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 June 30, 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
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 10
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Letter to the Shareholders:
We have embarked in a new direction over the last few months. Our focus on
Internet and Intranet Productivity Solutions remains unchanged. Our technology
is better than ever. The release of PeakJet 2000 in July is the best product
release the company has ever experienced.
So what happened last quarter and why am I optimistic about the future?
In the third quarter we faced a number of difficult decisions. Primary among
them was the poor performance of Internet software in general in the traditional
retail channel and the channels somewhat onerous terms of payment for product.
Specifically, PeakJet 1.55 and NetMagnet were moving slowly in this channel and
the cost of maintaining presence has been generating negative cash flow.
The company decided to prioritize electronic commerce, electronic software
distribution, alliance programs and International partnerships. This is a
significant change in strategy that doesn't eliminate retail but changes the
focus of retail to the Internet. In addition, we have strengthened our policy
regarding payment terms and adopted a far more cash flow driven model. Quite
simply we won't do bad business for the sake of top line numbers.
During the quarter, we announced significant enhancements to our e-commerce
capability, created the core alliance program, opened the Peak Store on our
site and commenced negotiations with a number of partners for the joint sale
and distribution of our products. PeakSoft has significantly expanded its sales
force with new agreements signed for both vertical and geographic markets,
while simultaneously reducing sales and marketing expense by 65% over the
comparable quarter for 1997. We elected to discontinue shipment of our
PeakJet 1.55 product to retail in anticipation of the new PeakJet 2000 release
(July 2nd). We have also discontinued shipment of NetMagnet to that channel
and have significantly enhanced the product with a new pricing and sales
strategy to be announced shortly.
Subsequent to the quarter end, the early positive results from these
strategies started to be felt. PeakSoft announced co-marketing and bundling
deals with Symantec, Software Builders and RealNetworks. Our PeakJet 2000
product is now being offered for sale on a standalone basis and in value
added bundles by some of industrys most successful companies.
The second consideration is the development of new value-added solutions that
deliver high per unit margins with on-going royalties and support fees. The
markets for our solutions are becoming more mainstream and growing at a very
high rate. As an early entrant we have paid our dues and look to reap the
gain for our effort and foresight.
Page 2 of 10
<PAGE>
The company has a pending listing on the OTC-BB under the symbol "PEAFF" and
was briefly active in March of 1998. Upon filing for reporting status for the
first time in the US the company's listing was halted as a result of new
requirements of the OTC-BB to meet the reporting standards of the United
States Securities and Exchange Commission. The Company has made its initial
filing to the SEC, and the Company and its advisors are actively working on a
timely basis.
Sincerely yours,
/s/ Douglas H. Foster
- ---------------------
Douglas H. Foster
President/Chief Executive Officer
August 13, 1998
Page 3 of 10
<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
http://www.peak.com/investor
Stock Listing
PeakSoft Corporations common stock is listed on the Alberta Stock Exchange
under the symbol "C.PKT" and pending application for listing on the OTC
Bulletin Board (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
--------- ----------
Douglas Foster Douglas Foster
Chairman of the Board President & CEO
Donald McInnes Tim Metz
Chief Operating Officer
Peter Janssen Calvin Patterson
Corporate Counsel
Carl Conti Liam Taylor
Vice President, Engineering
William Baker Claudia Temple
Director of Marketing
Page 4 of 10
<PAGE>
Third Quarter Review
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Net loss for the quarter ended June 30, 1998 decreased from CDN$1,225,563 in the
comparable period in 1997, to CDN$724,825 a decrease of CDN$500,738. The
decrease results from a significant decrease in the selling and marketing costs
for this quarter, i.e., CDN$240,000. The decrease results from a decrease in
salaries of about CDN$83,000, a decrease in product advertising of about
CDN$88,000 and a decrease in travel of about CDN$40,000, In addition, in the
quarter ended June 30,1997 a loss of CDN$269,658 was experienced from a
trademark lawsuit settlement.
General and administration expense, remained consistent through the two quarters
end June 30, 1998 and June 30, 1997. Research and development costs decreased
from CDN$129,336 to CDN$111,355 in the comparable 1998 period. The decrease was
due to reduction in non-essential staff.
The decrease in the amortization results from capitalized research and
development costs, under Canadian Generally Accepted Accounting Principles, that
was fully amortized at the end of the 1997 fiscal year.
The Company is placing more emphasis on marketing in the next quarters to
capture a higher sales volume. The third quarter revenue decreased from third
quarter 1997 reported revenue of CDN$529,924 to CDN$127,796 a difference of
about CDN$402,000 as a result of the implementation of the new market strategy.
During this transition period, the Company has made the decision not to ship new
products into the traditional retail channel.
Nine Month Review
- -----------------
Net loss for the nine months ended June 30, 1998 decreased to CDN$1,987,432,
from CDN$3,007,867 in the comparable nine months ended June 30, 1997. Largely
the decrease in the loss was due to a recovery of expenses from the settlement
of certain trade debts with creditors. In addition, significant decreases in
Selling and Marketing expenses, and Research and Development were experienced,
even though General and Administration expenses increased.
General and administration expenses increased from CDN$787,680 for the nine
months ending June 30, 1997 to CDN$1,198,165 in the comparable 1998 period. The
CDN$410,485 increase was due to increase in administration salaries of about
CDN$235,000, for additional staff, and 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$45,000.
Selling and marketing decrease by CDN$692,786 and is primarily due to the
decrease in product advertising and promotion by CDN$468,000 and a reduction in
non-essential staff and contractors of about CDN$209,000. Research and
Development decreased from CDN$504,206 in the nine months ending June 30, 1997
to CDN$435,365 in the comparable 1998 period. The decrease of about CDN$68,000
was primarily due to reduction of non-essential staff.
Page 5 of 10
<PAGE>
Revenue for the nine months ended June 30, 1998 decreased from CDN$1,239,308 in
the comparable period in 1997, to CDN$1,027,378, a decrease of CDN$211,930, and
was due primarily to the declining sales of PeakJet 1.5 in anticipation of the
launch of PeakJet 2000, which was released July 2nd. The Company's focus of the
new market strategy is higher gross margin of future sales and overall costs.
Net loss decreased from CDN$3,007,867 to CDN$1,987,432, a difference of
CDN$1,020,435, due to significantly reduced operating expenses. The overall
decrease in expenses reflect a reduction in expenditures, while continuing to
keep a minimal investment in marketing for the Company's Internet products.
The amortization expense of CDN$746,971 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. The acquired
research and development will be fully amortized for fiscal year end resulting
in an expected lower amortization for fiscal year 1999 of approximately
CDN$200,000.
The Company's cash position decreased from CDN$50,597 in 1997, to CDN$33,907 in
1998 while accounts receivable decreased from CDN$489,207 to CDN$203,851. Cash
and accounts receivable remain an area of critical importance and are being
actively addressed by management. The decrease in accounts receivable represents
the Company's transition into new markets focusing on sales channels that
provide up front cash flow. In general, the results for the quarter are
indicative of the Company's decreasing trend in its expenditures and execution
of its marketing strategy.
Year 2000
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In response to the Year 2000 (Y2K) compliance rule established by the Board of
Governers of the Alberta Stock Exchange, the Company has conducted a
comprehensive review of its computer systems to identify the systems that could
be affected by the "Year 2000" issue and is developing an implementation plan to
resolve the issue. The Year 2000 problem is the result of computer programmed
being written using two digits rather than four to define the applicable year.
Time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a major system failure or
miscalculations. The Company presently believes that, with modifications to
existing software and converting to new software, the Year 2000 problem will not
pose significant operational problems for the Company's computer systems as so
modified and converted. The Company has completed the required modifications and
conversions. The Company is in the process of obtaining Year 2000 compliance
statements from vendors, suppliers, an all other third parties that do business
with the Company.
Based upon the foregoing, PeakSoft does not believe it is necessary to undertake
any special measures to cope with the turn of the century. PeakSoft backs up all
critical data as a matter of routine.
Page 6 of 10
<PAGE>
PeakSoft does not believe that its computer systems require any further
remediation to render them Y2K compliant.
For the reasons set out above, PeakSoft has not incurred, and does not expect to
incur, any significant costs relating to remediation of Y2K issues.
Although there can be no assurances, PeakSoft does not expect material Y2K
implications to its business operations because its computers and the programs
being run on them are of recent vintage and are being marketed as being Y2K
compliant.
Page 7 of 10
<PAGE>
Consolidated Balance Sheet
(prepared by Management)
June 30,
1998 1997
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(in Canadian dollars)
Assets
Current Assets
Cash $ 33,907 $ 50,597
Accounts receivable 203,851 489,207
Inventories 93,849 75,068
Prepaids and deposits 47,180 78,174
----------- -----------
378,787 693,046
Capital assets 138,784 230,094
Acquired research & development 205,574 1,027,874
Licenses -- 18,877
Investment in InfoBuild 284,000 --
----------- -----------
$ 1,007,145 $ 1,969,891
Liabilities and Shareholders' Equity
Current Liabilities:
Demand loan -- 27,608
Accounts payable and accrued liabilities 702,320 1,381,732
Interest Payable on Long-term debt 153,187 --
Deferred revenue -- 86,486
Reserve for returns & allowances 53,101 --
Current portion of long-term debt -- 24,573
Current portion of obligations under
capital leases 29,551 41,064
----------- -----------
938,159 1,536,890
Long-term debt 1,927,802 --
Obligations under capital leases 37,867 41,461
Shareholders' Equity:
Share capital 6,332,390 5,723,317
Other paid-in capital 173,759 --
----------- -----------
6,506,149 5,723,317
Accumulated deficit 8,402,832 5,331,777
----------- -----------
(1,896,683) 391,540
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$ 1,007,145 $ 1,969,891
=========== ===========
Page 8 of 10
<PAGE>
Consolidated Statement of Operations and Deficit
Quarter ended Quarter ended Nine months Nine months
ended ended
June 30,1998 June 30,1997 June 30,1998 June 30,1997
------------ ------------ ------------ ------------
(in Canadian dollars)
Sales $ 127,796 $ 529,924 $ 1,027,378 $ 1,239,308
Cost of goods sold 33,671 135,065 192,511 366,297
94,125 394,859 834,867 873,011
Operating Expenses:
General and 328,058 314,946 1,198,165 787,680
administration
Selling and marketing 133,259 373,990 829,258 1,522,044
Research and development 111,355 129,336 435,365 504,026
572,672 818,272 2,462,788 2,813,750
Earnings (loss) (478,547) (423,413) (1,627,921) (1,940,739)
before the undernoted
Amortization** 246,278 532,492 746,971 797,470
Earnings (loss) $ (724,825) $ (955,905) $(2,374,892) $(2,738,209)
from operations
Gain on sale of contract -- -- 134,951 --
Loss from trademark -- 269,658 -- 269,658
litigation
Net earnings (loss) before
Extraordinary Item (724,825) (1,225,563) (2,239,941) (3,007,867)
Extraordinary Item
Recovery of expenses -- -- 252,509 --
from settlement
of liabilities
Net earnings (loss) (724,825) (1,225,563) (1,987,432) (3,007,867)
Accumulated deficit, $(7,678,007) $(4,106,214) $(6,415,400) $(2,323,910)
beginning of period
Accumulated deficit, $(8,402,832) $(5,331,777) $(8,402,832) $(5,331,777)
end of period
Loss per common share (.05) (.10) (.15) (.25)
**Note: The amortization expense for the quarter and nine months ended
June 30, 1997, is adjusted per 1997 audited financial statements to restate
the accumulated amortization of the acquired research and development.
Page 9 of 10
<PAGE>
Statement of Changes in Financial Position
Quarter ended Quarter ended Nine months Nine months
ended ended
June 30,1998 June 30,1997 June 30,1998 June 30,1997
------------ ------------ ------------ ------------
(in Canadian dollars)
Cash provided by (used in):
Operations:
Net earnings (loss) $ (724,825) $(1,225,563) $(1,987,432) $(3,007,867)
Items not involving cash:
Amortization 246,278 532,492 746,971 797,470
Change in non-cash
operating working capital 140,445 316,481 (355,997) 12,793
----------- ----------- ----------- ------------
(338,102) (376,590) (1,596,458) (2,197,607)
Financing:
Repayment of long
term debt 304,851 -- 531,875 (12,702)
Obligation under
capital leases (4,975) -- 1,867 (9,881)
Decrease in obligation
to issue shares -- -- (399,900) --
Issuance of share capital 20,055 323,475 532,199 2,207,900
----------- ----------- ----------- ------------
319,931 315,365 666,041 2,185,317
Investments:
Purchase of capital assets (9,006) 1,038 (107,042) 32,921
Increase (decrease) (27,177) (60,187) (1,037,459) 20,634
In cash position
Cash, beginning of period 61,084 110,784 1,071,366 29,963
Cash, end of period $ 33,907 $ 50,597 $ 33,907 $ 50,597
Page 10 of 10
