FOREST GLADE INTERNATIONAL INC, 10KSB, 1999-12-17

FOREST GLADE INTERNATIONAL INC
10KSB, 1999-12-17
OPERATORS OF NONRESIDENTIAL BUILDINGS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-KSB

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended July 31, 1999

FOREST GLADE INTERNATIONAL INC.
----------------------------------------------
(Name of Small Business Issuer 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)

SECURITIES REGISTERED UNDER SECTION 12 (b) OF THE ACT: NONE.

Title of each class Name of each exchange on which each
class is registered

SECURITIES REGISTERED UNDER SECTION 12 (g) OF THE ACT: Common Stock

Indicate by check mark whether the Company: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the Company was required to file such
reports), and (2) has been subject to such filing requirements for the past
ninety (90) days. YES ( X ) NO ( )

Check here if there is no disclosure of delinquent filers in response to Item
405 of Regulation SB is not contained in this form, and no disclosure will be
contained, to the best of the Company's knowledge, in definitive proxy of
information statements incorporated by reference in Part III of the Form 10-KSB
or any amendment to this Form 10-KSB. ( )

Issuer's operational revenues for its most recent fiscal year ending July 31,
1999 were $88,410. Issuer's Common Shares outstanding at November 12, 1999 was
36,900,000. The aggregate market value based on the voting stock held by
non-affiliates as of November 9, 1999 was $11,303,500 (based on 10,183,333
shares and on an average of low bid and high asked prices of $1.11).

Except for the historical information contained herein, the matters set forth in
this Form 10-KSB are forward looking statements within the meaning of the "Safe
Harbor" provision of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risk and uncertainties that may cause
actual results to differ materially. These forward-looking statements speak only
as of the date hereof and the Company disclaims any intent or obligation to
update these forward-looking statements.

<PAGE>

DOCUMENTS INCORPORATED BY REFERENCE: Certain exhibits

ITEM 1. DESCRIPTION OF BUSINESS
===============================

(a) Business Development
- -------------------------

Forest Glade International Inc. (the Company) 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 Company acquired 100%
of the outstanding common stock of Forest Glade Properties Inc. in exchange for
7,700,000 shares of the Company's common stock. The business of the Company is
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 founders of the Company.

On December 1, 1998, the Company's wholly owned subsidiary, Forest Glade
Properties Inc., entered into an Agreement to acquire the mobile home park,
Mountain View Park located in Sparwood, British Columbia, 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. There is no relationship between
North Country Appraisals and the Company or its management and principal
shareholders. The terms of payment were the assumption of the existing mortgage
against the property with a balance of $674,716 Cdn., at the date of
acquisition, and the issuance to the Vendors of 200,000 common shares of Forest
Glade International Inc., at a deemed value of $2.73 per share for a total of
$546,000 (or $825,284 Cdn.). Subsequently, the Company also assumed a demand
loan, future income taxes, certain other assets and liabilities directly related
to the operation of the Mountain View Park. Assumption of these liabilities
reduced the deemed value assigned to the common stock issued in the transaction
to $1.77 per share.

Gil Rahier Holdings, Ltd., a company beneficially owned by Gil Rahier, a
Director of the Company, was the registered owner of 50% of the corporation
owning the property, and received 100,000 common shares of Forest Glade
International Inc. Orval and Annette Schattenkirk, non-affiliates, were the
owners of the remaining 50% interest of 514592 BC, Ltd., received 100,000 shares
of Forest Glade International Inc. Mr. Rahier acquired his interest in 514592
B.C. Ltd., in May 1996.

On August 25, 1999, the Company entered into a share exchange agreement with the
stockholders of 514592 BC Ltd. that closed on August 31, 1999. The share
exchange agreement modified the original terms of the acquisition of the
Mountain View Park on December 1, 1998 to change the acquisition from an asset
purchase to a purchase of the shares of 514592 BC Ltd. At December 1, 1998 the
net assets of 514592 BC Ltd. were solely related to the operations of the Park.
No new business was undertaken in 514592 BC Ltd. during the period from December
1, 1998 to August 31, 1999. Aside from the legal structure of the acquisition
discussed above, the terms of the original acquisition agreement remain except
for the following:

i) The resultant change in structure creates a deferred tax liability on
acquisition equal to the difference between the fair value assigned to
the property and equipment for accounting purposes and the carryover
basis used for tax. This temporary difference has been recorded in the
1999 financial statements of the Company.

<PAGE>

ii) The Company agreed to repurchase for cancellation 100,000 shares of
the Company's common stock previously issued to Orval Schattenkirk (on
behalf of Annette Schattenkirk and himself) in exchange for $411,750
Cdn (approximately $275,000). $102,937.50 Cdn (approximately $68,000)
was paid to each of Annette and Orval Schattenkirk on closing with
promissory notes issued for the balance of $102,937.50 Cdn due to each
of them on March 2, 2000. Funds for the payment of promissory notes
are being held in an attorney trust account until due at which time
the funds will be released.

iii) Additional cash consideration of CDN$37,500 (approximately $25,000)
was paid to Gil Rahier Holdings Ltd. Gil Rahier Holdings Ltd. is also
to receive reimbursement of CDN$20,000 (approximately $13,000) paid to
Orval Schattenkirk for management services supplied to 514592 BC Ltd.

Historical cost of the Mountain View Park to 514592 B.C. Ltd., was $1,009,776
Cdn., (approximately $740,000 US). Upon conclusion of this transaction the
Company accounted for the mobile home park based upon its appraised value
(resulting in an increase in cost of approximately $240,000 US).

Forest Glade Properties Inc., entered into an agreement with an unaffiliated
third party to acquire an additional mobile home park in Alberta, Canada in
August 1998 and paid non refundable deposits of $75,000 Cdn (approximately
$50,000), while negotiating the terms of the acquisition. Forest Glade
Properties, Inc., and the seller were unable to come to an agreement as to the
price and form of consideration for the acquisition and in October 1998, the
deposit was forfeited to the seller.

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 for the working capital use 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.

Upon closing the agreement to acquire SSA Coupon Ltd., a change in control has
occurred and the transaction will be accounted for using the purchase method of
accounting applicable for reverse acquisitions. Following reverse acquisition
accounting, financial statements subsequent to the closing of the acquisition
will be presented as a continuation of SSA Coupon Ltd. The value assigned to the
common stock of the Company on acquisition will be determined based on the fair
value of the net assets of the Company at the date of acquisition.

(b) Narrative Description of Business
- --------------------------------------

<PAGE>

The Company's historical primary business is owning and operating mobile home
parks. The Company is also seeking to develop its recently acquired
Web-Retriever business through its SSA subsidiary.

WEB-RETRIEVER
- -------------
SSA has developed an internet website "www.Web-Retriever.com" which will serve
as internet access portal site which will provide the user with hyperlink access
to different internet functions such as its Geo-Enabled Search Engine, the
user's NetPet and typical internet portal functions such as email, stock quotes
and classified advertisement listings. Users will also be able to customize
their own starting screen or page for the internet. Using Web-Retriever
Geo-Enabled Search Engine software, customized start pages can also include
local weather, headlines and links to local newspapers and other websites
selected by geographic location.

Geo-Enabled Search Engine
- -------------------------
An internet search engine is a worldwide web accessible service which allows the
user to input search terms such as key words or phrases and the application
searches through the search engine's data base and internet sites to identify
sites which have key words or phrases which match or nearly match the search
terms. SSA's Geo-Enabled Search Engine will allow the user to select
geographical search criteria such as state, province, region, city, postal codes
or telephone area codes as well as other search terms. It will also allow the
user to use a map interface which will focus the search to the desired area.

The Company believes the Geo-Enabled Search Engine is unique in its ability to
use user selected geographical search criteria. The Company believes this
feature will be attractive to users seeking information on specific products or
services and the most convenient geographic locations where such products and
services can be examined and or purchased in person. The Company further
believes that searches with geographical criteria will focus the search results
to the most appropriate websites by excluding websites for locations not within
the geographically criteria, thus reducing the number of located but
inappropriate websites. For example, a search for restaurants serving specific
type of food in a specific city or area of a city cannot only locate and rank
the choices, but if internet information is available locate such things as
menus and reviews.

The Web-Retriever 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.

NetPet
- ------
Another unique component of the Web-Retriever is the NetPet. This is a
personalized software application which will allow the user to access the
Web-Retriever website from computers other than the user's primary computer. The
application is installed onto the user's primary computer and appears as an
animated character on the computer screen while accessing the Web-Retriever
website or any other website. The NetPet allows the user to hyperlink to the
Web-Retriever website to perform searches, write email, enter chat-rooms or
other functions. The sound and appearance of the NetPet may be customized by the
user selecting from a menu of characters, such as animals, robots or other
animated objects. The personalized information on the user's NetPet

<PAGE>

will also be stored on the Web-Retriever website server so that access this
information from any computer which can be connected to the internet. The
personalized information will include the appearance of the NetPet, previously
selected favorite websites, and customized internet start pages.

E-commerce Solutions and Self Build Websites
- --------------------------------------------
Through SSA, the Company intends to market the Web-Retriever to small and medium
sized business who may have been reluctant to develop e-commerce business. A
business user can use Web-Retriever's self-build websites to create a customized
e-commerce website by filling in information according to templates. Relying
upon the geographic search features of the Web-Retriever, customers within the
business market area will be directed to the business website and retail
location.

Classified Listings
- -------------------
Web-Retriever will also offer classified ad listings similar to many online
classified ad listings. However using the Web-Retriever's geographic search
capabilities, searches can be geographically defined so that results correspond
to the user's geographic area.

Potential Revenue Sources
- -------------------------
The Company believes that it will generate revenue through multiple sources.
These sources are:

Regional Internet Advertising: Targeted to small and medium sized or
Geographically focused business. Advertising fees will vary as the
hits per day on the site increase. For regional advertising it will
depend on hits derived from the advertiser's region. SSA Coupon
intends to sub-license advertising for particular regions, cities,
states or provinces to major internet service providers active in the
region.

National and International Advertising: Targeted to national and
international corporations advertising to the world via the internet.
There will be both banner advertising as well as classified
advertisements. Fees would also depend on the hit rate of the site and
on whether a hyperlink is being provided.

Licensing of software: License of the Geo-Enabled Search Engine to other
portal sites and search engines. This will not only earn fees but will
also act as a marketing tool for the Geo-Enabled Search Engine.

<PAGE>

Database Marketing: SSA Coupon's computers will contain data bases it has
loaded as well as data bases obtained from searching the internet and
data bases created from user profiles. SSA Coupon intends to sell or
license this information, primarily to marketing and retail companies.

Classified Advertising: The Geo-Enabled Search Engine will allow users to
post classified advertisements for items for sale for which SSA Coupon
will charge a fee. Auctions of products can also be facilitated for
which SSA Coupon will receive a commission.

Sponsorship: Customized internet portals can be offered to schools and
other organizations. Providing such services will market the
Geo-Enabled Search Engine will providing another venue for
advertising.

Website Development: This will allow a user to create their own website
through the use of templates for which SSA Coupon will charge a fee.

Net Pet: This personalized communications tool assists the user in
navigating the internet as well as maintaining the users preferences
and data both on the user's computer as well as in the SSA Coupon
database, thus allowing the user to access this information from any
computer location. The users will be charged a fee for a Net Pet.

Marketing
- ---------
Marketing will be conducted through a combination of print, television, radio
and internet advertising. The Company believes that its Net Pet and strategic
alliances with internet service providers and web portals will also create name
recognition.

Competition
- -----------
The Company faces extensive competition in the area of internet portals and
search engines. These competitors include internationally recognized companies
such as Yahoo and Alta Vista as well as many other competing portals and search
engines. Most of these competitors have substantially greater financial
resources as well as substantial research and development capabilities. Most of
these competitors have an established market share which the Company will
attempt to capture.

<PAGE>

Patents and Trademarks
- ----------------------
The Company intends to apply for trademark protection for "Net Pet" and
"Netpet.com". The Company also intends to file for copyright protection on new
programs written.

Government Regulation
- ---------------------
SSA'soperations and products and services are all subject to regulation by
various U.S. and Canadian federal, state, provincial and local regulatory
agencies. The Company takes measures to ensure our compliance with all such
regulations as promulgated by these agencies from time to time. There are
currently few laws and regulations directly applicable to the Internet. Any new
law or regulation pertaining to, or the application or interpretation of
existing laws to, the Internet could increase the cost of doing business or
otherwise adversely affect business. Laws and regulations directly applicable to
Internet communications, commerce and advertising are becoming more prevalent.
It is possible that a number of laws and regulations may be adopted with respect
to the Internet covering issues such as user privacy, pricing, content,
copyrights, distribution, antitrust and characteristics and quality of products
and services. The growth of the market for online commerce may prompt calls for
more stringent consumer protection laws that may impose additional burdens on
those companies conducting business online both in the United States and abroad.
Governments in foreign jurisdictions may regulate Internet or other online
services in such areas as content, privacy, network security, encryption or
distribution more stringently than in the United States. This may affect our
ability to conduct business internationally. Tax authorities in a number of
states in the U.S. are currently reviewing the appropriate tax treatment of
companies engaged in online commerce, and new state tax regulations may subject
us to additional state sales and income taxes.

Several states in the U.S. have also proposed legislation that would limit the
uses of personal user information gathered online or require online services to
establish privacy policies. The Federal Trade Commission has also initiated
action against at least one online service regarding the manner in which
personal information is collected from users and provided to third parties.
Changes to existing laws or the passage of new laws intended to address these
issues, including some recently proposed changes, could create uncertainty in
the marketplace that could reduce demand for our products and services or
increase the cost of doing business as a result of litigation costs or increased
service delivery costs, or could in some other manner have a material adverse
effect on our business, results of operations and financial condition.

Employees
- ---------
SSA presently employs six persons on full time basis and contracts with other
persons on an as needed basis.

MOBILE HOME PARKS
- -----------------
The Company presently owns and operates one mobile home park (see Description of
Properties below). The Company 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

<PAGE>

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. Management believes that
the market for mobile home rental space is stable and steadily growing due to
the increasing population and diversity of economic activity in British
Columbia. Over the past two decades the economy of British Columbia has grown
from its primary dependence upon natural resources to include manufacturing and
urban commerce, resulting in a stable and steadily growing market for housing in
general including mobile home parks.

The Company'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 Company's operations.

The criteria for an acquisition include, but are not necessarily limited to:

Favorable assessment of the development and operation of the park;
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 Company's operations are generally subject to zoning and other local
business regulation.

The Company employs 2 people on a full time basis with one person employed at
the Mountain View Park operation, and 1 at its corporate headquarters.

ITEM 2. DESCRIPTION OF PROPERTY
===============================

The Company 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 population of Sparwood is approximately 4,200 people with the trading area
population of the surrounding Elk River Valley being approximately 24,000
people. Mining and timber are the primary employers 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 resulting in a sixty-two percent
occupancy rate. The occupancy rate has remained stable for the past twelve
months and is expected to remain so. The rentals are based upon monthly tenancy
and 80% of the rentals have occupied their space for longer than 1 year.

Located on the Park is a Moduline Mobile Home Dealership which is owned
independently by an unaffiliated third party. The Dealership pays the Park a
commission for each mobile home sale and produces a profit of $7,500 Cdn.
(approximately $5,000) for each unit sold. The Dealership provides a facility to
display mobile homes to perspective purchasers, together with an opportunity to
establish residency.

<PAGE>

The Company's subsidiary holds the property in fee simple title which is
encumbered by a first mortgage in the amount of $655,718 Cdn., (approximately
$435,000) at July 31, 1999 bearing interest at the rate of the prime interest
rate plus 1% per annum. The mortgage is payable in blended monthly payments of
$6,800 Cdn. (approximately $4,500). The prime rate is based upon the Royal Bank
of Canada published prime rate. In September 1999, the mortgage loan was amended
to consolidate it with the $20,000 Cdn., (approximately $13,000) demand loan,
extending the repayment period to May 2012. 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. This belief is based upon the close proximity of the Mountain View Park
to the central business district of Sparwood, access to a greenspace park and
playground and the availability of municipal water, sewage, natural gas,
electric and garbage services.

The Company records annual depreciation on the property at the rate of 4% for
Buildings; 20% for Equipment; and 8% for Pads using the straight-line method. As
of July 31, 1999, the tax basis for the property is approximately $875,000 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 approximately
$10,000 Cdn. annually.

ITEM 3. LEGAL PROCEEDINGS:
===========================

The Company is not party to any pending legal proceedings and nor are any
proceedings against the Company being threatened. The Company's subsidiary, SSA
Coupon Ltd., is a defendant in a action filed in the Supreme Court of British
Columbia in October 1999, by Trevor Kray. The action also names Maurice Simpson,
William Murray and Dana Shaw as defendants. The action claims a breach of
contract by the Defendants and seeks unspecified damages. Trevor Kray was a
consultant engaged by SSA Coupon, Ltd., to assist it with corporate development
and financing. The Company believes that the action has no merit and intends to
vigorously defend the action. On November 17, 1999, SSA Coupon Ltd., commenced
an action against Trevor and Shannon Kray and Kray & Company Consulting ("the
Krays") alleging misappropriation and conversion to their personal use
approximately $235,000 advanced to them as consultants on behalf of SSA Coupon
Ltd. It is also alleged the Krays misrepresented the amount of funding provided
by a financier on behalf of SSA Coupon and thus caused delays in the development
and completion of SSA Coupon Ltd., projects. SSA Coupon Ltd., seeks compensation
for monies misappropriated by the Krays as well as general damages. 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.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted for a vote of security holders of the Company during
the fourth quarter of the fiscal year ended July 31, 1999.

<PAGE>

PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTER
=============================================================================

(a) MARKET INFORMATION
- ------------------------
Since August 8, 1999 the Company's stock has been listed for sale on the OTC
Electronic Bulletin Board under the symbol FGII. As of November 12, 1999, there
were two stock brokerage firms making a market in the Company's common stock.
The high and low bid prices of the Common Stock of the Company have been as
follows:

Period: High bid per share: Low bid per share:
- --------------------------------------------------------------------------------
Aug. 8, 1999 to Oct. 31, 1999 2.72 0.875

The above quotations reflect inter-dealer prices, without retail mark-up,
markdown, or commission and may not necessarily represent actual transactions.

(b) HOLDERS
- ------------
There were 28 holders of the Company's 36,900,000 shares of common stock
outstanding as of November 29, 1999. This includes 9 holders of 28,400,000
shares of the Company's common stock whose certificates are restricted.
9,300,000 of the restricted shares were issued in November 1998 and may be sold
pursuant to Rule 144. 19,000,000 shares were issued in November 1999. The
holders of the 26,716,667 shares are affiliates of the Company.

(c) DIVIDENDS
- --------------
The Company has not declared any dividends since inception, and has no present
intention of paying any cash dividends on its common stock in the foreseeable
future. The payment by the Company of dividends, if any, in the future, rests
within the discretion of its Board of Directors and will depend, among other
things, upon the Company's earnings, its capital requirements and its financial
condition, as well as other relevant factors.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
================================================================================

The following should be read in conjunction with the Consolidated Financial
Statements and notes thereto appearing elsewhere in this report. The Company's
1999 fiscal year is its first operational year and includes costs associated
with its 10SB registration. All amounts are stated in U.S. dollars unless
otherwise noted.

Results of Operations / Plan of Operations
- -------------------------------------------
The Company had a net loss of $523,889 for the fiscal year ended July 31, 1999.
Contained in this loss was the $235,288 loss of its subsidiary SSA Coupon Ltd.,
and a $78,503 loss due to the termination of a trailer park acquisition. Please
see "Business Development" in Item 1 above and "Legal Proceedings" in Item 3
above. While the Company anticipates continued losses from SSA, it does not
anticipate significant future operating losses from the Mountain View Park. The
Company's Mountain View Park generated $88,410 in revenue for the period from
December 1, 1998 (acquisition) to July 31, 1999 and is expected to continue or
increase such revenue for the current fiscal year. Management believes that the
Sparwood, British Columbia area is growing rapidly due to the development of a
ski resort in nearby Fernie, British Columbia. Management believes

<PAGE>

that as result the vacancy rate will decrease. The Company does not anticipate
any significant increase in maintenance and operating expenses.

The Company's Plan of Operation for its SSA subsidiary is to continue
development of the Web-Retriever site with preliminary beta testing to begin in
December, 1999 with full beta testing by March, 2000. The Company has projected
the site to be fully operational by April, 2000. The anticipated expenses for
the preliminary beta testing include $60,000 for computer systems, $3,000 for a
four hour power supply system, $75,000 to purchases data bases for use in the
site, $28,000 for programmers, web page designers and other technical personnel
and $10,000 for high speed communications lines, rent and other expenses. The
anticipated expenses for the full beta testing are an additional $56,000 for
programmers, web page designers and other technical personnel and $18,000 for
high speed communications lines, rent and other expenses. Upon achieving full
technical operations, the Company anticipates that a multi-media marketing
campaign to promote the site will require $5,000,000 to $10,000,000. The Company
is committed to provide $1,250,000 of working capital to SSA in $40,000 weekly
increments since July, 1999. The Company has provided SSA with $650,000 in
capital through November 15, 1999.

The Company has incurred operating losses to date of $527,868 since inception.
The continuation of the Company is dependent upon the continuing financial
support of its 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. It is management's intention to raise new equity financing of
approximately $3 to $5 million within the upcoming twelve months. There are,
however, no assurances that any such activity will generate funds that will be
available for operations. Accordingly, the Company's financial statements
contain note disclosure describing the circumstances that lead there to be doubt
over its ability to continue as a going concern. The Company's auditors have
also expressed a reservation of their opinion on the July 31, 1999 financial
statements in this regard.

Liquidity
- ----------
The Company has funded its operations through internally generated revenues and
loans from the Company's directors ($29,842) and non-recourse advances from
unaffiliated third parties in the amount of $513,128. These funds have been
advanced in contemplation of a future offering of the Company's common stock.
The Company has recorded this amount as a long term liability though there are
no terms of repayment, interest accruing or security interest attached to the
liability. The Company anticipates conducting a private placement or public
offering of its securities to fund the SSA Plan of Operations.

Year 2000 Computer 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
the year 2000 date 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 and if not addressed, the impact on operations and financial
reporting may range from minor errors to significant system failure which could
affect an entity's ability to conduct normal business operations. It is not
possible to be certain that all aspects of the Year 2000 Issue affecting the
entity, including those related to the efforts of customers, suppliers, or other
third parties, will be fully resolved.

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
===================================================

<PAGE>

The consolidated financial statements of the Company are filed under this Item,
and are included herein by reference.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE:
================================================================================

Please See Item 13(b) Below.

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The following are the names, positions, and municipalities of residence and
relevant backgrounds of key personnel of the Corporation:

DIRECTORS AND EXECUTIVE OFFICERS
- --------------------------------
WAYNEE. LOFTUS - Age 50. President, Chief Executive Officer and Chairman of the
Board of Directors since inception. 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.

FRANKA. DENIS - Age 63. Vice President and Director since inception. 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.

GIL RAHIER - Age 59. Secretary, Treasurer and Director since inception. 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 Company 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 48. Director since inception. 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.

SIGNIFICANT EMPLOYEES
- ---------------------

WILLIAM F. MURRAY - Age 53. President of SSA Coupon, Ltd., since inception.
Since 1997, Mr. Murray has been in a partner in the law partnership of
Metro Law Office, Burnaby, British Columbia. He graduated from the law
school at the University of British Columbia in 1975 and has practiced
commercial law in the Vancouver area for the past twenty three years.

<PAGE>

DANA H. SHAW - Age 40 Secretary and Chief Technical Officer of SSA Coupon Ltd.,
since inception. Since 1991, Mr. Shaw has been an independent Small
Business Technology and Marketing Consultant assisting start-up, small and
medium sized businesses to integrate communications and technology systems
into their marketing and business plans.

MAURICE SIMPSON - Age 36. Vice President of SSA Coupon, Ltd. Mr. Simpson has
been with SSA Consulting of Vancouver, British Columbia, designing internet
web pages.

ITEM 10. EXECUTIVE COMPENSATION
===============================

(a) SUMMARY COMPENSATION TABLE

The Company has omitted the Summary Compensation Table as it has not
paid any cash or non-cash compensation to its Chief Executive Officer
or other officers during the fiscal year ended July 31, 1999. The time
devoted to the operations of the Company by the Company's directors
and officers is minimal.

(b) OPTIONS/SAR GRANTS IN LAST FISCAL YEAR (INDIVIDUAL GRANTS)

The Company does not have a Directors and Officers Stock Option Plan,
or a Key Personnel Compensation Plan.

(d) LONG-TERM INCENTIVE PLANS - AWARDS IN THE LAST FISCAL YEAR

The Company does not have a Directors and Officers Stock Option Plan,
or a Key Personnel Compensation Plan.

(e) COMPENSATION OF DIRECTORS

1. Standard Arrangements

The members of the Company's Board of Directors are reimbursed
for actual expenses incurred in attending Board meetings.

2. Other Arrangements

There are no other arrangements.

(f) EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT, CHANGE IN CONTROL
ARRANGEMENTS

The Company has not paid any cash or non-cash compensation to its
Chief Executive Officer or other officers during the fiscal year ended
July 31, 1999 and does not have any written or oral employment
contracts with its officers.

<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
=======================================================================

The following table sets forth certain information regarding the beneficial
ownership of common Stock by each director and nominee and by all directors and
officers of the Company as a group and of certain other beneficial owners of
more than 5% of any class of the Company's voting securities as of November 15,
1999 unless otherwise noted. Each such person has sole voting and dispositive
power with respect to such securities, except as otherwise indicated.

(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.

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%
10819 156th Street.
Surrey, BC V3R 6J7

William Murray 2,850,000 7.7%
3343 Highland Blvd..
N. Vancouver, BC V7/r 2Y2

Dana Shaw 2,850,000 7.7%
5260 - 6th Av.
Delta, BC V4M 1L5

(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 (4 persons) 7,716,667 21.0%

(1) 444 Victoria Street, Suite 370, Prince George, B.C. CANADA V2L 2J7

Compliance with Section 16 Reporting:
- ------------------------------------
The above named Executive Officers and Directors failed to timely file Forms 3
Initial Statement of Ownership and Form 5 Annual Statement of Ownership. None of
the above named Executive Officers have entered into transactions requiring the
filing of a Form 4 Changes in Ownership. All holdings of common stock and
options to acquire common stock are accurately reported herein.

<PAGE>

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.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
=======================================================

The Company's By-laws include a provision regarding Related Party Transactions
which requires that each participant to such a transaction identify all direct
and indirect interest 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.

The Company's Board of Directors are the Company's Founders and Promoters. 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.

Pursuant to the Agreement and Plan of Reorganization dated September 30, 1998,
which closed on November 17, 1998, the Company acquired 100% of the outstanding
common stock of Forest Glade Properties Inc. in exchange for 7,700,000 shares of
the Company's common stock.. Wayne E. Loftus, Michael Jenks, Stan Polson and Gil
Rahier each received 1,283,333 shares of common stock for their shares of Forest
Glade Properties, Inc, and Frank Denis received 2,566,668 shares of the
Company's common stock for his shares of Forest Glade Properties, Inc.

On December 1, 1998, the Company's wholly owned subsidiary, Forest Glade
Properties Inc., entered into an Agreement to acquire 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. There is no relationship between North Country Appraisals
and the Company or its management and principal shareholders. The terms of
payment were the assumption of the existing mortgage against the property with a
balance of $674,716 Cdn., at the date of acquisition, and the issuance to the
Vendors of 200,000 common shares of Forest Glade International Inc., at a deemed
value of $2.73 per share for a total of $546,000 (or $825,284 Cdn.).
Subsequently, the Company also assumed a demand loan, future income taxes,
certain other assets and liabilities directly related to the operation of the
Mountain View Park. Assumption of these liabilities reduced the deemed value
assigned to the common stock to $1.77 per share.

Gil Rahier Holdings Ltd., a company beneficially owned by Gil Rahier, a Director
of the Company, was the registered owner of 50% of 514592 BC Ltd., and received
100,000 common shares of Forest Glade International, Inc. Orval and Annette
Schattenkirk, non-affiliates, were the owners of the remaining 50% interest of
514592 BC Ltd., and received 100,000

<PAGE>

shares of Forest Glade International Inc. Gil Rahier Holdings, Ltd., acquired
its interest in 514592 B.C. Ltd., in May 1996.

During the fiscal year ended July 31, 1999, the Company also paid $20,045 Cdn.,
to Pacific Rim Mortgage Company, of which the Company's president Wayne Loftus
is the control person for office rent, secretarial services and other offices
expenses.

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES & REPORTS ON FORM 8-K
=======================================================================

The following documents are filed as part of this report under Part II, Item 8:

Audited Financial Statements and notes thereto Pages F-1 to F-13

(a) Exhibits as required by Item 601 of Regulation S-B

Exhibit Number Description Incorporated by Reference to
- --------------------------------------------------------------------------------

(3) (1) Articles of Incorporation
as amended Company's Report on Form
10SB12G dated December 9,
1998.

(3) (2) Bylaws Company's Report on Form
10SB12G dated December 9,
1998.

(b) Reports of Form 8-K

Change in Control / Acquisition of SSA Coupon Ltd., dated August 30, 1999

Change in Auditors dated October 21, 1999

<PAGE>

Forest Glade International Inc
Consolidated Financial Statements
For the year ended July 31, 1999
(Expressed in US Dollars)

<PAGE>

Forest Glade International Inc.

Table of Contents

Auditors' Report - (July 21, 1999)- BDO Dunwoody LLP

Comments by Auditors for US Readers on Canada-US Reporting Differences
(July 31, 1999)

Auditors' Report - (July 31, 1998) - Chan Foucher Lefebvre

Consolidated Financial Statements

Balance Sheet

Statements of Operations

Statements of Changes in Stockholders' Equity

Statements of Cash Flows

Summary of Significant Accounting Policies

Notes to the Financial Statements

<PAGE>

Auditors' Report

To The Directors and Stockholders
Forest Glade International Inc.

We have audited the Consolidated Balance Sheet of Forest Glade International
Inc. as at July 31, 1999 and the Consolidated Statements of Operations, Changes
in Stockholders' Equity and Cash Flows for the year then ended. 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 consolidated 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 year then ended in
accordance with accounting principles generally accepted in the United States.

"BDO Dunwoody LLP"
Vancouver, Canada
October 29, 1999 Chartered Accountants

<PAGE>

Comments by Auditors for U.S. Readers
On Canada-U.S. Reporting Differences

To The Directors and Stockholders of
Forest Glade International Inc.

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 consolidated financial statements. Our report to the stockholders
dated October 29, 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
October 29, 1999 Chartered Accountants

<PAGE>

CHAN FOUCHER LEFEBVRE
o Chartered Accountants o

1820 Third Avenue, Prince George, BC V2M
1G4 Phone (250) 562-4522 Fax (250) 562-4524 Toll
Free 1-888-562-4528

AUDITORS' REPORT

To the Shareholders of
Forest Glade Properties Inc.:
(formerly 558539 B.C. Ltd.):

We have audited the statements of operations, changes in stockholders' equity
and cash flows of Forest Glade Properties Inc. (formerly 558539 BC Ltd.) 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 results of the company's 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
- -------------------------
CHAN FOUCHER LeFEBVRE

CHARTERED ACCOUNTANTS

September 3, 1998
Prince George, Canada

<PAGE>

Forest Glade International Inc.
Consolidated Balance Sheet
(Expressed in US Dollars)

July 31 1999
- ---------------------------------------------------------------------
Assets

Current
Cash $ 6,630
Prepaid expenses 4,762
-------------
11,392

Restricted cash (Note 12) 248,738
Property and equipment (Note 3) 959,019
-------------
$ 1,219,149
=============

Liabilities and Stockholders' Equity (Deficit)

Liabilities

Current
Accounts payable and accrued liabilities $ 81,178
Liability on investment in SSA Coupon Ltd. (Note 6) 60,288
Security deposits 2,225
Due to directors (Note 4) 29,842
Current portion of long-term debt 21,887
-------------
195,420

Long-term debt (Note 5) 939,445
Deferred income taxes (Note 11) 155,598
-------------
1,290,463
-------------
Stockholders' equity (deficit)
Capital stock
Authorized
200,000,000 common shares, par value $0.001
Issued
17,900,000 common shares 17,900
Additional paid-in capital 435,524
Accumulated deficit (527,868)
Accumulated other comprehensive income - foreign
currency translation gains 3,130
-------------
(71,314)
-------------
$ 1,219,149
=============

The summary of significant accounting policies and notes form an integral part
of these consolidated financial statements.

<PAGE>

Forest Glade International Inc.
Consolidated Statements of Operations
(Expressed in US Dollars)

Period from
January 29
1998
Year ended (incorporation)
July 31 To July 31
1999 1998

Revenue
Rentals $ 88,410 $ -
-------------- -------------
Expenses
Bank charges 1,020 -
Consulting fees 61,960 -
Depreciation 36,392 26
Office and miscellaneous 27,681 575
Professional fees 88,522 1,796
Property management 11,589 -
Property taxes and utilities 29,695 -
Repairs and maintenance 7,567 -
Travel and promotion 16,835 1,582
-------------- -------------
281,261 3,979
-------------- -------------

(192,851) (3,979)

Loss on investment (Note 6) (235,288) -
Interest on long-term debt (25,910) -
Loss on termination of trailer
park acquisition (Note 7) (78,503) -
-------------- -------------

Loss before income taxes (532,552) (3,979)

Income tax recovery-deferred 8,663 -
-------------- -------------

Net loss for the period $ (523,889) $ (3,979)
============== =============

Loss per share $ (0.03) $ -
============== =============

Weighted average shares outstanding 17,833,333 7,700,000
============== =============

The summary of significant accounting policies and notes form an integral part
of these consolidated financial statements.

<PAGE>

Forest Glade International Inc.
Consolidated Statements of Changes in Stockholders' Equity
(Expressed in US Dollars)

Accumulated
Foreign Total
Additional Currency Stockholders'
Common Stock Paid-in Accumulated Translation Equity
Shares Amount Capital Deficit Gains (deficit)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capital contribution on
incorporation - Forest
Glade Properties Inc. 100 $ 66 $ - $ - $ - $ 66

Net loss for the period - - - (3,979) - (3,979)

Adjustment for the issuance
of common stock on reverse
acquisition of
Forest Glade Properties Inc.
(Note 2) 7,699,900 7,634 (7,634) - - -
----------- ---------- ---------- ----------- ----------- ---------------

Balance, July 31, 1998 7,700,000 7,700 (7,634) (3,979) - (3,913)

Adjustment for the issuance of
initial shares (net of $10,000
issue costs) of Forest Glade
International Inc. on incorporation
in August, 1998 10,000,000 10,000 (80,000) - - (90,000)

Capital contributions during the year - - 10,000 - - 10,000

Issuance of common stock on acquisition
of property and equipment
(Note 2) 200,000 200 353,158 - - 353,358
----------- ---------- ---------- ----------- ----------- ---------------

17,900,000 17,900 435,524 (3,979) - 449,445
----------- ---------- ---------- ----------- ----------- ---------------

Net loss for the period - - - (523,889) - (523,889)

Foreign currency translation
adjustments - - - - 3,130 3,130
----------- ---------- ---------- ----------- ----------- ---------------

Total comprehensive income - - - (523,889) 3,130 (520,759)
----------- ---------- ---------- ----------- ----------- ---------------

Balance, July 31, 1999 17,900,000 $ 17,900 $ 435,524 $(527,868) $ 3,130 $ (71,314)
=========== ========== ========== =========== =========== ===============

</TABLE>

The summary of significant accounting policies and notes form an integral part
of these consolidated financial statements.

<PAGE>

Forest Glade International Inc.
Consolidated Statements of Cash Flows
(Expressed in US Dollars)

Period from
January 29
1998
Year ended (incorporation)
July 31 to July 31
1999 1998
- ----------------------------------------------------------------------------------------------------------------

<S> <C> <C>
Cash provided by (used in)

Operating activities
Net loss for the period $ (523,889) $ (3,979)
Adjustments to reconcile net loss to net cash used in operating
activities
Depreciation 36,392 26
Loss on termination of trailer park acquisition 78,503 -
Loss on investment 235,288 -
Deferred income tax recovery (8,663) -
Change in assets and liabilities
Increase in prepaid expenses (2,983) -
Increase in accounts payable and accrued liabilities 50,638 10,824
Increase in security deposits 368 -
--------------- ---------------
(134,346) 6,871
--------------- ---------------
Investing activities
Deposit and costs incurred on terminated trailer park
acquisition (65,018) (13,485)
Investment in SSA Coupon Ltd. (175,000) -
Cash acquired on acquisitions 97,646 -
--------------- ---------------
(142,372) (13,485)
--------------- ---------------
Financing activities
Repayment of long-term debt (21,213) -
Issuance of common stock - 66
Proceeds on long-term debt 514,000 9,564
Advances from directors 29,688 -
Additional capital contributions 10,000 -
--------------- ---------------
532,475 9,630
--------------- ---------------
Increase in cash for the period 255,757 3,016

Effect of foreign exchange on cash (3,405) -

Cash, beginning of period 3,016 -
--------------- ---------------
Cash, end of period $ 255,368 $ 3,016
=============== ===============
</TABLE>

The summary of significant accounting policies and notes form an integral part
of these consolidated financial statements.

<PAGE>

Forest Glade International Inc.
Summary of Significant Accounting Policies
(Expressed in US Dollars)
July 31, 1999

Basis of Presentation
- ---------------------
These consolidated financial statements are expressed in US dollars and have
been prepared in conformity with accounting principles generally accepted in the
United States. Included in the financial statements are the accounts of the
Company and its wholly-owned subsidiary, Forest Glade Properties Inc.

In accordance with provisions governing the accounting for reverse acquisitions,
the figures presented for the period from January 29, 1998 to July 31, 1998 are
those of Forest Glade Properties Inc.

All significant intercompany transactions have been eliminated on consolidation.
All per share information for fiscal 1998 has been restated to reflect the
recapitalization.

Foreign Currency Translation
- ----------------------------
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").

Assets and liabilities of the subsidiary denominated in a foreign currency are
translated at the exchange rate at the period end. Income statement accounts are
translated at the average rates of exchange prevailing during the periods.
Translation adjustments arising from the use of differing exchange rates from
period to period are included in the Accumulated Foreign Currency Translation
Gains account in Stockholders' Equity.

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
management's best estimates as additional information becomes available in the
future.

<PAGE>

Forest Glade International Inc.
Summary of Significant Accounting Policies - Continued
(Expressed in US Dollars)

July 31, 1999

Investments
- -----------
The Company's investment in 20% of the issued and outstanding shares of SSA
Coupon Ltd. ("SSA") is accounted for using the equity method. Under the equity
method, the amount of the investment is adjusted for the Company's share of
income or losses of SSA. As the Company is the only stockholder obligated to
provide SSA with ongoing working capital, it has recognized 100% of the loss of
SSA for the period from its incorporation (September 24, 1998) to July 31, 1999.

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 and amounts due to
directors, the carrying amounts approximate fair value due to the immediate
or short-term maturity of these financial instruments. The carrying amount
for long-term debt approximates fair value because, in general, the
interest on the underlying indebtedness fluctuates with market rates.

Property and Equipment
- ----------------------
Property and equipment is recorded at cost. Depreciation is provided over the
estimated useful lives of the property and equipment on the straight-line basis
at rates set out below:

Building - 4%
Equipment - 20%
Pads - 8%

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 carrying amounts and tax
bases of assets and liabilities using enacted tax rates in effect in the years
in which the differences are expected to reverse.

<PAGE>

Forest Glade International Inc.
Summary of Significant Accounting Policies - Continued
(Expressed in US Dollars)

July 31, 1999

Loss Per Share
- --------------
Loss per share is computed in accordance with SFAS No. 128, "Earnings Per
Share". Basic loss per share is calculated by dividing the net loss available to
common stockholders by the weighted average number of shares outstanding during
the period. Diluted earnings per share reflects the potential dilution of
securities that could share in earnings of an entity. In a loss period, dilutive
common equivalent shares are excluded from the loss per share calcu

For the year ended July 31, 1999 and for the period from January 29, 1998
(incorporation) to July 31, 1998, there were no common share equivalents.

Comprehensive Income
- --------------------

The Company has adopted SFAS No. 130. "Reporting Comprehensive Income", which
establishes standards for reporting and display of comprehensive income, its
components and accumulated balances. The Company is disclosing this information
on its Statement of Changes in Stockholders' Equity. Comprehensive income is
comprised of net income (loss) and all changes to stockholders' equity except
those resulting from investments by owners and distributions to owners.

New Accounting Pronouncements
- -----------------------------
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. 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 assets 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.

<PAGE>

Forest Glade International Inc.
Summary of Significant Accounting Policies - Continued
(Expressed in US Dollars)

July 31, 1999

New Accounting Pronouncements - Continued
- -----------------------------------------
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
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities",
("SOP 98-5") 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. SOP 98-5 is effective for fiscal
years beginning after December 15, 1998 with initial adoption reported as the
cumulative effect of a change in accounting principle. Adoption of this standard
would not have a material effect on the financial statements.

<PAGE>

Forest Glade International Inc.
Notes to the Consolidated Financial Statements
(Expressed in US Dollars)

July 31, 1999

1. Nature of Business and Continuing Operations
- -------------------------------------------------
The Company was incorporated under the laws of the State of Nevada on August 27,
1998 and was inactive until November 17, 1998 when it acquired all the issued
and outstanding shares of Forest Glade Properties Inc. ("FGP"), an inactive
Canadian company incorporated on January 29, 1998. Upon completion of the
acquisition and the subsequent acquisition of the Mountain View Park (the
"Park") a mobile home park in Sparwood, British Columbia on December 1, 1998,
the Company is now engaged in the business of operations of this park in Canada.
Subsequent to July 31, 1999, to create a separate and distinct division of the
Company, the Company entered into an agreement to acquire the remaining 80%
interest it did not own in SSA (Note 2), a company engaged in the development of
an internet search engine. At July 31, 1999, the only financial statement items
resulting from the Company's involvement in the development of an internet
search engine are set out in Note 6.

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 an unrestricted working capital deficit of $184,028 and
has accumulated operating losses of $527,868 since its inception. 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. It is
management' s intention 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 technology created by SSA and to provide financing for the
marketing and promotion of its activities, 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.

<PAGE>

Forest Glade International Inc.nd liabilities comprising the04)
Notes to the Consolidated Financial Statements
(Expressed in US Dollars)

July 31, 1999

2. Business Acquisitions
- --------------------------
a) On November 17, 1998, the Company acquired all the issued and outstanding
shares of FGP in exchange for 7.7 million shares of the Company's common
stock. The transaction was accounted for using the purchase method as a
reverse acquisition as the former shareholders of FGP controlled the
Company upon conclusion of this transaction. Accordingly, these financial
statements have been accounted for as a continuation of FGP. The net assets
of the Company at the date of acquisition consisted of $90,000 of cash
received on its initial capitalization.

b) On December 1, 1998, FGP acquired beneficial control of certain assets and
liabilities comprising the Mountain View Park in British Columbia, Canada,
from 514592 BC Ltd. a company 50% controlled by a director of the Company
in exchange for the issuance of 200,000 shares of common stock.

The fair value of assets acquired and liabilities assumed at the date of
acquisition was as follows:

Current assets $ 9,386
Property and equipment 981,750
----------------
991,136

Current liabilities (21,204)
Long-term debt (454,692)
Deferred income taxes (161,882)
----------------
$ 353,358
================

The final allocation of the purchase price replaced preliminary allocations made
previously by $180,515, primarily due to the value assigned to deferred income
taxes. The effect of the change is recorded as a reduction to additional paid-in
capital.

The acquisition was accounted for using the purchase method. On August 31, 1999,
the terms of the acquisition were amended to acquire the shares of 514592 BC
Ltd. as opposed to the assets (Note 12). Substantially, the changed terms did
not affect the purchase price allocation except that a deferred tax liability
was created for a temporary difference between the accounting and tax bases of
the property and equipment. The tax effect of this difference has been reflected
from the date of the original acquisition. Additional consideration to be paid
will be recorded in the Company's 2000 fiscal year (Note 12).

<PAGE>

Forest Glade International Inc.
Notes to the Consolidated Financial Statements
(Expressed in US Dollars)

July 31, 1999

2. Business Acquisitions - Continued
- --------------------------------------
c) On July 23, 1999, the Company entered into an agreement with SSA Coupon
Ltd. ("SSA") to acquire a 20% interest in SSA. SSA is a company
incorporated in British Columbia, Canada on September 24, 1998 for the
purpose of developing, exploiting and marketing a geographically enabled
internet web search engine and smart source data base and internet portal
and personalized internet communications tool. As consideration, the
Company paid $25 and agreed to raise $1.25 million in capital for the
working capital use of SSA to be forwarded to SSA in $40,000 weekly
increments. Additionally, the Company has agreed to pay, or cause SSA to
pay to the three founding shareholders of SSA, in perpetuity, royalties
aggregating to 7% of the gross revenues of SSA and/or the Company relating
to the technology created by SSA. Such royalties will be paid on a
quarterly basis (See Note 6 for detail on contributions made).

Subsequent to July 31, 1999, the Company entered into a share exchange
agreement with the other shareholders of SSA to acquire the remaining
interest in SSA in exchange for 19 million restricted shares of the
Company's common stock. Restrictions on these shares will be removed at the
rate of 10% each year after their issuance.

Upon closing this agreement and the issuance of the shares, the transaction
will be accounted for using the purchase method of accounting as applicable
for reverse acquisitions. Following reverse acquisition accounting,
financial statements subsequent to the closing of this acquisition will be
presented as a continuation of SSA. The value assigned to the common stock
of the Company on acquisition will be determined based on the fair value of
the net assets of the Company at the date of acquisition.

The summarized unaudited pro-forma results of operations set forth below for the
year ended July 31, 1999 assume that the above acquisitions of FGP and the Park
occurred as of August 1, 1998 and include expenses for amortization of property
and equipment acquired.

Period from
Year ended January 29, 1998 to
July 31, 1999 July 31, 1998
- ---------------------------------------------------------------------

Revenue $ 127,895 $ 131,990
Pro-forma net loss $ (530,597) $ (51,569)
Pro-forma net loss
per common share $ (0.03) $ (0.00)

<PAGE>

Forest Glade International Inc.
Notes to the Consolidated Financial Statements
(Expressed in US Dollars)

July 31, 1999

3. Property and Equipment
- ---------------------------
1999
Accumulated
Cost Depreciation
- --------------------------------------------------------------------------

Land $ 330,119 $ -
Building 14,776 398
Equipment 8,221 1,147
Pads 642,092 34,644
--------------- --------------

995,208 36,189
--------------- --------------

Net book value $ 959,019
=============

4. Due to Directors
- ---------------------
Amounts loaned to the Company by certain of its directors are unsecured,
non-interest bearing and are due on demand.

<PAGE>

Forest Glade International Inc.
Notes to the Consolidated Financial Statements
(Expressed in US Dollars)

July 31, 1999

5. Long-term Debt
- -------------------

1999 Demand loan for the purchase of trailer park equipment, 1999
bearing interest at the Royal Bank of Canada's prime ----------------
interest rate per annum plus 1%, payable monthly and
collateralized by the underlying equipment. On
September 22, 1999, the demand loan was consolidated
with the mortgage facility with the Royal Bank of Canada
and is repayable under the same terms and conditions
outlined below for that facility except that the repayment
term was extended to May 2012. $ 13,266

Mortgage payable, collateralized by the Mountain View
Park property and an assignment of rents, repayable in
monthly installments of approximately $4,500 including
interest at the Royal Bank of Canada's prime interest
rate per annum plus 1% until fully repaid in 2011. 434,938

Non recourse advances received in contemplation of
future share issuances, unsecured, non-interest bearing
with no agreed upon terms of settlement. At the date of the
financial statements, there are no formal stock
subscription agreements in place, although the lenders
have indicated their preference for settlement in stock. 513,128
---------------

961,332

Current portion 21,887
---------------
$ 939,445
===============

Including the effect of the restructured demand loan above, future principal
payments are as follows:

2000 $ 21,887
2001 23,864
2002 25,653
2003 27,575
2004 29,644
Thereafter 832,709
-------------
$ 939,445
=============

<PAGE>

Forest Glade International Inc.
Notes to the Consolidated Financial Statements
(Expressed in US Dollars)

July 31, 1999

6. Liability on Investment in SSA Coupon Ltd.
- -----------------------------------------------
1999
- -----------------------------------------------------------------------------

Capital advanced to SSA in 1999 (Note 2) $ 175,000

Share of loss of SSA for the period from SSA's incorporation
(September 24, 1998) to July 31, 1999 (235,288)
----------------
Balance, end of year $ (60,288)
================

(a) The Company has recognized 100% of the loss incurred by SSA for the
period from SSA's incorporation to July 31, 1999 as the Company was
the only stockholder of SSA with a continuing obligation to provide
working capital. SSA is in the development stage and to date has not
recognized any revenue. SSA is involved in a dispute with a former
consultant over amounts advanced to the consultant by the Company in
connection with the acquisition agreement. SSA has been unable to
obtain an accurate accounting by the consultant of $114,814 received
and spent on behalf of SSA to July 31, 1999, although the consultant
alleges that such monies were withheld to cover costs incurred. At the
date of the financial statements, SSA is uncertain of the outcome of
this dispute. Accordingly, all amounts advanced by the Company and not
received by SSA have been written off in the period ended July 31,
1999. Any recoveries will be recorded in the period of settlement.

Assets and liabilities of SSA at July 31, 1999 are summarized as
follows:

Current assets $ 53,899
Fixed assets 3,448
-------------
57,347
Current liabilities (117,635)
-------------
$ (60,288)
=============

To October 29, 1999, the Company advanced an additional $405,000 to
SSA, of which SSA received approximately $285,000, with the balance in
dispute as discussed above.

<PAGE>

Forest Glade International Inc.
Notes to the Consolidated Financial Statements
(Expressed in US Dollars)

July 31, 1999

6. Liability on Investment in SSA Coupon Ltd. - Continued
- ------------------------------------------------------------

On October 18, 1999, the consultant filed a lawsuit in the Province of
British Columbia against SSA and its former principals for breach of
contact with unspecified damages. At this time, the outcome of this
litigation cannot be determined. However, management believes the
action to be without merit. 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.

(b) SSA has the following commitments:

(i) SSA had previously entered into contracts with its three founding
stockholders ("the SSA Consultants") 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 SSA terminate these agreements, additional
termination fees aggregating to approximately $2 million would be
due to the SSA Consultants. The monthly fee of $4,000 remains
until the first period that SSA has quarterly earnings in excess
of approximately $167,000. Once quarterly earnings exceed
$167,000, monthly payments to the SSA Consultants 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.

The net liability on investment in SSA includes $117,048 owed to
the three stockholders pursuant to these agreements. Amounts
owing are unsecured and non-interest bearing.

(ii) On August 1, 1999, SSA 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 SSA are approximately $18,000 plus SSA's
proportionate share of operating costs.

(iii)On October 29, 1999, SSA 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. SSA is obligated to pay a
license fee to the vendor in the amount of $75,000 per annum,
payable quarterly.

<PAGE>

Forest Glade International Inc.
Notes to the Consolidated Financial Statements
(Expressed in US Dollars)

July 31, 1999

7. Commitment
- ---------------
The Company's subsidiary has signed a contract for paving at the Park. The total
contracted cost of paving to be done in 2000 is approximately $44,000.

8. 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. In November 1998, the Company abandoned the acquisition and, thus, the
deposit and all amounts previously deferred have been written off.

9. Related Party Transactions
- -------------------------------
Related party transactions not disclosed elsewhere in these consolidated
financial statements include $13,228 charged by a company controlled by the
Company's President for rent and administrative services. This amount is
included in accounts payable at July 31, 1999.

10. Supplementary Cash Flow Information
- ------------------------------------------
Required disclosures of supplemental information on the Statements of Cash Flows
include:

a) common stock was issued in connection with the acquisition of the
Mountain View Park in the amount of $353,358.

b) cash consists of:
1999 1998

Cash $ 6,630 $ 3,016
Restricted cash 248,738 -
------------- -----------
$ 255,368 $ 3,016
============= ===========

<PAGE>

c) Interest paid $ 25,910 $ -
============= ===========

11. Income Taxes
- ------------------
The tax effects of the temporary differences that give rise to the Company's
deferred tax assets and liabilities are as follows:

1999 1998
- ---------------------------------------------------------------

Net operating losses $ 135,895 $ 1,790
Property and equipment (155,598) -
Valuation allowance (135,895) (1,790)
---------- ------------
Deferred tax asset (liability) $ 55,598) $ -
========== ============

Period from
Year January 29, 1998
ended (incorporation) to
July 31 July 31
1999 1998
- ----------------------------------------------------------------------

Provision (benefit) at federal
statutory rate $(181,068) $ (1,352)

Foreign income taxes at other
than the federal statutory
rate (18,846) (438)

Permanent difference relating
to the recognition of the
Company's share of losses in SSA. 79,998 -

Increase in valuation allowance 111,253 1,790
---------- ------------

$ (8,663) $ -
========== ============

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 $350,000 which will expire in various amounts in 2003 through 2006
(in Canada) and 2019 in the United States.

The tax benefit of operating losses of the Park totalling $22,852 at the date of
acquisition were fully provided for by valuation allowance.

12. Subsequent Events
- -----------------------

a) Subsequent to July 31, 1999, the Company received additional
non-interest bearing advances in contemplation of future share
issuances totalling $375,000. $315,000 was forwarded to SSA pursuant
to the purchase agreement (Notes 2 and 6).

b) On August 25, 1999, the Company entered into a share exchange
agreement with the stockholders of 514592 BC Ltd. that closed on
August 31, 1999. The share exchange agreement modified the original
terms of the acquisition of the Mountain View Park on December 1, 1998
(Note 2) to change the acquisition from an asset purchase to a
purchase of the shares of 514592 BC Ltd. At December 1, 1998 the net
assets of 514592 BC Ltd. were solely related to the operations of the
Park. No new business was undertaken in 514592 BC Ltd. during the
period from December 1, 1998 to August 31, 1999. Aside from the legal
structure of the acquisition discussed above, the terms of the
original acquisition agreement remain except for the following:

i) The resultant change in structure creates a deferred tax
liability on acquisition equal to the difference between the fair
value assigned to the property and equipment for accounting
purposes and the carryover basis used for tax. This temporary
difference has been recorded in the 1999 financial statements of
the Company.

ii) The Company agreed to repurchase for cancellation 100,000 shares
of common stock previously issued to two stockholders controlling
50% of the common stock of 514592 BC Ltd. in exchange for
CDN$411,750 (approximately $275,000). 50% of the repurchase price
was paid on closing with the balance due on March 2, 2000. Cash
advanced to the Company (Note 5) to be put in trust to settle
this transaction is recorded as restricted on the Balance Sheet.
The balance of cash in trust to settle the obligation was
advanced subsequent to July 31, 1999 on a non-interest bearing
basis by the other former shareholder of 514592 BC Ltd.

iii) Additional cash consideration of CDN$37,500 (approximately
$25,000) was paid to the other 50% stockholder of 514592 BC Ltd.
This stockholder, also a director of the Company, is to receive
reimbursement of CDN$20,000 (approximately $13,000) he paid to
the other 50% stockholder for management services supplied to
514592 BC Ltd.

The purchase price adjustment and the effect of the share repurchase in
(ii) and (iii) above will be recorded in the Company's 2000 fiscal year.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities set forth below on the dates indicated.

FOREST GLADE INTERNATIONAL INC.
(Company)

By:

/s/ WAYNE LOFTUS
- -------------------------------------------------
Wayne Loftus, President, Chairman of the Board
December 14 1999

/s/ GIL RAHIER
- -------------------------------------------------
Gil Rahier, Chief Financial Officer, Director
December 14 1999

/s/ FRANK DENIS
- ------------
Frank Denis, Director
December 14 1999

/s/ MICHAEL JENKS
- ---------------------
Michael Jenks, Director
December 14 1999

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> AUG-01-1998
<PERIOD-END> JUL-31-1999
<CASH> 6,630
<SECURITIES> 0
<RECEIVABLES> 4,762
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,392
<PP&E> 995,208
<DEPRECIATION> 36,189
<TOTAL-ASSETS> 1,219,149
<CURRENT-LIABILITIES> 195,420
<BONDS> 1,095,043
0
0
<COMMON> 17,900
<OTHER-SE> (89,214)
<TOTAL-LIABILITY-AND-EQUITY> 1,219,149
<SALES> 88,410
<TOTAL-REVENUES> 88,410
<CGS> 0
<TOTAL-COSTS> 281,261
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 313,791
<INTEREST-EXPENSE> 25,910
<INCOME-PRETAX> (532,552)
<INCOME-TAX> 8,663
<INCOME-CONTINUING> (523,889)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (523,889)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)

</TABLE>