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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 000-30217
WORLDWIDE DATA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3810724
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
36 Toronto Street Suite 250
Toronto, Ontario Canada M5C 2C5
(Address of principal executive offices and zip code)
(416) 214-6416
(Issuer's telephone number, including area code)
Indicate by check mark whether the issuer: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes [ ] No [X].
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date: 3,087,500 shares of common
stock, no par value, as of December 31, 2000.
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WORLDWIDE DATA, INC.
FORM 10-QSB
FOR THE QUARTER ENDED June 30, 2000
TABLE OF CONTENTS
PART I. CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Page
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Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets
June 30, 2000 and December 31, 1999 3
Condensed Consolidated Statements of Operations
Three months and six months ended
June 30, 2000 and June 30, 1999 4
Condensed Consolidated Statements of Cash Flows
Six months ended June 30, 2000 and June 30, 1999 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities and Use of Proceeds None
Item 3. Defaults upon Securities None
Item 4. Submission of Matters to a Vote of Security Holders None
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
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Part I
FINANCIAL INFORMATION
Item 1. Financial Statements
Worldwide Data, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
June 30, December 31,
2000 1999
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(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 100 $ 217
Accounts receivable, net of allowances
of $11 and $10 36 47
Other current assets 5 9
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Total current assets 141 273
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Property and equipment, net 83 80
Other assets 239 187
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Total assets $ 463 $ 540
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Liabilities and Shareholders' Equity
Current liabilities:
Bank loan $ 18 $ 35
Accounts payable and accrued liabilities 258 141
Payable to officer 58 55
Debenture payable 250 250
Deferred revenue 24 4
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Total current liabilities 608 485
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Shareholders' equity:
Common stock, $.001 par value; 10,000,000 shares
authorized, 3,487,500 shares (400,000 held in
escrow) issued and outstanding. Preferred stock
$.01 par value 10,000 shares authorized, issued
and outstanding, none 3 3
Additional paid-in capital 1,612 1,612
Accumulated other comprehensive income (loss) (33) 13
Accumulated deficit (1,727) (1,573)
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Total shareholders' equity (145) 55
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Total liabilities and shareholders' equity $ 463 $ 540
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The accompanying notes are an integral part of these consolidated financial
statements
Page 4
Worldwide Data, Inc.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
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2000 1999 2000 1999
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Net revenues:
Products and services $ 163 $ 132 $ 432 $ 220
Aircraft leasing - 35 - 54
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Total net revenues 163 167 432 274
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Cost of net revenues:
Products and services 60 58 169 67
Aircraft leasing - 65 - 101
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Total cost of net revenues 60 123 169 168
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Gross profit 103 44 263 106
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Operating expenses:
Selling general and administrative 240 87 404 209
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Total operating expenses 240 87 404 209
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Income (loss) from operations (137) (43) (141) (103)
Interest income, net (8) (1) (12) (3)
Net income (loss) $ (145) $ (44) $ (153) $ (106)
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Net income (loss) per share - basic and diluted $ (0.05) $ (0.03) $ (0.05) $ (0.05)
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Weighted-average shares - basic and diluted 3,087 2,246 3,087 2,246
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The accompanying notes are an integral part of these consolidated financial
statements
Page 5
Worldwide Data, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
Six months ended
June 30,
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2000 1999
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Cash flows from operating activities:
Net income (loss) $ (153) $ (106)
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities:
Bad debt expense 0 1
Accumulated other comprehensive income (45) (16)
Depreciation and amortization 13 14
Changes in operating assets and liabilities:
Accounts receivable 11 34
Prepaid expenses 5 2
Accounts payable and accrued liabilities 116 (3)
Deferred revenue 20 8
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Net cash provided by (used in)
operating activities (33) (66)
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Cash flows from investing activities:
Purchases of property and equipment (16) (47)
Other assets (54) (131)
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Net cash used in investing activities (70) (178)
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Cash flows from financing activities:
Proceeds from sale of common stock 0 265
Proceeds from officer 3 (50)
Loan payments (17) (0)
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Net cash provided by financing activities (14) 215
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Net increase (decrease) in cash and
cash equivalents (117) (29)
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Cash and cash equivalents, at beginning
of period 217 58
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Cash and cash equivalents, at end of period $ 100 $ 29
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The accompanying notes are an integral part of these consolidated financial
statements
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WORLDWIDE DATA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND OPERATIONS
Worldwide Data, Inc. ("Worldwide") was incorporated in the State of
Delaware on February 27, 1995. On August 16, 1995, Worldwide Online Corp.
("WWOL") was incorporated in Ontario, Canada. On February 26, 1998, Worldwide
exchanged 1,500,000 shares of it's common stock for the 85% of WWOL common stock
that Worldwide did not already own.
We create intranets/extranets for corporations, designs and develops
corporate web sites and databases and creates client-specific applications.
During 1999, we added application hosting and e-business consulting to our
service offerings.
On November 17, 1998, Worldwide acquired all the outstanding shares of
761395 Alberta Ltd. ("Alberta"), a Canadian company in the aircraft leasing
business. Alberta's assets were subsequently sold and the company is presently
inactive. The accompanying unaudited financial statements have been prepared by
us in accordance with the rules and regulations of the Securities and Exchange
Commission for interim financial statements. Accordingly, certain information
and footnote disclosures, normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been condensed or
omitted pursuant to such rules and regulations. In the opinion of our
management, the unaudited financial statements reflect all adjustments,
consisting only of normal recurring adjustments necessary for a fair
presentation of our financial position at June 30, 2000, our operating results
for the six months ended June 30, 2000 and June 30, 1999 and cash flows for the
six months ended June 30, 2000 and June 30, 1999. These financial statements
and the notes should be read in conjunction with our audited consolidated
financial statements and notes thereto contained in our Form SB-1/A filed with
the Securities and Exchange Commission.
The results of operations for the three and six months ended June 30, 2000
are not necessarily indicative of the results that may be expected for future
quarters or the year ending December 31, 2000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The financial statements consolidate the accounts of Worldwide and all its
wholly owned subsidiaries. All intercompany transactions have been eliminated.
Revenue Recognition
We record revenue when products or services are provided to customers.
Net Income (Loss) per Common Share
Basic net income (loss) per common share is based on the weighted average
number of common shares outstanding during the period presented. Fully diluted
loss per share has not been disclosed, as it is anti-dilutive.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires our management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
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disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Comprehensive Income (Loss)
Comprehensive income (loss) is the total of (1) net income (loss) plus (2)
all other changes in net assets arising from non-owner sources.
The following table sets forth a reconciliation of net income (loss) to
comprehensive income (loss), net of tax:
Three months ended Six months ended
June 30, June 30,
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2000 1999 2000 1999
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Net income (loss) $ (145) $ (44) $ (153) $ (106)
Foreign currency translation adjustment (24) (16) (45) (16)
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Comprehensive income (loss) $ (169) $ (60) $ (198) $ (122)
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Fair Value of Financial Instruments
The following estimated fair value amounts have been determined using
available market information and appropriate valuation methodologies. However,
considerable judgement is necessarily required in interpreting market data to
develop the estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that we could realize in a
current market exchange. The use of different market assumptions and/or
methodologies may have a material effect on the estimated fair value amounts.
The following amounts represent the carrying amount and fair value as being the
same:
June 30, December 31,
2000 1999
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(in thousands)
Cash and cash equivalents $ 100 $ 217
Accounts receivable, net 36 47
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Concentration of Credit Risk
We place our cash with major financial institution. As of June 30, 2000,
all of our cash was placed with one institution.
Our customers are from diverse industries and geographic locations. One
customer accounted for 6.5% of net revenues for the six months ended June 30,
2000. This customer also accounted for 12.7% of our accounts receivable balance
at June 30, 2000.
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Statements in this report concerning future events or future performance,
financial results or achievements of Worldwide, or other statements, which are
not statements of historical facts, are forward-looking statements. These
statements may be identified by terminology such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts",
"potential" or "continue" or the negative of such terms or comparable terms.
These statements are subject to a number of known and unknown risks,
uncertainties and other factors, which may cause our actual results,
performance, or achievements to differ from those expressed or implied by those
statements. Relevant risks and uncertainties include among others: our limited
operating history; variability of our operating results; market acceptance of
our Internet traffic and content management products; our timely development of
new products and features; our ability to manage growth; our ability to maintain
and develop distribution relationships; competition in the Internet traffic and
content management market; our ability to expand in the international markets;
unpredictability of our sales cycle and other risk factors. These
forward-looking statements speak only as of the date of this report. We
expressly disclaim any obligation or undertaking to release publicly any updates
or revisions to any forward-looking statements contained in this report to
reflect any change in our expectations with regard to such statements or any
change in events, conditions or circumstances on which any statement is based.
The following information should be read in conjunction with our audited
consolidated financial statements and notes thereto for 1999 contained in our
Form SB - 1/A filed with the Securities and Exchange Commission.
Results of Operations
The following table sets forth financial data as a percentage of total net
revenues for the periods indicated.
Three months ended Six months ended
June 30, June 30,
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2000 1999 2000 1999
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Statement of Operations Data:
Net revenues:
Products and services 100.0% 79.0% 100.0% 80.3%
Aircraft leasing 21.0 19.7
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Total net revenues 100.0 100.0 100.0 100.0
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Cost of net revenues:
Products and services 36.8 34.7 39.1 30.5
Aircraft leasing 39.0 30.8
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Total cost of net revenues 36.8 73.7 39.1 61.3
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Gross margin 63.2 26.3 60.9 38.7
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Operating expenses:
Selling, general and administrative 147.2 52.1 93.5 76.3
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Total operating expenses 147.2 52.1 93.5 148.2
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Income (loss) from operations (84.0) (25.8) (32.6) (37.6)
Interest income, net (4.9) (0.6) (2.8) (1.1)
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Net income (loss) (88.9)% (26.4)% (35.4)% (38.7)%
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Net Revenues:
Net revenues consist of products revenues and services revenues. Product
revenues include revenue from hardware sales. Service revenues include revenue
from e-business consulting and Internet solutions, support, training and
management services.
Revenues. Revenues increased by 23.5% from $132,000 for the three months
ended June 30, 1999 to $163,000 for the three months ended June 30, 2000.
Revenues increased 96.4% from $220,000 for the six months ended June 30, 1999 to
$432,000 for the six months ended June 30, 2000. These increases were due
primarily to increased revenue from our e-business consulting and Internet
solutions services.
Operating Expenses:
Our operating expenses consist primarily of salaries, benefits,
professional service fees, and depreciation. Operating expenses increased by
175.9% from $87,000 for the three months ended June 30, 1999 to $240,000 for the
three months ended June 30, 2000. Operating expenses increased by 93.3% from
$209,000 for the six months ended June 30, 1999 to $404,000 for the six months
ended June 30, 2000. These increases were due primarily to increase in
professional service fees and fees incurred in connection with the preparation
and filing with the Securities and Exchange Commission of our Form SB-1.
Operating Loss:
Our loss from operations increased by 218.6% from $43,000 for the three
months ended June 30, 1999 to $137,000 for the three months ended June 30, 2000.
Operating loss from operations increased by 36.9% from $103,000 for the six
months ended June 30, 1999 to $141,000 for the six months ended June 30, 2000.
Liquidity and Capital Resources
At December 31, 1999, we had cash of $217,000 as compared to cash of
$58,000 as December 31, 1998. During 1999, we completed equity sales whereby we
received net proceeds of approximately $265,000. We used $190,000 of the
proceeds to complete the acquisition of Alberta. The remaining $75,000 of
proceeds were used for working capital.
Cash provided by (used in) our operating activities was $(66,000) for the
six months ended June 30, 1999 and $(33,000) for the six months ended June 30,
2000. As of June 30, 2000, we had $100,000 in cash. We expect that accounts
receivable will continue to increase to the extent our revenues continue to
increase. Any such increases can be expected to reduce cash. We have provided
extended payment terms to one of our resellers and may offer similar financing
to other resellers in the future.
Cash used in investing activities was $178,000 for the six months ended
June 30, 1999 and $70,000 for the six months ended June 30, 2000, which reflect
the purchase of property and equipment. We expect capital expenditures to
continue to increase through the end of 2000, due to the costs of expansion and
expenditures for information systems.
As of June 30, 2000, our principal commitments consisted of obligations
outstanding under operating leases. The annual cost of the lease for our 3,500
square foot facility in Toronto is approximately $66,000, subject to annual
adjustments. As of June 30, 2000, we had no other material commitments. We
expect that our existing cash balances and cash from operations will be
sufficient to meet our anticipated working capital and capital expenditures for
the next twelve months.
We may require additional capital in the future for new business activities
related to our current and planned business, or in the event we decide to make
additional acquisitions or enter into joint venture and strategic alliances.
Sources of additional capital may include cash flow from operations, public or
private sales of equity, debt financing, bank debt and vendor financing.
However, we cannot assure you that we will be successful in producing sufficient
cash flow or raising debt or equity capital to meet our strategic business
objectives or that such funds, if available, will be available on a timely basis
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and on terms that are acceptable to us. If we are unable to obtain such
capital, we may have to delay or curtail business operations. In addition, we
may increase the number of consulting projects we take on, which in turn may
accelerate our need for additional capital.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Interest Rate Risk. We do not hold derivative financial instruments or
equity securities in our investment portfolio. Our cash may from to time to
time be invested in short-term instruments. Our short-term investments mature
in two years or less, with the average maturity being one year or less. These
securities are subject to interest rate risk and will decrease in value if
interest rates increase.
Foreign Currency Risk. Currently the majority of our sales and expenses
are denominated in Canadian dollars and as a result, we have not experienced
significant foreign exchange gains and losses to date. While we have conducted
some transactions in foreign currencies during the fiscal year ended December
31, 1999 and the three and six months ended June 30, 2000 and expect to continue
to do so, we do not anticipate that foreign exchange gains and losses will be
significant. We have not engaged in foreign currency hedging to date, although
we may do so in the future.
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Part II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27.1 Financial Data Schedule (filed only with the electronic
submission of Form 10-QS in accordance with the Edgar
requirements).
99.1 Risk Factors
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by us during the period ended June
30, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on this day of February, 2001.
Worldwide Data, Inc.
(Registrant)
By: /s/ Romeo Colacitti
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Romeo Colacitti
Chairman
(Duly Authorized Officer)
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EXHIBIT INDEX
Exhibit
Index Title
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27.1 Financial Data Schedule
99.1 Risk Factors