SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ý ANNUAL REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
Commission File No. 0-17973
I-LINK INCORPORATED
(Name of registrant as specified in its charter)
|
Florida |
|
52-2291344 |
|
(State or other
jurisdiction |
|
(I.R.S. Employer |
|
|
|
|
|
9775 Business Park Avenue, San Diego, California 92131 (885) 547-5700 |
||
|
(Address and telephone number of principal executive offices) |
||
Securities registered pursuant to Section 12(b) of the Exchange Act: None.
Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, $.007 par value.
Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past twelve months (or for such period that the Registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
The aggregate market value of Common Stock held by non-affiliates based upon the closing price on June 28, 2002, as reported by the Electronic Bulletin Board, was approximately $16,317,000.
Check whether the registrant is an accelerated filed (as defined in Rule 12b-2 of the Act).
Yes o No ý
As of March 27, 2003, there were 116,549,547 shares of Common Stock, $.007 par value, outstanding.
TABLE OF CONTENTS
2
Item 1. Description of Business
Overview
I-Link Incorporated’s (“I-Link”, the “Company”, “our” or “we”) vision is to be the preferred supplier of communications products and services to targeted markets that will deliver profitable growth while creating value for all stakeholders. The mission of I-Link is to provide businesses and consumers with competitively priced voice, data and enhanced communications services via direct and indirect channels. Through the dedication of our employees, we deliver industry leading customer care, customized product solutions and full back office support, building long-term loyalty and trust with all of our customers.
History and Development of the Business
I-Link was incorporated in Florida in 1983 under the name Medcross, Inc. It changed its name to I-Link Incorporated in 1997. In 1994, I-Link began operating as an Internet service provider (“ISP”) with a business model built around providing both network access and value-added services. I-Link quickly identified that the emerging Internet Protocol (“IP”) environment was a promising basis for enhanced service delivery, and soon turned to designing and building an IP telecommunication platform consisting of I-Link proprietary software, hardware and leased telecommunication lines. The goal was to create a platform with the quality and reliability necessary for voice transmission. By 1996, I-Link released its first IP-based service called “Fax-4-Less.” This service provided users with a more efficient and cost-effective way to distribute facsimile information.
In 1997, I-Link started offering enhanced services over a mixed IP-and-circuit-switched network platform. These services offered a blend of traditional and enhanced communication services and combined the inherent cost advantages of the IP-based network with the reliability of the existing public switched telephone network (“PSTN”). The suite of services included a one number “follow me” service, long distance calling, unified messaging, conference calling, message broadcasting, and web-based interface to manage messages and maintain personal account settings. In 1997 we formed our subsidiary I-Link Worldwide, LLC through which we began marketing our products and services thorough a network marketing channel.
In August 1997, I-Link acquired MiBridge, Inc. (“MiBridge”), a New Jersey-based communications technology company engaged in the design, development, integration and marketing of a range of software telecommunication products that support multimedia communications over the PSTN, local area networks (“LAN”) and IP networks. Historically, MiBridge concentrated its development efforts on compression systems such as voice- and fax-over-IP (“VoIP”). As part of I-Link, MiBridge continued to develop patent-pending technologies combining sophisticated compression capabilities with IP telephony technology. The acquisition of MiBridge permitted us to accelerate the development and deployment of IP technology across our network platform.
In 1998, we first deployed our real-time, IP communications network platform. With this new platform, all core-operating functions such as switching, routing, and media control, became software-driven. This new platform represented the first nationwide, commercially viable VoIP platform of its kind. Following the launch of its software-defined VoIP platform in 1998, I-Link has continued to refine and enhance the platform to make it even more efficient and capable for our partners and customers.
3
In February 2000, we transitioned our direct-sales marketing program to Big Planet, Inc. (“Big Planet”), a subsidiary of Nu Skin Enterprises, Inc., whereupon Big Planet became one of our wholesale customers. The transition of the network marketing sales channel to Big Planet has allowed us to focus our efforts on the expansion of the VoIP platform and the development and deployment of new enhanced services and products, while at the same time maintaining existing channels for retail sales.
On March 1, 2001, I-Link became a majority-owned subsidiary of Counsel Communications, LLC, which is now a wholly owned subsidiary of Counsel Corporation, (collectively, “Counsel”). Since taking a controlling position in I-Link Counsel has advanced approximately $60.7 million in cash to I-Link. Of this amount, approximately $20.5 million was utilized to acquire certain assets of WorldxChange Communications, Inc. and RSL COM U.S.A. Inc., while the remaining approximate $40.2 million has been used directly in operations, principally to fund operating losses and bring I-Link’s technology to market. Through December 31, 2002, $5.5 million of these advances have been repaid and pursuant to a debt restructuring agreement, Counsel has agreed to convert approximately $29.3 million of its existing debt, including accrued interest, to capital (subject to shareholder approval). Additionally, Counsel has committed to fund, through long-term inter-company advances or equity contributions, all capital investment, working capital or other operational cash requirements of I-Link through April 15, 2004.. Related to our association with Counsel, on April 17, 2001, I-Link acquired WebToTel, Inc. (“WebToTel”), a subsidiary of Counsel, and also its subsidiary, Nexbell Communications Inc. (“Nexbell”), in a stock-for-stock transaction. Nexbell was sold in December 2001. (see Note 6 of financial statements included in Item 8 hereof)
In June 2001, our wholly owned subsidiary WorldxChange Corp. (“WorldxChange”) purchased certain assets and assumed certain liabilities of WorldxChange Communications, Inc. from a bankruptcy proceeding. WorldxChange is a facilities-based telecommunications carrier that provides international and domestic long-distance service to retail customers. Telecommunication services provided by WorldxChange initially consisted primarily of a dial-around product that allows a customer to make a call from any phone by dialing a 10-10-XXX prefix. Historically, WorldxChange marketed its services through consumer mass marketing techniques, including direct mail and direct response television and radio. In 2002, WorldxChange amended its channel strategy, de-emphasized the direct mail channel and devoted its efforts to pursue more profitable methods of attracting and retaining customers. WorldxChange also utilizes commercial agents as well as a network of independent commission agents recruited through its multi-level marketing programs to retain and attract new customers.
On December 6, 2002, we entered into a definitive purchase and sale agreement to sell substantially all of the assets and customer base of I-Link Communications Inc. (“ILC”), a wholly owned subsidiary of I-Link, to Buyers United, Inc. (“BUI”). The sale is anticipated to close in the second quarter of 2003. The sale includes the physical assets required to operate I-Link’s nationwide network using its patented VoIP technology (constituting the core business of ILC) and a fully paid perpetual license to use our proprietary software-based network convergence solution for voice and data. In January 2003, we entered into our second domestic agreement with a communications company, to license and assist that company in deploying a similar network solution for voice and data. (see Note 4 of financial statements included in Item 8 hereof)
We have three issued patents and utilize the technology underlying those patents in providing our products and services. We have also licensed certain portions of that technology to third parties. We have several patent applications that are currently pending before United States Patent and Trademark Office (“USPTO”). See Item #2 – Description of Properties below for a more full explanation of our patents.
On December 10, 2002, WorldxChange completed the purchase of the Enterprise and Agent business of RSL COM U.S.A. Inc (“RSL”) from a bankruptcy proceeding. The acquisition included the assets used by RSL to provide long distance voice and data services, including frame relay, to small and medium size businesses (“Direct” business), and the assets used to provide long distance and other voice services to small businesses and the consumer/residential market (“A&R” business), together with the existing customer base of the Enterprise and Agent business.
Today, I-Link remains focused on delivering voice and data services and solutions to our partners and customers. With over eight years experience developing VoIP technologies, I-Link continues to offer a
4
proven and time-tested solution for companies to use our technology to reduce telecommunication costs and/or who wish to enter the enhanced communications market. At present, I-Link continues to actively market its voice and data services and solutions through wholesale and retail channels, and licenses its enhanced services platform to partners and service providers domestically who wish to offer voice services without incurring high development costs.
As of December 31, 2002, I-Link had 356 employees with whom we feel we have a generally good relationship. We are not subject to any collective bargaining agreements.
Business Reorganization
At the next shareholders’ meeting, we intend to ask shareholders to approve a proposal to change the name of I-Link Incorporated to Acceris Communications Inc.
In late 2002, we reorganized I-Link into three operating segments. Acceris Communications Partners (“Acceris Partners”), Acceris Communications Solutions (“Acceris Solutions”) and Acceris Communications Technologies (“Acceris Technologies”). These segments are discussed below.
Acceris Partners is a combination of the WorldxChange assets acquired in June 2001 and the A&R business of RSL, which we acquired in December 2002. Acceris Partners is a facilities-based provider of circuit-switched long distance telecommunication services to end users. Acceris Partners, through WorldxChange, initially approached the market through a combination of direct mailings (primarily of a dial-around product that allows a customer to make a call from any phone by dialing a 10-10-XXX prefix) and multi-level marketing (“MLM”). In 2002, Acceris Partners amended its channel strategy, de-emphasizing the direct mail channel and devoting our efforts to the agent channel. It is focused on two distinct agent channels: MLM and commercial agent. In addition, Acceris Partners expanded its product offerings in 2002 to focus on 1+ switched (1+ is when a customer can pick up the phone and directly dial a long distance number by pushing 1-area code-phone number), dedicated circuits, and data. Further, the Company began to offer a 1+plus calling plan to its existing customer base in the dial around business (10-10-XXX prefix). This segment accounted for approximately 95% of the revenue from continuing operations in 2002 and is expected to be the largest contributor to revenue in 2003, but at a lesser percentage as Acceris Solutions contributes a larger proportion. There were no customers in 2002 that accounted for over 10% of this segment’s revenues, which revenues were generated in the United States of America.
Acceris Solutions is the Enterprise business of RSL, which was acquired in December 2002. Acceris Solutions provides customized integrated communications solutions for voice and data. Our innovative approach to networking, connectivity and telecommunications products and services leverages technology to improve the way our customers do business. Our solutions help our customers increase revenues and reduce the total cost of technology ownership. What differentiates Acceris Solutions from other network providers is that we will work with our customers to develop a customized solution that is designed and implemented specifically for the way they do business. As this business was acquired in December 2002, this segment accounted for approximately 2% of the revenue from continuing operations in 2002. The revenue contribution from this source will increase dramatically in 2003 as it operates for the full year in 2003. In 2002, Acceris Solution ‘s two largest customers accounted for 12% and 10% respectively of the revenues of this segment which revenues were generated in the United States of America.
Acceris Technologies is the former technology licensing and development business of I-Link. Acceris Technologies offers a fully developed network convergence solution for voice and data. Over the last five years, Acceris Technologies has sold several technology licenses in international markets based on its IP communications technology, which are supported by three patents. Acceris Technologies refined its technology over the last five years by proving and resolving quality of service integration while developing numerous enhanced features that create incremental revenue for communications providers. This maturing of the technology was enabled by the building and operation of an IP network across the United States.
5
This segment accounted for approximately 3% of the revenue from continuing operations in 2002. The revenue contribution from this source is expected to increase in 2003, however its contribution as a percentage of total revenue will remain relatively consistent with 2002. There were three customers in 2002 each of which accounted for over 10% of the total revenues and which, combined, accounted for 100% of this segment’s revenues, which revenues were with US subsidiaries of international companies. However, as of the end of 2002 these customers were no longer our customers.
Competition
Our long-term success will be founded in our ability to provide quality service, enhanced features and new product offerings, which offer greater convenience to the Consumer and Enterprise markets. These products must be offered at value for service pricing, through our selected distribution channels.
The Acceris Solutions and Acceris Partners businesses face competition from numerous telecommunications organizations offering service in the United States. Providers include such large organizations as AT&T, Sprint and Verizon, as well as numerous small, less widely known, service providers.
The Acceris Partners business, consistent with its competitors, sees significant attrition in its customer base over short periods of time. In order to attract new customers and minimize attrition, we must develop and market product offerings that appeal to people demanding long distance services originating in the United States. Factors that influence the highly mobile customer base include, among other things, premium quality of service, enhanced features offerings and premium customer service, at value pricing. Long-term success in the Acceris Partners market is sustained by attracting new customers and developing customer loyalty.
The Acceris Solutions business differs significantly from the Acceris Partners business. In this business, customers tend to remain with the Company for many years. This longer term retention results in recurring revenue streams, which result from our ability to offer specific solutions to each individual customer. Acceris Solutions differentiates itself from its competitors by offering customized, integrated solutions that enhance its customers’ productivity and, ultimately, improve profitability.
Acceris Technologies offers an internally developed patented technology solution that operates in both a convergence and IP world. Acceris Technologies provides a 100% software solution for VoIP deployment. The solution unlike some competition does not rely on hardware to provide switching, conference or enhanced services. Additionally, the solution provides an open Application Programming Interface (“API”), to enable development of a wide variety of voice applications and services. Commencing in late 2002, we made the decision to pursue the development of the domestic market providing software based IP solutions to United States domestic carriers which assists those companies by reducing their internal costs and/or allows them to offer enhanced service products (such as One-number) to retail customers. Prior to late 2002, we had offered these products internationally and marketed our enhanced service products to customers on a retail basis. Formalizing this directional decision of our overall business strategy, in December we entered into an agreement to sell our IP network operations based in Draper, Utah to BUI. We do not see any direct competition to our current technology although there are many competitors with certain portions of our technology, but not as an entire package. Our competition would include the traditional switched telephony infrastructure providers, such as Nortel and Lucent, which this technology displaces. While our competition offers products with similar features, our competitive product is software based versus hardware based and as such can be deployed at a significantly lower cost. Also the software nature of our product makes it easier and more economically feasible to develop additional features and services to meet ever-changing customer needs.
Government Regulation
General. We believe many of the services we provide are subject to the provisions of the
6
Telecommunications Act of 1996 (the “1996 Act”), the regulations promulgated thereunder, as well as the applicable laws and regulations of the various states administered by the relevant state authorities. While the recent trend in the U.S., for both federal and state regulation of telecommunication service providers has been toward less regulation rather then more, the Federal Communications Commission (“FCC”) and relevant state authorities continue to regulate telecommunication carriers and the terms and conditions under which telecommunication services are provided.
Federal. The FCC modifies its regulations of telecommunication carriers from time to time. In March 2001, the FCC issued an order requiring non-dominant carriers to remove their international exchange service tariffs from the FCC by January 28, 2002. We believe we are in compliance with the FCC’s detariffing orders and that achieving such compliance did not significantly impact us.
In 1997 the FCC issued an order implementing those provisions of the 1996 Act, which promote universal telephone service (the “USF Order”). The USF Order requires interstate telecommunication carriers to contribute toward a fund for schools and libraries, a fund for rural health care and a fund to develop regions characterized by low income levels and high telecommunication costs (collectively “USF”). Our USF contributions are assessed based on certain end user telecommunication revenues, which we calculate in accordance with the FCC’s legislative rules. The amounts we contribute to USF may be billed to our end-users and we have elected to pass those charges along to our end user customers. If we continue to bill these amounts to our end-user customers, our customers may choose to purchase similar services from our competitors. If we elect not to bill these amounts to our end-user customers in the future, our profit margins may be less.
During the past year the FCC increased the USF contribution percentages. Originally in May 2001 and subsequently in February 2002, the FCC proposed changes to the USF regulations that, if adopted, would alter the basis on which we determine our USF contributions and the ability and means by which such contributions may be recovered from our customers. For example, although the FCC has not proposed to prevent carriers from passing USF charges through to customers, the FCC has recently ruled that it will limit the extent to which carrier costs for administering USF charges may be passed through to customers. In addition, the FCC is considering alternative mechanisms under which it will assess USF charges to carriers. Although we believe that certain proposals may benefit the Company, we cannot predict the outcome of these proceedings. It remains possible that the FCC could adopt a USF contribution mechanism that would have a negative effect upon our operations.
State. In addition to regulation by the FCC, the majority of the states require us to register or apply for certification prior to initiating intrastate interexchange telecommunications services. To date, our subsidiaries, ILC and WorldxChange, are authorized through certification to provide intrastate interexchange telecommunications services and, in certain states, local exchange services. These subsidiaries are subject to the obligations that the applicable state laws place on all similarly certificated carriers including the regulation of services, the payment of regulatory fees and the preparation and submission of reports. If state regulators or legislators change current regulations or adopt new regulations it may negatively impact our ability to provide telecommunication services.
Available Information
I-Link is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (Exchange Act), which requires that I-Link file reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”). The SEC maintains a website on the Internet that contains reports, proxy and information statements and other information regarding registrants, including I-Link, that file electronically with the SEC. The SEC’s website address is www.sec.gov. In addition, I-Link’s Exchange Act filings may be inspected and copied at the public reference facilities of the SEC located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549; and at the SEC’s regional offices at Citicorp Center, 500 West Madison Street, Room 1400, Chicago, IL 60661, and at 233 Broadway, New York, NY 10279. Copies of the material may also be obtained upon request and payment of the appropriate fee from the Public Reference Section of the SEC located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549.
7
Item 2. Description of Properties
At December 31, 2002, I-Link leased approximately 26,300 square feet of space for office and other facilities in Draper, Utah pursuant to commercial leases with original terms of five to seven years. These leases expire between 2003 and 2005 subject to our right to extend for an additional five years. The current aggregate base rent is approximately $28,000 per month. I-Link also leases several other co-location facilities throughout the United States to house its Communication Engines. Such spaces vary in size and length of term.
Of the 26,300 square feet leased as of December 31, 2002, I-Link subleased approximately 12,000 square feet on a month to month basis at approximately $14,000 per month which was the same as our cost. In February 2003, I-Link was released from this lease (12,000 square feet) and cancelled its related sublease agreement.
In December 2002, I-Link entered into an agreement wherein it was released from the lease of approximately 14,300 square feet (approximately $14,000 per month) subject to the closing of its sale of certain assets to BUI, which we anticipate will close in the second quarter of 2003.
WorldxChange rents approximately 24,000 square feet of office space in San Diego, California under a five-year commercial lease dated August 1, 1997, which was extended to March 2003, at a cost of approximately $25,000 per month. WorldxChange also leases several other co-location facilities throughout the United States to house its network equipment. Such spaces vary in size and length of term.
WorldxChange also rents approximately 46,000 square feet of office space in Pittsburgh, Pennsylvania under a lease dated December 11, 2002 and expiring on June 30, 2005, at a cost of approximately $54,000 per month. A $200,000 irrevocable letter of credit is in place until December 2004 as security for the lease.
We have three issued patents and utilize the technology underlying those patents in providing our products and services. We have also licensed certain portions of that technology to third parties. We have several patent applications that are currently pending before USPTO. In August 2002, our “voice internet transmission system” patent (“VoIP Patent”) was issued (No. 6,438,124) The VoIP Patent joins I-Link’s two other IP patents, filed in 1996, which are related to the delivery of high quality conference calls with compressed signals (No. 5,898,675; No. 5,754,534). Together, these patented technologies have been successfully deployed and commercially proven in a nationwide IP network and in I-Link’s unified messaging service, application programming interface, and software licensing businesses. I-Link plans to further leverage these patents as it packages an IP solution for the growing Enterprise and applications markets. While we are using the technology underlying the VoIP Patent in our business, we are also investigating whether and to what extent the VoIP Patent is licensable to third parties. The Company is currently reviewing the results of that review and considering its alternatives.
Item 3. Legal Proceedings
In the Arbitration Matter of Red Cube International AG, v. I-Link Incorporated, before the American Arbitration Association, New York, New York, AAA # 50 T 117 0002B 01.
On or about January 24, 2001 Red Cube International, AG (“Red Cube AG”) delivered to us a written demand for arbitration under a May 2000 Cooperation and Framework Agreement between the parties. Red Cube AG’s demand constituted written notice of an alleged breach of the Cooperation and Framework Agreement. We denied these allegations, filed a counterclaim against Red Cube, AG and filed a third-party claim against Red Cube, Inc, seeking compensatory and/or punitive damages for Red Cube Inc.’s default under a subsequent agreement to provide approximately $60,000,000 in equity funding to us, engaging in a scheme to drive us out of business and obtain control of our proprietary technology, telecommunications network, key
8
employees and customers.
On July 9, 2002 an evidentiary arbitration hearing was held in New York before a panel of arbitrators of the AAA and the AAA panel issued its award effective October 7, 2002. The AAA panel dismissed all of Red Cube’s claims with prejudice and determined that Red Cube had breached the agreements between the parties. The arbitration panel awarded I-Link $6,741,835 in damages against Red Cube International AG and Red Cube International, Inc., jointly and severally. In addition the AAA panel ordered Red Cube to pay I-Link $18,210 as reimbursement for certain administrative fees and expenses and $64,033 as reimbursement for a portion of the arbitrators’ compensation. As uncertainty exists at this time as to the ultimate collectibility of the awarded amount, management has not recorded any benefit relating to this reward in the financial statements.
D/Vit, Inc. v I-Link Incorporated, Civil No. H-00-3914, United States District Court, Southern District of Texas, Houston Division.
On November 9, 2000 D/Vit, Inc (“Dvit”) filed an action against I-Link in federal court in Texas alleging that I-Link’s use of the “V-Link” trademark infringed upon Dvit’s intellectual property rights in the mark “V Linc”. Dvit’s complaint sought damages and an injunction enjoining I-Link’s use of the mark “V-Link”. On August 22, 2001 the court issued a preliminary injunction enjoining I-Link’s use of the “V-Link” mark. I-Link had already elected to change the name of its product to “I-Link One Number”. On February 14, 2002, I-Link filed a motion for summary judgment asking the court to rule as a matter of law that I-Link’s past use of the “V-Link” mark did not constitute an infringement upon Dvit’s intellectual property rights in the “V Linc” mark. Also on February 14, 2002, Dvit filed a motion for partial summary judgment asking the court to determine as a matter of law that I-Link’s prior use of the “V-Link” mark infringed upon Dvit’s rights in the “V Linc” mark. On May 8, 2002, the court issued a Memorandum and Order (“Order”) denying I-Link’s motion for summary judgment and granting Dvit’s partial motion for summary judgment. The Order permanently enjoined I-Link from using the “V-Link” mark in association with the sale, marketing, description, development or service of its telecommunications products. The court’s order did not address possible damages. In December 2002, we settled the claim for $180,000 of which $120,000 was previously reserved.
We are involved in litigation relating to claims arising out of our operations in the normal course of business, none of which is expected, individually or in the aggregate, to have a material adverse affect on us.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fourth quarter of the fiscal year ended December 31, 2002, to a vote of our security holders.
Item 5. Market for I-Link Incorporated’s Common Stock and Related Stockholder Matters
Price Range of Common Stock
I-Link’s common stock is traded on the OTC-Electronic Bulletin Board under the symbol ILNK.
The following table sets forth the high and low prices for our common stock for the period as quoted on Nasdaq from January 1, 2000 to September 30, 2001 and on the Electonic Bulletin Board from October 1, 2001 to December 31, 2002 (as reported by Commodity Systems, Inc.) based on interdealer
9
quotations, without retail markup, markdown, commissions or adjustments and may not represent actual transactions:
|
Quarter Ended |
|
High |
|
Low |
|
||
|
|
|
|
|
|
|
||
|
March 31, 2001 |
|
$ |
1.22 |
|
$ |
0.25 |
|
|
June 30, 2001 |
|
0.75 |
|
0.38 |
|
||
|
September 30, 2001 |
|
0.57 |
|
0.19 |
|
||
|
December 31, 2001 |
|
0.24 |
|
0.07 |
|
||
|
|
|
|
|
|
|
||
|
March 31, 2002 |
|
$ |
0.50 |
|
$ |
0.07 |
|
|
June 30, 2002 |
|
0.29 |
|
0.13 |
|
||
|
September 30, 2002 |
|
0.24 |
|
0.09 |
|
||
|
December 31, 2002 |
|
0.17 |
|
0.07 |
|
||
On March 27 2003, the closing price for a share of our common stock was $0.13.
Holders
As of March 18, 2003, we had approximately 800 stockholders of common stock of record and approximately 11,700 beneficial owners.
Dividends
To date, we have not paid and do not anticipate that we will pay dividends on our common stock in the foreseeable future. As of December 31, 2002, we do not have any preferred stock outstanding which has any preferential dividend. Preferred stock dividends in the amount of $0, $0 and $196,333 were paid in 2002, 2001 and 2000, respectively, in common stock (non-cash) on the converted shares of Series F redeemable preferred stock. A preferred stock dividend in the amount of $630,313 was paid in 2001 in common stock (non-cash) on the Class C preferred stock.
Item 6. Selected Financial Data
The following selected consolidated financial information was derived from the audited consolidated financial statements and notes thereto. The information set forth below is not necessarily indicative of the results of future operations and should be read in conjunction with Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and Notes thereto included elsewhere in this Form 10-K.
|
|
|
2002 |
|
2001 |
|
2000 |
|
1999 |
|
1998 |
|
|||||
|
Statement of Operations Data: |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Telecommunications services |
|
$ |
90,410,940 |
|
$ |
50,288,917 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
Marketing services |
|
— |
|
— |
|
463,740 |
|
3,672,988 |
|
4,548,421 |
|
|||||
|
Technology licensing and Development |
|
2,836,655 |
|
5,696,893 |
|
8,972,828 |
|
2,506,701 |
|
1,466,315 |
|
|||||
|
Other |
|
— |
|
— |
|
400,000 |
|
— |
|
— |
|
|||||
|
Net sales |
|
93,247,595 |
|
55,985,810 |
|
9,836,568 |
|
6,179,689 |
|
6,014,736 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Operating costs and expenses: |
|
|
|
|||||||||||||