SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: August 30, 1999
FOREST GLADE INTERNATIONAL, INC.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 52-212-549
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer
Identification
No.)
444 Victoria Street, Suite 370 Prince George, B.C., CANADA V2L 2J7
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(250) 564-6868
-----------------
(Registrant's telephone number, including area code)
<PAGE>
Item 1. Changes in Control
==========================
On July 23, 1999, the Company entered into an agreement with SSA Coupon Limited
(SSA) whereby SSA agreed to issue the Company shares of its common stock equal
to 20% of the outstanding common stock of SSA. SSA is a British Columbia
corporation, formed in September 1998. The Company further agreed to raise
$1,250,000 US as a joint venture partner of SSA to be contributed in weekly
installments of $40,000. The July 23, 1999 Agreement also requires that a
royalty of 7% will be paid to the SSA Majority Shareholders on gross revenue
received by the Company through the use of SSA Intellectual Property or
technology. As of November 15, 1999, the Company has provided SSA with $650,000
pursuant to this Agreement.
On August 30, 1999, the Company entered into an Agreement on Principal Terms
with Maurice Simpson, William Murray and Dana Shaw (the SSA Majority
Shareholders) to acquire their shares representing 80% of the outstanding common
stock of SSA in exchange for 19,000,000 shares of the Company's restricted
common stock. The Share Exchange Agreement was executed on September 29, 1999
and closed on November 3, 1999.
Security Ownership of Certain Beneficial Owners and Management
- --------------------------------------------------------------
The following information gives effect to the issuance of the 19,000,000 to the
SSA Majority Shareholders upon closing of the Share Exchange Agreement.
(a) Security Ownership of Certain Beneficial Owners holding five percent
or greater of the 36,900,000 shares of common stock outstanding as of
date of Closing of the Share Exchange Agreement.
Title of Name and Address Amount and Nature % of
Class of Beneficial Owner of Beneficial Ownership Class
- --------------------------------------------------------------------------------
Common Maurice Simpson 13,300,000 36.0%
c/o4920 - 800 W. Pender St.
Vancouver, BC V6C 2V6
William Murray 2,850,000 7.7%
c/o Metro Town Law Office
1230B - 4700 Kingsway
Burnaby, BC V5H 4M1
Dana Shaw 2,850,000 7.7%
5260 - 6th Av.
Delta, BC V4M 1L5
<PAGE>
(b) Security Ownership of Management
Title of Name and Address(1) Amount and Nature % of
Class of Beneficial Owner of Beneficial Ownership Class
- --------------------------------------------------------------------------------
Common Wayne E. Loftus 1,583,333 4.3%
Frank Denis 2,866,668 7.8%
Michael Jenks 1,583,333 4.3%
Gil Rahier 1,683,333 4.6%
All officers and Directors
as a Group (5 persons) 7,716,667 21.0%
(1) 444 Victoria Street, Suite 370, Prince George, B.C. CANADA V2L 2J7
Item 2. Acquisition or Disposition of Assets
============================================
Upon closing of the Share Exchange Agreement, the Company will own 100% of the
common stock of SSA. SSA has developed an internet search engine called
"Web-Retriever" which has the capability to produce search results relative to a
user determined location. Other planned features are NET PET, a personalized
internet application which will store the user's selected web pages, start page
settings so that the user can log on to the Web-Retriever website from any
computer or location and have their personalized internet information available
thus free this type of information from the user's primary location.
Web-Retriever will also provide email, stock quotes and classified advertisement
listings.
The Web-Retriever.com search engine is currently in the alpha stage of
development. SSA is presently seeking to acquire and or license several
components and is working on increasing its server capacities, network security
and database compilation. SSA intends to release a limited function version for
testing and use by the public within the next thirty to ninety days. The release
of this limited function version will be through the SSA website at
"www.web-retriever.com" where a demo version and more information regarding SSA
is available.
Item 7. Financial Statements and Exhibits.
==========================================
(a) Audited Financial Statements of SSA Coupon Limited.
(b) Pro Forma Financial Information giving effect to the acquisition.
(c) Exhibits
10.5 Agreement on Principal Terms dated August 30, 1999
(Previously filed on August 30, 1999)
10.6 Agreement on Principal Terms dated July 23, 1999
(Previously filed on August 30, 1999)
<PAGE>
Audited Financial Statements of SSA Coupon Limited.
SSA Coupon Ltd.
(A Development Stage Company)
Financial Statements
July 31, 1999
(Expressed in US Dollars)
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Table of Contents
Auditors' Report
Comments by Auditors for U.S. Readers On Canada-U.S. Reporting Differences
Financial Statements
Balance Sheet
Statement of Changes in Stockholders' Equity
Statement of Operations
Statement of Cash Flows
Summary of Significant Accounting Policies
Notes to the Financial Statements
<PAGE>
Auditors' Report
To the Directors and Stockholders of
SSA Coupon Ltd.
(A Development Stage Company)
We have audited the Balance Sheet of SSA Coupon Ltd. (a development stage
company) as at July 31, 1999 and the Statements of Changes in Stockholders'
Equity, Operations and Cash Flows for the period from September 24, 1998
(incorporation) to July 31, 1999. 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 auditing standards generally accepted
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, 1999 and the
results of its operations and its cash flows for the period from September 24,
1998 (incorporation) to July 31, 1999 in accordance with accounting principles
generally accepted in the United States.
"BDO Dunwoody LLP"
Vancouver, Canada
December 3, 1999 Chartered Accountants
2
<PAGE>
Comments by Auditors for U.S. Readers
On Canada-U.S. Reporting Differences
To the Directors and Stockholders of
SSA Coupon Ltd.
(A Development Stage Company)
In the United States, reporting standards for auditors require the addition of
an explanatory paragraph (following the opinion paragraph) when the financial
statements are affected by conditions and events that cast substantial doubt on
the Company's ability to continue as a going concern, such as those described in
Note 1 to the financial statements. Our report to the stockholders dated
December 3, 1999 is expressed in accordance with Canadian reporting standards
which do not permit a reference to such events and conditions in the auditors'
report when these are adequately disclosed in the financial statements.
"BDO Dunwoody LLP"
Vancouver, Canada
December 3, 1999 Chartered Accountants
3
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Balance Sheet
(Expressed in US Dollars)
July 31 1999
- ------------------------------------------------------------------
Assets
Current
Cash $ 49,725
Prepaid expenses and deposits 4,174
-----------
53,899
Fixed assets 3,448
-----------
$ 57,347
===========
Liabilities and Stockholders' Equity (Deficit)
Liabilities
Current
Accounts payable and accrued liabilities (Note 3) $ 117,635
-----------
Stockholders' equity (deficit)
Share capital
Authorized
10,000 Common shares, no par value
Issued
10,000 Common shares 66
Additional paid-in capital (Note 2) 175,000
Deficit accumulated during the development stage (235,354)
-----------
(60,288)
-----------
$ 57,347
===========
The accompanying summary of significant accounting policies and notes form an
integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
SSA Coupon Ltd.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
(Expressed in US Dollars)
Deficit
Accumulated Total
Additional During the Stockholders'
Common Stock Paid-in Development Equity
Shares Amount Capital Stage (Deficit)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Initial capital contributions on September
24, 1998 at C$0.01 per share 10,000 $ 66 $ - $ - $ 66
Capital contributions by Forest Glade
International Inc. during the period
(Note 2)
- - 175,000 - 175,000
Net loss for the period - - - (235,354) (235,354)
--------- -------- --------- ----------- -----------
Balance, July 31, 1999 10,000 $ 66 $ 175,000 $ (235,354) $ (60,288)
========= ======== ========= =========== ===========
</TABLE>
The accompanying summary of significant accounting policies and notes form an
integral part of these financial statements.
5
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Statement of Operations
(Expressed in US Dollars)
Period from
September 24
1998 (incorporation)
to July 31
1999
- ----------------------------------------------------------------------
General and administrative expenses
Research and development $ 39,900
Management fees and business development 79,800
Incorporation costs 840
---------------
120,540
Write-down of advances (Note 4) 114,814
---------------
Net loss for the period $ 235,354
===============
The accompanying summary of significant accounting policies and notes form an
integral part of these financial statements.
6
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Statement of Cash Flows
(Expressed in US Dollars)
Period from
September 24
1998
(incorporation)
to July 31
1999
- -------------------------------------------------------------------------------
Cash provided by (used in)
Operating activities
Net loss for the period $ (235,354)
Increase in prepaid expenses and deposits (4,174)
Increase in accounts payable and accrued liabilities 117,635
--------------
(121,893)
--------------
Financing activities
Issuance of common stock 66
Additional capital contributions 175,000
--------------
175,066
--------------
Investing activities
Purchase of fixed assets (3,448)
--------------
Increase in cash for the period and cash, end of period $ 49,725
==============
The accompanying summary of significant accounting policies and notes form an
integral part of these financial statements.
7
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Summary of Significant Accounting Policies
(Expressed in US Dollars)
July 31, 1999
Basis of Presentation
- ---------------------
These financial statements are expressed in US dollars and are prepared in
accordance with accounting principles generally accepted in the United States.
The Company has selected July 31 as its fiscal year end.
Fixed Assets
- ------------
Fixed assets, consisting of computer equipment acquired in July 1999, are
carried at cost less accumulated depreciation (1999 - $Nil). Computers are
depreciated using the straight-line method over their estimated useful life of
three years.
Software Development Costs
- --------------------------
The Company has adopted Statement of Position ("SOP") 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use". Accordingly,
direct internal and external costs associated with the development of the
features, content and functionality of the Company's internet software, incurred
during the application development stage, will be capitalized and amortized over
the estimated useful life of three years once development is complete.
During the period from September 24, 1998 to July 31, 1999, the Company carried
out procedures in the preliminary project stage including the research and
evaluation of ideas and determination of an implementation plan as well as
certain activities relating to application software development. Capitalization,
however, has not occurred for periods prior to the agreement with Forest Glade
International Inc. as the Company previously lacked financing available to
complete the project.
Financial Instruments
- ---------------------
The Company's financial instruments consist of cash, receivables and accounts
payable and accrued liabilities. Unless otherwise noted, it is management's
opinion that the Company is not exposed to significant interest, currency or
credit risks arising from these financial instruments. The fair values of these
financial instruments approximate their carrying values, unless otherwise noted,
since they are short-term in nature or they are receivable or payable on demand.
8
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Summary of Significant Accounting Policies - Continued
(Expressed in US Dollars)
July 31, 1999
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 carrying amounts and tax bases of assets and liabilities
using enacted rates in effect in the years in which the differences are expected
to reverse.
Foreign Currency Translation
- ----------------------------
The Company's functional currency is the Canadian dollar as all of the Company's
operations are in Canada. The Company uses the US dollar as its reporting
currency for consistency with Forest Glade International Inc., the Company's
parent subsequent to November 3, 1999 (Note 3(b)).
Transactions undertaken in currencies other than the US dollar are translated to
US dollars using the exchange rate in effect as of the transaction date. Assets
and liabilities denominated in foreign currencies are then translated to US
dollars using the period end rate. Translation adjustments (1999 - $Nil) are
included in Stockholders' Equity.
Use of Estimates ---------------- The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from management's best
estimates as additional information becomes available.
9
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Summary of Significant Accounting Policies - Continued
(Expressed in US Dollars)
July 31, 1999
New Accounting Pronouncements
- -----------------------------
In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", was issued. SFAS No. 133 requires companies to recognize all
derivatives contracts as either assets or liabilities on the balance sheet and
to measure them at fair value. If certain conditions are met, a derivative may
be specifically designated as a hedge, the objective of which is to match the
timing of gain or loss recognition on the hedging derivative with the
recognition of (i) the changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk or (ii) the earnings effect
of the hedged forecasted transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized in income in the period of
change. SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000.
Historically, the Company has not entered into derivatives contracts either to
hedge existing risks or for speculative purposes. Accordingly, the Company does
not expect adoption of the new standards on August 1, 2000 to affect its
financial statements.
In April 1998, the American Institute of Certified Public Accountants issued SOP
98-5, "Reporting on the Costs of Start-Up Activities" which provides guidance on
the financial reporting of start-up costs and organization costs. It requires
costs of start-up activities and organization costs to be expensed as incurred.
The Company adopted SOP 98-5 effective upon its incorporation.
10
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Notes to the Financial Statements
(Expressed in US Dollars)
July 31, 1999
1. Nature of Business and Continued Operations
- ------------------------------------------------
The Company was incorporated in the province of British Columbia, Canada on
September 24, 1998 and is engaged in the development of an internet website
which will serve as an internet portal site to provide users with access to
various search engine and other internet features.
These accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. As at July 31,
1999, the Company has recognized no revenue and has accumulated operating losses
of $235,354 since its incorporation. The continuation of the Company is
dependent upon the continuing financial support of creditors and stockholders
and obtaining long-term financing as well as achieving a profitable level of
operations. Management plans to raise equity capital to finance the operations
and capital requirements of the Company. Management of Forest Glade intends to
raise new equity financing of approximately $3 to $5 million within the upcoming
year. Amounts raised will be used to continue development of the Company's
website, to provide financing for the marketing and promotion of its site, to
secure products and for other working capital purposes including operational
hardware and software upgrades. While the Company is expending its best efforts
to achieve the above plans, there is no assurance that any such activity will
generate funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. These financial statements do not include any adjustments
that might arise from this uncertainty.
2. Capital Contributions and Reverse Acquisition
- ---------------------------------------------------
On July 23, 1999, the Company entered into an agreement with Forest Glade to
allow Forest Glade to purchase 20% of the Company's common stock. As
consideration, Forest Glade paid $25 and agreed to contribute capital totaling
$1.25 million for working capital use to be contributed in weekly increments of
$40,000. To July 31, 1999, advances totaling $175,000 had been made by Forest
Glade. Subsequent to July 31, 1999, an additional $465,000 was contributed to
the Company.
11
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Notes to the Financial Statements
(Expressed in US Dollars)
2. Capital Contributions - Continued
- ------------------------------------
To issue Forest Glade 2,500 shares of common stock pursuant to this agreement,
the Company amended its Memorandum on September 30, 1999 to increase its
authorized capital to 15,000 shares of common stock without par value. The stock
was issued to Forest Glade on September 30, 1999.
On November 3, 1999, the founding stockholders of the Company exchanged their
shares in the Company for 19 million shares of Forest Glade International Inc.,
("Forest Glade") a Nevada company whose shares are publicly traded in the United
States. Forest Glade operates a mobile home park in British Columbia, Canada.
Upon closing this acquisition, the transaction will be accounted for using the
purchase method of accounting as a reverse acquisition. Following reverse
acquisition accounting, consolidated financial statements subsequent to the
closing of the acquisition will be presented as a continuation of the Company.
The operations of Forest Glade will be consolidated with those of the Company
from the date of acquisition. The fair value of the net assets of Forest Glade
at July 31, 1999 was as follows:
Current assets $ 11,392
Property and equipment and
other long-term assets 1,207,757
-------------
1,219,149
Current liabilities (135,132)
Deferred income taxes (155,598)
Long-term debt (939,445)
-------------
$ (11,026)
=============
12
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Notes to the Financial Statements
(Expressed in US Dollars)
3. Commitments and Subsequent Events
- ------------------------------------
a) During the period, the Company entered into contracts with its three
stockholders for consulting services each at approximately $4,000 per month
for a period of five years expiring in September 2003, renewable for
successive two-year terms. Should the Company terminate these agreements,
additional termination fees aggregating to approximately $2 million would
be due to the three stockholders. The monthly fee of $4,000 remains until
the first period that the Company has quarterly earnings in excess of
approximately $167,000. Once quarterly earnings exceed $167,000, monthly
payments to the stockholders increase in accordance with specific earnings
benchmarks up to a maximum of approximately $29,000 per month for quarterly
earnings in excess of approximately $4 million.
Accounts payable and accrued liabilities include $117,048 owed to the three
stockholders pursuant to these agreements. Amounts owing are unsecured and
non-interest bearing. Consulting fees on the Statement of Operations
consist of fees charged under these contracts.
b) Pursuant to the share exchange agreement (Note 2) whereby Forest Glade
acquired the remaining common stock of the Company it did not already own,
Forest Glade agreed to pay, or cause the Company to pay the original three
stockholders a royalty aggregating 7% (payable quarterly) of the gross
revenues of every kind and nature received by Forest Glade or the Company
arising directly or indirectly from its intellectual property. Revenue from
intellectual property includes licensing, use, and sale of banner
advertising, access fees, service fees and from any other exploitation of
the Company's technology.
c) On August 1, 1999, the Company entered into a lease agreement for office
premises in Delta, British Columbia until expiry on July 31, 2000 (with a
three-year renewal option). The minimum annual lease payments of the
Company are approximately $18,000 plus its proportionate share of operating
costs.
d) On October 29, 1999 the Company signed an agreement with a vendor to
acquire use of the vendor's proprietary data for a one-year term renewable
in additional one-year terms. The Company is obligated to pay a license fee
to the vendor in the amount of $75,000 per annum, payable quarterly.
13
<PAGE>
SSA Coupon Ltd.
(A Development Stage Company)
Notes to the Financial Statements
(Expressed in US Dollars)
4. Contingent Liability
- -----------------------
The Company, along with its three founding stockholders, is the defendant in an
action filed in the Supreme Court of British Columbia in October 1999 by a
former consultant to the Company. The action claims breach of contract and seeks
unspecified damages. The Company believes that the action has no merit and
intends to vigorously defend the action. On November 17, 1999, the Company
commenced an action against the consultant seeking compensation for $235,000
allegedly misappropriated by the consultant as well as general damages.
Amounts advanced by Forest Glade to July 31, 1999 to the consultant and not
received by the Company totaling $114,814 were written off in the period.
Management does not expect that the outcome of these legal proceedings could
have a material adverse effect on the Company's financial condition, results of
operations or cash flows. The outcomes of these actions are indeterminable.
Accordingly, any further losses or recoveries will be recorded in the period
they become probable and quantifiable.
5. Income Taxes
- ----------------
The tax effects of temporary differences that give rise to the Company's
deferred tax asset are as follows:
1999
- --------------------------------------------
Tax loss carryforwards $ 106,000
Valuation allowance (106,000)
-------------
$ -
=============
The Company evaluates its valuation allowance requirements based on projected
future operations. When circumstances change and this causes a change in
management's judgement about the recoverability of deferred tax assets, the
impact of the change on the valuation allowance is reflected in current income.
At July 31, 1999, the Company had losses available for income tax purposes of
approximately $235,000 which will expire in 2005.
14
<PAGE>
Pro Forma Financial Information giving effect to the acquisition.
Forest Glade International Inc.
Pro-Forma Consolidated Financial Statements
For the period from September 24, 1998
(incorporation) to July 31, 1999
(Expressed in US Dollars)
(Unaudited)
Unaudited Pro-Forma Consolidated Financial Information
The Unaudited Pro-Forma Consolidated Financial Information reflects financial
information that gives effect to the acquisition of the remaining 80% of the
outstanding common shares of SSA Coupon Ltd. ("SSA") not already owned by the
Company. Consideration for the acquisition was 19 million shares of common stock
of the Company. The statements are based on accounting for the business
combination as a reverse acquisition, whereby the Company will be the surviving
corporate entity, but SSA is the accounting acquirer. As SSA is the accounting
acquirer in a transaction accounted for as a purchase in accordance with
generally accepted accounting principles, the purchase price has been allocated
to the Company's assets and liabilities based on preliminary estimates of their
respective fair values. At July 31, 1999, liabilities of the Company exceeded
assets and the resulting net liability position (excluding the liability to the
Company of its investment in SSA at July 31, 1999) of $11,026 is recorded as a
reduction of additional paid-in capital.
The Pro-Forma Consolidated Statements included herein reflect the use of the
purchase method of accounting for the above transaction as applicable to reverse
acquisitions. Such financial information has been prepared from, and should be
read in conjunction with, the historical financial statements and notes thereto
included elsewhere in the Company's 10-KSB Annual Report and in this 8-K Current
Report.
The Pro-Forma Consolidated Statement of Operations gives effect to the
transaction as if it had occurred at September 24, 1998, the incorporation date
of SSA, combining the results of the Company for the year ended July 31, 1999
and SSA for the period from September 24, 1998 to July 31, 1999. The Pro-forma
Consolidated Balance Sheet was prepared as if the above acquisition occurred on
July 31, 1999.
The Pro-Forma Consolidated Financial Information is unaudited and is not
necessarily indicative of the consolidated results which actually would have
occurred if the above transactions had been consummated at the beginning of the
periods presented; nor does it purport to present the results of operations for
future periods.
<PAGE>
Forest Glade International Inc.
Table of Contents
Pro-Forma Consolidated Balance Sheet
Pro-Forma Consolidated Statement of Operations
Notes to the Pro-Forma Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Forest Glade International Inc.
Pro-Forma Consolidated Balance Sheet
(Expressed in US Dollars)
(Unaudited)
July 31, 1999
Forest Glade
International SSA Pro-forma
Inc. Coupon Ltd. Adjustments Balance
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Current
Cash $ 6,630 $ 49,725 $ - $ 56,355
Prepaid expenses and deposits 4,762 4,174 - 8,936
-------------- ----------- -------------- ------------
11,392 53,899 - 65,291
Restricted cash 248,738 - - 248,738
Property and equipment 959,019 3,448 - 962,467
-------------- ----------- -------------- ------------
$ 1,219,149 $ 57,347 $ - $ 1,276,496
============== =========== ============== ============
Liabilities and Stockholders' Equity (Deficit)
Liabilities
Current
Accounts payable and accrued liabilities $ 81,178 $ 117,635 $ - $ 198,813
Liability on investment in SSA Coupon Ltd. 60,288 - (60,288) 1 -
Security deposits 2,225 - - 2,225
Due to directors 29,842 - - 29,842
Current portion of long-term debt 21,887 - - 21,887
-------------- ----------- -------------- ------------
195,420 117,635 (60,288) 252,767
Long-term debt 939,445 - - 939,445
Deferred income taxes 155,598 - - 155,598
-------------- ----------- -------------- ------------
1,290,463 117,635 (60,288) 1,347,810
-------------- ----------- -------------- ------------
Stockholders' equity (deficit)
Capital stock
Authorized
200,000,000 Common shares, par value
$0.001
Issued
17,900,000 (pro-forma - 36,900,000)
Common shares 17,900 66 18,934 1 36,900
Additional paid-in capital 435,524 175,000 (483,384) 1 127,140
Accumulated deficit (527,868) (235,354) 527,868 1 (235,354)
Accumulated other comprehensive income -
foreign currency translation gains 3,130 - (3,130) 1 -
-------------- ----------- -------------- ------------
(71,314) (60,288) 60,288 (71,314)
-------------- ----------- -------------- ------------
$ 1,219,149 $ 57,347 $ - $ 1,276,496
============== =========== ============== ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Forest Glade International Inc.
Pro-Forma Consolidated Statement of Operations
(Expressed in US Dollars)
(Unaudited)
For the period from September 24, 1998
(incorporation) to July 31, 1999
Forest Glade
International SSA Coupon Pro-forma
Inc. Ltd. Adjustments Balance
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue - rentals $ 88,410 $ - $ - $ 88,410
-------------- ----------- -------------- ------------
Expenses
Bank charges 1,020 - - 1,020
Consulting fees 61,960 119,700 - 181,660
Depreciation 36,392 - - 36,392
Office and miscellaneous 27,681 840 - 28,521
Professional fees 88,522 - - 88,522
Property management 11,589 - - 11,589
Property taxes and utilities 29,695 - - 29,695
Repairs and maintenance 7,567 - - 7,567
Travel and promotion 16,835 - - 16,835
-------------- ----------- -------------- ------------
281,261 120,540 - 401,801
============== =========== ============== ============
(192,851) (120,540) - (313,391)
Loss on investment and advances (235,288) (114,814) 235,288 1 (114,814)
Interest on long-term debts (25,910) - - (25,910)
Loss on termination of trailer park
acquisition (78,503) - - (78,503)
-------------- ----------- -------------- ------------
Loss before income taxes (532,552) (235,354) 235,288 (532,618)
Income tax recovery - deferred 8,663 - - 8,663
-------------- ----------- -------------- ------------
Net loss for the period $ (523,889) $ (235,354) $ 235,288 $ (523,955)
============== =========== ============== ============
Basic and diluted loss per share $ (0.03) $ (0.01)
============== ============
Weighted average shares outstanding 17,833,333 36,900,000
============== ============
</TABLE>
<PAGE>
Forest Glade International Inc.
Notes to the Pro-forma Consolidated Financial Statements
(Expressed in US Dollars)
(Unaudited)
July 31, 1999
Adjustment
To reflect the acquisition of the remaining 80% of SSA Coupon Ltd.
("SSA") in exchange for 19,000,000 shares of common stock of the Company.
The business combination is recorded using the purchase method of
accounting as applicable to reverse acquisitions as the former
stockholders of SSA control the Company immediately following the
acquisition. Following reverse acquisition accounting, consolidated
financial statements subsequent to closing are presented as a
continuation of SSA. The operations of the Company are consolidated with
those of SSA from the date of acquisition. The statements are based on
accounting for the business combination as a reverse acquisition, whereby
the Company will be the surviving corporate entity, but SSA is the
accounting acquirer. As SSA is the accounting acquirer in a transaction
accounted for as a purchase in accordance with generally accepted
accounting principles, the purchase price has been allocated to the
Company's assets and liabilities based upon preliminary estimates of
their respective fair values. The fair value of the net assets of the
Company at July 31, 1999 approximates book values. The Company's net
liability position (excluding the liability to the Company of its
investment in SSA at July 31, 1999) of $11,026 is recorded as a reduction
of additional paid-in capital.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FOREST GLADE INTERNATIONAL, INC.
Dated: December 14, 1999
/s/ WAYNE LOFTUS
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Wayne Loftus, President
