SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended June 30, 2003.
or
|_| Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
Commission file number: 0-25940
WIRE ONE TECHNOLOGIES, INC.
(Exact Name of registrant as Specified in its Charter)
Delaware 77-0312442
(State or other Jurisdiction of (I.R.S. Employer Number)
Incorporation or Organization)
225 Long Avenue, Hillside, New Jersey 07205
(Address of Principal Executive Offices)
973-282-2000
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes |X| No |_|
Check whether the registrant is an accelerated filer as defined in Rule
12b-2 of the Exchange Act of 1934.
Yes |_| No |X|
The number of shares outstanding of the registrant's Common Stock as of
August 12, 2003 was 29,583,081.
WIRE ONE TECHNOLOGIES, INC
Index
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements*..............................................................1
Consolidated Balance Sheets
June 30, 2003 and December 31, 2002................................................1
Consolidated Statements of Operations
For the Six Months and Three Months Ended June 30, 2003 and 2002...................2
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2003 and 2002....................................3
Notes to Consolidated Financial Statements.................................................4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...........9
Item 3. Quantitative and Qualitative Disclosures about Market Risk.....................................14
Item 4. Controls and Procedures........................................................................15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..............................................................................15
Item 2. Changes in Securities and Use of Proceeds......................................................15
Item 3. Defaults Upon Senior Securities................................................................15
Item 4. Submission of Matters to a Vote of Security Holders............................................15
Item 5. Other Information..............................................................................15
Item 6. Exhibits and Reports on Form 8-K...............................................................15
Signatures.............................................................................................16
Certifications.........................................................................................17
* The Balance Sheet at December 31, 2002 has been taken from the audited
financial statements at that date. All other financial statements are
unaudited.
Wire One Technologies, Inc.
Consolidated Balance Sheets
June 30, 2003 December 31, 2002
------------- -----------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents ...................................... $ 907,188 $ 2,762,215
Accounts receivable-net ........................................ 2,016,190 1,277,891
Assets of discontinued AV operations ........................... 72,535 807,067
Assets of discontinued VS operations ........................... 34,072,174 41,314,701
Other current assets ........................................... 1,636,461 727,262
------------- -------------
Total current assets ....................................... 38,704,548 46,889,136
Furniture, equipment and leasehold improvements-net ................. 12,627,010 11,512,415
Goodwill ............................................................ 2,547,862 2,547,862
Other assets ........................................................ 488,797 552,251
------------- -------------
Total assets ............................................... $ 54,368,217 $ 61,501,664
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................... $ 1,968,035 $ 1,055,427
Accrued expenses ............................................... 625,253 681,369
Liabilities of discontinued VS operations ...................... 17,838,861 17,333,120
Current portion of capital lease obligations ................... 165,974 --
------------- -------------
Total current liabilities .................................. 20,598,123 19,069,916
Bank loan payable ................................................... 4,519,741 5,845,516
------------- -------------
Total liabilities .................................... 25,117,864 24,915,432
------------- -------------
Commitments and contingencies
Subordinated debentures ............................................. 4,888,000 4,888,000
Discount on subordinated debentures ................................. (4,066,373) (4,888,000)
------------- -------------
Subordinated debentures, net ................................... 821,627 --
------------- -------------
Stockholders' Equity:
Preferred stock, $.0001 par value;
5,000,000 shares authorized, none issued ................... -- --
Common Stock, $.0001 par value; 100,000,000 authorized;
29,551,097 and 28,931,660 shares outstanding,
respectively ............................................... 2,955 2,893
Treasury stock, 39,891 shares at cost .......................... (239,742) (239,742)
Additional paid-in capital ..................................... 132,523,780 131,132,374
Accumulated deficit ............................................ (103,858,267) (94,309,293)
------------- -------------
Total stockholders' equity ................................. 28,428,726 36,586,232
------------- -------------
Total liabilities and stockholders' equity ................. $ 54,368,217 $ 61,501,664
============= =============
See accompanying notes to consolidated financial statements.
1
Wire One Technologies, Inc.
Consolidated Statements of Operations
(Unaudited)
Six Months Ended June 30, Three Months Ended June 30,
------------------------------ ------------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net revenues ............................................... $ 4,901,488 $ 2,357,977 $ 2,674,630 $ 1,258,556
Cost of revenues ........................................... 4,898,606 2,175,847 2,604,320 1,206,306
------------ ------------ ------------ ------------
Gross margin ............................................... 2,882 182,130 70,310 52,250
------------ ------------ ------------ ------------
Operating expenses
Selling ............................................... 2,941,463 2,183,805 1,654,784 1,157,238
General and administrative ............................ 2,632,012 2,367,718 1,397,348 1,215,844
Restructuring ......................................... -- 260,000 -- 260,000
------------ ------------ ------------ ------------
Total operating expenses ................................... 5,573,475 4,811,523 3,052,132 2,633,082
------------ ------------ ------------ ------------
Loss from continuing operations ............................ (5,570,593) (4,629,393) (2,981,822) (2,580,832)
------------ ------------ ------------ ------------
Other (income) expense
Amortization of deferred financing costs .............. 92,763 59,695 47,254 45,938
Interest income ....................................... (5,800) (58,132) (611) (38,802)
Interest expense ...................................... 786,983 105,786 413,933 79,547
Amortization of discount on subordinated debentures ... 992,875 -- 458,250 --
------------ ------------ ------------ ------------
Total other expenses, net .................................. 1,866,821 107,349 918,826 86,683
------------ ------------ ------------ ------------
Net loss from continuing operations ........................ (7,437,414) (4,736,742) (3,900,648) (2,667,515)
Loss from discontinued AV operations ....................... (1,173,067) (1,268,474) (380,045) (695,593)
Loss from discontinued VS operations ....................... (938,493) (769,170) (619,014) (852,770)
Loss from discontinued Voice operations .................... -- (101,339) -- (101,339)
------------ ------------ ------------ ------------
Net loss attributable to common stockholders ............... $ (9,548,974) $ (6,875,725) $ (4,899,707) $ (4,317,217)
============ ============ ============ ============
Net loss from continuing operations per share:
Basic and diluted ..................................... $ (0.26) $ (0.17) $ (0.14) $ (0.10)
============ ============ ============ ============
Loss from discontinued AV operations per share:
Basic and diluted ..................................... $ (0.04) $ (0.04) $ (0.01) $ (0.02)
============ ============ ============ ============
Loss from discontinued VS operations per share:
Basic and diluted ..................................... $ (0.03) $ (0.03) $ (0.02) $ (0.03)
============ ============ ============ ============
Loss from discontinued Voice operations per share:
Basic and diluted ..................................... $ -- $ -- $ -- $ --
============ ============ ============ ============
Net loss attributable to common stockholders per share:
Basic and diluted ..................................... $ (0.33) $ (0.24) $ (0.17) $ (0.15)
============ ============ ============ ============
Weighted average number of common shares:
Basic and diluted ..................................... 29,113,216 28,632,548 29,195,477 28,934,509
============ ============ ============ ============
See accompanying notes to consolidated financial statements.
2
Wire One Technologies, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended June 30,
--------------------------------
2003 2002
------------ ------------
Cash flows from Operating Activities
Net loss .......................................................... $ (9,548,974) $ (6,875,725)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization ................................... 3,016,236 2,513,055
Amortization of deferred financing costs ........................ 92,763 59,695
Amortization of discount on subordinated debentures ............. 992,875 --
Non-cash compensation ........................................... 673,536 160,690
Increase (decrease) in cash attributable to changes in
assets and liabilities, net of effects of acquisitions:
Accounts receivable .................................... (738,300) 1,357,727
Inventory .............................................. -- (1,393,635)
Assets of discontinued AV operations ................... 734,532 --
Assets of discontinued VS operations ................... 6,369,170 --
Other current assets ................................... (1,770,059) (4,883,513)
Other assets ........................................... (10,196) (484,832)
Accounts payable ....................................... 581,906 2,004,417
Accrued expenses ....................................... (56,117) 872,434
Liabilities of discontinued VS operations .............. 505,741 --
Deferred revenue ....................................... -- (1,641,890)
Other current liabilities .............................. (66,127) (1,465,049)
------------ ------------
Net cash provided by (used in) operating
activities ........................................ 776,986 (9,776,626)
------------ ------------
Cash flows from Investing Activities
Purchases of furniture, equipment and leasehold
improvements ................................................ (1,409,578) (2,998,969)
------------ ------------
Net cash used in investing activities .................... (1,409,578) (2,998,969)
------------ ------------
Cash flows from Financing Activities
Proceeds from common stock offering ............................. -- 20,257,962
Costs of issuance of subordinated debentures .................... (171,248) --
Exercise of warrants and options, net ........................... 293,700 371,494
Proceeds from bank loans ........................................ 51,820,394 11,498,264
Payments on bank loans .......................................... (53,146,169) (13,646,992)
Deferred financing costs ........................................ (19,112) --
Payments on capital lease obligations ........................... -- (32,053)
------------ ------------
Net cash provided by (used in) financing activities ...... (1,222,435) 18,448,675
------------ ------------
Increase (decrease) in cash and cash equivalents ..................... (1,855,027) 5,673,080
Cash and cash equivalents at beginning of period ..................... 2,762,215 1,689,451
------------ ------------
Cash and cash equivalents at end of period ........................... $ 907,188 $ 7,362,531
============ ============
Supplement disclosures of cash flow information:
Cash paid during the period for:
Interest ........................................................ $ 225,059 $ 105,786
============ ============
Taxes ........................................................... $ -- $ --
============ ============
Non-cash financing and investing activities:
Equipment with costs totaling $232,100 was acquired under capital lease
arrangements during the six months ended June 30, 2003.
See accompanying notes to consolidated financial statements.
3
WIRE ONE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
Note 1 -- The Business
Wire One Technologies, Inc. operates Glowpoint(SM), the first IP-based
subscriber network service dedicated to video communications. Launched in late
2000, Glowpoint carries video calls within the United States and to Europe and
South America on a network provisioned through carrier-class backbone and last
mile access partners over a variety of solutions including DSL, T1, ATM and
Optical Ethernet. Glowpoint currently serves over 280 customers, has 1,720
endpoints installed or under contract and carries an average of 7,000 calls per
month. The network service offers guaranteed up-time, real-time billing and
usage information, gateway services to legacy ISDN-based sites, multi-point
bridging, live operator assistance, encryption, scheduling features and
international least-cost routing, among other value-added features. The Company,
headquartered in Hillside, New Jersey, operates a state-of the-art network
operations center in Hillside where research and development, software, network
engineering, product development, product management and customer service
functions are located. The Company also maintains an operations center in
Camarillo, California where help desk facilities are located and multi-point
bridging, live-operator assistance and other customer service functions are
performed.
On June 10, 2003, Wire One signed a definitive agreement to sell substantially
all of the assets of its video solutions ("VS") segment to Gores Technology
Group ("Gores"), a privately held international acquisition and management firm,
in order to focus solely on growing its Glowpoint network service. The sale of
Wire One's VS segment is subject to a number of contingencies, including
stockholder approval and other customary closing conditions (see Note 6). The VS
segment includes the Company's videoconferencing equipment distribution, system
design and engineering, installation, operation and maintenance activities and
consists of: a headquarters and warehouse facility in Miamisburg, Ohio; a help
desk operation in Camarillo, California; 24 sales offices and demonstration
facilities across the United States; and a client list of approximately 3,000
active customers with an installed base of approximately 22,000 video
conferencing systems. As a result, this segment is classified as a discontinued
operation in the accompanying financial statements with its assets and
liabilities summarized in single line items on the consolidated balance sheets
and its results from operations summarized in a single line item on the
consolidated statement of operations. See Note 6 for further information.
Note 2 -- Basis of Presentation
The accompanying unaudited financial statements of the Company have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and pursuant to the
rules and regulations of the Securities and Exchange Commission. Accordingly,
they do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six months ended June 30,
2003 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2003. For further information, refer to the financial
statements and footnotes thereto included in the Company's Annual Report for the
fiscal year ended December 31, 2002 as filed with the Securities and Exchange
Commission.
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries, AllComm Products Corporation ("APC"), VTC
Resources, Inc. ("VTC") and Wire One Travel Services, Inc. ("WOTS"). All
material intercompany balances and transactions have been eliminated in
consolidation.
Note 3 -- Effect of Recently Issued Accounting Standards
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Instruments
with Characteristics of both Liabilities and Equity". SFAS No. 150 establishes
standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. SFAS No. 150
requires that an issuer classify a financial instrument that is within the scope
of SFAS No. 150 as a liability. SFAS No. 150 is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective beginning September 1, 2003. The adoption of SFAS No. 150 is not
expected to have a material effect on the Company's financial statements.
In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"). This interpretation of Accounting
Research Bulletin No. 51, "Consolidated Financial Statements," addresses
consolidation by business enterprises of variable interest entities. Under
current practice, two enterprises generally have been included in consolidated
financial statements because one enterprise controls the other through voting
interests. This interpretation defines the concept of "variable interests" and
requires existing unconsolidated variable interest entities to be consolidated
by their primary beneficiaries if the entities do not effectively disperse the
risks among the parties involved. The provisions of FIN 46, which the Company
adopted in 2003, did not have a material impact on the consolidated financial
statements.
4
In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45"). This interpretation elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The disclosure requirements of this interpretation are
effective for interim and annual periods after December 15, 2002. The initial
recognition and initial measurement requirements of this interpretation are
effective prospectively for guarantees issued or modified after December 31,
2002. The provisions of FIN 45, which the Company adopted in 2003, did not have
a material impact on the consolidated financial statements.
In November 2002, the Emerging Issues Task Force (EITF) reached consensus on
Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables". Revenue
arrangements with multiple deliverables include arrangements which provide for
the delivery or performance of multiple products, services and/or rights to use
assets where performance many occur at different points in time or over
different periods of time. The Company generally enters into arrangements for
multiple deliverables that occur at different points in time when it is engaged
to provide installation services. EITF Issue No. 00-21 is effective for fiscal
periods beginning after June 15, 2003. The Company has not completed the
evaluation of the impact of EITF Issue No. 00-21.
Note 4 -- Stock-Based Compensation
At June 30, 2003, the Company accounts for its stock-based compensation plans
using the intrinsic value method in accordance with the provisions of APB
Opinion No. 25, "Accounting for Stock Issued to Employees", and complies with
the disclosure provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation", and SFAS No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure".
The following table illustrates, in accordance with the provisions of SFAS No.
148, the effect on net loss and loss per share if the Company had applied the
fair value recognition provisions of SFAS No. 123 to stock-based employee
compensation.
Six Months Ended Three Months Ended
June 30, June 30,
--------------------------- ----------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net loss as reported ..................... $ (9,548,974) $(6,875,725) $(4,899,707) $(4,317,217)
Add: stock-based compensation
expense included in reported
loss, net of tax .................... 111,595 160,690 55,262 54,986
Deduct: total stock-based
employee compensation
expense determined under the
fair value based method for
all awards, net of tax .............. (1,854,682) (2,257,922) (665,587) (976,110)
------------ ----------- ----------- -----------
Pro forma net loss ....................... $(11,292,061) $(8,972,957) $(5,510,032) $(5,238,341)
============ =========== =========== ===========
Loss per share:
Basic and diluted - as reported .......... $ (0.33) $ (0.24) $ (0.17) $ (0.15)
Basic and diluted - pro forma ............ $ (0.39) $ (0.31) $ (0.19) $ (0.18)
The fair value of the Company's stock-based option awards to employees was
estimated assuming no expected dividends and the following weighted-average
assumptions:
Six Months Ended Three Months Ended
June 30, June 30,
--------------------------- ----------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Risk free interest rate.................... 3.69% 4.02% 3.61% 3.76%
Expected lives............................. 5 years 4 years 5 years 4 years
Expected volatility........................ 102.04% 90.01% 57.76% 88.46%
5
Note 5 -- Loss Per Share
Basic loss per share is calculated by dividing net loss attributable to common
stockholders by the weighted average number of common shares outstanding during
the period. Diluted loss per share is calculated by dividing net loss
attributable to common stockholders by the weighted average number of common
shares outstanding plus the weighted-average number of net shares that would be
issued upon exercise of stock options and warrants using the treasury stock
method and the deemed conversion of subordinated debentures using the
if-converted method.
Six Months Ended Three Months Ended
June 30, June 30,
----------------------------- -----------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Weighted average shares outstanding .................... 29,113,216 28,632,548 29,195,477 28,934,509
Effect of dilutive options and warrants ................ -- -- -- --
Weighted average shares outstanding
---------- ---------- ---------- ----------
including dilutive effect of securities ................ 29,113,216 28,632,548 29,195,477 28,934,509
========== ========== ========== ==========
Weighted average options and warrants to purchase 12,010,926 and 11,832,214
shares of common stock and subordinated debentures convertible into 2,036,677
common shares were outstanding during the six and three months ended June 30,
2003. Weighted average options and warrants to purchase 10,619,267 and
10,587,974 shares of common stock were outstanding during the six and three
months ended June 30, 2002. These options and warrants were not included in the
computation of diluted EPS because the Company reported a net operating loss for
these periods and their effect would have been anti-dilutive.
Note 6 -- Discontinued Operations
In March 2003, the Company completed the sale of certain assets and liabilities
of its Audio-Visual ("AV") division to Signal Perfection Limited ("SPL") for
approximately $807,000, $250,000 of which was paid in cash at the close of the
transaction and the balance of which was paid in the form of a promissory note
payable in five equal consecutive monthly payments commencing on April 15, 2003.
The sale of the AV division was aimed at enabling the Company to focus more of
its resources to the development and marketing of its subscriber-based IP
network, Glowpoint, and to its VS segment. As a consequence, this division,
previously part of the VS segment, has been classified as a discontinued
operation in the accompanying financial statements, with its assets summarized
in a single line item on the consolidated balance sheets and its results from
operations summarized in a single line item on the consolidated statements of
operations.
Assets of discontinued AV operations consist of the following:
June 30, 2003 December 31, 2002
------------- -----------------
Inventory.......................................................... $ 72,535 $ 300,000
Earnings in excess of billings..................................... -- 507,067
------------ ------------
Total..................................................... $ 72,535 $ 807,067
============ ============
Revenues and pretax loss from discontinued AV operations are as follows:
Six Months Ended June 30, Three Months Ended June 30,
---------------------------- ----------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Revenues ............ $ 3,873,822 $ 9,093,235 $ 1,631,897 $ 3,281,284
Pretax loss ......... $(1,173,067) $(1,268,474) $ (380,045) $ (695,593)
6
On June 10, 2003, Wire One signed an asset purchase agreement with Gores.
Pursuant to the asset purchase agreement, the Company agreed to sell to Gores
all of the properties, rights, interests and other tangible and intangible
assets that relate in any material respect to its VS segment. Gores will pay
Wire One approximately $20 million in cash upon closing, which may be adjusted
downward if any purchase price adjustments are required, and an unsecured
promissory note in the principal amount of $1 million maturing on December 31,
2004 and bearing interest at a rate of 5% per annum. Gores will hold back $2
million to cover potential purchase price adjustments payable by Wire One
arising under the asset purchase agreement.
Gores will also pay Wire One on each of June 30, 2004 and June 30, 2005
additional payments, not to exceed an aggregate of $2 million, equal to five
percent of the sum of (1) the amounts billed by Gores from the operation of the
VS segment by Gores after the closing, plus (2) the annual revenues derived from
the video solutions business of Pierce Technology Services, Inc. (formerly
Forgent Networks, Inc.) for such year in excess of $96 million. If Gores sells
substantially all of the assets of its video solutions business prior to June
30, 2005, whether by merger, sale of stock or sale of assets, for total
consideration greater than $35 million, Gores will pay Wire One $2 million less
amounts previously paid.
As partial consideration for the purchase of assets, Gores will assume certain
liabilities related to the VS segment, including (1) all liabilities to be paid
or performed after the closing date that arise from or out of the performance or
non-performance by Gores after the closing date of any contracts included in the
assets or entered into after June 10, 2003 and (2) Wire One's accounts payable,
customer deposits, deferred revenue and accrued liabilities related to the VS
segment.
The sale of Wire One's VS segment is subject to a number of contingencies,
including stockholder approval and other customary closing conditions. A
stockholder vote is expected to take place at the Company's 2003 Annual Meeting
of Stockholders scheduled for Thursday, August 21, 2003. It is expected that, if
approved, the closing of the sale will take place promptly after stockholder
approval and all other closing conditions are satisfied, unless the parties
agree upon another time. It is the intent of the parties to complete the sale
of the VS segment as soon as practicable following approval by Wire One
stockholders.
The VS segment includes the Company's videoconferencing equipment distribution,
system design and engineering, installation, operation and maintenance
activities and consists of: a headquarters and warehouse facility in Miamisburg,
Ohio; a help desk operation in Camarillo, California; 24 sales offices and
demonstration facilities across the United States; and a client list of
approximately 3,000 active customers with an installed base of approximately
22,000 video conferencing systems. As a result, this segment is classified as a
discontinued operation in the accompanying financial statements, with its assets
and liabilities summarized in single line items on the consolidated balance
sheets and its results from operations summarized in a single line item on the
consolidated statement of operations.
Assets of discontinued VS operations consist of the following:
June 30, 2003 December 31, 2002
------------- -----------------
Accounts receivable ................ $21,703,567 $24,163,666
Inventory .......................... 6,274,464 8,122,996
Other current assets ............... 3,892,199 6,149,214
Fixed assets ....................... 2,007,390 2,684,264
Other assets ....................... 194,554 194,561
----------- -----------
Total ..................... $34,072,174 $41,314,701
=========== ===========
7
Liabilities of discontinued VS operations consist of the following:
June 30, 2003 December 31, 2002
------------- -----------------
Accounts payable ................... $ 8,926,350 $ 7,994,535
Accrued expenses ................... 1,406,300 1,441,444
Deferred revenue ................... 7,506,211 7,871,267
Other liabilities .................. -- 25,874
----------- -----------
Total ..................... $17,838,861 $17,333,120
=========== ===========
Revenues and pretax loss from discontinued VS operations are as follows:
Six Months Ended June 30, Three Months Ended June 30,
------------------------------ ------------------------------
2003 2003 2003 2002
------------ ------------ ------------ ------------
Revenues ............. $ 40,253,589 $ 41,565,209 $ 21,977,752 $ 23,472,446
Pretax loss .......... $ (938,493) $ (769,170) $ (619,014) $ (852,770)
Note 7 -- Bank Loan Payable
In May 2002, the Company entered into a $25 million working capital credit
facility with JPMorgan Chase Bank. Under terms of the three-year agreement for
this facility, loan availability is based on (1) 80% of eligible accounts
receivable and (2) the lesser of 50% against eligible finished goods inventory
or 80% against the net eligible amount of the net orderly liquidation value by
category of finished goods inventory as determined by an outside appraisal firm,
subject to an inventory cap of $2 million. Borrowings bear interest at the
lender's base rate plus 1 1/2% per annum. The credit facility contains certain
financial and operational covenants. In March 2003, the Company concluded an
amendment to the credit facility which, among other things, reduced the
commitment amount of the line of credit from $25 million to $15 million. For the
period from April 1, 2003 through June 30, 2003, the Company was in compliance
with the covenants of its credit agreement. At June 30, 2003, $4.5 million was
outstanding under the facility and the interest rate was 5.50%. Proceeds from
the sale of the VS segment will be used to pay down the outstanding balance
under the facility to zero. The credit facility will remain in place subsequent
to the closing of the VS sale transaction. The loan has been classified as
non-current in the accompanying consolidated balance sheet because the facility
matures on May 31, 2005.
Note 8 -- Business Segments
The Company followed SFAS No. 131, Disclosures about Segments of a Business
Enterprise and Related Information, which establishes standards for reporting
information about operating segments, for the period beginning January 1, 2002
and thereafter. Operating segments were defined as components of the Company
about which separate financial information was evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and to assess
financial performance.
Prior to 2002, the Company was engaged in one business, providing customers with
a single source for video products and services. During fiscal 2002, the
Company's direct investment in the Glowpoint network had increased and the
financial results of the Video Network segment became more material to the
Company so that the Company determined that it was in two reportable segments
for fiscal 2002 and, accordingly reported two operating segments, Video
Solutions and Video Network.
Pursuant to the Company's June 10, 2003 signing of the asset purchase agreement
with Gores to sell the VS segment which resulted in the segment's results being
reported as a discontinued operation, the Company is now engaged in one
business, operating its IP-based subscriber network, Glowpoint.
8
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
Of Operations.
The following discussion should be read in conjunction with the Company's
consolidated financial statements and the notes thereto. The discussion of
results, causes and trends should not be construed to imply any conclusion that
such results or trends will necessarily continue in the future.
The statements contained herein, other than historical information, are or may
be deemed to be forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities and
Exchange Act of 1934, as amended, and involve factors, risks and uncertainties
that may cause the Company's actual results in future periods to differ
materially from such statements. These factors, risks and uncertainties, include
the relatively short operating history of the Company; market acceptance and
availability of new products and services; rapid technological change affecting
products and services sold by the Company; the impact of competitive products,
services, and pricing, as well as competition from other service providers;
possible delays in the shipment of new products; and the availability of
sufficient financial resources to enable the Company to expand its operations.
Overview
Wire One operates Glowpoint(SM), the first IP-based subscriber network dedicated
to video communications. Launched in late 2000, Glowpoint carries video calls
within the United States and to Europe and South America on a network
provisioned through carrier-class backbone and last mile access partners over a
variety of solutions including DSL, T1, ATM and Optical Ethernet. A recipient of
Network World magazine's top rated World Class Award for "Quality of
Service-guaranteed IP videoconferencing service", Glowpoint presently serves
over 280 customers, has over 1,720 endpoints installed or under contract, and
carries an average of over 7,000 calls per month. The network service offers
guaranteed up-time, real-time billing and usage information, gateway services to
legacy ISDN-based sites, multi-point bridging, live operator assistance,
encryption, scheduling features and international least-cost routing, among
other value-added features. Revenue related to the Glowpoint network subscriber
service and the multi-point video and audio bridging services we offer are
recognized through a monthly billing process after services have been rendered.
In March 2003, we completed the sale of certain assets and liabilities of our AV
division to SPL for approximately $807,000, $250,000 of which was paid in cash
at the close of the transaction and the balance of which was paid in the form of
a promissory note payable in five equal consecutive monthly payments commencing
on April 15, 2003. The sale of our AV division was aimed at enabling us to focus
more of our resources on the development and marketing of our Glowpoint network,
and to our VS business. As a result, this division, previously a component of
the VS segment, is classified as a discontinued operation in the accompanying
financial statements, with its assets summarized in a single line item on our
consolidated balance sheets and its results from operations summarized in a
single line item on our consolidated statements of operations. See footnote 6 to
the consolidated financial statements for further information.
In June 2003, we signed an asset purchase agreement to sell all of the
properties, rights, interests and other tangible and intangible assets relating
to our VS business to Gores. The asset purchase agreement calls for Gores to pay
us approximately $23 million to $25 million consisting of $20 million in cash
upon closing, which may be adjusted downward if any purchase price adjustments
are required, and an unsecured promissory note in the principal amount of $1
million maturing on December 31, 2004 and bearing interest at a rate of 5% per
annum. Gores will hold back $2 million to cover potential purchase price
adjustments payable by us arising under the asset purchase agreement. The sale
of the VS business, which is expected to close in late August, is aimed at
enabling us to further focus our resources on the development and marketing of
Glowpoint, our subscriber-based IP network. As a result, this segment is
classified as a discontinued operation in the accompanying financial statements,
with its assets and liabilities summarized in single line
9
items on the consolidated balance sheets and its results from operations
summarized in a single line item on the consolidated statements of operations.
See footnote 6 to the consolidated financial statements for further information.
Wire One Technologies, Inc.
Results of Operations
(Unaudited)
Six Months Ended June 30, Three Months Ended June 30,
------------------------- ---------------------------
2003 2002 2003 2002
------ ------ ------- -------
Net revenues .................................. 100.0% 100.0% 100.0% 100.0%
Cost of revenues .............................. 99.9 92.3 97.4 95.9
------ ------ ------ ------
Gross margin .................................. 0.1 7.7 2.6 4.1
------ ------ ------ ------
Operating expenses
Selling .................................. 60.0 92.6 61.9 91.9
General and administrative ............... 53.7 100.4 52.2 96.6
Restructuring ............................ -- 11.0 -- 20.7
------ ------ ------ ------
Total operating expenses ...................... 113.7 204.0 114.1 209.2
------ ------ ------ ------
Loss from continuing operations ............... (113.6) (196.3) (111.5) (205.1)
------ ------ ------ ------
Other (income) expense
Amortization of deferred financing
costs ................................ 1.9 2.6 1.8 3.7
Interest income .......................... (0.1) (2.5) -- (3.1)
Interest expense ......................... 16.1 4.5 15.5 6.3
Amortization of discount on
subordinated debentures .............. 20.3 -- 17.1 0.0
------ ------ ------ ------
Total other expenses, net ..................... 38.2 4.6 34.4 6.9
------ ------ ------ ------
Net loss from continuing operations ........... (151.8) (200.9) (145.9) (212.0)
Loss from discontinued AV operations .......... (23.9) (53.8) (14.2) (55.3)
Loss from discontinued VSB operations ......... (19.1) (32.6) (23.1) (67.7)
Loss from discontinued Voice operations ....... -- (4.3) -- (8.0)
------ ------ ------ ------
Net loss attributable to common
stockholders ............................. (194.8)% (291.6)% (183.2)% (343.0)%
====== ====== ====== ======
Six Months Ended June 30, 2003 ("2003 period") Compared to Six Months Ended June
30, 2002 ("2002 period") and Three Months Ended June 30, 2003 ("June 2003
quarter") Compared to Three Months Ended June 30, 2002 ("June 2002 quarter").
NET REVENUES. Net revenues from continuing operations increased $2.5 million, or
108%, in the 2003 period to $4.9 million from $2.4 million for the 2002 period.
$2.8 million in revenue growth related to Glowpoint network services was offset
by a $300,000 decline in revenues from the H.320 bridging service. The growth in
network services revenue was the result of having, on average, 684 more video
endpoints receiving invoices in the 2003 period than in the 2002 period and
those endpoints each producing an average of $655 per month in revenue. Net
revenues of $2.7 million for the June 2003 quarter represent an increase of $1.4
million, or 113%, over the $1.3 million in revenues reported for the June 2002
quarter. $1.6 million in revenue growth related to Glowpoint network services
was offset by a $200,000 decline in revenues from the H.320 bridging service.
The growth in network services revenue
10
was the result of having, on average, 794 more video endpoints receiving
invoices in the June 2003 quarter than in the June 2002 quarter and those
endpoints each producing an average of $661 per month in revenue.
GROSS MARGINS. Gross margins decreased approximately $200,000 in the 2003 period
from the 2002 period to $3,000. Gross margins decreased in the 2003 period to
0.1% of net revenues, as compared to 7.7% of net revenues in the 2002 period.
Gross margins were $70,000 in the June 2003 quarter, an increase of $20,000 over
the $50,000 in the June 2002 quarter. The primary cause of the overall decline
in gross margins in the 2003 period was the increased fixed costs incurred in
the 2003 period to continue the build-out of the network and to re-configure
portions of the network that were prompted by changes occurring in the
operations of our backbone providers. At the end of the 2003 period, there were
1,252 video endpoints on the network. Gross margins related to video network
revenues improved in the June 2003 quarter, a trend we anticipate to continue as
video endpoints are installed that will utilize existing capacity of the network
while minimal further fixed costs related to the operation of the network will
be incurred.
SELLING. Selling expenses, which include sales salaries, commissions, overhead,
and marketing costs, increased $700,000 in the 2003 period to $2.9 million, or
60.0% of net revenues, from $2.2 million, or 92.6% of net revenues, for the 2002
period. Selling expenses increased $500,000 to $1.7 million in the June 2003
quarter from $1.2 million for the June 2002 quarter, but were down as a
percentage of revenue from 91.9% in the June 2002 quarter to 61.9% in the June
2003 quarter. The primary cause for these increases was the $300,000 of
marketing expenses incurred in the June 2003 quarter related to the NBA draft
event, an increase in commissions and bonuses of $100,000 and a $200,000
increase in research and development costs.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
$300,000 in the 2003 period to $2.6 million from $2.3 million for the 2002
period. General and administrative expenses as a percentage of net revenues for
the 2003 period declined from 100.4% in the 2002 period to 53.7% in the 2003
period. General and administrative expenses increased $200,000 to $1.4 million
in the June 2003 quarter from $1.2 million in the June 2002 quarter, but were
down as a percentage of revenue from 96.6% in the June 2002 quarter to 52.2% in
the June 2003 quarter. The primary cause for these increases was the $200,000 of
professional fees incurred related to divestitures and other corporate
activities. General and administrative expenses are expected to continue to
decline as a percentage of revenue as the fixed costs in this category are
spread over a larger revenue base.
RESTRUCTURING. A restructuring charge of $260,000 was recorded in the June 2002
quarter. This restructuring charge was related to severance and other
personnel-related costs and was taken to position us the realize $2.0 million in
annual operating expense savings
OTHER (INCOME) EXPENSES. Other expenses increased $1.8 million to $1.9 million
in the 2003 period from $100,000 in the 2002 period. The increase was primarily
due to the recognition of $1.0 million in amortization of discount on the
subordinated debentures issued in December 2002. The other major component of
this category, interest expense, increased $700,000 to $800,000. This increase
was primarily due to higher interest expense on our line of credit facility of
$100,000; the Black-Scholes value assigned to the 100,000 warrants granted to
JPMorgan Chase Bank in the period of $200,000; and interest accrued on the
subordinated debentures of $300,000.
DISCONTINUED OPERATIONS. In the 2003 period, we treated our AV division as a
discontinued operation because: 1) the operations and cash flows of this
division have been eliminated from our ongoing operations as a result of a
disposal transaction; and 2) we do not have any significant continuing
involvement in the operation of the division. We incurred a loss from
discontinued AV operations in the 2003 period of $1.2 million which was $100,000
less than the $1.3 million incurred in the 2002 period. As a result of the
signing of the definitive agreement to sell the VS segment, this segment is also
being treated as a discontinued operation. This disposal, which is expected to
occur in August 2003, will result in our having no significant continuing
involvement in the operation of this segment after the disposal transaction.
Loss from discontinued VS
11
operations increased $100,000 in the 2003 period to $900,000 from the $800,000
loss incurred in the 2002 period.
NET LOSS. Net loss attributable to common stockholders increased to $(9.5)
million, or $(.33) per diluted share, from $(6.9) million, or $(.24) per diluted
share, for the 2002 period. Earnings before interest, taxes, depreciation and
amortization ("EBITDA") from continuing operations is a measurement tool
management used to understand our results of operations. As EBITDA from
continuing operations does not include non-cash charges and the results of
discontinued operations it serves as a more accurate gauge of our current
operating results. In addition, our primary covenant with our asset-based lender
is based on EBITDA results. The following table provides a reconciliation of the
net loss attributable to common stockholders to EBITDA from continuing
operations.
Six Months Ended June 30, Three Months Ended June 30,
------------------------------ ------------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net loss attributable to common stockholders ........... $(9,548,974) $(6,875,725) $(4,899,707) $(4,317,217)
Depreciation and amortization ..................... 3,016,236 1,641,383 1,641,950 889,859
Amortization of deferred financing costs .......... 92,763 59,695 47,254 45,938
Amortization of discount on
subordinated debentures ....................... 992,875 -- 458,250 --
Non cash compensation ............................. 673,536 160,690 429,993 54,986
Loss from discontinued AV operations .............. 1,173,067 1,268,474 380,045 695,593
Loss from discontinued VS operations .............. 938,493 769,170 619,014 852,770
Loss from discontinued Voice
operations .................................... -- 101,339 -- 101,339
Interest expense, net ............................. 219,242 47,654 38,591 40,745
----------- ----------- ----------- -----------
EBITDA from continuing operations ...................... $(2,442,762) $(2,827,320) $(1,284,610) $(1,635,987)
=========== =========== =========== ===========
Liquidity and Capital Resources
At June 30, 2003, we had working capital of $18.1 million compared to $27.8
million at December 31, 2002, a decrease of approximately 35%. We had $900,000
in cash and cash equivalents at June 30, 2003 compared to $2.8 million at
December 31, 2002. The $9.7 million decrease in working capital resulted
primarily from the net pay down of $1.3 million of bank loans, the funding of
the $4.8 million cash loss from operations in the 2003 period and the purchase
of $1.4 million of furniture, equipment and leasehold improvements.
Net cash provided by operating activities for the 2003 period was $800,000 as
compared to net cash used in operations of $9.8 million during the 2002 period.
The primary source of operating cash in 2003 was the decrease in net assets of
discontinued operations of $7.6 million. We used this cash to fund the $4.8
million cash loss from operations and the $1.8 million increase in other current
assets.
Investing activities for the 2003 period included purchases of $1.4 million for
network, computer and demonstration equipment and leasehold improvements. The
Glowpoint network is currently built out to handle the anticipated level of
subscriptions for 2003. Although we anticipate current expansion of the network,
we have no significant commitments to make capital expenditures for Glowpoint or
the video solutions segment in 2003.
Financing activities in the 2003 period included net pay-downs under our
revolving credit line totaling $1.3 million.
12
We currently have a $15.0 million working capital credit facility with JPMorgan
Chase Bank. Borrowings under this facility bear interest at the lender's base
rate plus 1 1/2% per annum. At June 30, 2003, there was $4.5 million outstanding
under this facility. Proceeds from the sale of the VS segment will be used to
pay down the outstanding balance under the facility to zero. The credit facility
will remain in place subsequent to the closing of the VS sale transaction. Our
credit facility contains certain financial and operational covenants. To date in
2003, we were in compliance with these covenants.
Management believes, based on current circumstances, we have adequate capital
resources to support current operating levels for at least the next twelve
months.
Critical accounting policies
We prepare our financial statements in accordance with accounting principles
generally accepted in the United States of America. Preparing financial
statements in accordance with generally accepted accounting principles requires
us to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclose contingent assets and liabilities as of the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. The following paragraphs include a discussion of
some critical areas where estimates are required.
Revenue recognition
Revenue related to the Glowpoint network subscriber service and the multi-point
video and audio bridging services we offer are recognized through a monthly
billing process after services have been rendered.
Allowance for Doubtful Accounts
We record an allowance for doubtful accounts based on specifically identified
amounts that we believe to be uncollectible. We also record additional
allowances based on certain percentages of our aged receivables, which are
determined based on historical experience and our assessment of the general
financial conditions affecting our customer base. If our actual collections
experience changes, revisions to our allowance may be required. After all
attempts to collect a receivable have failed, we write off the receivable
against the allowance.
Long-lived assets
We evaluate impairment losses on long-lived assets used in operations, primarily
fixed assets, when events and circumstances indicate that the carrying value of
the assets might not be recoverable in accordance with FASB Statement No. 144
"Accounting for the Impairment or Disposal of Long-lived Assets". For purposes
of evaluating the recoverability of long-lived assets, the undiscounted cash
flows estimated to be generated by those assets are compared to the carrying
amounts of those assets. If and when the carrying values of the assets exceed
their fair values, the related assets will be written down to fair value.
Goodwill and other intangible assets
In June 2001, the FASB finalized FASB Statements No. 141, "Business
Combinations" (SFAS 141), and No. 142, "Goodwill and Other Intangible Assets"
(SFAS 142). SFAS 141 requires the use of the purchase method of accounting and
prohibits the use of the pooling-of-interest method of accounting for business
combinations initiated after June 30, 2001. SFAS 141 also required that we
recognize acquired intangible assets apart from goodwill if they meet certain
criteria. SFAS 141 applies to all business combinations initiated after June 30,
2001 and for purchase business combinations completed on or after July 1, 2001.
The FASB also requires, upon adoption of SFAS 142, that we classify the carrying
amounts of intangible assets and goodwill based on the criteria in SFAS 141.
SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that we identify reporting units
13
for the purposes of assessing potential future impairments of goodwill, reassess
the useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 was adopted in 2002 and we
will review goodwill and other intangible assets on an annual basis going
forward with an as of date of September 30.
Any future business combinations will be accounted for under the purchase
method, which may result in the recognition of goodwill and other intangibles
assets, some of which may subsequently be charged to operations, either by
amortization or impairment charges.
Recent Pronouncements of the Financial Accounting Standards Board
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Instruments
with Characteristics of both Liabilities and Equity". SFAS No. 150 establishes
standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. SFAS No. 150
requires that an issuer classify a financial instrument that is within the scope
of SFAS No. 150 as a liability. SFAS No. 150 is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective beginning September 1, 2003. The adoption of SFAS No. 150 is not
expected to have a material effect on the Company's financial statements.
In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"). This interpretation of Accounting
Research Bulletin No. 51, "Consolidated Financial Statements," addresses
consolidation by business enterprises of variable interest entities. Under
current practice, two enterprises generally have been included in consolidated
financial statements because one enterprise controls the other through voting
interests. This interpretation defines the concept of "variable interests" and
requires existing unconsolidated variable interest entities to be consolidated
by their primary beneficiaries if the entities do not effectively disperse the
risks among the parties involved. The provisions of FIN 46, which the Company
adopted in 2003, did not have a material impact on the consolidated financial
statements.
In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45"). This interpretation elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The disclosure requirements of this interpretation are
effective for interim and annual periods after December 15, 2002. The initial
recognition and initial measurement requirements of this interpretation are
effective prospectively for guarantees issued or modified after December 31,
2002. The provisions of FIN 45, which the Company adopted in 2003, did not have
a material impact on the consolidated financial statements.
In November 2002, EITF reached consensus on Issue No. 00-21, "Revenue
Arrangements with Multiple Deliverables". Revenue arrangements with multiple
deliverables include arrangements which provide for the delivery or performance
of multiple products, services and/or rights to use assets where performance may
occur at different points in time or over different periods of time. We
generally enter into arrangements for multiple deliverables that occur at
different points in time when we are engaged to provide installation services.
EITF Issue No. 00-21 is effective for fiscal periods beginning after June 15,
2003. To date, we have not completed the evaluation of the impact of this EITF.
Inflation
Management does not believe inflation had a material adverse effect on the
financial statements for the periods presented.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have exposure to interest rate risk related to our cash equivalents
portfolio. The primary objective of our investment policy is to preserve
principal while maximizing yields. Our cash equivalents portfolio is short-term
in nature, therefore changes in interest rates will not materially impact our
consolidated financial condition. However, such interest rate changes can cause
fluctuations in our results of operations and cash flows.
We maintain borrowings under a $15 million working capital credit facility with
an asset based lender that are not subject to material market risk exposure
except for such risks relating to fluctuations in market interest rates. The
carrying value of these borrowings approximates fair value because they bear
interest at a floating rate based on the "prime" rate. There are no other
material qualitative or quantitative market risks particular to our business or
operations.
ITEM 4. CONTROLS AND PROCEDURES
As of end of the period covered by this report, we carried out an evaluation,
under the supervision and with the participation of our Chief Executive
14
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based upon that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information relating to us (including our consolidated subsidiaries)
required to be included in our periodic SEC filings. There has been no change in
our internal control over financial reporting that occurred during our most
recent fiscal quarter that has materially affected or is reasonably likely to
materially affect our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are defending several suits or claims in the ordinary course of
business, none of which individually or in the aggregate is material to our
business, financial condition or results of operations.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
32.2 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
(b) Reports on Form 8-K
(i) Form 8-K dated August 6, 2003 furnishing the Company's preliminary
results for the six and three months ended June 30, 2003.
(ii) Form 8-K dated July 23, 2003 furnishing the Company's preliminary
results for its second quarter ended June 30, 2003.
(iii) Form 8-K dated June 10, 2003 announcing that the Company entered
into an agreement to sell substantially all of the assets of its
Video Solutions segment to Gores Technology Group.
(iv) Form 8-K dated May 1, 2003 furnishing the Company's preliminary
results for its first quarter ended March 31, 2003.
15
Signatures
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
WIRE ONE TECHNOLOGIES, INC.
Registrant
Date: August 14, 2003 By: /s/ Richard Reiss
--------------------------------------------
Richard Reiss, Chief Executive Officer
(principal executive officer)
Date: August 14, 2003 By: /s/ Christopher Zigmont
--------------------------------------------
Christopher Zigmont, Chief Financial Officer
(principal financial and accounting officer)
16