Item 2. Description of Property Item 3. Legal Proceedings Item 4. Submission of Matters to a Vote of Security Holders
Part II -------
Item 5. Market for Common Equity and Related Shareholder Matters Item 6. Management's Discussion and Analysis or Plan of Operation Item 7. Financial Statements Item 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Part III --------
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act Item 10. Executive Compensation Item 11. Security Ownership of Certain Beneficial Owners and Management Item 12. Certain Relationships and Related Transactions Item 13. Exhibits and Reports on Form 8-K
Except where the context otherwise requires, all references in this Registration to the "Registrant" or the "Company" or "KSign" refer to KSign International, Inc., a Nevada corporation and "KSign Co. Ltd." refers to KSign Co. Ltd., a South Korean Corporation.
PART I ------
Item 1. Description of Business. ----------------------------------
(a) KSign International, Inc. (formerly Witnet Internatnional, Inc.), (the "Company") was formed under the laws of Nevada on February 2, 1998 under the name Valance 9 Development, Inc. to develop and market a world wide web authoring software product. The initial amount of authorized capital was $100,000 consisting of 100,000,000 shares of Common Stock, $0.001 par value. The authorized capital was increased to 150,000,000 shares of Common stock, $0.001 par value in October, 2002. There is only one class of stock - the Company's common stock.
Today, the Company is a software development company. Company's main product line relates to PKI, Public Key Infrastructure, solutions which issue digital certificates to authenticate people with digital signature. The solution uses public key cryptography algorithms, which can replace paper signed documents with digital forms.
On April 17, 1998, the Company's Articles of Incorporation were amended. The purpose of the amendment was to change the name of the corporation from Valance 9 Development to Valence 9 Development, Inc.
Valence 9 Development, Inc. filed a Form 15(c)211 with the National Association of Securities Dealers (NASD) to allow its Common Stock to trade on the OTC Bulletin Board. The Company's Common Stock began trading on the OTC Bulletin Board in July of 1998, under the trading symbol "VLND." In August, 1998 the symbol was changed at Valence 9 Development, Inc.'s request to "VNIN." On August 27, 1999 the Company's Articles of Incorporation were amended. The purpose of the amendment was to change the name of the corporation from Valence 9 Development, Inc. to New Cinema Partners.
On August 31, 1999, the Company and New Cinema Partners, Inc. executed an Acquisition Agreement whereby the Company acquired all of the issued and outstanding common stock of New Cinema Partners, Inc., a Canadian corporation formed on February 18, 1999.
The Company was de-listed for non-compliance with the OTC Bulletin Board's reporting requirements in May of 1999, and began trading on the pink sheets at that time until the Company became a "Reporting Company" under the 1934 Securities Exchange Act and resumed trading on the OTC Bulletin Board in December, 2000. From August, 1999 to October 2, 2002 the Company's securities have been traded under the trading symbol "NCPP."
The initial five shareholders (the "Initial Control Group") of the Company were issued 25,100,000 common shares of the Company's common stock at inception. This group consisted of the officers and directors of the Company and their designees (Wayne Walrath, Lewis Hayse, Michael Gordy, Francois Escher, and Robert Short). From February to March of 1999, the Company did a series of offerings pursuant to Rule 504 promulgated under Regulation D of the Securities Act of 1933, as amended. The total amount of common shares issued at the completion of those offerings was 32,588,800, with the Initial Control Group controlling 77% of those shares.
In June, 1999, the Company issued and then cancelled 438,637 shares pursuant to a letter of intent to acquire Image Advertising Plc. The shares were cancelled because the acquisition was never consummated.
In June, 1999, the Company did an 800 to 1 reverse split of its common stock, resulting in the Company's issued and outstanding common shares going from 32,588,800 to 40,736 shares. The reverse stock split was done in order to prepare the Company to be able to acquire a new business, once it had become evident that the then-current business was not viable.
On August 31, 1999, the Company and New Cinema Partners, Inc. executed an Acquisition Agreement whereby the Company changed its name to New Cinema Partners and acquired all of the issued and outstanding common stock of New Cinema Partners, Inc., in exchange for 4,000,000 shares of its common stock. This transaction resulted in the former shareholders of New Cinema Partners, Inc., becoming the holders of the 4,000,000 newly issued shares, (the "New Control Block").
In September, 1999 the Company issued 7,000,000 free trading shares pursuant to Rule 504 promulgated under Regulation D of the Securities Act of 1933, as amended. The total amount of common shares issued at the completion of this offering was 11,040,736 with the Control Group holding 36.23% of those shares.
In May, 2000, the Company issued 3,000,000 restricted shares to total of six corporations to do consulting to help find a new business for the Company. This brought the Company's total issued and outstanding common shares to 14,040,736, of which the New Control Block held 4,000,000 shares, or 28.5%.
In June, 2000, the Company consummated an asset purchase agreement acquiring certain intellectual properties, comprising scripts and storylines, owned by 1255234 Ontario, Inc., also known as Stone Canyon Pictures. The purchase price was 10,000,000 shares of the Company's common stock.
On July 4, 2000, the Company consummated an asset purchase agreement acquiring certain intellectual properties, comprising scripts and storylines, owned by 1255234 Ontario, Inc., also known as Stone Canyon Pictures. As part of the
transaction, Mr. Damien Lee, founder and one of the principals of Stone Canyon Pictures, became the Chief Executive Officer and the Chairman of the Board of Directors of the Corporation.
On March 12, 2001, after being unable to raise adequate funds for any film production, Mr. Lee resigned from his position with the Company.
On May 8, 2001, the Company issued 500,000 common shares valued at $45,000 in consideration for legal fees owing by the Company.
On June 12, 2001, the Company issued 1,384,285 common shares in consideration for the cancellation of a promissory note in the amount of $95,516 and the Company issued 5,100,000 common shares in settlement of accounts payable in the amount of $402,900.
In June 2001, New Cinema Partners entered into a purchase agreement with Imperial Logistics, Inc. However, the acquisition agreement was canceled due to the inability of New Cinema Partners to secure the required financing which had been committed by a third party.
In February 2002, New Cinema Partners signed a formal asset purchase agreement with LCTC Enterprises, Inc. Under the terms of the agreement, New Cinema Partners would issue stock in exchange for the equipment and it would have pursued the business plan of LCTC Enterprises. In addition, New Cinema Partners would have changed its name to Cemcorp International and its business to global cement manufacturing and distribution in strategic markets worldwide. The acquisition was not completed.
In April 2002, New Cinema Partners signed an agreement to acquire Verifox Technologies, Inc. The transaction authentication company would have changed the direction of New Cinema Partners from a development stage entertainment company to a transaction authentication technologies company. The acquisition was not completed.
In May 2002, New Cinema Partners was assigned an agreement to acquire Mediall Tech, Co. Ltd. of South Korea. However, the agreement was terminated.
On July 11, 2002, New Cinema Partners filed an 8-K stating that they agreed to change their name to Witnet International, Inc. and to increase its authorized capital from 100,000,000 to 150,000,000 common shares.
On July 30th 2002 the Company issued a total of 10,000,000 restricted common shares to finders and consultants representing Travellers International, Inc.) in accordance with the Share Exchange Agreement with Witnet Co. Ltd. (Korea) dated May 24th, 2002.
On August 28th, 2002 the Company issued 55,000,000 restricted common shares for the acquisition of Witnet Co. Ltd (Korea) in accordance with a Share Exchange Agreement dated May 24, 2002. The shares were issued to the shareholders of Witnet Co. Ltd, (Korea) in exchange for 100% of Witnet Co. Ltd. (Korea). The holders of these shares comprise the current control block and they hold together 55,000,000 common shares of the 112,803,021 shares that were outstanding as of December 31, 2002.
On October 2, 2002, the Company amended the Articles of Incorporation. The purpose of the Amendment was to change the name of the Company from New Cinema Partners, Inc. to Witnet International, Inc. and to increase the number of authorized shares from 100,000,000 common shares to 150,000,000 common shares.
On October 2, 2002, New Cinema Partners, Inc. changed its name to Witnet International, Inc. and its trading symbol became "WTNT".
On November 18, 2002, the Company changed its fiscal year end from February 28 to December 31.
On December 23rd 2002 the Company issued a total of 7,000,000 restricted common shares with respect to employees and consultants of the Company including 3,000,000 shares to Mun Su Han (President and CEO, Director) and 2,000,000 shares to Jason Chung (CFO, Director) in relation to their employee agreements and 2,000,000 shares were issued to consultants.
On December 23rd 2002 the Company issued a total of 9,328,000 restricted common shares in exchange for expenses and fees owed by the Company. The shares were issued in lieu of cash payment totaling $932,800.
On April 3, 2003 the Company entered into an agreement with Julius Czurgo on the marketing of its products. The Company issued 10,000,000 common shares as payment towards the agreement.
On July 9, 2003 the Company issued 12 million common shares as prepayment to two consultants in exchange for future services to be rendered over the following six months.
On October 13, 2003 the Company issued 8,300,000 restricted common shares in exchange for expenses and consulting fees, 1,500,000 restricted common shares to for payment of a loan owed by the company's subsidiary Witnet Co., Ltd. and 500,000 restricted common shares for legal work performed by an attorney. On October 20, 2003, Witnet International, Inc. filed an 8-K stating that they agreed to change their name to KSign International, Inc. and to undergo a reverse 10 for 1 split of its common shares.
On December 1, 2003 the Company issued 4,158,000 restricted common shares as payment for expenses and fees owed by the company.
On December 1, 2003 the Company cancelled 880,000 restricted common shares. These shares were initially issued at par value of $880 for services that were never completed.
On December 31, 2003, the Company amended the Articles of Incorporation. The purpose of the Amendment was to change the name of the Company from Witnet International, Inc. to KSign International, Inc. and to effect a 10 for 1 reverse split of the Company's common shares.
On February 25, 2004, Witnet International, Inc. changed its name to KSign International, Inc. and its trading symbol became "KSIG". The reverse split of common shares also went into effect on the same day.
On February 27th, 2004 the Company issued 32,800,000 restricted common shares for the acquisition of KSign Co. Ltd (Korea) in accordance with a Share Exchange Agreement dated September 5, 2003. The shares were issued to the shareholders of KSign Co. Ltd, in exchange for 100% of KSign Co. Ltd. The holders of these shares comprise the current control block and they hold together 32,800,000 common shares of the approximate 47,638,375 shares outstanding as of February 27, 2004.
Note: The company's change of name to KSign International, Inc, 10:1 reverse stock-split and the issuance shares to the shareholders of KSign Co., Ltd. would have happened before the December 31, 2003 fiscal year end were it not for the delays in obtaining approval of a majority of shareholders. For the purposes of the rest of this report, it will be assumed that all the mentioned transactions occurred before the fiscal year end.
(b) Business of Issuer. -------------------
Description of Business -----------------------
The Company, through the acquisition of KSign Co. Ltd. of South Korea, ("KSign") is a software development company focused on internet security solutions. KSign Co., Ltd. is the Company's main operating subsidiary and following the acquisition of KSign Co. Ltd., the Company has undertaken their business plan.
KSign is a leading provider of Public Key Infrastructure ("PKI") and Wireless Public Key Infrastructure ("WPKI") security solutions located in South Korea. KSign designed, developed and delivered fundamental information security principals enabling developers, governments and enterprises to add strong security to their devices, networks and applications.
Company Overview ----------------
KSign Co. Ltd. began operations in November of 1999. KSign is a software development and system integration company. Headed by CEO Ki-Yoong Hong, KSign currently has 46 employees. The main operations of KSign is located at 12F/ Hanmi B/D, 192-19 Nonhyun-dong, Gangnam-ku, Seoul, Korea, 135-010. KSign's internet site can be found at www.ksign.com.
KSign internally researches and develops its own software Public Key Infrastructure, PKI and Wireless Public Key Infrastructure, WPKI solutions. KSign may sell these solutions through System Integrators who may use KSign's solution in their overall client service or in some cases KSign may act as a System Integrator who then market the solutions directly to enterprises and institutions. As a system integrator, KSign provides system design, engineering and installation of an overall PKI or WPKI solution for its clients.
Technology Overview -------------------
PKI and WPKI solutions allow the issuance of digital certificates to authenticate users through digital signature using public key cryptography algorithms that replace paper signed documents with digital forms.
In addition, KSign has integrated PKI solutions with other security applications such as server data security, biometrics solutions and system management for wireless environment into one integrated package to handle any entities' information system and data security needs.
Products & Solutions --------------------
KSign's main lines of business are as follows:
PKI Solutions (KSignPKI, KSignPKI PRO, KSignRA, KSignCA, KSignTSA, KSignOCSP, KSignDVCS)
PKI (Public Key Infrastructure) provides the fundamental level of security using public key certificates to digitally identify users. Trusted third parties, CA (Certificate Authority) issues these certificates.
KSignPKI allows not only allow users to encrypt their data but the data also contains a digital signature certificate that is unique to the user. This provides a credible level of security on an Internet environment using TCP/IP protocol. This allows on-line service providers the authentication, confidentiality, integrity and non-repudiation on their services provided.
WPKI Solutions (KSignWPKI, KSignWRA, KSignWCA, WirelessE2E) -----------------------------------------------------------
Recently wireless communication has become vastly common. Mobile devices (Mobile phone, PDA, etc) have developed to provide access to the Internet and allow users the ability retrieve as if they were in a wired environment. Services such as internet banking, on-line stock trading, e-mail, ticket reservation and e-shopping are available to wireless users. The need for security for wireless internet environment has grown to the same level as wired Internet environment.
KSignWPKI is KSignPKI especially tailored for the needs of wireless internet environments.
Security Toolkit (KSignCASE) ----------------------------
KSign's Toolkits fully support certificate verification, and encrypt/decrypt on message and data for between each users and servers.
For KSignPKI Solutions, KSign Toolkits provide certificate verification, and KSignCASE the encrypt/decrypt toolkit will apply and generate public key pairs for generating user certificates. Users can easily issue, revoke and update administration protocol based certificates. Additionally KSignCASE supports data encryption/decryption capabilities that can be used with other KSign Application Solutions.
Businesses Markets ------------------
The markets for KSign's products and solution implementation services includes medium and large corporations across all industry segments and as well as governments. Among the various markets available to KSign, KSign intends to focus on industries that are extra security sensitive such as banking and finance as well as government ministries and agencies that handle sensitive and confidential data.
Competitors -----------
KSign competes with other providers of PKI and Security solutions providers in Korea. Management is confident that KSign is competitive in this business because:
- Security methodologies used in its products use the most advanced security techniques available on the market. - KSign's applications seamlessly integrate security with the applications making it easily implemented and installed onto clients' information system. - Once implemented, the solutions are easy to manage by the clients' information system managers.
Distribution ------------
KSign sells its products through System Integrators and software distributors. KSign has formed marketing alliances with various System Integrators in Korea and Japan. These system integrators sell software, hardware and provide consulting services to install and implement the systems for clients.
In some instances, KSign will act as a system integrator and provide its products and services directly to its clients. KSign's main clients have been the Government of the Republic of Korea, major Korean commercial banks and Major Korean Mobile Telephone carriers.
Intellectual Properties -----------------------
KSign protects its proprietary core technology in PKI, WPKI, PKI applications and Security toolkit through a combination of trademarks, contractual provisions and patents. The name "KSign" is registered as a trademark as well as various product names. Additionally, contracts under which we license the use and/or sale of our products include confidentiality clauses to protect our products and any information in connection with them as trade secrets.
Additionally, KSign has submitted the following patents which are currently pending:
Feb 2001 The Integrated Office Program for Security Service
Feb 2001 Electronic Certificate Issuing and Delivery System using ID, Password Authentication \ Mechanism
Mar 2002 Secure On-line System for Reading and Issuing the Registered Transcript
Mar 2002 A Processing Method and a Computer Program Product Effective CRL
Mar 2002 Batch Converter for Document Security
Mar 2002 Electronic Passport based on PKI Digital Signature Certificate
Jun 2002 Authorization Key Escrow Service System and Method
Jun 2002 The Electronic Bankbook
Oct 2002 Real Time Account Information Control System using on Mobile Device
Oct 2002 Real Time Credit Card Control System using on Mobile Device
Mar 2003 Control Access System for PKI-enabled security Digital Broadcasting Security
Despite these precautions, it may be possible for unauthorized third parties to copy certain portions of our products or to obtain and use information that we regard as proprietary. There can be no assurance that our efforts will provide
meaningful protection for our proprietary technology against others who independently develop or otherwise acquire substantially equivalent techniques or gain access to, misappropriate, or disclose our proprietary technology.
