SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K/A
Amended Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of March 31, 1998
The Letter to the Shareholders, the Six Month Review, and the Second Quarter
Review have all been revised to clarify the reasons for the changes in expense
under the classifications of "General and administrative" and "Marketing and
sales".
PeakSoft Corporation
--------------------
(Translation of registrant's name into English)
1801 Roeder Avenue; Suite 144, Bellingham, WA 98225
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(Address of principal executive offices)
[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
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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 February 5, 1999
(Signature) By: /s/ T.W. Metz
----------------------
T.W. Metz
Chief Operating Officer
Page 1 of 8
<PAGE>
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 Web site 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, in total, for administration, selling and marketing, and research and
development decreased from CDN$1,995,478 for the six months ended March 31, 1997
to CDN$1,890,116 for the comparable period in 1998. This decrease was primarily
due to a reduction in non-essential staff as part of the restructuring
undertaken by the company. Sales increased from CDN$709,384 for the six months
ending March 31, 1997 to CDN$899,582 for the comparable period in 1998.
The sales growth resulted largely from licensing agreements with Macmillan and
InfoBuild. The Company believes it can continue to streamline its costs in the
coming quarter through new partnerships that reduce expenses 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 10, 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 positioning 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 accomplish even
greater improvements through the remainder of the year.
Sincerely yours,
/s/ Douglas H. Foster
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Douglas H. Foster
President/Chief Executive Officer
May 4, 1998
Page 2 of 8
<PAGE>
Corporate Information
Corporate Headquarters
PeakSoft Corporation
1801 Roeder Avenue; Suite 144
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
Directors Management
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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
Page 3 of 8
<PAGE>
Second Quarter Review
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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. General and administrative expenses increased from CDN$312,131 for
the quarter ending March 31, 1997 to CDN$421,008 for the comparable period in
1998. This was due primarily to an increase in salaries of about CDN$70,000, for
additional staff, and interest expense of about CDN$40,000. Marketing and sales
expenses decreased to CDN$261,625 for the quarter ending March 31, 1998 from
CDN$719,660 in the comparable period in 1997. This was due primarily to a
decrease in product advertising of about CDN$380,000 and a decrease in
indepedendant contractors of about CDN$80,000. Research and development expenses
decreased to CDN$143,597 for the quarter ending March 31, 1998 from CDN$155,406
in the comparable period in 1997. The decrease was primarily due to reduction in
non-essential staff. Amortization increased to CDN$246,959 for the quarter
ending March 31, 1998 from CDN$167,147 in the comparable period in 1997. 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 and amortized at a rate of $205,574 per
quarter.
The Company is actively creating budgets to 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 Peak'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 quarters results reflect the Companys
continuing growth in the expanding Internet market. The Company also renewed its
bundling agreement with MacMillan Digital Publishing USA.
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 Peaks 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.
Management has drastically reduced expenditures in all areas, especially in cost
of goods sold, research and development, and selling and marketing. General and
administrative expenses for the six months ending March 31, 1998 were
CDN$870,107 and CDN$472,734 in the comparable period in 1997, an increase of
CDN$397,373. This was due primarily to the increase in administration salaries
of about CDN$213,000, for additional staff, an increase in interest on long-term
debt and bank charges and interest of about CDN$130,000 and net increase of
other expenses of about CDN$34,000. Marketing and sales expenses decreased to
CDN$695,999 for the six months ending March 31, 1998 from CDN$1,148,054 in the
comparable period in 1997 a decrease of CDN$452,055 or 39.4%. This was due
Page 4 of 8
<PAGE>
primarily to the decrease in product advertising of about CDN$380,000 and a
decrease in independant commission contract sellors of about CDN$80,000 Research
and development expenses decreased to CDN$324,010 for the six months ending
March 31, 1998 from CDN$374,690 in the comparable period in 1997 a decrease of
CDN$50,680. The decrease was primarily due to reduction in non-essential staff.
Amortization increased to CDN$500,693 for the six months ending March 31, 1998
from CDN$264,978 in the comparable period in 1997 an increase of CDN$235,715.
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 and amortized at a rate of
$205,574 per quarter.
The Companys cash position was decreased from $110,784 in 1997, to $61,084 in
1998 and remains an area of critical importance and is being actively addressed
by management. The Company does not have access to any unused lines of credit at
this time. Due to managements increased control over cash flow, there are no
expected non-operation expenditures. In general, the results for the six months
reflect the Companys continuing growth in this fast-paced, rapidly expanding
Internet market.
Page 5 of 8
<PAGE>
Consolidated Balance Sheet
(prepared by Management)
March 31,
1998 1997
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(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
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483,443 696,261
Capital assets 176,496 350,731
Acquired research & development 411,149 1,439,023
Licenses -- 19,234
Investment in InfoBuild 284,000 --
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$ 1,355,088 $ 2,505,249
Liabilities and Shareholders' Equity
Current Liabilities:
Demand loan -- 20,756
Accounts payable and accrued liabilities 797,449 1,010,768
Deferred revenue -- 84,337
Reserve for returns & allowances 54,208 --
Current portion of long-term debt -- 24,573
Current portion of obligations under
capital leases 28,134 21,616
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879,791 1,162,050
Long-term debt 1,622,951 --
Obligations under capital leases 44,259 49,571
Shareholders' Equity:
Share capital 6,312,335 3,458,942
Other paid-in capital 173,759 --
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6,486,094 3,458,942
Obligation to issue share capital -- 1,940,900
Accumulated deficit 7,678,007 4,106,214
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(1,191,913) 1,293,628
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$ 1,355,088 $ 2,505,249
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Page 6 of 8
<PAGE>
Consolidated Statement of Operations and Deficit
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 sold 96,362 145,494 158,840 231,232
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 development 143,597 155,406 324,010 374,690
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)
Page 7 of 8
<PAGE>
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
operating working capital (244,162) 263,163 (236,470) 98,871
--------- ----------- ----------- -----------
(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
Page 8 of 8
