UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-KCURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 3, 2005 RADIUM VENTURES, INC.
(Exact name of Registrant as specified in its Charter)
(State or other Jurisdiction of Incorporation)
(Commission File Number) (I.R.S. Employer Identification Number)
28202 Cabot Road; Ste 300
Laguna Niguel, California92677
(Address of Principal Executive Offices) (Zip Code)
(Registrant's telephone number, including area code)
2840 Mount Seymour Parkway,
North Vancouver, BC, Canada, V7H 1E9
(Former name, former address, and former fiscal year, if changed since last
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions: (See General Instruction 1.2 below.)
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS;ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES;ITEM 5.01 CHANGES IN CONTROL OF REGISTRANT;ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS;ITEM 8.01 OTHER EVENTS.SUMMARY
On June 3, 2005, Radium Ventures Inc. ("RADIUM" or "WE") acquired
Interactive Television Networks, Inc., a Nevada corporation formerly knows as
XTV, Inc. ("ITVN"), through a reverse triangular merger (the "MERGER") between
ITVN and Radium Ventures Acquisition, Inc., our wholly owned subsidiary. As a
result of the Merger, ITVN is now our wholly-owned subsidiary. The Merger was
effected pursuant to that certain Agreement and Plan of Reorganization dated May27, 2005 (the "REORGANIZATION AGREEMENT"). Shane Whittle and James
Scott-Moncrieff, the principal stockholders and founders of Radium (the
"FOUNDERS"), also were parties to the Reorganization Agreement.
Immediately following the Merger, we formally ceased the Internet
document editing business that we had previously conducted, we closed our
offices in Vancouver, Canada, and we moved our offices to the offices of ITVN in
Southern California. We currently do not plan to conduct any business other than
owning the shares of ITVN, which will continue to conduct its operations that it
has, to date, been engaged in. For a summary description of ITVN's business, see
"Description Of Business," below.
In connection with the Merger, we (i) cancelled 750,000 of the
outstanding shares of our common stock held by the Founders and (ii) agreed to
issue up to 22,117,550 shares of our common stock to the existing stockholders
of ITVN, in exchange for all of the issued and outstanding common stock of ITVN.
In addition to the foregoing, in accordance to the Reorganization Agreement,
upon the closing of the Merger we issued 50,000 shares to our financial advisor,
hired a CEO who was granted 581,676 shares and hired a CFO who was granted
250,000 shares. The shares issued, or issuable, to the former stockholders of
ITVN represent approximately 89% of outstanding shares of Radium common stock as
of June 8, 2005. As a result, the former stockholders of ITVN have acquired
control of Radium in the Merger. The shares issued in the Merger were issued
pursuant to an exemption provided under Section 4(2) of the Securities Act of
1933, as amended, without the use of an underwriter.
Under Nevada corporate laws, any stockholder who does not vote in favor
of a merger has the right to dissent and to receive a cash payment equal to the
"fair value" of the dissenting shares in exchange for the cancellation of those
shares. The Merger was approved by all of the ITVN stockholders, except one
stockholder who owns 4,147,482 shares of Radium common stock. In addition, the
same stockholder is entitled receive and retain an additional share certificate
in the amount of 2,083 shares of ITVN (the equivalent of 1,382,140 shares of
Radium common stock) if the stockholder delivers 20,000 qualified customers that
buy our set-top box and subscribe to our services before April 30, 2006. The
2,083 shares are currently held in escrow and the stockholder has not yet
delivered any qualified customers to us. That stockholder did not vote for or
against the Merger. However, as required by Nevada law, we have notified the
holder of those shares of its dissenter's rights under Nevada law. The
stockholder has 30 days in which to decide whether or not to dissent to the
Merger. We currently do not know whether or not the non-voting stockholder will
exercise its dissenter's rights. In the event that the stockholder does elect to
exercise its dissenter's rights, the number of shares that were issued to the
former ITVN stockholders will decrease from 22,117,500 shares to 16,588,278
At the time of the closing of the Merger, Shane Whittle was our sole
director as well as our President and Secretary. As a result of the prior
resignation in 2004 of our other director, we had a vacancy on our Board of
Directors. Since we are now conducting a new line of business (i.e. ITVN's
business) and need executives who are familiar with ITVN's business, our sole
director filled the vacancy on the Board of Directors by appointing Michael
Martinez of ITVN to our Board of Directors. Accordingly, as of the date of this
Current Report on Form 8-K, our Board consists of Shane Whittle and Michael
Martinez. We also intend to add two other directors to our Board of Directors
who are familiar with the operations of ITVN. Mr. Whittle has appointed Charles
Prast and Murray Williams to be the two additional members of the Board. Mr.
Prast and Mr. Williams will take office on June 14, 2005, at which time Shane
Whittle will resign as a director. Accordingly, commencing on June 14, 2005, our
Board will be comprised of Michael Martinez, Charles Prast and Murray Williams.
As required by the Reorganization Agreement, upon the closing of the
Merger, Shane Whittle resigned as our President and Secretary, and Michael
Martinez was elected as our new President, Charles Prast was elected as our new
Chief Executive Office, and Murray Williams was elected as our new Chief
As described in "Executive Compensation/Employment Agreement," below,
in connection with hiring Mr. Charles Prast to be our new Chief Executive
Officer and hiring Mr. Murray Williams to be our new Chief Financial Officer, we
issued 581,767 shares of our common stock and 250,000 shares, respectively, to
them. The shares issued to our new executive officers were issued pursuant to an
exemption provided under Section 4(2) of the Securities Act of 1933, as amended.
In addition to the foregoing issuances of shares in the Merger, in
accordance with the Reorganization Agreement, upon the closing of the Merger we
issued 50,000 shares to our financial advisor. The shares issued to our
financial advisor were issued pursuant to an exemption provided under Section
4(2) of the Securities Act of 1933, as amended.
We intend to amend our Articles of Incorporation to (i) change our name
to "Interactive Television Networks, Inc.," (ii) to increase the number of
authorized shares of common stock from 25,000,000 to 100,000,000, and (iii) to
authorize the issuance of up to 25,000,000 shares of preferred stock. We
anticipate that the foregoing amendment of the Articles of Incorporation will be
filed and become effective within the next 30-45 days.
Unless otherwise indicated or the context otherwise requires, all
references below in this Current Report on Form 8-K to "we,""us" and the
"Company" refer to both Radium Ventures Inc. and its subsidiary Interactive
Television Networks, Inc. Where a distinction between Radium Ventures, Inc. and
Interactive Television Networks, Inc. is made, references to "Radium" are to
Radium Ventures Inc. and references to "ITVN" are to Interactive Television
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
This Current Report on Form 8-K contains a number of forward-looking
statements that reflect management's current views and expectations with respect
to our business, strategies, products future results and events and financial
performance. All statements made in this Current Report other than statements of
historical fact, including statements that address operating performance, events
or developments that management expects or anticipates will or may occur in the
future, including statements related to distributor channels, volume growth,
revenues, profitability, new products, adequacy of funds from operations,
statements expressing general optimism about future operating results and
non-historical information, are forward looking statements. In particular, the
words "believe,""expect,""intend,"" anticipate,""estimate,""may,""will,"
variations of such words, and similar expressions identify forward-looking
statements, but are not the exclusive means of identifying such statements and
their absence does not mean that the statement is not forward-looking. These
forward-looking statements are subject to certain risks and uncertainties,
including those discussed in "Risk Factors," below. Our actual results,
performance or achievements could differ materially from historical results as
well as those expressed in, anticipated or implied by these forward-looking
statements. We do not undertake any obligation to revise these forward-looking
statements to reflect any future events or circumstances.
Readers should not place undue reliance on these forward-looking
statements, which are based on management's current expectations and projections
about future events, are not guarantees of future performance, are subject to
risks, uncertainties and assumptions (including those described below) and apply
only as of the date of this Current Report. Our actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed below in "RiskFactors" as well as those discussed elsewhere in this Current Report, and the
risks to be discussed in our future Quarterly Reports on Form 10-QSB or our next
Annual Report on Form 10-KSB and in the press releases and other communications
to stockholders issued by us from time to time which attempt to advise
interested parties of the risks and factors that may affect our business. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
DESCRIPTION OF BUSINESSOVERVIEW
Following the Merger, our only business will be the operations
conducted by our new subsidiary, ITVN. All references in this Current Report on
Form 8-K to our business and operations after the Merger shall, therefore, refer
to the business that ITVN conducts. ITVN is a vertically integrated provider of
digital interactive content networks delivered to televisions over domestic
broadband connections of 300kbps or better.
The delivery of digital interactive content to the television is
commonly referred to as Internet Protocol Television ("IPTV"). ITVN develops and
sells a set-top box that permits ITVN to distribute our branded IPTV networks
content over the internet to any consumer who has (i) a broadband internet
connection of 300kbps or better and (ii) a television. In general, ITVN
maintains a library of motion pictures and video content on servers that are
connected to the internet. Consumers can access and view the stored content on
their televisions without the use or need for a computer by connecting their
televisions to the ITVN set-top box. The ITVN set-top box can be controlled much
the same as a standard VCR machine. The set-top box was developed by ITVN and
its affiliates and is currently being manufactured for ITVN in Asia by a third
party original equipment manufacturer. ITVN sells or leases the ITVN set-top
boxes to consumers and charges the consumers a monthly fee for access to our
branded IPTV networks. Revenues received by ITVN from the monthly fees are
shared between the company and the various providers of the content. Subscribers
can also access pay per-view motion picture titles and video content.
ITVN launched the commercial distribution of the ITVN set-top box and
its IPTV service in April 2005. To date, the marketing efforts have consisted of
a limited amount of internet advertising. We have taken delivery of 8,000 ITVN
set-top boxes and have commenced shipping of such units to subscribers.
The principal benefit of the ITVN set-top box is that it enables
consumers to view a library of motion pictures and other video content over the
internet on their television at any time "on demand." Our business plan is to
continue to make a wide variety of content available to the users of the ITVN
set-top box through the creation of branded IPTV networks. We do not plan to
develop any of our own content, and all content that will be distributed over
our network will be provided by the owners of that content. We hope to be able
to provide our monthly customers with continuous access to a variety of motion
pictures (such as classic motion pictures and possibly new releases that are
available at the local video rental stores), music videos, foreign language news
broadcasts (that are captured digitally and made available for viewing shortly
after broadcast in the country of origin) and adult entertainment.
OUR BUSINESS THE ITVN SET-TOP BOX
Our proprietary set-top box consists mainly of (i) a hardware
containing a graphics card and software, and (ii) connection ports to
audio/video components and the broadband connection. The hardware board has a
web browser in one graphics mode and software that drives the media players. The
onto the television screen. The box also allows the use of a remote control to
control navigation, and settings on the box. The ITVN set-top box can be set for
U.S. television standards (NTSC) or European standard (Pal). There are 8
megabytes of memory on the board that can be flashed and persist. The security
mechanism is controlled by transmitting IP and MAC address, and can be locked
down server side. The servers run Windows Server 2003 to allow DVD functionality
within the movies.
The ITVN set-top box includes ports on the back side of the box to
allow it to integrate into most modern audio-visual systems used and preferred
by consumers today, including Component Video ports, RC video ports, an S-Video
port, and the Ethernet jack that connects the box to the broadband connection.
Our set-top boxes are part of a new technology referred to as IPTV. An
IPTV service is any service that delivers videos and other media to customers
over their internet connections, such as web sites that allow end-users to
download or stream movies over the internet. IPTV is a term used to describe a
system where video signals are distributed using Internet protocol to
subscribers through a broadband internet connection. Internet protocol ("IP") is
the common protocol used by source and destination hosts for communicating data.
Generally IPTV refers to IP delivered content that is viewed on a television
rather than a PC. What is noteworthy about Internet protocol is that it sends
information in packets, thus allowing for faster connections and in turn greater
data delivery capabilities. IPTV thus uses the internet protocol's data delivery
capacity to deliver videos and other media to end-users with the requisite
OUR IPTV SERVICE
Our IPTV networks use the existing global infrastructure of the
internet to distribute paid content and services directly to traditional
television sets to any end-user with a television and a broadband internet
connection. The user must, however, acquire from us our set-top box to access
the content. The ITVN networks are completely interactive, end-to-end systems
delivered to consumers on demand or real time through our proprietary set top
box. Consumers simply connect the ITVN box to their existing broadband router
and to their television set though SCART or standard video connectors. No PC is
needed and the ITVN box is "plug and play".
Our service offers a simple, completely discreet, single source
solution for consumers of content not available through traditional broadcast or
satellite networks and is an alternative distribution source for producers of
content. Using the Internet, our service eliminates traditional middlemen
represented by the cable television providers, satellite television operators
and terrestrial television broadcasters. By connecting the subscriber to the
content of the owner, the content owner receives payment based directly on the
amount that such owner's content is viewed.
We plan to offer a number of IPTV networks and services delivered
through and accessed through a main television menu using a remote control. Most
of these networks and services are currently still in development. We currently
plan to introduce the following networks:
o A subscription news network with local news on demand from
dozens of countries worldwide appealing to first and second
generation US residents eager to follow local events in their
countries of origin. This network is expected to launch during
o A subscription music video network allowing consumers to view
music videos and to build a personalized library of music
videos-on-demand. This network is expected to launch during
o A subscription sports network featuring extreme sports popular
with the 15-35 year old consumer market. This network is
expected to launch during 2005.
o A free network featuring content from the Internet of popular
and timely interest, updated daily. This network is expected
to launch in the fall of 2005.
o Where applicable and allowed, we are also evaluating creating
and offering a home gaming and sports betting service. This
network is expected to launch by December 2005.
o A subscription file sharing service wherein ITVN subscribers
can send media files (pictures and videos) for viewing on a
television by them, their friends and family, or other
authorized persons who have an ITVN set-top box. This network
is expected to launch in the fall 2005.
o XTV Networks, a subscription adult content network featuring
70 channels of content, an interactive library, and over
20,000 pay-per-view titles. This network is currently
available and represents our principal source of revenues.
Although it is our intention to develop and offer some or all of the
foregoing services, and possibly others, no assurance can be given that we will
be able to develop these services or that we will determine that such services
are commercially feasible.
We plan to generate revenue from (i) monthly subscription fees; (ii)
pay-per-view fees; (iii) sale of set top boxes; and (iv) the wholesale of our
ITVN IPTV networks to independent IPTV providers or other content providers.
Depending on the services that we eventually offer over our networks, we may
also attempt to insert demographically targeted advertising into the content
channels and charge advertisers for such advertising. We believe that, unlike
traditional broadcasting, our service over the Internet is exempt from many of
the regulations imposed by the Federal Communications Commission on the
broadcasters. As a result, we believe that we may be able to advertise liquor
and tobacco products, as well as other consumer products which are prohibited
from advertising on traditional television networks.
XTV Networks currently represents our principal source of revenues.
Priced at $29.95 per month, the XTV Networks offer 70 live channels of content,
an interactive library and over 20,000 pay-per-view titles.
We believe our service offers the first real world opportunity to
establish a `virtual' pay cable broadcast network that does so with virtually no
programming capital expenditures on the production of content, no infrastructure
capital expenditures given that the internet is already widely disbursed, and no
restriction on the range of personalized content available to a worldwide
According to Pew Internet & American Life ("Pew"), adoption of high-speed
Internet connections in the home grew strongly in the United States in the first
several months of 2004, with home broadband penetration standing at 39% among
American Internet users by the end of February 2004. This is up from 31% in the
Pew's November 2003 study. Overall, Pew states that 48 million American adults
had high-speed connections in the home in February 2004. Of these high-speed
connections, Pew's survey shows that 54% of home broadband users are connected
with cable modems, 42% used digital subscriber lines ("DSL"), and 3% used
wireless or fixed-satellite technology. According to NCTA, the cable industry
served approximately 15 million high-speed Internet customers as of September
2003, up from 10.3 million in September 2002, an increase of 46% year-over-year.
According to a new market forecast report from MRG, Inc., from 2
million subscribers worldwide to IPTV services in September 2004, this market
was projected to grow to 26 million subscribers in 2008, prompting it to call
2005 "the year of IPTV." This growth has been fueled by the innovations of video
program offerings over the internet and the aggressive global improvement, cost
reduction and increased market penetration of broadband internet data delivery
IPTV Magazine estimates that in the first quarter of 2005 there were,
worldwide, 2.1 million IPTV users, 150 million broadband internet users, more
than 240 carriers providing IPTV services, and more than 25 manufacturers
producing set-top boxes utilizing internet protocol.
Internet Protocol Television, also called IPTV, is a term used to
describe systems where video signals are distributed to subscribers using a
broadband connection over Internet Protocol. Often this is in parallel with the
subscriber's internet connection, supplied by a broadband operator using the
same infrastructure but over a dedicated bandwidth allocation. Internet protocol
is the common protocol used by source and destination hosts for communicating
data. What is noteworthy about internet protocol is that no setup is needed
before a host tries to send packets to a host it has previously not communicated
with, thus allowing for faster connections and in turn greater data delivery
capabilities. IPTV thus uses internet protocol's data delivery capacity to
deliver video content to end-users with the requisite connections. An IPTV
service is any service that delivers IPTV to customers over their internet
connections, such as web sites that allow end-users to download or stream movies
over the internet, usually for a periodic subscription fee or a pay-per-view fee
BETTER SELECTION OF CONTENT - Virtually limitless programming and
on-demand content because only channels selected by consumers are delivered over
home broadband networks.
BETTER VIDEO-ON-DEMAND (VOD) - All content - including HDTV - can be
distributed on a subscription or a pay-per-play basis with content promotion
integrated into the user experience.
BETTER DIGITAL VIDEO RECORDING - Customers can pause, fast forward, and
rewind live and recorded content, and since its IPTV, multiple recordings can be
made without the need for tuners.
BETTER EXPERIENCE - True interactivity for the customer allowing two
way communication with services comparable to the web allowing a better
environment for users, programmers and advertisers.
According to Datamonitor, approximately 15 million households will be
accessing IPTV services by the end of 2007, an increase over the 600,000 homes
accessing these services at the end of 2003. They estimate global revenues from
the sector to exceed $7.5 billion in 2007.
We believe that these developments signify increased market penetration
for video-on-demand services and an exponential growth of IPTV services, which
we will aim to capitalize on. Technology, including analog to digital, broadband
and digital compression, has drastically altered the distribution of media
content in recent years. Niche companies have exploited these technologies. For
example, Netflix has exploited the DVD format, Echostar Communications and
DirectTV have exploited the small satellite receiver technology market, TiVo has
exploited time-phased digital video recorders (DVRs), and OnCommand has
exploited video-on-demand technology for the lodging industry. Each of the above
are, directly or indirectly, competitors for our services. Each of these
competitors has made material progress in displacing entrenched providers of
comparable media services. We believe that we have a method of content
distribution that can also potentially be as innovative and paradigm-shifting as
these other companies.
Our major competitors currently offering IPTV services in general in
the United States include:
o Movielink, self-described as the leading broadband movie
download service, offers U.S. customers an extensive selection
of movies, foreign films and other content. The service is
owned and operated by Movielink, LLC, a joint venture of
Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures
Entertainment, Universal Studios and Warner Bros. Studios.
Movielink draws its content offerings from the vast libraries
of those studios as well as Walt Disney Pictures, Miramax,
Artisan and others on a non-exclusive basis.
o DaveTV, self described as the distributor of DAVE Networks
which utilizes the latest matrix distribution technology to
deliver music, video and other information assets to
consumers, corporate customers, and commercial customers. DAVE
Media Center is a downloadable application that provides both
client and server functionality which communicates with other
DAVE modules around the world.
o Akimbo, self described as a licensor of special-interest
programs from a variety of video providers. Akimbo hosts and
distributes these programs via broadband connections to
televisions. Consumers must have an Akimbo Player to receive
the Akimbo Service, a home network and a broadband internet
connection in their homes. Using the Akimbo Guide, viewers
choose their programming, which is automatically downloaded to
the Akimbo Player for later viewing. Unlike ITVN, Akimbo does
not provide for instant content on-demand.
o Other competitors include SBC Communications and Microsoft who
have created a joint venture to exploit Microsoft's IP
television platform to deliver content to homes across the US.
Cable and satellite network providers have also developed
video-on-demand (or VOD) systems that compete with our service because they are
another means of on-demand video delivery to end-users. However, traditional
providers are unwilling to unbundle their content services in order to make a
wide range of content available to consumers. In contrast, our networks and
service will be focused on variety. In addition, because of the intimate,
personal preferences of consumers, many niche interests of consumers cannot be
delivered economically on the range of satellite frequencies allocated or cable
bandwidth available. We are able to deliver a high number of niche interests
using the low cost distribution of the internet.
Although our service provides content from a number of different
categories catering to a diverse set of interests, our adult entertainment
offerings currently is the appeal of our service to our subscribers. The online
adult internet industry is highly competitive and highly fragmented given the
relatively low barriers to entry. The leading adult internet companies, whose
VOD adult content competes with our service, are constantly vying for more
members while also seeking to hold down member acquisition costs paid to
webmasters. We believe that the primary competitive factors in the on-demand
adult content industry include the quality of content, technology, pricing, and
sales and marketing efforts.
Although we believe that our content will be unique due to its format,
low operating cost and low cost structure for acquiring new customers, we will
be competing against companies that have substantially greater financial,
technical, manufacturing, marketing, distribution and other resources than us.
See "Risk Factors."
MARKETING & DISTRIBUTION
We seek to market and distribute our boxes and subscription networks
across a variety of channels. A key element of our marketing and distribution
effort is our ability to track subscriber revenue in real-time and to allocate a
portion of these revenues to marketing and distribution partners. These channels
Web based affiliate programs: We currently have distribution and
marketing agreements with over 150 Internet marketing firms who promote our
products and services through the use of targeted advertising including banners,
advertorial and email. These firms receive a commission based on performance
criteria including initial orders generated for our box as well as a recurring
revenue stream based on a small percentage of subscription revenue from orders
generated from their promotional efforts.
Referral programs: Each subscriber has a personal promotional code
displayed as part of their on-screen menu. Subscribers who generate orders for
our services from friends or family receive a free month's subscription when
this code is applied to a new order. Friends and family receive a bonus of two
free pay-per-view movies when they input this promotional code as part of their
Retailers: We currently offer retailers marketing support and a
percentage of recurring revenues. In addition we provide marketing tools to
assist in maximizing sales.
Independent resellers: We have a number of local independent resellers
who use our marketing tools to encourage consumers to purchase our box and
related subscription services directly from ITVN. Each reseller has a personal
promotional code. Customers who enter this code online as part of their purchase
receive a bonus of two free pay-per-view movies. The resellers receive a
commission based on performance criteria including orders generated for our box
as well as a recurring revenue stream based on a small percentage of
subscription revenue from orders generated from their promotional efforts.
Campus marketing: We are in the initial stages of launching a Fall 2005
college marketing campaign on campuses. We are seeking to attract subscribers as
well as independent resellers as part of this effort.
We expect that our marketing budget will be a significant percentage of
revenue as we seek to educate the marketplace as to the advantages of IPTV as
well as the attractiveness of ITVN's services and subscription networks. We
intend to conduct traditional media advertising campaigns as well as seek
editorial and advertorial coverage of our products and services.
At June 1, 2005, we had 11 full time employees.
The following table sets forth the number of shares of common stock
beneficially owned as of June 3, 2005 by (i) those persons or groups known to
beneficially own more than 5% of our common stock on and after the closing of
the Merger, (ii) each director (including the two persons who will become
directors on June 14, 2005), and (iii) all current directors (including the two
persons who will become directors on June 14, 2005) and executive officers as a
group. The information is determined in accordance with Rule 13d-3 promulgated
under the Exchange Act. Except as indicated below, the stockholders listed
possess sole voting and investment power with respect to their shares.
AMOUNT AND NATURE OF BENEFICIAL PERCENT OFNAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS(1)
1728 Yew St.,
Vancouver, A1, Canada, V6K 3E9 - -
34145 Pacific Coast Highway, Suite 151
Dana Point, California92629 581,767 2.3%
34145 Pacific Coast Highway, Suite 151
Dana Point, California92629 7,132,981 28.7%
34145 Pacific Coast Highway, Suite 151
Dana Point, California92629 581,767 2.3%
34145 Pacific Coast Highway, Suite 151
Dana Point, California92629 7,962,398 32.0%
XTV Investments LLC(2)
2200 SW 10th Street, Deerfield Beach,
Florida33442 5,529,222(2)(3) 22.2%
All executive officers and directors as a
group (four (4) people) 8,296,515 33.3%
(1) Based on 24,831,767 shares outstanding on June 3, 2005 after (i) the
Merger, (ii) the issuance of 50,000 shares to a financial advisor, and
(iii) the issuance of 831,767 shares to our new executive officers. In
the event that XTV Investments, LLC exercises its dissenter's rights,
its 5,529,222 shares will be cancelled, thereby reducing the total
number of outstanding shares to 19,302,545 shares.
(2) XTV Investments LLC is a subsidiary of Interactive Brands Development,
Inc. XTV Investments LLC was provided its statutory rights to dissent
from the Merger and to have its shares repurchased by the company. In
the event that XTV Investments LLC exercises its dissenter's rights,
these shares will be cancelled.
(3) Includes 1,382,140 shares held in escrow subject to release upon the
achievement of certain sales goals of our products. All shares not
released from escrow by October 31,2006 will be cancelled on that date.
DIRECTORS AND EXECUTIVE OFFICERS
The following table identifies our current directors and executive
NAME AGE POSITION
-------------------- -------- ------------------------------------
Michael Martinez 39 President, Director
Charles Prast 39 Chief Executive Officer, Director(1)
Murray Williams 34 Chief Financial Officer, Director(1)
Shane Whittle 29 Director(2)
(1) Will become a director on June 14, 2005.
(2) Will resign as a director on June 14, 2005.
MICHAEL MARTINEZ, PRESIDENT. Mr. Martinez is a founder of ITVN and has
served as its President since its incorporation in December 2003. Mr. Martinez
became the President of Radium on June 3, 2005. Since 2003, Mr. Martinez has
also been operating his real estate investment business. From 1999 to 2002, he
was the Executive Vice President of Sales and Marketing for Cais Internet, Inc.
From 1997 to 1999, he was the Vice President of Alternate Sales Channels for
Telepacific, Inc. From 1993 to 1997, Mr. Martinez owned and operated CyberLink
Technologies, Inc. Mr. Martinez founded Coast to Coast Communications, Inc. in
1989 which he sold to LA Cellular in 1993.
CHARLES PRAST, CHIEF EXECUTIVE OFFICER. Mr. Prast became the Chief
Executive Officer of Radium effective June 3, 2005. Mr. Prast has served as a
consultant of ITVN from April 2005 until his appointment as President of Radium.
From January 2004 until March 2005, Mr. Prast served as a consultant to
Interactive Brand Development, Inc. From May 2002 until November 2003, Mr. Prast
was the President and Chief Executive Officer of Private Media Group, Inc. Prior
to joining Private Media, Mr. Prast was a senior corporate financier with
Commerzbank Securities in London. Mr. Prast received a B.A. degree from Bates
College in 1987.
MURRAY WILLIAMS, CHIEF FINANCIAL OFFICER. Mr. Williams became the Chief
Financial Officer of Radium effective June 3, 2005. Mr. Williams has served as a
consultant to ITVN from January 2004 until his appointment as CFO of Radium.
From November 2001 until present, Mr. Williams has been an accounting and
finance consultant for numerous private and public companies. Mr. Williams was
one of the founding members of Buy.com, Inc. and served as the principal
financial officer and held other officer positions with Buy.com, Inc. from
February 1998 to August 2001. Prior to joining Buy.com, Inc., from January 1993
through January 1998, Mr. Williams was employed with KPMG Peat Marwick, LLP. Mr.
Williams is a Certified Public Accountant, and received degrees in both
Accounting and Real Estate from the University of Wisconsin-Madison in 1992.
SHANE WHITTLE, DIRECTOR. Mr. Whittle has been serving as our President
and Secretary since May 20, 2004 and as a director since inception. Upon the
closing of the Merger, Mr. Whittle resigned as our President and Secretary.
Since April 2002, Mr. Whittle has served as the President of Global Industries
Corp., a natural resources company. Since January 1999 he has also been the sole
proprietor of a business specializing in running promotions for client companies
in the food & beverage industry including nightclubs, restaurants, boat cruises
and other special events and provided management consulting to A&A Gas
fireplaces. From September 1995 through June 1999, Mr. Whittle attended Capilano
College's business program part time and from September 1994 through June 1995
he attended British Columbia Institute of Technology international business
There are no family relationships between any of the officers and
EXECUTIVE COMPENSATION/EMPLOYMENT AGREEMENT
Until the Merger, none of our officers and directors received any
compensation. Effective June 3, 2005, we hired a new Chief Executive Officer, a
new Chief Financial Officer and a new President, and entered into employment
agreements with each of them. The following is a summary of the employment
agreements with our new executive officers.
Effective June 3, 2005, we entered into employment agreements with
Charles Prast, our Chief Executive Officer, Michael Martinez, our President, and
Murray Williams, our Chief Financial Officer. All three agreements are
substantially the same, except as described below. All of the employment
agreements have a term of three years, which terms will automatically be
extended for an additional year unless either party provides notice of
termination 60 days before the end of the three-year term. If any of the
employment agreements are terminated by Radium for any reason other than for
cause, the agreements require that the terminated officer will continue to
receive his salary until the earlier of (i) 12 months from the date of
termination, or (ii) the expiration of the term of the agreement. Under the
employment agreements, each of the three executive officers will receive an
annual salary of $240,000. Each officer is also entitled to a bonus, the amount
of which shall be determined in its discretion by our Board of Directors, at the
end of each calendar year if Radium has positive EBITDA for that calendar year.
Under the employment agreements, each officer is entitled to eight weeks of
vacation during each year of employment. As a signing bonus, we issued 581,767
shares to Mr. Prast and 250,000 shares to Mr. Williams. The shares were valued
at $0.10 per share. Under the employment agreements of Mr. Prast and Mr.
Williams, we agreed to "piggy-back" registration rights, under which we agree to
include their shares in the next registration statement that we file with the
There are no stock option, retirement, pension, or profit sharing plans
currently in effect for the benefit of our officers and directors, and no
benefits under any such plan has been granted to any of our current officers or
Neither Radium, nor ITVN has implemented a stock option plan, and
neither company has granted any stock options or stock appreciation rights to
any executive officer or any director. Accordingly, no stock options have been
exercised by any of the officers or directors in our fiscal year ended April 30,2005.
LONG-TERM INCENTIVE PLAN AWARDS
Other than the foregoing employment agreements that we entered into
with our three new executive officers, we do not have any long-term incentive
plans or arrangements that provide compensation intended to serve as incentive
for performance to occur over a period longer than one fiscal year, whether such
performance is measured by reference to our financial performance, our stock
price, or any other measure.
COMPENSATION OF DIRECTORS.
To date, our directors have not received any compensation for serving
as members of the Board of Directors, and the Board has not implemented any plan
to award options. There are no contractual arrangements with any member of the
Board of Directors.
Our Articles of Incorporation provide that we shall indemnify an
officer or director who is made a party to any action, proceeding or lawsuit,
because of his position with this company or our subsidiary, to the fullest
extent permissible under the laws of the State of Nevada. In addition, the
Articles of Incorporation provide that we must advance expenses incurred in
defending any such proceeding.
Regarding indemnification for liabilities arising under the Securities
Act of 1933 which may be permitted to directors or officers pursuant to the
foregoing provisions, we are informed that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy, as expressed
in the Act and is, therefore unenforceable.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except with respect to the Merger, neither our current directors or
executive officers, nor any person who beneficially owns, directly or
indirectly, shares carrying more than 10% of the voting rights of our capital
stock, has during the past three years had any material interest in any
transaction to which Radium was a party. The following directors, officers or
10% stockholders have, however, had the following relationships with ITVN during
the past three years:
Mr. Prast was a consultant of ITVN from April 2005 until June 3, 2005.
In consideration for his services, Mr. Prast received $36,000.
Mr. Williams worked for a consulting firm that was engaged by ITVN. Mr.
Williams provided consulting services through the consulting company from
January 2004 until June 3, 2005. In consideration for Mr. Williams' consulting
services, the consulting firm earned accrued fees of $185,000, $85,000 of which
has been paid.
David Koenig, one of our principal stockholders and an employee of
ITVN, owns a majority interest in Holio.net, LLC, a provider of video content.
Holio.net, LLC is one of the 50 content providers that are currently providing
content to ITVN for distribution to ITVN's customers. The terms under which
Holio.net provides the content to ITVN are the same as the terms between ITVN
and all of the other ITVN content providers. Since ITVN did not launch its
direct-to-consumer broadcast network until April 2005, no amounts were paid to
Holio.net during ITVN's fiscal year ended December 31, 2004. ITVN also subleased
some office space from Holio.net, LLC during the past two years. The total
amount of rent that ITVN paid to Holio.net, LLC under this sublease is $4,000.
Since ITVN has located new office space, the sublease with Holio.net, LLC has
Since the formation of ITVN, Michael Martinez has from time to time
funded ITVN's working capital needs with unsecured loans. The total amount of
the loans that Mr. Martinez has made to ITVN is $289,000, of which $180,000 has
been repaid. Accordingly, as of the date of this Current Report, ITVN is
indebted to Mr. Martinez for an amount equal to $109,000. Mr. Martinez did not
charge ITVN any interest on these loans.
We are not aware of any legal proceedings in which any director,
officer, or any owner of record or beneficial owner of more than five percent of
any of our classes of voting securities, or any affiliate of any such director,
officer, affiliate or security holder, is a party adverse to us or has a
material interest adverse to us.
We may occasionally become subject to legal proceedings and claims that
arise in the ordinary course of our business. It is impossible for us to predict
with any certainty the outcome of pending disputes, and we cannot predict
whether any liability arising from pending claims and litigation will be
material in relation to our consolidated financial position or results of
RISK FACTORSWE ARE AN EARLY-STAGE COMPANY SUBJECT TO ALL OF THE RISKS AND UNCERTAINTIES OF A
Although Radium has been in existence since April 2002, and our ITVN
operating subsidiary has been in existence since December 2003, we should be
evaluated as a new, start-up company, subject to all of the risks and
uncertainties normally associated with a new, start-up company. To date,
Radium's operations have not been successful and have not generated any
meaningful amount of revenues. Accordingly, we have ceased Radium's prior
operations and are concentrating all of our efforts on developing ITVN's IPTV
networks operations. However, ITVN itself is a start-up company that did not
commercially launch its IPTV services until April 2005 and, therefore, has only
recently commenced generating revenues. As a start-up company, we expect to
incur significant operating losses. Based on our internal projections, we do not
expect that our monthly revenues will be able to pay all of our projected
operating expenses until we have approximately 70,000 continuing monthly paying
customers. During the two months since the launch of our service and the
distribution of our IPTV set-top boxes, we signed up approximately 1200 customer
accounts for our IPTV services. No assurance can be given that we will ever have
70,000 continuous subscribers or that we will generate revenues sufficient for
us to become profitable.
WE HAVE LIMITED WORKING CAPITAL AND WILL NEED TO RAISE ADDITIONAL CAPITAL IN THE
As of April 30, 2005, Radium had a stockholders equity of only $6,000
(audited), and ITVN had stockholders equity of approximately $600,000
(unaudited). Since its inception, Radium has had a net loss of $59,000
(audited), and ITVN has had a net loss from operations of approximately
$1,171,000 (unaudited). On a combined basis, we currently only have a limited
amount of cash available, which cash is not sufficient to fund our anticipated
future operating needs. To date, the capital needs of ITVN have been funded by
loans made to the company by its officers and principal stockholders. Although
some of our officers/principal stockholders may, from time to time, make some
additional short-term loans to us if we need working capital, none of these
officers/stockholders has committed to make any additional loans, and no
assurance can be given that we will receive additional loans if and when needed.
Our capital needs in the future will depend upon factors such as market
acceptance of our product and any other new products and services we launch, the
success of our core business, the amount of sales and subscription revenues that
our operations generate, and the amount of our operating costs, including
marketing and sales costs. None of these factors can be predicted with
certainty. We currently purchase our ITVN set-top boxes from an off-shore
manufacturer and we have ordered 25,000 of such boxes. We will, however, have to
purchase additional boxes. In order to fund our future operations, including the
purchase of additional ITVN set-top boxes, we will need substantial additional
debt or equity financing, for which we currently have no commitments or
arrangement. We cannot assure you that any additional financing will be
available or, even if it is available that it will be on terms acceptable to us.
If we raise additional funds by selling stock, the ownership of our existing
stockholders will be diluted. Any inability to obtain required financing would
have a material adverse effect on our business, results of operations and
OUR FINANCIAL CONDITION COULD BE SEVERELY AND NEGATIVELY AFFECTED IF THE DISSENTER'S RIGHTS AVAILABLE TO AN ITVN STOCKHOLDER IS EXERCISED.
Under Nevada corporate laws, any stockholder who does not vote in favor
of a merger has the right to dissent and to receive a cash payment equal to the
"fair value" of the dissenting shares in exchange for the cancellation of those
shares. The merger of ITVN with our subsidiary was approved by all of the ITVN
stockholders, except one stockholder who owns 6,250 shares of ITVN (which shares
are exchangeable as part of the Merger into 4,147,082 shares of Radium common
stock). In addition, the same stockholder holds, and is entitled to retain, an
additional 2,083 shares of ITVN shares (the equivalent of 1,382,140 shares of
Radium common stock) if the stockholder delivers 20,000 qualified customers for
our IPTV services before April 30, 2006. The 2,083 shares are currently held in
escrow and will be forfeited if not released from escrow and the stockholder has
not yet delivered any qualified customers to us. As required by Nevada law, we
have notified the non-voting holder of those shares of its dissenter's rights
under Nevada law. The stockholder was given 30 days in which to decide whether
or not to dissent to the Merger, and whether or not to demand payment of the
fair value for those shares. We do not know whether or not the non-voting
stockholder will exercise its dissenter's rights. In the event that the
stockholder does elect to exercise its dissenter's rights, we will have to
determine what the "fair value" of the 6,250 shares was before the merger and
then pay that amount to the dissenting stockholder. We will also be required to
determine what the "fair value" of the 2,083 shares was before the merger and
then pay that amount to the escrow agent to be held in escrow. As discussed
above, currently, our funds and other financial resources are limited and the
total of our existing funds are less than the estimated fair value of the
shares. Accordingly, if the foregoing stockholder elects to dissent, we would
not have the financial resources to pay the amount of the value of the
dissenting shares and would have to raise the funds from new or existing
stockholders/lenders/investors. No assurance can be given that we will be able
to raise the amount necessary to fund the repurchase of the dissenting shares at
their pre-merger fair value. Although we do not know what the exact value of the
dissenting shares is, we believe that the amount is significantly less than the
value of the shares after the merger. We believe that the value of the shares is
less because, among other things, (i) all of the 8,333 shares were unregistered
shares, (ii) ITVN was a private company (not a public company with market
liquidity making it easier for holders of the common stock to sell their
shares), and (iii) 2,083 of the 8,333 shares are held in escrow and are subject
to forfeiture. If the stockholder who owns those shares does dissent, and we do
pay the fair value and thereafter retire the dissenting shares, the number of
Radium shares outstanding will be reduced by 5,529,222 shares, thereby
increasing the percentage of shares owned by all other shareholders by
approximately 29% and thereby making more shares available for future issuance
by Radium. No assurance can be given that a court would agree with our valuation
of the fair value of the dissenting shares but there are a number of precedent
cases that support our assessment.
WE HAVE ONLY HAD LIMITED PRODUCT SALES TO DATE, AND WE CAN GIVE NO ASSURANCE THAT OUR PRODUCTS AND SERVICES WILL BE ACCEPTED BY THE MARKET.
We launched the sale of our set-top boxes in April 2005. Although we
have not had any complaints to date, no assurance can be given that our ITVN
set-top boxes and the IPTV services that can be accessed through the set-top
boxes, will work satisfactorily in large scale commercial usage. Any
unanticipated problems with our set-top boxes, or the ability to deliver high
resolution video programming would limit our ability to market our products and
services. Because we have only been offering our products and services for two
months, we do not have sufficient market data to be able to predict whether our
products and services will be accepted by the IPTV or video-on-demand markets,
or whether any subscribers for our services will continue to subscribe for our
services. Our current business model is based on maintaining a base of on-going
monthly subscribers. Because all of our subscriptions were entered into
recently, we have no history from which we can predict the success of our
business model. Accordingly, we have limited experience in selling our ITVN
set-top boxes and providing our services on which to base any prediction about
our future operations and viability.
THE SUCCESS OF OUR BUSINESS DEPENDS ON THE GROWTH OF OUR CONTENT LIBRARY, THE GROWTH OF OUR SUBSCRIBER BASE, AND THE NEGOTIATION OF FAVORABLE PRICING TERMS WITH CONTENT PROVIDERS.
Although our business plan is to provide a number of network
programming alternatives to our customers (including music videos, foreign news
programming and classic movies), at this time we only have one category of
content that we can offer our customers--adult entertainment. Accordingly, our
ITVN set-top boxes and IPTV services currently can only be marketed to viewers
who are interested in adult content and not to the much larger audience that we
believe will be interested in our products and services when a number of the
other channels are available. Having only adult entertainment programming
available at this time limits the reach of our marketing and sales efforts. Our
strategy depends on expanding the content available using our set-top boxes,
which in turn depends on our relationships with production and distribution
companies that control content. We will need to develop and maintain such
relationships as we expand our business to provide additional content. There can
be no assurance, however, that we will be able to develop and maintain such
relationships or negotiate such terms. In such case, we may be forced to change
our strategy or abandon the media delivery business despite our investment in
infrastructure supporting such a business, which could have a material adverse
effect on the results of our operations.
IF WE ARE UNABLE TO COMPETE EFFECTIVELY WITH OTHER FORMS OF ENTERTAINMENT, WE WILL NOT BE ABLE TO INCREASE SUBSCRIBER REVENUE.
We face general competition from other forms of entertainment,
including sporting and cultural events, other television networks, feature films
and other programming. Our ability to compete depends on many factors, some of
which are outside of our control. These factors include the quality and appeal
of our competitors' content, the technology utilized by our competitors, the
effectiveness of their sales and marketing efforts and the attractiveness of
their product offerings. Our existing competitors, as well as potential new
competitors, may have significantly greater financial, technical and marketing
resources than we do. This may allow them to devote greater resources than we
can to the development and promotion of their product offerings. These
competitors may also engage in more extensive technology research and
development and adopt more aggressive pricing policies for their content.
Additionally, increased competition could result in price reductions, lower
margins and negatively impact our financial results.
WE MAY BE LIABLE FOR THE CONTENT WE MAKE AVAILABLE ON THE INTERNET.
Because we deliver adult programming we may be subject to obscenity or
other legal claims by third parties. Our business, financial condition and
operating results could be harmed if we were found liable for this content.
Implementing measures to reduce our exposure to this liability may require us to
take steps that would substantially limit the attractiveness of our service
and/or its availability in various geographic areas, which would negatively
impact our ability to generate revenue. Furthermore, we may not have insurance
that adequately protects us against all of these types of claims.
INCREASED GOVERNMENT REGULATION IN THE UNITED STATES AND ABROAD COULD IMPEDE OUR
ABILITY TO DELIVER OUR CONTENT AND EXPAND OUR BUSINESS.
Although we are not aware of any Federal or state laws or regulations
that limit the delivery of adult oriented entertainment over the Internet, new
laws or regulations, or the new application of existing laws could prevent us
from making our content available in various jurisdictions or could otherwise
restrict our planned operations in a manner that would have a material adverse
effect on our business, financial condition and operating results. These new
laws or regulations may relate to liability for information retrieved from or
transmitted over the internet, taxation, user privacy and other matters relating
to our products and services. Moreover, the application to the internet of
existing laws governing issues such as intellectual property ownership and
infringement, pornography, obscenity, libel, employment and personal privacy is
uncertain and developing.
The current administration in Washington D.C. has publicly announced
that it intends to restrict matters deemed to be obscene, including adult
entertainment. Efforts by the current administration to limit the delivery of
adult content over the Internet could result in increased government regulation
of our business and limit our operations. It is not possible for us to predict
what new governmental regulations we may be subject to in the future.
NEGATIVE PUBLICITY, LAWSUITS OR BOYCOTTS BY OPPONENTS OF ADULT CONTENT COULD ADVERSELY AFFECT OUR OPERATING PERFORMANCE AND DISCOURAGE INVESTORS FROM INVESTING IN OUR PUBLICLY TRADED SECURITIES.
We could become a target of negative publicity, lawsuits or boycotts by
one or more advocacy groups who oppose the distribution of "adult
entertainment." These groups have, in the past, mounted negative publicity
campaigns, filed lawsuits and encouraged boycotts against companies whose
businesses involve adult entertainment. The costs of defending against any such
negative publicity, lawsuits or boycotts could be significant, could hurt our
finances and could discourage investors from investing in our publicly traded
securities. As a provider of adult entertainment, we cannot assure you that we
may not become a target in the future.
BECAUSE WE ARE INVOLVED IN THE ADULT PROGRAMMING BUSINESS, IT MAY BE MORE DIFFICULT FOR US TO RAISE MONEY OR ATTRACT MARKET SUPPORT FOR OUR STOCK.
Although our business plan calls for us to become a provider of
mainstream content, including news, music and non-adult motion picture videos,
adult programming currently represents the majority of our revenues.
Accordingly, some investors, investment banking entities, market makers, lenders
and others in the investment community may decide not to provide financing to
us, or to participate in our public market or other activities due to the nature
of our business, which, in turn, may hurt the value of our stock, and our
ability to attract market support.
WE NEED TO EFFECTIVELY MANAGE OUR GROWTH AND THE EXECUTION OF OUR BUSINESS PLAN.
ANY FAILURE TO DO SO WOULD NEGATIVELY IMPACT OUR RESULTS.
To manage operations effectively, we must constantly improve our
operational, financial and other management processes and systems. Our success
also depends largely on our ability to maintain high levels of employee
utilization, to manage our costs in general and general and administrative
expense, in particular, and otherwise to execute on our business plan. We need
to cost-efficiently develop our new technology business as well as expand our
base of subscribers to implement our business strategy, and efficiently
implement our business strategies. There are no assurances that we will be able
to effectively and efficiently manage this growth. Any inability to do so could
increase our expenses and negatively impact our results of operations.
OUR INABILITY TO PROTECT OUR TRADEMARKS, PATENT AND TRADE SECRETS MAY PREVENT US
FROM SUCCESSFULLY MARKETING OUR PRODUCTS AND COMPETING EFFECTIVELY.
Failure to protect our intellectual property could harm our brand and
our reputation, and adversely affect our ability to compete effectively.
Further, enforcing or defending our intellectual property rights, including our
trademarks, patents, copyrights and trade secrets, could result in the
expenditure of significant financial and managerial resources. We regard our
intellectual property, particularly our intellectual property used to develop
the ITVN set-top boxes, to be of considerable value and importance to our
business and our success. We rely on a combination of trademark, patent, and
trade secrecy laws, confidentiality procedures and contractual provisions to
protect our intellectual property rights. There can be no assurance that the
steps taken by us to protect these proprietary rights will be adequate or that
third parties will not infringe or misappropriate our trademarks, trade secrets
or similar proprietary rights. In addition, there can be no assurance that other
parties will not assert infringement claims against us, particularly if we begin
producing original content, and we may have to pursue litigation against other
parties to assert our rights and prevent the illicit distribution and
downloading of any content we create. Any such claims or litigation could be
costly and we may lack the resources required to defend against such claims or
pursue infringements of our rights. In addition, any event that would jeopardize
our proprietary rights or any claims of infringement by third parties could have
a material adverse affect on our ability to retain our current clients and
attract new ones, particularly musical talent for our original content.
THE CONTENT WE WILL DELIVER WILL BE COMPETING AGAINST THE LARGE NUMBER OF CURRENTLY AVAILABLE VIDEOS, AND NUMEROUS LARGE, ESTABLISHED COMPANIES THAT HAVE SUBSTANTIALLY GREATER FINANCIAL, TECHNICAL, MANUFACTURING, MARKETING, DISTRIBUTION AND OTHER RESOURCES THAN US MAY DISTRIBUTE SIMILAR CONTENT TO OURS.
The video content delivery industry is characterized by intense
competition and rapid and significant technological advancements. Directly or
indirectly we are competing against standard over-the-air television broadcasts,
cable operators, video rental stores, other video rental services such as
Netflix, video sales, digital broadcasting companies, and even other Internet
video delivery services. Virtually all of these other video content delivery
companies have greater financial and other resources than we do, and virtually
all of them have far greater market presence and penetration than our start-up
service. Because most of the content that we are delivering through our set-top
box and our IPTV service is currently already available to the retail consumer,
we will be competing with any other similar content made available by any
distributors of videos, in all formats. Many large, international and well
funded companies have also entered, or announced their intention to enter, the
video-on demand industry, including delivery of video over the Internet. While
we believe that our service can be differentiated because it features a
simplified delivery box, low fees, easy installation, and can deliver video
anywhere through broadband Internet connection "on demand," many other companies
could also develop or market video delivery services that are substantially the
same as ours. The companies that we are aware of that are, or could compete
against us have substantially greater financial, technical, manufacturing,
marketing, distribution and other resources than us, and may compete directly
with our services or may provide improved services.
CERTAIN FACTORS RELATED TO OUR COMMON STOCK ALTHOUGH OUR COMMON STOCK IS LISTED FOR TRADING ON THE OTC BULLETING BOARD, YOU MAY BE UNABLE TO SELL YOUR SHARES, AND ANY SUCH SALE MAY NOT BE AT OR NEAR ASK PRICES.
Our common stock is currently listed for trading on the OTC Bulletin
Board maintained by the National Association of Securities Dealers, Inc. To
date, there has been virtually no trading in our common stock. Any stock that is
thinly traded, does not have a significant number of persons interested in
purchasing the shares at or near ask prices at any given time, and the number of
potential purchasers may be relatively small or non-existent. As a consequence,
there may be periods of several days or more when trading activity in our shares
is minimal or non-existent, as compared to a seasoned issuer which has a large
and steady volume of trading activity that will generally support continuous
sales without an adverse effect on share price. We cannot give you any assurance
that a broader or more active public trading market for our common stock will
develop or be sustained. Due to these conditions, we can give you no assurance
that you will be able to sell your shares at or near ask prices or at all if you
need money or otherwise desire to liquidate your shares.
IF SECURITIES OR INDUSTRY ANALYSTS DO NOT PUBLISH RESEARCH REPORTS ABOUT OUR BUSINESS, OUR STOCK PRICE AND TRADING VOLUME COULD DECLINE.
Small, relatively unknown public companies can achieve visibility in
the trading market through research and reports that industry or securities
analysts publish. However, to our knowledge, no analysts cover our company. The
lack of published reports by independent securities analysts could limit the
interest in our stock and negatively affect our stock price. We do not have any
control over research and reports these analysts publish or whether they will be
published at all. If any analyst who does cover us downgrades our stock, our
stock price would likely decline. If any analyst initiates and then ceases
coverage of our company or fails to regularly publish reports on us, we could
lose visibility in the financial markets or never achieve such visibility, which
in turn could cause our stock price or trading volume to stagnate or decline.
YOU MAY HAVE DIFFICULTY SELLING OUR SHARES BECAUSE THEY ARE DEEMED "PENNY STOCKS."
Since our common stock is not listed on the Nasdaq Stock Market or any
national securities exchange, if the trading price of our common stock is below
$5.00 per share, trading in our common stock will be subject to the requirements
of certain rules promulgated under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"). These rules require additional disclosures by
broker-dealers in connection with any trades involving a stock defined as a
penny stock. Such rules require the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and the
risks associated therewith and impose various sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors (generally defined as an investor with a net worth in
excess of $1,000,000 or annual income exceeding $200,000 individually or
$300,000 together with a spouse). For these types of transactions, the
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
the sale. The broker-dealer also must disclose the commissions payable to the
broker-dealer, current bid and offer quotations for the penny stock and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this
fact and the broker-dealer's presumed control over the market. Such information
must be provided to the customer orally or in writing before or with the written
confirmation of trade sent to the customer. Monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. The additional burdens
imposed upon broker-dealers by such requirements could discourage broker-dealers
from effecting transactions in our common stock, which could severely limit the
market liquidity of the common stock and the ability of holders of the common
stock to sell their shares.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired
The financial statements of Interactive Television Networks, Inc., the business
acquired, required by Rule 3-05(b) of Regulation S-X will be filed by the
Registrant by an amendment to this Current Report on Form 8-K by no later than
August 17, 2005.
(b) Pro forma financial information
The pro forma financial information of Radium and Interactive Television
Networks, Inc. required by Article 11 of Regulation S-X will be filed by the
Registrant by an amendment to this Current Report on Form 8-K by no later than
August 17, 2005.
The following exhibits are filed as part of this Current Report on Form 8-K:
EXHIBIT NUMBER DESCRIPTION
10.1 Agreement and Plan of Reorganization, dated as of May 27,2005, between Radium Ventures, Inc., Radium Ventures
Acquisition, Inc., Shane Whittle, James Scott-Moncrieff, and
Interactive Television Networks, Inc. (1)
(1) Previously filed as an exhibit to the Company's Current Report on
Form 8-K on June 2, 2005, which exhibit is hereby incorporated herein by
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.
Date: June 9, 2005 RADIUM VENTURES INC.
By: /S/ Michael Martinez, President
Dates Referenced Herein and Documents Incorporated by Reference