U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
General form for registration of securities of small business issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Forest Glade International, Inc.
--------------------------------
(Name of Small Business Issuer in its charter)
Nevada
------
(State or other jurisdiction of incorporation or organization)
52-212-549
----------
(I.R.S. Employer Identification No.)
Principal Executive Offices
---------------------------
444 Victoria Street, Suite 370
Prince George, B.C.
CANADA V2L 2J7
(250) 564-6868
--------------
(Issuer's Telephone No.)
Securities to be Registered under Section 12(b) of the Act: None
Securities to be Registered under Section 12(g) of the Act:
Common Stock (Title of Stock)
------------
Total number of pages: 60
Index to Exhibits Appears on Page 35
<PAGE>
Item 1
(a) Business Development
--------------------
Forest Glade International, Inc. (the Registrant) was incorporated on
August 27, 1998 under the laws of the State of Nevada for the purpose of
acquiring Forest Glade Properties, Inc., a corporation organized under the
laws of British Columbia, Canada. Pursuant to the Agreement and Plan of
Reorganization dated September 30, 1998, which closed on November 17, 1998,
the Registrant acquired 100% of the outstanding common stock of Forest
Glade Properties Inc. in exchange for 7,700,000 shares of the Registrant's
common stock. The business of the Registrant is a continuation of business
of Forest Glade Properties Inc., the business of owning and operating
mobile home parks in Canada. Forest Glade Properties Inc. was established
in January 1998 by Wayne Loftus, Frank Dennis, Michael Jenks, Stan Polson
and Gil Rahier, the Directors of the Registrant.
On December 1, 1998, the Registrant's wholly owned subsidiary, Forest
Glade Properties Inc., acquired the mobile home park, Mountain View Park,
Sparwood, B.C., from 514592 B.C. Ltd., a British Columbia corporation, for
$1,500,000 Cdn. based on the value determined by North Country Appraisals
(1985) Ltd., an independent appraiser certified by the Appraisal Institute
of Canada. The terms of payment were the placement of a new first mortgage
against the property in the amount of $750,000 Cdn., and the issuance to
the Vendors of 200,000 common shares of Forest Glade International Inc. at
a deemed value of $2.50 U.S. per share. Gil Rahier, a Director of the
Registrant, was the registered owner of 50% of the corporation owning the
property, and beneficially received 100,000 common shares of Forest Glade
International, Inc. Orv Schattenkirk, a non-affiliate, was the owner of
the remaining 50% interest of the corporation owning the property, and
received 100,000 shares of Forest Glade International Inc.
(b) Narrative Description of Business
---------------------------------
The Registrant's business is owning and operating mobile home parks in
British Columbia and Alberta, Canada. The Registrant presently owns and
operates one mobile home park (see Description of Properties below). The
Registrant rents mobile home sites and charges monthly fees for services
including maintenance, management, and provides utilities to the sites.
Each mobile home pad is provided with municipal water, sewer, garbage
service, natural gas, electricity and cable television.
The market for mobile home rental space is highly site specific with
proximity to a growing urban area or major employers such as the mining
industry providing the greatest demand for mobile home rental space. In
addition, the appearance, services and amenities of the mobile home park
are substantial factors in the competition for renters. Management
believes that the markets for mobile home rental space in British Columbia
and Alberta are stable and steadily growing. In addition, Management
believes that due to the increasing diversity of economic activity in
British Columbia from natural resources to manufacturing and urban
commerce, the market for housing in general and mobile home parks
specifically is not dependent upon a single industry.
The Registrant's plan of operation is to acquire additional, fully
developed and operating mobile home parks in the United States and Canada.
It is Management's belief that acquiring existing and operating mobile home
parks is a superior strategy to developing new mobile home parks for
several reasons. Acquiring operating parks avoids the expenses, delays and
risks inherent in new development while allowing rapid incorporation of the
existing parks cash flow with the Registrant's operations.
The criteria for an acquisition include, but are not necessarily
limited to:
Favorable assessment of the development and operation of the park;
2
<PAGE>
Minimum three year operating history;
Municipal water and other utilities;
Proximity to urban centers or major employers;
History of expenses not exceeding 30% of revenue;
Room for expansion;
Long term current ownership seeking retirement.
The Registrant's operations are generally subject to zoning and other
local business regulation.
The Registrant employs 2 people on a full time basis with namely 1
employed at the Mountain View Park operation, and 1 at its corporate
headquarters.
Item 2. Management's Discussion and Analysis or Plan of Operation
The Registrant was incorporated in August 1998 while its subsidiary was
incorporated in January 1998. Prior to the acquisition of the Mountain
View Park in Sparwood, B.C., the Registrant and its subsidiary were
inactive. The discussion below relates to a discussion of the financial
results of the Park (in Canadian dollars) and Management's plan of
operations.
Results of Operations
- ---------------------
The Park currently derives its revenue from 85 mobile home pads or sites
that are rented on a monthly basis. Management anticipates that 15
additional pads of the 51 presently vacant will be rented during 1999,
bringing the total number rented to 100. The Park expects commission
revenue from a Moduline Mobile Home Dealership which is owned by a
independent third party. The Registrant is evaluating several operating
mobile home parks in Western Canada and the United States for acquisition
in 1999 and thereafter.
Statement of operations data for the Park (in Canadian dollars)
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months For the Years
Ended October 31 Ended April 30
1998 1997 1998 1997
--------------------------------------------------
<S> <C> <C> <C> <C>
Rental revenue $87,177 $81,429 $160,291 $146,685
Commission revenue - $15,328 $ 25,210 $ 5,500
Total revenue $87,177 $96,757 $185,501 $152,185
Expenses $105,874 $127,581 $229,655 $189,037
Net loss for the period $18,697 $30,824 $44,154 $36,852
Exchange Rate information:
End of period $0.6481 $0.7102 $0.6982 $0.7154
Average for the period $0.6674 $0.7227 $0.7115 $0.7331
</TABLE>
Six months ended October 31, 1998 compared to the six months ended
- ------------------------------------------------------------------
October 31, 1997
- ----------------
Rental revenue for the six-month period ended October 31, 1998 was $87,177
or a 7% increase over the six-month period ended October 31, 1997. This
increase was attributable to additional pad rentals. Overall revenue of
$87,177 was down 10% over the six-month period ended October 31, 1997 due
to
3
<PAGE>
the absence in 1998 of $15,328 in commission income on mobile home sales
earned in 1997. Expenses declined by $21,707 over the similar period in
1997 to $105,874. While interest expense increased by $11,865 over 1997
due to recording of an interest rebate in 1997 on the refinancing of the
prior mortgage facility, this increase was offset by a $30,861 decline in
repairs and maintenance expenses. In 1997, the Park incurred significant
repair expenditures in relation to its sewer system and pumphouse. The
remaining expenses are comparable to amounts incurred in 1997.
The net loss of the Park for the six month period ended October 31, 1998
was $18,697 compared to a loss of $30,824 for the six month period ended
October 31, 1997.
The year ended April 30, 1998 compared to the year ended April 30, 1997
- -----------------------------------------------------------------------
Rental revenue for the year ended April 30, 1998 was $160,291 or a 9%
increase over the year ended April 30, 1997. This increase was
attributable to additional pad rentals. Overall revenue of $185,501 was up
22% over the year ended April 30, 1997 due to the increase in rental
revenue and $25,210 in commission income on mobile home sales in 1998
compared to $5,510 earned from that source in 1997. Expenses increased by
$40,618 over 1997 to $229,655. Repairs to the Park property increased by
$19,428 over 1997 due to required repairs to the sewer system and the
pumphouse. As well, professional fees incurred in connection with the
Company's attempt to recover costs incurred for sewer and pumphouse repairs
resulted in an increase of $7,193 over 1997. Finally, a full-year's
depreciation of $55,127 (an increase of $26,395) was recorded in 1998 due
to the fact that the property was acquired during 1997 resulting in a
reduced amount of depreciation in 1997. The effect of increases in these
expenses on the change in total expenses was reduced by a $10,048 decline
in interest on long term debt to $43,196. This decline was due to
refinancing the Company's mortgage on the property. The remaining expenses
are comparable to amounts incurred in 1997.
The net loss of the Park for the year ended April 30, 1998 was $44,154
compared to a loss of $36,852 for the year ended April 30, 1997.
Liquidity and Capital Resources
- -------------------------------
The Registrant and its subsidiary have initially relied on equity
contributions of capital from the directors and other shareholders to meet
its working capital requirements. Hereafter cash flow, after debt
servicing, generated from the operation of the Mountain View Park and
additional equity financing will provide funding to both expand the
existing park and provide capital for new acquisitions. In connection with
the acquisition of the Mountain View Park, the Company's subsidiary has
arranged mortgage debt financing of $750,000 Cdn., due in one year. It is
expected that this mortgage will be refinanced at favourable rates at the
end of the term to extend the repayment period. New acquisitions would be
partially financed by conventional mortgage borrowings.
Effect of Inflation
- -------------------
The Company believes that inflation has not had a material affect on its
past business.
Year 2000 Computer Problems
- ---------------------------
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without
considering the impact of the upcoming change in the
4
<PAGE>
century. If not corrected, many computer applications could fail or create
erroneous results by or at the Year 2000. The Year 2000 issue affects
virtually all companies and organizations.
Although many companies undertake major projects to address the Year
2000 issue, Management does not believe that its operations are highly
dependent upon computer programs. However, the Registrant has undertaken
to ensure that its associated computer fields were designed and constructed
to receive and manipulate four digit integers instead of only two. The
Registrant's computer system has been evaluated and found to adequately
address the Year 2000 Issue. As a result, no additional costs are expected
to be incurred.
Item 3. Description of Property
The Registrant presently owns one property:
Mountain View Park, Sparwood, British Columbia
- ----------------------------------------------
The Mountain View Park is a 33.23 acre facility located in Sparwood,
British Columbia which is 610 miles east of Vancouver in the southeast
corner of British Columbia, forty-five miles north of the U.S. - Canadian
border. The Park has 1,041 feet of frontage space on the main street of
Sparwood, close to its downtown area. Sparwood is a hub of coal mining and
timber activity in the area.
The Park has 136 mobile home pads. At present, 84 sites are rented,
plus 1 pad with a park owned mobile that is also rented. The rentals are
based upon monthly tenancy and 80% of the rentals have occupied their space
for longer than 1 year. The Registrant anticipates expansion to this Park
(see "Management Discussion and Analysis").
Located on the Park is a Moduline Mobile Home Dealership which is
owned independently. The Dealership pays the Park a commission for each
mobile home sale and produces a profit of $7,500 Cdn. for each unit sold.
The Dealership provides a facility to display mobile homes to perspective
purchasers, together with an opportunity to establish residency.
The Registrant's subsidiary holds the property in fee simple title
which is encumbered by a first Mortgage in the amount of $750,000 Cdn.,
bearing interest at the rate of 13.5% per annum, maturing in 1999, and is
renegotiable at that time. The monthly payments are $8,535 Cdn., including
interest and principal. The Park and the leased operations are covered by
liability and damage insurance, which Management believes to be adequate.
There is 1 other mobile home park 25 miles from Sparwood, B.C.
Management believes that the appearance, amenities and location of the
Mountain View Park makes the park competitive with the other existing park
and allows the Park to charge higher rentals than these other parks without
impact to its occupancy rates.
The Registrant records annual depreciation on the property at the rate
of 4% for Buildings; 20% for Equipment; and 8% for Pads using the declining
balance method. The tax basis for the property is $1,500,000 Cdn., and the
remaining useful life of the pads for purposes of depreciation is
approximately 12 years.
Taxes on the property are assessed at the rate of .0122% and total
$10,000 Cdn. annually. Annual realty taxes on the proposed expansion would
result in $5,000 Cdn. additional taxes per year.
5
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners holding five
percent or greater of the 17,900,000 shares of common stock outstanding as
of November 30, 1998.
Title of Class Name and Address Amount and Nature % of
of Beneficial Owner of Beneficial Owner Class
- ------------------------------------------------------------------------
Common Paul Flanagan 900,000 5.0%
c/o Intl Sec Trade
7th Flr., Ledsema Condo 117
Gambia St. Legaspi VIL 1229 Makati
Manila, Philippines
Janice Lun 900,000 5.0%
c/o Intl Sec Trade
7th Flr., Ledsema Condo 117
Gambia St. Legaspi VIL 1229 Makati
Manila, Philippines
(b) Security Ownership of Management
Name and Address(1) Amount and Nature % of
Title of Class of Beneficial Owner of Beneficial Owner Class
- ------------------------------------------------------------------------
Common Wayne E. Loftus 1,583,333 8.8
Frank Denis 2,866,668 16.0
Michael Jenks 1,583,333 8.8
Stan Polson 1,583,333 8.8
Gil Rahier 1,683,333 9.4
--------- ----
All officers and Directors
as a Group (5 persons) 9,300,000 52.0
(1) 444 Victoria Street, Suite 370, Prince George, B.C. CANADA V2L 2J7
(c) Changes in Control:
There are no arrangements which may result in a change in control
of the issuer.
Item 5. Directors, Executive Officers, Promoters and Control Persons
(a) Directors and Executive Officers
WAYNE E. LOFTUS - Age 49. President, Chief Executive Officer and
Chairman of the Board of Directors. 1983 to present, owner/manager of
Pacific Rim Mortgage & Loan Corp. located in Prince George, B.C., Canada.
Pacific Rim, a private corporation, is involved in brokering loans and
private financing in all facets of residential, commercial and
institutional lending. Education - Graduated 1972, Douglas Community
College, Burnaby, B.C. and obtained a Degree in Business Management &
Economics.
FRANK A. DENIS - Age 62. Vice President and Director. Since 1986 has
been President and owner of Kenda Enterprises Ltd. located in Prince
George, B.C., Canada. The Company is engaged in the business of buying and
selling of land and timber, having gross annual revenues of $1,000,000 Cdn.
Graduated in 1953 from Prince George Secondary High School located in
Prince George, B.C.
6
<PAGE>
GIL RAHIER - Age 58. Secretary, Treasurer and Director. Since 1976, Mr.
Rahier has been associated with the Barton Group of Companies located in
Prince George, British Columbia, and is presently a Senior Vice President
with a portfolio of forest industry and commercial insurance accounts.
Since April 1996 Mr. Rahier has served as president and director of 514592
B.C., Ltd., the corporation from whom the Registrant acquired its Mountain
View Park property. Mr. Rahier graduated in 1957 from Prince George Senior
Secondary School in Prince George, B.C., Canada.
MICHAEL JENKS - Age 47. Director. Since 1968 owner of Jeni Holdings
Ltd. located on Gabriola Island, British Columbia, Canada. The company
owns and develops commercial, industrial and residential real estate
properties throughout British Columbia. Mr. Jenks graduated in 1967 from
Duchess Park Senior Secondary School, located in Prince George, B.C.,
Canada.
STAN POLSON - Age 58. Director. 1978 to present, owner and operator of
Mountain View Mobile Home Sales Ltd., located in Prince George, British
Columbia, Canada. Owner, Developer and Operator of 4 mobile home Parks
established in the general region of Prince George, B.C., Canada.
Graduated in 1952 from High School in Bolgonie, Saskatchewan, Canada.
(b) Significant Employees: None
Item 6. Executive Compensation Table
(a) Name & Position Year Salary Paid
--------------- ---- -----------
Wayne Loftus - President & C.E.O. 1998 NIL
Item 7. Certain Relationships and Related Transactions
The Company's By-Laws include a provision regarding Related Party
Transactions which requires that each participant to such transaction
identify all direct and indirect interests to be derived as a result of the
Company's entering into the related transaction. A majority of the
disinterested members of the board of directors must approve any Related
Party Transaction.
On December 1, 1998, the Registrants wholly owned subsidiary, Forest
Glade Properties Inc., acquired the mobile home park, Mountain View Park,
Sparwood, B.C., from 514592 B.C. Ltd., a British Columbia corporation for
$1,500,000 Cdn. based on the value determined by North Country Appraisals
(1985) Ltd., an independent appraiser certified by the Appraisal Institute
of Canada. The terms of payment were the placement of a new first Mortgage
against the property in the amount of $750,000 Cdn., and the issuance to
the Vendors of 200,000 common shares of Forest Glade International Inc. at
a deemed value of $2.50 U.S. per share. Gil Rahier, a Director of the
Registrant, was the registered owner of 50% of the Corporation owning the
property, and beneficially received 100,000 common shares of Forest Glade
International, Inc.
Item 8. Description of Securities
The authorized capital stock of Company consists of 200,000,000 shares of
common stock. No warrants to acquire common stock have been authorized.
There are no outstanding obligations of the Company to repurchase, redeem
or otherwise acquire any shares of the Company's common stock.
7
<PAGE>
The common stock carry no preemptive rights, are not convertible,
redeemable, assessable or entitled to the benefits of any sinking fund.
The common stock affords the holders no cumulative voting rights, and the
holders of a majority of the shares voting for the election of the
directors can elect all of the directors if they should choose to do so.
Pursuant to a vote of the Shareholders on September 1, 1998, the
Registrant's Board of Directors has the authority to declare a reverse
split of the outstanding shares.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters
(a) Market Information
The Registrant's stock is not listed for sale on any exchange or trading
medium. The Registrant intends to seek the listing of its Common Stock on
the OTC Electronic Bulletin Board upon the effectiveness of this Form
10-SB. Until such time, there is no public market for the Company's Common
Stock.
(b) Holders
There are 23 holders of the Registrant's Common Stock as of November 30,
1998. There are 7,900,000 which are restricted securities as defined by
Rule 144, none of which have been held in excess of one year.
(c) Dividends
The Registrant has paid no dividends to date on its Common Stock. The
Registrant reserves the right to declare a dividend when operations merit.
Item 2. Legal Proceedings
There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or, to the
knowledge of the Registrant, threatened, against or affecting the
Registrant, or any of its properties, business affairs or business
prospects of the Registrant.
Item 3. Changes in and Disagreements with Accountants: None
8
<PAGE>
Item 4. Recent Sales of Unregistered Securities
During the past three years, the Registrant sold securities which were not
registered under the Securities Act of 1933, as amended, as set forth
below.
Date Name # of shares issued Consideration (U.S. $)
- ---- ---- ------------------ --------------
090198 Terry Kline 350,000 3,500
090198 Michael Lee 160,000 1,600
090198 Keith Betnard 250,000 2,500
090198 Tim Fung 400,000 4,000
090198 Andrew Fulton 525,000 5,250
090198 Henry Melnik 125,000 1,250
090198 Larry Kaburda 600,000 6,000
090198 Robert Ng 50,000 500
090198 Dennis Love 375,000 3,750
090198 Walter Slemko 900,000 9,000
090198 Peter King 750,000 7,500
090198 John Yale 800,000 8,000
090198 Bruce Cambruzzi 190,000 1,900
090198 Paul Flanagan 900,000 9,000
090198 Braham Pocock 250,000 2,500
090198 Jonathan Lahiffe 750,000 7,500
090198 Janice Lun 900,000 9,000
090198 Linda Hazelton 225,000 2,250
090198 Mark Virk 650,000 6,500
090198 Ron Seth 750,000 7,500
090198 David Tsuyuki 45,000 450
090198 Francis Yang 55,000 550
112598 Wayne E. Loftus 1,283,333 exchange(1)
112598 Frank Denis 2,566,668 exchange(1)
112598 Michael Jenks 1,283,333 exchange(1)
112598 Stan Polson 1,283,333 exchange(1)
112598 Gil Rahier 1,383,333 exchange(1)(2)
112598 Orv Shattenkirk 100,000 exchange(2)
(1) Shares exchanged for common stock of Forest Glade Properties Inc., on
Nov. 17, 1998
(2) 100,000 shares exchanged to each individual for Mountain View Park
property.
The Registrant was not a reporting company pursuant to the Securities
Exchange Act of 1934 nor was it a development stage company with no
business plan. Thus it was eligible to rely upon Rule 504. Moreover, Rule
504 was available in that the Registrant sold less than $1,000,000.00 worth
of securities in the previous 12 month period and except for the
Registrant's officers and directors, the purchasers were unaffiliated
investors. These sales were entirely private transactions pursuant to
which all material information as specified in Rule 502(b)(2) was made
available to the purchaser(s). Thus the exemptions from registration
afforded by Rule 4(2) and Rule 3(b) were available to the issuer.
On all transactions depicted, no sales commission was paid by the Company
to Pacific Rim Investment Inc. pursuant to the September 1, 1998, Offering
Sales Agency Agreement. (See Exhibit 10(ii)). Pacific Rim Investment Inc.
is a corporation organized under the law of the Pacific island nation of
Vanuatu. Pacific Rim has two principals. They are Geoffrey Robert Gee and
John Caldwell Malcolm.
9
<PAGE>
Item 5. Indemnification of Directors and Officers
Article 11 of the Company's By-laws provides that every person who was
or is a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or a person for whom he is the
legal representative is or was a director or officer of the corporation or
is or was serving at the request of the corporation or for its benefit as
a director or officer of another corporation, or as its representative in
a partnership, joint venture, trust or other enterprise, shall be
indemnified and held harmless to the fullest extent legally permissible
under the General Corporation Law of the State of Nevada against all
expenses, liability and loss (including attorney's fees, judgments, fines
and amounts paid or to be paid in settlement) reasonably incurred or
suffered by him in connection therewith.
10
<PAGE>
PART F/S
The following financial statements are filed as part of this registration
statement:
FOREST GLADE INTERNATIONAL, INC.
Unaudited Pro-Forma Consolidated Financial Information
Consolidated Balance Sheet as of October 31, 1998
Consolidated Statement of Operations for the three months ended October
31, 1998
Consolidated Statement of Operations for the year ended July 31, 1998
Notes to Financial Statements
FOREST GLADE PROPERTIES INC.
Auditors' Report
Financial Statements
Balance Sheets as of October 31, 1998 (unaudited) and July 31, 1998
Statements of Operations for the three months ended October 31, 1998
(unaudited) and for the six months ended July 31, 1998
Statements of Stockholders' Equity for the three months ended October
31, 1998 (unaudited) and for the six months ended July 31, 1998
Statements of Cash Flows for the three months ended October 31, 1998
(unaudited) and for the six months ended July 31, 1998
Notes to the Financial Statements
514592 B.C. LTD.
Auditors' Report
Financial Statements
Balance Sheets as of October 31, 1998 (unaudited) and April 30, 1998
Statements of Loss and Deficit for the six months ended October 31, 1998
and 1997 (unaudited), for the year ended April 30, 1998 and for the year
ended April 30, 1997 (unaudited)
Statements of Changes in Financial Position for the six months ended
October 31, 1998 and 1997 (unaudited), for the year ended April 30, 1998
and for the year ended April 30, 1997 (unaudited)
Notes to the Financial Statements
11
<PAGE>
FOREST GLADE INTERNATIONAL INC.
PRO FORMA BALANCE SHEET
OCTOBER 31, 1998
(Unaudited)
(In United States dollars)
<TABLE>
<CAPTION>
Forest Glade 514592 Pro Forma
Properties Inc. B.C. Ltd. Adjustments Balance
------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash $ 11,525 $ 6,130 $ (6,130) (1) $ 11,525
Prepaid expenses - 1,070 - 1,070
------------------------------------------------------------
11,525 7,200 (6,130) 12,595
Fixed Assets,
net of amortization 218 583,740 403,075 (2) 987,033
------------------------------------------------------------
$ 11,743 $ 590,940 $ 396,945 $ 999,628
============================================================
LIABILITIES
Current Liabilities
Accounts payable and
accrued Liabilities $ 2,622 $ 4,610 $ (4,610) (1) $ 2,622
Bank loan - 12,960 (12,960) (1) -
Deferred revenue and
security Deposits - 1,810 - 1,810
Current portion of long-term
Debt - 21,170 (21,170) (1) 3,300
3,300 (2)
------------------------------------------------------------
2,622 40,550 (35,440) 7,732
Long-Term Debt - 420,560 (420,560) (1) 482,775
482,775 (2)
Shareholders' Loans - 194,440 (194,440) (1) -
------------------------------------------------------------
2,622 655,550 (167,665) 490,507
------------------------------------------------------------
STOCKHOLDERS' EQUITY
Capital Stock 79 - 200 (2) 17,900
17,621 (3)
Authorized
200,000,000 common shares;
par value $0.001
Issued
17,900,000 common shares
Additional paid-in capital 97,342 - 499,800 (2) 579,521
(17,621) (3)
Accumulated Deficit (88,300) (64,610) 64,610 (1) (88,300)
------------------------------------------------------------
9,121 (64,610) 564,610 509,121
------------------------------------------------------------
$ 11,743 $ 590,940 $ 396,945 $ 999,628
============================================================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
12
<PAGE>
FOREST GLADE INTERNATIONAL INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED OCTOBER 31, 1998
(Unaudited)
(In United States dollars)
<TABLE>
<CAPTION>
Forest Glade 514592 Pro Forma
Properties Inc. B.C. Ltd. Adjustments Balance
------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Rental $ - $ 30,080 $ - $ 30,080
------------------------------------------------------------
Expenses
Bank charges and interest 814 - - 814
Depreciation 13 8,240 4,460 (2) 12,713
Office & miscellaneous 2,421 1,990 - 4,411
Professional fees 11,088 - - 11,088
Property management - 2,320 - 2,320
Property taxes - 1,740 - 1,740
Repairs and maintenance - 1,980 - 1,980
Travel - 1,200 - 1,200
Utilities - 5,470 - 5,470
------------------------------------------------------------
14,336 22,940 4,460 41,736
------------------------------------------------------------
(14,336) 7,140 (4,460) (11,656)
Interest on long-term debt - (9,820) (6,030) (4) (15,850)
Loss on termination of
trailer park
Acquisition (69,985) - - (69,985)
------------------------------------------------------------
Loss for the period $ (84,321) $ (2,680) $ (10,490) $ (97,491)
============================================================
Loss per share $ (0.005)
=============
Weighted Average shares
Outstanding 17,900,000
=============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
13
<PAGE>
FOREST GLADE INTERNATIONAL INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1998
(Unaudited)
(In United States dollars)
<TABLE>
<CAPTION>
Forest Glade 514592 Pro Forma
Properties Inc. B.C. Ltd. Adjustments Balance
------------------------------------------------------------
<S> <C> <C> <C> <C>
Rental $ - $ 114,050 $ - $ 114,050
Commission - 17,940 - 17,940
------------------------------------------------------------
- 131,990 - 131,990
------------------------------------------------------------
Expenses
Depreciation 26 39,220 16,180 (2) 55,426
Office & miscellaneous 575 9,630 - 10,205
Professional fees 1,796 8,750 - 10,546
Property management - 9,540 - 9,540
Property taxes - 7,070 - 7,070
Repairs and maintenance - 27,450 - 27,450
Travel 1,582 4,820 - 6,402
Utilities - 26,190 - 26,190
------------------------------------------------------------
3,979 132,670 16,180 152,829
------------------------------------------------------------
(3,979) (680) (16,180) (20,839)
Interest on long-term debt - (30,730) (38,770) (4) (69,500)
------------------------------------------------------------
Loss for the year $ (3,979) $ (31,410) $ (54,950) $ (90,339)
============================================================
Loss per share $ (0.005)
==============
Weighted Average shares
Outstanding 17,900,000
==============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
14
<PAGE>
FOREST GLADE INTERNATIONAL INC.
NOTES TO PRO FORMA STATEMENTS
(Unaudited)
(in United States dollars)
(1) To remove the assets and liabilities of 514592 B.C. Ltd. which are not
being acquired by Forest Glade Properties Inc. in connection with the
acquisition of Mountain View Park.
(2) To reflect the components of the purchase price for acquisition of
Mountain View Park.
Cash (Cdn. $750,000) $ 486,075
Share capital of Forest Glade International Inc.
(200,000 shares at a deemed value of US $2.50) 500,000
----------
986,075
Less prepaid expenses acquired (1,070)
Add deferred revenue and security deposits
acquired 1,810
----------
Purchase price of fixed assets $ 986,815
==========
The purchase price of $986,815 for the fixed assets would have
caused depreciation to increase by $4,460 for the three months
ended October 31, 1998 and by $16,180 for the year ended July 31,
1998.
(3) Share Exchange with Forest Glade Properties Inc.
The acquisition of Forest Glade Properties Inc. has been
accounted for as a reverse acquisition whereby the Pro Forma
Consolidated Financial Statements of Forest Glade International
Inc. are presented as a continuation of Forest Glade Properties
Inc. The acquisition is recorded at the fair value of the net
assets of Forest Glade International Inc. which prior to the
acquisition was $Nil due to its inactivity. The adjustment
necessary is to reclassify amounts between capital stock and
additional paid-in capital to reflect the par value stock of the
Registrant.
(4) Long-Term Debt
Forest Glade Properties Inc. has arranged a first mortgage
financing in the amount of Cdn. $750,000 bearing interest at a
rate of 13.5% per annum. The mortgage is secured by a first
financial charge on the property and an assignment of rents. The
debt is repayable by monthly payment of Cdn. $8,535.30 including
principal and interest.
15
<PAGE>
The new long-term debt financing would have caused interest
expense during the three months ended October 31, 1998 to
increase by $6,030 and during the year ended July 31, 1998 by
$38,770.
(5) Exchange Rate Information
The accounts of 514592 B.C. Ltd. have been translated into US
dollars using the following rates:
As at October 31, 1998 $0.6481
For the three months ended October 31, 1998 $0.6519
For the year ended April 30, 1998 $0.7115
16
<PAGE>
AUDITORS' REPORT
To the Shareholders of
Forest Glade Properties Inc.
(formerly 558539 BC Ltd.):
We have audited the balance sheet of Forest Glade Properties Inc. (formerly
558539 BC Ltd.) as at July 31, 1998, and the statements of loss,
stockholders' equity and cash flows for the period from the date of
incorporation (January 29, 1998) to July 31, 1998. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in Canada. Those standards require that we plan and perform an
audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at July 31, 1998 and the
results of its operations and its cash flows for the period from the date
of incorporation (January 29, 1998) to July 31, 1998 in accordance with
accounting principles generally accepted in the United States.
/s/ CHAN FOUCHER LeFEBVRE
CHARTERED ACCOUNTANTS
September 3, 1998
Prince George, Canada
17
<PAGE>
FOREST GLADE PROPERTIES INC.
BALANCE SHEETS
- --------------
(in United States dollars)
===========================================================================
OCTOBER 31 July 31
1998 1997
(UNAUDITED)
- ---------------------------------------------------------------------------
ASSETS
- ------
CURRENT ASSET
Cash $ 11,525 $ 3,016
DEPOSIT (Note 3) - 13,228
FIXED ASSET (Note 4) 218 231
---------- ----------
TOTAL ASSETS $ 11,743 $ 16,475
========== ==========
LIABILITIES
- -----------
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 2,622 $ 10,824
---------- ----------
STOCKHOLDERS' EQUITY
- --------------------
CAPITAL STOCK (Note 5) 79 66
ADDITIONAL PAID-IN CAPITAL 97,342 9,564
ACCUMULATED DEFICIT (88,300) (3,979)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 9,121 5,651
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,743 $ 16,475
========== ==========
See accompanying notes
18
<PAGE>
FOREST GLADE PROPERTIES INC.
STATEMENTS OF LOSS
(in United States dollars)
===========================================================================
for the period ended OCTOBER 31 July 31
1998 1997
(3 MONTHS) (6 months)
(UNAUDITED)
- ---------------------------------------------------------------------------
EXPENSES
- --------
Bank charges and interest $ 814 $ -
Depreciation 13 26
Office and miscellaneous 2,421 575
Professional fees 11,088 1,796
Travel - 1,582
---------- ----------
14,336 3,979
LOSS ON TERMINATION OF TRAILER PARK
ACQUISITION (Note 3) 69,985 -
---------- ----------
NET LOSS FOR THE PERIOD $ 84,321 $ 3,979
========== ==========
PRO-FORMA LOSS PER SHARE (Note 7) $ - $ -
========== ==========
PRO-FORMA WEIGHTED AVERAGE SHARES
- ---------------------------------
OUTSTANDING (Note 7) 17,700,000 17,700,000
========== ==========
See accompanying notes
19
<PAGE>
FOREST GLADE PROPERTIES INC.
STATEMENT OF STOCKHOLDERS' EQUITY
- ---------------------------------
(in United States dollars)
<TABLE>
<CATPION>
============================================================================================================
Common Stock Additional Total
------------------- Paid in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE, DATE OF INCORPORATION
(JANUARY 29, 1998) $ - $ - $ - $ - $ -
NET LOSS FOR THE PERIOD ENDED,
JULY 31, 1998 - - - (3,979) (3,979)
ISSUANCE OF COMMON STOCK 100 66 - - 66
ADDITIONAL PAID IN CAPITAL - - 9,564 - 9,564
---------- ---------- ---------- ---------- ----------
BALANCE, JULY 31, 1998 100 66 9,564 (3,979) 5,651
NET LOSS FOR THE PERIOD ENDED
- -----------------------------
OCTOBER 31, 1998 - - - (84,321) (84,321)
ISSUANCE OF COMMON STOCK 20 13 - - 13
ADDITIONAL PAID IN CAPITAL - - 87,778 - 87,778
---------- ---------- ---------- ---------- ----------
BALANCE, OCTOBER 31, 1998
(unaudited) 120 $ 79 $ 97,342 $ (88,300) $ 9,121
========== ========== ========== ========== ==========
20
<PAGE>
FOREST GLADE PROPERTIES INC.
STATEMENTS OF CASH FLOW
(in United States dollars)
===========================================================================
for the period ended OCTOBER 31 July 31
1998 1997
(3 MONTHS) (6 months)
(UNAUDITED)
- ---------------------------------------------------------------------------
NET INFLOW (OUTFLOW) OF CASH:
OPERATING ACTIVITIES
Net loss $ (84,321) $ (3,979)
Adjustment to reconcile net loss
to net cash used in operating activities
Depreciation 13 26
Loss on termination of trailer park
acquisition 69,985 -
Change in assets and liabilities
(Decrease) increase in accounts
payable and accrued liabilities (8,202) 10,824
---------- ----------
Net cash (used in) provided by operating
activities (22,525) 6,871
---------- ----------
FINANCING ACTIVITIES
Issuance of share capital 13 66
Additional capital contribution from
shareholders 87,778 9,564
---------- ----------
Net cash provided by financing activities 87,791 9,630
---------- ----------
INVESTING ACTIVITIES
Deposit and costs incurred on terminated
trailer park acquisition (56,757) (13,228)
Purchase of fixed asset - (257)
---------- ----------
Net cash used in investing activities (56,757) (13,485)
---------- ----------
INCREASE IN CASH FOR THE PERIOD 8,509 3,016
CASH POSITION, BEGINNING OF PERIOD 3,016 -
---------- ----------
CASH POSITION, END OF PERIOD $ 11,525 $ 3,016
========== ==========
See accompanying notes
21
<PAGE>
FOREST GLADE PROPERTIES INC.
NOTES TO THE FINANCIAL STATEMENTS
July 31, 1998
(Information as of October 31, 1998 and for the three month period then
ended is unaudited.)
(in United States dollars)
===========================================================================
1. DESCRIPTION OF BUSINESS
Forest Glade Properties Inc. (formerly 558539 B.C. Ltd.) is a private
company incorporated under the British Columbia Company Act and will
operate mobile home parks in British Columbia and Alberta, Canada.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
---------------------
The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States.
Reporting currency
------------------
The company's functional currency is the Canadian dollar as
substantially all of the company's operations are in Canada. The
company uses the United States dollar as its reporting currency for
consistency with other registrants of the Securities and Exchange
Commission ("SEC"). Additionally, as the company is now a subsidiary
of a U.S. company in the process of registering its securities with
the SEC (Note 7), the U.S. dollar is the appropriate reporting
currency.
Canadian dollar accounts in these financial statements are translated
into U.S. dollars on the following basis:
Monetary assets and liabilities - at the rate of exchange
prevailing at period end
Non-monetary assets - at the rates of exchange prevailing when
the assets were acquired
Sales and expenses - at rates approximating the rates of exchange
prevailing on the dates of the transactions
Exchange gains have not been disclosed separately in these statements
since they are immaterial.
Fixed asset
-----------
Fixed asset is recorded at cost and is depreciated using the
diminishing-balance method at 20% per annum.
22
<PAGE>
Interim Financial Statements
----------------------------
The financial information as at October 31, 1998 and with respect to
the three months then ended is unaudited. In the opinion of
management, it contains all adjustments consisting of normal recurring
accruals, necessary for the fair presentation of the results of that
period. The information is not necessarily indicative of the results
of operations expected for the fiscal year end.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the amounts reported in the
financial statements and related notes to the financial statements.
Actual results may differ from those estimates.
Financial Instruments
---------------------
The following assumptions were used to estimate the fair value of each
class of financial instruments:
For cash, accounts payable and accrued liabilities the carrying
amounts approximate fair value due to the immediate or short-term
maturity of these financial instruments.
Income taxes
------------
The Company follows the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes",
which requires the Company to recognize deferred tax liabilities and
assets for the expected future tax consequences of events that have
been recognized in the Company's financial statements or tax returns
using the liability method. Under this method, deferred tax
liabilities and assets are determined based on the temporary
differences between the financial statement and tax bases of assets
and liabilities using enacted tax rates in effect in the years in
which the differences are expected to reverse.
Loss per share
--------------
Loss per share is computed using the weighted average number of shares
outstanding during the period on a pro-forma basis after giving effect
to the reverse acquisition in Note 7. Effective for the period ended
July 31, 1998, the Company adopted SFAS No. 128, "Earnings Per Share".
New accounting pronouncements
-----------------------------
In June 1997, the Financial Accounting Standards Board issued SFAS No.
131 "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS 131") which supersedes SFAS No. 14, Financial
Reporting for Segments of a Business Enterprise. SFAS 131 establishes
standards for the way that public companies report
23
<PAGE>
information about operating segments in annual financial statements
and requires reporting of selected information about operating
segments in interim financial statements issued to the public. It
also establishes standards for disclosures regarding products and
services, geographic areas and major customers. SFAS 131 defines
operating segments as components of a company about which separate
financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources
and in assessing performance.
3. TERMINATION OF TRAILER PARK ACQUISITION
The Company paid a non-refundable deposit and incurred certain costs
in connection with the potential acquisition of a mobile home park in
Alberta, Canada. Subsequent to October 31, 1998, the Company has
abandoned the acquisition and thus the deposit and all amounts
previously deferred have been written off.
4. FIXED ASSET
OCTOBER 31, July 31,
1 9 9 8 1 9 9 8
ACCUMULATED NET BOOK Net Book
COST DEPRECIATION VALUE Value
--------------------------------- ---------
Office equipment $ 257 $ 39 $ 218 $ 231
======== ======== ======== ========
5. CAPITAL STOCK
Further information with respect to capital stock is as follows:
Authorized
10,000 Class A voting common shares without par value
10,000 Class B voting common shares without par value
10,000 Class C voting common shares without par value
10,000 Class D non-voting common shares without par value
10,000 Class E non-voting common shares without par value
10,000 Class F non-voting common shares without par value
Issued
120 Class A voting common shares
(100 shares - July 31, 1998) $ 79 $ 66
======== ========
On August 11, 1998, 20 Class A voting common shares were issued in a
private placement for $13 cash.
6. INCOME TAXES
The company has a loss for tax purposes in the amount of $3,333 which
is available to reduce future taxable income. This loss expires on
July 31, 2005. A valuation allowance has been made in the financial
statements for the potential benefit arising from this item.
24
<PAGE>
The company evaluates its valuation allowance requirements on an
annual basis based on projected future operations. When circumstances
change and this causes a change in management's judgement about the
realizability of deferred tax assets, the impact of the change on the
valuation allowance is generally reflected in current income. No
provision has been made in the financial statements for the tax loss
for the three month period ending October 31, 1998.
The tax effects of the temporary differences that give rise to the
company's deferred tax asset are as follows:
July 31, 1998
Tax loss carry forwards $ 1,500
Valuation allowance (1,500)
----------
$ -
==========
7. SUBSEQUENT EVENTS
(a) On September 30, 1998, the company's shareholders entered into a
share exchange agreement, which closed on November 17, 1998, with
Forest Glade International Inc. ("International"), a Nevada
company incorporated in August 1998, in the process of
registering securities with the SEC. The agreement will result
in the company becoming a wholly-owned subsidiary of
International. At the date of acquisition, the net assets of
International were $Nil. The capital structure of International
prior to completion of the share exchange is as follows:
Authorized
200,000,000 common shares, par value $0.001
Issued
10,000,000 common shares
The share exchange resulted in the exchange of 7.7 million common
shares of International for 100% of the issued shares of the
company. It is expected that the transaction will be accounted
for as a reverse acquisition. Accordingly, future financial
statements will be accounted for as a continuation of the
company. Pro-forma loss per share has been computed as if the
share exchange occurred on January 29, 1998.
b) On August 12, 1998 the company entered into an agreement for the
purchase of a mobile home park in British Columbia from a company
50% controlled by a shareholder of the company for $1,500,000 CDN
($992,129 USD) based on the value established by an independent
appraisal. Acquisition of this park will be financed by a first
mortgage in the amount of $750,000 CAD at 13.5% interest with
monthly payments of principal and interest of $8,535 CAD. The
property is pledged as security for the loan. The balance of the
purchase price is to be financed by way of the
25
<PAGE>
seller taking 200,000 common shares in International at $2.50 per
share. This purchase (to be accounted for using the purchase
method) and share transfer closed on December 31, 1998.
8. COMPARATIVE FIGURES
Certain of July 31, 1998's comparative figure have been reclassified
to conform to the current year's presentation.
26
<PAGE>
BRUCE F. JAMIESON INC. #407 - 325 HOWE STREET
CERTIFIED GENERAL ACCOUNTANT VANCOUVER, B.C. V6C 1Z7
Telephone: (604) 684-3354
Fax: (604) 684-3499
AUDITOR'S REPORT
To the Directors of
514592 B.C. Ltd.
- -------------------
I have audited the balance sheet of 514592 B.C. Ltd. as at April 30, 1998,
the statement of loss and deficit, and the statement of changes in
financial position for the year then ended. These financial statements are
the responsibility of the company's management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards in Canada. Those standards require that I plan and perform an
audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.
In my opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at April 30, 1998 and
the results of its operations and the changes in its financial position for
the year then ended in accordance with generally accepted accounting
principles in Canada.
"Bruce F. Jamieson"
CERTIFIED GENERAL ACCOUNTANT
Vancouver, Canada
October 30, 1998
27
<PAGE>
514592 B.C. LTD.
BALANCE SHEETS
OCTOBER 31, 1998
(With comparative audited figures as at April 30, 1998)
(In Canadian Dollars)
(UNAUDITED)
(Prepared by Management)
October 31, April 30,
1998 1998
(Unaudited)
-----------------------------
ASSETS
------
Current Assets
Cash $ 9,463 $ 21,025
Prepaid expenses 1,648 -
-----------------------------
11,111 21,025
Capital Assets (Note 4) 900,647 925,917
-----------------------------
$ 911,758 $ 946,942
=============================
LIABILITIES
-----------
Current Liabilities
Accounts payable and accrued liabilities $ 7,109 $ 10,599
Bank loan (Note 5) 20,000 20,000
Deferred revenue and security deposits 2,797 4,350
Current portion of long-term debt 32,670 31,680
-----------------------------
62,576 66,629
Long-term Debt (Note 6) 648,884 661,318
Shareholders' Loans (Note 7) 300,000 300,000
-----------------------------
1,011,460 1,027,947
-----------------------------
SHAREHOLDERS' EQUITY (DEFICIENCY)
---------------------------------
Share Capital (Note 8) 1 1
Deficit (99,703) (81,006)
-----------------------------
(99,702) (81,005)
-----------------------------
$ 911,758 $ 946,942
=============================
Capital Assets Sales Agreement (Note 3)
Approved on behalf of the Board:
"Annette Schattenkirk" "Orv Schattenkirk"
- ------------------------------------ -------------------
Director Director
The accompanying notes are an integral part of these
financial statements.
28
<PAGE>
514592 B.C. LTD.
STATEMENTS OF LOSS AND DEFICIT
FOR THE SIX MONTHS ENDED OCTOBER 31, 1998
(With comparative unaudited figures for the six months ended October 31,
1997, audited figures for the year ended April 30, 1998 and unaudited
figures for the year ended April 30, 1997)
(In Canadian Dollars)
(UNAUDITED)
(Prepared by Management)
</TABLE>
<TABLE>
<CAPTION>
For Six For Six For Year For Year
Months Ended Months Ended Ended Ended
October 31, October 31, April 30, April 30,
1998 1997 1998 1997
(Unaudited) (Unaudited) (Unaudited
------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE:
Rental $ 87,177 $ 81,429 $ 160,291 $ 146,685
Commissions - 15,328 25,210 5,500
------------------------------------------------------
87,177 96,757 185,501 152,185
------------------------------------------------------
EXPENSES:
Amortization 25,270 27,500 55,127 28,732
Interest on long-term debt 30,135 18,270 43,196 53,244
Office & miscellaneous 4,180 5,672 13,528 14,684
Professional fees - 3,882 12,294 5,101
Property management 7,104 7,420 13,406 13,250
Property taxes 5,342 4,607 9,936 10,274
Repairs and maintenance 10,484 41,345 38,583 19,155
Travel 5,386 1,638 6,781 10,473
Utilities 17,973 17,247 36,804 34,124
-------------------------------------------------------
105,874 127,581 229,655 189,037
-------------------------------------------------------
LOSS for the Period/Year 18,697 30,824 44,154 36,852
-------------------------------------------------------
DEFICIT, Beginning of Period/Year 81,006 36,852 36,852 -
-------------------------------------------------------
DEFICIT, End of Period/Year $ 99,703 $ 67,676 $ 81,006 $ 36,852
=======================================================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
29
<PAGE>
514592 B.C. LTD.
STATEMENTS OF CHANGES IN FINANCIAL POSITION
FOR THE SIX MONTHS ENDED OCTOBER 31, 1998
(With comparative unaudited figures for the six months ended October 31,
1997, audited figures for the year ended April 30, 1998 and unaudited
figures for the year ended April 30, 1997)
(In Canadian Dollars)
(UNAUDITED)
(Prepared by Management)
<TABLE>
<CAPTION>
For Six For Six For Year For Year
Months Ended Months Ended Ended Ended
October 31, October 31, April 30, April 30,
1998 1997 1998 1997
(Unaudited) (Unaudited) (Unaudited)
------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss for the period/year $ (18,697) $ (30,824) $ (44,154) $ (36,852)
Add non-cash item:
Amortization 25,270 27,500 55,127 28,732
------------------------------------------------------
6,573 (3,324) 10,973 (8,120)
Increase in prepaid expenses (1,648) (1,536) - -
Increase (decrease) in accounts
accounts payable and
accrued liabilities (3,490) (11,066) (5,648) 16,247
Increase (decrease) in deferred
revenue and security deposits (1,553) 274 3,041 1,309
------------------------------------------------------
(118) (15,652) 8,366 9,336
------------------------------------------------------
FINANCING ACTIVITIES:
Bank Loan - - 20,000 -
Increase (decrease) in
long-term debt (11,444) (15,730) (32,344) 725,342
Shareholders' loans - - - 300,000
Issuance of common shares - - - 1
------------------------------------------------------
(11,444) (15,730) (12,344) 1,025,343
------------------------------------------------------
INVESTING ACTIVITIES:
Purchase of capital assets - (322) (4,323) (1,005,453)
------------------------------------------------------
Net change in cash during the
period/year (11,562) (31,704) (8,301) 29,326
Cash, beginning of period/year 21,025 29,326 29,326 -
------------------------------------------------------
Cash (Deficiency), end of
period/year $ 9,463 $ (2,378) $ 21,025 $ 29,326
======================================================
The accompanying notes are an integral part of these
financial statements.
30
<PAGE>
514592 B.C. LTD.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998
Information as of October 31, 1998 and for the six months ended October
31, 1998 and 1997 and for the year ended April 30, 1997 is unaudited)
(In Canadian Dollars)
1. NATURE OF BUSINESS
514592 B.C. Ltd. (the "Company") was incorporated on February 27, 1996
under the Company Act of British Columbia, Canada. The Company was
established for the purpose of operating a mobile home park in British
Columbia which was acquired on May 1, 1996. The operations of this
mobile home park constitutes substantially all of the operations of
the Company.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
These financial statements are stated in Canadian dollars and
have been prepared in conformity with accounting principles
generally accepted in Canada. These financial statements comply
with Item 17 reporting requirements of the Securities and
Exchange Commission in the United States. There are no
reconciling items between accounting principles generally
accepted in Canada and in the United States that would be
disclosed under the requirements of Item 17.
(b) Financial Information
The financial information as of October 31, 1998 and with respect
to the six months ended October 31, 1997 and 1998, and with
respect to the year ended April 30, 1997 is unaudited and
prepared by management. In the opinion of management, it
contains all adjustments consisting of normal recurring accruals,
necessary for the fair presentation of the results of such
periods. The information is not necessarily indicative of the
results of operations expected for the fiscal year end.
(c) Uncertainty Due to the Year 2000 Issue
The Year 2000 Issue arises because many computerized systems use
two digits rather than four to identify a year. Date-sensitive
systems may recognize the year 2000 as 1900 or some other date,
resulting in errors when information using year 2000 dates is
processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something
other than a date. The effects of the Year 2000 Issue may be
experienced before, on or after January 1, 2000. If the Year
2000 Issue is not addressed by the Company and its major
customers, suppliers and other third party
31
<PAGE>
business associates, the impact on the Company's operations and
financial reporting may range from minor errors to significant
systems failure which could affect the Company's ability to
conduct normal business operations. It is not possible to be
certain that all aspects of the Year 2000 Issue affecting the
Company, including those related to the efforts of customers,
suppliers, or other third parties, will be fully resolved.
(d) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Company's
management to make estimates and assumptions that affect the
amounts reported in the financial statements and related notes
to the financial statements. Actual results may differ from
those estimates.
(e) Financial Instruments
The carrying value of financial instruments, not otherwise
disclosed separately in the financial statements, approximate
their fair values. These financial instruments include cash,
prepaid expenses, and accounts payable and accrued liabilities,
bank loan and deferred revenue and security deposits and their
fair value approximates their carrying value since they are short
term in nature and are receivable or payable on demand.
3. CAPITAL ASSETS SALES AGREEMENT
On August 12, 1998, the Company entered into an Agreement whereby it
agreed to sell all of its capital assets to Forest Glade Properties
Inc. (formerly: 558539 B.C. Ltd.), a corporation related by virtue of
a common director, for a price of $1,500,000 (Cdn.) by way of
assumption or payout of the long-term debt and with the balance of the
purchase price being financed by the Company taking shares at a deemed
value of $2.50 (U.S.) per share of the shares of Forest Glade
International Inc. of Las Vegas, Nevada, a corporation with which
Forest Glade Properties Inc. has entered into a share exchange
agreement to become its subsidiary. The closing date is expected to
be November 30, 1998.
4. CAPITAL ASSETS
Capital assets are recorded at cost and are amortized using the
declining balance method at the following rates:
Building - 4%
Equipment - 20%
Pads - 8%
One half of the normal rate of amortization is applied in the year of
acquisition
October 31, 1998 (Unaudited)
-------------------------------------
Accumulated Net Book
Cost Amortization Value
-------------------------------------
Land $ 298,830 $ - $ 298,830
32
<PAGE>
Building 14,323 948 13,375
Equipment 11,123 3,915 7,208
Pads 685,500 104,266 581,234
-------------------------------------
$1,009,776 $ 109,129 $ 900,647
=====================================
April 30, 1998
-------------------------------------
Accumulated Net Book
Cost Amortization Value
-------------------------------------
Land $ 298,830 $ - $ 298,830
Building 14,323 678 13,645
Equipment 11,123 3,115 8,008
Pads 685,500 80,066 605,434
-------------------------------------
$1,009,776 $ 83,859 $ 925,917
=====================================
5. BANK LOAN
The bank loan is payable on demand and bears interest of prime rate
plus 1% (October 31, 1998 - 8%, April 30, 1998 - 7.5%).
6. LONG-TERM DEBT
The long-term debt consists of a demand loan bearing interest at prime
rate plus 1 % (October 31, 1998 - 8 % and April 30, 1998 - 7.5%) and
is secured by a General Security Agreement providing a floating charge
over all of the Company's assets a registered mortgage against company
assets, and an assignment of rents (rental income). The debt is
repayable by monthly payments of $6,800 including principal and
interest.
October
31, 1998 April
(Unaudited) 30, 1998
------------------------------
Balance $ 681,554 $ 692,998
less: current portion 32,670 31,680
------------------------------
$ 648,884 $ 661,318
==============================
Under the present terms and conditions, principal payments due in the
next five years are as follows:
April 30, 1999 $ 31,680
April 30, 2000 $ 33,890
April 30, 2001 $ 36,480
April 30, 2002 $ 39,270
April 30, 2003 $ 42,270
33
<PAGE>
7. SHAREHOLDERS' LOANS
The amount due to the shareholders is non-interest bearing, unsecured
and has no specific terms of repayment. The shareholders have
indicated that they will not request payment of this amount within the
next fiscal year. Consequently, this amount has been classified as a
non-current liability in the accompanying financial statements.
8. SHARE CAPITAL
The authorized share capital of the Company is comprised of:
1,000 Class "A" Voting common shares without par value
9,000 Class "B" Non-voting common shares without par value
Issued for cash:
100 Class "A" voting common shares $ 1
===
9. TAX LOSSES CARRY FORWARD
The Company has accumulated losses of $72,890 for income tax purposes
which may be deducted in the calculation of taxable income in future
years. The losses expire as follows:
2004 $24,453
2005 $48,437
---------
$72,890
=========
The potential tax benefit which may result from application of these
losses is not reflected in these financial statements. The
realization of this tax benefit in future years will be recorded as an
adjustment to the tax provision in the year realized.
34
<PAGE>
PART III
Item 1. Index to Exhibits
3. (i) Articles of Incorporation
(ii) By-laws
10.1 Offering Sales Agency Agreement among Forest Glade
International, Inc.. and Pacific Rim Investment Inc.
10.2 Share Purchase Agreement dated September 30, 1998
21 Subsidiaries of the Registrant
27 Financial Data Schedule
35
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
FOREST GLADE INTERNATIONAL, INC.
(Registrant)
By:
WAYNE LOFTUS
- ------------
Wayne Loftus, President, Chairman of the Board
December 1, 1998
GIL RAHIER
- ----------
Gil Rahier, Chief Financial Officer, Director
December 1, 1998
FRANK DENIS
- -----------
Frank Denis, Director
December 1, 1998
MICHAEL JENKS
- -------------
Michael Jenks, Director
December 1, 1998
STAN POLSON
- -----------
Stan Polson, Director
December 1, 1998
36
</TABLE>
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
FOREST GLADE INTERNATIONAL INC.
KNOW ALL MEN BY THESE PRESENTS:
That we the undersigned, have this day voluntarily associated ourselves
together for the purpose of forming a corporation under the laws of the
State of Nevada and do hereby certify:
ONE
The name of this corporation is FOREST GLADE INTERNATIONAL INC.
TWO
The resident agent of said corporation shall be Pacific Corporate Services
Company, 7631 Bermuda Road, Las Vegas, NV., 89123 and such other offices as
may be determined by the By-Laws in and outside the State of Nevada.
THREE
The objects to be transacted, business and pursuit and nature of the
business, promoted or carried on by this corporation are and shall continue
to be engaged in any lawfiil activity.
FOUR
The members of the governing board shall be styled Directors and the first
Board of Directors shall consist of one (1). The number of stockholders of
said corporation shall consist of one (1). The number of directors and
shareholders of this corporation may, from time to time, be increased or
decreased by an amendment to the By-Laws of this corporation in that
regard, and without the necessity of amending these Articles of
Incorporation. The name and address of the first Board of Directors and of
the Incorporator signing these Articles as follows:
STACEY MCGRILLEN
307-19533 FRASER HWY
SURREY, B.C. CANADA, V3S 6K7
FIVE
The Corporation is to have perpetual existence.
37
<PAGE>
SIX
The total authorized capitalization of this Corporation shall be and is the
sum of 200,000,000 shares of Common Stock at $0.001 par value, said stock
to carry hill voting power and tile said shares shall be issued fully paid
at such time as the Board of Directors may designate in exchange for cash,
property, or services, the stock of other corporations or other values,
rights, or things, and the judgement of the Board of Directors as to the
value thereof shall be conclusive.
SEVEN
The capital stock shall be and remain non-assessable. The private property
of the stockholders shall not be liable for the debts or liabilities of the
Corporation.
IN WITNESS WHEREOF, I have set my hand this 25th day of August, 1998.
STACEY MCGRILLEN
Province of British Columbia
Canada
On this 25th day of August, 1998 before me, a Notary Public in and for
said, Province of British Columbia, Canada. Personally appeared, Stacey
McGrillen known to me to be the person whose name is subscribed to the
foregoing instrument, and he duly acknowledged to me that he executed the
same for the purpose therein mentioned.
IN WITNESS WHEREOF, I have set my hand and offered by official seal in, The
City of Vancouver, Province of British Columbia, Canada, the day and year
in this Certificate first above written.
Notary Public
38
EXHIBIT 3.2
BYLAWS
OF
FOREST GLADE INTERNATIONAL INC.
A Nevada Corporation
ARTICLE 1
---------
Offices
SECTION 1. The registered office of this corporation shall be in
the County of Clark, State of Nevada.
SECTION 2. The corporation may also have offices at such other
places both within and without the State of Nevada as the Board of
Directors may from time to time determine or the business of the
corporation may require.
ARTICLE 2
---------
MEETINGS OF STOCKHOLDERS
SECTION 1. All annual meetings of the stockholders shall be held
at the registered office of the corporation or at such other place within
or without the State of Nevada as the Directors shall determine. Special
meetings of the stockholders may be held at such time and place within or
without the State of Nevada as shall be stated in the notice of the
meeting, or in a duly executed waiver of notice thereof.
SECTION 2. Annual meetings of the stockholders, commencing with
the year 1997 shall be held on the 1ST of September, each year if not a
legal holiday and, if a legal holiday, then on the next secular day
following, or at such other time as may be set by the Board of Directors
from time to time, at which the stockholders shall elect by vote a Board of
Directors and transact such other business as may properly be brought
before the meeting.
SECTION 3. Special meetings of the stockholders, for any purpose
or purposes, unless otherwise prescribed by statute or by the Articles of
Incorporation, may be called by the President or the Secretary by
resolution of the Board of Directors or at the request in writing of
stockholders owning a majority in amount of the entire capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state the purpose of the proposed meeting.
SECTION 4. Notices of meetings shall be in writing and signed by
the President or Vice-President or the Secretary or an Assistant Secretary
or by such other person or persons as the Directors shall designate. Such
notice shall state the purpose or purposes for which the meeting is called
and the time and the place, which may be within or without this State,
where it is to be held. A copy of such notice shall be either delivered
personally to or shall be mailed, postage prepaid, to each stockholder of
record entitled to vote at such meeting not less than ten nor more than
sixty days before such meeting. If mailed, it shall be directed to a
stockholder at his address as it appears upon the records of the
corporation and upon such mailing of any such notice, the service thereof
shall be complete and the time of the notice shall begin to run from the
date upon which such notice is deposited in the mail for transmission to
such stockholder. Personal delivery of any such notice to any officer of a
corporation or association, or to any member of a partnership shall
constitute delivery of such notice to such corporation, association or
partnership. In the event of the
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39
<PAGE>
transfer of stock after delivery of such notice of and prior to the holding
of the meeting it shall not be necessary to deliver or mail notice of the
meeting to the transferee.
SECTION 5. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
SECTION 6. The holders of a 10% of the stock issued and
outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for
the transaction of business except as otherwise provided by statute or by
the Articles of Incorporation. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote there at, present in person or represented by proxy, shall
have power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present
or represented, any business may be transacted which might have been
transacted at the meeting as originally notified. The Company may have
more than one shareholder.
SECTION 7. When a quorum is present or represented at any meeting,
the vote of the holders of a 10% of the stock having voting power present
in person or represented by proxy shall be sufficient to elect directors or
to decide any question brought before such meeting, unless the question is
one upon which by express provision of the statutes or of the Articles of
Incorporation, a different vote shall govern and control the decision of
such question.
SECTION 8. Each stockholder of record of the corporation shall be
entitled at each meeting of stockholders to one vote for each share of
stock standing in his name of the books of the corporation. Upon the demand
of any stockholder, the vote for Directors and the vote upon any question
before the meeting shall be by ballot.
SECTION 9. At any meeting of the stockholders any stockholder may
be represented and vote by a proxy or proxies appointed by an instrument in
writing. In the event that any such instrument in writing shall designate
two or more persons to act as proxies, a majority of such persons present
at the meeting, or, if only one shall be present, then that one shall have
and may exercise all of the powers conferred by such written instrument
upon all of the persons so designated unless the instrument shall otherwise
provide. No proxy or power of attorney to vote shall be used to vote at a
meeting of the stockholders unless it shall have been filed with the
secretary of the meeting when required by the inspectors of election. All
questions regarding the qualifications of voters, the validity of proxies
and the acceptance of or rejection of votes shall be decided by the
inspectors of election who shall be appointed by the Board of Directors, or
if not so appointed, then by the presiding officer of the meeting.
SECTION 10. Any action which may be taken by the vote of the
stockholders at a meeting may be taken without a meeting if authorised by
the written consent of stockholders holding at least a majority of the
voting power, unless the provisions of the statutes or of the Articles of
Incorporation require a greater proportion of voting power to authorise
such action in which case such greater proportion of written consents shall
be required.
ARTICLE 3
---------
DIRECTORS
SECTION 1. The business of the corporation shall be managed by
it's Board of Directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or
by the Articles of Incorporation or by these Bylaws directed or required to
be exercised or done by the stockholders.
2
40
<PAGE>
SECTION 2. The number of Directors which shall constitute the
whole board shall be One. The number of Directors may from time to time be
increased or decreased to not less than one nor more than fifteen by action
of the Board of Directors. The Directors shall be elected at the annual
meeting of the stockholders and except as provided in section 2 of this
Article, each Director elected shall hold office until his successor is
elected and qualified. Directors need not be stockholders.
SECTION 3. Vacancies in the Board of Directors including those
caused by an increase in the number of directors, may be filled by a
majority of the remaining Directors, though less than a quorum, or by a
sole remaining Director, and each Director so elected shall hold office
until his successor is elected at an annual or a special meeting of the
stockholders. The holders of a two-thirds of the outstanding shares of
stock entitled to vote may at any time peremptorily terminate the term of
office of all or any of the Directors by vote at a meeting called for such
purpose or by a written statement filed with the secretary or, in his
absence, with any other officer. Such removal shall be effective
immediately, even if successors are not elected simultaneously and the
vacancies on the Board of Directors resulting therefrom shall only be
filled from the stockholders.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in case of the death, resignation or removal of any Directors, or if
the authorised number of Directors be increased, or if the stockholders
fail at any annual or special meeting of stockholders at which any Director
or Directors are elected to elect the full authorised number of Directors
to be voted for at that meeting.
The stockholders may elect a Director or Directors at any time to fill
any vacancy or vacancies not filled by the Directors. If the Board of
Directors accepts the resignation of a Director tendered to take effect at
a future time, the Board or the stockholders shall have power to elect a
successor to take office when the resignation is to become effective.
No reduction of the authorised number of Directors shall have the
effect of removing any Director prior to the expiration of his term of
office.
ARTICLE 4
---------
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 1. Regular meetings of the Board of Directors shall be
held at any place within or without the State which has been designated
from time to time by resolution of the Board or by written consent of all
members of the Board. In the absence of such designation regular meeting
shall be held at the registered office of the corporation. Special meetings
of the Board may be held either at a place so designated or at the
registered office.
SECTION 2. The first meeting of each newly elected Board of
Directors shall be held immediately following the adjournment of the
meeting of stockholders and at the place thereof. No notice of such meeting
shall be necessary to the directors in order legally to constitute the
meeting, provided a quorum be present. In the event such meeting is not so
held, the meeting may be held at such time and place as shall be specified
in a notice given hereinafter provided for special meetings of the Board of
Directors.
SECTION 3. Regular meetings of the Board of Directors may be held
without call or notice at such time and at such place as shall from time to
time be fixed and determined by the Board of Directors.
SECTION 4. Special meetings of the Board of Directors may be
called by the Chairman or the President or by the Vice-President or by any
two directors.
3
41
<PAGE>
Written notice of the time and place of special meetings shall be
delivered personally to each director, or sent to each director by mail or
by other form of written communication, charges prepaid, addressed to him
at his address as it is shown upon the records or if not readily
ascertainable, at the place in which the meetings of the directors are
regularly held. In case such notice is mailed or telegraphed, it shall be
deposited in the United States mail or delivered to the telegraph company
at least forty-eight (48) hours prior to the time of the holding of the
meeting. In case such notice is delivered as above provided, it shall be so
delivered at least twenty-four (24) hours prior to the time of the holding
of the meeting. Such mailing, telegraphing or delivery as above provided
shall be due, legal and personal notice to such director.
SECTION 5. Notice of the time and place of holding an adjourned
meeting need not be given to the absent directors if the time and place be
fixed at the meeting adjourned.
SECTION 6. The transaction of any meeting of the Board of
Directors, however called and noticed or wherever held, shall be as valid
as though had at a meeting duly held after regular call and notice, if a
quorum be present, and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice, or a consent to
holding such meeting, or approvals of the minutes thereof. All such
waivers, consents or approvals shall be filed with the corporate records or
made a part of the minutes of the meeting.
SECTION 7. A majority of the authorised number of directors shall
be necessary to constitute a quorum for the transaction of business, except
to adjourn as hereinafter provided. Every act or decision done or made by
a majority of the directors present at a meeting duly held at which a
quorum is present shall be regarded as the act of the Board of Directors,
unless a greater number be required by law or by the Articles of
Incorporation. Any action of a majority, although not at a regularly called
meeting, and the record thereof, if assented to in writing by all of the
other members of the Board shall be as valid and effective in all respects
as if passed by the Board in regular meeting.
SECTION 8. A quorum of the directors may adjourn any directors
meeting to meet again at stated day and hour; provided, however, that in
the absence of a quorum, a majority of the directors present at any
directors meeting, either regular or special, may adjourn from time to time
until the time fixed for the next regular meeting of the Board.
ARTICLE 5
---------
COMMITTEES OF DIRECTORS
SECTION 1. The Board of Directors may, by resolution adopted by a
majority of the whole Board, designate one or more committees of the Board
of Directors, each committee to consist of two or more of the directors of
the corporation which, to the extent provided in the resolution, shall and
may exercise the power of the Board of Directors in the management of the
business and affairs of the corporation and may have power to authorise the
seal of the corporation to be affixed to all papers which may require it.
Such committee or committees shall have such name or names as may be
determined from time to time by the Board of Directors. The members of any
such committee present at any meeting and not disqualified from voting may,
whether or not they constitute a quorum, unanimously appoint another member
of the Board of Directors to act at the meeting in the place of any absent
or disqualified member. At meetings of such committees, a majority of the
members or alternate members at any meeting at which there is a quorum
shall be the act of the committee.
SECTION 2. The committee shall keep regular minutes of their
proceedings and report the same to the Board of Directors.
4
42
<PAGE>
SECTION 3. Any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all members of
the Board of Directors or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
ARTICLE 6
---------
COMPENSATION OF DIRECTORS
SECTION 1. The directors may be paid their expenses of attendance
at each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like reimbursement
and compensation for attending committee meetings.
ARTICLE 7
---------
NOTICES
SECTION 1. Notices to directors and stockholders shall be in
writing and delivered personally or mailed to the directors or stockholders
at their addresses appearing on the books of the corporation. Notice by
mail shall be deemed to be given at the time when the same shall be mailed.
Notice to directors may also be given by telegram.
SECTION 2. Whenever all parties entitled to vote at any meeting,
whether of directors or stockholders, consent, either by a writing on the
records of the meeting or filed with the secretary, or by presence at such
meeting and oral consent entered on the minutes, or by taking part in the
deliberations at such meeting without objection, the doings of such meeting
shall be as valid as if had at a meeting regularly called and noticed, and
at such meeting any business may be transacted which is not excepted from
the written consent to the consideration of which no object for want of
notice is made at the time, and if any meeting be irregular for want of
notice or of such consent, provided a quorum was present at such meeting,
the proceedings of said meeting may be ratified and approved and rendered
likewise valid and the irregularity or defect therein waived by a writing
signed by all parties having the right to vote at such meeting; and such
consent or approval of stockholders may be by proxy or attorney, but all
such proxies and powers of attorney must be in writing.
SECTION 3. Whenever any notice whatever is required to be given
under the provisions of the statutes, of the Articles of Incorporation or
of these Bylaws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
ARTICLE 8
---------
OFFICERS
SECTION 1. The officers of the corporation shall be chosen by the
Board of Directors and shall be a President, a Secretary and a Treasurer.
Any person may hold two or more officers.
5
43
<PAGE>
SECTION 2. The Board of Directors at it's first meeting after each
annual meeting of stockholders shall choose a Chairman of the Board who
shall be a director, and shall choose a President, a Secretary and a
Treasurer, none of whom need be directors.
SECTION 3. The Board of Directors may appoint a Vice-Chairman of
the Board, Vice-Presidents and one or more Assistant Secretaries and
Assistant Treasurers and such other officers and agents as it shall deem
necessary who shall hold their offices for such terms and shall exercise
such powers and perform such duties as shall be determined from time to
time by the Board of Directors.
SECTION 4. The salaries and compensation of all officers of the
corporation shall be fixed by the Board of Directors.
SECTION 5. The officers of the corporation shall hold office at
the pleasure of the Board of Directors. Any officer elected or appointed by
the Board of Directors may be removed any time by the Board of Directors.
Any vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise shall be filled by the Board of
Directors.
SECTION 6. The CHAIRMAN OF THE BOARD shall, preside at meetings of
the stockholders and the Board of Directors, and shall see that all orders
and resolutions of the Board of Directors are carried into effect.
SECTION 7. The VICE-CHAIRMAN shall, in the absence or disability
of the Chairman of the Board, perform the duties and exercise the powers of
the Chairman of the Board and shall perform other such duties as the Board
of Directors may from time to time prescribe.
SECTION 8. The PRESIDENT shall be the chief executive officer of
the corporation and shall have active management of the business of the
corporation. He shall execute on behalf of the corporation all instruments
requiring such execution except to the extent the signing and execution
thereof shall be expressly designated by the Board of Directors to some
other officer or agent of the corporation.
SECTION 9. The VICE-PRESIDENT shall act under the direction of the
President and in the absence or disability of the President shall perform
the duties and exercise the powers of the President. They shall perform
such other duties and have such other powers as the President or the Board
of Directors may from time to time prescribe. The Board of Directors may
designate one or more Executive Vice-Presidents or may otherwise specify
the order of seniority of the Vice-Presidents. The duties and powers of the
President shall descend to the Vice-Presidents in such specified order of
seniority.
SECTION 10. The SECRETARY shall act under the direction of the
President. Subject to the direction of the President he shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record the proceedings. He shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of
all meetings of the stockholders and special meetings of the Board of
Directors, and will perform other such duties as may be prescribed by the
President or the Board of Directors.
SECTION 11. The ASSISTANT SECRETARIES shall act under the direction
of the President. In order of their seniority, unless otherwise determined
by the President or the Board of Directors, they shall, in the absence or
disability of the Secretary, perform the duties and exercise the powers of
the Secretary. They shall perform other such duties and have such other
powers as the President or the Board of Directors may from time to time
prescribe.
SECTION 12. The TREASURER shall act under the direction of the
President. Subject to the direction of the President he shall have custody
of the corporate funds and securities and shall keep full and
6
44
<PAGE>
accurate accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all monies and other valuable effects in the
name and to the credit of the corporation in such depositories as may be
designated by the Board of Directors. He shall disburse the funds of the
corporation as may be ordered by the President or the Board of Directors,
taking proper vouchers for such disbursements, and shall render to the
President and the Board of Directors, at it's regular meetings, or when the
Board of Directors so requires, an account of all his transactions as
Treasurer and of the financial condition of the corporation.
SECTION 13. If required by the Board of Directors, he shall give
the corporation a bond in such sum and with such surety as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of
his death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the corporation.
SECTION 14. The ASSISTANT TREASURER in the order of their
seniority, unless other wise determined by the President or the Board of
Directors, shall, in the absence or disability of the Treasurer, perform
the duties and exercise the powers of the Treasurer. They shall perform
such other duties and have such other powers as the President or the Board
of Directors may from time to time prescribe.
ARTICLE 9
---------
CERTIFICATES OF STOCK
SECTION 1. Every stockholder shall be entitled to have a
certificate signed by the President or a Vice-President and the Treasurer
or an Assistant Treasurer, or the Secretary or an Assistant Secretary of
the corporation, certifying the number of shares owned by him in the
corporation. If the corporation shall be authorised to issue more than one
class of stock or more than one series of any class, the designations,
preferences and relative, participating, optional or other special rights
of the various classes of stock or series thereof and the qualifications,
limitations or restrictions of such rights, shall be set forth in full or
summarised on the face or back of the certificate which the corporation
shall issue to represent such stock.
SECTION 2. If a certificate is signed (a) by a transfer agent
other than the corporation or it's employees or (b) by a registrar other
than the corporation or it's employees, the signatures of the officers of
the corporation may be facsimiles. In case any officer who has signed or
whose facsimile signature has been placed upon a certificate shall cease to
be such officer before such certificate is issued, such certificate may be
issued with the same effect as though the person had not ceased to be such
officer. The seal of the corporation, or a facsimile thereof, may, but need
not be, affixed to certificates of stock.
SECTION 3. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or
destroyed upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When authorising
such issue of a new certificate or certificates, the Board of Directors
may, in it's discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such
manner as it shall require and/or give the corporation a bond in such sum
as it may direct as indemnity against any claim that may be made against
the corporation with respect to the certificate alleged to have been lost
or destroyed.
SECTION 4. Upon surrender to the corporation or the transfer agent
of the corporation of a certificate for shares duly endorsed or accompanied
by proper evidence of succession, assignment or authority to transfer, it
shall be the duty of the corporation, if it is satisfied that all
provisions of the laws and
7
45
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regulations applicable to the corporation regarding transfer and ownership
of shares have been complied with, to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction
upon it's books.
SECTION 5. The Board of Directors may fix in advance a date not
exceeding sixty (60) days nor less than ten (10) days preceding the date of
any meeting of stockholders, or the date for the payment of any dividend,
or the date for the allotment of rights, or the date when any change or
conversion or exchange of capital stock shall go into effect, or a date in
connection with obtaining the consent of stockholders for any purpose, as
a record date for the termination of the stockholders entitled to notice of
and to vote at any such meeting, and any adjournment thereof, or entitled
to receive payment of any such dividend, or to give such consent, and in
such case, such stockholders, and only such stockholders as shall be
stockholders of record on the date so fixed, shall be entitled to notice of
and to vote at such meeting, or any adjournment thereof, or to receive such
payment of dividend, or to receive such allotment of rights, or to exercise
such rights, or to give such consent, as the case may be, notwithstanding
any transfer of any stock on the books of the corporation after any such
record date fixed as aforesaid.
SECTION 6. The corporation shall be entitled to recognise the
person registered on it's books as the owner of shares to be the exclusive
owner for all purposes including voting and dividends, and the corporation
shall not be bound to recognise any equitable or other claim to or interest
in such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by
the laws of Nevada.
ARTICLE 10
----------
GENERAL PROVISIONS
SECTION 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the Articles of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property or in shares of
the capital stock, subject to the provisions of the Articles of
Incorporation.
SECTION 2. Before payment of any dividend, there may be set aside
out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for
equalising dividends or for repairing or maintaining any property of the
corporation or for such other purpose as the directors shall think
conducive to the interest of the corporation, and the directors may modify
or abolish any such reserve in the manner in which it was created.
SECTION 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time
designate.
SECTION 4. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.
SECTION 5. The corporation may or may not have a corporate seal,
as may be from time to time be determined by resolution of the Board of
Directors. If a corporate seal is adopted, it shall have inscribed thereon
the name of the corporation and the words "Corporate Seal" and "Nevada".
The seal may be used by causing it or a facsimile thereof to be impressed
or affixed or in any manner reproduced.
8
46
<PAGE>
ARTICLE 11
----------
INDEMNIFICATION
Every person who was or is a party or is a threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or
a person of whom he is the legal representative is or was a director or
officer of the corporation or is or was serving at the request of the
corporation or for it's benefit as a director or officer of another
corporation, or as its representative in a partnership, joint venture,
trust or other enterprise, shall be indemnified and held harmless to the
fullest extent legally permissible under General Corporation Law of the
State of Nevada time to time against all expenses, liability and loss
(including attorney's fees, judgements, fines and amounts paid or to be
paid in settlement) reasonably incurred or suffered by him in connection
therewith. The expenses of officers and directors incurred in defending a
civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of
the action, suit or proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to
be indemnified by the corporation. Such right of indemnification shall be
a contract right which may be enforced in any manner desired by such
person. Such right of indemnification shall not be exclusive of any other
right which such directors, officers or representatives may have or
hereafter acquire and, without limiting the generality of such statement,
they shall be entitled to their respective rights of indemnification under
any bylaw, agreement, vote of stockholders, provision of law or otherwise,
as well as their rights under this Article.
The Board of Directors may cause the corporation to purchase and
maintain insurance on behalf of any person who is or was a director or
officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, or as it's
representative in a partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred in any such
capacity or arising out of such status, whether or not the corporation
would have the power to indemnify such person.
The Board of Directors may from time to time adopt further Bylaws with
respect to indemnification and amend these and such Bylaws to provide at
all times the fullest indemnification permitted by the General Corporation
Law of the State of Nevada.
ARTICLE 12
----------
AMENDMENTS
SECTION 1. The Bylaws may be amended by a majority vote of all the
stock issued and outstanding and entitled to vote at any annual or special
meeting of the stockholders, provided notice of intention to amend shall
have been contained in the notice of the meeting.
SECTION 2. The Board of Directors by a majority vote of the whole
Board at any meeting may amend these Bylaws, including Bylaws adopted by
the stockholders, but the stockholders may from time to time specify
particular provisions of the Bylaws which shall not be amended by the Board
of Directors.
APPROVED AND ADOPTED THIS 1ST DAY OF SEPTEMBER, 1998.
9
47
EXHIBIT 10.1
FOREST GLADE INTERNATIONAL INC.
OFFERING SALES AGENCY AGREEMENT
This Agreement is made by and between FOREST GLADE INTERNATIONAL INC. a
Nevada Corporation ("the Company") and Pacific Rim Investments, Inc., a
Corporation organised under the laws of the Republic of Vanuatu (the "Sales
Agent") concerning an offering of Shares of the Company's Common Stock to
be conducted by the Sales Agent (the "Shares" and the "Offering").
The Parties Agree as follows:
1. ENGAGEMENT AS SALES AGENT. Pacific Rim Investments, Inc., is hereby
engaged by the Company as a Sales Agent for the Offering to sell up to
10,000,000 Common Shares at a price to the Purchasers thereof of $0.01 U.S.
per Share. The Sales Agent's engagement shall be on a "best efforts"
"continuous offering" basis. This Agreement shall terminate when all of the
Shares to be offered pursuant to this Agreement are sold unless terminated
earlier pursuant to this Agreement. The Sales Agent will promptly deliver
funds by noon of the third business day following it's receipt into an
account of the Company, and all payments will be made by wire transfer of
funds to the Company. Promptly upon execution of this Agreement, the
Company shall cause such certificates representing 10,000,000 Shares of
Common Stock to be issued in the name of the Sales Agent. Such certificates
shall be free of any restrictive legend as to it's transferability.
However, the Company's Transfer Agent shall prohibit the transfer of Shares
except as certified by the Sales Agent and the Company of the sale of the
Shares pursuant to this Offering and as set forth in Paragraph below.
2. COMPLIANCE WTTH SECURITIES LAWS. The Company and the Sales Agent have
and will comply with all necessary or desirable statutory or regulatory
requirements in the United States of America ("United States"), the
Republic of Vanuatu and each state or nation in which the securities may be
offered or sold in connection with the Offering. The Sales Agent will not
act without having received all such consents or approvals of governmental
or other agencies, persons or institutions which may be reasonably
considered necessary or desirable in connection with the Offering and such
consents or approvals having been received in terms acceptable to the
Company and the
48
<PAGE>
Sales Agent and being in full force and effect. The Company and the Sales
Agent agree that the Offering shall be conducted in the Republic of Vanuatu
and that the Sales Agent shall provide a legal opinion acceptable to the
Company as to compliance with all relevant laws of the Republic of Vanuatu.
3. MATERIAL INFORMATION AND OFFERING MATERIALS. The Company
has provided the Sales Agent with all material information regarding the
Company, it's operations, management, principal owners, financial condition
and business plans. Upon request of the Sales Agent, the Company shall
prepare an Offering Memorandum which fully and fairly describes the
Company, the securities and terms of the Offering in compliance with the
requirements of Regulation D of the United States Securities and Exchange
Commission (the "Memorandum"). The Company will prepare and deliver to the
Sales Agent as many copies of the Memorandum as the Sales Agent may
reasonably require. The Sales Agent shall not prepare or use a Memorandum
or other sales material without the prior review and written consent of the
Company.
4. SALES COMMISSION. The Sales Agent shall be paid a sales commission of
10% of the sales price per Share for each Share sold by the Sales Agent in
the Offering. The commission shall be deducted from the proceeds of the
Sale of the Shares deposited from time to time by the Sales Agent with the
Company and accompanied by an accounting of the sales and commissions
deducted therefrom.
5. DUE DILIGENCE COOPERATION. The Company agrees that all documents and
other information relating to the Company's affairs have been and will be
made available upon request to the Sales Agent at the Sales Agents office
and copies of any such documents will be furnished upon request to the
Sales Agent. Included within the documents which must be made available as
soon as possible to the extent not already in the possession of the Sales
Agent are at least the Company's Articles of Incorporation and all
amendments thereto, the Company's By-Laws and all amendments thereto,
Minutes of all the Company's Incorporates, Directors and Shareholders
Meetings, all financial statements of the Company, and correct copies of
any material contracts or agreements to which the Company is a party.
6. SALES & BENEFICIAL OWNERSHIP RECORDS. Within 30 days of the
49
<PAGE>
completion or termination of the Offering, the Sales Agent shall provide
the Company with an accurate account of all sales made in the Offering.
Such account shall indicate the name and address of each individual
purchaser, the number of Shares purchased and whether the certificate or
certificates evidencing the Shares purchased are to be issued to the
purchasers in joint tenancy or otherwise. In the event the purchaser is
reasonably believed to be subject to U.S. income taxation, the Sales Agent
shall also provide the purchaser's social security number or taxation ID
number of the Purchaser. In the event, that Purchasers do not elect to
receive individual certificates for Shares purchased, the Sales Agent shall
continue to hold the certificates for the Shares as the Record Owner on
behalf of the Beneficial Owner(s) who are such Purchaser(s) as have elected
for the Sales Agent to hold the Shares. The Sales agent shall promptly
notify the Company of changes to the Beneficial Owners for whom it serves
as record owner and shall indemnity and hold harmless the Company and its
Transfer Agent from all liability arising from its holding Shares on behalf
of the Purchasers thereof.
7. COMPANY'S EXPENSES. The Company agrees that it will bear all costs and
expenses incident to the issuance, offer, sale and delivery of the Shares,
including all expenses, fees and legal council fees of qualification under
securities laws, the fees and disbursements of legal counsel and
accountants for the Company, the cost of preparing and printing sales
material or Memorandum and related exhibits, including all amendments and
supplements to the Memorandum, the cost of printing as many Memorandums as
the Sales Agent reasonably may deem necessary, and the expenses incurred by
Company representatives in attending a reasonable number of "due diligence"
meetings (which shall include all expenses of presentations reasonably
specified by the Sales Agent) with the Sales Agents representatives and any
other expenses customarily paid by an issuer.
8. SALES AGENT EXPENSES. The Sales Agent shall pay its own expenses
including all mailing, telephone, travel and clerical costs and all other
office costs incurred or to be incurred by the Sales Agent or by it's sales
personnel in connection with the Offering as well as all fees and expenses
of any legal counsel whom it may employ to represent it in connection with
the Offering.
50
<PAGE>
9. RIGHT OF INSPECTION. For a period of five years after the date of this
Agreement, the Sales Agent will have the right, at the Sales Agent's
expense, to have a person or persons selected by the Sales Agent, review
the books and records of the Company, provided that the Sales Agent may
cause such review no more than once in any twelve (12) month period.
10. FINDER. The Company and the Sales Agent represent to each other that no
person has acted as a finder in connection with this Agreement and each
will indemnify the other party with respect to any claim for finders fees
in connection herewith.
11. INDEMNIFICATION. The Parties agree to indemnify, defend, and hold each
other and each person, if any, who controls the Company or the Sales Agent,
free and harmless from and against any and all losses, claims, demands,
liabilities, and expenses (including reasonable legal or other expenses
incurred in connection with defending or investigating any such claims or
liabilities, whether or not resulting in any liability to the Party or
controlling person(s) which the Party or controlling person(s) may incur
under the United States law, U.S. State Securities Laws, common law or
Vanuatu law or otherwise, but only to the extent that such liabilities
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact (or omission of a material fact necessary to
make the statements not misleading) contained in any document prepared
pursuant to this Agreement; provided, however, that this indemnity
agreement shall not apply to statements or omissions made in reliance upon
information furnished by either Party, in writing, expressly in use for any
document prepared pursuant to this Agreement. The foregoing indemnity shall
not be deemed to protect Party or controlling person(s) to which either
Party would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of their duties, or by reason
of their reckless disregard of their obligations and duties under this
Agreement; and such indemnity shall further not apply to any violations,
statements or omissions made in reliance upon written information furnished
to either Party expressly for use in any documents prepared pursuant to
this Agreement. Each Party and their controlling person(s) agree to give
the other Party and their controlling person(s) an opportunity to
participate in the defense or preparation of the defense of any action
brought to enforce any such claim or liability for which the Parties have
agreed to indemnity and defend, and each Party shall have the right so to
participate. Th agreement of each Party under the foregoing indemnity is
expressly conditioned upon notice of any such
51
<PAGE>
action having been sent by the Party or controlling person(s), as the case
may be, to the other Party, promptly after the commencement of such action
against either Party or controlling person(s), such notice either being
accompanied by copies of papers served or filed in connection with such
action or by a statement of the nature of the action to the extent known to
the Party. Failure to notify the other Party within a reasonable amount of
time of any such action shall relieve the other Party of it's respective
liabilities under the foregoing indemnity, but failure to notify the other
Patty shall not relieve it from any liability which it may have to the
other Party or controlling person(s) other than on account of this
indemnity provision. Neither Party shall be liable for amounts paid in
settlement of any such claim if such settlement was effected without its
prior notification. The provisions of this paragraph shall not in any way
prejudice any right or rights which either Party may have against the other
Party under any Federal or State securities law, at common law or
otherwise.
12. NOTICE OF LEGAL PROCEEDINGS. It is agreed that the Company and the
Sales Agent will each advise the other patty immediately and confirm in
writing the receipt of any threat of or the initiation of any steps or
procedures which would impair or prevent the right to offer the Shares or
the issuance of any orders or other prohibitions, preventing or impairing
the proposed offering, by the SEC or any other regulatory authority. In the
case of the happening of any such event, neither the Company nor the Sales
Agent will acquiesce in such steps, procedures or suspension orders and
each party agrees to actively defend any such actions or orders unless both
parties agree in writing to the acquiescence in such actions or orders.
13. CANCELLATION. If for any reason the Company or the Sales Agent decides
in their sole discretion not to proceed with the Offering, such party shall
provide written notice of such termination to the other party. The Company
nor the Sales Agent shall have any liability to the other if either decides
not to proceed with the Offering for any reason whatsoever.
14. NOTICES. All notices hereunder shall be in writing and be delivered or
mailed, certified mail with return receipt requested, to the following
addresses, or be by telegram sent to the following addresses with written
confirmation thereafter forwarded:
52
<PAGE>
To the Company: President
FOREST GLADE INTERNATIONAL INC.
P.O. BOX 285 CANIM LAKE,
B.C. CANADA VOK 1J0
To the Sales Agent:
Pacific Rim Investments, Inc.
2nd Floor, Pilioko House,
Rue Emile Mercet, Box # 782,
Port Vila, Vanuatu, South Pacific.
15. INDEPENDENT STATUS OF PARTIES. Nothing in this Agreement shall render
either Party a general partner of the other. Nor shall either Party be a
general agent for the other, nor any agency authority be deemed given to
the other Party except as expressly set forth in this Agreement or by
subsequent written authorization of either Party.
16. DISPUTE RESOLUTION. Any dispute or controversy arising out of or
relating to this Agreement, or any breach of this Agreement shall be
settled by negotiated and good faith use of dispute resolution alternatives
prior to litigation. Any Party who fails to proceed in good faith with
alternative dispute resolution as determined by a Court with jurisdiction
or by the competent Finder of Fact in Arbitration shall be liable to the
non-breaching Party for the cost of defending the claim in dispute
regardless of the outcome of said dispute resolution.
17. ENTIRE AGREEMENT. This Agreement contains the entire Agreement among
the parties which may not be amended nor may any rights hereunder be waived
except by an instrument in writing signed by the party sought to be charged
with such amendment or waiver.
18. GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed by, the laws of Nevada.
19. BINDING EFFECT. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective personal representatives
and assigns, except as above set forth.
20. COUNTERPART SIGNATURES. This Agreement may be executed in any number of
counterparts of the signature page, each of which shall be considered an
original. In addition, a signature transmitted by fax identifying the
source thereof shall be considered an original signature.
53
<PAGE>
EXECUTED BY THE PARTIES AS SET FORTH BELOW AS OF THIS 1ST, DAY OF
SEPTEMBER, 1998.
Forest Glade International, Inc. Pacific Rim Investments, Inc.
By: ____________________________ By: _____________________________
54
EXHIBIT 10.2
SHARE PURCHASE AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 30th day of September, 1998.
BETWEEN:
Wayne Loftus, Frank Denis, Mike Jenks, Stan Polson and Gil Rahier
c/o #370 - 444 Victoria Street
Prince George, B.C. CANADA
(hereinafter referred to as the "Vendors")
OF THE FIRST PART
AND:
Forest Glade International Inc., a corporation incorporated
pursuant to the laws of the State of Nevada with its records
office at 7631 Bermuda Road, Las Vegas, Nevada, U.S.A., 89123
(hereinafter referred to as the "Purchaser")
OF THE SECOND PART
AND:
Forest Glade Properties Inc., a corporation incorporated pursuant
to the laws of the Province of British Columbia with its
principal office at 444 Victoria Street, Suite 370, Prince
George, B.C., CANADA
(hereinafter referred to as "Forest Glade")
OF THE THIRD PART
WHEREAS:
A. The Vendors are the owners of all the outstanding shares in Forest
Glade.
B. The Purchaser has agreed with the Vendors to purchase all 120 Class A
shares in Forest Glade in exchange for shares in the Purchaser.
THIS AGREEMENT WITNESSETH that in consideration of the covenants,
agreement, warranties and payments herein set out and provided for, the
parties hereby respectively covenant and agree as follows:
1. PURCHASED SHARES
Subject to the terms and conditions hereof, the Vendors covenant and
agree to sell, assign, and transfer to the Purchaser, and the
Purchaser covenants and agrees to purchase from the Vendors all (and
not less than all) of the issued and outstanding shares in the capital
stock of Forest Glade (the "Purchased Shares") for the purchase price
(the "Purchase Price") payable as set out in Article 2 hereof.
55
<PAGE>
-2-
2. PURCHASE PRICE
(1) The Purchase Price shall be 7,700,000 Class A Common voting
shares of the Purchaser at $0.01 U.S. per share.
(2) The Purchase Price shall be transferred to the Vendors at the
Closing.
(3) The Closing of this transaction shall take place on November 17,
1998 (the "Closing Date").
3. REPRESENTATIONS AND WARRANTIES OF THE VENDORS
The Vendors covenant, represent and warrant as follows:
(1) As of the date hereof, and as of the Closing Date, and the
Vendors acknowledge that the Purchaser is relying upon such
covenants, representations and warranties in connection with the
purchase by the Purchaser of the Purchased Shares.
(2) The number of shares in Forest Glade that have been duly issued
for valuable consideration are 120 Class A.
(3) (a) The shareholders of record are as follows:
Wayne Loftus 20; Frank Denis 40; Mike Jenks 20; Stan Polson
20; and Gil Rahier 20 = 120 Class A
(b) The shareholders of the Purchaser after the exchange of 120
Class A shares are as follows:
Wayne Loftus - 1,283,333; Frank Denis - 2,566,668; Mike
Jenks - 1,283,333; Stan Polson - 1,283,333; Gil Rahier -
1,283,333 = 7,700,000
(4) No person, firm or corporation has any agreement or option or any
right (whether by law, pre-emptive or contractual and including
convertible securities, warrants or convertible obligations of
any nature) for the purchase or the issue of either the Purchased
Shares or any unissued shares in the capital stock of Forest
Glade.
(5) The entering into of this agreement and the transactions
contemplated hereby will not result in the violation of any of
the terms and provisions of the constating documents or by-laws
of the Vendors or of any indenture or other agreement, written or
oral, to which the Vendors may be a party.
(6) This agreement has been duly executed and delivered by the
Vendors and is a valid and binding obligation of the Vendors
enforceable in accordance with its terms.
(7) The Vendors are non-resident within the meaning of the
International Revenue Code of the United States.
56
<PAGE>
-3-
(8) To the Vendor's knowledge, there are no existing or threatened
legal actions or claims against Forest Glade.
(9) The audited financial statements of Forest Glade dated September
30, 1998, a copy of which is attached hereto as "Schedule A",
fairly represent the financial position of Forest Glade as at the
dates indicated.
6. COVENANTS OF THE VENDORS
The Vendors covenant and agree that on or before the Closing Date, it
will do, or will cause to be done, all necessary steps and proceedings
to permit all of the Purchased Shares to be duly and regularly
transferred to the Purchaser.
7. COVENANTS OF THE PURCHASER
The Purchaser covenants and agrees that on or before the Closing Date,
it will do, or will cause to be done, all necessary steps and
proceedings to permit all of the shares of the Purchaser being given
to the Vendors to be duly and regularly transferred to the Vendors.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Vendors and Purchaser
contained in this agreement, and contained in any document or
certificate given pursuant hereto, shall survive the closing of the
purchase and sale of the Purchased Shares herein provided for, for a
period of two years from the Closing Date.
9. ENTIRE AGREEMENT
This agreement constitutes the entire agreement between the parties
hereto. There are not, and shall not be, any verbal statements,
representations, warranties, undertakings or agreements between the
parties hereto, and this agreement may not be amended or modified in
any respect except by written instrument signed by the parties hereto.
10. PROPER LAW OF CONTACT
This agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the State
of Nevada.
11. BENEFIT AND BINDING NATURE OF THE AGREEMENT
This agreement shall enure to the benefit of, and be binding upon, the
parties hereto and their respective successors and assigns.
57
<PAGE>
-4-
FOREST GLADE INTERNATIONAL, INC. FOREST GLADE PROPERTIES, INC.
/s/WAYNE LOFTUS /s/WAYNE LOFTUS
/s/MIKE JENKS /s/FRANK DENIS
/s/GIL RAHIER /s/STAN POLSON
58
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
------------------------------
Forest Glade Properties, Inc.
59
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> JUL-31-1999 JUL-31-1998
<PERIOD-START> AUG-01-1998 JAN-29-1998
<PERIOD-END> OCT-31-1998 JUL-31-1998
<CASH> 11,525 3,016
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 11,525 3,016
<PP&E> 257 257
<DEPRECIATION> 39 26
<TOTAL-ASSETS> 11,743 16,475
<CURRENT-LIABILITIES> 2,622 10,824
<BONDS> 0 0
0 0
0 0
<COMMON> 79 66
<OTHER-SE> 9,042 5,585
<TOTAL-LIABILITY-AND-EQUITY> 11,743 16,475
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 14,336 3,979
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 69,985 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (84,321) (3,979)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (84,321) (3,979)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (84,321) (3,979)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
