SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
Quarter ended March 31, 1999
PEAKSOFT MULTINET CORP.
-----------------------
(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 Multinet Corp.
(Registrant)
Date May 26, 1999
(Signature) By: /s/ T.W. Metz
----------------------
T.W. Metz
Chief Operating Officer
Page 1 of 10
<PAGE>
PEAKSOFT MULTINET CORP.
Second Quarter Report
For the three months ended March 31, 1999
Page 2 of 10
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LETTER TO SHAREHOLDERS
1999 continues to be a pivotal year for PeakSoft. In this first quarter
shareholder approval was given to a 1 for 8 share consolidation and a debt
conversion which eliminated approximately 93% of the Company's long term debt,
both of which received the required regulatory approval during the second
quarter. This conversion makes Westgate International LP and The Liverpool
Limited Partnership our largest shareholders (in the high 40% range if their
respective holdings are totaled). Elliott Associates, L.P. a $1.4 billion fund
based in New York represents both entities.
During the quarter the Company changed its name and trading symbol pursuant to
the requirements of The Alberta Stock Exchange (ASE). The name of the Company
became PeakSoft Multinet Corp. and the new trading symbol for the ASE is "PKS".
The Company also resumed trading on The OTC:BB under its new name with a trading
symbol of "PEAMF".
The quarter also saw the retirement from the board of two directors, Mr. Carl
Conti and Mr. William Baker. We thank them for the commitment and value that
they brought to our board.
The Annual Shareholders Meeting was held on March 5, 1999. The shareholders
voted in favor of the 3 items on the proxy. No new business was discussed. We
welcomed two new directors to the board, Mr. Simon Arnison and Mr. Colin Morse.
We also welcomed Gordon K.W. Gee Chartered Accountants as the Company's new
auditor during this quarter.
During the period under consideration, the Company continued the sales of its
utility product, PeakJet 2000, through e-commerce and strategic alliances, such
as Real Networks, Software Builders, Cyenta, MP Technologies and others. At the
same time the Company is developing new solutions for the Internet, Intranets,
Extranets, and e-commerce. As part of this strategy, the Company entered into a
co-marketing alliance with Novell, Inc., for the small business market.
Subsequent to the end of the quarter, the Company announced its Small Business
Community, at http://www.peak.com and moved its corporate sit to
http://www.peaksoft.com. The release of the PeakTrack Business Series, content
rich software tools designed to increase productivity in small businesses was
also announced subsequent to the end of the quarter. PeakTrack will enhance the
functionality of the company's online business community, peak.com. The
PeakTrack Business Series initially consists of four industry specific tools,
PeakTrack Law, PeakTrack Travel, PeakTrack Realty and PeakTrack Business. More
information on these products can be found at http://peaktrack.com.
The Company obtained an additional USD $500,000 in operating capital during the
quarter. We believe that the Company is positioned to take maximum advantage of
the dynamic Internet Market in 1999. It is the fervent objective of management
to keep the Company ahead of the pack.
Sincerely yours,
/s/ T.W. Metz
- -------------------------
T.W. METZ
Chief Operating Officer
May 26, 1999
Page 3 of 10
<PAGE>
Consolidated Balance Sheet
(Prepared by Management)
========================================================================
March 31, 1999 1998
- ------------------------------------------------------------------------
(in Canadian dollars)
Assets
Current Assets
Cash $ 154,777 $ 61,084
Accounts receivable 192,698 281,734
Inventories 42,494 98,051
Prepaids and deposits 26,286 42,574
- ------------------------------------------------------------------------
416,255 483,443
Capital assets 95,011 176,496
Acquired research & development - 411,149
Licenses - -
Investment in InfoBuild 284,000 284,000
- ------------------------------------------------------------------------
$ 795,266 $ 1,355,088
========================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Demand loan - -
Accounts payable and accrued liabilities 688,439 797,449
Interest payable on long-term debt 86,908 -
Deferred revenue - -
Reserve for returns & allowances - 54,208
Current portion of obligations under 27,075 28,134
capital leases
- ------------------------------------------------------------------------
802,422 879,791
Long-term debt 444,143 1,622,951
Obligations under capital leases 6,329 44,259
Shareholders' Equity:
Share capital 9,449,523 6,486,094
Other paid-in capital - -
- ------------------------------------------------------------------------
9,449,523 6,486,094
Accumulated deficit 9,907,151 7,678,007
- ------------------------------------------------------------------------
(457,628) (1,191,913)
- ------------------------------------------------------------------------
$ 795,266 $ 1,355,088
- ------------------------------------------------------------------------
Consolidated Statement of Operations and Deficit
================================================================================
Page 4 of 10
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<TABLE>
<CAPTION>
Quarter Quarter Six Months Six Months
ended ended ended ended
March 31, March 31, March 31, March 31,
(in Canadian dollars) 1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $ 138,950 $ 699,372 $ 286,979 $ 899,582
Cost of goods sold 3,545 96,362 11,641 158,840
- ------------------------------------------------------------------------------------------------------
135,405 603,010 275,338 740,742
Operating Expenses:
General and administration 247,726 421,008 546,785 870,107
Selling and marketing 83,377 261,625 175,101 695,999
Interest on LT Debt 77,231 - 77,231 -
Research and development 82,453 143,597 161,135 324,010
---------------------------------------------------------------------------------------------------
490,787 826,230 960,252 1,890,116
- ------------------------------------------------------------------------------------------------------
Earnings (loss) before the undernoted (355,382) (223,220) (684,914) (1,149,374)
Amortization 13,789 246,959 26,530 500,693
Recovery of expenses from settlement - - - 252,509
of liabilities
- ------------------------------------------------------------------------------------------------------
Earnings (loss) from operations $ (369,171) $ (470,179) $ (711,444) $(1,397,558)
Gain on sale of contract - 134,951 - 134,951
Loss from Trademark Litigation - - - -
- ------------------------------------------------------------------------------------------------------
Net earnings (loss) (369,171) (335,228) (711,444) (1,262,607)
Accumulated deficit, beginning of period $(9,537,980) $(7,342,779) $(9,195,707) $(6,415,400)
- ------------------------------------------------------------------------------------------------------
Accumulated deficit, end of period $(9,907,151) $(7,678,007) $(9,907,151) $(7,678,007)
======================================================================================================
Loss per common share (0.01) A (0.02) A (0.02) A (0.09) A
======================================================================================================
Loss per common share (0.09) B (0.20) B (0.18) B (0.75) B
A = Loss per common share calculated on shares outstanding before consolidation.
B = Loss per common share if calculated on shares outstanding after consolidation.
</TABLE>
Page 5 of 10
<PAGE>
Statement of Changes in Financial
Position
<TABLE>
<CAPTION>
======================================================================================================
Quarter Quarter Six Months Six Months
ended ended ended ended
(in Canadian dollars) March 31 March 31 March 31 March 31
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Cash provided by (used in):
Operations:
Net earnings (loss) $ (369,171) $ (335,228) $ (711,444) $(1,262,607)
Items not involving cash:
Amortization 13,789 246,959 26,530 500,693
Change in non-cash operating (573,711) (244,162) - (236,470)
working capital (413,271)
- ------------------------------------------------------------------------------------------------------
(929,093) (332,431) (1,098,185) (998,384)
Financing:
Funds transferred from escrow - 154,350 - -
Long Term Debt 444,143 (6,678) 444,143 (14,936)
Obligation under capital leases (12,373) 9,571 (22,310) 6,842
Decrease in obligation to issue shares - - - (399,900)
Issuance of share capital 668,296 - 823,899 512,144
- ------------------------------------------------------------------------------------------------------
1,100,066 157,243 1,245,732 104,150
Investments:
Purchase of capital assets (10,536) (11,284) (15,594) (116,048)
- ------------------------------------------------------------------------------------------------------
Increase (decrease) in cash position 160,437 (186,472) 131,953 (1,010,282)
Cash, beginning of period (5,660) 247,556 22,824 1,071,366
- ------------------------------------------------------------------------------------------------------
Cash, end of period $ 154,777 $ 61,084 $ 154,777 $ 61,084
======================================================================================================
</TABLE>
Page 6 of 10
<PAGE>
SECOND QUARTER REVIEW
The quarter ended March 31, 1999 shows a continuation of expense cutbacks in all
areas of operations. Total operating expenses decreased from CDN $826,230, to
CDN $490,787 in the comparable period in 1999, a decrease of CDN $335,433 or
40.6%. The primary reasons for the decrease are set out below. Net loss for the
quarter ended March 31, 1999 increased from CDN $335,228 in the comparable
period in 1998, to CDN $369,171, an increase of CDN $33,943. The increase is due
primarily to the interest charge on long term debt that was converted. There
were significant decreases in selling and marketing, research and development,
general and administrative expenses, and amortization.
Revenue decreased from CDN $699,372 in the quarter ended March 31, 1998, to CDN
$135,950 in the comparable period in 1999, a decrease of CDN $560,422. The
decrease is primarily due to the Company's focus and commitment of resources to
its small business community portal strategy, which was announce subsequent to
the end of the period. While gross sales were down, there was a significant
reduction in the Cost of goods sold. The cost of goods sold during the period
ended March 31, 1998 represented 13.78% of sales, as compared to 2.55% for the
comparable period in 1999. This was primarily due to the reduced costs
associated with electronic commerce.
General and administration expenses decreased from CDN $421,008 for the quarter
ended March 31, 1998, to CDN $247,726 in the comparable period in 1999, a
decrease of CDN $173,282. The reduction is due primarily to management's
continued reduction in expenses.
Selling and marketing expenses decreased from CDN $261,625 for the quarter ended
March 31, 1998, to CDN $83,377 in the comparable period in 1999, a decrease of
CDN $178,248. The reduction is due primarily to decreases in product advertising
and promotion, reduced costs associated with electronic commerce, as well as the
commitment of existing resources to the company's small business community
portal strategy.
Research and development expenses decreased from CDN $143,597 for the quarter
ended March 31, 1998, to CDN $82,453 in the comparable period in 1999, a
decrease of CDN $61,144. The reduction is due primarily to management's
continued reduction in expenses.
The interest, CDN $77,231, on Long Term Debt which was converted to shares
during the quarter, was charged to operating expenses.
Amortization expenses decreased from CDN $246,959 in the quarter ended March 31,
1998, to CDN $13,789 in the comparable period in 1999, a decrease of
CDN$233,170. The decrease is due primarily to the research and development that
was acquired from Chameleon Bridge Technologies Corp., which was capitalized
according to Canadian GAAP, and was fully amortized at the end of the 1998
fiscal year.
Page 7 of 10
<PAGE>
SIX MONTH REVIEW
The six months ended March 31, 1999 shows a continuation of expense cutbacks in
all areas of operations. Total operating expenses decreased from CDN $1,890,166,
to CDN $960,252 in the comparable period in 1999, a decrease of CDN $929,864 or
49.20%. The primary reasons for the decrease are set out below. Net loss for the
six months ended March 31, 1999 decreased from CDN $1,262,607 in the comparable
period in 1998, to CDN $711,444, a decrease of CDN $551,163. The decrease is due
primarily to significant decreases in selling and marketing, research and
development, general and administrative expenses. The decrease is also due to
offsets for amortization, interest on long term debt, the recovery of expenses
from settlement of liabilities, and the gain on the sale of a subsidiary during
the period ended March 31, 1998.
Revenue decreased from CDN $899,582 in the six months ended March 31, 1998, to
CDN $286,979 in the comparable period in 1999, a decrease of CDN $612,603. The
decrease is primarily due to the Company's focus and commitment of resources to
its small business community portal strategy, which was announce subsequent to
the end of the period. While gross sales were down, there was a significant
reduction in the Cost of goods sold. The cost of goods sold during the six
months ended March 31, 1998 represented 17.66% of sales, as compared to 4.06%
for the comparable period in 1999. This was primarily due to the reduced costs
associated with electronic commerce.
General and administration expenses decreased from CDN $870,107 for the six
months ended March 31, 1998, to CDN $546,785 in the comparable period in 1999, a
decrease of CDN $323,322. The reduction is due primarily to management's
continued reduction in expenses.
Selling and marketing expenses decreased from CDN $695,999 for the six months
ended March 31, 1998, to CDN $175,101 in the comparable period in 1999, a
decrease of CDN $520,898. The reduction is due primarily to decreases in product
advertising and promotion, reduced costs associated with electronic commerce, as
well as the commitment of existing resources to the company's small business
community portal strategy.
Research and development expenses decreased from CDN $324,010 for the six months
ended March 31, 1998, to CDN $161,135 in the comparable period in 1999, a
decrease of CDN $162,135. The reduction is due primarily to management's
continued reduction in expenses.
The interest, CDN $77,231, on Long Term Debt which was converted to shares
during the period, was charged to operating expenses.
During the period, management negotiated with trade and other creditors to
realize a CDN $252,509 reduction of liabilities.
Amortization expenses decreased from CDN $500,693 in the six months ended March
31, 1998, to CDN $26,530 in the comparable period in 1999, a decrease of
CDN$474,163. The decrease is due primarily to the research and development that
was acquired from Chameleon Bridge Technologies Corp., which was capitalized
according to Canadian GAAP, and was fully amortized at the end of the 1998
fiscal year.
Page 8 of 10
<PAGE>
YEAR 2000
In response to the Year 2000 compliance rule established by the Board of
Governors 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 programs
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 the conversion 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, and 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.
PeakSoft does not believe that its computer systems require remediation to
render them Y2K compliant.
For the reasons set out above, PeakSoft has not incurred, and does not
expect to incur, any costs relating to remediation of Y2K issues.
PeakSoft has concluded that it faces no material Y2K implications to its
business operations because its computers and the programs being run on them are
of recent vintage, marketed as being Y2K compliant.
This release may contain forward-looking statements as well as
historical information. Forward-looking statements, which are
included in accordance with the "safe harbor" provisions of the
"Private Securities Litigation Reform Act of 1995, may involve known
and unknown risks, uncertainties and other factors that may cause the
company's actual results and performance to be materially different
from any results or performance suggested by the statements in this
release. Such statements, and other matters addressed in this press
release, may involve a number of risks and uncertainties including
price competition, technological advances, decreased demand or
diversion to other software solutions.
Page 9 of 10
<PAGE>
CORPORATE INFORMATION
CORPORATE HEADQUARTERS
Peaksoft Multinet Corp.
1801 Roeder Avenue, Suite 144
Bellingham, Washington 98225
USA
Tel (360) 752-1100
Fax (360) 752-1110
http://www.peaksoft.com
http://www.peak.com
-------------------
http://www.peaktrack.com
INVESTOR INFORMATION
(888) 377-7325
STOCK LISTING
PEAKSOFT MULTINET CORP. common stock is traded on The Alberta Stock
Exchange under the symbol "PKS" and is traded on The OTC Bulletin Board (R)
(OTCBB) under the symbol "PEAMF".
AUDITOR
Gordon K.W. Gee, Ltd.
Chartered Accountant
Vancouver, B.C.
LEGAL COUNSEL
Farris, Vaughn, 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
Director Chief Operating Officer
Peter Janssen Calvin Patterson
Director Corporate Counsel
Simon Arnison
Director
Colin Morse
Director
Page 10 of 10