FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended: January 31, 2000
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission file number: 0-25151
FOREST GLADE INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
NEVADA 52-212-549
(State of incorporation) (IRS Employer ID No.)
444 Victoria Street, Suite 370 Prince
George, B.C., CANADA V2L 2J7
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (250) 564-6868
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
As of March 10, 2000 the Registrant had 39,116,000 shares of Common Stock
outstanding.
Transitional Small Business Disclosure Format (check one); Yes No X
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN THE GENERAL INSTRUCTIONS AND IS
THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
Part I Financial Information
Item 1 Financial Statements.
Consolidated Interim Balance Sheets -
January 31, 2000 and July 31, 1999
Consolidated Interim Statements of Operations -
Six months and three months ended January 31, 2000 and 1999
Consolidated Interim Statement of changes in Stockholders' Equity -
Six months ended January 31, 2000
Consolidated Interim Statements of Cash Flow -
Six months ended January 31, 2000 and 1999
Notes to Consolidated Interim Financial Statements
<PAGE>
Forest Glade International Inc.
Consolidated Interim Balance Sheets
- --------------------------------------------------------------------------------
January 31 July 31
2000 1999 (a)
- --------------------------------------------------------------------------------
(Unaudited)
Assets
Current
Cash $ 73,649 $ 49,725
Prepaid expenses and deposits (Note 5) 230,642 4,174
------------ ---------
304,291 53,899
Restricted cash (Note 2) 142,515 -
Property and equipment 1,105,105 3,448
Software development costs (Note 3) 129,531 -
Goodwill, net of accumulated amortization
of $18,868 and $Nil 358,500 -
------------ ---------
$ 2,039,942 $ 57,347
================================================================================
Liabilities and Stockholders' Equity (Deficit)
Liabilities
Current
Accounts payable and accrued liabilities $ 184,392 $ 117,635
Unearned revenue and deposits 13,863 -
Due to stockholders 116,559 -
Current portion of long-term debt 22,814 -
------------ ---------
337,628 117,635
Long-term debt 435,420 -
Deferred income taxes 156,849 -
Advances for stock subscriptions 417,814 -
---------- -------
1,347,711 117,635
---------- -------
Stockholders' equity (deficit)
Capital stock
Authorized
200,000,000 common shares, par value $0.001
Issued
38,110,000 (July 31, 1999 - 19,000,000)
common shares 38,110 19,000
Additional paid-in capital 1,405,590 156,066
Accumulated deficit (746,878) (235,354)
Accumulated other comprehensive loss - foreign currency
translation losses (4,591) -
--------- --------
692,231 (60,288)
--------- --------
$ 2,039,942 $ 57,347
================================================================================
a) Represents the financial position of SSA Coupon Ltd. (Note 2)
See accompanying notes to consolidated interim financial statements.
<PAGE>
Forest Glade International Inc.
Consolidated Interim Statements of Operations
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three months ended Six months ended
January 31 January 31
2000 1999 (a) 2000 1999 (a)
<S> <C> <C> <C> <C>
Revenue
Property rentals $ 34,381 $ - $ 34,381 $ -
Expenses
Administration 70,019 23,940 115,682 23,940
Advertising and promotion 70,729 - 82,878 -
Amortization and depreciation 42,322 - 42,322 -
Investor relations 139,000 - 139,000 -
Professional fees 45,588 - 45,588 840
Property management 16,793 - 16,793 -
Research and development - 11,970 - 11,970
------- -------- ------- -------
384,451 35,910 442,263 36,750
------- -------- ------- -------
(350,070) (35,910) (407,882) (36,750)
Write-down of advances (Note 4) - - (95,235) -
Interest on long-term debt (11,047) - (11,047) -
Loss before income taxes (361,117) (35,910) (514,164) (36,750)
Income tax recovery - deferred 2,640 - 2,640 -
Net loss for the period $ (358,477) $ (35,910) $(511,524) $ (36,750)
=====================================================================================
Loss per share $ (0.01) $ - $ (0.02) $ -
=====================================================================================
Weighted average shares
outstanding 37,310,435 19,000,000 28,155,217 19,000,000
=====================================================================================
</TABLE>
a) Represents the results of operations of SSA Coupon Ltd.
See accompanying notes to consolidated interim financial statements.
<PAGE>
Forest Glade International Inc.
Consolidated Interim Statements of Changes in Stockholders' Equity
(Unaudited)
For the six-month period ended January 31, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Accumulated
Foreign Total
Additional Currency Stockholders'
Common Stock Paid-in Accumulated Translation Equity
Shares Amount Capital Deficit Losses (Deficit)
<S> <C> <C> <C> <C> <C> <C>
Balance, August 1, 1999
-SSA Coupon Ltd. 100 $ 66 $ 175,000 $ (235,354) $ - $ (60,288)
Adjustment for the issuance
of common stock on reverse
acquisition 18,999,880 18,934 (18,934) - - -
---------- --------- ---------- ----------- ----------- -------------
19,000,000 19,000 156,066 (235,354) - (60,288)
Issuance of common stock
by SSA Coupon Ltd. prior
to acquisition - - 14 - - 14
Adjustment for the
stockholders' equity of
the Company at the
acquisition date 17,800,000 17,800 (193,080) - - (175,280)
Issuance of common stock
on exercise of stock
options 1,210,000 1,210 1,317,690 - - 1,318,900
Issuance of common stock
for services 100,000 100 124,900 - - 125,000
---------- ------ --------- -------- -------- ---------
(235,354) - 1,208,346
-------- -------- ---------
Net loss for the period (511,524) - (511,524)
Foreign currency translation
adjustments - (4,591) (4,591)
------- ------- --------
Total comprehensive loss (511,524) (4,591) (516,115)
------- ------- --------
Balance, January 31, 2000 38,110,000 $ 38,110 $1,405,590 $ (746,878) $ (4,591) $ 692,231
================================================================================================================
</TABLE>
See accompanying notes to consolidated interim financial statements.
<PAGE>
Forest Glade International Inc.
Consolidated Interim Statements of Cash Flows
(Unaudited)
For the six-month periods ended January 31 2000 1999 (a)
- --------------------------------------------------------------------------------
Cash provided (used) by
Operating activities
Net loss for the period $ (511,524) $ (36,750)
Adjustments to reconcile net loss to net
cash used in operating activities
Amortization and depreciation 42,322 -
Deferred income tax recovery (2,640) -
(Increase) decrease in assets
Prepaid expenses and deposits (4,025) -
Increase (decrease) in liabilities
Unearned revenue and deposits 11,411 -
Accounts payable and accrued liabilities (14,801) 36,750
------- ------
(479,257) -
Investing activities
Software development costs (129,531) -
Cash acquired on reverse acquisition
of SSA Coupon Ltd. 145,757 -
Purchase of property and equipment (126,340) -
-------- ------
(110,114) -
-------- ------
Financing activities
Repayment of long-term debt (5,630) -
Advances for common stock and stock
subscriptions 766,000 -
Repayment of advances from directors (7,519) -
------- -----
752,851 -
------- -----
Increase in cash for the period 163,480 -
Effect of foreign exchange on cash 2,959 -
Cash, beginning of period 49,725 -
------- -----
Cash, end of period $ 216,164 -
================================================================================
(a) Represents the cash flows of SSA Coupon Ltd. (Note 2)
See accompanying notes to consolidated interim financial statements.
<PAGE>
Forest Glade International Inc.
Notes to the Consolidated Interim Financial Statements
(Unaudited)
January 31, 2000 and 1999
- --------------------------------------------------------------------------------
1. Basis of Presentation
The consolidated interim financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that
these consolidated interim financial statements be read in conjunction with
the financial statements of the Company for the year ended July 31, 1999
and notes thereto included in the Company's 10-KSB annual report and in the
Form 8-K current report filed in respect of the Company's acquisition of
SSA Coupon Ltd. The Company follows the same accounting policies in the
preparation of interim reports.
Results of operations for the interim periods are not indicative of annual
results.
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 January 31, 2000, the Company has recognized minimal
revenues and has accumulated operating losses of $746,878 since its
inception. The continuation of the Company is dependent upon the successful
completion of development of the Company's web-site, fetchomatic.com, 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. The Company 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.
<PAGE>
2. Business Acquisitions
a) On November 3, 1999, the Company closed the share exchange agreement with
the shareholders of SSA Coupon Ltd. ("SSA"), a company that was
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. The Company acquired 100% of
the issued and outstanding shares of 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.
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.
Effective as of the closing date, the transaction was 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 are presented as a continuation of SSA.
The operations of Forest Glade are consolidated with those of SSA from the
date of acquisition. The fair value of the net assets of the Company at
November 3, 1999 was as follows:
Current assets $ 9,440
Property and equipment and other long-term assets 1,652,326
---------
1,661,766
Current liabilities (274,421)
Deferred income taxes (156,843)
Long-term debt (1,607,870)
----------
Goodwill $ (377,368)
==========
Goodwill is amortized on a straight-line basis over five years. The value
assigned to the common stock issued on the transaction was $Nil based on
the estimated fair value of the net assets of the Company at the
acquisition date.
<PAGE>
2. Business Acquisitions - Continued
b) On December 1, 1998, the Company acquired beneficial control of certain
assets and liabilities comprising the Mountain View Park (the "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 acquisition was accounted for using the purchase method. On August 31,
1999, the terms of the acquisition were amended such that the Company
acquired the shares of 514592 BC Ltd. as opposed to the assets. As part of
the acquisition agreement, the Company repurchased and cancelled 100,000
shares of common stock previously issued to two stockholders controlling
50% of the common stock of 514592 BC Ltd. in exchange for approximately
$287,000. 50% of the repurchase price was paid on closing with the balance
due without interest on March 2, 2000. Cash advanced to the Company and put
in trust to settle the balance due in March 2000 is recorded as
"restricted" on the Balance Sheet.
The summarized unaudited pro-forma results of operations set forth below
for the six-month periods ended January 31, 2000 and 1999 assume that the
above acquisitions occurred as of August 1, 1998 and include expenses for
amortization of goodwill and property and equipment acquired.
January 31
2000 1999
---------------------------
Revenue $ 63,399 $ 60,491
Pro-forma net loss $ (771,451) (311,557)
Pro-forma net loss per common share $ (0.02) $ -
- --------------------------------------------------------------------------------
3. 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 prior to July 31, 1999, SSA 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 the application software development. The Company commenced the
capitalization of costs associated with software development on August 1,
1999.
<PAGE>
4. Contingent Liability
SSA, along with its three founding stockholders, was 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 claimed breach of contract and
sought unspecified damages. 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 the Company subsequent to July 31, 1999 to the
consultant and not received by SSA totaling $95,235 were written off in the
first quarter.
- --------------------------------------------------------------------------------
5. Prepaid Expenses
In December 1999, the Company entered into a promotional agreement with a
company for a one-year term in exchange for 175,000 shares of common stock
plus 200,000 warrants to purchase common stock. 100,000 of the warrants are
exercisable at a price of $1.09 with the balance exercisable at $3 for a
four-year period. The expenses are amortized to the Statement of Operations
over the term of the contract. The value assigned to the common stock based
on the trading price of the stock on the agreement date was $218,750.
100,000 shares of common stock were issued by the Company while a
stockholder provided 75,000 shares to satisfy the balance. Amounts
repayable to the stockholder are due on a non-interest bearing basis.
- --------------------------------------------------------------------------------
6. Supplemental Cash Flow Information
Required disclosures of supplemental information on the Statements of Cash
Flows include:
(a) Supplemental disclosure of non-cash investing and financing activities:
2000 1999
-----------------------------
i) issuance of common stock in satisfaction of
promotional expenses, including obligation to
stockholder (Note 5). $ 218,750 $ -
ii) acquisition of the shares of SSA in
exchange for 19 million shares of
common stock. $ - $ -
<PAGE>
6. Supplemental Cash Flow Information - Continued
b) Cash consists of:
2000 1999
----------------------------
Cash $ 73,649 $ -
Restricted cash 142,515 -
---------- -----------
$ 216,164 $ -
========== ===========
c) Interest paid for the six-month periods ended January 31, 2000 and 1999 was
$7,047 and $Nil.
- --------------------------------------------------------------------------------
7. Stock Options
On November 5, 1999 the Company adopted its 1999 Stock Option Plan to offer
an inducement to obtain services of key employees, directors and
consultants of the Company. The maximum number of shares issuable under the
Plan shall not exceed 5 million. Under the Plan, the Company's Board of
Directors determines the exercise price and terms of the options not,
however, to exceed five years from the date of grant.
The Company granted 4.7 million options during the period at an exercise
price of $1.09 per share. During the period, 1,210,000 options were
exercised for total proceeds of $1,318,900. Subsequent to January 31, 2000,
a further 1,006,000 options were exercised.
Proceeds received in advance of the exercise of stock options are presented
as a long-term liability on the Balance Sheet.
<PAGE>
8. Segmented Information
The Company is primarily involved in the development of an internet
website. Prior to the acquisition of SSA, the Company's sole business was
the operation of a mobile home park in Sparwood, British Columbia.
Information on reportable business segments is as follows:
<TABLE>
<CAPTION>
2000 1999
----------------------------------------------------
Software Mobile Home Software
Development Park Total Development
---------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue $ - $ 34,381 $ 34,381 $ -
Segmented expenses
Operating and administrative (274,759) (16,793) (291,552) (36,750)
Interest - (11,047) (11,047) -
Depreciation of capital
assets (9,659) (13,795) (23,454) -
-------- ---------- -------- -----------
Segmented loss $ (284,418) $ (7,254) $ (291,672) $ (36,750)
======== ========== ======== ===========
Total Assets $ 484,362 $ 1,004,792 $ 1,489,154 57,347
Capital expenditures $ 248,806 $ 7,065 $ 255,871 $ -
</TABLE>
Reconciliations of net loss for the period and assets from reportable segments
are as follows:
2000 1999
---------------------------
Segment loss $ (291,672) $ (36,750)
Expenses not allocated to segments
Corporate expenses (203,624) -
Deferred income taxes 2,640 -
Amortization of goodwill (18,868) -
---------- -----------
Net loss for the period $ (511,524) $ (36,750)
========== ===========
Assets from reportable segments $1,489,154 $ 57,347
Assets not allocated to segments
Goodwill 358,500 -
Other corporate 192,288 -
--------- ----------
Total assets $2,039,942 $ 57,347
========== ============
<PAGE>
9. 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.
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.
<PAGE>
Item 2 - Management's Discussion and Analysis or Plan of Operation.
The following should be read in conjunction with the Consolidated Financial
Statements and notes thereto appearing elsewhere in this report. On November 3,
1999, the Company completed a share exchange agreement with the stockholders of
SSA Coupon Ltd. ("SSA") to acquire 100% of the issued and outstanding shares of
SSA in exchange for 19 million shares of restricted common stock. Prior to
November 3, 1999, the Company had a 20% interest in SSA, but was the only
stockholder with an obligation to fund the operations of SSA. SSA was
incorporated in British Columbia, Canada on September 28, 1998 for the purpose
of the development of a web-site containing an Internet search engine under the
name of fetchOmatic.com. Prior to the initial investment by the Company in July
1999, SSA had undertaken early stage research and development of the web-site.
Subsequent to the investment by the Company, SSA has further developed the
web-site and has released version 1.0 for beta testing. Management expects the
web-site to be fully operational in April 2000.
The share exchange with the stockholders of SSA has been accounted for as a
reverse acquisition since, at the conclusion of the share exchange, the former
stockholders of SSA controlled the Company. Following the accounting for reverse
acquisitions, the financial statements subsequent to closing of the share
exchange are presented as a continuation of SSA, consistent with a change of the
primary business focus from trailer park rentals to web-site development.
Accordingly, the operations of Forest Glade International Inc. are consolidated
with those of SSA from date of acquisition. The value assigned to the common
stock issued on reverse acquisition of SSA was $Nil based on the estimated fair
values of the net assets of Forest Glade International Inc. at the date of
acquisition.
Results of Operations
The Company incurred a net loss of $511,524 for the six-month period ended
January 31, 2000. Some significant components to the composition of the loss for
the six-month period were:
- - Administration expenses of $115,682, consisting of fees to administrative
personnel and rent on the Company's premises in Prince George and Delta,
British Columbia;
- - Advertising an promotion of $82,878, consisting of various marketing
efforts with respect to the Company's fetchOmatic search engine;
- - Amortization and depreciation of $42,322, including $18,868 of goodwill
amortization, arising out the share exchange agreement;
- - Investor relation fees of $139,000, including various payments made to
entities to expose the Company to potential investors. The Company's stock
was first listed on the NASD OTC:BB in July 1999 so expenditures have been
incurred since to create awareness of the Company in the markets;
<PAGE>
- - Professional fees of $45,588, consisting of legal and accounting services
provided to the Company including fees in connection with litigation. See
Part II, Item 1 "Legal Proceedings";
- - Write-down of advances of $95,235, consisting of amounts advanced to a
consultant by the Company for which the Company alleged misappropriation of
funds for personal use. See Part II; Item 1 "Legal Proceedings".
Revenue totaling $34,381 was generated from rentals at the Company's mobile home
park in Sparwood, British Columbia for the period from November 3, 1999 to
January 31, 2000.
Plan of Operation
The Company's plan of operation is to continue the development of the Company's
fetchOmatic web-site and commence full operation of the web-site. Anticipated
expenses for the next three months in connection with the development are
approximately $225,000 for programmers, web page designers and other technical
personnel. Other anticipated expenses of $225,000 include further investments in
computer hardware, telecommunication lines and other administrative charges.
Upon achieving full technical operations, the Company anticipates that a full
multi-media marketing campaign to promote the site will require $5-10 million.
It is management's intention to raise $3-5 million of equity financing in the
upcoming year to fund the ongoing expenditures of the Company.
The Company has incurred operating losses since inception. The continuation of
the Company is dependent upon the continuing financial support of its creditors
and stockholders and long term financing as well as the successful development
of its web-site and achieving a profitable level of operations. 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.
<PAGE>
Liquidity
The Company's principal capital requirements to date have been to fund the
development of the Company's fetchOmatic search engine. Net cash used in
operating activities for the six-month period ended January 31, 2000 was
$479,257. Net cash used in investing activities during the six-month period
ended January 31, 2000 was $110,114, consisting of $129,531 directly spent in
the development of the fetchOmatic web-site and $126,340 for the acquisition of
fixed assets, primarily computer equipment. Net cash used in investing
activities was reduced by $145,757 as a result of cash on hand of Forest Glade
International Inc. existing as of the acquisition date with SSA. The Company's
primary financing activity to date has been the receipt of advances in exchange
for future issuances of common stock. For the six-month period ended January 31,
2000, the Company received $766,000 by way of such advances consisting of
$411,000 of funds advanced during the period subsequent to acquisition and
$355,000 advanced from Forest Glade International Inc. to SSA during the first
quarter of the 2000 fiscal year. In December and January, the Company issued
1,317,690 shares of common stock pursuant to the exercise of stock options.
Additionally, 100,000 shares were issued from treasury to a company to provide
promotional services over the next twelve months, along with 75,000 shares
loaned by a stockholder. The value assigned to the services based on the trading
price of the common stock on the date of the transactions was $218,750. The cost
of such services are deferred and amortized to the statement of operations on a
straight-line basis over the one-year term of the contract.
The net increase in cash for the six-month period ended January 31, 2000 was
$163,480. Cash includes $142,515 in respect to amounts in trust to settle a
promissory note in March 2000 in connection with the acquisition of the mobile
home park.
Part II - Other Information
Item 1 - Legal Proceedings:
The Company's subsidiary, SSA Coupon Ltd., was a defendant in a action filed in
the Supreme Court of British Columbia in October 1999, by Trevor Kray. The
action also named Maurice Simpson, William Murray and Dana Shaw as defendants.
The action claimed a breach of contract by the Defendants and sought unspecified
damages. Trevor Kray was a consultant engaged by SSA Coupon Ltd., to assist it
with corporate development and financing. 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.,
sought compensation for monies misappropriated by the Krays as well as general
damages.
In February 2000, the Company entered into a settlement agreement with the Krays
which resulted in dismissal of both actions. Trevor Kray agreed to return
100,000 shares of the Company's common stock to the Company. No other payments
were required by the settlement agreement.
Item 2. - Changes in Securities: None
Item 3. - Default Upon Senior Securities: None
Item 4. - Submission of Matters to a Vote of Security Holders: None
Item 5. - Other Information: None
Item 6. - Exhibits and Reports on Form 8-K: None
<PAGE>
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: March 24, 2000
/s/ WAYNE LOFTUS
- ----------------
Wayne Loftus, President
/s/ GIL RAHIER
- --------------
Gil Rahier, Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> AUG-01-1999
<PERIOD-END> JAN-31-2000
<CASH> 73,649
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 304,291
<PP&E> 1,105,105
<DEPRECIATION> 42,322
<TOTAL-ASSETS> 2,039,943
<CURRENT-LIABILITIES> 337,627
<BONDS> 435,420
0
0
<COMMON> 38,110
<OTHER-SE> 1,405,590
<TOTAL-LIABILITY-AND-EQUITY> 2,039,942
<SALES> 0
<TOTAL-REVENUES> 34,381
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 442,263
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,047
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