Ethernet Fast Ethernet transfers data at 100 Mb/s, ten times
faster than conventional Ethernet at 10 Mb/s. However, Ethernet relies
on a contention protocol, which experiences frequent data collisions
under heavy usage, thus reducing the usable bandwidth. Observations
have been that a Fast Ethernet network under heavy use can drop to only
60 Mb/s of data throughput. In spite of these drawbacks, Fast Ethernet
accounts for a large percent of network installations today.
Gigabit Ethernet It was intended by the proponents of Gigabit Ethernet
that the need for high speed in the LAN be addressed by both fiber and
copper cable versions of Ethernet. To this intent, both versions of
Gigabit Ethernet have now become ratified standards of the IEEE. However,
the fiber version is still out of reach for many networks seeking to
upgrade to greater bandwidth, but unable or unwilling to address the
significant cost of a fiber network. Even though the cost of fiber
products has decreased by as much as half to two-thirds over the past
year, these reductions do not take into account the cost of discarding
current copper wire and rewiring the network with relatively expensive
fiber cable. The copper version of Gigabit Ethernet that was designed to
take care of this need isn't rolling out as expected. Very few Gigabit
Ethernet products for copper cable are available at the present, and
pricing and shipping dates are still uncertain.
Thus, Gigabit Ethernet is functioning in its fiber implementation in the
network backbone, but does not as yet target increased bandwidth to the
desktop. WideBand networking is available and shipping in both fiber and
copper versions. It brings Gigabit speeds to the desktop over copper
cable, and to the network backbone over copper or fiber. WideBand is
also providing for a WideBand/Gigabit Ethernet fiber backbone interface.
Since WideBand products are already shipping, Management believes this
provides an opportunity for WideBand to become established as the Gigabit
copper technology of choice.
ATM Asynchronous Transfer Mode (ATM), focuses on wide area
networking. ATM divides data to be sent over the network into packets
of 53 bytes, which are then transmitted at speeds up to 622 Mb/s. ATM
applications deviate from current networking technologies in that a
point-to-point line is temporarily dedicated to a single user. This
means that application software must be rewritten to become ATM "smart"
in order to operate in these ATM network systems. By comparison,
WideBand products are compatible with existing software technology and
infrastructures.
Targeted Market Segments
Taking into consideration the technological position of WideBand compared to
competing networking systems, two market segments have been identified by
Management and will be the primary focus of WideBand's marketing program.
These market segments are (i) very large networks and (ii) network
installations requiring very high data rates.
Very Large Networks In very large network installations, many users
share central resources, such as servers, printers, and other specialty
equipment. In these installations, most users require only a nominal
amount of networking bandwidth to accomplish their various tasks.
However, due to the large number of users sharing the same network
segment, the total bandwidth requirement becomes substantial. These
large organizations with conventional networking installations see a
significant degradation of network performance during times of peak
utilization, resulting in delays and inefficient use of labor.
Management believes that these organizations struggling with slow,
inefficient networks could realize immediate benefit by implementing
WideBand networking.
Network Installations Requiring Very High Data Rates The second
market segment is comprised of users with very large amounts of data
that need to be transferred from one computer to another. One example
is the "pre-press" process of the graphics industry. Most image
processing and color separations are now done by computer on
specialized machines. To achieve necessary resolutions, these data
files can be as large as five hundred megabytes each. Transferring
such files from the photo editor to the separations machine, and then
on to the photo plotter, for example, can create delays from dozens of
minutes to hours. During file transfer time, not only is the network
bandwidth consumed, but also the various pieces of equipment used to
process the data are tied up waiting for file transfer to be completed.
This equipment and the labor to run it are expensive, which management
believes will lead many in the industry to invest in an improved
networking technology that allows these large files to be transferred
more rapidly.
Other examples of potential customers within this market segment
include research and development facilities with very large
experimental databases, which must be transferred between machines, and
educational facilities with large numbers of video and graphics files
going over the network to classrooms.
WideBand's competitors are those companies that currently produce and sell
computer networking adapters, hubs and switches. The best known of these are
3Com, SMC, and Cisco. All of these companies are firmly entrenched in the
market, with good name recognition and a track record of providing quality
products. WideBand's advantage in this arena will come from offering a
quality product with more bandwidth at a comparable price.
The following table shows current pricing for competing products:
ETHERNET PRODUCTS
General Description High Price Low Price
PCI 10 Mb/s card 78.36 29.99
PCI 10/100 Mb/s combo card 170 26.99
PCI 10/100 Mb/s combo Server card 315.00 199.00
PCI 100 Mb/s card 474.72 175.00
PCI 100 Mb/s Server card 615.17 299.00
PCI 1000 Mb/s card 1,949.00 699.99
8 port 10 Mb/s switching hub 271.00 190.00
12 Port 10 Mb/s switching hub 1,138.00 429.00
16 port 10 Mb/s switching hub 578.00 528.00
24 Port 10 Mb/s switching hub 1600.00 659.00
8 port 10/100 Mb/s hub 275.00 155.00
12 port 10/100 Mb/s hub 788.00 313.00
16 port 10/100 Mb/s hub 526.00 210.00
24 port 10/100 Mb/s hub 1,039.00 626.00
4 port 100 Mb/s hub 193.82 99.99
8 port 100 Mb/s hub 995.00 175.00
12 Port 100 Mb/s hub 2,295.00 319.99
24 Port 100 Mb/s hub 3,995.00 1,094.99
Sources: Price information obtained from SMC Online Price List, November 15,
1999; COMPAQ Online Price List, March 1, 1999; HP Online Price List, November
15, 1999; LINKSYS Online Price List, March 1, 1999; Insight Online Price
List, November 15, 1999; CompUSA Online Price List, November 15, 1999; and
3com Online Price List, November 15, 1999.
Marketing Strategies
WideBand plans to market its products in the U.S. through a single tier
marketing structure. WideBand has currently established an independent
dealer network consisting of 86 dealers. WideBand will sell its products to
these dealers, who in turn will sell them to end users. The WideBand dealer
organization has been established with dealers selected to represent
geographic territories, even though no exclusive areas have been granted. In
this way, the dealers will be able to operate without undue competition in a
specified market area, thereby allowing them to spend the amount of time
necessary to develop a market for these new and innovative products.
Except in isolated instances, WideBand will not sell its product through
distributors to the dealers. To the contrary, WideBand prefers a "hands-on"
approach to the selection of its dealers, insuring that each dealer is
trained and qualified to support the users in a geographic territory. Some
of the requirements for becoming a WideBand dealer include the purchase of a
small inventory of products and sending dealer employed technicians to attend
a WideBand sponsored factory school.
In addition to the dealer network, WideBand intends to sell its products to
OEM's, which will incorporate WideBand into their existing product lines.
These customers typically go after niche markets and, since they market the
products in their own name, will not interfere with WideBand's single tier
dealer distribution channel.
Internationally WideBand plans to market its products in each country by
establishing a Master Distributor. The Master Distributor will have the
responsibility of importing WideBand products through local customs,
translating manuals and marketing materials into the native language, and
performing any of the necessary testing and registrations required by local
law. The Master Distributors, then, will appoint independent dealers within
their geographic territories to sell WideBand products. For smaller
countries, it is WideBand's intention to grant exclusive status to a Master
Distributor while retaining the authority to discontinue that Master
Distributor in the event of conflicts or problems. In larger countries the
plan is to eventually establish a WideBand Corporation-owned office, which
will set up and manage an independent dealer organization according to the
pattern and the model established in the U.S. market.
Backlog Of Orders
Currently, WideBand Corporation is shipping product from inventory upon
receipt of orders. Some large orders have depleted inventories, but even in
these instances, the lead times have not exceeded 2-4 weeks.
During the year 2000, WideBand plans to begin an advertising campaign to
increase sales of products. It is anticipated that during the advertising
campaign, orders will increase dramatically. It is the opinion of
management, that an order backlog in excess of 4 weeks will have a
detrimental impact on sales. To maintain reasonable lead times during the
expansion phase, contract manufactures are being qualified to manufacture
WideBand products. These manufacturers have available capacity to
substantially increase sales.
There are currently two typical order sizes. One is from customers and
dealers who are buying for the first time. A typical first-time order is
approximately $2995. The second is from established customers and dealers
who are upgrading more of their network (or their client's network) to
WideBand. A typical repeat order can be between $3,000 and $21,000, with the
average being approximately $10,000.
Employees
WideBand personnel currently consists of 20 employees, which is expected to
increase to 40 during the next year and will include new clerical, marketing,
operations, and manufacturing personnel.
None of the current employees are subject to any collective bargaining
agreements. It is not expected that any of the employees hired in the next
year will be subject to any collective bargaining agreements.
Real Estate, Plant and Equipment, and Property Leases
WideBand Corporation owns a 15000 square foot structure located in Gallatin,
Missouri. This facility houses WideBand's corporate headquarters and its
manufacturing operations. WideBand Corporation has also purchased 20 acres
of land in the newly developed Gallatin Industrial Park. It is intended that
this land be used for future expansion.
In the Gallatin, Missouri, facility WideBand owns and operates a state-of-
the-art "Pick-and- Place" electronic circuit board assembly line. This
equipment assembles electronic circuit boards robotically, utilizing surface
mount components. The current capacity of this manufacturing facility is
$500,000 of finished product per month with the ability to expand to
$1,000,000 of product per month with an additional "Pick-and-Place" machine.
WideBand Corporation also owns research and development equipment utilized in
the design and testing of networking prototypes. Most important in this
equipment is a 6 GHz digital oscilloscope manufactured by Tektronix
Corporation and a 128 bit high-performance logic analyzer built by Hewlett-
Packard Corporation. As in the case with the manufacturing equipment, all of
the research and development tools and equipment are owned by WideBand.
WideBand Corporation does not lease or rent any equipment at the present
time.
Regulation
WideBand is subject to regulation by the Federal Communications Commission
regarding radiation emissions from its computer hardware products. WideBand
has contracted with an FCC registered laboratory to have emissions tests
conducted. These tests have concluded that WideBand networking products fall
within the guidelines required by the FCC for the office and professional
environment.
Future Development Plans, Needs, and Current Progress
The development and launch of WideBand networking technology has been divided
into three developmental phases.
Phase 1 The first phase involves the development of WideBand II, a high-
performance networking technology with the added benefits and features of (1)
increased speed, (2) elimination of data collisions, and (3) dual delivery
channels. Products based on this technology have been under development
since the inception of WideBand Corporation and have been shipping to
customers over the past two years. These products have been enhanced with
new features, better performance, and optimized to be more reliable and
manufacturable. The design of these products is now fairly mature, and the
prototype FPGAs (Field Programmable Gate Arrays) are being converted into
ASIC's (Applications Specific Integrated Circuits) to reduce cost.
Phase 2 Phase 2 of the development program involves the creation of
products to interface with existing Fast Ethernet equipment. This will allow
WideBand II products to become incrementally installed into today's existing
and established networks.
Central to the Phase 2 development phase is the WideBand/Ethernet
Accelerator. This device will eliminate collisions in Ethernet segments
while providing a high-speed WideBand II backplane to interconnect different
groups of users.
The WideBand/Ethernet Accelerator is currently under development in the
WideBand research laboratory. This device will be a very important part of
the overall implementation strategy of WideBand technology and is expected to
contribute substantially to revenues over the next several years. It is
anticipated that WideBand/Ethernet Accelerators will begin shipping during
the second quarter of the year 2000.
Phase 3 During Phase 3, WideBand Corporation plans to develop the next
generation networking technology, which is being referred to as WideBand III.
This technology, at present, is only in the conceptual stage, but it is
anticipated to be much faster than WideBand II and to possess several other
significant features to solve the needs of future computing environments.
A firm schedule for implementation has not yet been developed, but it is
targeted that the first WideBand III products would be unveiled in the fall
2001 timeframe.
Advertising Plans and Objectives
In order to generate significant sales volumes of WideBand products, it will
be necessary to launch a successful advertising campaign. The current plan
is to launch the advertising campaign in the spring of the year 2000,
concurrent with the launch of the WideBand/Ethernet Accelerator. At this
point, WideBand Corporation will have both a next generation networking
technology as well as an interim product, which will assist customers in
beginning the migration towards WideBand networking.
It is anticipated that the major thrust of the advertising campaign will take
place in computer and networking trade journals. Full page, full color
advertisements describing WideBand networking technology, its benefits and
features, will introduce this new technology to the industry, where at
present it is largely unknown.
WideBand will also exhibit its products at computer trade shows, including
COMDEX, NetWorld + Interop, and a host of regional shows.
In the early phases of the marketing campaign, WideBand will also advertise
in educational publications in support of its current marketing thrust, which
is focused towards educational institutions. WideBand is planning, however,
to broaden this advertising campaign to include other market segments, such
as Fortune 1000 companies, government agencies, and other substantial
institutions.
Plans to Increase Manufacturing
The current manufacturing facilities can be expanded to produce $1,000,000 of
finished product per month with an investment of less than $100,000. As
demand for its products begins to expand, it is WideBand Corporation's
intention to contract the manufacturing of the most popular products to
outside sources and to license its proprietary "chips" to other companies and
vendors.
The major purpose of WideBand's in-house manufacturing facility will be to
establish manufacturing methods of new products and to resolve any design
flaws, which inhibit the ease of production and reliability. After these
"kinks" are worked out of a design, WideBand will then contract out
production of that product to outside sources both in and outside of the U.S.
Smaller, more complex runs that will require more hands-on attention by
WideBand technicians will be contracted to U.S.-based contract production
facilities. Simpler items, which will be required in larger volumes and
regarding which price considerations are important, will be contracted to
off-shore manufacturing facilities.
WideBand will maintain its proprietary position in the technology by
enforcing its patents and by designing and developing the electronic chips
used in its circuit boards inside its own WideBand research laboratories.
WideBand will provide its WideBand "chips" to those companies that desire to
acquire licenses to manufacture compatible WideBand products.
Risk Factors Involved in Failure to Achieve Certain Objectives
If WideBand Corporation fails to obtain its previously discussed objectives,
the following consequences may occur:
If WideBand is unable to consummate the Merger and Share Exchange, its
efforts to become a competitive public company will be delayed which
might further delay its ability to obtain the funding necessary to
complete its other corporate objectives.
If the development of WideBand I products and WideBand chips are
delayed, WideBand will very likely miss its window of opportunity to
become a major player in the high-speed networking market. WideBand
technology could then be relegated to niche and specialty markets and
WideBand would then possibly never make more than a modest profit.
Delay of the advertising campaign will have a similar effect on
WideBand. Without the name recognition and interest in the product
that can be generated by advertising, sales will not reach a point that
WideBand can "break into" the high-speed networking market.
If WideBand is not able to "ramp-up" its production capabilities fast
enough to meet product demand or if the products produced are of an
inferior quality potential customers will take their business
elsewhere.
Technical Services and Support
WideBand provides technical support to its customers through its network of
independent dealers. The dealers are strategically located to be able to
provide customers with on-site, local support in most cases. The dealers are
trained in a special three-day company sponsored school.
Training and technical support is also provide for end users not situated in
a territory covered by an existing dealer, or in cases where special
technical requirements merit such support.
Problems with equipment in the field are swapped out under warranty or for a
modest fee with the defective units being returned to the factory for repair.
A Hot Line is maintained to help dealers and users with their network designs
and to solve difficult technical problems as they arise.
Sales and Distribution
WideBand markets its products and services through a single tier marketing
structure of dealers and Master Distributors worldwide. In addition to its
own sales force selling WideBand-made products, it is WideBand's intention to
license WideBand products to be manufactured by third parties under their own
names, and to license its chips to OEMs for incorporation into their own
products.
Significant Customers
Although WideBand sells to many customers involved in certain industries
(e.g. government and education) which, if aggregated together, would result
in sales to a particular industry of more than 10%, no single customer
represents sales by WideBand in the aggregate amount of 10% or more of the
consolidated revenues of WideBand. Accordingly, WideBand management believes
that the loss of any single customer would not have a material adverse effect
on WideBand taken as a whole.
Legal Proceedings
WideBand is not involved in any legal proceedings which are material to its
business or operations or to the duties and obligations of any of its
officers and directors.
Use of Proceeds From the Merger and Share Exchange
The funds WideBand acquires in the Merger and Share Exchange and any
additional capital it might raise or obtain in the near future will be used
for general working capital and specifically to fund the following:
Engineering Costs Currently, WideBand products are manufactured utilizing
Field Programmable Gate Array (FPGA) technology. To do this, WideBand
purchases FPGA blanks that are programmed in WideBand's research and
development facilities. The completed parts are versatile, allowing changes
to be made on a part-by-part basis, but they are also expensive suitable only
for prototypes.
To transition into volume production, it is necessary to move the designs over
to Application Specific Integrated Circuits (ASIC). These devices come pre-
programmed from the factory at a substantial cost savings over FPGAs. Part of
the proceeds from the proposed transaction, if not used for working capital,
may be used to pay the tooling and engineering costs of initiating ASIC
production.
Marketing Program Proceeds may also be utilized to launch the sales and
marketing programs. These costs include advertising, trade shows, development
and production of sales collateral, and expansion of the sales and marketing
staff.
Product Rollout Costs The final category for which the funds will be
utilized is to roll out production of WideBand products based on the ASIC
components. These costs include inventory, production and other costs
associated with the ramp-up in manufacturing of the products.
None of the proceeds provided by the Company shall be used by WideBand to
reimburse any officer or director of WideBand for any loan made to WideBand
or any other indebtedness WideBand might have to any officer, director,
stockholder or affiliate of WideBand.
MANAGEMENT OF VIS VIVA CORPORATION
Executive Officers and Directors
The following sets forth the name and age of each executive officer of
the Company, the positions and offices with the Company held by each
executive officer, the principal occupation, employment, and business
experience of each executive officer during the past five years, and the
year each director first became a director:
Has Served as a
Name Age Position with the Company Director/Officer Since
John Michael Coombs 44 President and Director 1995
Terry S. Pantelakis 58 Vice President and Director 1995
Angelo Vardakis 30 Secretary/Treasurer and Director 1999
John Michael Coombs, Director and President. Mr. Coombs graduated from
Gonzaga University with a Bachelor of Arts degree in English in 1977. In
1981, he received a Juris Doctorate degree from Loyola Law School in Los
Angeles, the adjunct law school to Loyola Marymount University. Mr.
Coombs was admitted to the Utah State Bar in 1982 and has been engaged in
the private practice of law, specializing in business and commercial
litigation since that time.
Terry S. Pantelakis, Director and Vice President. Mr. Pantelakis has
been a principal of AAA Jewelers & Loans, a Salt Lake City, Utah, jewelry
store and pawnshop, since 1963. Mr. Pantelakis graduated from the
Gemological Institute of America in 1959 and is a certified gemologist.
Angelo Vardakis, Director and Secretary/Treasurer. Mr. Vardakis is a 1988
graduate of Highland High School in Salt Lake City, Utah. Since 1989, he
has been employed as a manager of AAA Jewelers & Loans and is the brother
of Mr. Pantelakis's son-in-law. On July 1, 1999, Mr. Vardakis became an
officer and director of the Company.
See also "THE MERGER AND SHARE EXCHANGE Management of the Company's Business
after the Merger and Share Exchange." Directors serve until the next annual
meeting of stockholders or until a successor is elected and qualified.
Officers serve until the next annual meeting of the Board of Directors or
until a successor is elected and qualified. The Company has no standing
Audit Committee. The Company also does not have a nominating or compensation
committee.
MANAGEMENT OF WIDEBAND CORPORATION
Executive Officers, Key Employees, and Directors
The executive officers, key employees, and directors of WideBand, and their
respective ages at September 30, 1999, are as follows:
NAME AGE POSITION
Dr. Roger E. Billings 51 President, CEO, Chairman of the Board,
Director, and Principal Stockholder
Donald N. Fenn 56 Vice President, Director, and
Chief Financial Officer (CFO)
Dr. Maria Sanchez 38 Vice President of Research and Director
Sharla Riead 38 Controller
Dr. Roger E. Billings has been the president, CEO, Chairman of the Board and
principal shareholder of WideBand from its inception in 1994 to the present.
From 1984 through 1994, Dr. Billings served as president of the International
Academy of Science (IAS) located in Blue Springs, Missouri. In 1987, Dr.
Billings received a Doctor of Research Degree from the International Academy
of Science. In 1976, he graduated from Brigham Young University located in
Provo, Utah, with a Bachelor of Science degree in Chemistry, Physics, and
Electrical-Mechanical-Chemical Engineering.
Dr. Billings has had considerable experience in running and operating public
companies. In 1973, he founded Billings Energy Research Corporation as a
public company and acted as its Chairman of the Board, CEO and President. In
1977, he founded Billings Computer Corporation, a subsidiary of Billings Corp.
In 1979, Dr. Billings, through Billings Corporation, founded another computer
company called Cal Disk Corporation located in Anaheim, California, of which
Dr. Billings also served as president.
Donald N. Fenn has served as a director and Vice-President of WideBand since
its inception in 1994. Mr. Fenn directs operations, including manufacturing,
raw materials procurement and management, field service, repair, and
shipping/receiving. From 1990 to the present, Mr. Fenn has owned Insul
Products, a chemical and milling business.
From 1989 through 1995, Mr. Fenn owned and operated "Vittles," a small
restaurant chain, which offered good food at fast food prices. At Vittles, he
implemented cost accounting methods to keep track of inventory and cost of
goods sold, thereby increasing profit margins. Mr. Fenn sold the chain to
Arctic Circle in 1995 for $1.1 million.
Dr. Maria Sanchez has served as WideBand's Vice President of Research since
1994. Dr. Sanchez directs and coordinates activities concerned with research
and development of concepts, ideas, specifications, and applications for
WideBand's new products or services. Dr. Sanchez received her Doctor of
Research Degree from the International Academy of Science in 1993. In 1984,
she graduated first in her class, Summa Cum Laude, from the University of
Missouri-Columbia with a Bachelor of Science Degree in Chemical Engineering.
Sharla Riead has served as the Controller and director of financial affairs of
WideBand from 1997 to the present. She also directs preparation of financial
analysis of operations for guidance of management and the preparation of
reports that outline WideBand's financial position in areas of income,
expenses, and earnings.
Ms. Riead, from 1990 until the present has been a Financial Systems Project
Manager for Sprint Corporation. In 1988, U.S. Sprint recruited her from a
Senior Systems Analyst position with Marion Labs, and her analysis and code
corrections have saved Sprint an estimated $80 to $100 million per year.
PERSONS TO ASSUME DIRECTORSHIPS OF WIDEBAND UPON COMPLETION OF THE MERGER
AND SHARE EXCHANGE
In addition to Dr. Billings, Mr. Fenn, and Dr. Sanchez, the following
individual will also assume a position on the Board of Directors of WideBand
upon consummation of the Merger and Share Exchange:
JACK R. COOMBS, age 72, is a successful Salt Lake City, Utah, businessman and
the principal shareholder of Vis Viva Corporation. For the sake of
continuity of management and because of his years of experience with public
companies, Mr. Coombs will assume a position as a Director of WideBand upon
completion of the Merger and Share Exchange. Mr. Coombs graduated from the
University of Utah in 1950 with a Bachelor of Science Degree in Banking and
Finance. Mr. Coombs is a Chartered Life Underwriter (CLU). He has also
known Dr. Billings since the early 1970's as he was involved with Dr.
Billings when Billings Energy Research Corporation was formed and became a
public company. Though he does have a significant ownership interest in Vis
Viva, Mr. Coombs, at this time, owns no shares of WideBand Corporation.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
OF VIS VIVA CORPORATION
The following table summarizes all compensation paid to the Company's
president and all other named executive officers of the Company for services
rendered in all capacities to the Company during the fiscal years ended June
30, 1999, June 30, 1998 and June 30, 1997:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
John Michael
Coombs, 6/30/97 0 $500(1) 0 0 (2) 0 $10,297.23(3)
President, 6/30/98 0 $500(1) 0 0 0 0 $ 4,500(3)
Director 6/30/99 0 $500(1) 0 0 0 0 $ 4,000(3)
Terry S.
Pantelakis, 6/30/97 0 $500(1) 0 0 (2) 0 0
Vice Pres., 6/30/98 0 $500(1) 0 0 0 0 0
Director 6/30/99 0 $500(1) 0 0 0 0 0
Angelo
Vardakis, 6/30/97 0 0 0 0 0 0 0
Sec./Treas.,6/30/98 0 0 0 0 0 0 0
Director 6/30/99 0 0 0 0 0 0 0
Sandra E.
Hansen, 6/30/97 0 $500(1)0 0 (2) 0 0
Former 6/30/98 0 $500(1)0 0 0 0 0
Sec./Treas. 6/30/99 0 0 0 0 0 0 0
Director
(1) During the years indicated, $500 was paid
to these directors and officers for services
rendered during the year. Because the
Company has no firm policy with respect to such
compensation, it has been characterized as a bonus.
(2) On July 8, 1996, the Board of Directors of the
Company unanimously resolved to grant options to
the following directors and executive officers to
purchase "unregistered" and "restricted" shares
of the Company's common stock at a price of $0.25
per share: John Michael Coombs (50,000 shares);
Terry S. Pantelakis (50,000 shares); and Sandra
E. Hansen (5,000 shares). These options, which
were exercisable at any time in the future, were
granted in consideration of services rendered by
each of these persons during the fiscal year
ended June 30, 1996. Each director abstained
from voting on the granting of the option to
himself or herself. On August 25, 1999, which is
subsequent to the period covered by this Report,
all of these options were exercised. The option
held by Ms. Hansen was exercised by Pavant Oil
Corporation, a secured creditor of Ms. Hansen.
Pavant Oil Corporation may be deemed to be controlled
by John Michael Coombs. See Item 11.
(3) John Michael Coombs, has acted as the Company's
legal counsel since 1992. Each of these figures
reflects the amount of legal fees that the Company
has paid to Mr. Coombs for the periods indicated.
Compensation Plans
Other than $500 in director's fees paid for each fiscal year, no cash
compensation, deferred compensation or long-term incentive plan awards were
issued or granted to the Company's management during the fiscal years ended
June 30, 1999, 1998, 1997 or 1996. Further, no member of the Company's
management has been granted any option or stock appreciation right during the
years ended June 30, 1999, 1998, 1997 or 1996 with the exception of a total
of 105,000 shares of options granted for the 1995 fiscal year to the officers
and directors at $0.25 per share. As disclosed elsewhere herein, such
options were exercised on August 25, 1999, the result of which conferred an
additional $26,250 in paid-in-capital to the Company.
Compensation of Directors and Officers
There are no standard arrangements to which the Company's directors are
compensated for any services provided as director. No additional amounts are
payable to the Company's directors for committee participation or special
assignments.
Employment Contracts, Termination of Employment, and Change-In-Control
Arrangements
None of the executive officers named in the Summary Compensation Table had an
employment agreement of any kind with the Company. The Company had no
compensatory plans or arrangements, including payments to be received from
the Company, with respect to any person named in the Summary Compensation
Table set out above which would in any way result in payments to any such
person because of his or her resignation, retirement or other termination of
such person's employment with the Company, or any change in control of the
Company, or a change in the person's position or responsibilities following a
change in control of the Company.
Executive Compensation
The Company's officers have not been compensated above and beyond their
historical, $500 per year compensation as directors or as otherwise set forth
above in the Compensation Summary. Upon completion of the Plan and
Agreement, the current Board of Directors of the Company will resign and
WideBand's nominees shall assume positions on the Board of Directors of the
Company. Such Board of Directors will then appoint executive officers and
key employees of the Company. See "THE SHARE EXCHANGE Management of the
Company's Business After the Share Exchange." Upon such appointment, the new
Directors intend to set salary, bonus, and other compensation items for such
newly appointed officers at levels the new Directors deem to be comparable in
the industry for small, publicly traded, high technology companies.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS OF WIDEBAND
WideBand has made no loans to nor is it doing business with any of its
officers, directors, key personnel or 10% stockholders, or any of their
relatives (or any entity controlled directly or indirectly by any of such
persons) within the last two years, or proposes to do so within the future.
(This includes sales or lease of goods, property or services to or from
WideBand, employment or stock purchase contracts, etc.) One exception is
the Master Licensing Agreement WideBand has with Dr. Billings.
The following table summarizes all compensation paid to WideBand's president
and all other named executive officers of WideBand for services rendered
WideBand in all capacities during its last fiscal year ended March 31, 1999
and through and including the period ended September 30, 1999:
Summary Compensation Table
Cash Other
Dr. Roger E. Billings -0- -0-
Donald N. Fenn -0- -0-
Dr. Maria Sanchez -0- -0-
Sharla Riead $4,200 -0-
Total: $4,200 -0-
Directors as a group -0- -0-
(number of persons: 4,
Sharla Riead is not a director)
Because WideBand has been primarily engaged in research and development since
inception, the officers and directors (other than Ms. Riead) have not taken
any compensation for acting as such. No compensation, other than as
disclosed above, is anticipated during the fiscal year commencing September
30, 1999. WideBand will be changing its fiscal year end from March 31 to
September 30.
Compensation Plans
WideBand has no compensation plans in place. At present, WideBand also has no
special provisions for approval of such future agreements, options, warrants
or rights. Two individuals who are neither officers nor directors of WideBand
hold options to acquire a total of 100,000 shares of WideBand at a price of
$5.00 per share. By 2004, all of these options expire. If and when these
options are exercised, if they are, $500,000 of additional paid-in capital
will come into WideBand.
Compensation of Directors
There are no standard arrangements pursuant to which WideBand's directors are
compensated for any service provided as director. No additional compensation
is payable to WideBand's directors for committee participation or special
assignments.
Employment Contracts, Termination of Employment, and Change-In-Control
Arrangements
None of the executive officers named in the Summary Compensation Table had an
employment agreement with WideBand. WideBand had no compensatory plans or
arrangements, including payments to be received from WideBand, with respect
to any person named in the Summary Compensation Table set out above which
would in any way result in payments to any such person because of his or her
resignation, retirement or other termination of such person's employment with
WideBand, or any change in control of WideBand, or a change in the person's
responsibilities following a change in control of WideBand.
Executive Compensation
It is anticipated that the current officers and significant employees of
WideBand will continue with their current positions and salaries upon
completion of the Plan and Agreement. Compensation in terms of salary,
bonus, and other compensation items for such officers to be appointed upon
Closing of the Merger and Share Exchange will be at levels the new Board of
Directors deems to be comparable in the industry for small, publicly traded,
high technology companies.
SECURITY OWNERSHIP FOR CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF VIS VIVA
CORPORATION
The following table sets forth certain information concerning the beneficial
ownership of the Company's Common Stock as of September 30, 1999, with the
computations being based upon 1,375,000 shares of common stock being issued
and outstanding, by (i) each beneficial owner of more than 5% of the
Company's Common Stock, (ii) each director of the Company, (iii) each
executive officer of the Company, and (iv) all executive officers and
directors as a group. This information was determined in accordance with
Rule 13(d)-3 under the Securities Exchange Act of 1934, as amended, and is
based upon the information furnished by the persons listed below. Except as
otherwise indicated, each shareholder listed possesses sole voting and
investing power with respect to the shares indicated as being beneficially
owned.
Shares of Stock Beneficially Owned
Title of Name and address Amount and Nature Percent
Shares of Beneficial Owner of Beneficial Owner of Class
Common Stock Jack Coombs 609,975 (1) 44.36%
Common Stock J.M. Coombs 141,000 (2) 10.25%
Common Stock T. Pantelakis 50,000 3.6%
Common Stock A. Vardakis - 0 - - 0 -
Common Stock All directors 800,975 58.25%
and executive officers
and over 5% shareholders
as a group
(1) Of this amount, 70,000 shares are held in the name of Margaret
V. Coombs, Mr. Coombs's wife, and 15,000 shares are held for the
benefit of the Rebecca Ann Coleman Trust, of which Margaret V. Coombs
is the trustee.
(2) Of this amount, a total of 9,000 shares are held in the name of
John Michael Coombs for his three minor children pursuant to the
Uniform Gifts to Minors Act. The figure also includes (i) 50,000
shares of "unregistered" and "restricted" common stock acquired on
August 25, 1999, pursuant to the exercise of Mr. Coombs's option; and
(ii) 23,000 such shares which are held by Pavant Oil Corporation, which
may be deemed to be controlled by Mr. Coombs.
SECURITY OWNERSHIP FOR CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT OF WIDEBAND CORPORATION
The following table sets forth information regarding the beneficial
ownership of the WideBand Common Stock, respectively, as of September 30,
1999, by: (i) each person known by WideBand to beneficially own more than
5% of the outstanding shares of WideBand Common Stock; (ii) each of the
directors of WideBand; (iii) each of the executive officers of WideBand;
and (iv) all directors and executive officers of WideBand as a group.
Unless otherwise indicated, each of the stockholders named in the table
has sole voting and investment power with respect to the shares identified
as beneficially owned.
Shares of Stock Beneficially Owned
Title of Name and address Amount and Nature Percent
Shares of Beneficial Owner of Beneficial Owner of Class
Common Stock Roger E. Billings 10,390,044 81.2%
Common Stock Donald N. Fenn 599,818 4.7%
Common Stock Maria Sanchez 2,000 -1%
Common Stock Sharla Riead 6,000 -1%
Common Stock All directors 10,997,862 85.9%
and executive officers
and over 5% shareholders
as a group
DESCRIPTION OF THE CAPITAL STOCK OF VIS VIVA'S CORPORATION
As of the Record Date, December 20, 1999, there were 1,375,000 shares of
Vis Viva Common Stock issued and outstanding, held by approximately 168
stockholders of record. After giving effect to the one-for-seven reverse
split of the Vis Viva Common Stock as contemplated by the Plan and
Agreement, the Company anticipates that there will be approximately
196,430 shares of Vis Viva Common Stock issued and outstanding as of
Closing and the Effective Time. The exact figure is unknown only because
fractional shares, however many there are, shall be rounded up to the
nearest whole share. The Articles of Incorporation of the Company (the
"Articles"), authorize the issuance of fifteen million (15,000,000) shares
of Common Stock, par value $0.01 per share. Except as otherwise required
by law, each share of Vis Viva Common Stock entitles the stockholder to
one vote on each matter which stockholders may vote on at all meetings of
stockholders of the Company. Holders of the Vis Viva Common Stock are not
entitled to cumulative voting in the election of directors. Holders of
the Vis Viva Common Stock do not have preemptive, subscription, or
conversion rights and there are no redemption or sinking fund provisions
applicable thereto. Shares of Vis Viva Common Stock are entitled to share
equally and ratably in dividends paid from the funds legally available for
the payment thereof, when, as and if declared by the Board of Directors of
the Company. The declaration of dividends, however, is subject to the
discretion of the Board of Directors. Holders of Vis Viva Common Stock
are also entitled to share ratably in the assets of the Company available
for distribution to holders of Vis Viva Common Stock after payment of
liabilities of the Company upon liquidation or dissolution of the Company,
whether voluntary or involuntary. All the outstanding shares of Vis Viva
Common Stock are fully paid and nonassessable. The Company has no present
intention of paying any cash dividends on the Vis Viva Common Stock and
plans to retain any earnings to finance the development and expansion of
its operations. The payment of cash dividends also may be restricted by a
number of other factors, including future earnings, capital requirements
and the financial condition of the Company, and restrictions on the
payment of dividends imposed under Nevada law.
DESCRIPTION OF THE CAPITAL STOCK OF WIDEBAND CORPORATION
As of the date of this document, there were 12,801,819 shares of WideBand
Common Stock issued and outstanding. See "SECURITY OWNERSHIP FOR CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT OF WIDEBAND." The Articles of Incorporation
of WideBand (the "WideBand Articles"), authorize the issuance of 50 million
shares of Common Stock, par value $.001 per share. As provided by the Bylaws
of WideBand (the "WideBand Bylaws"), except as otherwise required by law or
by the WideBand Articles, each share of WideBand Common Stock entitles the
holder to one vote on each matter which stockholders may vote on at all
meetings of stockholders of WideBand. Holders of WideBand Common Stock are
not entitled to cumulative voting in the election of directors. Holders of
WideBand Common Stock do not have preemptive, subscription, or conversion
rights and there are no redemption or sinking fund provisions applicable
thereto. Shares of WideBand Common Stock are entitled to share equally and
ratably in dividends paid from the funds legally available for the payment
thereof, when, as and if declared by the Board of Directors of WideBand. The
declaration of dividends, however, is subject to the discretion of the Board
of Directors. Holders of WideBand Common Stock are also entitled to share
ratably in the assets of WideBand available for distribution to holders of
WideBand Common Stock after payment of the liabilities of WideBand upon
liquidation or dissolution of WideBand, whether voluntary or involuntary.
All the outstanding shares of WideBand Common Stock are fully paid and
nonassessable. WideBand has no present intention of paying any cash
dividends on the WideBand Common Stock and plans to retain any earnings to
finance the development and expansion of its operations. The payment of cash
dividends also may be restricted by a number of other factors, including the
future earnings, capital requirements and financial condition of WideBand,
and restrictions on the payment of dividends imposed under Missouri law.
CERTAIN INDEMNIFICATION AND LIMITED
LIABILITY PROVISIONS VIS VIVA CORPORATION
The Company's Articles and Bylaws provide that the Company shall indemnify
all directors and officers of the Company as fully permitted to the extent
authorized by Nevada law. Under such provisions, any director or officer,
who in his capacity as such, is made a party to any suit or proceeding, shall
be indemnified if such director or officer acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interest of the Company and, in the case of a criminal proceeding, he or she
had no reasonable cause to believe his or her conduct was unlawful; provided,
however, that no indemnification may be given a director or officer where the
claim or liability arose out of that person's own gross negligence or willful
misconduct, or if such person is ultimately adjudged in the proceeding to be
liable to the Company or liable on the basis that he or she derived an
improper personal benefit. The Bylaws and Nevada law further provide that
such indemnification is not exclusive of any other rights to which such
individuals may be entitled under the Articles, the Company's Bylaws, any
agreement, vote of stockholders or otherwise. The Company currently
maintains no director's and officer's liability insurance for the benefit of
the officers and directors of the Company.
CERTAIN INDEMNIFICATION AND LIMITED
LIABILITY PROVISIONS WIDEBAND CORPORATION
WideBand's Articles provide that WideBand shall indemnify all directors and
officers of WideBand, or any person who has served or may serve, at the
request of the Board of Directors of WideBand, as permitted by Missouri law.
Under such provisions, any director or officer, who in his capacity as such,
is made a party to any suit or proceeding, shall be indemnified if such
director or officer acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interest of WideBand and, in the
case of a criminal proceeding, he or she had no reasonable cause to believe
his or her conduct was unlawful; provided, however, that no indemnification
may be given in connection with any claim or liability arising out of such
person's own negligence or willful misconduct or if such person is ultimately
adjudged in the proceeding to be liable to WideBand or otherwise liable on
the basis that he or she derived an improper personal benefit. WideBand's
Articles and Missouri law further provide that such indemnification is not
exclusive of any other rights to which such individuals may be entitled under
the Articles, WideBand's Bylaws, any agreement, vote of stockholders or
otherwise. WideBand's Bylaws provide that the Board of Directors may
authorize WideBand to indemnify any officer, employee or agent of WideBand
who is not a director of WideBand, to the extent permitted by Missouri law.
WideBand currently maintains no policy of director's and officer's liability
insurance for the benefit of its officers and directors.
TRANSFER AGENT AND REGISTRAR FOR VIS VIVA CORPORATION
The transfer agent and registrar for the Company Common Stock is Atlas Stock
Transfer Corporation, 5899 South State Street, Murray, Utah 84107, telephone
number (801) 266-7151.
ABSENCE OF PREEMPTIVE RIGHTS OR FIRST RIGHT OF REFUSAL
RELATIVE TO WIDEBAND'S COMMON STOCK
Other than the subscription agreements or investment letters signed by
stockholders of WideBand and the restrictive legend otherwise appearing on
each respective stock certificate, there is no stockholders agreement or
arrangement which, among other things, restricts a stockholder's lifetime
ability to transfer shares of WideBand Common Stock or which otherwise
provides a right of first refusal to WideBand and remaining stockholders to
purchase shares of WideBand Common Stock from a selling stockholder, or which
otherwise provides for the purchase of the shares of WideBand Common Stock
held by a stockholder in the event of death of the stockholder and for the
funding of such purchase by insurance proceeds.
PRINCIPAL ACCOUNTANTS
Hansen, Barnett & Maxwell located in Salt Lake City, Utah, has acted as the
Company's independent auditors since 1994. During October 1999, Hansen,
Barnett & Maxwell was engaged to act as the principal accountants for
WideBand. This does not pose a conflict of interest in that the auditors are
not giving advice or recommendations but are merely acting in an independent
accounting capacity. In an effort to conserve costs and because the
financial information on both the Company and WideBand contained herein is
believed to be more than sufficient, the Company does not anticipate engaging
a representative of Hansen, Barnett & Maxwell to be present at the Special
Meeting.
YEAR 2000 COMPLIANCE BY WIDEBAND
State Of Readiness WideBand Corporation has taken measures to ensure that
its products will function accurately and without interruption before,
during, and after January 1, 2000, without any change in operations
associated with the advent of the new century. WideBand products will
respond to two-digit year-date input in a way that resolves the ambiguity as
to century in a disclosed, defined, and predetermined manner, and will store
and provide output of date information in ways that are unambiguous as to
century. WideBand products will ensure year 2000 compatibility, including
date data century recognition, calculations that accommodate same century and
multi-century formulas and date values, and date data interface values that
reflect the applicable century.
WideBand Corporation also affirms that its own internal operations and
delivery schedules, to the extent that they may affect the provision of
WideBand products, will not be significantly affected due to the date change
on January 1, 2000.
Costs WideBand currently uses equipment such as computers, servers,
Internet Service Provider lines, telephones, fax machines, software, and
computer components manufactured by third parties to conduct its business.
All of its current equipment and software, as far as can be determined, is
Y2K compliant, and WideBand does not believe it has any costs associated with
upgrading any of its equipment or systems.
Risks WideBand relies on a number of third party suppliers for parts to
build its computer adapter and concentrator products. It is possible that
some or all of these suppliers might suffer an interruption in the
manufacturing of their parts due to Y2K failures somewhere in their systems,
including third party suppliers to them of products or services. If there
were to be an interruption in production for these suppliers, their in-house
and hired experts would work tirelessly to correct the problems until they
were remedied. However, if such remedy could not be made in a timely way,
WideBand could suffer loss of business by not being able to fill orders for
computer networking products in a timely way. Based on the Company's sales
trends of the past few months, the amount of loss, in worst case, could be as
much as $100,000 per month associated with Y2K non-compliance.
In addition, WideBand's daily business activities are dependent on
information technologies such as in-house computer systems and access to the
Internet, and non-information technologies and services such as electricity
and telephone service. Although these suppliers are large, well-established
companies (such as Southwestern Bell Telephone) that have been implementing
Y2K compliance measures for some time, should any of these services be
interrupted, the companies involved would take immediate measures to correct
the interruption. If such remedies could not be made in a timely way,
WideBand could suffer disruption of operations, causing, among other things,
a temporary inability to process transactions, send invoices, or engage in
similar normal business activities, leading to lost revenues in the worst
case, as much as $100,000 per month associated with non-compliance.
Since WideBand has a few international customers, the Company may be
marginally at risk if any of the systems in any of these foreign countries
experience service interruptions. However, WideBand expects that these
system interruptions would also be temporary and that service would be
restored quickly by their suppliers. And since these customers make up less
than 10% of its customer base, delayed orders would not marginally affect
WideBand's earnings.
Contingency Plans WideBand is not dependent on its suppliers to solve any
interruption of service in any of its supply systems. The companies that
operate these systems are large and have maintenance personnel who have been
trained to solve these interruption problems. Their history of service
restoration has been quite impressive in previous years and WideBand has been
assured that they have already successfully conducted tests to prove their
competence with the Y2K issue.
If any of WideBand's systems were to be interrupted because of Y2K
difficulties, there are sufficient technical in-house and local personnel to
correct any problem without significant delay.
OTHER BUSINESS
The Special Meeting is being held for the purposes set forth in the Notice
that accompanies this Information Statement. The Board of Directors is not
presently aware of any business to be transacted in the Special Meeting other
than as set forth in such Notice.
FINANCIAL AND OTHER INFORMATION
The following financial information comprising Exhibit "B" hereto contains
the Company's audited financial statements as set forth in the Company's 1998
Annual Report on Form 10-KSB for its fiscal year ended June 30, 1999, filed
with the Commission on September 23, 1999.
Also attached hereto as Exhibit "C" is certain audited financial information
on WideBand Corporation for the nine months ended September 30, 1999 and for
the twelve month periods ended December 31, 1998 and December 31, 1997.
Furthermore, attached hereto as Ex. "D" are certain pro forma, condensed,
combined financial information on both companies as of September 30, 1999.
By Order of the Board of Directors
J. Michael Coombs, President
Salt Lake City, Utah
January 25, 2000
DEFINITIONS OF TERMS
1000Base-T Gigabit Ethernet networking operating over Unshielded Twisted
Pair (UTP) cable at a 1000 megabits or 1 Gigabit per second data transmission
rate.
100Base-T The official name for the IEEE Fast Ethernet Standard, a computer
network which transmits data at 100 Megabits per second.
10Base-T The IEEE standard for Ethernet computer networking that operates
over Unshielded Twisted Pair (UTP) cable at a 10 Megabits per second data
transmission rate.
8B/10B coding A coding method that encodes 8-bit transmissions into 10-bit
transmissions and then back again to improve the communication link bt
ensuring that sufficient clock transitions are present in the data to enable
reliable clock recovery. It also aids in hardware error detection and
provides a mechanism whereby special control characters can be transmitted
across network links.
adapter card or NIC NIC (Network Interface Card) or Adapter is an expansion
card of electronic circuitry that fits into one of the expansion slots inside
a personal computer and enables communication over a network.
ANSI American National Standards Institute. ANSI is a non-profit,
nongovernmental body supported by over 1000 trade organizations, professional
societies, and companies. ANSI is the American representative at ISO.
application Software ready to perform a function. A program written for or
by a user that performs the user's work; also a program used to connect and
communicate with stations in a network.
ARP Address Related Protocol. A protocol in the TCP/IP suite that
translates the logical IP address for a system into the hardware address
assigned to the adapter in that system.
ARPA Advanced Research Projects Agency.
ARPAnet The first packet-switched network, which offered datagram services
in which packets were delivered without regard to sequence or routing.
ASIC Application Specific Integrated Circuit, an ASIC is a chip usually
composed of a number of components and is designed to perform a particular
purpose either general or proprietary to an individual manufacturer.
ATM Asynchronous Transfer Mode, a highly efficient cell-switching protocol
used to transfer voice, video, and data at high rates over local area and
wide area fiber optic networks.
backbone The main cable of a bus or tree LAN to which nodes or other LAN
segments are attached.
bandwidth In a digital communications channel, the data or information-
carrying capacity usually measured in Hertz or in bits per second.
bit The smallest unit of data in a computer. A bit has a single binary
value, either 0 or 1. Although computers usually provide instructions that
can test and manipulate bits, they generally are designed to store data and
execute instructions in bit multiples called bytes. In most computer
systems, there are eight bits in a byte. The value of a bit is usually
stored as either above or below a designated level of electrical charge in a
singe capacitor within a memory device.
bridge A bridge is a simple networking device that interconnects two or
more LANs. Bridges operate at the lowest network level and are not aware of
what networking protocols are in use.
broadband A term that refers to channels supporting rates in excess of DS3
(45 Mb/s) or E3 (34 Mb/s).
broadcast A transmission to all addresses on the network or subnetwork.
Buffered Packet Synchronization A method of eliminating data collisions in
WideBand Networks by buffering and ordering data transmissions coming into
the hub or concentrator until the line is clear, then sending them on to
their destination. The result is a very tightly packed outbound channel with
fully intact packets and efficient bandwidth utilization.
bytes In most computer systems, a byte is a unit of information that is
eight bits long. A byte is the unit most computers use to represent a
character such as a letter, number, or typographic symbol. A byte can also
be a string of bits that need to be used in some larger unit for application
purposes.
CAT-5 cable or Category 5 cable see UTP-5
cell A small unit of information containing data and routing information
that is switched through an ATM network.
channel A physical medium that transports the digital traffic in a
computer.
chip A computer component containing electronic circuits to convey digital
data in a computer system.
client/server A system of sharing information that consists of a central
machine (server) that processes requests from and furnishes data to client
machines.
CSMA/CD Carrier Sense Multiple Access with Collision Detection. The LAN
discipline (protocol) used by both Ethernet and the IEEE 802.3 standard.
Under SCMA/CD, a device that wishes to transmit on the network first
"listens" for other activity. If the network is quiet, the device then
attempts to transmit. Data collisions re detected and result in both
transmitters attempting to retry their transmissions at a later time.
collision detection The mechanism in Ethernet and IEEE 802.3 networks that
detects the occurrence of a data collision (CSMA/CD = "carrier sense multiple
access with collision detection").
collision domain A collection of Ethernet devices (nodes) connected by any
number of repeaters. Only one node at a time may successfully transmit
inside a collision domain. When any node in the domain talks, all the other
nodes listen.
collision domain diameter The maximum separation between any two devices in
an Ethernet network, which is based on the ability of a transmitting computer
to detect a data collision. The faster the transmission speed, the smaller
the collision domain diameter due to the time it takes for the transmitting
station to hear if there has been a collision. For 10 Mb/s Ethernet the
diameter is 3,000 meters; for Fast Ethernet it is 412 meters.
computer network Interconnected computers and/or peripherals.
Concentrator A wiring center and concentrating point for individual
workstations on a computer network; the device that is the facilitator of
network connection between clients and servers in a WideBand network.
conventional network A network that transmits data back and forth between
clients and servers; a client/server network.
copper cable Cable which is made of pairs of copper wire.
data collision The phenomenon in Ethernet and IEEE 802.3 networks whereby
two or more systems transmit at the same time on the same LAN segment,
causing the two transmissions to overlap and become garbled
database Any collection of data , especially a file or set of files that
stores data in a retrievable format for later recovery.
de facto standard A publicly available, widely used specification, usually
defined by a vendor rather than a standards committee.
Ethernet A local area network standard that uses the Carrier Sense,
Multiple Access with Collision Detection (CSMA/CD) discipline.
Ethernet repeater A device that joins two Ethernet or IEEE 802.3 LAN
segments to form a single logical segment.
Ethernet switching A technique for reducing access contention in an
Ethernet or IEEE 802.3 LAN by connecting multiple LAN segments to an
intelligent, high speed switching hub.
Fast Ethernet The 100 Mb/s version of Ethernet.
Fibre Channel A network protocol developed by IBM in the late 1980s as a
method of providing high-speed serial links for processor-to-processor and
processor-to-mass storage applications and later provided the underlying
physical technology base for Gigabit Ethernet.
fiber optic cable Extruded glass fibers that carry light waves over
extended distances, potentially through tortuous curved pathways. Digital
signals can be imposed on a light beam a process called modulation
injected into a fiber optic cable, and recovered from the beam at the other
end of the cable.
FIFO First In First Out memory chip that sends out first what it receives
first.
FPGA Field Programmable Gate Array A computer chip that is programmable
to the functions specified by the manufacturer.
frame A block of information organized in a format appropriate to a
specific type of network; an OSI data link layer defined unit of
transmission whose length is defined by flags at the beginning and end.
full duplex Simultaneous independent bi-directional transmission over a
common medium.
Gb/s One Gigabit per second; a data transmission rate of one billion bits
of information each second.
Gigabit One billion bits of data.
Gigabit Ethernet The 1000 Mb/s or 1 Gigabit version of Ethernet.
half duplex Transmission in one of two directions at any given time, but
not both directions simultaneously over a common medium.
hub Basically two types: "Dumb" hubs act an LAN segment repeaters or wiring
hubs. "Smart" hubs provide sophisticated wiring management, support network
management protocols, and often support bridging, routing, and gateway
functions.
IEEE Institute of Electrical and Electronics Engineers. A professional
society that, among other activities, participates in the development of
standards. IEEE recommendations are usually forwarded to ANNSI for their
endorsement.
infrastructure The hardware, software and services required for end users
to perform their I/S related duties.
Internet A global web of interconnected computer networks using the TCP/IP
protocol for data transport and network management. The Internet grew out of
the original ARPAnet, and was for a time a government-funded public network.
It is currently being transformed into a commercially funded public network.
Users are usually charged for access to the Internet on the basis of
bandwidth rather than usage, although for low-end feeders, access may be
charged at an hourly rate.
interoperable The ability to share resources among applications on
different platforms.
ISO The International Standards Organization is a voluntary, independent
organization chartered to define international standards for communications
(of all types).
LAN Local Area Network. A communications architecture that passes
information between multiple systems over relatively short distances at very
high speeds. A LAN is also a network of computers and peripherals that spans
a small physical area, usually one building or a small campus.
Mb/s or Mbps Megabits per second. 1,048,576 bits per second (approximately
131,072 bytes per second).
medium The single common access platform, such as copper wire, fiber, or
free space.
multicast A connection type with the capability to broadcast to multiple
destinations on the network.
network adapter card, network interface card (NIC) See adapter card.
nodes Points in a network where service is provided, service is used, or
communications channels are interconnected.
OEM Original Equipment Manufacturer. A company that purchases original
equipment from the manufacturer and remarkets the product, usually with some
value added.
operating system or network operating system A generic term for the
operating system level software used to manage and control networks.
pick-and-place machine A machine or robot that automatically picks up and
places parts on a blank circuit board according to a computer program.
packet A unit of information that contains data, origin information, and
destination information, which is switched as a whole through a network.
protocol A set of rules whereby two or more devices agree on information
and code structures required for successful and error-free communications.
router A sophisticated networking device that interconnects and regulates
traffic flow between two or more LANs. Routers operate at the network
protocol level and can distinguish one protocol from another.
segment A section of a cable in an Ethernet or IEEE 802.3 LAN.
server A computer providing a service to LAN users, such as shared access
to disks, files, a printer, or an electronic mail system. Usually a
combination of hardware and
software.
star topology The network configuration in which all workstations are
connected together and to the network via a central hub, thus creating,
roughly, star-like points or spokes going out from the center.
streaming data Data that is delivered at a constant rate, such as video
data.
surface mount An electronic part or component that is mounted on the top of
a circuit board, whose connectors do not go through holes to the other side.
TCP/IP Transmission Control Protocol/Internet Protocol. TCP/IP is a set of
network services that provide interoperability between heterogeneous systems.
The TCP portion is a connection-oriented protocol responsible for providing
reliable and recoverable communications between two endpoints. The IP
portion handles the routing and delivery of TCP messages.
Token Ring A LAN with a ring topology that uses token passing as it access
method.
traffic Data transmissions on a network.
UTP-5 Unshielded Twisted Pair cable made of pairs of wires twisted
together and enclosed in a protective (but unshielded) sheath. Level 5 is
one of 5 types with increasing data rate capability from 4 Mb/s to 100 Mb/s.
WAN Wide Area Network. A network composed of systems that are relatively
far apart. A WAN may also encompass a series of LANs connected together over
a wide area.
workstation A personal computer or device (such as a printer or modem) that
is connected to a network.
EXHIBITS TO INFORMATION STATEMENT
Exhibit A Plan and Agreement of Merger and any amendments thereto
Exhibit B Audited Financial Statements of the Company for its fiscal
year ended June 30, 1999 and Unaudited Stub for its first
quarter ended September 30, 1999
Exhibit C Audited Financial Statements of WideBand Corporation
For Nine-Month Period Ended September 30, 1999 and for the
Twelve-Month Periods Ended December 31, 1998 and December
31, 1997
Exhibit D Pro forma Condensed, Combined Financial Statements of Vis
Viva Corporation and WideBand Corporation for the Period
Ended September 30, 1999
Exhibit E Summary of Dissenters' Rights Provisions under Nevada law
Exhibit F Form of Articles of Merger to be filed in both the States
of Missouri and Nevada
Exhibit G Form of Articles of Amendment to the Articles of
Incorporation of Vis Viva Corporation
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated and made effective as of this
6th day of September, 1999, by and between VIS VIVA CORPORATION, a publicly
held Nevada corporation ("VISV") and WIDEBAND CORPORATION, a Missouri
corporation ("WIDEBAND").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of VISV and WIDEBAND deem the merger of
WIDEBAND with and into VISV on the terms herein set forth to be desirable and
in the best interests of their respective stockholders and, subject to
approval by their respective shareholders, desire to adopt this Agreement and
Plan of Merger to result in a tax-free reorganization within the meaning of
Section 368(a)(1)(A) of the Internal Revenue Code of 1954, as amended, and
WHEREAS, the Boards of Directors of VISV and WIDEBAND have approved this
Agreement and Plan of Merger (the "Agreement") and have directed that the
Agreement and the merger contemplated hereby be submitted to their respective
stockholders for adoption.
NOW THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements contained herein,
VISV and WIDEBAND hereby agree that WIDEBAND shall be merged with and into
VISV, which shall be the surviving corporation, and that the plan, terms and
conditions of such merger shall be as follows:
ARTICLE I
Plan of Merger of WIDEBAND with and into VISV
1.01. The Merger. On the Effective Date of the Merger (as defined in
Article 1.05), WIDEBAND shall be merged with and into VISV, the separate
existence of WIDEBAND (except as it may be continued by operation of law)
shall cease, and VISV as the surviving corporation shall continue its
corporate existence under the laws of the State of Nevada and VISV shall
possess all of the rights, privileges, immunities, powers, franchises and
authority, of a public as well as of a private nature, and be subject to all
the restrictions, disabilities and duties of WIDEBAND; and all and singular,
the rights, privileges, immunities, powers, franchises and authority of
WIDEBAND, and all assets and property of every description, real, personal and
mixed, and every interest therein, wherever located, and all debts or other
obligations belonging to or due to WIDEBAND on whatever account, as well for
stock subscriptions as all other things in action or belonging to WIDEBAND on
whatever account, as well as for stock subscriptions as all other things in
action or belonging to WIDEBAND, shall be vested in VISV; and all assets,
property, rights, privileges, immunities, powers, franchises and authority,
and all and every other interest, shall be thereafter as effectually the
property of VISV as they were of WIDEBAND, but all rights of creditors and all
liens upon any property of WIDEBAND shall be preserved unimpaired, and all
debts, liabilities and duties of WIDEBAND shall thenceforth be attached to
VISV and may be enforced against VISV to the same extent as if said debts,
liabilities and duties had been incurred or contracted by VISV prior to this
transaction.
1.02. Adoption of Plan; Requirement of Shareholder Approval of Both
WIDEBAND and VISV; Dissenters' Rights; Notification. The Merger transaction
contemplated hereby will require shareholder approval of the transaction under
both Nevada and Missouri corporate law. See Sections 78.451 through 78.466,
Nevada Revised Statutes (NRS), as amended, titled MERGER; EXCHANGE OF SHARES.
VISV intends to accomplish such approval by means of a consent of a majority
of its shareholders as authorized by Section 78.320, NRS, titled Stockholders'
meetings: Quorum; Consent for actions taken without meeting. If Nevada law
requires that VISV give dissenters' rights of appraisal as contemplated in NRS
Sections 78.471 through 78.502, titled RIGHTS OF DISSENTING SHAREHOLDERS, VISV
will do so. Accordingly, VISV shall not solicit proxies even though, as a
Section 12(g) "reporting company," it is subject to the Proxy Rules
promulgated under Section 14(a) of the Securities Exchange Act of 1934 ("the
'34 Act"). VISV will instead provide its shareholders with an Information
Statement as required under Section 14(c) of the '34 Act and the 14C series of
rules promulgated thereunder by the Securities and Exchange Commission
("Commission"). VISV will also notice-up a shareholders' meeting in Salt Lake
City at an appropriate time immediately in advance of the anticipated Closing
at which it will welcome shareholders to attend and vote their shares if they
so desire. In an effort to establish an exemption from registration for this
transaction, VISV will also be providing such Information Statement, among
other materials such as purchaser suitability questionnaires and the like to
the Shareholders of WIDEBAND. WIDEBAND shall conduct its own shareholders'
meeting, after its shareholders have received appropriate disclosure materials
on VISV and the transaction contemplated hereby, and they have had the
opportunity to have any questions they or a purchaser representative, as
applicable, may have, answered. See Exhibit 10.02 hereto (containing a form
of investment and acknowledgment letter each WIDEBAND Shareholder is to sign
and furnish VISV prior to Closing). In seeking approval of the transaction by
a majority of WIDEBAND's shareholders, WIDEBAND shall also be obligated, as
and if required by Missouri corporate law, to give its Shareholders
dissenter's rights of appraisal.
1.03. Proposals To Be Approved By the Shareholders of Both WIDEBAND
and VISV. The Shareholders of both WIDEBAND and VISV shall approve the
following proposals: (i) approval of this Plan and Agreement of Merger
("Agreement"), including the issuance of the finder's, agent's or consultant's
post-split shares to be issued in connection therewith (see Article 5.14
below); (2) approval of the recapitalization or 1 for 7 reverse-split of
VISV's shares as necessary to effectuate the transaction; (3) approval of the
name change for VISV to "WideBand Corporation"; (4) approval of the slate of
directors to assume positions on the Board of VISV upon the Closing, persons
to be designated by WIDEBAND (seeArticle 2.02 below); and (5) approval of any
other amendments to the Articles of Incorporation of VISV if necessary, such
as to broaden the scope of its corporate purpose to include the business
operations presently carried on by WIDEBAND.
1.04. Establishment of Record Date. The Record Date for those VISV
shareholders entitled to vote on this Agreement shall be August 9, 1999 or a
later date not more than thirty (30) days prior to the date VISV's Information
Statement is disseminated to VISV's shareholders. WIDEBAND shall establish
its own record date, if necessary, for its shareholders to vote on and approve
the transaction in accordance with Missouri corporate law.
1.05. Effective Date of the Merger. The merger shall become
effective as of the close of business on the date of filing as provided in
Article 4.02 (the "Effective Date of the Merger").
1.06. Instruments and Further Assurances. From time to time, as and
when requested by VISV, or by its successors or assigns, the officers and
directors of WIDEBAND last in office shall execute and deliver such deeds and
other instruments for transfer and shall take or cause to be taken such
further or such other actions as shall be reasonably necessary in order to
vest or perfect in VISV, or to confirm of record or otherwise to VISV, to the
extent such officers and directors have the power so to do, title to and
possession of all the property, interests, assets, rights, privileges,
immunities, powers, franchises and authority of WIDEBAND.
ARTICLE 2
Articles of Incorporation, Directors and Officers and By-Laws
2.01. Articles of Incorporation. Except as provided below, the
Articles of Incorporation of VISV, as in effect on the Effective Date of the
Merger, shall be the Articles of Incorporation of VISV, as the surviving
corporation, until they are amended as provided therein or by law. Upon the
Effective Date of the Merger, the Articles of Incorporation of VISV shall be
amended to change the name of VISV to "WideBand Corporation," among other
amendments as may be necessary to effectuate and carry out the terms and
provisions of this Agreement. A copy of the form of Amended Articles of
Incorporation of VISV and the form of Articles of Merger to be filed in both
the States of Missouri and Nevada, thereby establishing the Effective Date of
the Merger, are attached hereto as Exhibit 2.01.
2.02. Directors and Officers. Upon the Effective Date of the Merger,
the Board of Directors and Officers of VISV, the surviving corporation, shall
consist of the persons identified in Exhibit 2.02 hereto. Said directors
shall hold office as provided in the By-Laws of the surviving corporation. At
the VISV shareholders' meeting to be held pursuant to Article 8.01 below, the
shareholders of VISV will vote on the election of the persons listed in
Exhibit 2.02 to be directors of VISV until its next annual meeting or until
they or any one of them resign and their respective resignations are accepted.
2.03. By-Laws. The By-Laws of VISV, as in effect on the Effective
Date of the Merger, shall be the By-Laws of the surviving corporation, until
they are amended as provided therein or otherwise by law.
ARTICLE 3
Conversion and Exchange of Shares
3.01 Conversion of Shares. The manner of converting or exchanging
the shares of VISV and WIDEBAND shall be as follows:
(a) Each share of the Common Capital Stock, $.001 par value per share, of
VISV ("VISV Common Stock") that is issued and outstanding on the Effective
Date of the Merger shall be reverse-split into one (1) share for every seven
(7) shares of stock after the merger. For example, there are currently
1,270,000 shares of VISV issued and outstanding with open-ended options to
acquire an additional 105,000 shares @ $0.25 per share. It is anticipated
that these options shall be exercised prior to Closing, in which case there
will be 1,375,000 shares of VISV then-issued and outstanding. Immediately
prior to the Effective Date of the Merger and of the 1 for 7 reverse split,
there shall be 196,429 shares of VISV issued and outstanding. Fractional
shares of VISV Common Stock which result from such reverse-split will be
rounded up to the nearest whole number of shares.
(b) Each share of Common Capital Stock, $0.001 par value per share, of
WIDEBAND ("WIDEBAND Common Stock") that is issued and outstanding on the
Effective Date of the Merger shall, by virtue of the merger, be converted,
one-for-one, into a total of twelve million eight hundred and one thousand
eight hundred and nineteen (12,801,819) fully paid and non-assessable shares
of VISV Common Stock. (This figure is larger than the figure of 12,713,601
used in the August 9, 1999, Memorandum of Intent. This is because the
Memorandum of Intent neglected or failed to recognize the 88,218 "restricted"
shares issued to Mr. Donald N. Fenn on or about August 5, 1999, in
consideration for his conveyance, to WIDEBAND, of various hard assets in which
Mr. Fenn had a cost basis of as much as $441,090, assets which, at the same
time, may have a fair market value in excess thereof. See also Article
6.04(a) below. Two individuals also have outstanding options to acquire one
hundred thousand (100,000) shares of WIDEBAND at $5.00 per share, options that
expire in the years 2000, 2003 and 2004. See Article 6.02 below. If any part
or portion of such currently outstanding options to acquire an additional
100,000 shares of WIDEBAND stock are exercised prior to Closing, additional
VISV Common Stock shall be issued upon Closing to such persons so exercising
his or her option(s) or any part thereof. No fractional shares of VISV Common
Stock will be issued to WIDEBAND Shareholders upon conversion of the WIDEBAND
Common Stock to VISV Common Stock. Finally, while WIDEBAND's shareholders
voted at a September 25, 1996, shareholders' meeting to authorize the issuance
of certain convertible preferred stock, its Articles of Incorporation have
never been amended to reflect such nor have any of such shares been issued.
Accordingly, such non-existent shares will not be affected by this transaction
nor, as a result thereof, will any such non-existent but authorized shares
otherwise be convertible into VISV Common Stock.
(c) As described in Article 5.14 below, there will also be fifty five
thousand (55,000) post-split VISV shares issued upon Closing to certain
persons as a finder's, agent's or consultant's fee, action which is also
intended to be approved by the shareholders. Taking into consideration the
196,429 reverse-split shares of VISV remaining after the Closing, adding in
the 12,801,819 shares to be issued to the Shareholders of WIDEBAND in the
exchange, plus the 55,000 shares post-split shares referred to herein, there
will be no less than 13,053,248 shares of VISV then-issued and outstanding
upon the Effective Date. (This figure ignores taking into consideration the
issuance of any shares issuable to the WIDEBAND optionees prior to Closing by
WIDEBAND, an event that could occur. Such options, contrary to the Memorandum
of Intent, must legally survive Closing.)
3.02 Exchange of Certificates or Delivery of Shares. On and after
the Effective Date of the Merger, each holder of a certificate or certificates
representing WIDEBAND Common Stock, upon presentation and surrender of such
certificate or certificates to VISV or its transfer agent, Atlas Stock
Transfer Corp., shall be entitled to receive in exchange therefor a
certificate or certificates representing the number of full shares of VISV
Common Stock to which he is entitled, as provided in Article 3.01. Until so
presented and surrendered in exchange for a certificate representing VISV
Common Stock, each certificate which represented issued and outstanding shares
of WIDEBAND Common Stock on the Effective Date of the Merger shall, except as
provided in the following sentence, be deemed for all purposes to evidence
ownership of the number of full shares of VISV Common Stock into which such
shares of WIDEBAND Common Stock have been converted pursuant to the merger.
Until surrender of such certificates in exchange for certificates representing
VISV Common Stock, the holder thereof shall not be entitled to vote at any
shareholders meeting of VISV.
ARTICLE 4
Closing; Effective Date of Merger
4.01 Closing. The closing of the transaction contemplated by this
Agreement shall take place at 124 South 600 East, Suite 100, Salt Lake City,
Utah, at such date and time, within five (5) business days after the
satisfaction or waiver of the last of the conditions set forth in Articles 9,
10 and 11 hereof to be satisfied or waived, as the parties may fix. The
closing of such transactions is herein called the "Closing" and the date of
that Closing is referred to herein as the "Closing Date."
4.02 Effective Date. Subject to the conditions in this agreement
and to the execution and filing of certificates or articles of merger and
other documents as may be required by Nevada and Missouri corporate law, the
merger shall become effective at the close of business on such date as such
filings are made or at such other date as stated in the certificate or
articles of merger (the "Effective Date of the Merger"). Unless this
Agreement shall have been terminated pursuant to the provision of Article 12
hereof, such filings shall be made on or as soon as practicable after the
Closing.
ARTICLE 5
Representations and Warranties of VISV
5.01. Organization, Standing, Qualification, etc. VISV is a publicly
held "development stage" Nevada corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada. Its registered
agent is State Agent & Transfer Syndicate, Inc., located at 318 North Carson
Street, Carson City, Nevada 89701, phone no. (800) 253-1013, Website:
www.stagent.com. VISV has all requisite corporate power and is duly
authorized, qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own its properties
and assets and to carry on its business as it is presently being conducted.
To the best knowledge, information and belief of management, the nature of
VISV's business and the ownership of its properties do not require it to
become qualified in any state as a foreign corporation and therefore, it has
not done so. VISV was originally incorporated in the State of Utah in 1980.
In May 1981, it commenced a public offering of its securities to Utah
residents in reliance on the Section 3(a)(11) or intrastate exemption from
registration, including Rule 147 promulgated thereunder by the Securities and
Exchange Commission ("SEC" or "Commission"). In 1982, VISV obtained a "come
to rest" opinion of counsel by which VISV Common Stock was thereafter eligible
for trading in interstate commerce. Effective June 30, 1995, VISV changed its
domicile from the State of Utah to the State of Nevada. In March 1996, it
filed a Form 10-SB with the Commission by which it became a Section 12(g)
"reporting company" under the Securities Exchange Act of 1934 ("the '34 Act").
All of VISV filings with the Commission since March 1996 are available on
EDGAR, the Commission's publicly available Database. As of August 9, 1999,
VISV had approximately 168 stockholders of record. Its transfer agent is and
always has been Atlas Stock Transfer located in Murray, Utah.
5.02. Capitalization. The authorized capital stock of VISV consists
of 50,000,000 shares of common stock, with $.001 par value, of which 1,270,000
shares are currently issued and outstanding. As stated above, there are
outstanding options to acquire 105,000 additional shares at $0.25 per share.
All issued and outstanding shares are duly authorized, fully paid, validly
issued and non-assessable in accordance with applicable law. No dividends or
other distribution of the assets of VISV have been declared or paid in the
capital stock of VISV. Except for the transactions contemplated by this
Agreement, there are no outstanding warrants, options, preemptive rights or
rights to subscribe for or purchase any shares of VISV's capital stock or any
outstanding securities that are convertible into VISV's capital stock. The
VISV Shares to be issued pursuant to this Agreement have been duly authorized
and, when issued to the shareholders of WIDEBAND in exchange for their
WIDEBAND Common Stock will be validly issued, fully paid and non-assessable.
5.03 Articles of Incorporation, By-Laws and Minutes. The complete
Articles of Incorporation and the By-Laws of VISV, as will be in effect on the
Effective Date of the Merger, are attached hereto as Exhibit 5.03.
5.04. Financial Statements and Assets.
(a) VISV's audited financial statements for its 1998 fiscal year ended
June 30, 1999, are anticipated to reflect in excess of $300,000 in net worth
or shareholders' equity, an amount which excludes accrued interest receivable
as of such date from corporate bond investments.
Attached hereto as Exhibit 5.04 are the complete audited financial
statements of VISV as of June 30, 1999 (hereinafter referred to as the "VISV
Financial Statements").
All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved. As of the date of any of such balance sheets, except as and
to the extent reflected or reserved against therein, VISV did not have any
liabilities or obligations (absolute or contingent) which should be reflected
in a balance sheet or the notes thereto prepared in accordance with generally
accepted accounting principles, and all assets reflected therein are, to the
best knowledge, information and belief of management, properly reported and
present fairly the value of the assets of VISV in accordance with generally
accepted accounting principles. To the best knowledge, information and belief
of management, such statements of operations present fairly the results of
operations of VISV for the periods indicated. To the best knowledge,
information and belief of management, such statements of changes in financial
position present fairly the information that should be presented therein in
accordance with generally accepted accounting principles.
The books and records, financial and others, of VISV are in all material
respects complete and correct and have been maintained in accordance with good
business and accounting practice.
5.05. Authorization. The Board of Directors of VISV has approved the
Agreement and the transaction contemplated hereby, has authorized the
execution and delivery of this Agreement of VISV and has authorized the
execution and delivery of this Agreement of VISV and has authorized the
submission of this Agreement and the transactions contemplated hereby to the
VISV shareholders for their consideration with the recommendation that it be
approved or that it believes a majority of the shareholders will in fact
consent to the transaction without the need to solicit such approval. VISV
has full power, authority and legal right to enter into this Agreement and
this Agreement constitutes a legal, valid and binding obligation of VISV
enforceable in accordance with its terms.
5.06. Litigation. There is no action, suit, proceeding or
investigation pending, at law or in equity, or to the knowledge of VISV's
management, threatened, against or affecting VISV before or in any court,
either state or federal, public board, or body which calls into question the
creation, organization or existence of VISV, the validity of this Agreement or
the authority of VISV to execute, deliver and carry out the terms of the
Agreement or which judgment, order or finding can reasonably be expected to
have a material adverse effect on the condition (financial or otherwise) of
VISV. VISV has no knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality.
5.07. Subsidiaries. Other than its investments in its Herzog, Heine
& Geduld brokerage account located in New York, VISV does not own, directly or
indirectly, any interest or investment, whether in equity or debt, in any
corporation, business, trust or other entity.
5.08. Compliance with Law and Other Instruments. VISV is not in
violation or default of any term of its Articles of Incorporation or By-Laws,
or of any agreement, contract, commitment, instrument, indenture, judgment,
decree or order, applicable to it and, to the best of management's knowledge,
it has timely filed all reports and any other documents required by it to be
filed with any governmental agency, including the Commission. The execution,
delivery and performance of this Agreement and the taking of action
contemplated hereby will not result in any violation of or be in action
contemplated hereby will not result in any violation of or be in conflict with
or constitute a default under (a) the Article of Incorporation or By-Laws of
VISV, or (b) any material agreement or instrument to which VISV or any
consolidated subsidiary is a party or by which it is bound, or (c) any
material judgment, decree or order to which VISV is subject, or result in the
creation of any material lien, charge or encumbrance on any of the properties
or other assets of VISV.
5.09. Contracts and Commitments.
There are no material contracts, agreements, franchises, license
agreements or other commitments to which VISV is a party or by which it or any
of its properties are bound;
VISV is not a party to any contract, agreement, other commitment or
instrument or subject to any charter or other corporate restriction or any
judgment, order, wit, injunction, decree or award which materially and
adversely affects, or in the future may (as far as VISV can now foresee),
materially and adversely affect, the business, operations, properties, assets
or condition of VISV; and
VISV is not a party to any material oral or written (i) contract for the
employment of any officer or employee which is not terminable on 30 days' (or
less) notice, (ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension or retirement plan, agreement or arrangement, (iii)
agreement, contract or indenture relating to the borrowing of money, (iv)
guaranty of any obligation, other than one on which VISV is a primary obligor,
for the borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations, which, in the aggregate do not
exceed $1,000, (v) consulting or other similar contract with an unexpired term
of more than one year or providing for payments in excess of $1,000 in the
aggregate, (vi) collective bargaining agreement, (vii) agreement with any
present or former officer or director of VISV, or (viii) consent, agreement or
other commitment involving payments by it of more than $1,000 in the
aggregate.
5.10. Liabilities. Except as disclosed or provided for in the VISV
Financial Statements, VISV, to the best of its knowledge after due inquiry,
has no debt, obligation or liability of any nature, whether accrued, absolute,
contingent or otherwise, whether due or to become due to any person or entity,
including any of its officers, directors, or shareholders, in excess of
$1,000.
5.11. Title to Properties and Related Matters. VISV has good and
marketable title to all of its properties, interests in properties and assets,
real and personal, which are reflected in the latest balance sheet included in
the VISV Financial Statements or acquired after that date (except properties,
interests in properties and assets sold or otherwise disposed of since such
date in the ordinary course of business), free and clear of all mortgages,
liens, pledges, charges, or encumbrances except: (i) statutory liens or claims
not yet delinquent, (ii) such imperfections of title and easements as do not
and will not materially detract from or interfere with the present or proposed
use of the properties subject thereto or affected thereby, or otherwise
materially impair present business operations of such properties, and (iii) as
described in the VISV Financial Statements.
5.12. Directors and Officers. The Board of Directors and principal
officers of VISV, as of the date hereof, are those persons identified in
Exhibit 5.12 hereto.
5.13. Tax Returns. Within the times and in the manner prescribed by
law, VISV has filed all federal, state and local tax returns required by law
and has paid all taxes, assessments and penalties due and payable. All taxes
and governmental charges levied or assessed against the property or the
business of VISV have been paid, other than taxes or charges the payment of
which is not yet due or which, if due, is not yet delinquent or is being
contested in good faith or has not been finally determined.
5.14. Brokers/Agents/Finders/Consultants. Other than a finder's fee,
agent's fee or consultant's fee payable to Coombs & Company and John Michael
Coombs, neither VISV nor any officer or director of VISV has employed any
broker, finder, consultant or agent or has agreed to pay or has otherwise
incurred any brokerage fee, finder's fee, consulting fee or commission with
respect to the transactions contemplated by this Agreement. In this regard
and upon Closing, Coombs & Company, a partnership, shall be entitled to
receive a fee of forty thousand (40,000) post-split "restricted" shares and
J.M. Coombs shall be entitled to receive fifteen thousand (15,000) post-split
"restricted" shares. Both Coombs & Company and J.M. Coombs shall execute
investment letters to the effect that the consultant's shares they shall be so
acquiring as a fee are acquired for investment purposes only and not with a
view to the further distribution thereof. In the event that VISV, after
Closing, registers any shares with the Commission, WIDEBAND and
its principals hereby agree that it shall register the 55,000 post-split
shares subject of this paragraph and, if necessary or otherwise advisable, it
will register such shares with the Commission on a Form S-8. In addition, if
necessary to take Coombs & Company and J.M. Coombs out of the parameters of
Section 16(b), the "short-swing profit" statute under the '34 Act, VISV and
WIDEBAND shall submit the approval such 55,000 post-split share finder's,
agent's or consultant's fee to their respective shareholders as part of their
mutual adoption of this Plan and Agreement. With the exception of, or subject
to, the foregoing, VISV and its officers jointly and severally agree to
indemnify and hold WIDEBAND and its officers and directors harmless from and
against any fee, loss or expense arising out of claims by brokers, finders or
consultants employed or alleged to have been employed by them in connection
with this transaction.
5.15. Prior Sales. VISV has not privately offered and sold any of
its securities within the last two (2) years and therefore, it need not attach
hereto as Exhibit 5.15 a list setting forth the names and addresses of the
purchasers of any securities of VISV so offered and sold and whether any such
purchaser is a 5% or more shareholder.
5.16. Shareholder List. Attached hereto as Exhibit 5.16 is an
alphabetical list, as of a date within thirty (30) days for the date hereof,
of all of the shareholders of VISV and the number of shares of VISV Common
Stock owned by each. Such list also identifies which stock certificates have
stop transfer orders and which have restrictive legends placed upon them.
5.17. Transfer Agent and Market Maker(s). VISV's transfer agent,
since its public offering in 1981, is and has been Atlas Stock Transfer
Corporation located at 5899 South State Street, Murray, Utah 84107, phone no.
801-266-7151. Its only market maker has been Wilson-Davis & Company whose
address is 39 West Market Street, 3rd Floor, P.O. Box 11587, Salt Lake City,
Utah, 84147, phone no. 801-532-1313. There is no affiliation, direct or
indirect, by and among Atlas Stock Transfer Corp., Wilson-Davis & Co., and any
current or former officer and director of VISV, including principal
shareholder of VISV, Jack R. Coombs.
5.18. Compliance with Laws and Regulations. VISV has complied with
all applicable statues and regulations of any federal, state or other
applicable jurisdiction or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets or condition of VISV or except to the extent
that noncompliance would not result in the incurrence of any material
liability.
5.19. Material Contract Defaults. Neither VISV nor any other party
is in default in any material respect under the terms of any outstanding
contract, agreement, lease or other commitment which is material to the
business, operations, properties or assets or the condition of VISV, and there
is no event of default or event which, with notice of lapse of time or both,
would constitute a default in any material respect under any such contract,
agreement, lease or other commitment in respect of which it has not taken
adequate steps to prevent such a default from occurring.
5.20. Absence of Certain Changes or Events. Since June 30, 1999 and
except as set forth in or permitted by this Agreement and the Exhibits hereto,
there has not been, with respect to VISV:
(a) Any change in the business, operations, method of management or
accounting, or financial condition or the manner of conducting the business of
VISV other than changes in the ordinary course of business, none of which has
had a material adverse effect on such business, operations or financial
condition, taken as a whole, or changes resulting from compliance with this
Agreement;
(b) Any damage, destruction or loss (whether or not covered by
insurance) materially and adversely affecting the assets, business, operations
or condition of VISV;
(c) Any declaration, setting aside or payment of any dividend or
other distribution in respect of the shares of VISV of any class, or any
direct or indirect redemption, purchase or other acquisition of any shares of
any class of VISV;
(d) Any material increase in the direct or indirect compensation or
other benefits payable or to become payable by VISV to any of its officers,
directors, employees or agents over the respective rates and amounts set forth
the in the VISV Financial Statements;
(e) Any sale, lease, abandonment or other disposition by VISV of any
real property otherwise than in the ordinary course of business, or any sale,
assignment, transfer, license or other disposition by VISV of any tangible or
intangible asset;
(f) Any grant of any option, warrant or right to purchase, or other
right to acquire shares of any class of VISV granted to any person;
(g) Any employment, bonus or deferred compensation agreement entered
into between VISV and any of its directors, officers or other employees or
consultants;
(h) Any issuance of shares of VISV beyond the shares then issued and
outstanding, with the exception of the exercise of the options to acquire an
additional 105,000 shares at $0.25 per share;
(i) Any indebtedness incurred by VISV for borrowed money not now
repaid, or any commitment to borrow money entered into by VISV;
(j) Any amendment of the Article of Incorporation or By-Laws of VISV;
(k) Any material obligation or liability, absolute or contingent, paid
except current liabilities reflected in or shown on the most recent balance
sheet included in the VISV Financial Statements and current liabilities
incurred since that date in the ordinary course of business or in connection
with this transaction;
(l) Any sale or transfer, or any agreement, arrangement or option for
the sale or transfer, of any of its assets, property or rights having an
aggregate value of $10,000 or more (other than in the ordinary course of
business); or
(m) Any other material transaction.
Notwithstanding the foregoing, any or all of the foregoing changes or events
shall be permitted upon the written consent of WIDEBAND by action or its Board
of Directors, evidenced by the delivery by WIDEBAND to VISV of a certified
copy of resolutions of such Board specifying the change or event consented to
by WIDEBAND.
5.21. Books and Records. From the date of this Plan to the Closing,
VISV will (1) give to WIDEBAND and its Shareholders, or their respective
representatives, full access during normal business hours to all of its
offices, books, records, contracts and other corporate documents and
properties so that WIDEBAND and its Shareholders, or their respective
representatives, may inspect and audit them; and (2) furnish such information
concerning the properties and affairs of VISV as WIDEBAND and its
Shareholders, or their respective representatives may reasonably request.
ARTICLE 6
Representations and Warranties of WIDEBAND
WIDEBAND hereby warrants and represents to VISV as follows:
6.01. Organization, Standing, Qualification, etc. WIDEBAND is a
Missouri corporation engaged in the development, manufacture and marketing of
high performance computer networking products. It was duly organized in
September 1994 as Jacomo Corporation and, on September 1, 1995, Articles of
Amendment were filed with the State of Missouri changing its name to "Wideband
Corporation." WIDEBAND is validly existing and in good standing under the
laws of the State of Missouri and has all requisite corporate power necessary
to engage in the business it is currently engaged in. It is duly authorized,
qualified, franchised and licensed under all applicable laws, regulations,
ordinances and orders of public authorities to own its properties and assets
and to carry on its business as it is presently being conducted. WIDEBAND is
qualified to do business in all states where the nature of WIDEBAND's business
and the ownership of its properties require it to become qualified as a
foreign corporation.
6.02. Capitalization. The authorized capital stock of WIDEBAND
consists of 50,000,000 shares of common stock, having a par value of $0.001,
of which no more than 12,801,819 shares will be issued and outstanding as of
the Effective Date of the Merger. (This figure does not account for, or
include, the potential exercise of certain outstanding options to acquire
100,000 additional WIDEBAND shares at $5.00 per share. See also Article
3.01(b) above.) All outstanding shares of WIDEBAND are duly authorized, fully
paid, validly issued and non-assessable in accordance with applicable law. No
dividends or other distribution of the assets of WIDEBAND have been declared
or paid in the capital stock of WIDEBAND. Except as set forth in Exhibit 6.02
attached hereto, there are no outstanding warrants, options, preemptive rights
or rights to subscribe for or purchase any shares of WIDEBAND's capital stock
or any outstanding securities that are convertible into WIDEBAND's capital
stock.
6.03. Articles of Incorporation and By-Laws. The complete Articles
of Incorporation and the By-Laws of WIDEBAND as will be in effect on the
Closing Date, are attached hereto as Exhibit 6.03.
6.04. Financial Statements and Assets.
(a) As of August 6, 1999, WIDEBAND had received $2,598,000 in paid in
capital and an additional $441,090 in the form of hard assets conveyed to the
company in exchange for stock. If and when its outstanding stock options of
100,000 shares exercisable at $5.00 per share are in fact exercised, it shall
receive an additional $500,000 in paid in capital. It has no debt. As of the
date of this Agreement, WIDEBAND has a total of 12,801,819 common capital
shares issued and outstanding and the outstanding stock options to acquire
100,000 additional shares at $5.00 per share. While its shareholders
authorized the issuance of a convertible preferred shares in September 1996,
no such shares have been issued and WIDEBAND's Articles of Incorporation have
never been amended to take account of the same. WIDEBAND has an Exclusive
Licensing Agreement with Roger E. Billings dba Billings Intellectual Property
relative to various patents and patent applications, an agreement which
replaces and supercedes, in all particulars, a Master License Agreement dated
October 24, 1994 by and between Dr. Billings dba Billings Intellectual
Properties and WIDEBAND's predecessor, Jamoco Corporation. The agreement
also authorizes the corporation to use the "WideBand" trademark. The
agreement gives Dr. Billings a one-and one-half percent (1 1/2%) royalty with
respect to the licensing, marketing and sale of such products and inventions.
Currently, there are five (5) U.S. patents that have issued. An additional
two (2) U.S. patents are pending and expected to issue in the near future.
Numerous international patents on the WideBand technology are also pending.
The parties acknowledge that in a certified audit of WIDEBAND under GAAP and
GAAS, the value of WIDEBAND's patents, trademarks and copyrights (i.e., its
Exclusive Licensing Agreement) may be given nominal value. To preserve the
integrity of WIDEBAND's properties and assets, certain significant employees
have executed non-disclosure and non-compete agreements. See Article 10.06
below.
Attached hereto as Exhibit 6.04 are the unaudited balance sheet and
income statement of WIDEBAND as of its most recent quarter preceding the
Closing, prepared by the accounting firm which will undertake and prepare its
post-Closing, audited financial statements (collectively referred to as the
"WIDEBAND Financial Statements"). If other supplementary accounting
information, in addition to that identified in the previous sentence, is
necessary for Closing, WIDEBAND shall prepare such. WIDEBAND is informed and
believes that within 75 days of Closing the transaction, it must file, as part
of an 8-K Current Report to be filed within 15 days of Closing, an audited
balance sheet for its most recent fiscal year end, audited income statements
for its most recent two fiscal year ends and other standard inclusions such as
a statement of stockholders' equity and statement of cash flows. WIDEBAND is
on track with its auditors in preparing such audited financial statements.
All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved. As of the date of any of such balance sheets, except as and
to the extent reflected or reserved against therein, WIDEBAND did not have any
liabilities or obligations (absolute or contingent) which should be reflected
in a balance sheet or the notes hereto prepared in accordance with generally
accepted accounting principles, and all assets reflected therein are properly
reported and present fairly the value of the assets of WIDEBAND in accordance
with generally accepted accounting principles. Such statements of operations
present fairly the results of operations of WIDEBAND for the periods
indicated. Such statements of changes in financial position present fairly
the information that should be presented therein in accordance with generally
accepted accounting principles.
6.05. Authorization. The Board of Directors of WIDEBAND has approved
this Agreement and the transactions contemplated hereby, has authorized the
execution and delivery of this Agreement by WIDEBAND, and has authorized the
submission of this Agreement and the transaction contemplated hereby to the
WIDEBAND shareholders for their consideration with the recommendation that it
be approved. WIDEBAND has full power, authority and legal right to enter
into this Agreement and to consummate the transactions contemplated hereby and
this Agreement constitutes a legal, valid and binding obligation of WIDEBAND
enforceable in accordance with its terms.
6.06. Litigation. There is no action, suit, proceeding or
investigation pending, at law or in equity, or to the knowledge of WIDEBAND's
management, threatened, against or affecting WIDEBAND before or in any court,
either state or federal, public board, or body which calls into question the
creation, organization or existence of WIDEBAND, the validity of this
Agreement or the authority of WIDEBAND to execute, deliver and carry out the
terms of the Agreement or which judgment, order or finding can reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise) of WIDEBAND. WIDEBAND has no knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or instrumentality.
6.07. Subsidiaries. WIDEBAND does not own, directly or indirectly,
any interest or investment, whether equity or debt, in any corporation,
business, trust or other entity.
6.08. Compliance with Law and Other Instruments. Except as set forth
in Exhibit 6.08, WIDEBAND is not in violation or default of any term of its
Articles of Incorporation or By-Laws, or of any agreement, contract,
commitment, instrument, indenture, judgment, decree or order, applicable to it
and has timely filed all reports and any other documents required by it to be
filed with any governmental agency. The execution, delivery and performance
of this Agreement and the taking of action contemplated hereby will not result
in any violation of or be in conflict with or constitute a default under (a)
the Articles of Incorporation or By-Laws of WIDEBAND, or (b) any material
agreement or instrument to which WIDEBAND or any consolidated subsidiary is a
party or by which it is bound, or (c) any material judgment, decree or order
to which WIDEBAND is subject, or result in the creation of any material lien,
charge or encumbrance on any of the properties of WIDEBAND.
6.09. Contracts and Commitments. WIDEBAND is not a party to any
contract, agreement, other commitment or instrument or subject to any charter
or other corporate restriction or any judgment, order, writ, injunction,
decree or award which materially and adversely affects, or in the future may
(as far as WIDEBAND can now foresee), materially and adversely affect, the
business, operations, properties, assets or condition of WIDEBAND.
6.10 Liabilities. Except as set forth in the WIDEBAND Financial
Statements or in any exhibit, WIDEBAND, to the best of its knowledge, after
due inquiry, has no debt, obligation or liability of any nature, whether
accrued, absolute, contingent or otherwise, whether due or to become due to
any person or entity, including any of its officers, directors, or
shareholders, in excess of $1,000.
6.11 Title to Properties and Related Matters. WIDEBAND has good and
marketable title to all of its properties, interests in properties and assets,
real and personal, which are reflected in the latest balance sheet included in
the WIDEBAND Financial Statements or acquired after that date (except
properties, interests in properties and assets sold or otherwise disposed of
since such date in the ordinary course of business), free and clear of all
mortgages, liens, pledges, charges or encumbrances except: (i) statutory liens
or claims not yet delinquent, (ii) such imperfections of title and easements
as do not and will not materially detract from or interfere with the present
or proposed use of the properties subject thereto or affected thereby, or
otherwise materially impair present business operations of such properties; or
(iii) as described in the WIDEBAND Financial Statements.
6.12 Directors and Officers. The Board of Directors and principal
officers of WIDEBAND, as of the date hereof, are those persons identified in
Exhibit 6.12 hereto.
6.13. Tax Returns. Within the times and in the manner prescribed by
law, WIDEBAND has filed all federal, state and local tax returns required by
law and has paid all taxes, assessments and penalties due and payable. All
taxes and governmental charges levied or assessed against the property or the
business of WIDEBAND have been paid, other than taxes or charges the payment
of which is not yet due or which, if due, is not yet delinquent or is being
contested in good faith or has not been finally determined.
6.14. Brokers. Neither WIDEBAND nor any officer or director of
WIDEBAND has employed any broker, finder or agent or has agreed to pay or has
otherwise incurred any brokerage fee, finder's fee or commission with respect
to the transactions contemplated by this Agreement. WIDEBAND agrees to
indemnify and hold VISV and its officers and directors harmless from and
against any fee, loss or expense arising out of claims by brokers or finders
employed or alleged to have been employed by it.
6.15 Shareholder List. Attached hereto as Exhibit 6.15 is an
alphabetical list of all of the shareholders of WIDEBAND and the number of
shares of WIDEBAND Common Stock owned by each of them.
6.16 Compliance with Laws and Regulations. WIDEBAND has complied
with all applicable statutes and regulations of any federal, state or other
applicable jurisdiction or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets or condition of WIDEBAND or except to the
extent that noncompliance would not result in the incurrence of any material
liability.
6.17 Material Contract Defaults. Neither WIDEBAND nor any other
party is in default in any material respect under the terms of any outstanding
contract, agreement, lease or other commitment which is material to the
business, operations, properties or assets or the condition of WIDEBAND and
there is no event of default or event which, with notice of lapse of time or
both, would constitute a default in any material respect under any such
contract, agreement, lease or other commitment in respect of which it has not
taken adequate steps to prevent such a default from occurring.
6.18 Absence of Certain Changes or Events. Since June 30, 1999, and
except in connection with or as set forth in or permitted by this Agreement
and the Exhibits hereto, there has not been, with respect to WIDEBAND:
Any change in the business, operations, method of management or account, or
financial condition or the manner of conducting the business of WIDEBAND other
than changes in the ordinary course of business, none of which has had a
material adverse effect on such business, operations or financial condition,
taken as a whole;
Any damage, destruction or loss (whether or not covered by insurance)
materially and adversely affecting the assets, business, operations or
condition of WIDEBAND;
Any declaration, setting aside or payment of any dividend or other
distribution in respect of the shares of WIDEBAND of any class, or any direct
or indirect redemption, purchase or other acquisition of any shares of any
class of WIDEBAND by WIDEBAND;
Any material increase in the direct or indirect compensation or other benefits
payable or to become payable by WIDEBAND to any of its officers, directors,
employees or agents over the respective rates and amounts set forth in the
WIDEBAND Financial Statements;
Any sale, lease, abandonment or other disposition by WIDEBAND of any real
property otherwise than in the ordinary course of business, or any sale,
assignment, transfer, license or other disposition of WIDEBAND of any tangible
or intangible asset;
Any material obligation or liability, absolute or contingent, paid or incurred
except current liabilities in the ordinary course of business and costs
incurred in connection with this transaction;
Any material obligation or liability, absolute or contingent, paid except
current liabilities reflected in or shown on the most recent balance sheet
included in the WIDEBAND Financial Statements, and current liabilities
incurred since that date in the ordinary course of business or in connection
with this transaction; or
Any sale or transfer, or any agreement arrangement or option for the sale or
transfer, of any of its assets, property or rights having an aggregate value
of $10,000 or more (other than in the ordinary course of business).
Notwithstanding the foregoing, any or all of the foregoing changes or events
shall be permitted upon the written consent of VISV by Action or its Board of
Directors, evidenced by the delivery by VISV to WIDEBAND of a certified copy
of resolutions of such Board specifying the change or even consented to by
VISV.
6.19. Books and Records. From the date of this Plan to the Closing,
WIDEBAND will (1) give to VISV full access during normal business hours to all
of its offices, books, records, contracts and other corporate documents and
properties so that VISV may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of WIDEBAND as VISV may
reasonably request.
Article 7
Covenants of WIDEBAND Prior to Effective Date of Merger
Between the date hereof and the Effective Date of the Merger:
7.01. Stockholders' Meeting. The Board of Directors of WIDEBAND will
submit this Agreement to its stockholders for their approval, and will
recommend such approval, at a meeting thereof to be duly called and held at
the earliest practicable date as may be agreed upon in writing by VISV and
WIDEBAND.
7.02. Access. WIDEBAND will afford to the officers and other
authorized representatives of VISV, access to the plants, properties, books
and records of WIDEBAND and will furnish VISV with such additional financial
and operating data and other information as to the business and properties of
WIDEBAND, as may be necessary for VISV to evaluate thoroughly, prior to the
Effective Date of the Merger, the business, assets, operations and financial
condition of WIDEBAND, as VISV may from time to time reasonably request. If,
for any reason, the merger contemplated by the agreement is not consummated,
VISV will use its best efforts to cause all confidential information obtained
by it from WIDEBAND to be treated as such, will also use its best efforts not
to use such information in a manner detrimental to WIDEBAND and will promptly
return to WIDEBAND all documents, papers, books, records and other materials
(and all copies thereof) obtained from WIDEBAND in the course of its
investigation and evaluation of WIDEBAND.
7.03. Representations. WIDEBAND will take all action necessary to
render accurate, as of the Effective Date of the Merger, WIDEBAND's
representations and warranties contained herein, and it will refrain from
taking any action that would render any such representation or warranty
inaccurate as of such time. WIDEBAND will use its best efforts to perform or
cause to be satisfied each covenant or condition to be performed or satisfied
by it.
7.04. Preservation of Business. WIDEBAND will carry on its business
in substantially the same manner as it has heretofore and shall perform in all
material respects all of its obligations under material contracts, leases and
documents relating to or affecting its assets, property and business and will
use its best efforts to preserve intact its business organization and its good
will with its suppliers, customers and other having business relations with
it.
7.05. Approvals. WIDEBAND will use its best efforts to obtain all
licenses or other approvals required to be obtained by it from any appropriate
governmental or regulatory body or other person in connection with the
carrying out of the transactions contemplated by this Agreement and the
continued operation of its business after the merger.
7.06. Notice of Breach. WIDEBAND will immediately give notice to
VISV of the occurrence of any event or the failure of any event to occur that
results in a breach of any of WIDEBAND's representations or warranties or a
failure by WIDEBAND to comply with any covenant, condition or agreement
contained herein.
7.07. Negotiations with Third Parties. WIDEBAND will not, without
the prior approval of VISV, initiate or encourage discussions or negotiations
with third parties relating to or otherwise approve (or approve without prior
discussions with VISV any unsolicited offer regarding) any merger, sale, or
other disposition of any substantial part of WIDEBAND's assets or stock.
7.08. Information To Be Supplied. WIDEBAND will furnish VISV with
all information concerning WIDEBAND, its officers, directors and shareholders
that is reasonably required for inclusion in the proxy statement or
information statement materials to be used by VISV to obtain the approval of
WIDEBAND's and VISV's shareholders to this Plan and Agreement (the "Proxy
Materials").
7.09. Proxy or Information Statement. As of the date of mailing of
the Proxy or Information Statement and as of the date of WIDEBAND's
Stockholders Meeting referred to in Article 7.01, the information provided and
to be provided by WIDEBAND to VISV for use in the Proxy Materials and in any
other proxy material to be used by WIDEBAND or VISV in connection with the
merger will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
ARTICLE 8
Covenants of VISV Prior to the Effective Date of Merger
Between the date hereof and the Effective Date of the Merger:
8.01. Stockholders' Meeting. While it is anticipated that a majority
of the Shareholders of VISV will approve this Agreement by consent, the Board
of Directors of VISV will nonetheless submit this Agreement to its
stockholders for their approval and will conduct a Shareholders Meeting in
Salt Lake City, Utah, to be duly called and held at the earliest practicable
date as may be agreed upon in writing by VISV and WIDEBAND. At that meeting,
the Board of Directors of VISV will also nominate the persons listed in
Exhibit 2.02 to be elected to the Board of Directors of VISV and will
recommend their election to the VISV shareholders.
8.02. Access. VISV will afford to the officers and other authorized
representatives of WIDEBAND, access to the plants, properties, books and
records of VISV and will furnish WIDEBAND with such additional financial and
operating data and other information as to the business and properties of
VISV, as may be necessary for WIDEBAND to evaluate thoroughly, prior to the
Effective Date of the Merger, the business, assets, operations and financial
condition of VISV, as WIDEBAND may from time to time reasonably request. If,
for any reason, the merger contemplated by the Agreement is not consummated,
WIDEBAND will use its best efforts to cause all confidential information
obtained by it from VISV to be treated as such, will also use its best efforts
not to use such information in a manner detrimental to VISV and will promptly
return to VISV all documents, papers, books, records and other materials (and
all copies thereof) obtained from VISV in the course of its investigation and
evaluation of VISV.
8.03. Representations. VISV will take all action necessary to render
accurate, as of the Effective Date of the Merger, VISV's representations and
warranties contained herein, and it will refrain from taking any action that
would render any such representation or warranty inaccurate as of such time.
VISV will use its best efforts to perform or cause to be satisfied each
covenant or condition to be performed or satisfied by it.
8.04. Preservation of Business. VISV will carry on its business in
substantially the same manner of it has heretofore and shall perform in all
material respects all of its obligations under material contracts, leases and
documents relating to or affecting its assets, property and business and will
use its best efforts to preserve intact its business organization and its good
will with its suppliers, customers and other having business relations with
it. In this regard and while it cannot predict the market fluctuations of its
existing securities, it is anticipated that VISV will have as much as $350,000
in cash, liquid assets upon Closing, the large majority of which is in the
nature of marketable securities, some of which are "unpriced," meaning that
there is not an active, trading market for such particular securities, and no
unpaid liabilities other than the legal, accounting and travel costs and
expenses incident to Closing the Transaction, an amount which is not expected
to exceed $15,000. In the event that it becomes necessary or advisable to
sell or otherwise dispose of any security in VISV's Herzog, Heine & Geduld
brokerage account, VISV agrees to consult with WIDEBAND and/or Mr. Donald N.
Fenn prior to selling or disposing of the same.
8.05. Approvals. VISV will use its best efforts to obtain all
licenses or other approvals required to be obtained by it from any appropriate
governmental or regulatory body or other person in connection with the
carrying out of the transactions contemplated by this Agreement.
8.06. Public Announcements. VISV will not, without the prior consent
of WIDEBAND (or, in the case of an announcement required by applicable
securities law, without prior consultation with WIDEBAND) make any
announcement to the public concerning the transactions contemplated by this
Agreement. In this regard, WIDEBAND has already agreed that VISV may file an
8-K Current Report with the Commission 15 days after August 9, 1999, attaching
copies of the Memorandum of Intent and Press Release of same date.
8.07. Notice of Breach. VISV will immediately give notice to WIDEBAND
of the occurrence of any event or the failure of any event to occur that
results in a breach of any representation or warranty by VISV or a failure by
VISV to comply with any covenant, condition or agreement contained herein.
8.08. Negotiations with Third Parties. VISV will not, without the
prior approval of WIDEBAND, initiate or encourage discussions or negotiations
with third parties relating to or otherwise approve (or approve without prior
discussions with WIDEBAND any unsolicited offer regarding) any merger, sale,
or other disposition of any substantial part of VISV's assets or stock.
8.09. Required Information. VISV will furnish WIDEBAND with all
information concerning VISV that is reasonably required for inclusion in the
proxy or other disclosure materials used by WIDEBAND to obtain approval of
this Plan and Agreement from its Shareholders.
8.10. Proxy or Information Statement. As of the date of the mailing
of the Proxy Materials and as of the date of the VISV stockholders meeting to
be held pursuant to Article 8.01, the information provided and to provided by
VISV to WIDEBAND for use in VISV's Information Statement and in any other
proxy soliciting material to be used by WIDEBAND or VISV in connection with
the merger, will not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made
therein in light of the circumstances under which they were made, not
misleading.
ARTICLE 9
Conditions to Obligations of VISV and WIDEBAND
The obligations of VISV and WIDEBAND to effect the merger hereunder are,
at their respective elections, subject to the satisfaction or waiver of the
following condition:
9.01. Stockholder Approval. On or before the Closing, VISV's and
WIDEBAND's stockholders shall have approved this Agreement.
ARTICLE 10
Further Conditions to Obligations of VISV
The obligation of VISV to effect the merger hereunder is, at is option,
subject to the satisfaction or waiver of the following further conditions:
10.01. Representation Letter. All of the representations and
warranties of WIDEBAND contained in this Agreement shall be true as of the
Effective Date of the Merger as though such representations and warranties
were then made in exactly the same language, and WIDEBAND shall have performed
all obligations and complied with all covenants required by this Agreement to
be performed or complied with by it prior to the Effective Date of the Merger.
At the Closing, VISV shall have received a certificate, dated the Closing,
executed by the President and by the Secretary of WIDEBAND, certifying in such
detail as VISV may reasonably request as to the accuracy of such
representations and warranties and the fulfillment of such obligations and
compliance with such covenants as of the Closing.
10.02. Investment and Acknowledgment Letters. Prior to his or her
receipt of the certificate for shares of VISV common stock to be issued to him
or her, each shareholder of WIDEBAND shall have executed and delivered to VISV
an investment letter in the form attached hereto as Exhibit 10.02 wherein each
such shareholder acknowledges that the shares of VISV Common Stock to be
issued to, and received by, him or her after the Effective Date of the Merger
are being issued pursuant to an exemption from registration under the
Securities Act of 1933, as amended, and applicable state securities laws and
may therefore not be subsequently sold or transferred unless and until that
shareholder registers the same or such proposed sale or transfer is exempt
from registration. Each WIDEBAND shareholder shall also represent and
acknowledge in such investment letter that the shares of VISV acquired
pursuant to this Agreement are acquired for investment purposes only and
without a view to the further distribution thereof and that a standard
restrictive legend to such effect shall be imprinted on the VISV stock
certificate he or she receives. As set forth in Exhibit 10.02, each WIDEBAND
shareholder shall further acknowledge and list that which he or she has relied
upon in deciding whether to accept the terms of this proposed Merger and each
shall additionally warrant and represent, inter alia, that he or she has had
the opportunity to consult with counsel about this transaction and otherwise
had the opportunity to ask VISV's accountants and VISV management any
questions about the transaction that he or she might have had. See again
Exhibit 10.02.
10.03. Litigation. No action shall have been instituted by any
governmental agency challenging the legality of the merger or seeking to
prevent or delay consummation of the transactions contemplated by this
Agreement which shall have resulted in preliminary or permanent injunctive
relief prohibiting consummation of the merger.
10.04. Opinion of Counsel to WIDEBAND. VISV shall receive an opinion
dated the Closing Date of Steven L. Taylor, Esq., counsel to WIDEBAND,
satisfactory to VISV, to the effect that:
WIDEBAND is a corporation validly existing and in good standing under the
laws of the State of Missouri and has all the requisite corporate power to
own, lease and operate its assets and carry on its business as now being
conducted in any jurisdiction in which it is now conducting business;
The execution and delivery by WIDEBAND of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in the breach of any provision of WIDEBAND's Articles of Incorporation
or By-Laws or constitute default or give rise to right of termination,
cancellation or acceleration under any of the terms, conditions or provisions
of any known mortgage, indenture, license agreement or obligation or violate
any court order, writ, injunction or decree applicable to WIDEBAND or any of
its properties or assets of which such counsel has knowledge after making
inquiry of the principal executive officers with respect thereto;
Based solely on a review of the Articles of Incorporation, By-Laws,
corporate minutes and stock record books of WIDEBAND, (i) the authorized
capital stock of WIDEBAND is as set forth in Article 6.01, and the shares of
WIDEBAND stock referred to in Article 6.01 constitute all of the issued and
outstanding shares of capital stock of WIDEBAND; (ii) the outstanding shares
of WIDEBAND capital stock are validly issued, fully paid and non-assessable
and are not subject to any pre-emptive rights of any shareholder of WIDEBAND;
and (iii) except as set forth in Exhibit 6.02, there are no outstanding
subscriptions, options, rights, warrants, convertible securities, or other
agreements or commitments known to such counsel obligating WIDEBAND to issue
or transfer from treasury any additional shares of its capital stock of any
class;
This Agreement has been duly and validly authorized, executed and
delivered and constitutes the legal and binding obligation of WIDEBAND except
as limited by bankruptcy and insolvency laws and by other laws affecting the
rights of creditors generally;
Such counsel does not know of any suit, action, arbitration, or legal,
administrative or other proceeding or governmental investigation pending or
threatened against or affecting WIDEBAND or its business or properties or
financial or other condition; and
WIDEBAND's issuance of its securities to its existing shareholders is not
in violation of any state or federal securities laws and that appropriate
exemptions from registration were available for all offers and sales of
existing WIDEBAND securities.
10.05. Receipt of Release or Waiver from International Academy of
Science (IAS). VISV shall have received a release or waiver, in a form to be
agreed upon by counsel, whereby IAS, an entity which shares office space with
WIDEBAND in Blue Springs, Missouri, shall forever relinquish any claim of any
right, title or interest in or to the technology, patents and other properties
of WIDEBAND, directly or indirectly. Such document shall be attached hereto
as Exhibit 10.05.
10.06. Receipt of Non-Disclosure, Non-Compete Agreements. VISV shall
have received agreements signed by the principal employees of WIDEBAND,
including all officers and directors other than Dr. Roger E. Billings, in
which such persons agree not to divulge any trade secrets or technology of
WIDEBAND and in which they further agree, for a reasonable period of time, not
to be employed by or for a WIDEBAND competitor. The purpose of this
requirement is to ensure the integrity, and otherwise safeguard the assets of,
and technology licensed to, WIDEBAND, particularly when, as a result of this
Agreement, WIDEBAND shall be a publicly held entity.
ARTICLE 11
Further Conditions to Obligations of WIDEBAND
The obligation of WIDEBAND to effect the merger hereunder is, at its
option, subject to the satisfaction or waiver of the following further
conditions:
11.01. Representation Letter. All of the representations and
warranties of VISV contained in this Agreement shall be true as of the
Effective Date of the Merger as though such representations and warranties
were then made in exactly the same language, and VISV shall have performed all
obligations and complied with all covenants required by this Agreement to be
performed or complied with by it prior to the Effective Date of the Merger.
At the Closing, WIDEBAND shall have received a certificate, dated the Closing,
executed by the President and the Secretary or Vice-President of VISV,
certifying as to the accuracy of such representations and warranties and the
fulfillment of such obligations and compliance with such covenants as of the
Closing.
11.02. Litigation. No action shall have been instituted by any
governmental agency challenging the legality of the merger or seeking to
prevent or delay consummation of the transactions contemplated by this
Agreement which shall have resulted in preliminary or permanent injunctive
relief prohibiting consummation of the merger.
11.03. Opinion of Counsel to VISV. WIDEBAND shall receive an opinion
dated the Closing Date of John Michael Coombs, counsel to VISV, in form
satisfactory to WIDEBAND, to the effect that:
VISV is a corporation validly existing and in good standing under the
laws of the State of Nevada and has all the requisite corporate power to own,
lease and operate its assets and carry on its business as now being conducted
in any jurisdiction in which it is now conducting business;
The shares of VISV Common Stock to be issued to the shareholders of
WIDEBAND are duly authorized and will be, upon the effectiveness of the
merger, legally issued, fully paid and non-assessable;
The execution and delivery by VISV of this Agreement and the consummation
of the transactions contemplated hereby will not conflict with or result in
the breach of any provision of VISV's Articles of Incorporation or By-Laws or
constitute default or give rise to right of termination, cancellation or
acceleration under any of the terms, conditions or provisions of any known
mortgage, indenture, license agreement or obligation or violate any court
order, writ, injunction or decree applicable to VISV or any of its properties
or assets of which such counsel has knowledge after making inquiry of the
principal executive officers with respect thereto;
Based solely on a review of the Articles of Incorporation, By-Laws,
corporate minutes and stock record books of VISV, (i) the authorized capital
stock of VISV is as set forth in Article 5.02, and the shares of VISV Common
Stock referred to in Article 5.02 constitute all of the issued and outstanding
shares of capital stock of VISV; (ii) the outstanding shares of VISV Common
Stock are validly issued, fully paid and non-assessable and are not subject to
any pre-emptive rights, warrants, convertible securities, or other agreement
or commitments known to such counsel obligating VISV to issue or transfer from
treasury any additional shares of its capital stock of any class;
This Agreement has been duly and validly authorized, executed and
delivered and constitutes the legal and binding obligation of VISV except as
limited by bankruptcy and insolvency laws and by other laws affecting the
rights of creditors generally;
Such counsel does not know of any suit, action, arbitration, or legal,
administrative or other proceeding or governmental investigation pending or
threatened against or affecting VISV or its business or properties or
financial or other condition; and
The issuance of the VISV shares to be issued to the Shareholders of
WIDEBAND as provided for herein shall be exempt from state and federal
securities registration. In this regard, WIDEBAND agrees to cooperate and
assist counsel in submitting and receiving back the necessary purchaser
suitability questionnaires and other offeree materials necessary to establish
that VISV shall have an exemption from state and federal registration for the
issuance of the shares subject of this Agreement. In the event that Rule
506 of Regulation D of the General Rules and Regulations of the Commission is
not an available exemption for VISV's issuance of its shares to the
Shareholders of WIDEBAND upon Closing, WIDEBAND agrees to further cooperate in
providing counsel with the necessary factual and other information concerning
WIDEBAND's shareholders and their relationship to it, its principals and each
other as necessary to enable counsel to issue a closing opinion that the
issuance of the VISV shares to the Shareholders of WIDEBAND, as provided for
in this Plan and Agreement, is a "transaction not involving any public
offering" under Section 4(2) of the Securities Act of 1933 ("the '33 Act") and
the Blue Sky Laws of the various states in which certain WIDEBAND Shareholders
reside.
ARTICLE 12
Termination: Abandonment of Merger
12.01. Termination. This Agreement may be terminated and the merger
abandoned at any time prior to the Effective Date of the Merger, whether
before or after submission to or approval by the stockholders of VISV: (a) by
mutual agreement of the Boards of Directors of VISV and WIDEBAND; or (b) by
the Board of Directors of either WIDEBAND or VISV if the Closing shall not
have taken place on or prior to October 31, 1999, other than by reason of
default by the terminating party.
12.02. Liability. In the event of termination of this agreement, and
abandonment of the merger by either VISV or WIDEBAND as provided in this
Agreement, this Agreement shall forthwith become wholly void and of no effect
and (except for liability of a party where default by such party has
occasioned the termination of this Agreement and abandonment of the merger by
the non-defaulting party) there shall be no liability on the part of either
VISV or WIDEBAND or their respective officers, directors or stockholders
(except as set forth in the last sentence of Articles 7.02 and 8.02).
ARTICLE 13
Miscellaneous
13.01. Notices. Any notice, request, instruction or other document
to be given under this Agreement after the date hereof by any party hereto to
any other shall be in writing and shall be delivered personally or sent by
registered or certified mail, postage prepaid, if to VISV, addressed to it at:
124 South 600 East, Suite 100, Salt Lake City, Utah 84102 Attention: J.
Michael Coombs, Esq., and if to WIDEBAND, addressed to it at 401 Grand,
Gallatin, MO 64640 Attention: Dr. Roger E. Billings and Mr. Donald F. Fenn,
with a copy or copies to Steven L. Taylor, Esq., 124 South 600 East, Suite
200, Salt Lake City, Utah 84102.
13.02. Waivers. Each party may, by written instrument, extend the
time for the performance of any of the obligations or other acts of any party
hereto, and (a) waive any inaccuracies of such other party in the
representations and warranties contained herein or in any document delivered
pursuant to this Agreement, (b) waive compliance with any of the covenants of
such other party contained in this Agreement, (c) waive such other party's
performance of any of the obligations set out in this Agreement and (d) waive
any condition to its obligation to effect the merger. Any agreement on the
part of any party hereto for any such extension or waiver shall be validly and
sufficiently authorized for the purposes of this Agreement if it is authorized
and executed as to VISV, by its President, and as to WIDEBAND, by its
President.
13.03. Amendments. This Agreement may be amended at any time prior
to the Effective Date of the Merger, whether before or after the meeting of
stockholders of VISV, by a written instrument executed by VISV and WIDEBAND
with the approval of their respective Boards of Directors, provided that no
amendment shall change the exchange ratios set forth in Articles 3.01 without
the approval of the stockholders of both WIDEBAND and VISV.
13.04. Governing Law and Time. This Agreement shall be governed by
and construed in accordance with the laws of the State of Missouri and Nevada
and any conflict in such laws shall be resolved according to conflicts of law
principles. Time shall be of the essence of this Agreement.
13.05. Parties. This Agreement shall inure to the benefit of and be
binding upon VISV and WIDEBAND and their respective successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties to
this Agreement and their respective successors, and any person who controls
VISV or WIDEBAND within the meaning of Section 15 of the Securities Act of
1933, and the heirs and legal representatives of each of them, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained in this Agreement. This Agreement and all conditions and
provisions of this Agreement are intended to be for the sole and exclusive
benefit of the parties to this Agreement and their respective successors,
heirs and legal representatives and such controlling persons and officers
and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation.
13.06. Complete Agreement Severability. This Agreement contains
the entire understanding between the parties and supersedes any and all prior
agreements between the parties. If any provision of this Agreement is found
to be void by any court of competent jurisdiction, the remaining provisions
shall remain in full force and effect.
13.07. Multiple Copies. This Agreement may be executed in multiple
copies, each of which shall constitute an original, but all of which shall
constitute one and the same agreement.
IN WITNESS WHEREOF, VISV and WIDEBAND have caused this Agreement and
Plan of Merger to be executed as of the date first above written.
VIS VIVA CORPORATION
By: /s/ John Michael Coombs
------------------------
John Michael Coombs, President
WIDEBAND CORPORATION
By: /s/Roger E. Billings
---------------------
Dr. Roger E. Billings, President
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT TO THAT CERTAIN AGREEMENT AND PLAN OF MERGER dated and
made effective on the 6th day of September, 1999, by and between VIS VIVA
CORPORATION, a pubicly held Nevada corporation ("Vis Viva") and WIDEBAND
CORPORATION, a Missouri corporation ("WIDEBAND"), is dated and made effective
this 27th day of October, 1999.
WITNESSETH
WHEREAS, the transaction contemplated by the September 6, 1999, Agreement
and Plan of Merger cannot be closed by October 31, 1999, as set forth in
Article 12.01 thereof,
NOW THEREFORE, the undersigned representatives of VIS VIVA and WIDEBAND
hereby agree to amend Article 12.01 in the Agreement and Plan of Merger to
provide that the anticipated Closing Date shall occur on or before February
29, 2000, as opposed to October 31, 1999.
VIS VIVA and WIDEBAND hereby further acknowledge that the par value of
Vis Viva Corporation's common stock is $0.01, not $0.001 as mistakenly set
forth Article 3.01(a) in the Plan and Agreement of Merger and therefore, the
parties hereby agree to amend the Agreement in that regard as necessary to
correct such error.
VIS VIVA and WIDEBAND further agree that pursuant to the contemplated
Merger and Share Exchange, the Articles of Incorporation of VIS VIVA shall be
further amended to increase the authorized number of its common capital shares
from 15 million to 20 million shares. This matter shall also be submitted to
a vote of the shareholders of VIS VIVA and the September 6, 1999 Agreement and
Plan of Merger is hereby amended in all particulars to reflect such change.
IN WITNESS WHEREOF, VIS VIVA and WIDEBAND have caused this first
Amendment to the Agreement and Plan of Merger to be executed as of the date
first above written.
VIS VIVA CORPORATION
By:
Its: President
WIDEBAND CORPORATION
By:
Its: President and CEO
EXHIBIT "B"
VIS VIVA CORPORATION
(A Development Stage Company)
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AND
FINANCIAL STATEMENTS
As of June 30, 1999 and 1998, for the Years
Then Ended, and for the Cumulative
Period from September 11, 1980 (Date of Inception)
Through June 30, 1999
Hansen, Barnett & Maxwell
A Professional Corporation
Certified Public Accountants
VIS VIVA CORPORATION
TABLE OF CONTENTS
Page
Report of Independent Certified Public Accountants 1
Financial Statements
Balance Sheets - June 30, 1999 and 1998 2
Statements of Operations for the Years Ended June 30, 1999
and 1998, and Cumulative for the Period September 11, 1980
(Date of Inception) through June 30, 1999 3
Statements of Comprehensive Income (Loss) for the Years
Ended June 30, 1999 and 1998 and Cumulative for the
Period September 11, 1980 (Date of Inception) through
June 30, 1999 3
Statements of Stockholders' Equity for the Period from
September 11, 1980 (Date of Inception) through June 30,
1997 and for the Years Ended June 30, 1998 and 1999 4
Statements of Cash Flows for the Years Ended June 30,
1999 and 1998, and Cumulative for the Period September
11, 1980 (Date of Inception) through June 30,1999 5
Notes to the Financial Statements 6
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
Member of AICPA Division of Firms Fax (801) 532-7944
Member of SECPS 345 East Broadway, Suite 200
Member of Summit International Associates Salt Lake City, Utah 84111-2693
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
Vis Viva Corporation
We have audited the accompanying balance sheets of Vis Viva Corporation (a
development stage company) as of June 30, 1999 and 1998, and the related
statements of operations, comprehensive income (loss), stockholders' equity,
and cash flows for the years then ended, and cumulative for the period
September 11, 1980 (date of inception) through June 30, 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. The financial statements of Vis Viva Corporation from inception
through June 30, 1994 (not presented herein) were audited by other auditors
whose report, dated September 26, 1994, expressed an unqualified opinion on
those statements. Our opinion, in so far as it relates to the cumulative
amounts for the period from inception through June 30, 1994, is based solely
on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. 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 that our audits and the report of the
other auditors provides a reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Vis Viva Corporation as of June 30, 1999
and 1998, and the results of its operations and its cash flows for the years
then ended, and cumulative for the period September 11, 1980 (date of
inception) through June 30, 1999, in conformity with generally accepted
accounting principles.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
August 16, 1999
VIS VIVA CORPORATION
(A Development Stage Company)
BALANCE SHEETS
June 30,
1999 1998
ASSETS
Current Assets
Cash and cash equivalents $ -- $ 90,738
Investment in securities, net of
valuation allowance 418,999 355,409
Accrued interest receivable 36,740 23,029
Prepaid income taxes -- 5,577
Deferred tax asset 93,119 32,128
Total Current Assets 548,858 506,881
Total Assets $ 548,858 $ 506,881
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Brokerage loan payable $ 116,360 $ --
Income tax payable 2,173 --
Total Current Liabilities 118,533 --
Stockholders' Equity
Common Stock - $0.01 par value;
15,000,000 shares authorized;
1,270,000 shares issued
and outstanding 12,700 12,700
Additional paid-in capital 148,129 148,129
Unrealized loss on investment
in securities, net of taxes (180,760) (59,478)
Earnings accumulated during
the development stage 450,256 405,530
Total Stockholders' Equity 430,325 506,881
Total Liabilities and Stockholders' Equity $ 548,858 $ 506,881
VIS VIVA CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative
For the Period
September 11,
For the Years Ended 1980 (Inception)
June 30, Through
1999 1998 June 30, 1999
Income
Interest income $ 72,125 $ 64,426 $ 605,680
Gain from sale of investments 662 897 163,286
Other income 2,721 200 13,077
Total Income 75,508 65,523 782,043
Operating Expenses
Abandoned acquisition expenses - - 14,000
Bad debt - - 8,839
Travel and entertainment 2,469 1,678 19,649
Legal fees 5,432 17,019 58,807
Directors fees 1,000 1,500 27,275
Accounting and auditing 5,125 4,700 30,305
Consulting - 535 2,582
Filing fees and transfer costs - 85 2,838
Office expenses 125 424 4,168
Rent 1,319 1,819 6,523
Amortization - - 875
Designing costs - - 850
Miscellaneous 706 472 8,328
Total Operating Expenses 16,176 28,232 185,039
Interest Expense 6,393 10,372 41,069
Income Before Income Taxes 52,939 26,919 555,935
Provision for Income Taxes 8,213 1,616 105,679
Net Income $ 44,726 $ 25,303 $ 450,256
Basic Earnings Per Share $ 0.04 $ 0.02 $ 0.35
Diluted Earnings Per Share $ 0.03 $ 0.02 $ 0.32
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Cumulative
For the Period
September 11,
For the Years Ended 1980 (Inception)
June 30, Through
1999 1998 June 30, 1999
Net Income $ 44,726 $ 25,303 $ 450,256
Other Comprehensive Loss
Unrealized losses on
investment in securities (182,272) (76,291) (273,879)
Income tax benefit 60,990 26,922 93,119
Other Comprehensive Loss (121,282) (49,369) (180,760)
Comprehensive Income (Loss) $ (76,556) $ (24,066) $ 269,496
VIS VIVA CORPORATION
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
Additional
Common Stock Paid-In
Shares Amount Capital
Balance - September 11, 1980
(Date of Inception) - $ - $ -
Shares issued to incorporators for
cash, September 11, 1980,
$0.05 per share 420,000 4,200 16,800
Proceeds from public offering,
May 1981, for cash, net of
offering costs of $30,171,
$0.17 per share 1,000,000 10,000 159,829
Redemption and retirement of
stock for cash, December 1988,
$0.20 per share (150,000) (1,500) (28,500)
Change in unrealized loss on
investment in securities,
net of tax - - -
Net income for the period from
September 11, 1980 (date of
inception) through June 30, 1997 - - -
Balance - June 30, 1997 1,270,000 12,700 148,129
Change in unrealized loss on
investment in securities,
net of tax - - -
Net income for the year ended
June 30, 1998 - - -
Balance - June 30, 1998 1,270,000 12,700 148,129
Change in unrealized loss on
investment in securities,
net of tax - - -
Net income for the year ended
June 30, 1999 - - -
Balance - June 30, 1999 1,270,000 $ 12,700 $ 148,129
VIS VIVA CORPORATION
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(CONTINUED)
Earnings
Unrealized Accumulated
Loss on During the Total
Investment Development Stockholders'
In securities Stage Equity
Balance - September 11, 1980
(Date of Inception) $ - $ - $ -
Shares issued to incorporators for
cash, September 11, 1980,
$0.05 per share - - 21,000
Proceeds from public offering,
May 1981, for cash, net of
offering costs of $30,171,
$0.17 per share - - 169,829
Redemption and retirement of
stock for cash, December 1988,
$0.20 per share - - (30,000)
Change in unrealized loss on
investment in securities,
net of tax (10,109) - (10,109)
Net income for the period from
September 11, 1980 (date of
inception) through June 30, 1997 - 380,227 380,227
Balance - June 30, 1997 (10,109) 380,227 530,947
Change in unrealized loss on
investment in securities,
net of tax (49,369) - (49,369)
Net income for the year ended
June 30, 1998 - 25,303 25,303
Balance - June 30, 1998 (59,478) 405,503 506,881
Change in unrealized loss on
investment in securities,
net of tax (121,282) - (121,282)
Net income for the year ended
June 30, 1999 - 44,726 44,726
Balance - June 30, 1999 $(180,760) $450,256 $ 430,325
VIS VIVA CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Cumulative
for the Period
September 11,
For the Years Ended 1980 (Inception)
June 30, through
1999 1998 June 30, 1999
Cash Flows From
Operating Activities
Net income $ 44,726 $ 25,303 $ 450,256
Adjustments to reconcile net
income to net cash provided by
operating activities:
Amortization of bond discount (20,239) - (20,239)
Amortization of organization cost - - 875
Gain from sale of investments (662) (895) (163,284)
Prepaid expenses - 13,000 -
Deferred tax provision 5,577 (7,824) 5,577
Increase in accrued
interest receivable (13,711) (6,585) (36,740)
Change in income taxes payable 2,173 - 2,173
Net Cash Provided By
Operating Activities 17,864 22,999 233,041
Cash Flows From Investing Activities
Organization costs paid - - (875)
Purchase of securities (414,630) (510,150) (4,077,069)
Proceeds from sale
of securities 189,668 638,933 3,567,714
Net Cash (Used in) Provided by
Investing Activities (224,962) 128,783 (510,230)
Cash Flows From Financing Activities
Proceeds from margin
loan payable 116,360 (61,044) 116,360
Net proceeds from issuance
of common stock - - 190,829
Acquisition and retirement
of common stock - - (30,000)
Net Cash (Used in) Provided by
Financing Activities 116,360 (61,044) 277,189
Net Increase (Decrease) In Cash
and Cash Equivalents (90,738) 90,738 -
Cash and Cash Equivalents at
Beginning of Period 90,738 - -
Cash and Cash Equivalents at
End of Period $ - $ 90,738 $ -
Supplemental Cash Flow Information
Cash paid for interest $ 6,393 $ 10,372 $ 41,069
Cash paid for income taxes 2,636 11,613 104,813
VIS VIVA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization Vis Viva Corporation (the Company) was incorporated under the
laws of the State of Utah on September 11, 1980. Effective June 30, 1995, the
Company changed its domicile to the State of Nevada. Vis Viva Corporation is
a development stage company. It is primarily engaged in the process of
investigating business opportunities which appear to have profitable potential
for the Company.
Use of Estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures. Actual
results could differ from those estimates. An estimate which is subject to
change in the near future is the unrealized gain (loss) on investment in
securities.
Cash Equivalents The Company considers all highly liquid debt instruments
purchased with an original maturity of three months or less to be cash
equivalents.
Investment in Securities Investments in equity and debt securities are
stated at fair value, based on quoted market prices, and are classified as
available-for-sale. Unrealized gains and losses are reported in stockholders'
equity, net of related deferred income taxes. Gains and losses on disposition
are based on the net proceeds less the cost basis of the security sold, using
the specific identification method.
Stock-Based Compensation Compensation arising from stock options granted to
directors and officers is accounted for using the intrinsic-value-based
method.
Earnings Per Share Basic earnings per common share is computed by dividing
net income by the weighted-average number of common shares outstanding during
the period. Diluted earnings per share includes the dilutive effect of
outstanding stock options.
NOTE 2--INVESTMENT IN SECURITIES AND OTHER COMPREHENSIVE LOSS
Marketable equity and debt securities are classified as available-for-sale and
are stated at fair value. At June 30, 1999 and 1998, available-for-sale
securities consisted of the following:
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
June 30, 1999
Common Stocks $ 182,990 $ - $ 139,594 $ 43,396
Corporate debt securities 509,888 17,438 151,723 375,603
Total $ 692,878 $ 17,438 $ 291,317 $ 418,999
June 30, 1998
Common stocks $ 33,761 $ - $ 13,013 $ 20,748
Corporate debt securities 413,255 7,307 85,901 334,661
Total $ 447,016 $ 7,307 $ 98,914 $ 355,409
As of June 30, 1999, corporate debt securities had maturities ranging from
August 2001 to July 2005.
VIS VIVA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
Proceeds from sales of securities and the resulting gross realized gains and
losses were as follows:
For the Period
September 11,
For the Years Ended 1980 (Inception)
June 30, Through
1999 1998 June 30, 1999
Proceeds from sales
of securities $ 189,668 $ 638,933 $ 3,567,714
Gross realized gains $ 12,814 $ 60,541 $ 305,708
Gross realized losses (12,152) (59,644) (142,422)
Net Gain from Sale
of Investments $ 622 $ 897 $ 163,286
Other comprehensive loss consists of the change in net unrealized holding gain
and loss on securities available for sale and their related income tax benefit
as follows:
Before-Tax Tax Net-of-Tax
Amount Benefit Amount
For the Year Ended June 30, 1999
Unrealized net holding losses $ (181,610) $ 60,768 $ (120,842)
Reclassification adjustment
for net gains included
in net income (662) 222 (440)
Other Comprehensive Loss $ (182,272) $ 60,990 $ (121,282)
For the Year Ended June 30, 1998
Unrealized net holding losses $ (75,394) $ 26,605 $ (48,789)
Reclassification adjustment
for net gains included
in net income (897) 317 (580)
Other Comprehensive Loss $ (76,291) $ 26,922 $ (49,369)
Cumulative For the Period
September 11, 1980
(Date of Inception)
Through June 30, 1999
Unrealized net holding losses $(110,593) $ 37,602 $ (72,991)
Reclassification adjustment
for net gains included in
net income (163,286) 55,517 (107,769)
Other Comprehensive Loss $(273,879) $ 93,119 $ (180,760)
NOTE 3 BROKERAGE LOAN PAYABLE
As of June 30, 1999, the Company had a $116,360 margin loan payable to a
securities broker. The loan is secured by securities which have been placed on
deposit and are held by the broker. In the event the value of the securities
decrease, resulting in a shortfall of collateral, the broker can call for a
margin payment. If the margin payment is not made, the broker can sell the
securities in satisfaction of the margin payment. The margin loan payable and
related accrued interest is due upon sale of the underlying securities. The
interest rate on the margin loan payable as of June 30, 1999 was 7.875%.
VIS VIVA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 4--EARNINGS PER SHARE
The following data shows the amounts used in computing earnings per share:
Cumulative
For the Period
September 11,
For the Years Ended 1980 (Inception)
June 30, Through
1999 1998 June 30, 1999
Net Income $ 44,726 $ 25,303 $ 450,256
Weighted-average number of common
shares used in basic earnings
per share 1,270,000 1,270,000 1,301,816
Dilutive effect of stock options 105,000 105,000 105,000
Weighted-average number of common
shares used in diluted earnings
per share 1,375,000 1,375,000 1,406,816
NOTE 5--ABANDONED ACQUISITION AND BAD DEBT
The Company advanced $14,000 to Worldwide FiberComm, Inc. for a possible
merger which was terminated October 15, 1993. Upon termination, the advance
was charged to operations.
The Company paid expenses in connection with a possible merger with Draycott
Corporation, which was terminated. Management determined that the amount paid
was uncollectible as of June 30, 1988. During 1989, Draycott Corporation began
making payments on the receivable. Payments totaled $5,724 through 1993 which
were offset against bad debt expense. No payments were received subsequent to
1993.
NOTE 6--RETIREMENT OF STOCK
In December of 1988, the Company redeemed 150,000 shares of its common stock
for $30,000 and retired the shares.
NOTE 7--RELATED PARTY TRANSACTIONS
An individual who acted as the Company's legal counsel since 1992, became an
officer and director of the Company in May 1995. Fees paid in legal expenses
to the officer and director were $4,000 and $4,500 for the years ended June
30, 1999 and 1998, respectively. For the period from September 11, 1980 (date
of inception) through June 30, 1999, a total of $37,932 has been paid for
various legal counsel services.
During the years ended June 30, 1999 and 1998, $1,000 and $1,500,
respectively, were paid for directors' fees to the directors and officers of
the Company.
NOTE 8--INCOME TAXES
Deferred income taxes are recognized for differences between the bases of
assets for financial statement and income tax purposes. At June 30, 1999 and
1998, the deferred tax asset resulted from unrealized losses on investment in
securities and amounted to $93,119 and $32,128, respectively.
VIS VIVA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
The components of income tax expense were as follows:
Cumulative
For the Period
September 11,
For the Years Ended 1980 (Inception)
June 30, Through
1999 1998 June 30, 1999
Current - Federal $ 8,213 $ 6,036 $ 90,350
- State - - 15,329
8,213 6,036 105,679
Deferred - Federal - (4,420) -
- (4,420) -
Provision for Income Taxes $ 8,213 $ 1,616 $ 105,679
The Company has not been subject to state income tax subsequent to June 30,
1995. The following is a reconciliation of income tax expense to the amount
computed using the federal statutory rate:
Cumulative
For the Period
September 11,
For the Years Ended 1980 (Inception)
June 30, Through
1999 1998 June 30, 1999
Tax at federal statutory rate (34%) $ 17,999 $ 9,152 $ 189,017
State income taxes,
net of federal benefit - - 13,335
Non-deductible expenses - 157 494
Effect of lower taxes (9,786) (7,693) (97,167)
Provision for Income Taxes $ 8,213 $ 1,616 $ 105,679
NOTE 9--STOCK OPTIONS
In July 1996, the Company granted options to directors and officers of the
Company to purchase a total of 105,000 shares of common stock. The exercise
price is $0.25 per share. The market price at the date of grant was also $0.25
per share. The options are exercisable at any time and do not expire.
On August 25, 1999, all stock options to acquire 105,000 shares were exercised
for $26,250 or $0.25 per share. After the exercise of the option the Company
has 1,375,000 shares of common stock outstanding (Unaudited).
A summary of the status of the Company's stock options as of June 30, 1999 and
1998 and changes during the years ending on those dates is as follows:
Weighted-Average
Shares Exercise Price
Outstanding - June 30, 1997 105,000 $ 0.25
Outstanding - June 30, 1998 105,000 0.25
Outstanding - June 30, 1999 105,000 $ 0.25
Exercisable - June 30, 1999 105,000 $ 0.25
NOTE 10--PAST DISPUTES
In December 1996, the Company was a party to a complaint filed against two
brokerage firms and a bank alleging fraud and insider trading with regard to
certain investments in debt securities held by the Company. In exchange for
legal representation in this matter by the Company's president, all benefits
and rights to damages under the action for the Company were assigned to the
president. Upon settlement of the action in September 1997, it was determined
that the Company was not damaged due to the appreciation in the securities
held by the Company.
NOTE 11--SUBSEQUENT EVENT
On August 9, 1999, the Company signed a Reverse Merger Memorandum of
Intent (the "Agreement) with Wideband Corporation ("Wideband"), a Missouri
corporation engaged in the development, manufacture, and marketing of high
performance computer networking products. There is no assurance the Agreement
will be completed; however, the terms of the agreement are as follows: The
Company would effect a 1-for-7 reverse- split of its outstanding common
shares, resulting in 181,428 post-split common shares being issued and
outstanding. The Company would issue an additional 12,801,819 common shares
(post-split) to the shareholders of Wideband. would issue 55,000 post-split
common shares to an officer of the Company and another affiliate as
transaction broker and consultant fees. As a result of the anticipated
transaction, the Company would have 13,053,247 outstanding common shares,
Wideband shareholders would own approximately 98% of the outstanding common
shares of the Company and Wideband would merge into and with the Company. It
is contemplated that immediately following the transaction, the name Vis Viva
would change to Wideband Corporation. The transaction is subject to the
execution of a definitive Plan and Agreement of Merger.
EXHIBIT "C"
WIDEBAND CORPORATION
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AND
FINANCIAL STATEMENTS
September 30, 1999 and
December 31, 1998
WIDEBAND CORPORATION
TABLE OF CONTENTS
Page
Report of Independent Certified Public Accountants F-1
Balance Sheets - September 30, 1999 and December 31, 1998 F-2
Statements of Operations for the Nine Months Ended September
30, 1999 and 1998 (Unaudited) and for the Years Ended
December 31, 1998 and 1997 F-3
Statements of Stockholders' Equity for the Years Ended
December 31, 1997 and 1998 and for the Nine Months Ended
September 30, 1999 F-4
Statements of Cash Flows for the Nine Months Ended September
30, 1999 and 1998 (Unaudited) and for the Years Ended December
31, 1998 and 1997 F-5
Notes to Financial Statements F-6
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
Member of AICPA Division of Firms Fax (801) 532-7944
Member of SECPS 345 East 300 South, Suite 200
Member of Summit International Associates Salt Lake City, Utah 84111-2693
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and the Stockholders
Wideband Corporation
We have audited the accompanying balance sheets of Wideband Corporation as of
September 30, 1999 and December 31, 1998, and the related statements of
operations, stockholders' equity, and cash flows for the nine months ended
September 30, 1999 and for each of the two years in the period ended December
31, 1998. 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. Those standards require that we plan and perform the audits to
obtain reasnable 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 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 Wideband Corporation as of
September 30, 1999 and December 31, 1998, and the results of its operations
and its cash flows for the nine months ended September 30, 1999 and for each
of the two years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
November 19, 1999
WIDEBAND CORPORATION
BALANCE SHEETS
September 30, December 31,
1999 1998
ASSETS
Current Assets
Cash and cash equivalents . . . . . . . . . .$ 83,902 $ 71,256
Trade accounts receivables. . . . . . . . . . 7,003 6,939
Inventory . . . . . . . . . . . . . . . . . . 81,027 135,409
Related party receivable. . . . . . . . . . . 8,430
Total Current Assets. . . . . . . . . . . . 180,362 213,604
Property and Equipment . . . . . . . . . . . . . 477,669 104,594
Less accumulated depreciation . . . . . . . . (69,020) (35,874)
Net Property and Equipment. . . . . . . . . 408,649 68,720
Patents, Net of Amortization . . . . . . . . . . 60,285 55,421
Total Assets . . . . . . . . . . . . . . . . . .$649,296 $337,745
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Trade accounts payable. . . . . . . . . . . .$ 22,315 $
Unearned customer deposits. . . . . . . . . . 2,268 1,868
Related party payable . . . . . . . . . . . . 8,873
Obligations under capital leases. . . . . . . 69,550
Total Current Liabilities . . . . . . . . . 33,456 71,418
Stockholders' Equity
Common stock - $0.001 par value;
50,000,000 shares authorized;
shares issued and outstanding:
12,801,819 shares in 1999 and
12,688,601 shares in 1998. . . . . . . . . 12,802 12,689
Additional paid-in capital. . . . . . . . . 3,172,794 2,518,775
Accumulated deficit . . . . . . . . . . . .(2,569,756)(2,265,137)
Total Stockholders' Equity. . . . . . . . . 615,840 266,327
Total Liabilities and Stockholders Equity . . .$649,296 $337,745
WIDEBAND CORPORATION AND SUBSIDIARY
STATEMENTS OF OPERATIONS
For the Nine Months For the Year Ended
Ended September 30, December 31,
1999 1998 1998 1997
(Unaudited)
Sales . . $ 175,089 $188,596 $258,146 $210,553
Cost of Sales . . . . . . . . 91,239 81,565 124,578 116,065
Gross Profit. . . . . . . . . 83,850 107,031 133,568 94,488
Expenses
Research and development. . 229,968 128,358 163,361 315,144
General and administrative .52,395 36,647 52,237 79,721
Sales and marketing. 106,106 77,305 155,085 252,570
Interest . . . . . . -0- -0- 4,000 1,054
Total Expenses . . . 388,469 242,310 374,683 648,489
Net Loss . . . . . . . . . .$(304,619)$(135,279)$(241,115)$(554,001)
Basic and Diluted Loss Per
Common Share $ (0.02) $ (0.01) $ (0.02) $ (0.04)
Weighted Average Number of
Common Shares Used in Per
Share Calculation 12,732,946 12,641,001 12,642,137 12,619,814
WIDEBAND CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
Additional Total
Common Shares Paid-in Accumulated Stockholders
Shares Amount Capital Deficit Equity
Balance -
December 31, 1996 12,610,501 $12,610 $1,927,988 $(1,470,021)$ 470,577
Shares issued for cash 24,900 25 124,475 --- 124,500
Shares issued for services 5,600 6 27,994 --- 28,000
Services contributed by
employees --- --- 56,156 --- 56,156
Transfer of 4,000
shares by shareholder
for services to the
Company --- --- 20,000 --- 20,000
Net loss for the year. --- --- --- (554,001) (554,001)
Balance -
December 31, 1997 12,641,001 12,641 2,156,613 (2,024,022) 145,232
Shares issued for cash 47,600 48 237,952 --- 238,000
Services contributed
by employees --- --- 124,210 --- 124,210
Net loss the year --- --- --- (241,115) (241,115)
Balance -
December 31, 1998 12,688,601 12,689 2,518,775 (2,265,137) 266,327
Shares issued for cash 25,000 25 124,975 --- 125,000
Shares issued for assets 88,218 88 441,002 --- 441,090
Services contributed by
employees --- --- 88,042 --- 88,042
Net loss for the period --- --- --- (304,619) (304,619)
Balance -
September 30, 1999 12,801,819 $ 12,802$3,172,794 $(2,569,756)$ 615,840
WIDEBAND CORPORATION
STATEMENTS OF CASH FLOWS
<CAPITON>
For the Nine Months For the Years Ended
Ended September 30, December 31,
1999 1998 1998 1997
(Unaudited)
Cash Flows From Operating Activities
Net loss. . . . . . . . . . $(304,619) $(135,279) $(241,115) $(554,001)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Depreciation and amortization 35,808 16,404 21,531 11,002
Services contributed by
employees 88,042 93,157 124,210 56,156
Common stock issued for services --- --- --- 28,000
Majority shareholder's personal
shares issued for services
rendered to the Company --- --- --- 20,000
Loss on disposal of assets . . . --- 3,513
Changes in operating assets and liabilities:
Trade receivables. . . . . . . (64) (16,859) 4,333 (3,030)
Inventory. . . . . . . . . . . 54,382 30,875 11,349 39,130
Trade accounts payable . . . . 22,315 65,357 (17,013) (6,483)
Accrued liabilities. . . . . . --- (2,795) (5,963) (8,824)
Deferred revenue . . . . . . . 400 (1,943) 1,868 ---
Net Cash and Cash Equivalents Used By
Operating Activities. . . . . (103,736) 48,917 (100,800) (414,537)
Cash Flows From Investing Activities
Payments for the purchase of property
and equipment. . . . . . . . . (1,535) (4,825) (4,825) (6,619)
Payments for patents. . . . . . . (7,526) (23,468) (13,806) (14,420)
Net Cash and Cash Equivalents Used By
Investing Activities. . . . . . (9,061) (28,293) (18,631) (21,039)
Cash Flows From Financing Activities
Proceeds from issuance of common
stock . 125,000 --- 238,000 124,500
Payments on payable to related
party 443 (10,589) (10,589) (2,100)
Proceeds from notes payable to
related party --- --- --- 50,000
Principal payments on notes
payable to related party --- --- (50,000) ---
Net Cash and Cash Equivalents
Provided By Financing Activities 125,443 (10,589) 177,411 172,400
Net Increase (Decrease) In Cash and
Cash Equivalents . . . . . . . . 12,646 10,035 57,980 (263,176)
Cash and Cash Equivalents
Beginning of Period 71,256 13,276 13,276 276,452
End of Period $ 83,902 $ 23,311 $71,256 $ 13,276
Supplemental Cash Flow Information
Cash paid for interest. . . . .$ --- $ --- $ 5,054 $ ---
Noncash Investing and Financing Activities Note 6
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Business Wideband Corporation is engaged in the
development, manufacturing, marketing and training of high performance
computer networking products. The Company was incorporated on September 23,
1994 under the laws of the State of Missouri. Previous to September 30, 1999,
the Company was considered a development stage enterprise. During the period
ended September 30, 1999, the Company achieved planned operations and is
therefore no longer considered a development stage enterprise.
Use of 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 in these financial statements
and accompanying notes. Actual results could differ from those estimates.
Business Condition 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 ordinary course of business. As shown in
the financial statements, the Company has sustained losses from operations of
$304,619, $241,115 and $554,001 during the nine months ended September 30,
1999 and for the years ended December 31, 1998 and 1997, respectively. In
addition, operating activities have used cash of $103,736, $100,800 and
$414,537 during the nine months ended September 30, 1999 and for the years
ended December 31, 1998 and 1997, respectively. These factors increase the
risk that the Company may be unable to continue as a going concern. The
Company's ability to continue as a going concern is dependent upon its ability
to generate sufficient cash flows to meet its obligations on a timely basis,
to obtain additional financing as may be required, and ultimately to attain
profitable operations. Management plans to begin selling its networking
products in commercial quantities and to obtain additional equity capital.
There is no assurance, however, that these efforts will result in profitable
operations or in the Company s ability to meet obligations when due.
Trade Accounts Receivable Due to subsequent collection of trade accounts
receivable, an allowance for doubtful accounts was not required.
Concentration of Risk and Segment information The Company operates solely in
the computer networking industry and has assets only within the United States.
However, the Company has sales throughout the world. The concentration of
business in one industry subjects the Company to a concentration of credit
risk relating to trade accounts receivable. Sales to major customers are
defined as sales to any one customer which exceeded 10% of total sales. The
risk of loss of a major customer subjects the Company to the possibility of
decreased sales.
Financial Instruments The Company considers all highly-liquid debt instruments
purchased with a maturity of three months or less to be cash equivalents. The
amounts reported as cash and cash equivalents, trade accounts receivable,
trade accounts payable and unearned customer deposits are considered to be
reasonable approximations of their fair values. The fair value estimates
presented herein were based on market information available to management at
the time of the preparation of the financial statements. The reported fair
values do not take into consideration potential expenses that would be
incurred in an actual settlement.
Inventory Inventory is stated at the lower of cost or market. Cost is
determined using the first-in, first-out method.
Research and Development Expense Costs directly associated with research and
development activities in the computer networking industry are expensed as
incurred. These costs include software development costs included as a
component of the Company s product.
Patents Legal fees and other direct costs incurred in obtaining patents in
the United States and other countries are capitalized. The patents are
amortized on a straight-line basis over a 15-year period beginning on the date
the patents are issued. Amortization expense was $2,662, $1,370 and $487
during the nine months ended September 30, 1999 and during the years ended
December 31, 1998 and 1997, respectively.
The realization of patents and other long-lived assets is evaluated
periodically when events or circumstances indicate a possible inability to
recover the carrying amount. An impairment loss is recognized for the excess
of the carrying amount over the fair value of the asset or the group of
assets. Fair value is determined based on expected discounted net future cash
flows. The analyses necessarily involve significant management judgement to
evaluate the capacity of an asset to perform within projections.
Property and Equipment Property and equipment are stated at cost.
Depreciation is computed using the straight-line method over the estimated
useful lives, which are five to thirty-nine years. Maintenance and repairs are
charged to operations and major improvements are capitalized. Upon retirement,
sale, or other disposition, the cost and accumulated depreciation are
eliminated from the accounts and gain or loss is included in operations.
Sales Recognition Sales are recognized upon delivery and acceptance of the
products or services by the customer.
Advertising Costs Advertising costs are expensed when incurred. Advertising
expense was $9,712, $6,000, and $335 for the nine months ended September 30,
1999 and for the years ended December 31, 1998 and 1997, respectively.
Income Taxes The Company recognizes the amount of income taxes payable or
refundable and recognizes deferred tax assets and liabilities for the future
tax consequences attributable to differences between the financial statement
amounts of certain assets and liabilities and their respective tax bases and
for operating loss carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years those temporary differences are expected to be recovered or settled.
Deferred tax assets are reduced by a valuation allowance to the extent that
uncertainty exists as to whether the deferred tax assets will ultimately be
realized.
Stock-Based Compensation Stock-based compensation related to stock options
granted to employees is measured by the intrinsic value method. This method
recognizes compensation expense based on the difference between the fair value
of the underlying common stock and the exercise price of the stock options on
the date granted. Stock-based compensation to non-employees is measured by
the fair value of the stock options and warrants on the grant date as
determined by the Black-Scholes option pricing model.
Basic and Diluted Loss Per Share Basic loss per common share is computed by
dividing net loss by the weighted-average number of common shares outstanding
during the period. Diluted loss per share reflects potential dilution which
could occur if all potentially issuable common shares from stock options
resulted in the issuance of common stock. In the present position, diluted
loss per share is the same as basic loss per share because 100,000, 50,000 and
40,000 potentially issuable common shares at September 30, 1999, December 31,
1998 and 1997, respectively, would have decreased diluted loss per share and
have been excluded from the calculation.
NOTE 2 INVENTORY
Inventory consisted of the following:
September 30, December 31,
1999 1998
Materials . $ 67,181 $ 104,018
Work in process. . 8,382 1,021
Finished goods . . 5,464 30,370
Total. . $ 81,027 $ 135,409
NOTE 3 PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
September 30, December 31,
1999 1998
Land . . $ 71,540 $ ---
Building 300,000 ---
Manufacturing equipment 73,993 2,908
Equipment under capital
lease obligations --- 69,550
Other equipment. . 17,636 17,636
Automobiles. . . . 14,500 14,500
Total. . $ 477,669 $ 104,594
In June 1999, the Company acquired equipment under capital lease obligations
from a shareholder/director by issuing common stock, as further described in
Note 5.
Depreciation expense was $22,018, $6,251 and $5,998 for the nine months ended
September 30, 1999 and for the years ended December 31, 1998 and 1997,
respectively. Amortization of equipment under capital lease obligations was
$11,128, $13,910, and $4,517 for the nine months ended September 30, 1999 and
for the years ended December 31, 1998 and 1997, respectively.
NOTE 4 INCOME TAXES
The net loss for all periods presented resulted entirely from operations
within the United States. There was no provision for or benefit from income
tax for any period. The components of the net deferred tax asset were as
follows:
September 30, December 31,
1999 1998
Operating loss carryforwards . . .$ $685,402 $ 604,042
Valuation allowance. . . . . . . . (685,402) (604,042)
Net Deferred Tax Asset . . . . . .$ --- $ ---
For tax reporting purposes, the Company had operating loss carryforwards of
$1,797,776 at September 30, 1999, which will expire beginning in the year
2009.
The following is a reconciliation of the tax benefit that would result from
applying the federal statutory rate to pretax loss with the provision for
income taxes:
September 30, December 31,
1999 1998 1997
Tax at statutory rate (34%) . . . $(103,570) $ (81,979) $ (188,360)
Non-deductible expenses . . . . . 34,776 48,588 30,229
Change in valuation allowance . . 81,360 43,338 180,983
State tax benefit, net of federal tax effect(12,566) (9,947) (22,852)
Net Income Tax Expense. . . . . . $ --- $ --- $ ---
NOTE 5 STOCKHOLDERS EQUITY
In June 1999, the Company issued 88,218 shares of common stock to a director
for the following: 1) settlement of a $69,550 capital lease obligation
relating to equipment, 2) purchase of land for $71,540 and 3) purchase of a
building for $300,000. The total value of the items settled and received was
$441,090, or $5.00 per share.
During 1997, the Company employed personnel to test market a preliminary
version of its product. Certain of these employees agreed to continue
employment with the Company without compensation. The Company was and is not
obligated to pay these individuals for services rendered from 1997 through
September 30, 1999; however, the Company has recognized expense for these
periods and has recognized an equal amount as contributed capital. The
expense was $88,042, $124,210 and $56,156 for the nine months ended September
30, 1999 and for the years ended December 31, 1998 and 1997, respectively.
During 1997, the Company s majority shareholder and president transferred
4,000 shares of common stock to individuals for services provided to the
Company. The services were valued at $20,000 or $5.00 per share, and were
accounted for as a contribution of capital from the majority shareholder.
The Company issued 5,600 shares of common stock in May and June of 1997 for
services rendered. The services were valued at $28,000, or $5.00 per share.
NOTE 6--NONCASH INVESTING AND FINANCING ACTIVITIES
Common stock was issued during the year ended December 31, 1997 for services.
During the year ended 1997, the Company entered into a capital lease agreement
with a related party for the use of equipment. The value of the equipment and
the capital lease obligation was $69,550. The equipment was acquired in June
1999 by the issuance of common stock.
Common stock was issued during the nine months ended September 30, 1999, for
the satisfaction of amounts owed and for the purchase of land, building and
equipment.
NOTE 7 STOCK OPTIONS
The Company has issued individual stock options to employees for services. A
summary of the status of the Company s stock options as of September 30, 1999
and December 31, 1998 and 1997, and changes during the periods then ended are
as follows:
December 31,
September 30, 1999 1998 1997
Weighted- Weighted- Weighted-
Average Average Average
Shares Exercise Price Shares Exercise Price Shares Exercise Price
Outstanding
at beginning
of year 50,000 $ 5.00 40,000 $ 5.00 40,000 $ 5.00
Granted 50,000 5.00 10,000 5.00 --- ---
Outstanding
at end of
period 100,000 5.00 50,000 5.00 40,000 5.00
Options
exercisable at
period-end 100,000 5.00 50,000 5.00 40,000 5.00
Weighted-average
fair value of
options granted
during the
period $ 3.44 $ 3.17
The weighted-average remaining contractual life of the stock options
outstanding at September 30, 1999 was 2.9 years. The Company measures
compensation relating to stock options by the intrinsic value method
prescribed in Accounting Principles Board Opinion 25, Accounting for Stock
Issued to Employees, and related interpretations. No compensation was
recognized from stock options during any period. Had compensation cost from
the stock options been determined based upon Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation, net loss and basic
diluted loss per share would have increased to the pro forma amounts indicated
below:
For the Nine
Months Ended For the Years Ended
September 30, December 31,
1999 1998 1997
Net loss:
As reported. . . . . . . . . $ (304,619) $ (241,115) $ (554,001)
Pro forma. . . . . . . . . . (476,619) (272,815) (554,001)
Basic and diluted loss per share:
As reported. . . . . . . . . $ (0.02) $ (0.02) $ (0.04)
Pro forma. . . . . . . . . . (0.04) (0.02) (0.04)
The fair value of each option granted was estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1999 and 1998, respectively: dividend yield of
0.0% for both periods; expected volatility of 82% and 73% risk-free interest
rate of 5.1%, 5.2% and expected life of the options of 5.0 years and 5.0
years.
NOTE 8 RELATED PARTY TRANSACTIONS
The Company borrowed $50,000 in September 1997 from the Company s president.
The $50,000 as well $5,054 in interest were repaid in December 1998.
The President of the Company is a member of the board of trustees of the
International Academy of Science. The Academy has a program to give their
students experience in industry and the Company participates in this program.
The Academy also performs research on behalf of the Company under normal
contract arrangements. The Company made payments for research services by the
Academy during the nine months ended September 30, 1999 and during the years
ended December 31, 1998 and 1997 of $56,074, $33,075 and $57,675,
respectively. The Company is a steering committee member of WGNA which is a
special interest group established to administer WideBand Networking as an
industry standard. WGNA is hosted by the International Academy of Science.
The President of the Company owns a controlling interest in WideNet
Corporation (recently renamed FSIX Corporation). FSIX manufactures a line of
file server products most of which utilize WideBand adapters manufactured by
the Company. The Company also markets servers produced by FSIX through its
dealer organization. Payments to and from FSIX during all periods presented
were nominal.
See Notes 5, 6, and 9 for other related party transactions.
NOTE 9 LICENSING AGREEMENT
The Company has an exclusive licensing agreement with the Company s president
and majority stockholder relative to patents and patent applications. Under
the terms of the agreement, the Company is required to pay a royalty of 1.5%
of sales to the president.
NOTE 10 MAJOR CUSTOMERS
Sales to major customers and their percentage of sales are as follows:
For the Nine Months
Ended September 30, For the Years Ended December 31,
1999 1998 1997
Customer A . . . . .$ --- --- $27,696 11% $ 40,479 19%
Customer B . . . . . 27,709 16% --- --- --- ---
Customer C . . . . . 17,340 10% --- --- --- ---
Customer D . . . . . --- --- --- --- 19,290 11%
Export sales to customers in various countries were 13%, 9% and 11% of sales
during the nine months ended September 30, 1999 and for the years ended
December 31, 1998 and 1997, respectively.
NOTE 11 SUBSEQUENT EVENTS
On August 6, 1999, the Company entered into an agreement and plan of merger
(the "Agreement") with VisViva Corporation ( VisViva ), a Nevada corporation.
Under the terms of the agreement, VisViva would effect a 1-for-7 reverse split
of its outstanding common shares resulting in 181,428 post-split common shares
being issued and outstanding. VisViva would issue an additional 12,801,819
common shares to the shareholders of the Company, and would issue 55,000
common shares to an officer of VisViva and another affiliate as transaction
broker and consultant fees. As a result of the anticipated transaction,
VisViva would have 13,038,247 outstanding common shares. The Company s
shareholders would own approximately 98% of the outstanding common shares of
VisViva and the Company would merge with and into VisViva and VisViva would
change its name to Wideband Corporation.
EXHIBIT "D"
WIDEBAND CORPORATION
INDEX TO FINANCIAL STATEMENTS
Page
Unaudited Pro Forma Condensed Consolidated Financial Statements F-1
Unaudited Pro Forma Condensed Consolidated Balance Sheet -
September 30, 1999 F-2
Unaudited Pro forma Condensed Consolidated Statements of
Operations for the Nine Months Ended September 30, 1999 F-3
Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the Year Ended December 31, 1998 F-4
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements F-5
WIDEBAND CORPORATION
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
On September 6, 1999, WideBand Corporation ("WideBand") entered into an
agreement with Vis Viva Corporation ("Vis Viva") pursuant to which Vis Viva
effectuated a one-for-seven stock split of its common stock, resulting in
196,429 common shares of Vis Viva common stock being outstanding and Vis Viva
agreed to issue 12,801,819 shares of its common stock in exchange for 100% of
the issued and outstanding common stock of WideBand. In addition, Vis Viva
changed its name to WideBand Corporation in connection with the agreement.
The agreement will be accounted for as the reorganization of WideBand and the
acquisition of Vis Viva at historical cost. The following unaudited pro forma
condensed consolidated balance sheet has been prepared to present the
consolidated financial position of WideBand as though the agreement had been
consummated on September 30, 1999. The following unaudited pro forma
condensed consolidated statement of operations has been prepared to present
the combined operations of the consolidated companies for the nine months
ended September 30, 1999 and for the year ended December 31, 1998 assuming the
agreement had been completed on January 1, 1998. The information presented
for the statement of operations for Vis Viva for the nine months ended
September 30, 1999 was derived from 10-KSB for Vis Viva for the year ended
June 30, 1999 with proforma adjustments made to reflect the actual expenses,
other expenses and other income for the nine months ended September 30, 1999.
The information presented for the statement of operations for Vis Viva for the
year ended December 31, 1998 was derived from the 10-KSB for Vis Viva for the
year ended June 30, 1998 with proforma adjustments made to reflect the actual
expenses, other expenses and other income for the year ended December 31,
1998.
The following financial information was derived from, and should be read in
conjunction with the separate historical financial statements of Vis Viva
included in its annual report to shareholders on Form 10-KSB for the year
ended June 30, 1999, and the financial statements of WideBand and the related
notes to those financial statements which are included elsewhere herein. The
unaudited pro forma condensed consolidated balance sheet and statement of
operations have been included herein for comparative purposes only and do not
purport to be indicative of the results of operations which actually would
have been obtained had the agreement been completed on September 30, 1999 or
on January 1, 1998, or the results of operations which may be obtained in the
future. In addition, further results may vary significantly from the results
reflected in these pro forma financial statements.
WIDEBAND
UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
BALANCE SHEET
SEPTEMBER 30, 1999
ASSETS
Pro Pro
Forma Forma
WideBand Visviva Adjustments Results
Current Assets
Cash $ 83,902 $ --- $ --- $ 83,902
Accounts receivable 7,003 --- --- 7,003
Inventory 81,027 --- --- 81,027
Interest receivable --- 26,807 --- 26,807
Investments in securities
available-for-sale --- 378,004 --- 378,004
Deferred tax asset --- 98,158 --- 98,158
Related party receivable 8,430 --- --- 8,430
Total Current Assets 180,362 502,969 --- 683,331
Net Equipment 408,649 --- --- 408,649
Other Assets, Net 60,285 --- --- 60,285
Total Assets $ 649,296 $ 502,969 $ --- $ 1,152,265
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 22,315 $ 100,301 $ --- $ 122,616
Unearned revenue 2,268 --- --- 2,268
Related party payable 8,873 --- --- 8,873
Total Current Liabilities 33,456 100,301 --- 133,757
Stockholders' Equity
Common stock 12,802 13,750(A) 3,172,794 4,059,742
(B) 582,896
(C) 277,500
Additional
paid-in-capital 3,172,794 173,329(A) (3,172,794) ---
(B) (173,329) ---
Unrealized loss on
investment in securities -
net of taxes --- (196,478) --- (196,478)
Retained earnings
(deficit) (2,569,756) 412,067(B) (412,067) (2,844,756)
(C) (275,000) ---
Total Stockholders'
Equity 615,840 402,668 --- 1,018,508
Total Liabilities and
Stockholders' Equity $ 649,296 $502,969 $ --- $ 1,152,265
WIDEBAND
UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
Vis Viva Pro Pro
Balances as of Forma Forma
WideBand June 30, 1999 Adjustments Results
Revenues $ 175,089 $ --- $ --- $ 175,089
Cost of Sales 91,239 --- --- 91,239
Gross profit 83,850 --- --- 83,850
Operating Expenses
Selling and
administrative
expense 158,501 16,176(D) 9,881 184,558
Research and
development expense 229,968 --- --- 229,968
Total Operating
Expenses 388,469 16,176 9,881 414,526
Loss from Operations (304,619) (16,176) (9,881) (330,676)
Other Income (Expense)
Interest income --- 72,125 (D) (26,818) 45,307
Interest expense --- (6,393)(D) (578) (6,971)
Capital gains on sales
of securities --- 3,383 9,565 12,948
Net Other Income (Expense) --- 69,115 (17,831) 51,284
Net Income (Loss) Before
Income Taxes (304,619) 52,939 (27,712) (279,392)
Income Tax Expense
(Benefit) --- 8,213 (D) (4,429) 3,784
Net Income (Loss) $ (304,619) $ 44,726 $ (23,283) $(283,176)
Basic and diluted
loss per common share$ (0.02) $ 0.23 $ --- $ (0.02)
Weighted average number
of common shares used
in per share
calculations 12,732,946 196,430 --- 12,929,376
WIDEBAND
UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
Vis Viva Pro Pro
Balances as of Forma Forma
WideBand June 30, 1999 Adjustments Results
Revenues $ 258,146 $ --- $ --- $ 258,146
Cost of Sales 124,578 --- --- 124,578
Gross profit 133,568 --- --- 133,568
Operating Expenses
Selling and
administrative
expense 207,322 28,232 (D) 5,288 240,842
Research and
development expense 163,361 --- --- 163,361
Total Operating
Expenses 370,683 28,232 5,288 404,203
Loss from Operations (237,115) (28,232) (5,288) (270,635)
Other Income (Expense)
Interest income --- 64,426 (D) (5,663) 58,763
Interest expense (4,000) (10,372)(D) (2,553) (16,925)
Gains on sale of
securities --- 1,097 (28,831) (27,734)
Net Other Income
(Expense) (4,000) 55,151 (37,047) 14,104
Net Income (Loss)
Before Income Taxes (241,115) 26,919 (42,335) (256,531)
Income Tax Expense
(Benefit) --- 1,616 (D) (5,584) (3,968)
Net Income (Loss) $ (241,115) $ 25,303 $ (36,751) $(252,563)
Basic and diluted
loss per common share $ (0.02) $ 0.13 $ $ (0.02)
Weighted average
number of common
shares used in per
share calculations 12,642,137 196,430 12,838,567
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(A) As part of the merger, the authorized common capital shares will
increase from 15 million to 20 million shares and the par value will
become "no par value".
(B) On September 30, 1999, Vis Viva had 196,428 (post split) common shares
outstanding. Wideband Corporation had 12,801,819 common shares
outstanding at September 30, 1999. As part of the agreement, Vis Viva
exchanged 12,801,819 shares of its common stock for all of the
outstanding common stock of WideBand Corporation and changed its name to
Wideband Corporation. As a result of the agreement, Wideband
Corporation had 12,998,247 common shares outstanding. The agreement has
been accounted for as the reorganization of Wideband Corporation and the
acquisition of Vis Viva using the purchase method of accounting. Vis
Viva did not have any operations and had only investment assets at the
date of the agreement. Accordingly, the acquisition of the assets and
liabilities of Via Viva were recorded at their historical costs. The
results of Wideband Corporation are for the nine months ended September
30, 1999.
(C) In connection with the merger, the Company issued 55,000 shares as
compensation to certain finders, agents and consultants. The 55,000
shares of common stock are valued at $5.00 per share, or $275,000. This
adjustment is not expected to have a continuing impact on the Company,
thus the adjustment is shown only on the unaudited condensed pro forma
consolidated balance sheet.
(D) Vis Viva's year end is June 30, adjustments were required to present
operations for the nine months ended September 30, 1999 and for the year
ended December 31, 1998.
EXHIBIT E
Summary of Dissenters' Rights of Appraisal under Nevada Law
The following constitutes a summary or overview of dissenters' rights
provisions under the Nevada Revised Statutes (NRS). Such summary is not
exhaustive, nor is it intended to be exhaustive or complete and therefore, it
is recommended that any shareholder of the Company interested in exercising
dissenters' rights consult counsel and/or Nevada law directly.
NRS 92A.380 Right of stockholder to dissent from certain corporate actions
and to obtain payment for shares.
A stockholder in a Nevada corporation is entitled to dissent from, and
obtain payment of the fair value of his shares in event of merger transaction
to which the Nevada corporation is a party and the owner of shares is entitled
to vote on the plan of merger and also when the resolution of the board of
directors authorizing the plan provides that voting or non-voting stockholders
are entitled to dissent from the transaction and obtain payment for their
shares.
NRS 92A.410 Notification of stockholders regarding right of dissent.
If a proposed corporate action creating dissenters' rights is submitted
to a vote at a stockholders' meeting, the notice of the meeting must state
that stockholders are or may be entitled to assert dissenters' rights and be
accompanied by a copy of sections of applicable Nevada law. (This summary is
intended to satisfy such requirement.)
If the corporate action creating dissenters' rights is taken by written
consent of the stockholders or without a vote of the stockholders, the
domestic corporation shall notify in writing all stockholders entitled to
assert dissenters' rights that the action was taken and send them the
dissenter's notice described in NRS 92A.430 (see below).
NRS 92A.420 Prerequisite to demand for payment for shares. If a proposed
corporate action creating dissenters' rights is submitted to a vote at a
stockholders' meeting, a stockholder who wishes to assert dissenter's rights
(a) must deliver to the subject corporation, before the vote is taken, written
notice of his intent to demand payment for his shares if the proposed action
is effectuated; and (b) must not vote his shares in favor of the proposed
action.
A stockholder who does not satisfy the requirements of the preceding
paragraph is not entitled to payment for his shares.
NRS 92A.430 Dissenter's notice: Delivery to stockholders entitled to assert
rights; contents. Those persons seeking to invoke dissenters' rights and who
also comply with NRS 92A.420 above shall be sent, no later than 10 days after
the effectuation of the corporate action, a dissenters' rights notice advising
such shareholder of the procedure and process by which such shareholder will
be paid the fair market value of his or her shares.
NRS 92A.440 Demand for payment and deposit of certificates; retention of
rights of stockholder. A stockholder to whom a dissenter's notice is sent
(see section 430 immediately above) must (a) demand payment; (b) certify
whether he or she acquired beneficial ownership of the shares before the date
required to be set forth in the dissenter's notice for this certification; and
(c) deposit his or her certificates, if any, in accordance with the terms of
the notice.
The stockholder who does not demand payment or deposit his certificates
where required, each by the date set forth in the dissenter's notice, is not
entitled to payment for his shares.
NRS 92A.460 Payment for shares: General requirements. Subject to certain
exceptions, within 30 days after receipt of a demand for payment, the subject
corporation shall pay each dissenter who complied with NRS 92A.440 the amount
the subject corporation estimates to be the fair value of his shares, plus
accrued interest. The obligation of the subject corporation under this
subsection may be enforced by the district court (a) of the county where the
corporation's registered office is located; or (b) at the election of the
dissenter residing or having its registered office the State of Nevada, of the
county where the dissenter resides or has its registered office.
The payment must be accompanied by (a) the subject corporation's balance
sheet as of the end of a fiscal year ending not more than 16 months before the
date of payment, a statement of income for that year, a statement of changes
in the stockholders' equity for that year and the latest available interim
financial statements, if any; (b) a statement of the subject corporation's
estimate of the fair value of the shares; (c) an explanation of how the
interest was calculated; (d) a statement of the dissenter's rights to demand
payment under NRS 92A.480; and (e) a copy of NRS 92A.300 to 92A.500,
inclusive.
NRS 92A.480 Dissenter's estimate of fair value: Notification of subject
corporation; demand for payment of estimate. A dissenter may notify the
subject corporation in writing of his own estimate of the fair value of his
shares and the amount of interest due, and demand payment of his estimate, or
reject the offer and demand payment of the fair value of his shares and
interest due, if he believes that the amount paid or offered is less than the
fair value of his shares or that the interest due is incorrectly calculated.
A dissenter waives his right to demand payment unless he notifies the
subject corporation of his demand in writing within 30 days after the subject
corporation made or offered payment for his shares.
NRS 92A.490 Legal proceedings to determine fair value: Duties of subject
corporation; powers of court; rights of dissenter. If a demand for payment
remains unsettled, the subject corporation shall commence a proceeding within
60 days after receiving the demand and petition the court to determine the
fair value of the shares and accrued interest. If the subject corporation
does not commence the proceeding within the 60-day period, it shall pay each
dissenter whose demand remains unsettled the amount demanded.
A subject corporation shall commence the proceeding in the district
court of a county where its registered office is located. If the subject
corporation is a foreign entity without a resident agent in the state, it
shall commence the proceeding in the county where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
entity was located.
The subject corporation shall make all dissenters, whether or not
residents of Nevada, whose demands remain unsettled, parties to the proceeding
as in an action against their shares. All parties must be served with a copy
of the petition. Nonresidents may be served by registered or certified mail
or by publication as provided by law.
The jurisdiction of the court in which the proceeding is commenced is
plenary and exclusive. The court may appoint one or more persons as
appraisers to receive evidence and recommend a decision on the question of
fair value. The appraisers have the powers described in the order appointing
them, or any amendment thereto. The dissenters are entitled to the same
discovery rights as parties in other civil proceedings.
Each dissenter who is made a party to the proceeding is entitled to a
judgment: (a) for the amount, if any, by which the court finds the fair value
of his shares, plus interest, exceeds the amount paid by the subject
corporation; or (b) for the fair value, plus accrued interest, of his
after-acquired shares for which the subject corporation elected to withhold
payment.
NRS 92A.500 Legal proceeding to determine fair value: Assessment of costs and
fees. The court in a proceeding to determine fair value shall determine all
of the costs of the proceeding, including the reasonable compensation and
expenses of any appraisers appointed by the court. The court shall assess the
costs against the subject corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable,
to the extent the court finds the dissenters acted arbitrarily, vexatiously or
not in good faith in demanding payment.
The court may also assess the fees and expenses of the counsel and
experts for the respective parties, in amounts the court finds equitable: (a)
against the subject corporation and in favor of all dissenters if the court
finds the subject did not substantially comply with the requirements of Nevada
law; or (b) against either the subject corporation or a dissenter in favor of
any other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good faith with
respect to the rights provided by Nevada law.
If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the subject
corporation, the court may award to those counsel reasonable fees to be paid
out of the amounts awarded to the dissenters who were benefited.
In a proceeded commenced pursuant to NRS 92A.460, the court may assess
the costs against the subject corporation, except that the court may assess
costs against all or some of the dissenters who are parties to the proceeding,
in amounts the court finds equitable, to the extent the court finds that such
parties did not act in good faith in instituting the proceeding.
EXHIBIT F
ARTICLES OF MERGER
OF
VIS VIVA CORPORATION
(a Nevada corporation)
AND
WIDEBAND CORPORATION
(a Missouri corporation)
Pursuant to 92A.100 through 92A.500 and specifically, 92A.200, of
the Nevada Revised Statutes (NRS) and 351.430 of the Missouri Revised
Statutes (1994), the corporations herein named do hereby adopt the following
Articles of Merger.
1. Annexed hereto and made a part hereof as Exhibit "A" is the
September 6, 1999 Plan and Agreement of Merger, as amended, for merging
WIDEBAND CORPORATION, a Missouri corporation ("WideBand"), with and into VIS
VIVA CORPORATION, a Nevada corporation ("VISV"). In addition to having
obtained approval by the stockholders of each constituent corporation as set
forth below, the said Plan and Agreement of Merger, as amended, has been
adopted and approved by the Board of Directors of WideBand and by the Board of
Directors of VISV, all as required under NRS 78.458.1(b).
2. The merger of WideBand with and into VISV is permitted by
the laws of the States of Missouri and Nevada and has been undertaken in
compliance with said laws.
3. The said Plan and Agreement of Merger, Exhibit "A" hereto,
was submitted to the stockholders of WideBand pursuant to the provisions of
351.458 and 351.420 of the Missouri Revised Statutes (1994). The manner of
approval thereof by said stockholders was as follows:
(i) The designation, number of outstanding shares and the
number of votes entitled to be cast by the one and only class of securities
entitled to vote on the said Plan and Agreement of Merger are as follows:
Number
Entitled
Designation Outstanding Shares to Vote
Common stock 18,801,819 18,801,819
(ii) The transaction was submitted to the stockholders of
WideBand at a Special Meeting of its Shareholders held on January __, 2000.
The total number of votes whose owners or holders consented, in writing, to
the merger herein provided for is as follows:
Number Voted For Number Voted Against
_______ ______
The foregoing number of votes which voted for adoption of
the said Plan and Agreement of Merger by the singular voting group entitled to
vote thereon was well over fifty percent (50%) and therefore, such was
sufficient for the approval thereof by the said class.
4. The said Plan and Agreement of Merger, Exhibit "A" hereto,
was also submitted to a vote of the stockholders of VISV pursuant to the
provisions of NRS 78.390 titled "Amendment of articles after issuing stock:
Procedure," and NRS 92A.190 titled "Merger or exchange with foreign entity" of
the Revised Nevada Statutes. The manner of approval thereof by said
stockholders was as follows:
(i) The designation, number of outstanding shares and the
number of votes entitled to be cast by the one and only class of securities
entitled to vote on the said Plan and Agreement of Merger are as follows:
Number
Entitled
Designation Outstanding Shares to Vote
Common stock 1,375,00 1,375,000
(ii) The transaction was submitted to the stockholders of
VISV at a Special Meeting of its Shareholders held on January __, 2000. The
total number of votes whose owners or holders consented in advance to the
merger in writing as contemplated in NRS Section 78.320 and who otherwise voted
in favor of the merger transaction herein provided for at the Special Meeting is
as follows:
Number Voted For Number Voted Against
_______ ____
The foregoing number of votes which voted for adoption of
the said Plan and Agreement of Merger by the singular voting group entitled to
vote thereon was well over fifty percent (50%) and therefore, such was
sufficient for the approval thereof by the said class.
As to each specific Article of Amendment to be voted upon,
all as contemplated in NRS 78.390.1(b), the vote on the proposal to amend the
Articles of Incorporation to change the name of the company from "Vis Viva
Corporation" to "WideBand" were as follows:
Number Voted For Number Voted Against
_______ ____
On the proposal to increase the authorized shares from 15
million common capital shares to 20 million common capital shares, the votes
were as follows:
Number Voted For Number Voted Against
_______ ____
On the proposal to streamline the corporate purposes of the
Company to provide that the Company shall be authorized to conduct and engage
in any lawful business, the votes were as follows:
Number Voted For Number Voted Against
_______ ____
On the proposal to reverse-split the outstanding stock of
the Company 1-for-7 (a proposal which does not require amending the Articles
but which generally requires shareholder approval), the votes were as follows:
Number Voted For Number Voted Against
_______ ____
On the proposal to ratify the conferring of certain stock
options upon certain insiders of the Company in 1996 and the subsequent
exercise thereof on August 25, 1999 (a proposal which does not require
amending the Articles but which the board wanted to submit to the
shareholders), the votes were as follows:
Number Voted For Number Voted Against
_______ ____
On the proposal to issue a total of 55,000 "restricted"
shares to certain insiders as finder's, agent's or consultant's fees (a
proposal which does not require amending the Company's Articles but which the
board wanted to submit to the shareholders), the votes were as follows:
Number Voted For Number Voted Against
_______ ____
5. As contemplated in NRS 78.390 there have been amendments to
the Articles of Incorporation of VISV, the Survivor, resulting from the merger
transaction provided for herein. Such amendments are contained in the
Certificate of Amendment to the Articles of Incorporation of Vis Viva
Corporation to be filed with the State of Nevada contemporaneously with the
filing of these Articles of Merger.
6. The merger herein described shall become effective at the
time that this document is first recorded with the Secretary of State of the
State of Missouri and at the time this document is thereafter recorded and
filed with the Secretary of State of the State of Nevada.
7. The most convenient address of the Surviving Corporation is
and shall be 401 West Grand, Gallatin, MO 64640, phone number (660) 663-3000,
fax no. (660) 663-3736. The Surviving Corporation shall also maintain a
Nevada office as follows: WideBand Corporation, a Nevada corporation, c/o
State Agent and Transfer Syndicate, Inc., Attn: Elizabeth R. Brogan, 318
North Carson Street, Carson City, Nevada 89701.
WIDEBAND CORPORATION,
a Missouri corporation
Date: __________________________ ___________________________________
Roger E. Billings, President
Date: __________________________ ____________________________________
_______________, Secretary/Treasurer
STATE OF MISSOURI )
) ss
COUNTY OF ___________ )
On January __, 2000, personally appeared before me, a Notary
Public in and for the State and County aforesaid, Roger E. Billings, President
of, and _________________, Secretary/Treasurer of WideBand Corporation, a
Missouri corporation, personally known to me to be the persons whose names are
subscribed to the above instrument in the said capacities, who acknowledged
that they executed the said instrument.
____________________________________
NOTARY PUBLIC
VIS VIVA CORPORATION,
a Nevada corporation
Date: __________________________ ___________________________________
John Michael Coombs, President
Date: __________________________ ____________________________________
Angelo Vardakis, Secretary/Treasurer
STATE OF UTAH )
) ss
COUNTY OF SALT LAKE )
On January __, 2000, personally appeared before me, a Notary
Public in and for the State and County aforesaid, John Michael Coombs,
President of, and Angelo Vardakis, Secretary/Treasurer of Vis Viva
Corporation, a Nevada corporation, personally known to me to be the persons
whose names are subscribed to the above instrument in the said capacities, who
acknowledged that they executed the said instrument.
____________________________________
NOTARY PUBLIC
EXHIBIT G
CERTIFICATE OF AMENDMENT TO
THE ARTICLES OF INCORPORATION
OF
VIS VIVA CORPORATION, a Nevada corporation
(to be filed with the Articles of Merger)
Pursuant to Nevada Revised Statutes (NRS) Sections 78.380 through
78.403, titled "Amendment and Restatement of Articles of Incorporation," the
above corporation hereby adopts and files the following Amendments to its
original Articles of Incorporation:
ARTICLE ONE -- NAME
The name of the corporation (hereinafter called the "Corporation") is
and has been changed and shall now and hereafter be known as "WideBand
Corporation."
ARTICLE THREE -- CAPITAL STOCK
The number of shares the Corporation is authorized to issue is twenty
million (20,000,000) shares, having no par value per share, and the
Corporation is authorized to issue, and/or grant options and/or warrants to
purchase, or otherwise acquire, shares of the common stock of the Corporation,
upon such terms and for such consideration as the Board of Directors of the
Corporation shall determine. All shares of stock of this Corporation shall be
of the same class, namely, common capital shares, and shall have the same
rights and preferences. Fully paid shares of stock of this Corporation shall
not be subject to any further call or assessment. The Corporation shall have
the right to purchase, take or otherwise acquire its own shares to the full
extent permitted under Nevada law.
ARTICLE TEN -- PURPOSE
This Corporation is authorized to conduct any and all lawful business,
activity or enterprise for which corporations may be organized under Nevada
law.
IN WITNESS WHEREOF, the undersigned hereby executes this Certificate
of Amendment to the Articles of Incorporation of VIS VIVA CORPORATION, a
Nevada corporation, on this _____ day of January, 2000.
___________________________________
John Michael Coombs
STATE OF UTAH )
) ss
COUNTY OF SALT LAKE )
On this ________ day of January, 2000, personally appeared before me, a
Notary Public in and for the State and County aforesaid, John Michael Coombs,
known to me to be the person who executed the foregoing Certificate of
Amendment to the Articles of Incorporation of Vis Viva Corporation, now known
as "WideBand Corporation," and who further acknowledged to me that he executed
the same freely and voluntarily and for the uses and purposes therein
mentioned.
WITNESS my hand and official seal, the day and year first above written.
___________________________________
NOTARY PUBLIC