UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 22, 2000
PAYFORVIEW.COM CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA
(STATE OR OTHER JURISDICTION OF INCORPORATION)
0-27161 91-1976310
(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
575 MADISON AVENUE, 10TH FLOOR, NEW YORK, NY 10022
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(212) 605-0150
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
MAS ACQUISITION XVI CORP.
1710 E. DIVISION ST.
EVANSVILLE, IN 47711
(812) 479-7226
(FORMER NAME, ADDRESS AND TELEPHONE NUMBER)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to a Stock Exchange Agreement (the "Exchange Agreement") dated
as of February 22, 2000 between MRC Legal Services Corporation, a California
Corporation, which entity is the controlling shareholder of MAS Acquisition
XVI Corp. ("MAS XVI"), an Indiana corporation, and Payforview.com Corp.,
a Nevada corporation ("Payforview" or the "Company"), approximately 96.8%
(8,250,000 shares) of the outstanding shares of common stock of MAS Acquisition
XVI Corp. were exchanged for 335,000 shares of common stock of Payforview
in a transaction in which Payforview became the parent corporation of MAS
XVI.
The Exchange Agreement was adopted by the unanimous consent of the Board of
Directors of MAS XVI on February 22, 2000. The Exchange Agreement was
adopted by the unanimous consent of the Board of Directors of
Payforview on February 22, 2000. No approval of the shareholders of
Payforview or MAS XV is required under applicable state corporate law.
Prior to the merger, MAS XVI had 8,519,800 shares of common
stock outstanding of which 8,250,000 shares were exchanged for 335,000
shares of common stock of Payforview. By virtue of the exchange,
Payforview acquired 96.8% of the issued and outstanding common stock
of MAS XVI.
Prior to the effectiveness of the Exchange Agreement, Payforview
had an aggregate of 48,112,847 shares of common stock, par value $.0001,
issued and outstanding.
Upon effectiveness of the acquisition, Payforview had an aggregate of
48,782,847 shares of common stock outstanding.
The officers of Payforview continue as officers of Payforview
subsequent to the Exchange Agreement. See "Management" below. The officers,
directors, and by-laws of Payforview will continue without change.
A copy of the Exchange Agreement is attached hereto as an exhibit. The
foregoing description is modified by such reference.
(b) The following table sets forth certain information regarding
beneficial ownership of the common stock as of February 22, 2000 (prior to the
issuance of 770,000 shares pursuant to the Exchange Agreement and the
Consulting Agreement) by each individual who is known to the Company,
as of the date of this filing, to be the beneficial owner of more than
five percent of any class of Payforview's voting securities:
Title of Name and address Amount and nature Percentage
class of beneficial of beneficial of class
Owner ownership(1)
Common Southampton Genetic 3,219,650 6.7%
Sciences, Inc.(2) (affiliate)
55 Frederick Street
Nassau, Bahamas
Common Argel Holdings, Ltd.(3) 3,120,250 6.5%
55 Frederick Street (affiliate)
Nassau, Bahamas
(1) Unless otherwise indicated, the Company believes that
all persons named in the above table have sole voting
and investment power with respect to all shares of
common stock beneficially owned by them.
(2) Nic Meredith, an officer and a director of the Company,
is under a management contract with Southampton Genetic
Sciences, Inc. to provide consulting services regarding
investment opportunities, and as such, may have
significant influence as to the voting of this
shareholder in matters regarding the Company.
(3) Warren Wayne, an officer and a director of the Company,
is under a management contract with Argel Holdings,
Ltd. to provide consulting services regarding
investment opportunities, and as such, may have
significant influence as to the voting of this
shareholder in matters regarding the Company.
The table below sets forth the ownership, as of the date of this
filing, by all directors and nominees, and each of the named executive
officers of the Company, and directors and executive officers of Payforview
as a group.
Title of Name and address Amount and nature Percentage
class of beneficial of beneficial of class
owner ownership
Common Marc A. Pitcher 0 0.0%
305-1188 Richards St. (affiliate)
Vancouver, BC V6B 3E6
Canada
Common Nicholas R.S. Meredith(2) 0 0.0%
Rosemount, Grange Road (affiliate)
Winchester, Hants
SO23 9RT
United Kingdom
Common Warren Wayne(2) 0 0.0%
7480 Reeder Road (affiliate)
Vancouver, BC
Canada
Common All Officers and 0 0.0%
Directors as a
Group
(1) Unless otherwise indicated, the Company believes that
all persons named in the above table have sole voting
and investment power with respect to all shares of
common stock beneficially owned by them.
(2) See notes 2 and 3 to the first chart above, regarding
management contracts of Nic Meredith and Warren Wayne.
There are no agreements between or among any of the
shareholders which would restrict the issuance of shares in a
manner that would cause any change of control of Payforview.
There are no voting trusts, pooling arrangements or similar
agreements in place between or among any of the shareholders, nor
do the shareholders anticipate the implementation of such an
agreement in the near term.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Exchange Agreement
was negotiated between representatives of the shareholders of MAS XVI
and the management of Payforview.
In evaluating Payforview as a candidate for the proposed acquisition,
MAS XVI used criteria such as the value of the assets of Payforview, its
Present stock price as set forth on the over-the-counter bulletin board,
Its internet business and other anticipated operations, and Payforview's
Business name and reputation. The shareholders of MAS XVI determined
that the consideration for the merger was reasonable.
(b) Payforview intends to continue its historical businesses and
proposed businesses as set forth more fully immediately below.
Description of Business.
PayForView.com is an Internet-based, diversified
entertainment company which was created to distribute movies,
music, live events and sports, directly to consumers on a
pay-for-view, Internet and retail basis.
Payforview will use existing and proprietary technology
gained through funding and marketing partnerships with Internet
and electronics companies to achieve its goal of allowing viewers
to view the movie or event of their choice in real time, at the
time they want, on their computer or television.
Payforview will also acquire, distribute and sell filmed
entertainment in the traditional manner through existing
relationships with distributors and content providers.
Payforview is in the process of acquiring content and
creating programming and broadcasting for Internet and
traditional distribution.
Payforview was organized on August 26, 1988, under the
name Sierra Gold Corporation and under the laws of the State of
Nevada. Payforview had no operations at that time and as such
was considered a development stage company.
Payforview commenced trading on the National Association
of Securities Dealers (NASD) OTC Bulletin Board on December 21,
1998 under the trading symbol SIRG.
On January 4th, 1999 the name of Payforview was changed
to PayForView.com under the trading symbol PAYV.
Recent Company History
Through an agreement to purchase Voyager International
Entertainment Inc. on January 5th, 1999, and subsequent
agreements with Reel Media, and other filmed content owners,
Payforview has acquired the foreign distribution and domestic
Internet broadcast and DVD rights to extensive motion picture and
video libraries. The more than 2500 titles either closed or being
negotiated to date include well-known silent films, classic
animation features and shorts, and a wide variety of motion
pictures and television programs.
Company Objectives
Payforview plans to negotiate with other content
providers and distributors for the Internet broadcast and DVD
rights to other films, as well as for sports, live events,
business and educational programming content.
Strategic Alliances
Payforview plans to enter the marketplace through
alliances with entertainment and technology companies that will
provide elements needed for the completion of Payforview's
plans. These companies will include those providing Internet
related technical support, filmed or live programming, recorded
music and sports related footage. This creates a vertical
integration of entertainment-related products and Internet
expertise, which will establish a base of operations and cash
flow for Payforview.
The targets for Strategic Alliances are as follows:
1. Film/TV Production Companies
2. Technology Providers
3. Record Labels
4. Sporting Event/Management Companies
5. Broadband Service Providers
1. Film/TV Production Companies
Payforview has entered into agreements with
film/television production companies Avalon Films of Los Angeles,
Voyager Productions Ltd. of Vancouver and Reel Media
International of Dallas, which will supply Payforview with
filmed product. Through distribution of existing libraries and
other licensed property, management believes that Payforview
will be able to generate revenue in the short and long term.
Voyager Productions Ltd.
Voyager Productions Ltd. is a Vancouver-based film
production company in the business of "Road Housing" the
production of motion pictures. By taking advantage of the
Canadian Dollar, Canadian tax incentives and Vancouver's pool of
film production talent, Voyager Productions Ltd. can save
American producers significant amounts of money. Suitable
projects from Payforview and Aurora will be produced by
Voyager Productions. Voyager Productions Ltd. is headed by
securities and entertainment Lawyer Tyrol Russell, who has
practiced law with Vancouver's Russell & Dumoulin and the
national firm Lang, Michener, Lawrence & Shaw.
Reel Media International
Reel Media International is a Dallas, Texas-based company
which represents broadcast rights to 350 color films and 400
Classic black and white titles in it's catalog. The library
collection includes films starring Elizabeth Taylor, John
Travolta, Ingrid Bergman, Roger Moore, John Wayne and Lana
Turner, as well as hundreds of other stars.
Reel Media International provides Payforview with the
Internet broadcast rights to these films on an exclusive basis
allowing Payforview to develop and maintain a competitive
edge.
2. Technology Providers
Payforview's marketing plan is to provide online
entertainment through partnerships with Internet technology
leaders. To that end, Payforview is working with various
companies for technical joint ventures and service agreement to
provide essential streaming video and web casting services.
InterVu
InterVu is a streaming media service provider working to
make the Internet a viable broadcast medium for entertainment,
business and education.
InterVu has the technical expertise to allow Payforview
to reliably deliver programming via the Internet. InterVu has
developed proprietary technology which allows Payforview to
manage broadcast streams in real time and gives Payforview
access to critical information about its video database and
streaming files.
With its own distributed broadcast network, InterVu can
provide Payforview with reliable and efficient connectivity
to the Internet using a premier Internet infrastructure built on
a high-speed backbone and high speed links to the Internet.
InGenius Multimedia
Payforview has entered into a license and development
agreement with Ottawa, Canada-based InGenius Multimedia. Under
the terms of the agreement, InGenius has agreed to license to the
registrant its "SofTV" web authoring software, and to design and
build an interactive streaming media website specifically for
Internet Broadcast.
3. Record Label
In order to take full advantage of the crossover potential
between film, television product and recorded music product, the
registrant has purchased Los Angeles-based Street Solid Records.
Street Solid Records
In 1997, Street Solid Records Inc. ("Street Solid") was
formed to develop, produce and market recorded music to the
worldwide market.
Overall, Street Solid Records can be characterized as a
developing independent record label specializing in urban music.
Street Solid currently owns 25 completed master recordings,
which represent 15 recording artists under contract. In addition
to owning the rights to the recordings, Street Solid owns the
publishing rights to all songs represented on those 25 albums.
Among those under contract are Father MC, Above The Law, and RBX.
An affiliation with Street Solid provides Payforview
access to national and international distribution for music
products as well as street promotion, press, radio promotion and
retail marketing. This creates sales activity for film
soundtracks, and provides additional support for film releases.
The founder and President of Street Solid Records is Jay
Warsinske. Mr. Warsinske has led the development of a number of
record labels and has assisted with the career development of
such artists as N.W.A., Run-DMC, Dr. Dre, Ohio Players, Eazy-E,
Roger & Zapp, Ice Cube, Eric B & Rakim, Ice-T, Cypress Hill,
Fugees, Mellow Man Ace, and dozens of other artists.
Capital Requirements
Payforview estimates initial capital requirements at
$10,000,000 for the following purposes:
1. Creation or acquisition of "Front End Technology" which
is the website and programming mechanism which will be the face
presented to subscribers. This includes the website design,
transaction and database programming, file distribution and links
to the web cast network;
2. Digitizing and electronic storage of "first tier" films
from the library, plus acquisition and licensing of additional
content;
3. Securing of a multi-cast server network for streaming
video distribution;
4. Funding of the Street Solid Records, Voyager and film
sales business plans;
5. Operational and administrative expenses; and
6. Film Sales Marketing
Total Initial Requirement
Payforview has raised approximately $3,000,000 of the
above required amount and is in the process of seeking private
placements for the remainder.
The Product
Payforview is in the business of delivering
entertainment. Payforview operates in three separate elements
including the Entertainment Programming, the Delivery Method and
the Supporting Technology.
Entertainment Programming
The programs viewed on programming include a wide variety of
feature films, sports events, documentaries, music concerts and
videos and live events such as plays, dances and comedies. This
programming is acquired through specific license agreements with
the owners of these products, or created originally for the
registrant through Joint Ventures with film and television
production companies.
Delivery Method
Titles in Payforview's catalogue are delivered to the
end user through the Internet and through traditional Film
Licensing.
1. Internet
In order to view good quality film and video files over the
Internet, subscribers will require a cable modem or greater
bandwidth access. Research indicates that cable companies will
be the leading provider of residential broadband service,
capturing more than 80% of the market by 2002. By 2006 the
industry expects a total of 48.8 million North American
subscribers with high bandwidth access. (Al Nazarali & Associates
Market Research, January 1999).
The following table identifies current and expected trends
in the adoption of high bandwidth Internet access. These
high-end band width users represent computer users with the
capacity to use services provided by Payforview.
Year Cable Modem DSL Subscriber Total High
Users Users Bandwidth Users
1997 170,000 40,000 210,000
1998 350,000 90,000 440,000
1999 1,250,000 250,000 1,500,000
2000 1,600,000 400,000 2,000,000
2001 10,000,000 2,500,000 12,500,000
2002 12,800,000 3,200,000 16,000,000
*Cable modem services are estimated to serve 80% of the broadband
market. The remaining 20% is served by DSL (Digital Subscriber
Line) services.
Supporting Technology
Along with providing customers access to entertainment
programming via the Internet, Payforview will also provide
the hardware to receive this programming at home, through a
personal computer or television. This hardware will be in the
form of a set top box, ("STB") similar to a cable decoder which
will convert the digital information to analogue so it can be
viewed on a standard television set. These units will be
required to access all of Payforview's online programming.
Market Analysis
Overview
Internet Commerce
The International Data Corporation estimates that 48 million
households in the U.S. have at least one personal computer. Of
this amount, roughly 75% or 36 million households are online.
Internet commerce is growing rapidly. Between now and 2003, an
estimated 30 million households will conduct commerce online for
the first time. (International Data Corporation).
In 1999, total U.S. online sales by consumers reached $8
billion. Worldwide online sales are expected to grow to $3.2
trillion by 2003. The average Internet shopper spent $629 for
goods and services in 1998, which is twice that of 1997.
Some 20% of all U.S. households have computers with Internet
access, and a further 53 million DVD or DVD equipped computers
will be accessible by 2002. (Forrester's Entertainment and
Technology Strategies). Currently, 86% of all U.S. households
have a VCR, and in 1997, the estimated video tape rental revenue
was $9.1 billion in the U.S. and another $1 billion throughout
the rest of North America. (Al Nazarali & Associates Market
Research, January 1999)
Payforview estimates second year market potential at
250,000 subscribers, growing to 1,000,000 by year three. These
figures are based on the potential of the current market in an
industry that is recording compounded annual growth in excess of
2.5% per month.
Online Entertainment
Research shows a large portion of Internet spending will be
for media goods and entertainment. Management believes that
positioning Payforview now through the acquisition of
additional content, and using the most current Internet
technology available, Payforview will be positioned to take
advantage of this online commerce trend.
Market Position
In planning a market intrusion, Payforview is looking to
begin by concentrating on a "Business to Business" professional
sales approach, followed closely by or implemented in tandem with
a general consumer marketing strategy. Success in either of the
two areas, although distinct and unique in themselves, will lead
to increased success in the other through brand recognition and
content availability.
Bandwidth Islands
In the marketplace, we have identified companies, which we
describe as "Bandwidth Islands". These are organizations whose
primary business is the sale and service of bandwidth and related
services to end users, both residential and commercial. Each of
these Islands has a built in subscriber base, and instant access
through their database to the high bandwidth users which the
registrant is targeting. In effect, these Islands provide a safe
and friendly harbor in which to begin to conduct business away
from the open ocean of the wider marketplace.
In selling high bandwidth services to homes, one of the
challenges faced by the Islands is content. Consumers, while
attracted to the extra speed in Internet Surfing possible with
higher bandwidth, generally question the value of upgrading to
higher bandwidth at higher cost when to date, there is not enough
content on the net for which high bandwidth is required. Imagine
paying for cable on a monthly basis if you only got one or two
extra channels, and they were in black and white. Such is the
current state of the High Bandwidth arena.
Payforview will provide a "turnkey content package" to
these Islands. By collecting content and creating and perfecting
a delivery and tracking mechanism, Payforview will be able to
offer the Islands the content with which they will be able to
attract additional high band width customers, and keep the ones
they have on line and on Payforview's subscriber list.
Additionally, by retaining control of the content and delivery
system, Payforview could sell advertising during its
programming, thus offering the Island an additional source of
revenue.
The Entertainment Industry
No other industry can match the entertainment industry for
its high profile profit potential. It is expanding at a rate
never before seen. Five of the top 50 fifty entertainment
companies had revenues of over $10 billion and virtually every
company in the top fifty had revenues in the hundreds of millions
during 1996. (Variety Magazine Global Top 50 - August 31, 1997).
The continued growth in demand is expected to continue, due
to the ever expanding cable industry and the emerging markets in
Eastern Europe, hungry for Western product. The success of
Columbia Films' Men In Black, which grossed $750 million,
demonstrates the revenue potential of filmed entertainment,
including the merchandising and licensing opportunities. In 1996,
entertainment companies had combined revenues of $197 billion.
(Variety Magazine Global Top 50 - August 31, 1997). The
proliferation of cable and satellite networks has created new
ancillary markets for films and television to be sold worldwide.
These markets provide even more revenue than the traditional
distribution channels and have increased the demand for product
required to fill the schedules for these networks. The greatest
growth area in the industry remains the continually expanding
export market of North American entertainment products to the
rest of the world.
Secondary marketing of motion pictures has reached the point
where revenues from the above sources and foreign sales can
outstrip original box office figures.
Film Distribution
As in most businesses, the key to success in the film
entertainment industry is distribution. Accordingly, the
registrant intends to create a division designed to maximize the
library's income potential by identifying top titles and
merchandising opportunities through the sales of videocassettes,
DVDs and Special Edition boxed sets. Additionally, the
registrant will be able to assign, in whole or in part,
international distribution rights to portions of the library for
foreign territories.
As international television, satellite, cable, video and DVD
markets grow, Payforview is positioned to take advantage of
these established and emerging market areas.
Through distribution of the existing library and other
licensed property, Payforview expects to be in a position to
generate revenue quickly.
Competition
The Internet broadcast industry is in its infancy.
Competitors such as Dallas based Broadcast.com have been
successful organizations by concentrating on the delivery of
professional services - becoming a fulfillment house for
companies who want to broadcast their content on the net. Others,
like New York based Simply TV are considering a broadcast
approach, such as simulcasting existing stations and content,
while Intertainer positions itself as a movie store on the net by
concentrating on the video rental market.
Payforview's approach differs from these through
diversification. By having Record Label, Sports alliances and a
Film Sales Acquisition Division, Payforview is in a position
to create revenue from the non-Internet sources while also
creating the very content it intends to broadcast on the
Internet. By including music, live events, sports, business and
educational programming, Payforview is creating a vertically
integrated approach to building a business. This will lend
further security to shareholders and set Payforview apart
from the competition.
Marketing Plan
Distribution Sales Strategy
Because of Payforview's focus on a wide range of markets
for filmed product distribution, the sales strategy includes
active representation at the international television product
trade shows, ongoing corporate presence in Los Angeles, Toronto,
New York and London, direct sales with international broadcasters
and strong post-market support.
The primary method of selling Payforview's film
libraries is representation at international trade shows. These
events provide for direct meetings and product pitches to
broadcasters plus opportunities to develop and continue new and
existing relationships with co-production partners. These "show
and tell" opportunities last four to five days and include a full
schedule of pre-booked meetings as well as active networking.
Advertising and Promotion
The advertising and promotion strategy is to position the
registrant as a leader in catalogue film distributor in the
market.
We will utilize the following media and methods to inform
our customers:
1. Primary business publications with high specific market
penetration in conjunction with trade shows.
2. Special, high-interest issues of major publications,
focusing on national press for Payforview rather than product
publicity.
Public Relations
During 2000, Payforview will focus on the following
publicity strategies:
1. Contracting a publicist who will develop a sustained
public relations effort, with ongoing contact between key editors
and top-level personnel;
2. Developing a regular and consistent production update
program for the major target media;
3. Maintaining contact with editorial staff for the purpose
of being included in production listings;
4. Maintaining a complete company background on the
registrant to be used as the primary public relations tool for
all target media editorial contact.
Financial Plan
Revenue Streams
Payforview can generate revenue from the following
sources:
1. Internet Pay-For-View Distribution Rights and Retail
Sales
2. Assignment and Sales of Rights
3. Traditional Film Distribution/Sales
4. Street Solid/Sportsworldlive Revenue
5. Advertising sales including previews for theatrical
feature film releases and commercials attached to pay-for-view
films.
6. Data Base Management and Sales of demographic profile and
viewing habits of subscribers.
Payforview can realize revenue from the sales or
assignment of additional or international rights to Internet
broadcast and DVD production and traditional film sales almost
immediately.
Management's Discussion and Analysis or Plan of Operation.
Financial Condition
As of September 30, 1999, Payforview had received
approximately $327,000 in revenue, and has otherwise been
supported in its operations by private investments. The
investments are in the form of loans with no specific terms of
repayment or interest rate. The amount of the loans to date is
approximately $1,050,000.
Liquidity
Payforview expects an improvement in liquidity based on
anticipated sales in the third and fourth quarters and from
revenue derived from record sales at its subsidiary, Street Solid
Records. Additionally, revenues are expected from the sale of
advertising for specific Internet broadcast projects, such as
film festivals and live events.
In addition to expected revenue, recent private placement
commitments to fund the business plan of Payforview over the
next 18 to 24 months should also improve the liquidity of the
registrant.
Capital Resources
Material commitments made in the first three quarters of
1999 include two short-term office leases, film rights
acquisition contracts and employment contracts. To date, funding
for these commitments has been through private financing.
PayForView.com/Voyager International Share Exchange.
On January 5th, 1999, Sierra Gold Corporation, which at the
same time changed its name to PayForView.com, acquired total
control of Voyager International Entertainment, Inc., a private
company, by issuing 3,096,280 of Payforview's shares in
exchange for 100% of the issued and outstanding shares of
Voyager, such that Voyager became a wholly-owned subsidiary of
Payforview. Voyager shareholders received 0.6 shares of the
registrant for each Voyager share held. A total of 2,596,280
restricted shares of Payforview's Common Stock have been
issued to Voyager shareholders, as well as 500,000 shares placed
into trust for agents and commission recipients. The transaction
has been treated as a reverse takeover for accounting purposes.
Under the terms of the purchase agreement between the
registrant and Voyager, 500,000 restricted shares of the
Company's Common Stock were placed in trust in January of 1999 as
a commission to be paid at an unspecified future date and upon
successful completion of the transaction. As of the date of this
filing, the ultimate recipient(s) of the commission and the total
value of the consideration are as yet undetermined. The Company
evaluated the commission at $0.50 per share, based upon the
market price on the date of closing, discounted by 50% to
encompass the restricted nature of the shares. No shares have
yet been released from trust.
Street Solid Records Purchase for Shares
In January of 1999, Payforview purchased 100% of the
issued and outstanding shares of Los Angeles-based rap and
hip-hop record label Street Solid Records through the issuance of
391,170 pre-split restricted shares (1,173,509 post-split) of the
Company's Common Stock, with a deemed value of $0.70 per share,
to Mr. Jay Warsinske, the sole owner of Street Solid. The
valuation was based upon the current business operations and
assets of Street Solid. The value associated with artists
contracts, rights to master recordings and existing distribution
contracts was determined to be $270,000. The value of fixed
assets, including office furniture and equipment, was $3,819.
Two-For-One Forward Stock Split
On January 15, 1999, Payforview completed a two-for-one
forward stock split.
Reel Media License
On February 19, 1999, Payforview entered into an
agreement with Dallas-based Reel Media for the exclusive Internet
broadcast rights to a motion picture library. The terms of the
deal included issuance by Payforview of 35,000 restricted
shares and payment of a license fee equal to 3% of gross revenue
received from Pay-For-View and advertising purchases. The deal
gave Payforview access to 750 films, television shows and
shorts for Internet broadcast. The 35,000 restricted shares had
a deemed value of $0.50 per share for acquisition purposes.
ITV.Net Services Agreement
On March 11, 1999, Payforview entered into a service
agreement with ITV.Net for the provision of Web Casting,
production and Streaming Media services for a live Internet event
from the Cannes Film Festival. The value of the contract was
$85,000, and was payable $40,000 up front and the balance,
including incidentals, after the production. Payforview paid
the down payment in cash, and after the event, negotiated with
ITV.Net to pay the $58,000 balance with 82,000 restricted shares
at a negotiated value of $0.70 per share.
Bacchus Asset Purchase
On March 23, 1999, Payforview concluded an agreement,
negotiated in January, for the purchase of certain assets of the
Vancouver-based film development company, Bacchus Entertainment.
In exchange for 675,000 restricted shares of the Company's Common
Stock and an agreement by Payforview to continue to invest in
current projects, Payforview received the exclusive rights to
a motion picture in development and the expertise and services of
the Principals of Bacchus. The value of the Bacchus assets was
determined to be approximately $337,500 and the restricted shares
were issued, subject to completion of due diligence by the
registrant, with a deemed value of $0.50 per share.
Sage Consulting Agreement
On March 29, 1999, Payforview contracted the motion
picture and programming consulting services of Sage Entertainment
of New York. The contract called for the services of Sage to be
provided from time to time at Payforview's option for the
purposes of evaluating content licensing agreements and for the
inspection of content to be acquired by Payforview. The
value of Sage's services was set at $1,000.00 per month for
ongoing consulting and $2,000 in advance as a retainer. For
payment of the retainer, Payforview issued 1,000 restricted
shares with a deemed value of $2.00 per share. No monthly
payments have been made at this time.
Three-for-Two Forward Stock Split
On April 9, 1999 Payforview declared a three-for-two
forward stock split.
Sportsworld Live
On April 14, 1999, Payforview concluded an agreement,
negotiated in January, with Australian media company Sportsworld
Network PTY Limited for the Internet broadcast rights to a
library of hundreds of hours of sports-related shorts and
highlights and rights to future content as it is produced by
Sportsworld. The terms of the agreement included the issuance by
Payforview of 25,000 restricted shares of Payforview and
payment of a license fee equal to 8% of gross revenue received by
Payforview from distribution and advertising purchases. To
date, Payforview has paid to Sportsworld 25,000 shares of the
Company's restricted Common Stock with a deemed value of $0.50
per share.
William Stuart Consulting Agreement
In May 1999, Payforview signed a consulting agreement
with William Stuart of Los Angeles for the provision of advice
and expertise related to the Motion Picture Industry. Bill
Stewart is an experienced motion picture producer, with dozens of
films, including the 1996 hit "The Rock", to his credit. The
value of ongoing consulting by William Stuart was set at
$250,000. Payforview issued 333,333 restricted shares to
William Stuart, at a deemed value of $0.75 per share, based upon
then-current market pricing, discounted by the restricted nature
of the shares and the contingencies inherent to the agreement.
InGenius Multimedia
On August 17, 1999, Payforview entered into a license
and development agreement with Ottawa, Canada-based InGenius
Multimedia. Under the terms of the agreement, InGenius agreed to
license to Payforview its "SofTV" web authoring software, and
to design and build an interactive streaming media site
specifically for Internet Broadcast. The initial stage of
development called for the payment of $200,000 in fees for
services to InGenius, with $100,000 payable in cash and $100,000
payable in restricted stock. To date, Payforview has paid
InGenius $50,000.00 in cash as a retainer and 200,000 shares of
the Company's Common Stock with a deemed value of $0.50 per
share.
William Mutual Consulting Agreement
In August 1999, Payforview signed a consulting agreement
with William Mutual of Vancouver, Canada for the provision of
ongoing advice and expertise related to Streaming Media
technology. William Mutual's company, ITV.Net, is a leader in
the Streaming Media industry, and provides services to leading
internet companies. For ongoing consulting services, the value
of Mr. Mutual's services was set at $50,000. Payforview
issued 25,000 restricted shares to William Mutual, with a deemed
value of $2.00 per share.
BSD Debenture and Subscription Agreement
In June 1999, Payforview entered into a 2% series A
senior subordinated convertible redeemable debenture and a
separate securities subscription agreement for the purchase of
the Debenture with BSD Holdings Ltd., a Texas-based investor.
The debenture was valued at $1,000,000, and had a conversion
price equal to 75% of the closing bid price of the Common Stock
of Payforview on the day immediately preceding the date of a
notice of conversion to Payforview from BSD. The
subscription agreement was executed under Rule 504 of Regulation
D, and gave BSD the option to purchase some or the entire
debenture up to a maximum of $1,000,000.
Between June 1999 and September 1999, BSD elected to convert
$600,000 of the debenture. A total of 600,000 shares have been
issued to BSD under the original terms of the debenture.
Acquisition of MAS XVI Consulting Agreement
On February 22, 2000 the Company entered into a consulting agreement between the
Company and the following individual professional persons who acted as
consultants to the Company: M. Richard Cutler, Brian A. Lebrecht, Vi Bui, James
Stubler, and Samuel Eisenberg for services involving consultation, advice and
counsel with respect to the negotiation and completion of the stock exchange
between Payforview and MAS XVI. In addition to cash compensation, the
agreement calls for issuance of a total of 335,000 shares of Payforview
to be issued to the consultants together with an obligation for the Company
to register such shares on Form S-8 at Payforview's sole expense.
Property
The Company presently maintains offices at two locations, in
Vancouver, British Columbia and New York, New York. The business
office in Vancouver is located at the Guinness Business Centre,
Suite 300, Guinness Tower, 1055 West Hastings Street, Vancouver,
British Columbia V6E 2E9. The Vancouver office consists of
approximately 1,000 square feet, leased at $3,300 per month, with
a six-month lease and an option to renew for additional six-month
intervals. The New York office, presently located at 575
Madison Avenue, 10th Floor, New York, New York 10022, consists of
approximately 300 square feet, with a renewable three-month
lease. This office is a temporary location while the Company
seeks more suitable long-term office space.
Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters.
Market Information
The Company's common stock is presently quoted on the OTC
Bulletin Board of the NASD under the ticker symbol "PAYVE".
However, there is currently no "established trading market" for
the Company's common stock, and no assurance can be given that
any current market for the Company's common stock will develop or
be maintained. For any market that develops for the Company's
common stock, the sale of "restricted securities" (common stock)
pursuant to Rule 144 of the Securities and Exchange Commission by
members of management, or any other person to whom any such
securities may be issued in the future may have a substantial
adverse impact on any such public market. A minimum holding
period of one year is required for resales under Rule 144, along
with other pertinent provisions, including publicly available
information concerning the Company; limitations on the volume of
"restricted securities" which can be sold in any 90 day period;
the requirement of unsolicited broker's transactions; and the
filing of a Notice of Sale of Form 144. There are approximately
9,622,717 restricted shares of the Company eligible for trading
as of the date of this filing.
The following quotations were provided by the National
Quotation Bureau, LLC, and do not represent actual transactions;
these quotations do not reflect dealer markups, markdowns or
commissions.
STOCK QUOTATIONS*
CLOSING BID
-----------------------
Quarter ended: High Low
- -------------- ---- ---
January 31, 2000 1.14 0.35
December 31, 1999 0.63 0.12
September 30, 1999 1.75 0.375
June 30, 1999 (2) 7.25 1.25
March 31, 1999 (1) 3.9375 1.0625
(1) Effective January 15, 1999, the Company instituted a 2-
for-1 forward stock split of its Common Stock.
(2) Effective April 9, 1999, the Company instituted a 3-for-
2 forward stock split of its common stock.
With the exception of the 300,000 warrants held by
Swartz Private Equity, there is currently no Common Stock of the
Company which is subject to outstanding options or warrants to
purchase.
There are currently over 9,000,000 shares of the
Company's Common Stock which are eligible to be sold under Rule
144 of the Securities Act of 1933 as amended or that the
registrant has agreed to register for sale by security holders.
There is currently no common equity that is being or
is proposed to be publicly offered by Payforview, the
offering of which could have a material effect on the market
price of the issuer's common equity.
As of January 31, 2000, the Company had approximately 176
shareholders of record.
The securities of the Company will be considered low-priced
or "designated" securities under rules promulgated under the
Exchange Act. Penny Stock Regulation Broker-dealer practices in
connection with transactions in "Penny Stocks" are regulated by
certain rules adopted by the Securities and Exchange Commission.
Penny stocks generally are equity securities with a price of less
than $5.00 (other than securities registered on certain national
securities exchanges or quoted on the NASDAQ system). The penny
stock rules require a broker-dealer, prior to a transaction in a
penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information
about penny stocks and the risk associated with the penny stock
market. The broker-dealer must also provide the customer with
current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market
value of each penny stock held in the customer's account. In
addition, the penny stock rules generally require that prior to a
transaction in a penny stock, the broker-dealer must make a
written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may
have the effect of reducing the level of trading activity in the
secondary market for a stock that becomes subject to the penny
stock rules. When the Registration Statement becomes effective
and the Company's securities become registered, the stock will
likely have a trading price of less than $5.00 per share and will
not be traded on any national exchanges. Therefore, the
Company's stock will become subject to the penny stock rules and
investors may find it more difficult to sell their securities,
should they desire to do so.
The Company has not paid any dividends to date. In
addition, it does not anticipate paying dividends in the
immediate foreseeable future. The Board of Directors of the
Company will review its dividend policy from time to time to
determine the desirability and feasibility of paying dividends
after giving consideration to the Company's earnings, financial
condition, capital requirements and such other factors as the
board may deem relevant.
The Company intends to furnish its shareholders with annual
reports containing audited financial statements and such other
periodic reports as the Company may determine to be appropriate
or as may be required by law. Upon the effectiveness of this
Registration Statement, the Company will be required to comply
with periodic reporting, proxy solicitation and certain other
requirements by the Securities Exchange Act of 1934.
The Company's Transfer Agent for its shares of voting Common
Stock is Transfer Online, 227 SW Pine Street, Suite 300,
Portland, Oregon 97204.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth the names and ages of the current directors
and executive officers of Payforview who will remain so with the combined
entity,
their principal offices and positions and the date each such person became a
director or executive officer.
All directors are elected annually by the shareholders and
hold office until the next annual general meeting of shareholders
or until their successors are duly elected and qualified, unless
they sooner resign or cease to be directors in accordance with
the Articles of Incorporation of the Registrant. Executive
officers are appointed and serve at the pleasure of the Board of
Directors.
The following persons are the current directors and
executive officers of the Company:
MARC A. PITCHER - President, Chief Operating Officer and Director
Date Position Commenced: January 4th, 1999
Term of Office: One Year
Address:305-1188 Richards Street, Vancouver, BC V6B 3E6, Canada
Age: 32
January 4 1999 - Present, PayForView.com, Internet Company,
President. August 1998 - October 1999, Professional Business
Interiors, Interior Design/Construction Project Manager; June
1992 - May 1998, Future Business Center, Commercial Office
Leasing, partner, operations manager.
NICHOLAS R. S. MEREDITH - Vice President, Finance and Director
Date Position Commenced: January 4th, 1999
Term of Office: One Year
Address: Rosemount, Grange Road, Winchester, Hants, SO23 9RT, UK
Age: 39
January 1999 - Present; PayForView.com, Internet Company, Vice
President Finance; February 1998 - January 1999, Voyager
International Entertainment, Film Production, Chief Executive
Officer; January 1996 - October 1999, BTV Productions Inc., Film
Production company, President; January 1995 - January 1996,
Global Financial Services, Finance Consultant.
WARREN WAYNE - Vice President, Content and Acquisitions and
Director
Date Position Commenced: January 4th, 1999
Term of Office: One Year
Address: 7480 Reeder Road, Richmond, BC, Canada
Age: 38
January 1999 - Present, PayForView.com, Internet company; VP
Finance; February 1998 - January 1999, Voyager International
Entertainment; Film Production, Chief Operating Officer; June
1997 - February 1998, Wassermann Investments Holding Co.,
consultant; September 1985 - June 1997, Self Employed, Film
Production.
There are no significant employees who are not described as
executives above, and there are no family relationships among
directors, executive officers or any nominees to these positions.
During the past five years, no present or former director,
executive officer or person nominated to become a director or an
executive officer of the Company:
(1) was a general partner or executive officer of any
business against which any bankruptcy petition was filed, either
at the time of the bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject
to a pending criminal proceeding (excluding traffic violations
and other minor offenses);
(3) was subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any
type of business, securities or banking activities; or
(4) was found by a court of competent jurisdiction (in a
civil action), the Securities and Exchange Commission or the
Commodity Futures Trading Commission to have violated a federal
or state securities or commodities law, and the judgment has not
been reversed, suspended or vacated.
EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
------------------------------- ----------------------------------------
Name and Year Salary($) Bonus($) Other Restricted Securities All other
Principal annual stock awards underlying compensation
position compensation options/SARs ($)
(Medical) (#)
----------------------------------------------------------------------------------------------
Marc A. 2000 60,000 20,000 6,000 0 0 0
Pitcher 1999 60,000 20,000 6,000 0 0 0
(President,
COO & Director)
Nicholas R.S. 2000 60,000 20,000 6,000 0 0 0
Meredith 1999 60,000 20,000 6,000 0 0 0
(Vice President
& Director)
Warren Wayne 2000 60,000 20,000 6,000 0 0 0
(Vice 1999 60,000 20,000 6,000 0 0 0
President
& Director)
No cash compensation, deferred compensation or long-term
incentive plan awards were issued or granted to the Company's
management during the period ended December 31, 1999, except as
set forth in the Summary Compensation Table. Further, no member
of the Company's management has been granted any option or stock
appreciation rights; accordingly, no tables relating to such
items have been included within this Item.
There are no employment contracts, compensatory plans or
arrangements, including payments to be received from the Company,
with respect to any director or executive officer of the Company
which would in any way result in payments to any such person
because of his or her resignation, retirement or other
termination of employment with the Company or its subsidiaries,
any change in control of the Company, or a change in the person's
responsibilities following a change in control of the Company.
Long-Term Compensation
As at December 31, 1999, being a date within 135 days of
this Registration Statement, Payforview had no Long Term
Compensation plans or agreements with any of its officers or
directors.
Employment Contracts
On January 4, 1999, Payforview executed contracts for
three key management employees, Marc Pitcher, President, Nic
Meredith, VP Finance and Warren Wayne, VP Licensing and
Acquisition. The remuneration for each is as follows:
Marc Pitcher - Term of contract one year. Annual salary $60,000.
Monthly Vehicle allowance of $500. Bonus of $20,000 upon receipt
by the Company of financing not introduced by an outside third
party of between $2 Million and $10 Million. Bonus of $50,000
upon receipt by the Company of financing not introduced by an
outside third party of more than $10 Million.
Nic Meredith - Term of contract one year. Annual salary $60,000.
Monthly Vehicle allowance of $500. Bonus of $20,000 upon receipt
by the Company of financing not introduced by an outside third
party of between $2 Million and $10 Million. Bonus of $50,000
upon receipt by the Company of financing not introduced by an
outside third party of more than $10 Million.
Warren Wayne - Term of contract one year. Annual salary $60,000.
Monthly Vehicle allowance of $500. Bonus of $20,000 upon receipt
by the Company of financing not introduced by an outside third
party of between $2 Million and $10 Million. Bonus of $50,000
upon receipt by the Company of financing not introduced by an
outside third party of more than $10 Million.
Fraser Barnes - No fixed term of contract. Annual salary
$55,000. Reimbursement of reasonable and necessary expenses.
Option Agreements
In January of 1999, the Board of Directors of the Company
approved, through a director's resolution, the creation of an
employee option plan. The Company intends to implement an
employee option plan in the near future; however, as of the date
of this filing, no employee option plan has been implemented.
RISK FACTORS
Payforview does not have any significant operating
history upon which to evaluate its future performance. As there
is no lengthy history of operations, investors will be unable to
assess future operating performance or future financial results
or condition by comparing these criteria against their past or
present equivalents. No revenues have been received as yet and no
services have actually been delivered to any customers.
Future revenues are expected to be derived from the sale of
media content on its websites and from commissions on electronic
commerce transactions between viewers and advertisers. The
registrant will only be able to attract content providers or
advertisers to its websites if it can develop and maintain a
viewer base of sufficient size and economic means to offer
prospective content providers and advertisers meaningful
marketing opportunities for their products and services.
Payforview expects to incur losses on both a quarterly
and an annual basis for the foreseeable future and cannot assure
investors of ever achieving profitability.
Payforview's success will depend upon market acceptance
of streaming technology as an alternative to broadcast
television. Without streaming technology, viewers proposed
on-demand programming would not be able to initiate playback
until the programming was downloaded in its entirety, resulting
in significant waiting times.
The acceptance of streaming technology will depend upon a
number of factors, including:
* market acceptance of streaming players such as
Microsoft's Windows Media Player and RealNetworks' RealPlayer
* technological improvements to the Internet
infrastructure, such as an increase in generally available
bandwidth, to allow for improved video and audio quality and a
reduction in Internet usage congestion.
* the ability of Internet users to acquire sufficient
skill and experience to download and operate streaming players.
* reconfiguration of older Web browsers to handle the
inclusion of streaming players.
Payforview anticipates deriving revenues from the sale
of various types of content, generally created by third parties,
over the Internet. Internet product delivery, particularly
utilizing streaming video technology, is a new and rapidly
evolving industry whose demand and market acceptance has not as
yet been proven. Furthermore, standards have not as yet been
widely accepted for the measurement of the effectiveness of
Web-based media services delivery.
Payforview's ability to generate revenue will depend
upon a number of factors, including:
* pricing of content delivered by other websites.
* the amount of traffic on our proposed websites.
* the ability of Payforview to demonstrate user
demographic characteristics that are attractive to content
providers.
* the establishment of desirable production and programming
relationships.
Acceptance of the Internet among content providers,
distributors, studios, television networks, such as sports
programmers and advertising agencies will also depend to a large
extent on the level of Internet use by consumers and upon growth
in the commercial use of the Internet. Because global commerce
and the online exchange of information is new and evolving, we
are unable to predict with any assurance whether the Internet
will prove to be a viable commercial marketplace in the long
term. Prospective revenues would be adversely affected if
widespread commercial use of the Internet does not develop or is
substantially delayed, or if the Internet does not develop as an
effective and measurable advertising medium.
In addition to media content delivery and advertising,
another intended source of revenue is from electronic commerce
tie-ins. E-commerce has only recently begun to develop and is
rapidly evolving. As is typical in a new and rapidly evolving
industry, demand and market acceptance for recently introduced
services and products are subject to uncertainty. Consumer
satisfaction from shopping over the Internet has been mixed,
there is no assurance that e-commerce will continue to grow. The
registrant's ability to derive revenues from arrangements with
e-commerce businesses and to deliver acceptable programming
content will depend upon a number of factors including:
* acceptance by the general public of the Internet as a
convenient and safe shopping forum.
* the offer of quality products at competitive prices.
* Payforview's ability to attract viewers and direct
such viewers to its e-commerce business tie-ins.
At present, prospective viewers can download streaming
software off the Internet, in most instances at no charge. There
is no assurance that streaming software will continue to be made
available to the public free of charge. If users are charged to
acquire streaming software, streaming technology may not be
widely accepted by Internet users.
Internet infrastructure failures or disruptions caused by
increased traffic on the Web, may result in technical
difficulties. Vandalism or acts of God, among other factors, may
impede Payforview's ability to transmit streaming video
content to viewers. Repeated failures or disruptions may result
in viewer dissatisfaction with the Internet as a viewing medium,
which may lead to a diminution of Payforview's viewer base
and a resultant impairment of Payforview's ability to
generate advertising and e-commerce transaction revenues.
Payforview will have to rely on local and long-distance
telecommunications companies to provide data communications
capacity. These providers may experience service disruptions or
have limited capacity, which could disrupt the provision of
streaming video content to viewers. Payforview may not be
able to replace or supplement these services on a timely basis,
if at all. In addition, because Payforview must rely on
third-party telecommunications services providers for connection
to the Internet, Payforview may not be able to control
decisions regarding the availability of, or our access to,
services at any given time.
Payforview's success will depend to a large degree upon
the efforts of its management, technical and marketing personnel.
Payforview's success will also depend on its ability to
attract and retain additional qualified management, technical and
marketing personnel. Hiring employees with the combination of
skills and attributes required to carry out the strategy is
extremely competitive. The loss of the services of key personnel
together with an inability to attract qualified replacements
could adversely affect prospective growth.
Payforview will compete for both viewers and advertisers
with numerous larger and well-financed companies. These include:
* other websites, Internet access providers and Internet
broadcasters that provide content to attract users.
* Online services, other website operators and
advertising networks, as well as traditional media such as
television. Radio and print for a share of available media
content suitable for distribution via the Internet, and for
advertisers' total advertising budgets.
* traditional media such as broadcast television, cable
television, radio and print with international content.
To compete successfully, Payforview will have to provide
sufficiently compelling and popular content to generate users and
support advertising intended to reach such users. Payforview
believes that the principal competitive factors in attracting
Internet users include the quality of service and the relevance,
timeliness, depth and breadth of content and services offered.
Payforview also expects to compete with online services,
other website operators and advertising networks, as well as
traditional media such as television, radio and print for a share
of advertisers' total advertising budgets.
The principal competitive factors for attracting advertisers
include:
* the number of users accessing Payforview's websites.
* the demographics of prospective users.
* Payforview's ability to deliver focused programming
and advertiser interactivity through its websites.
* the overall cost-effectiveness and value of advertising
on Payforview's network.
* Payforview's ability to achieve recognition of the
PayForView.com name.
Payforview's intended establishment of operations in
foreign countries and hiring freelance media providers will
entail significant expenditures and some knowledge of each
country's national and local laws, including tax and labor laws.
Furthermore, there are certain risks inherent in conducting
business internationally, including, among others, regulatory
requirements, legal uncertainty regarding liability, difficulties
in staffing and managing foreign operations, longer payment
cycles, different accounting practices, currency exchange rate
fluctuations, tariffs and other trade barriers, political
instability and potentially adverse tax consequences, any of
which could adversely affect growth opportunities.
Copyrights, trade secrets and similar intellectual property
are significant to Payforview's growth and success. The
registrant relies upon a combination of copyright and trademark
laws, trade secret protection, confidentiality and non-disclosure
agreements and contractual provisions with its employees and with
third parties to establish and protect proprietary rights. The
registrant has applied for federal trademark protection for
"PayForView.com" and intends to apply for federal trademark
protection for all domain names used in the PayForView.com
network. Legal standards relating to the validity, enforceability
and scope of protection of certain proprietary rights in
Internet-related industries are uncertain and still evolving. The
registrant is unable to assure investors as to the future
viability or value of any of its proprietary rights or those of
other companies within the industry. Payforview is also
unable to assure investors that the steps taken to protect
proprietary rights will be adequate. Furthermore, Payforview
can have no assurance that its proposed business activities will
not infringe upon the proprietary rights of others, or that other
parties will not assert infringement claims against the
registrant.
Payforview will require substantial additional financing
in order to expand its network offerings beyond the initial
venues, and to become a meaningful competitor in the Internet
broadcast industry. There is no assurance that such financing
will be available. Moreover, if additional capital is raised
through borrowing or other debt financing, this would incur
interest expense.
Although there are currently few laws and regulations
directly applicable to the Internet it is likely that new laws
and regulations will be adopted in the United States and
elsewhere covering issues as music licensing, copyrights,
privacy, pricing, sales taxes and characteristics and quality of
internet services. The adoption of restrictive laws and
regulations could slow Internet growth or its use as a commercial
or advertising medium.
Year 2000 Disclosure.
The Year 2000 issue is the potential for system and
processing failures of date-related data and the result of
computer-controlled systems using two digits rather than four to
define the applicable year. For example, computer programs that
have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in
system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability
to process transactions. As of the date of this filing, this
risk has been a non-issue and neither Payforview nor any of
its hardware or software suppliers has experienced any system
failures or disruptions caused by the Year 2000 issue. There were
no costs to Payforview associated with this issue.
Potential de-listing of common stock
We may be de-listed from the OTC bulletin board. NASD Eligibility Rule 6530
issued on January 4, 1999, states that issuers who do not make current
filings pursuant to Sections 13 and 15(d) of the Securities Act of 1934 are
ineligible for listing on the OTC bulletin board. Issuers who are not current
with such filings are subject to de-listing according to a phase-in
schedule depending on each issuer's trading symbol as reported on January 4,
1999. Our trading symbol on January 4, 1999 was PAYV. Therefore, under
the phase-in schedule, our common stock is subject to de-listing on March 7,
2000. One month prior to our potential de-listing date, our common stock
had its trading symbol changed to PAYVE.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Upon execution of the Exchange Agreement and delivery of the Payforview
shares to
the shareholders of MAS XVI, pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, Payforview became the
successor issuer to MAS XVI for reporting purposes under the Securities
Exchange Act of 1934 and elected to report under the Act effective
February 22, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Not applicable.
ITEM 7. FINANCIAL STATEMENTS
1. PayForView.com Corp. Consolidated Interim Financial
Statements January 1, 1999 - September 30, 1999
2. Voyager International Entertainment Inc. Audited Consolidated
Financial Statements from incorporation on April 6, 1998
to December 31, 1998
3. Sierra Gold Corporation Audited Financial Statements
December 31, 1998; December 31, 1997; December 31, 1996
PAYFORVIEW.COM, CORP.
(formerly Sierra Gold Corporation)
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
SEPTEMBER 30, 1999
PAYFORVIEW.COM CORP.
(formerly Sierra Gold Corporation)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
(Audited)
September 30, December 31,
1999 1998
----------- -----------
ASSETS
Current
Accounts receivable $ 86,242 $ -
Prepaid expenses and deposits 350,337 2,802
Due from related parties - 7,648
----------- -----------
436,579 10,450
Capital assets (Note 4) 14,066 7,025
Goodwill (Note 5) 3,439 -
Licenses and rights (Note 6) 547,208 -
----------- -----------
$1,001,292 $ 17,475
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and
accrued liabilities $ 832,570 $ 82,893
Loan payable (Note 8) 1,046,763 59,418
----------- -----------
1,879,333 142,311
----------- -----------
Stockholders' equity
Capital stock (Note 10)
Authorized
100,000,000 common shares with
a par value of $0.0001
Issued
17,810,722 common shares
(December 31, 1998 - 4,327,131) 1,781 4,327
Additional paid in capital 2,209,547 146,365
Stock subscriptions receivable (50) -
Deficit, accumulated during
the development stage (3,089,319) (275,528)
----------- -----------
(878,041) (124,836)
----------- -----------
$ 1,001,292 $ 17,475
=========== ===========
History and organization of the Company (Note 1)
The accompanying notes are an integral part
of these consolidated financial statements.
PAYFORVIEW.COM CORP.
(formerly Sierra Gold Corporation)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
Cumulative
Amounts
From Period From
Incorporation Incorporation
on April 6, Nine Month on April 6,
1998 to Period Ended 1998 to
September 30, September 30, September 30,
1999 1999 1998
----------- ----------- -----------
REVENUE $ 327,138 $ 327,138 $ -
COST OF SALES 679,820 679,820 -
----------- ----------- -----------
OPERATING LOSS (352,682) (352,682) -
----------- ----------- -----------
EXPENSES
Advertising and promotion 601,218 601,218 -
Amortization 95,345 93,446 1,266
Commissions (Note 7a) 262,250 262,250 -
Consulting fees 452,419 441,639 10,780
Corporate relations 42,608 - 42,608
Interest 10,762 10,762 -
Management fees 159,525 150,525 -
Office and general 107,878 79,746 22,989
Professional fees 117,574 85,663 18,523
Recording expenses 14,924 - 14,924
Rent 96,336 67,321 19,511
Royalties 143,000 143,000 -
Telephone 49,887 44,581 3,537
Transfer agent 10,901 10,901 -
Travel 185,654 177,349 8,305
Wages and benefits 13,648 - 10,583
Web-site development 105,208 105,208 -
Write-off of licenses and rights 80,000 - 30,000
Write-off of receivable 187,500 187,500 -
----------- ----------- -----------
(2,736,637) (2,461,109) 183,026
----------- ----------- -----------
Loss for the period $(3,089,319) $(2,813,791) $ (183,026)
=========== =========== ============
Basic and fully diluted loss per share $ (0.18) $ (0.08)
============ ============
Weighted average shares outstanding 15,441,869 2,282,443
=========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
PAYFORVIEW.COM CORP.
(formerly Sierra Gold Corporation)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
Deficit
Accumulated
Common Shares Issued Additional Stock During the
------------------------- Paid in Subscription Development
Number Amount Capital Receivable Stage Total
_________ __________ ___________ _____________ _____________ _____________
Balance, April 6, 1998 - $ - $ - $ - $ - $ -
Capital stock of Voyager
International
Entertainment Inc.
issued for services 3,800,000 3,800 34,200 $ - - 38,000
Capital stock of Voyager
International
Entertainment
Inc. issued for
acquisition of Voyager
Film Sales Inc. 200,000 200 - - - 200
--------- -------- -------- ----------- -------- --------
Capital stock of Voyager
International
Entertainment Inc.
issued for cash 327,131 327 112,165 - - 112,492
Loss for the period - - - - (275,528) (275,528)
--------- -------- -------- ----------- ------------- -----------
Balance,
December 31, 1998 4,327,131 4,327 146,365 - (275,528) (124,836)
Capital stock of Voyager
International
Entertainment Inc. (4,327,131) - - - - -
Capital stock of
Payforview.com Corp.
at January 5, 1999 3,750,000 375 625 - - 1,000
Adjustment for
par value - (4,327) 4,327 - - -
Issuance of shares for
acquisition of Voyager
International
Entertainment
Inc. (Note 7a) 7,788,840 779 1,817 - - 2,596
Issuance of shares for
commission on acquisition
of Voyager International
Entertainment Inc.
(Note 7a) 1,500,000 150 249,850 - - 250,000
Issuance of shares for
acquisition of Street
Solid Records Inc.
(Note 7b) 1,173,509 117 273,702 - - 273,819
Issuance of shares for
acquisition of licenses
and rights (Note 6) 1,102,500 110 367,390 - - 367,500
Issuance of shares
for services 759,833 76 479,924 - - 480,000
Issuance of shares
for debt 95,500 10 61,290 - - 61,300
Issuance of shares
for cash 540,540 54 99,946 - - 100,000
Issuance of shares on
conversion of
convertible
debentures 600,000 60 599,540 - - 600,000
Shares subscribed
for cash 500,000 50 - (50) - -
Share issuance costs - - (75,629) - - (75,629)
Loss for the period - - - - (2,813,791) (2,813,791)
--------- -------- -------- ----------- ------------ -----------
Balance at September 30,
1999 17,810,722 $ 1,781 $2,209,547 $ (50) $ (3,089,319) $ (878,041)
=========== ======== ========== =========== =========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
PAYFORVIEW.COM CORP.
(formerly Sierra Gold Corporation)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
Cumulative
Amounts
From Period From
Incorporation Incorporation
on April 6, Nine Month on April 6,
1998 to Period Ended 1998 to
September 30, September 30, September 30,
1999 1999 1998
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $(3,089,319) $(2,813,791) $ (183,026)
Items to reconcile loss to cash
from operating activities
Amortization 95,345 93,446 1,266
Issuance of common stock
for services 518,000 480,000 38,000
Issuance of common stock
for commission 250,000 250,000 -
Changes in other operating assets
and liabilities
Increase in accounts receivable (86,242) (86,242) -
Increase in prepaid expenses
and deposits (350,337) (347,535) (2,802)
Decrease (increase) in due
from related party 200 7,648 (21,467)
Increase in accounts payable
and accrued liabilities 893,420 810,527 55,043
----------- ----------- -----------
Net cash used in operating
activities (1,768,933) (1,605,947) (112,986)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of capital assets (14,693) (5,769) (8,924)
----------- ----------- -----------
Net cash used in investing
activities (14,693) (5,769) (8,924)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital stock issued for cash 212,492 100,000 112,492
Share issuance costs (75,629) (75,629) -
Proceeds from loan payable 1,046,763 987,345 9,418
Proceeds from convertible
debenture 600,000 600,000 -
----------- ----------- -----------
Net cash provided by financing
activities 1,783,626 1,611,716 121,910
----------- ----------- -----------
Cash, end of period $ - $ - $ -
----------- ----------- -----------
Cash paid during the period
for interest $ 11,149 $ 10,762 $ 387
----------- ----------- -----------
Cash paid during the period
for income taxes $ - $ - $ -
----------- ----------- -----------
Supplemental disclosure for non-cash operating, financing
and investing activities (Note 12)
The accompanying notes are an integral part
of these consolidated financial statements.
PAYFORVIEW.COM CORP.
(formerly Sierra Gold Corporation)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
SEPTEMBER 30, 1999
1. ORGANIZATION OF THE COMPANY
Payforview.com Corp ("the Company") was incorporated on
August 26, 1988. On January 4, 1999, the Company changed its
name from Sierra Gold Corporation to Payforview.com Corp.
On January 5, 1999, the Company issued 2,596,280 (7,788,840
post split) common shares at par value for all the issued
and outstanding shares of Voyager International
Entertainment Inc. ("Voyager"). In January 1999, the Company
issued 391,170 (1,173,509 post split) common shares at par
value for all the issued and outstanding shares of Street
Solid Records Inc. On January 15, 1999 the Company
implemented a two for one forward stock split. On April 9,
1999 the Company implemented a three for two forward stock
split.
These financial statements contain the financial statements
of Voyager, its wholly-owned subsidiary Voyager Film Sales
Inc., Street Solid Records Inc. and Payforview.com Corp
presented on a consolidated basis. On January 5, 1999, the
Company acquired all the issued and outstanding share
capital of Voyager by issuing 2,596,280 (7,788,840 post
split) common shares (Note 7a). As a result of the share
exchange, control of the combined companies passed to the
former shareholders of Voyager. This type of share exchange
has been accounted for as a capital transaction accompanied
by a recapitalization of Voyager. Recapitalization
accounting results in consolidated financial statements
being issued under the name of Payforview.com Corp, but are
considered a continuation of Voyager. As a result, the
financial statements presented represent the consolidated
financial position of the above companies as at September
30, 1999 and the results of operations of Voyager for the
nine month period ended September 30, 1999 and the period
from April 6, 1998 (incorporation) to September 30, 1999 and
the results of operations of Payforview from the deemed date
of acquisition during the period. The number of shares
outstanding at September 30, 1999 as presented are those of
Payforview.com, Corp.
The company is considered a development stage company.
Presently, the Company is developing an internet based
website to distribute movies, music, live event and sports
events direct to consumers on a pay-for-view and retail
basis.
In the opinion of management, the accompanying consolidated
financial statements contain all adjustments necessary
(consisting only of normal recurring accruals) to present
fairly the financial information contained therein. These
consolidated statements do not include all disclosures
required by generally accepted accounting principles and
should be read in conjunction with the audited consolidated
financial statements of the Company for the year ended
December 31, 1998. The results of operations for the period
ended September 30, 1999 are not necessarily indicative of
the results to be expected for the year ending December 31,
1999.
2. SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
These consolidated financial statements include the accounts
of Payforview.com Corp. (formerly Sierra Gold Corporation)
and its wholly-owned subsidiaries, Voyager International
Entertainment Inc., Voyager Film Sales Inc. and Street Solid
Records Inc. All significant inter-company balances and
transactions have been eliminated in consolidation.
Stock-based compensation
Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation", encourages, but
does not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The
Company has chosen to account for stock-based compensation
using Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees". Accordingly,
compensation cost for stock options is measured as the
excess, if any, of the quoted market price of the Company's
stock at the date of the grant over the amount an employee
is required to pay for the stock.
Income taxes
Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for
Income Taxes". A deferred tax asset or liability is
recorded for all temporary differences between financial and
tax reporting and net operating loss carryforwards.
Deferred tax expenses (benefit) results from the net change
during the period of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will
not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on
the date of enactment.
Use of estimates
The preparation of consolidated financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported
amount of revenues and expenses during the period. Actual
results could differ from these estimates.
Accounting for derivative instruments and hedging activities
In June 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 133
"Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133") which establishes accounting and
reporting standards for derivative instruments and for
hedging activities. SFAS 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999. In
June 1999, FASB issued SFAS 137 to defer the effective date
of SFAS No. 133 to fiscal quarters of fiscal years beginning
after June 15, 2000. The Company does not anticipate that
the adoption of the statement will have a significant impact
on its financial statements.
Reporting on costs of start-up activities
In April 1998, the American Institute of Certified Public
Accountant's issued Statement of Position 98-5 "Reporting on
the Costs of Start-Up Activities" ("SOP 98-5") which
provides guidance on the financial reporting of start-up
costs and organization costs. It requires costs of start-up
activities and organization costs to be expensed as
incurred. SOP 98-5 is effective for fiscal years beginning
after December 15, 1998 with initial adoption reported as
the cumulative effect of a change in accounting principle.
The Company has adopted this statement during the period.
Foreign currency translation
Transaction amounts denominated in foreign currencies are
translated into United States currency at exchange rates
prevailing at transactions dates. Carrying values of
monetary assets and liabilities are adjusted at each balance
sheet date to reflect the exchange rate at that date. Gains
and losses from restatement of foreign currency monetary
assets and liabilities are included in income, except for
those gains and losses related to long-term monetary assets
or liabilities which are deferred and amortized over the
life of the respective asset or liability.
Revenue recognition
Revenues from products and services are recognized at the
time the goods are shipped or services provided to the
customer, with an appropriate provision for returns and
allowance.
Capital assets
Capital assets are stated at cost unless the future
undiscounted cash flows expected to result from either the
use of an asset or its eventual disposition is less than its
carrying amount in which case an impairment loss is
recognized based on the fair value of the assets.
Amortization of capital assets is based on the estimated
useful lives of the assets and is computed using the
straight-line method as follows:
Computer equipment 3 years
Furniture and office equipment 5 years
Goodwill
Goodwill represents the excess of acquisition costs over the
fair market value of the net assets of acquired business and
is being amortized on a straight-line basis over their
useful lives being five years. In accordance with APB 17,
"Intangible Assets", the Company continues to evaluate the
amortization period to determine whether events and
circumstances warrant revised amortization periods.
Additionally, the Company considers whether the carrying
value of such assets should be reduced based on the future
benefits of its intangible assets.
Licenses and rights
Licenses and rights costs are deferred and amortized on a
straight-line basis over the lesser of their estimated
useful lives, generally three to five years, or their
contractual term. In accordance with APB 17, "Intangible
Assets", the Company continues to evaluate the amortization
period to determine whether events and circumstances warrant
revised amortization periods. Additionally, the Company
considers whether the carrying value of such assets should
be reduced based on the future benefits of its intangible
assets.
Loss per share
Loss per share is computed based on the weighted average
number of common shares and common stock equivalents
outstanding during the period, unless the common stock
equivalents are anti-dilutive.
Comprehensive income
The Company has adopted Statement of Financial Accounting
Standards No. 130 ("SFAS 130"), "Reporting Comprehensive
Income". This statement establishes rules for the reporting
of comprehensive income and its components. The adoption of
SFAS 130 had no impact on total stockholders' equity as of
September 30, 1999.
Comparative figures
Certain comparative figures have been reclassified to
conform with the current period's presentation.
3. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of accounts
receivable, accounts payable and loan payable. Unless
otherwise noted, it is management's opinion that the Company
is not exposed to significant interest, currency or credit
risks arising from these financial instruments. The fair
value of these financial instruments approximate their
carrying values, unless otherwise noted.
4. CAPITAL ASSETS
Net Book Value
------------------
Accumulated (Audited)
Cost Amortization 9/30/99 12/31/98
------ ------- ------- -------
Computer equipment $ 856 $ 426 $ 430 $ 571
Furniture and office 17,656 4,020 13,636 6,454
equipment ------ ------- ------- -------
$18,512 $ 4,446 $14,066 $ 7,025
======= ======= ======= =======
5. GOODWILL
Net Book Value
------------------
Accumulated (Audited)
Cost Amortization 9/30/99 12/31/98
------ ------- ------- -------
Goodwill $4,046 $ 607 $3,439 $ -
======= ======= ======= =======
6. LICENSES AND RIGHTS
a) License and distribution rights to the master
recordings of various recording artist which were
purchased on the acquisition of Street Solid Records
Inc. (Note 7b). The deemed value of the license and
distribution rights acquired was $270,000.00
b) On February 19, 1999 Payforview entered into an
agreement with Reel Media International to acquire the
license and internet broadcast rights to a 750 film
library. As consideration for the license rights,
Payforview.com Corp. issued 35,000 (52,500 post split)
common shares at a deemed value of $17,500 and will pay
a license fee of 3% of revenues generated from the
license rights. The term of the agreement is for four
years.
c) On March 23, 1999 Payforview.com Corp. issued 675,000
(1,012,500 post split) common shares to Bacchus
Entertainment Ltd. at a deemed value of $337,500 as
consideration for the purchase of various rights and
interests in feature films and motion picture
productions.
d) In April 1999 Payforview.com Corp. entered into an
agreement with Sportsworld Network (Australia) Pty
Limited to acquire the non-exclusive, worldwide license
rights to broadcast various sports related filmclips
and highlights. As consideration for the license
rights, Payforview.com Corp. issued 25,000 (37,500 post
split) common shares at a deemed value of $12,500 and
will pay a license fee of 8% of gross revenues
generated from the license. The license agreement
expires July 1, 2000.
Net Book Value
------------------
Accumulated (Audited)
Cost Amortization 9/30/99 12/31/98
------ ------- ------- -------
Street Solid Records
Inc. - licenses and
distribution rights $270,000 $40,500 $229,500 $ -
Reel Media International -
750 film library license
and Internet broadcast
rights 17,500 2,917 14,583 -
Bacchus Entertainment Ltd. -
rights and interests 337,500 39,375 298,125 -
Sportsworld Network -
license and broadcast
rights 12,500 7,500 5,000 -
--------- ------ --------- -------
637,500 $90,292 $547,208 $ -
========= ======== ======= =======
7. BUSINESS COMBINATIONS
a) On January 5, 1999, Payforview.com Corp. ("Payforview")
acquired all of the issued and outstanding share
capital of Voyager International Entertainment Inc.
("Voyager"). As consideration, Payforview issued
2,596,280 (7,788,840 post split) common shares.
Legally, Payforview is the parent of Voyager. However,
as a result of the share exchange described above,
control of the combined companies passed to the former
shareholders of Voyager. This type of share exchange,
has been accounted for as a capital transaction
accompanied by a recapitalization of Voyager rather
than a business combination. Accordingly, the net
assets of Voyager are included in the balance sheet at
book values, with the net assets of Payforview recorded
at fair market value at the date of acquisition. The
revenues and expenses and assets and liabilities
reflected in the financial statements prior to the date
of acquisition are those of Voyager. Revenue and
expenses or assets and liabilities are subsequent to
the date of acquisition include the accounts of
Payforview.
The cost of an acquisition should be based on the fair
value of the consideration given, except where the fair
value of the consideration given is not clearly
evident. In such a case, the fair value of the net
assets acquired is used.
At January 5, 1999, Payforview was a newly listed
company on the OTC Bulletin Board with a thin market
for its shares, making it impossible to estimate the
actual market value of the 2,596,280 (7,788,840 post
split) common shares. Therefore, the cost of the
acquisition, $2,596, has been determined by the fair
value of Payforview's net assets.
The total purchase price of $2,596 was allocated as
follows:
Goodwill $ 4,046
Accounts payable and
accrued liabilities (1,450)
----------
$ 2,596
==========
As part of this transaction, Payforview issued 500,000
(1,500,000 post split) common shares at a deemed value
of $250,000 as a commission on the acquisition.
b) In January 1999, Payforview acquired all the issued and
outstanding share capital of Street Solid Records Inc.
("Street Solid"), a Nevada corporation. As
consideration, Payforview issued 391,170 (1,173,509
post split) common shares. The acquisition was
accounted for using the purchase method. The operations
and financial position of Street Solid were accounted
for in the consolidated financial statements of the
Company subsequent to the date of acquisition.
The cost of an acquisition should be based on the fair
value of the consideration given, except where the fair
value of the consideration given is not clearly
evident. In such a case, the fair value of the net
assets acquired is used.
In January 1999, Payforview was a newly listed company
on the OTC Bulletin Board with a thin market for its
shares, making it impossible to estimate the actual
market value of the 391,170 (1,173,509 post split)
common shares. Therefore, the cost of the acquisition,
$273,819, has been determined by the fair value of
Street Solid's net assets.
The total purchase price of $273,819 was allocated as
follows:
Licenses and rights $ 270,000
Capital assets 3,819
------------
$ 273,819
============
8. LOAN PAYABLE
The loan payable is unsecured, non-interest bearing with no
fixed terms of repayment.
9. CONVERTIBLE DEBENTURE
On June 25, 1999, Payforview.com Corp. ("Payforview")
entered into a Debenture Agreement and Securities
Subscription Agreement with BSD Holdings L.L.C. ("BSD").
Under the Debenture Agreement, Payforview can issue up to
$1,000,000 of 2% series A senior subordinated convertible
redeemable debentures. The principal sum outstanding plus
accrued interest calculated at a rate of 2% per annum are
due at maturity on June 25, 2001.
Each $10,000 debenture is convertible into common shares of
Payforview at the option of the holder at a conversion price
equal to 75% of the closing bid price of Payforview's common
stock on the OTC Bulletin Board for the day immediately
preceding the date of the notice of conversion.
Payforview has the option to redeem the debentures at 125%
of the principal amount to the extent conversion has not
occurred.
Under the agreement, Payforview has issued $600,000 of
debentures to BSD. Immediately upon issuance, BSD converted
the debentures into 600,000 common shares of Payforview at a
deemed value of $600,000.
In addition, Payforview issued 500,000 common shares at a
deemed value of $50 to BSD as collateral towards future
debenture financings and conversions.
10. CAPITAL STOCK
Additional paid in capital
The excess of proceeds received for common shares over their
par value of $0.0001, less share issue costs, is credited to
additional paid in capital.
Stock split
On January 15, 1999, the Company implemented a 2:1 stock
split. On April 9, 1999, the Company implemented a 3:2
stock split. The consolidated statements of changes in
stockholders' equity has been restated to give retroactive
recognition of the stock split for all periods presented by
reclassifying from additional paid-in capital to common
shares the par value of additional shares arising from the
split. In addition, all references to number of shares and
per share amounts of common stock have been restated to
reflect the stock split.
Common stock
As part of the acquisition of Voyager International
Entertainment Inc., the Company issued 2,596,280 (7,788,840
post split) common shares at a deemed value of $2,596 (Note
7a). In addition, the Company issued 500,000 (1,500,000
post split) common shares at a deemed value of $250,000 as a
commission on the acquisition.
As part of the acquisition of Street Solid Records Inc., the
Company issued 391,170 (1,173,509 post split) common shares
at a deemed value of $273,819 (Note 7b).
The Company issued 735,000 (1,102,500 post split) common
shares at a deemed value of $367,500 towards the acquisition
of licenses and rights (Note 6).
The Company issued 759,833 (759,833 post split) common
shares at a deemed value of $480,000 for services rendered.
The Company issued 95,500 (95,500 post split) common shares
at a deemed value of $61,300 towards the settlement of
various debts.
The Company issued 540,540, (540,540 post split) common
shares for cash proceeds of $100,000.
The Company issued 600,000 (600,000 post split) common
shares at a deemed value of $600,000 upon the conversion of
$600,000 of convertible debenture (Note 9).
The Company issued 500,000 (500,000 post split) common
shares for proceeds of $50 as collateral towards future
debenture financings and conversions (Note 9). As of
September 30, 1999, the $50 is still receivable.
Warrants
On April 15, 1999, the Company issued a warrant entitling
the holder to purchase 300,000 common shares at a minimum
exercise price of $4.50 per common share. The warrant will
expire on April 15, 2004.
11. RELATED PARTY TRANSACTIONS
During the period from April 6, 1998 to September 30, 1998,
the Company issued 3,800,000 shares of common stock at a
deemed value of $38,000 to directors for services rendered.
In addition, the Company issued 200,000 shares of common
stock at a deemed value of $200 to companies controlled by
directors for the acquisition of Voyager Film Sales Inc.
12. SUPPLEMENTAL DISCLOSURE FOR NON-CASH OPERATING, FINANCING
AND INVESTING ACTIVITIES
The significant non-cash transactions for the nine month
period ended September 30, 1999 were as follows:
a) As part of the acquisition of Voyager International
Entertainment Inc., the Company issued 2,596,280
(7,788,840 post split) common shares at a deemed value
of $2,596 (Note 7a). In addition, the Company issued
500,000 (1,500,000 post split) common shares at a
deemed value of $250,000 as a commission on the
acquisition.
b) As part of the acquisition of Street Solid Records
Inc., the Company issued 391,170 (1,173,509 post split)
common shares at a deemed value of $273,819 (Note 7b).
c) The Company issued 735,000 (1,102,500 post split)
common shares at a deemed value of $367,500 towards the
acquisition of licenses and rights (Note 6).
d) The Company issued 759,833 (759,833 post split) common
shares at a deemed value of $480,000 for services
rendered.
e) The Company issued 95,500 (95,500 post split) common
shares at a deemed value of $61,300 towards the
settlement of various debts.
f) The Company issued 500,000 (500,000 post split) common
shares for proceeds of $50 under a convertible
debenture (Note 9). As of September 30, 1999, the $50
is still receivable.
g) The Company issued 600,000 (600,000 post split) common
shares at a deemed value of $600,000 upon the
conversion at $600,000 of convertible debenture (Note
9).
The significant non-cash transactions for the period from
April 6, 1998 to September 30, 1998 were as follows:
a) The Company issued 3,800,000 shares of common stock at
a deemed value of $38,000 for services rendered.
b) The Company issued 200,000 shares of common stock at a
deemed value of $200 to acquire all of the issued and
outstanding common stock of Voyager Film Sales Inc.
13. INCOME TAXES
The Company's total deferred tax asset at September 30, 1999
is as follows:
Tax benefits of net operating
loss carryforward $ 1,173,941
Valuation allowance (1,173,941)
--------------
$ -
==============
The Company has a net operating loss carryforward of
approximately $3,089,319 (December 31, 1998 - $275,520).
The valuation allowance increased to $1,173,941 from
$104,701 during the period ended September 30, 1999 since
the realization of the operating loss carryforwards are
doubtful. It is reasonably possible that the Company's
estimate of the valuation allowance will change.
The operating loss carry forwards expire as follows:
2005 $ 275,528
2006 2,813,791
------------
$ 3,089,319
============
VOYAGER INTERNATIONAL ENTERTAINMENT INC.
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 1998
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Directors of
Voyager International Entertainment Inc.
(A Development Stage Company)
We have audited the accompanying consolidated balance sheet of
Voyager International Entertainment Inc. as at December 31, 1998
and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the period from
incorporation on April 6, 1998 to December 31, 1998. These
consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audit.
We conducted our audit in accordance with generally accepted
auditing standards in the United States of America. Those
standards require that we plan and perform an audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Voyager International Entertainment Inc. as at
December 31, 1998 and the results of its operations, changes in
stockholders' equity and its cash flows for the period from
incorporation on April 6, 1998 to December 31, 1998 in conformity
with generally accepted accounting principles in the United
States of America.
The accompanying consolidated financial statements have been
prepared assuming that Voyager International Entertainment Inc.
will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, unless the Company attains
future profitable operations and/or obtains additional financing,
there is substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regards to
these matters are discussed in Note 2. The consolidated
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Vancouver, Canada Chartered Accountants
July 21, 1999
VOYAGER INTERNATIONAL ENTERTAINMENT INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
(Expressed in United States Dollars)
AS AT DECEMBER 31, 1998
ASSETS
Current
Prepaid expenses and deposits $ 2,802
Due from related parties (Note 5) 7,648
----------
10,450
Capital assets (Note 6) 7,025
----------
$ 17,475
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 82,893
Loan payable (Note 9) 59,418
----------
142,311
----------
Stockholders' equity
Capital stock (Note 10)
Authorized
50,000,000 common shares with
a par value of $0.001
1,000,000 preferred shares with
a par value of $0.01
Issued
December 31, 1998 - 4,327,131 common shares 4,327
Additional paid in capital 146,365
Deficit, accumulated during the development stage (275,528)
----------
(124,836)
----------
$ 17,475
==========
istory and organization of the Company (Note 1)
On behalf of the Board:
______________________Director ______________________Director
The accompanying notes are an integral part of these consolidated
financial statements.
VOYAGER INTERNATIONAL ENTERTAINMENT INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
(Expressed in United States Dollars)
PERIOD FROM INCORPORATION ON APRIL 6, 1998 TO DECEMBER 31, 1998
EXPENSES
Amortization $ 1,899
Automobile 2,036
Consulting fees 10,780
Corporate relations 42,608
Investor relations 2,000
Legal and accounting 31,911
Management fees 9,000
Office and general 24,096
Recording expenses 14,924
Rent 29,015
Telephone and utilities 5,306
Travel 8,305
Wages and benefits 13,648
Write-off of licenses and rights (Note 7) 80,000
----------
Loss for the period $ 275,528
==========
Basic and fully diluted loss per share $ (0.07)
===========
Weighted average shares outstanding 3,780,207
============
The accompanying notes are an integral part of these consolidated
financial statements.
VOYAGER INTERNATIONAL ENTERTAINMENT INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
Deficit
Accumulated
Common Shares Issued Additional During the
------------------------- Paid in Development
Number Amount Capital Stage Total
__________ __________ ___________ ____________ ________
Balance, April 6, 1998 - $ - $ - $ - $ -
Shares issued for services 3,800,000 3,800 34,200 - 38,000
Shares issued for acquisition
of Voyager Film Sales Inc.
(Note 8) 200,000 200 - - 200
Shares issued for cash
at $0.01 per share 26,000 26 234 - 260
at $0.25 per share 200,000 200 49,800 - 50,000
at $0.30 per share 16,667 17 4,983 - 5,000
at $0.50 per share 34,464 34 17,198 - 17,232
at $0.80 per share 50,000 50 39,950 - 40,000
Loss for the period - - - (275,528) (275,528)
--------- --------- --------- --------- ---------
Balance, December 31, 1998 4,327,131 $ 4,327 $ 146,365 $(275,528) $(124,836)
========= ========= ========= ========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
VOYAGER INTERNATIONAL ENTERTAINMENT INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in United States Dollars)
PERIOD FROM INCORPORATION ON APRIL 6, 1998 TO DECEMBER 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $(275,528)
Items to reconcile loss to cash
from operating activities
Amortization 1,899
Issuance of common stock for services 38,000
Changes in other operating assets and liabilities
Increase in prepaid expenses and deposits (2,802)
Increase in due from related party (7,448)
Increase in accounts payable
and accrued liabilities 82,893
----------
Net cash used in operating activities (162,986)
----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of capital assets (8,924)
----------
Net cash used in investing activities (8,724)
----------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital stock issued for cash 112,492
Proceeds from loan payable 59,418
----------
Net cash provided by financing activities 171,910
----------
Cash, end of period $ -
==========
Cash paid during the period for interest $ 387
==========
Cash paid during the period for income taxes $ -
==========
Supplemental disclosure for non-cash operating, financing and
investing activities (Note 12)
The accompanying notes are an integral part of these consolidated
financial statements.
VOYAGER INTERNATIONAL ENTERTAINMENT INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 1998
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated on April 6, 1998 under the laws of
the state of Nevada. The Company currently has no operations
and, in accordance with SFAS #7, is considered a development
stage company. Presently, the Company is developing an internet
based website to distribute movies, music, live events and sports
events direct to consumers on a pay-for-view and retail basis.
2. GOING CONCERN
The Company's consolidated financial statements are prepared
using the generally accepted accounting principles applicable to
a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business.
However, the company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the
Company to continue as a going concern. It is management's plan
to seek additional capital through equity financing.
1998
Deficit accumulated during the development stage $ (275,528)
Working capital deficiency (131,861)
==========
3. SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
These consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiary, Voyager Film Sales
Inc. (Note 8). All significant inter-company balances and
transactions have been eliminated on consolidation.
Stock-based compensation
Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation", encourages, but does not require,
companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company has chosen to
account for stock-based compensation using Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees".
Accordingly, compensation cost for stock options is measured as
the excess, if any, of the quoted market price of the Company's
stock at the date of the grant over the amount an employee is
required to pay for the stock.
Income taxes
Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes". A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting and net
operating loss carryforwards. Deferred tax expenses (benefit)
results from the net change during the period of deferred tax
assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects
of changes in tax laws and rates on the date of enactment.
Use of estimates
The preparation of consolidated financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the consolidated
financial statements and the reported amount of revenues and
expenses during the period. Actual results could differ from
these estimates.
Accounting for derivative instruments and hedging activities
In June 1998, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 133 "Accounting
for Derivative Instruments and Hedging Activities" ("SFAS 133")
which establishes accounting and reporting standards for
derivative instruments and for hedging activities. SFAS 133 is
effective for all fiscal quarters of fiscal years beginning after
June 15, 1999. In June 1999, FASB issued SFAS 137 to defer the
effective date of SFAS No. 133 to fiscal quarters of fiscal years
beginning after June 15, 2000. The Company does not anticipate
that the adoption of the statement will have a significant impact
on its financial statements.
Reporting on costs of start-up activities
In April 1998, the American Institute of Certified Public
Accountant's issued Statement of Position 98-5 "Reporting on the
Costs of Start-Up Activities" ("SOP 98-5") which provides
guidance on the financial reporting of start-up costs and
organization costs. It requires costs of start-up activities and
organization costs to be expensed as incurred. SOP 98-5 is
effective for fiscal years beginning after December 15, 1998 with
initial adoption reported as the cumulative effect of a change in
accounting principle. The Company's adoption of this statement
during the period had no effect on its financial statements.
Foreign currency translation
Transaction amounts denominated in foreign currencies are
translated into United States currency at exchange rates
prevailing at transactions dates. Carrying values of monetary
assets and liabilities are adjusted at each balance sheet date to
reflect the exchange rate at that date. Gains and losses from
restatement of foreign currency monetary assets and liabilities
are included in income, except for those gains and losses related
to long-term monetary assets or liabilities which are deferred
and amortized over the life of the respective asset or liability.
Revenue recognition
Revenues from products and services are recognized at the time
the goods are shipped or services provided to the customer, with
an appropriate provision for returns and allowance.
Capital assets
Capital assets are stated at cost unless the future undiscounted
cash flows expected to result from either the use of an asset or
its eventual disposition is less than its carrying amount in
which case an impairment loss is recognized based on the fair
value of the assets.
Amortization of capital assets is based on the estimated useful
lives of the assets and is computed using the straight-line
method as follows:
Computer equipment 3 years
Furniture and office equipment 5 years
Licenses and rights
Licenses and rights costs are deferred and amortized on a
straight-line basis over the lesser of their estimated useful
lives, generally three to five years, or their contractual term.
In accordance with APB 17, "Intangible Assets", the Company
continues to evaluate the amortization period to determine
whether events and circumstances warrant revised amortization
periods. Additionally, the Company considers whether the
carrying value of such assets should be reduced based on the
future benefits of its intangible assets.
Loss per share
Loss per share is computed based on the weighted average number
of common shares and common stock equivalents outstanding during
the period, unless the common stock equivalents are
anti-dilutive.
Comprehensive income
The Company has adopted Statement of Financial Accounting
Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income".
This statement establishes rules for the reporting of
comprehensive income and its components. The adoption of SFAS
130 had no impact on total stockholders' equity as of December
31, 1998.
4. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of due from related
parties, accounts payable and loan payable. Unless otherwise
noted, it is management's opinion that the Company is not exposed
to significant interest, currency or credit risks arising from
these financial instruments. The fair value of these financial
instruments approximate their carrying values, unless otherwise
noted.
5. DUE FROM RELATED PARTIES
Amounts due from directors of the Company are non-interest
bearing, unsecured and have no fixed terms of repayment.
6. CAPITAL ASSETS
Accumulated Net Book
Cost Amortization Value
Computer equipment $ 856 $ 285 $ 571
Furniture and office 8,068 1,614 6,454
equipment ------ ------- -------
$ 8,924 $ 1,899 $ 7,025
======= ======= =======
7. LICENSES AND RIGHTS
a) The Company entered into an agreement on June 19, 1998 to
purchase certain rights, a record label and other assets.
The purchase price was:
i) $50,000 due on June 19, 1998 ($30,000 paid);
ii) $125,000 due on or before July 15, 1998, and;
iii) $125,000 due on or before August 15, 1998.
After a partial payment of $30,000, the Company determined
the assets to be non-existent. The $30,000 was deemed
unrecoverable by the Company and was written-off to
operations.
b) Under the terms of an agreement dated November 30, 1998, the
Company paid a non-refundable $50,000 fee towards the
purchase of the distribution rights to a 1,452 title film
library. The Company then determined the film library had
no economic value and the non-refundable fee was written-off
to operations.
8. BUSINESS COMBINATIONS
Voyager Film Sales Inc.
On May 8, 1998, the Company acquired all the issued and
outstanding share capital of Voyager Film Sales Inc., a Nevada
corporation ("VFS"). As consideration, the Company issued
200,000 common shares at a deemed value of $200, equal to the par
value of the shares issued. As the acquisition of VFS was deemed
to be from promoters and shareholders of the Company, the
purchase has been recorded at the historical cost of the net
assets of VFS, which approximate the par value of the shares
issued.
9. LOAN PAYABLE
The loan payable is unsecured and non-interest bearing with no
fixed terms of repayment.
10. CAPITAL STOCK
Additional paid in capital
The excess of proceeds received for common shares over their par
value of $0.001, less share issue costs, is credited to
additional paid in capital.
Common stock
The Company issued 3,800,000 common shares at a deemed value of
$38,000 for services rendered.
The Company issued 200,000 common shares at a deemed value of
$200 for the acquisition of Voyager Film Sales Inc. (Note 8).
The Company issued 327,131 common shares for cash proceeds of
$112,492.
11. RELATED PARTY TRANSACTIONS
During the period from April 6, 1998 to December 31, 1998, the
Company entered into the following transactions with related
parties:
a) The Company accrued management fees of $9,000 to directors.
b) The Company issued 3,800,000 shares of common stock at a
deemed value of $38,000 to companies controlled by directors
for services rendered.
c) The Company issued 200,000 shares of common stock at a
deemed value of $200 to companies controlled by directors
for the acquisition of Voyager Film Sales Inc. (Note 8).
Included in accounts payable as at December 31, 1998 is $11,000
due to directors.
12. SUPPLEMENTAL DISCLOSURE FOR NON-CASH OPERATING, FINANCING
AND INVESTING ACTIVITIES
The significant non-cash transactions for the period from
April 6, 1998 to December 31, 1998 were as follows:
a) The Company issued 3,800,000 shares of common stock at a
deemed value of $38,000 for services rendered.
b) The Company issued 200,000 shares of common stock at a
deemed value of $200 to acquire all the issued and
outstanding common stock of Voyager Film Sales Inc. (Note
8).
13. INCOME TAXES
The Company's total deferred tax asset at December 31, 1998 is as
follows:
Tax benefits of net operating loss carryforward $ 104,701
Valuation allowance (104,701)
---------
$ -
=========
The Company has a net operating loss carryforward of
approximately $275,528. The valuation allowance increased to
$104,701 for the period ended December 31, 1998 since the
realization of the operating loss carryforwards are doubtful. It
is reasonably possible that the Company's estimate of the
valuation allowance will change. The operating loss
carryforwards will expire in the 2005 fiscal year.
14. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use
two digits rather than four to identify a year. Date-sensitive
systems may incorrectly recognize the year 2000 as some other
date, resulting in errors. The effects of the Year 2000 Issue
may be experienced before, on, or after January 1, 2000 and, if
not addressed, the impact on operations and financial reporting
may range from minor errors to significant systems failure which
could affect an entity's ability to conduct normal business
operations. It is not possible to be certain that all aspects
of the Year 2000 Issue affecting the Company, including those
related to the efforts of customers, suppliers, or other third
parties, will be fully resolved.
PAYFORVIEW.COM CORP.
(Formerly Sierra Gold Corporation)
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1998
December 31, 1997
December 31, 1996
TABLE OF CONTENTS
PAGE #
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 3
STATEMENT OF OPERATIONS 4
STATEMENT OF STOCKHOLDERS' EQUITY 5
STATEMENT OF CASH FLOWS 6
NOTES TO-FINANCIAL STATEMENTS 7-11
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 TULITA DRIVE OFFICE (702)361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
INDEPENDENT AUDITORS REPORT
Board of Directors June 24, 1999
PAYFORVIEW.COM CORP.
Reno, Nevada
I have audited the accompanying Balance Sheets
PAYFORVIEW.COM CORP., (formerly Sierra Gold Corporation), (A
Development Stage Company), as of December 31, 1998, December 31,
1997, and December 31, 1996, and the related statements of
operations, stockholders, equity and cash flows for the three
years ended December 31, 1998, December 31, 1997, and December
31, 1996. These financial statements are the responsibility of
the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of PAYFORVIEW.COM CORP. (formerly Sierra Gold Corporation), (A
Development Stage Company), as of December 31, 1998, December 31,
1997, and December 31, 1996, and the results of its operations
and cash flows for the three years ended December 31, 1998,
December 31, 1997, and December 31, 1996, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As
discussed in Note #5 to the financial statements, the Company has
suffered recurring losses from operations and has no established
source of revenue. This raises substantial doubt about its
ability to continue as a going concern. Management's plan in
regard to these matters is described in Note #5. These financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/ Barry L. Friedman
Barry L. Friedman
Certified Public Accountant
PAYFORVIEW.COM CORP.
(Formerly Sierra Gold Corporation
(A Development Stage Company)
BALANCE SHEET
ASSETS
December December December
31, 1998 31, 1997 31, 1996
CURRENT ASSETS $ 0 $ 0 $ 0
-------- -------- --------
TOTAL CURRENT ASSETS $ 0 $ 0 $ 0
-------- -------- --------
OTHER ASSETS $ 0 $ 0 $ 0
-------- -------- --------
TOTAL OTHER ASSETS $ 0 $ 0 $ 0
-------- -------- --------
TOTAL ASSETS $ 0 $ 0 $ 0
-------- -------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Advances Payable (Note 45) $ 1,450 $ 0 $ 0
-------- -------- --------
TOTAL CURRENT LIABILITIES: $ 1,450 $ 0 $ 0
-------- -------- --------
STOCKHOLDERS' EQUITY: (Note #4)
Common stock, No Par Value
Authorized 2,500 shares
Issued and outstanding at
December 31, 1996 - 2,500
Shs $ 1,000
December 31, 1997 - 2,500
Shs $ 1,000
Common Stock
Par Value $0.0001,
authorized 100,000,000
shares, Issued and
Outstanding at
December 31, 1998
1,250,000 shares $ 125
Additional Paid-In Capital 875 0 0
ACCUMULATED LOSS -2,450 -1,000 -1,000
-------- -------- -------
TOTAL STOCKHOLDERS' EQUITY: $ -1,450 $ 0 $ 0
-------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY: $ 0 $ 0 $ 0
-------- -------- --------
See accompanying notes to financial statements & audit report
PAYFORVIEW.COM CORP.
(Formerly Sierra gold Corporation)
(A Development Stage Company)
STATEMENT OF OPERATIONS
Year Year Year Aug. 26, 1988
Ended Ended Ended (Inception)
Dec.31, Dec.31, Dec.31, to Dec.31,
1998 1997 1996 1998
INCOME:
Revenue $ 0 $ 0 $ 0 $ 0
-------- -------- -------- --------
EXPENSES:
General, Selling and
Administrative: $ 1,450 $ 0 $ 0 $ 2,450
-------- -------- -------- --------
TOTAL EXPENSES: $ 1,450 $ 0 $ 0 $ 2,450
-------- -------- -------- --------
NET PROFIT/LOSS (-) $ -1,450 $ 0 $ 0 $ -2,450
-------- -------- -------- --------
Net Profit/Loss(-)
per weighted share
(Note 1): $-.0012 $ NIL $ NIL $ -.0020
-------- -------- -------- --------
Weighted average
Number of common
shares outstanding: 1,250,000 1,250,000 1,250,000 1,250,000
-------- -------- -------- --------
See accompanying notes to financial statements & audit report
PAYFORVIEW.COM CORP.
(Formerly Sierra Gold Corporation)
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
-------- -------- -------- --------
Balance,
December 31, 1995 2,500 $ 1,000 $ 0 $ -1,000
Net loss year ended
December 31, 1996 0
-------- -------- -------- --------
Balance,
December 31, 1996 2,500 $ 1,000 $ 0 $ -1,000
Net loss year ended
December 31, 1997 0
-------- -------- -------- --------
Balance,
December 31, 1997 2,500 $ 1,000 $ 0 $ -1,000
September 16, 1998
Changed from No Par
Value to $0.0001 -1,000 +1,000
September 16, 1998
Forward Stock Split
500:1 1,247,500 +125 -125
Net loss year ended
December 31, 1998 -1,450
-------- -------- -------- --------
Balance,
December 31, 1998 1,250,000 $ 125 $ 875 $ -2,450
-------- -------- -------- --------
See accompanying notes to financial statements & audit report
PAYFORVIEW.COM CORP.
(Formerly Sierra Gold Corporation)
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Year Year Year Aug. 26, 1988
Ended Ended Ended (Inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1998 1997 1996 1998
-------- -------- -------- --------
Cash Flows from
Operating Activities
Net Loss $ -1,450 $ 0 $ 0 $ -2,450
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities: 0 0 0 0
Changes in assets and
Liabilities 0 0 0 0
Increase in current
Liabilities +1,450 0 0 +1,450
-------- -------- -------- --------
Net cash used in
Operating activities: $ 0 $ 0 $ 0 $ -1,000
Cash Flows from
Investing Activities: 0 0 0 0
Cash Flows from
Financing Activities:
Issuance of Common
Stock for Cash 0 0 0 +1,000
-------- -------- -------- --------
Net Increase (decrease) $ 0 $ 0 $ 0 $ 0
Cash,
Beginning of period: 0 0 0 0
-------- -------- -------- --------
Cash, End of Period: $ 0 $ 0 $ 0 $ 0
-------- -------- -------- --------
See accompanying notes to financial statements & audit report
PAYFORVIEW.COM CORP.
(Formerly Sierra Gold Corporations
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized August 26, 1988, under the laws of
the State of Nevada as Sierra gold Corporation. On December
29, 1998, the Company amended its Articles of Incorporation
in order to change it's name to PAYFORVIEW.COM CORP. The
Company currently has no operations and in accordance with
SFAS #7, is considered a development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual
method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and 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.
Cash and equivalents
The Company maintains a cash balance in a non-interest-
bearing bank that currently does not exceed federally
insured limits. For the purpose of the statements of cash
flows, all highly liquid investments with the maturity of
three months or less are considered to be cash equivalents.
There are no cash equivalents as of December 31, 1998
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial
Accounting Standards No. 109 SFAS 4109) "Accounting for
Income Taxes". A deferred tax asset or liability is recorded
for - all temporary difference between financial and tax
reporting. Deferred tax expense (benefit) results from the
net change during the year of deferred tax as-sets and
liabilities.
Loss Per Share
Net loss per share is provided in accordance with Statement
of Financial Accounting Standards No. 128 (SFAS #128)
"Earnings Per Share". Basic loss per share is computed by
dividing losses available to common stockholders by the
weighted average number of common shares outstanding during
the period. Diluted loss per share reflects per share
amounts that would have resulted if dilative common stock
equivalents had been converted to common stock. As of
December 31, 1998, the Company had no dilative common stock
equivalents such as stock options.
Year End
The Company has selected December 31st as its year-end.
Year 2000 Disclosure
Computer programs that have time sensitive software may
recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or
miscalculations causing disruption of normal business
activities.
The company's potential software suppliers have verified
that they will provide only certified "Year 2000,11
compatible software for all of the company's computing
requirements. Because the company's products and services
are sold to the general public with no major customers, the
company believes that the "'Year 200011 issue will not pose
significant operational problems and will not materially
affect future financial results.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended
December 31, 1998, due to the net loss and no state income
tax in Nevada, the state of the Company's domicile and
operations. The Company's total deferred tax asset as of
December 31, 1998 is as follows:
Net operation loss carry forward $ 2,450
Valuation allowance $ 2,450
Net deferred tax asset $ 0
The federal net operation loss carry forward will expire in
various amounts from 2008 to 2018.
This carry forward may be limited upon the consummation of a
business combination under IRC Section 381.
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of
2,500 shares with No Par Value.
Preferred Stock
The corporation has no preferred stock.
On August 26, 1988, the company issued 2,500 shares of its
No Par Value Common Stock in consideration of $1,000 in
cash.
On September 16, 1998, the State of Nevada approved the
Company's restated Articles of Incorporation, which
increased its capitalization from 2,500 common shares with
No Par Value stock to 25,000,000 common shares with $0.0001
Par Value stock.
On September 16, 1998, the company had a forward stock split
of 500:1 thus increasing the outstanding common stock of the
corporation from 2,500 common shares to 1,250,000 common
shares.
On December 29, 1998, the State of Nevada approved the
company's restated Articles of Incorporation that increased
the capitalization from 25,000,000 common shares with a par
value of $0.0001 to 100,000,000 common shares with a par
value of $0.0001.
NOTE 5 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any
additional share of common or preferred stock.
NOTE 6 - GOING CONCERN
The Company's financial statements are prepared using
generally accepted accounting principles applicable to a
going concern which contemplates the realization of assets
and liquidation of liabilities in the normal course of
business. However, the Company does not have significant
cash or other material assets, nor does it have an
established source of revenues sufficient to cover its
operating costs and to allow it to continue as a going
concern. It is the intent of the Company to seek a merger
with an existing, operating company. Until that time, the
stockholders/officers and or directors have committed to
advancing the operating costs of the Company interest free.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal.
property. An officer of the corporation provides office
services without charge. Such costs are immaterial to the
financial statements and accordingly, have not been
reflected therein. The officers and directors of the
Company are involved in other business activities and may,
in the future, become involved in other business
opportunities. If a specific business opportunity becomes
available, such persons may face a conflict in selecting
between the Company and their other business interests. The
Company has not formulated a policy for the resolution of
such conflicts.
NOTE 8 - SUBSEQUENT EVENTS
Effective January 15th, 1999, the company had a forward
stock split of 2:1 thus increasing the total issued and
outstanding shares of the corporation's common stock from
1,250,000 shares to 2,500,000 shares.
ITEM 8. CHANGE IN FISCAL YEAR
Payforview as the successor issuer has a fiscal year end of December 31,
which
fiscal year end will continue for the successor issuer.
EXHIBITS
1.1. Stock Exchange Agreement between MRC Legal Services Corporation and
Payforview.com Corp., dated as of February 22, 2000.
1.2. Consulting Agreement dated February 22, 2000.
3.1 Restated Articles of Incorporation.
3.2 Articles of Incorporation of Sierra Gold Corporation,
dated August 26, 1988.
3.3 Certificate of Amendment of Articles of Incorporation,
dated September 16, 1998, increasing the number of
shares of the registrant to twenty-five million at
$0.0001 par value and a resolution declaring a 500-for-
1 forward stock split.
3.4 Certificate of Amendment of Articles of Incorporation,
dated December 29, 1998, changing the name of the
registrant from SIERRA GOLD CORPORATION to
PAYFORVIEW.COM CORP., and authorizing a 2-for-1 forward
stock split to be effective January 15, 1999.
3.5 Board Resolution authorizing 3-for-2 forward stock
split to be effective April 9, 1999.
3.6 Bylaws, adopted on August 26, 1988.
23.1 Consent of Davidson & Company, chartered accountants
23.2 Consent of Barry L. Friedman, P.C., certified public accountant
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 hereunto duly authorized.
Payforview.com Corp.
By /s/ Marc A. Pitcher
President, Chief Operating Officer, Director
Date: February 22, 2000