FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934For the month of March 31, 1998.
(Translation of registrant's name into English)
PeakSoft Corporation
(Address of principal executive offices)
3614 Meridian, Suite 100
Bellingham, WA 98225
[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F
[Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes [X] No
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- 0-24069
Signatures: T. W. Metz
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, thereunto duly authorized.
PeakSoft Corporation
(Registrant)
Date May 5, 1998
(Signature) By: "T.W. Metz"
T.W. Metz, COO
Letter to Shareholders
During this quarter, the Company focused on the fundamentals. Our major
objectives included the launch of NetMagnet, a reduction in non-essential
expenses, the development of strategic partnerships in key areas, and
increased revenue. The company also conducted a thorough review of its
product, marketing and sales strategies in an effort to gain maximum value
for its technology and products.
NetMagnet was launched on January 21, 1998. The product is available
through leading retailers including CompUSA, Fry's and Best Buy. In
addition, it is being sold on the company's Website and through Internet
retail and banner partnerships. Initial response to NetMagnet has been
favorable, with a number of positive reviews and an "A List" placement in
PC Computing. The product is very leading edge and the target market is
sophisticated early adopters and innovators. Those who use the Internet
as an essential business tool will see great benefits from NetMagnet.
Expenses for administration, selling and marketing, and research and
development decreased by 30.3% over the same period a year ago and by 22.3%
over the previous quarter ended December 31, 1997. Revenue increased by 74%
over the same period last year and by 250% over the quarter ended
December 31, 1997. The sales growth resulted largely from licensing
agreements with Macmillan Publishing USA and InfoBuild Networks Inc. The
Company believes it can continue to streamline its costs in the coming
quarter through new partnerships that reduce expense but provide powerful
marketing and sales benefits.
The Company received approval from the OTC-BB to commence trading in the
U.S. under the symbol PEAFF on March 13, 1998. The company then filed
Form 20-F to become a reporting foreign issuer with the SEC, via EDGAR, on
April 20, 1998. Once our Form 20-F achieves a "No Comment" status with the
SEC we will be in a position to trade fully on the Bulletin Board in
conjunction with the Alberta Stock Exchange, symbol PKT.
Canadian and U.S. GAAP (Generally Accepted Accounting Principles)
regulations differ regarding the acquisition of research and development
from Chameleon Bridge Technologies. This leads to a significant reduction
in loss per share when our financial statements are reconciled for U.S.
GAAP. According to U.S. GAAP, the acquisition is expensed as incurred, not
amortized over a period of time.
The Company continues to evaluate market opportunities and its position in
the fast-paced market of Intranets and the Internet. We are committed to
adding value to our existing applications and to bringing new products to
market. We hope to continue the trend started in the last quarter and to
accomplish even greater improvements through the remainder of the year.
Sincerely yours,
"Douglas H. Foster"
Douglas H. Foster
President/CEO
May 4, 1998
Corporate Information
Corporate Headquarters
PeakSoft Corporation
3614 Meridian, Suite 100
Bellingham, Washington 98225
USA
Tel (360) 752-1100
Fax (360) 752-1110
http://www.peak.com
Investor Information
(888) 377-7325
Stock Listing
PeakSoft Corporation's common stock is traded on the Alberta Stock Exchange
under the symbol "C.PKT" and on the OTC Bulletin Board (r) (OTCBB) under
the symbol "PEAFF".
Auditor
K P M G
Vancouver, B.C.
Legal Counsel
Farris, Vaughan, Wills & Murphy
Vancouver, B.C.
Transfer Agent and Registrar
Montreal Trust
Calgary, Alberta
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Directors Management
Douglas Foster Douglas Foster
Chairman of the Board President & CEO
Donald McInnes Tim Metz
Chief Operating Officer
Peter Janssen
Liam Taylor
Carl Conti Vice President, Engineering
William Baker Calvin Patterson
Corporate Counsel
Second Quarter Review
Net loss for the quarter ended March 31, 1998 decreased from $1,098,334 in
the comparable period in 1997, to $335,228, a decrease of $763,106, or
69.9%. Management has drastically reduced expenditures this past quarter in
all areas, especially in cost of goods sold, research and development, and
selling and marketing. The Company is actively creating budgets which place
emphasis on marketing in the next quarters to capture a higher sales volume.
Revenue reflects an increase of 74.2% over second quarter 1997 reported
revenue. The increase is primarily due to the recent launch of PeakSoft's
third Internet product, NetMagnet, various licensing agreements, and the
growing sales volume of PeakJet. The Company has received 800,000 shares of
InfoBuild as a partial consideration for a $300,000 license agreement, which
is valued at its most recent funding share value. PeakSoft recognizes that
there is no guarantee that this value can be realized in the short-term. In
general, this quarter's results reflect the Company's continuing growth in
this fast-paced, rapidly expanding Internet market.
Six Month Review
Revenue for the six months ended March 31, 1998 increased from $709,384 in
the comparable period in 1997, to $899,582, an increase of $190,198 or 26.8%
and was due primarily to the growing sales volume of PeakSoft's Internet
software products. The operating loss decreased from $1,782,304 to
$1,262,607, reflecting higher sales volume and a significant reduction in
operating expenses. The decreases in expenses reflect a reduction in
expenditures, while continuing to keep a significant investment in marketing
for NetMagnet and future products.
The amortization expense includes the amortization on the research and
development that was acquired in 1996 from Chameleon Bridge Technologies
Corp, which is capitalized according to Canadian GAAP. (In accordance with
United States GAAP, research and development costs, including the costs of
research and development acquired in a business combination is expensed as
incurred. The results would be a lower loss per common share of $0.06
vs $0.09.)
The Company's cash position was decreased from $110,784 in 1997, to $61,084
in 1998 while accounts receivable decreased from $429,913 to $281,734.
Cash remains an area of critical importance and is being actively addressed
by management. In general, the results for the quarter are indicative of
the Company's increasing level of marketing activity and its stage of
development.
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Consolidated Balance Sheet
(prepared by Management)
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March 31, 1998 1997
(in Canadian dollars)
Assets
Current Assets
Cash $ 61,084 $ 110,784
Accounts receivable 281,734 429,913
Inventories 98,051 39,557
Prepaids and deposits 42,574 116,007
483,443 696,261
Capital assets 176,496 350,731
Acquired research 411,149 1,439,023
& development
Licenses - 19,234
Investment in InfoBuild 284,000 -
$ 1,355,088 $ 2,505,249
Liabilities and Shareholders' Equity
Current Liabilities:
Demand loan - 20,756
Accounts payable and 797,449 1,010,768
accrued liabilities
Deferred revenue - 84,337
Reserve for returns 54,208 -
& allowances
Current portion of - 24,573
long-term debt
Current portion of 28,134 21,616
obligations under
capital leases
879,791 1,162,050
Long-term debt 1,622,951 -
Obligations under 44,259 49,571
capital leases
Shareholders' Equity:
Share capital 6,312,335 3,458,942
Other paid-in capital 173,759 -
6,486,094 3,458,942
Obligation to issue - 1,940,900
share capital
Accumulated deficit 7,678,007 4,106,214
(1,191,913) 1,293,628
$ 1,355,088 $ 2,505,249
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Consolidated Statement of Operations and Deficit
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Quarter ended Quarter ended Six months Six months
ended ended
Mar 31,1998 Mar 31,1997 Mar 31,1998 Mar 31,1997
(in Canadian dollars)
Sales $ 699,372 $ 401,504 $ 899,582 $ 709,384
Cost of goods 96,362 145,494 158,840 231,232
sold
603,010 256,010 740,742 478,152
Operating Expenses:
General and 421,008 312,131 870,107 472,734
administration
Selling and marketing 261,625 719,660 695,999 1,148,054
Research and 143,597 155,406 324,010 374,690
development
826,230 1,187,197 1,890,116 1,995,478
Earnings (loss) (223,220) (931,187) (1,149,374) (1,517,326)
before the undernoted
Amortization 246,959 167,147 500,693 264,978
Recovery of expenses - - 252,509 -
from settlement
of liabilities
Earnings (loss) $(470,179) $(1,098,334) $(1,397,558) $(1,782,304)
from operations
Gain on sale of 134,951 - 134,951 -
contract
Net earnings (loss) (335,228) (1,098,334) (1,262,607) (1,782,304)
Accumulated deficit,$(7,342,779)$(3,007,880) $(6,415,400) $(2,323,910)
beginning of period
Accumulated deficit,$(7,678,007)$(4,106,214) $(7,678,007) $(4,106,214)
end of period
Loss per common share (.02) (.12) (.09) (.20)
Statement of Changes in Financial Position
Quarter ended Quarter ended Six months Six months
ended ended
Mar 31,1998 Mar 31,1997 Mar 31,1998 Mar 31,1997
(in Canadian dollars)
Cash provided by (used in):
Operations:
Net earnings (loss) $(335,228) $(1,098,334) $(1,262,607) $(1,782,304)
Items not involving cash:
Amortization 246,959 167,147 500,693 264,978
Change in non-cash (244,162) 263,163 (236,470) 98,871
operating working capital
(332,431) (668,024) (998,384) (1,418,455)
Financing:
Funds Transferred 154,350 - - -
from escrow
Repayment of (6,678) (6,422) (14,936) (12,702)
long-term debt
Obligation under 9,571 3,553 6,842 (1,771)
capital leases
Decrease in obligation - - (399,900)
to issue shares
Issuance of share capital - 786,812 512,144 1,545,632
157,243 783,943 104,150 1,531,159
Investments:
Purchase of capital assets (11,284) (29,773) (116,048) (31,883)
(11,284) (29,773) (116,048) (31,883)
Increase (decrease) (186,472) 86,146 (1,010,282) 80,821
in cash position
Cash, beginning of period 247,556 24,638 1,071,366 29,963
Cash, end of period $ 61,084 $ 110,784 $ 61,084 $ 110,784
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