<PAGE>
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
Of the SECURITIES EXCHANGE ACT OF 1934
For the months of April, 2000.
Sideware Systems Inc.
Suite 102, 930 West First Street, North Vancouver, British Columbia,
Canada V7Y 3N4
[Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.]
Form 20-F______X______. Form 40-F ____________.
[Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to RULE 12g3-2(b) under the Securities Exchange Act of
1934.]
Yes_____________ No_______X_______
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with RULE 12g3-2(b): 82 - ________________________.
<PAGE>
Quarterly Report FORM 61
ISSUER DETAILS
For Quarter Ended: December 31, 1999
Date of Report: May 17, 2000
Name of Issuer: Sideware Systems Inc.
Issuers Address: 102 - 930 West 1st Street, North Vancouver, B.C., V7P 3N4
Issuer Fax Number: (604) 980-7121
Issuer Phone Number: (604) 986-6121
Contact Person: Grant Sutherland
Contact Position: Chairman
Contact Telephone Number: (604) 986-6121
CERTIFICATE
The three schedules required to complete this Quarterly Report are attached and
the disclosure contained therein has been approved by the Board of Directors. A
copy of this Quarterly Report will be provided to any shareholder who requests
it.
Directors Name: "Grant Sutherland" Date Signed: May 17, 2000
Directors Name: "Owen Jones" Date Signed: May 17, 2000
<PAGE>
Consolidated Financial Statements of
SIDEWARE SYSTEMS INC.
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
<PAGE>
[LOGO]
[LETTERHEAD]
AUDITORS' REPORT TO THE SHAREHOLDERS
We have audited the consolidated balance sheets of Sideware Systems Inc. as at
December 31, 1999 and 1998 and the consolidated statements of operations and
deficit and cash flows for the year ended December 31, 1999, the eight months
ended December 31, 1998 and the years ended April 30, 1998 and 1997. 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 audits.
We conducted our audits in accordance with Canadian generally accepted auditing
standards. 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 December 31, 1999
and 1998 and the results of its operations and its cash flows for the year ended
December 31, 1999 and the eight months ended December 31, 1998 and the years
ended April 30, 1998 and 1997 in accordance with generally accepted accounting
principles in Canada. As required by the Company Act (British Columbia) we
report that, in our opinion, these principles have been applied on a consistent
basis.
Canadian generally accepted accounting principles vary in certain significant
respects from accounting principles generally accepted in the United States.
Application of accounting principles generally accepted in the United States
would have affected results of operations and cash flows for each of the periods
presented to the extent summarized in Note 15 to the consolidated financial
statements.
KPMG LLP
Chartered Accountants
Vancouver, Canada
February 21, 2000
<PAGE>
[LOGO]
[LETTERHEAD]
COMMENTS BY AUDITORS FOR U.S. READERS
ON CANADA-U.S. REPORTING CONFLICT
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 cause substantial doubt on
the Company's ability to continue as a going concern, such as those described in
Note 2 to the financial statements. Our report to the shareholders dated
February 21, 2000, 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.
KPMG LLP
Chartered Accountants
Vancouver, Canada
February 21, 2000
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Balance Sheets
(Expressed in Canadian dollars)
December 31, 1999 and 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 8,558,482 $ 317,344
Accounts receivable:
Trade - 35,181
Other (note 4) 177,955 200,000
Due from related parties (note 5(b)) - 375,315
Inventory 106,651 44,105
Prepaid expenses 350,786 98,408
Current portion of long-term receivables (note 6) 20,266 -
----------------------------------------------------------------------------------------------------------
9,214,140 1,070,353
Deposit on lease 29,172 8,213
Long-term receivables (note 6) 156,822 -
Deferred charges (note 6) 145,431 -
Fixed assets (note 7) 1,332,939 646,529
- ---------------------------------------------------------------------------------------------------------------
$ 10,878,504 $ 1,725,095
===============================================================================================================
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 583,093 $ 204,868
Due to related parties (note 5(b)) 56,780 -
Due to officers (note 5(c)) 317,000 73,870
----------------------------------------------------------------------------------------------------------
956,873 278,738
Shareholders' equity:
Share capital (note 8) 30,236,799 12,716,774
Special warrants - 977,082
Commitment related to investment advisory services (note 8(e)(ii)) - 75,000
Deficit accumulated during the development stage (20,315,168) (12,322,499)
----------------------------------------------------------------------------------------------------------
9,921,631 1,446,357
Future operations (note 2)
Litigation (note 10)
Commitments (note 12)
Year 2000 Issue (note 13)
Subsequent events (note 14)
- ---------------------------------------------------------------------------------------------------------------
$ 10,878,504 $ 1,725,095
===============================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
On behalf of the Board:
/s/ Grant Sutherland Director /s/ Edward White Director
-------------------------- ----------------------
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Statements of Operations and Deficit
(Expressed in Canadian dollars)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Year Eight months
ended ended
December 31, December 31, Years Ended April 30,
-----------------------------
1999 1998 1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
Sales to unrelated parties $ 3,763 $ 29,383 $ 26,782 $ 69,748
Equipment sales to related
parties (note 5(a)) 45,846 129,150 - -
----------------------------------------------------------------------------------------------------------
49,609 158,533 26,782 69,748
Cost of sales (exclusive of amortization and
other costs disclosed separately below):
Sales to unrelated parties 3,037 20,350 18,178 9,094
Equipment sales to related parties (note 5(a)) 45,846 120,068 - -
----------------------------------------------------------------------------------------------------------
48,883 140,418 18,178 9,094
- ---------------------------------------------------------------------------------------------------------------
Gross margin 726 18,115 8,604 60,654
Interest income 146,341 41,734 27,897 865
- ---------------------------------------------------------------------------------------------------------------
Operating income before operating expenses 147,067 59,849 36,501 61,519
Operating expenses:
Amortization 422,669 137,392 152,335 122,674
Bad debts 9,131 30,801 36,349 -
Capital taxes - - 7,100 -
Employee wages and benefits 2,590,482 401,843 360,143 176,731
Facilities 509,314 94,705 76,707 72,667
Filing and transfer fees 80,752 12,241 21,907 49,360
Foreign exchange loss (gain) 273,652 (141,047) (33,479) 6,139
Financial advisory and consulting
services (note 8(e)) 160,000 - 75,000 -
Marketing 1,569,086 581,764 635,498 418,764
Office, printing and sundry 392,159 124,375 167,228 107,575
Professional fees 1,125,201 356,820 620,845 961,245
Research and development, net of
government grants of $nil
(December 31, 1998 - $25,730;
April 30, 1998 and 1997 - $nil) 953,842 353,238 301,258 129,877
----------------------------------------------------------------------------------------------------------
8,086,288 1,952,132 2,420,891 2,045,032
- ---------------------------------------------------------------------------------------------------------------
Loss before non-operating items 7,939,221 1,892,283 2,384,390 1,983,513
Value assigned to shares issued to a director in
satisfaction of a royalty claim - - 25,000 -
Write-down of deferred development
costs and software - - - 2,604,115
Write-off of capital assets 53,448 - - -
- ---------------------------------------------------------------------------------------------------------------
53,448 - 25,000 2,604,115
- ---------------------------------------------------------------------------------------------------------------
Loss for the period, carried forward 7,992,669 1,892,283 2,409,390 4,587,628
</TABLE>
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Statements of Operations and Deficit, Continued
(Expressed in Canadian dollars)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Year Eight months
ended ended
December 31, December 31, Years Ended April 30,
-----------------------------
1999 1998 1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Loss for the period, brought forward $ 7,992,669 $ 1,892,283 $ 2,409,390 $ 4,587,628
Deficit accumulated during the development
stage, beginning of period 12,322,499 10,430,216 8,020,826 3,433,198
- ---------------------------------------------------------------------------------------------------------------
Deficit accumulated during the development
stage, end of period $ 20,315,168 $ 12,322,499 $ 10,430,216 $ 8,020,826
===============================================================================================================
Loss per share information:
Basic and diluted $ 0.21 $ 0.07 $ 0.11 $ 0.29
===============================================================================================================
Weighted average number of
common shares outstanding 38,421,589 26,908,735 21,430,724 15,705,723
===============================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Year Eight months
ended ended Years Ended April 30,
December 31, December 31, -----------------------------
1999 1998 1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash provided by (used in):
Operations:
Loss for the period $ (7,992,669) $ (1,892,283) $ (2,409,390) $ (4,587,628)
Items not involving cash:
Amortization 422,669 137,392 152,335 122,674
Write-down of deferred development
costs and software - - - 2,604,115
Investment advisory services to be settled
by equity instruments (note 8(e)(ii)) - - 75,000 -
Write-off of capital assets 53,448 - - -
Value assigned to shares issued in
satisfaction of a royalty claim - - 25,000 -
Value assigned to shares issued for
financial advisory services (note 8 (e)(i)) 160,000 - - -
Changes in non-cash operating working capital:
Accounts receivable 57,226 (183,841) 81,475 (86,445)
Due (to) from related parties 432,095 (373,078) 173,633 (81,370)
Inventory (62,546) (44,105) 7,651 (7,651)
Prepaid expenses (252,378) 34,696 (91,841) 37,684
Accounts payable and accrued liabilities 378,225 (17,643) 75,931 (81,941)
----------------------------------------------------------------------------------------------------------
(6,803,930) (2,338,862) (1,910,206) (2,080,562)
Financing:
Due to directors and officers 243,130 73,870 (243,233) 312,219
Special warrants issued for cash 3,097,761 977,082 1,200,000 1,293,750
Shares issued for cash 12,620,886 - 2,458,600 1,915,093
Share subscriptions receivable 589,296 - - (776,104)
----------------------------------------------------------------------------------------------------------
16,551,073 1,050,952 3,415,367 2,744,958
Investments:
Long-term receivables and deferred charges (322,519) - - -
Purchase of capital assets (1,162,527) (232,525) (336,803) (3,498)
Deposit on lease, net (20,959) - - 8,212
----------------------------------------------------------------------------------------------------------
(1,506,005) (232,525) (336,803) 4,714
- ---------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 8,241,138 (1,520,435) 1,168,358 669,110
Cash and cash equivalents, beginning of period 317,344 1,837,779 669,421 311
- ---------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 8,558,482 $ 317,344 $ 1,837,779 $ 669,421
===============================================================================================================
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows, Continued
(Expressed in Canadian dollars)
- ---------------------------------------------------------------------------------------------------------------
Year Eight months
ended ended Years Ended April 30,
December 31, December 31, -----------------------------
1999 1998 1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Supplemental information:
Cash paid for interest $ - $ - $ - $ -
Cash paid for taxes $ - $ - $ - $ -
Non-cash financing activities:
Shares issued on settlement of debt $ - $ - $ - $ 372,362
Shares issued for services rendered $ 160,000 $ - $ 25,000 $ -
Shares issued on exercise of special warrants $ 977,082 $ - $ - $ -
Shares issued for investment advisory
services (note 8(e)(ii)) $ - $ - $ 75,000 $ -
===============================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
1. GENERAL:
The Company was incorporated in 1983 under the Company Act (British
Columbia). Its principal business activity is developing and marketing of
software technology solutions with a principal focus on the e-commerce
market.
2. FUTURE OPERATIONS:
For financial reporting purposes, the Company is considered to be in the
development stage and the accompanying financial statements are those of a
development stage enterprise.
The Company has not generated significant revenues from these operations.
As at December 31, 1999, the Company has an accumulated deficit of
$20,315,168 and incurred a loss of $7,992,669 during the year ended
December 31, 1999. In addition, the Company is the defendant in a number of
legal proceedings and claims, for which the maximum potential losses are
material (note 10). The Company has filed counterclaims on certain of these
claims. These financial statements have been prepared in accordance with
Canadian generally accepted accounting principles applicable to a going
concern. Accordingly, they do not give effect to adjustments that would be
necessary should the Company be unable to continue as a going concern. The
Company's continuance as a going concern is dependent upon its ability to
obtain adequate equity financing, to reach profitable levels of operation
and its success in defending existing legal claims all of which are
consistent with management's intentions. There is no certainty that such
conditions can be achieved. In the next twelve months, management of the
Company also intends on applying financing received to the continued
development of products in process and to pursue sales or strategic
alliance opportunities with respect to such products. At the date of these
consolidated financial statements significant additional financing sources
have not been identified.
3. SIGNIFICANT ACCOUNTING POLICIES:
(a) Basis of presentation:
These consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in Canada
which, except as set out in note 15, also comply in all material
respects with generally accepted accounting principles in the United
States. The consolidated financial statements include the accounts of
the company, and its subsidiaries, Sideware International SRL, 3032650
Nova Scotia Company, 9050 Investments Ltd. (inactive), Sideware Corp.
(formerly Collaborative Groupware Inc.), Evergreen International
Technology Inc. (inactive) and 9123 Investments Ltd. (inactive), all of
which are wholly-owned. In addition, the Company accounts by the equity
method for its one-third interest in Concurrent Adoptive Recognition
Corp., which is inactive. All material intercompany balances and
transactions have been eliminated.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 2
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(b) Cash and cash equivalents:
Cash equivalents are highly liquid financial instruments having terms
to maturity at the date of acquisition of not more than three months.
(c) Inventory:
Inventory is valued at the lower of cost and net realizable value with
cost being determined on a first-in-first-out basis. Cost includes
laid-down cost.
(d) Fixed assets:
Fixed assets are carried at cost less accumulated amortization.
Amortization is calculated annually as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Asset Basis Rate
- ------------------------------------------------------------------------------
<S> <C> <C>
Furniture and fixtures declining-balance 20%
Computer equipment declining-balance 30%
Trade show assets declining balance 20%
Computer software straight-line 50%
Leasehold improvements straight-line lease term
- ------------------------------------------------------------------------------
</TABLE>
(e) Deferred charges:
Deferred charges represent the discount on notes receivable and will be
recognized by the yield method over the term of the note.
(f) Income taxes:
The Company follows the tax allocation method of accounting. Under this
method, deferred income taxes are provided on timing differences
between income reported for tax purposes and accounting income. In
addition, the Company records those investment tax credits, for which
it has reasonable assurance of realization, as a reduction of the
expenses or the cost of capital assets to which they relate.
(g) Research and development costs:
Research costs are expensed as incurred. Development costs are deferred
if they meet certain specified criteria which relate to the
identification of costs, future benefits and funding requirements.
Where development costs do not meet such criteria, they are expensed as
incurred. Government grants, which are not refundable, are disclosed as
a reduction of the related cost. Management periodically assesses the
underlying value of deferred development costs by reference to business
plans and estimated future cash flows and records write-downs where
appropriate.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 3
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(h) Revenue recognition:
The Company recognizes revenue when title has passed to the customer,
the collectability of the consideration is measurable and the Company
has no significant remaining performance obligations. This includes
revenues from sales to resellers, which are recorded in accordance with
their terms, when the resellers have no right of return and the Company
has no other remaining performance obligations. The Company recognizes
sales of equipment, to related parties, in revenues and related costs
in cost of sales as the Company takes title to and holds the equipment,
bearing all of the risks and rewards of ownership, prior to sale, and
bears the same risks as for sales to unrelated parties after sale,
including the risks related to collection of receivables.
(i) Foreign currency translation:
Monetary assets and liabilities denominated in a foreign currency have
been translated into Canadian dollars at rates of exchange in effect at
the balance sheet date. Non-monetary assets and liabilities, and
revenue and expense items are translated at rates prevailing when they
were acquired or incurred. Exchange gains and losses arising on
translation of assets and liabilities denominated in foreign currencies
are included in operations.
The Company's subsidiaries are treated as integrated operations and the
related accounts are translated into Canadian dollars using the
temporal method as follows:
(1) Revenue and expenses at average exchange rates for the year;
(2) Monetary items at the rates of exchange prevailing at the
balance sheet dates;
(3) Non-monetary items at historical exchange rates; and
(4) Exchange gains and losses arising from translation are included
in the determination of net earnings for the year.
(j) Use of estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Significant areas requiring
the use of management estimates relate to the useful lives of assets
for amortization. Actual amounts may differ from these estimates.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 4
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(k) Loss per share:
Loss per share is calculated based on the weighted average number of
shares outstanding.
As the effect of outstanding options, warrants and special warrants is
anti-dilutive, fully diluted loss per share does not differ from basic
loss per share.
(l) Adoption of new accounting standard:
During the year ended December 31, 1999, the Company adopted the new
accounting standard of the Canadian Institute of Chartered Accountants
relating to cash flows. The new standard has been retroactively applied
and the prior periods' comparative amounts have been restated to
conform to the new standard.
4. ACCOUNTS RECEIVABLE OTHER:
Accounts receivable, at December 31, 1999, is comprised of $162,187 of
Goods and Services Tax credits receivable with the balance made up of
miscellaneous recoverable amounts.
The balance in 1998 of $200,000 represents the cost of an interest in a
court judgment purchased from a company related through certain common
shareholders and directors. Subsequent to December 31, 1998, the judgment
was reversed on appeal and the $200,000 purchase price was returned to the
Company.
5. RELATED PARTY TRANSACTIONS:
(a) Transactions with related parties:
The following table summarizes the Company's related party transactions
with certain directors of the Company:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Year Eight months
ended ended Years ended April 30,
December 31, December 31, ------------------------------
1999 1998 1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Services rendered $ 661,621 $ 120,222 $ 214,596 $ 440,514
Salaries 748,572 106,880 178,000 42,000
Settlement of claims - - 25,000 -
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Included in revenues and cost of sales are revenues and related costs
associated with equipment sales to BrainTech, Inc. and Techwest
Management Inc., companies with certain common shareholders and
directors to the Company.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 5
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
5. RELATED PARTY TRANSACTIONS (CONTINUED):
(b) Due (to) from related parties:
At December 31, 1999, the Company owed $56,780 with respect to costs
incurred by TechWest Management Inc., a company with directors in
common, on behalf of the Company.
At December 31, 1998, the Company was owed $375,315 with respect to
costs incurred by the Company on behalf of BrainTech Inc. and TechWest
Management Inc., companies with directors in common.
These amounts are unsecured, payable on demand and bear no interest.
(c) Due to officers:
The amount due to officers represents advances from and amounts owing
for services provided by officers of the Company. These amounts are
unsecured, payable on demand and bear no interest.
6. LONG-TERM RECEIVABLES:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
1999 1998
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Employee loan, maturing September 30, 2024, bearing interest at 1% per
annum, repayable in bi-monthly blended instalments of $565, except if
employment is terminated in which case it is repayable immediately, real
estate has been pledged as security, net of unamortized discount of
$145,431. $ 150,264 $ -
Employee loans, maturing September 30, 2002, bearing
interest at prime plus 1% per annum. 26,824 -
- --------------------------------------------------------------------------------------------------------------
177,088 -
Less current portion (20,266) -
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
$ 156,822 $ -
- --------------------------------------------------------------------------------------------------------------
</TABLE>
The employee loan secured by real estate has been discounted to fair market
value calculated at prime plus 1%, which is the prevailing rate of similar
financial instruments, over 25 years.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 6
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
7. FIXED ASSETS:
- --------------------------------------------------------------------------------------------------------------
Accumulated Net book
DECEMBER 31, 1999 Cost amortization value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Furniture and fixtures $ 485,287 $ 129,265 $ 356,022
Computer equipment 1,004,818 413,060 591,758
Trade show assets 124,020 29,532 94,488
Computer software 135,081 73,290 61,791
Leasehold improvements 903,965 675,085 228,880
- --------------------------------------------------------------------------------------------------------------
$ 2,653,171 $ 1,320,232 $ 1,332,939
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Accumulated Net book
DECEMBER 31, 1998 Cost amortization value
- --------------------------------------------------------------------------------------------------------------
Furniture and fixtures $ 146,602 $ 83,378 $ 63,224
Computer equipment 517,674 277,913 239,761
Trade show assets 111,721 7,448 104,273
Computer software 99,352 51,194 48,158
Leasehold improvements 707,509 516,396 191,113
- --------------------------------------------------------------------------------------------------------------
$ 1,582,858 $ 936,329 $ 646,529
- --------------------------------------------------------------------------------------------------------------
8. SHARE CAPITAL:
Authorized:
200,000,000 common shares without nominal or par value.
Issued:
- --------------------------------------------------------------------------------------------------------------
Number
of shares Amount
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1996 10,792,309 $ 5,451,969
Shares issued on exercise of special warrants 7,683,000 1,754,500
Shares issued on exercise of non-transferable warrants 404,500 202,250
Cancellation of shares (a) (3,924,396) -
Shares issued for settlement of debt 1,489,446 372,362
Performance shares issued for cash 750,000 7,500
Shares issued on exercise of options 123,000 44,280
Less share issue costs - (93,437)
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1997 17,317,859 7,739,424
Shares issued on exercise of special warrants 4,450,000 1,293,750
Shares issued on exercise of non-transferable warrants 4,203,100 2,106,500
Shares issued on exercise of options 699,000 352,100
Shares issued to a director in satisfaction of a royalty claim 100,000 25,000
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1998 26,769,959 11,516,774
Shares issued on exercise of special warrants 500,000 1,200,000
- --------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 27,269,959 12,716,774
Shares issued on exercise of special warrants 9,724,611 4,149,843
Shares issued on exercise of non-transferable warrants 10,434,335 5,078,666
Shares issued on exercise of options 1,343,500 1,198,310
Shares issued for cash 2,746,833 6,712,155
Shares issued for services rendered 250,000 160,000
Share subscriptions (243,900 common shares) - 589,296
Less share issue costs - (368,245)
- --------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 51,769,238 $ 30,236,799
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 7
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
8. SHARE CAPITAL (CONTINUED):
Issued (continued):
Unless otherwise indicated, common shares issued for non-cash consideration
are valued at their market value at date of issuance.
(a) Escrow shares:
Included in issued shares at December 31, 1999 are 1,030,378 shares
(December 31, 1998 - 1,030,378; April 30, 1998 and 1997 - 1,030,378)
held in escrow to be released based on achievement of a cash flow
formula.
(b) Stock options:
(i) Activity during the year ended December 31, 1999 is as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Exercise Outstanding Outstanding Vested
Price per December 31, Expired/ December 31, December 31,
Expiry date Share 1998 Granted Exercised Cancelled 1999 1999
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
May 1, 2001 $ 0.50 895,000 - (142,000) - 753,000 753,000
February 12, 2002 0.36 267,000 - (124,000) (20,000) 123,000 123,000
February 12, 2002 0.50 40,000 - (40,000) - - -
March 26, 2002 0.82 93,000 - (83,000) - 10,000 10,000
December 16, 2002 0.70 740,000 - (280,000) (80,000) 380,000 380,000
July 6, 2003 0.36 555,000 - (190,000) - 365,000 365,000
April 14, 2004 1.14 - 760,000 (290,000) - 470,000 270,000
April 29, 2004 1.35 - 220,000 (59,000) - 161,000 161,000
June 17, 2004 2.33 - 1,090,000 (123,000) - 967,000 812,000
October 4, 2004 2.66 - 740,000 (11,500) - 728,500 683,500
October 20, 2004 2.78 - 150,000 (1,000) - 149,000 64,000
-----------------------------------------------------------------------------------------------------
2,590,000 2,960,000(1,343,500) (100,000) 4,106,500 3,621,500
=====================================================================================================
</TABLE>
Stock options vest over periods of up to two years. Exercise price
per share is equal to weighted average exercise per share.
(ii) Activity during the year ended December 31, 1998 is as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Exercise Outstanding Outstanding
price December 31, Expired/ December 31,
Expiry date per 1997 Granted Exercised Cancelled 1998
share
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
May 1, 2001 $ 0.50 941,000 - - (46,000) 895,000
February 12, 2002 0.36 267,000 - - - 267,000
February 12, 2002 0.50 60,000 - - (20,000) 40,000
March 26, 2002 0.82 93,000 - - - 93,000
December 16, 2002 0.70 760,000 - - (20,000) 740,000
October 6, 2003 0.36 - 555,000 - - 555,000
---------------------- --------- --------------- ------------ ----------- ------------ --------------
2,121,000 555,000 - (86,000) 2,590,000
====================== ========= =============== ============ =========== ============ ==============
</TABLE>
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 8
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
8. SHARE CAPITAL (CONTINUED):
(b) Stock options (continued):
(iii) A summary of the Company's stock option activity is as follows:
<TABLE>
<CAPTION>
Outstanding Options
----------------------------------------------
Number of Weighted average
Shares Exercise Price
------------ ---------------
<S> <C> <C>
Balances at April 30, 1996 - -
Options granted 2,308,000 0.49
Options exercised (123,000) 0.36
Options canceled (120,000) 0.50
------------ -----------
Balances at April 30, 1997 2,065,000 0.50
Options granted 800,000 0.70
Options exercised (699,000) 0.50
Options canceled (45,000) 0.68
------------ -----------
Balances at April 30, 1998 2,121,000 0.57
Options granted 555,000 0.36
Options exercised - -
Options canceled (86,000) 0.55
------------ -----------
Balances at December 31, 1998 2,590,000 0.52
Options granted 2,960,000 2.06
Options exercised (1,343,500) 0.89
Options canceled (100,000) 0.63
------------ ----
Balances at December 31, 1999 4,106,500 1.51
========== ====
</TABLE>
(c) Share purchase warrants:
(i) The following non-transferable share purchase warrants were outstanding at
December 31, 1999:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Number Exercise price Expiry
of shares per share date
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
600,000 $0.32 July 22, 2000
286,000 $0.40 December 23, 2000
779,276 $0.333 U.S. To March 26, 2000
$0.383 U.S. From March 27, 2000
To March 26, 2001
2,700,000 $0.55 To April 7, 2000
$0.63 From April 8, 2000
To April 7, 2001
2,746,833 $1.64 U.S. To September 14,2000
$1.89 U.S. From September 15, 2000
To September 14, 2001
==============================================================================================================
</TABLE>
(ii) The following non-transferable share purchase warrants were
outstanding at December 31, 1998:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Number Exercise price Expiry
of shares per share date
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
450,000 $ 0.465 April 16, 1999
3,000,000 $ 0.43 April 16, 1999
1,500,000 $ 0.92 October 23, 1999
==============================================================================================================
</TABLE>
Share purchase warrants generally expire two years subsequent to their issuance
date.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 9
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
8. SHARE CAPITAL (CONTINUED):
(d) Special warrants:
(i) As at December 31, 1999, no special warrants were outstanding.
(ii) At December 31, 1998, 90,000 special warrants were outstanding
which could be exercised in exchange for one common share and one
non-transferable share purchase warrant by November 19, 2000. The
non-transferable share purchase warrants have the following terms:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Number Exercise price Expiry
of shares per share date
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
90,000 $ 0.32 To November 19, 1999
$ 0.37 From November 20, 1999
To November 19, 2000
==============================================================================================================
</TABLE>
(e) Shares issued for financial advisory and consulting services:
(i) During the year ended December 31, 1999, 250,000 common shares
were issued for services pursuant to a financial advisory and
consulting agreement. The market value of the Company's common
shares at the date of the agreement was $0.64 per share.
(ii) Pursuant to an agreement entered into during the fiscal year ended
April 30, 1998, 125,000 share purchase warrants were issued for
financial advisory services. During the year ended December 31,
1999, these warrants were converted into 125,000 common shares at
$0.60 per share for total proceeds of $75,000 which had been
recorded as a commitment in the prior year. The value assigned to
these equity instruments of $75,000 has been expensed during the
fiscal year ending April 30, 1998.
9. INCOME TAXES:
The Company has non-capital loss carry forwards for income tax purposes of
approximately $17,785,000 which are available to reduce taxable income of
future years, the benefit of which has not been recorded in the accounts
and which expire as follows:
<TABLE>
<S> <C>
2000 $ 1,285,000
2001 -
2002 650,000
2003 3,600,000
2004 2,200,000
2005 1,650,000
2006 8,400,000
-------------------------------------------------------
$ 17,785,000
=======================================================
</TABLE>
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 10
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
10. LITIGATION:
The Company is engaged in the following litigation:
(a) During the year ended April 30, 1997, a former director of the Company
commenced legal proceedings against the Company for $276,000 alleged to
be owing to him for unpaid consulting fees and funds loaned or advanced
on behalf of the Company. The Company has filed a defense and
counterclaim.
(b) During the year ended April 30, 1997, four former directors commenced
legal proceedings against the Company and certain of its present
directors claiming unspecified damages for libel. The Company has filed
a defense and counterclaim.
(c) During the year ended April 30, 1996, the Company commenced legal
proceedings against former directors and officers of the Company,
companies related to a former director, and the Company's former
solicitors and auditors. The relief claimed included damages for breach
of fiduciary duty and negligence, an injunction preventing the sale of
a computer program named "E-Glue", and an order setting aside a
disputed general security agreement against the Company's assets.
484117 B.C. Ltd., a company controlled by a former director, filed a
counterclaim alleging that the Company was indebted to it in the amount
of $1,495,594 as at November 4, 1994, and seeking to enforce the
disputed general security agreement. The Company's former auditors
filed a counterclaim for approximately $50,000 alleged to be owing for
professional services.
(d) On January 11, 1999, parties related to a former director commenced
proceedings against the Company claiming damages for abuse of process.
The Company has filed a defense and counterclaim.
(e) On February 17, 2000, a company commenced legal proceedings against the
Company for $40,000 alleged to be owing to them for unpaid services.
The Company is in the course of preparing a defense to the claim.
While the ultimate outcomes of these claims are uncertain, management of
the Company believes it will be successful in defending these actions and
accordingly no amounts have been provided in these financial statements.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 11
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
11. FINANCIAL INSTRUMENTS:
(a) Fair values of financial instruments:
The Company's short-term financial instruments consist of cash and cash
equivalents, accounts receivable, due to/from related parties, due to
officers, accounts payable and accrued liabilities. The fair value of
these financial instruments approximate their carrying values due to
their short term maturity.
The fair value of the long-term receivables have been calculated using
the current market rate for such instruments of the same remaining
maturity term and credit risk and approximate carrying value.
(b) Foreign currency risk:
Foreign currency risk reflects the risk that the Company's net assets
or operations will be negatively impacted due to fluctuations in
exchange rates. Revenues billed in United States dollars by the Company
come due in the short-term and accordingly, management of the Company
believes there is no significant exposure to foreign currency
fluctuations. The Company does not have foreign currency hedges in
place.
(c) Credit risk:
Credit risk reflects the risk that the Company may be unable to recover
contractual receivables. No one contract represents a concentration of
credit risk. The Company employs established credit approval practices
to further mitigate this risk.
12. COMMITMENTS:
The Company has obligations under operating lease arrangements which
require the following minimum annual payments:
<TABLE>
<S> <C>
2000 $ 719,000
2001 712,500
2002 647,500
2003 407,000
2004 19,000
-------------------------------------------------------
$ 2,505,000
=======================================================
</TABLE>
Pursuant to agreements with companies with certain common shareholders and
directors of the Company, and a director of the Company, approximately
$115,000 of these amounts are recoverable from these related parties for
the fiscal years 2000 and 2001, approximately $89,000 for the fiscal year
2002, and approximately $36,000 for the fiscal year ending 2003.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 12
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
13. YEAR 2000 ISSUE:
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in some systems, which use certain dates in 1999 to
represent something other than a date. Although the change in date has
occurred, it is not possible to conclude that all aspects of the Year 2000
Issue that may affect the entity, including those related to customers,
suppliers, or other third parties, have been fully resolved.
14. SUBSEQUENT EVENTS:
(a) Stock options:
Subsequent to December 31, 1999, 657,500 stock options were exercised
and converted to common shares for total cash proceeds of $1,071,785.
On January 14 and 21, 2000, the Company granted and received regulatory
approval on 2,000,000 stock options (1,000,000 each grant date),
exercisable at prices of U.S.$8.69 and U.S.$11.08 per share until
January, 2005.
(b) Share purchase warrants:
Subsequent to December 31, 1999, 2,607,464 share purchase warrants were
exercised and converted to common shares for total cash proceeds of
$3,271,834.
(c) Private placement:
Subsequent to December 31, 1999, the Company issued, through private
placements, 2,500,000 units of the Company at a price of U.S.$1.64 per
unit. Each unit consists of one common share and one non-transferable
share purchase warrant, entitling the holder to purchase one additional
common share without par value, exercisable for a period of two years
at a price of U.S.$$1.64 per share for the first year and at a price of
U.S.$1.89 per share the second year.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 13
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
15. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES:
These consolidated financial statements have been prepared in accordance
with generally accepted accounting principles ("GAAP") in Canada, the
measurement principles of which conform, in all material respects, with
those in the United States except as described below:
(a) Income taxes:
Under the asset and liability method of United States Statement of
Financial Accounting Standards No. 109 ("FAS 109"), deferred income tax
assets and liabilities are measured using enacted tax rates for the
future income tax consequences attributable to differences between the
financial statement carrying amount of existing assets and liabilities
and their respective tax bases. The application of the provisions of
FAS 109 on the Company's balance sheet would result in no net
difference in deferred taxes from that reported under Canadian GAAP. At
December 31, 1999, the gross deferred tax asset amount relating to a
non-capital loss carry forward was $7,400,000 which is reduced by a
valuation allowance of $7,400,000 as management does not consider that
it is more likely than not that such assets will be realized in the
carry forward period. There was no deferred tax liability.
(b) Stock-based compensation:
For United States GAAP purposes, the Company has elected to follow the
disclosure-only provisions under Statement of Financial Accounting
Standards No. 123 ("FAS 123"), "Accounting for Stock-Based
Compensation", and applies Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and related
interpretations in accounting for its stock-based compensation to
employees. Accordingly, the Company's stock-based compensation expense
is measured based on the intrinsic value of the option on the date of
grant. FAS 123 requires companies that continue to follow APB 25 to
disclose the impact of applying the fair value method of FAS 123.
Under the intrinsic value method of APB 25, the stock option
compensation is the excess, if any, of the quoted market value of the
stock at the measurement date of the grant over the amount an optionee
must pay to acquire the stock. Accordingly, stock-based compensation
for the year ended December 31, 1999, the eight months ended December
31, 1998 and the years ended April 30, 1998 and 1997, for United States
GAAP purposes, would be $404,000; $44,400, $nil, and $120,250,
respectively.
Had stock compensation expense for the Company's stock option plan been
determined based on the fair value methodology under FAS 123, the
Company's net loss would have increased for the year ended December 31,
1999, the eight months ended December 31, 1998, and the years ended
April 30, 1998 and 1997 by $4,073,061, $117,616, $315,452 and $374,908,
respectively. In addition, the Company's loss per share under United
States GAAP for the year ended December 31, 1999, the eight months
ended December 31, 1998 and the years ended April 30, 1998 and 1997
would have been $0.33, $0.08, $0.13 and $0.16, respectively.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 14
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
15. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED):
(b) Stock-based compensation (continued):
The fair value for the options was estimated using the Black-Scholes
option pricing model with the following assumptions: Expected
volatility of 80% for the year ended December 31, 1999 and 70% for all
other periods, risk-free interest rate ranging from 5.3% to 6.3%,
expected life of five years, and a 0% dividend yield.
The weighted-average fair value of stock options granted for the year
ended December 31, 1999, the eight months ended December 31, 1998 and
the years ended April 30, 1998 and 1997, are $1.51, $0.29, $0.39 and
$0.21, respectively.
(c) Development stage enterprises:
For United States GAAP purposes, Statement of Financial Accounting
Standards No. 7, "Development Stage Enterprises", the Company would be
defined to be a development stage enterprise which would require the
following additional disclosures:
(i) The amounts in the consolidated statement of operations and
deficit accumulated during the development stage would be
presented on a cumulative basis from the Company's inception which
is summarized as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Revenues $ 1,263,036
Cost of sales (exclusive of amortization and other costs
disclosed separately below) 284,930
- --------------------------------------------------------------------------------------------------------------
978,106
Operating expenses:
Amortization 1,364,868
Bad debts 270,998
Employee wages and benefits 4,486,537
Filing and transfer fees 246,224
Investment advisory services 235,000
Marketing 4,148,048
Office, printing and sundry 2,617,665
Professional fees 4,900,072
Research and development 4,341,863
- --------------------------------------------------------------------------------------------------------------
22,611,275
- --------------------------------------------------------------------------------------------------------------
Loss before undernoted 21,633,169
Other income (468,248)
- --------------------------------------------------------------------------------------------------------------
Loss accumulated during the development stage under U.S. GAAP $ 21,164,921
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 15
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
15. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED):
(c) Development stage enterprises (continued):
(ii) The amounts in the consolidated statement of cash flows would also
be presented on a cumulative basis from the Company's inception
which is summarized as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Operations:
Loss accumulated during the development stage
under U.S. GAAP $ (21,164,921)
Items not involving the use of cash:
Amortization 1,364,868
Other 1,205,146
Changes in non-cash operating working capital items 20,733
- --------------------------------------------------------------------------------------------------------------
(18,574,174)
Financing 29,388,157
Investments (2,255,444)
- --------------------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents during the development stage 8,558,539
Cash at inception of development stage (57)
- --------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, December 31, 1999 $ 8,558,482
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 16
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
15. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED):
(c) Development stage enterprises (continued):
(iii) A cumulative statement of stockholders' equity would be presented
as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Share Capital Special Retained
----------------------------- Special earnings
Number Assigned warrants (deficit)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, inception of development 1,044,719 $ 526,961 $ - $ 382,003
stage
Shares issued for cash 400,000 100,000 - -
Loss for the year - - - (90,976)
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1990 1,444,719 626,961 291,027
Shares issued for acquisition of 6,660,452 1,105,231 - -
subsidiary
Shares issued as settlement for debt 900,000 225,000 - -
Loss for the year - - - (2,237,102)
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1991 9,005,171 1,957,192 - (1,946,075)
Shares issued for cash 500,000 200,000 - -
Shares issued for cash 220,000 198,000 - -
Loss for the year - - - (431,506)
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1992 9,725,171 2,355,192 - (2,377,581)
Shares issued for cash 783,000 567,250 - (781,817)
Loss for the year - - - -
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1993 10,508,171 2,922,442 - (3,159,398)
Shares issued as a finders fee 53,881 92,675 - -
Shares issued for cash 1,588,550 1,671,710 - -
Shares issued as settlement for debt 406,450 705,141 - -
Loss for the year - - - (2,256,961)
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1994 12,557,052 5,391,968 - (5,416,359)
Shares issued as settlement for debt 162,165 60,001 - -
Earnings for the year - - - 277,200
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1995 12,719,217 5,451,969 - (5,139,159)
Cancellation of escrow shares (1,926,908) - - -
Loss for the year - - - (898,154)
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1996 10,792,309 5,451,969 - (6,037,313)
Special warrants issued - - 3,250,500 -
Shares issued on exercise of
special warrants 7,683,000 1,754,500 (1,754,500) -
Shares issued on exercise of
non-transferable warrants 404,500 202,250 (202,250) -
Cancellation of shares (3,924,396) - - -
Shares issued as settlement for 1,489,446 372,362 - -
debt
Performance shares issued for 750,000 7,500 - -
cash
Shares issued on exercise of 123,000 44,280 - -
options
Share issue costs - (93,437) - -
Loss for the year - - - (2,002,863)
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1997 17,317,859 7,739,424 1,293,750 (8,040,176)
Shares issued on exercise of
non-transferable warrants 4,203,100 2,106,500 - -
Shares issued on exercise of options 699,000 352,100 - -
Shares issued in satisfaction of
a royalty claim 100,000 25,000 - -
Shares issued on exercise of
special warrants 4,450,000 1,293,750 (1,293,750) -
Special warrants issued - - 1,200,000 -
Loss for the year - - - (2,409,390)
- --------------------------------------------------------------------------------------------------------------
Balance, April 30, 1998
carried forward 26,769,959 11,516,774 1,200,000 (10,449,566)
</TABLE>
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 17
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
15. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED):
(c) Development stage enterprises (continued):
(iii) A cumulative statement of stockholders' equity would be presented
as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Share Capital Retained
------------------------------- Special earnings
Number Assigned warrants (deficit)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, April 30, 1998
brought forward 26,769,959 $ 11,516,774 $ 1,200,000 $ (10,449,566)
Shares issued on exercise
of special warrants 500,000 1,200,000 (1,200,000) -
Special warrant subscriptions - - 977,082 -
Loss for the period - - - (1,936,683)
- --------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 27,269,959 12,716,774 977,082 (12,386,249)
Shares issued on exercise of
non-transferable warrants 10,434,335 5,078,666 - -
Shares issued on exercise of options 1,343,500 1,198,310 - -
Shares issued on exercise of
special warrants 9,724,611 4,149,843 (977,082) -
Shares issued for cash 2,746,833 6,712,155 - -
Shares issued for services rendered 250,000 160,000 - -
Share subscriptions receivable
(243,900 common shares) - 589,296 - -
Share issue costs - (368,245) - -
Loss for the year - - - (8,396,669)
- --------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 51,769,238 $ 30,236,799 $ - $ (20,782,918)
==============================================================================================================
</TABLE>
Identification as a development stage enterprise would not impact
the measurement principles applied.
(d) Research and development:
For United States GAAP purposes, Statement of Financial Accounting
Standards No. 2, "Research and Development Expenditures", requires
development costs to be expensed as incurred. Under Canadian GAAP, such
expenses are deferred if they meet specified criteria. Deferred
development costs of $2,604,115 which were capitalized as at April 30,
1996 would have been expensed as incurred under United States GAAP. As
such, these costs were written off during the year ended April 30,
1997. Since April 30, 1996, no costs have been deferred under Canadian
GAAP and, accordingly, no difference has arisen to the amounts that
could be reported under United States GAAP.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 18
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
15. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED):
(e) Loss per share:
For United States GAAP purposes, 1,030,378 shares held in escrow as at
December 31, 1999 (December 31, 1998 - 1,030,378; April 30, 1998 and
1997 - 1,030,378) are considered contingently issuable. Accordingly,
these shares are excluded from the weighted average number of shares
outstanding for the purposes of calculating loss per share amounts. To
the extent that common shares held in escrow are released based on the
achievement of performance measures, compensation expense will be
recognized under United States GAAP at the date the shares became
releasable for the difference between the market value of the shares at
that date and the nominal consideration originally paid.
(f) Summary of United States GAAP adjustments:
The following table sets forth the effect on the loss for the period
and loss per share:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Year Eight months
ended ended Years Ended April 30,
December 31, December 31, ---------------------------
1999 1998 1998 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Loss determined under Canadian GAAP $ 7,992,669 $ 1,892,283 $ 2,409,390 $ 4,587,628
Expenses relating to stock-based
compensation (b) 404,000 44,400 - 19,350
Difference in accounting for deferred
development costs and software,
including reversal in 1997 of
write-down recorded under Canadian
GAAP for costs that would have been
expensed in a prior year under United - - - (2,604,115)
States GAAP (d)
- --------------------------------------------------------------------------------------------------------------
Loss determined under
United States GAAP $ 8,396,669 $ 1,936,683 $ 2,409,390 $ 2,002,863
==============================================================================================================
Weighted average number of common
shares outstanding under
United States GAAP 37,391,211 25,878,357 20,400,346 14,675,347
==============================================================================================================
Loss per share under
United States GAAP $ 0.22 $ 0.07 $ 0.12 $ 0.14
==============================================================================================================
</TABLE>
There would be no impact from the above adjustments on total assets or
shareholders' equity reported under Canadian GAAP at December 31, 1999
and December 31, 1998.
<PAGE>
SIDEWARE SYSTEMS INC.
(A Development Stage Enterprise)
Consolidated Notes to Financial Statements, page 19
(Expressed in Canadian dollars)
Year ended December 31, 1999
Eight months ended December 31, 1998
Years ended April 30, 1998 and 1997
- --------------------------------------------------------------------------------
15. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED):
(g) Statement of cash flows:
Cash flows from operations, financing and investment activities under
United States GAAP would be presented as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Year Eight months
ended ended Years Ended April 30,
December 31, December 31, ---------------------------
1999 1998 1998 1997
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash flows from:
Operations $ (6,803,930) $ (2,338,862) $ (1,910,207) $ (1,708,200)
Financing 16,551,073 1,050,952 3,415,367 2,372,596
Investments (1,506,005) (232,525) (336,802) 4,714
-----------------------------------------------------------------------------------------------------
Increase (decrease) in
cash and cash equivalents $ 8,241,138 $ (1,520,435) $ 1,168,358 $ 669,110
=====================================================================================================
</TABLE>
16. COMPARATIVE FIGURES:
Certain comparative figures have been reclassified to conform to the
financial statement presentation adopted in the current year.
<PAGE>
SIDEWARE SYSTEMS INC. SCHEDULE B
SHARE CAPITAL
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999
COMMON SHARES
<TABLE>
<CAPTION>
$ PER
NUMBER SHARE
<S> <C> <C>
Oct 1, 1999 Balance forward 46,020,303 $26,605,101
---------- -----------
Oct - Dec 1999 Shares issued on exercise of options 860,500 801,975
Oct - Dec 1999 Shares issued on exercise
of non-transferable warrants 4,263,435 2,347,288
Oct - Dec 1999 Shares issued on exercise
of special warrants 625,000 261,384
Oct - Dec 1999 Share subscriptions (243,900 common shares) - 589,296
Oct - Dec 1999 Share issue costs - (368,245)
---------- -----------
Dec 31, 1999 Total for the quarter 5,748,935 3,631,698
---------- -----------
SHARE CAPITAL DECEMBER 31/99 51,769,238 $30,236,799
=========== ===========
SPECIAL WARRANTS
Oct 1/99 Balance forward NIL
=============
Dec 31/99 SPECIAL WARRANTS DEC 31, 1999 NIL
=============
</TABLE>
<PAGE>
SIDEWARE SYSTEMS INC. SCHEDULE B
(CONTINUED)
OPTIONS GRANTED
DURING THE THREE MONTHS ENDED DECEMBER 31, 1999:
DATE: OCTOBER 4, 1999
EXERCISE PRICE: $2.66
EXPIRY DATE: OCTOBER 4, 2004
<TABLE>
<CAPTION>
NAME NUMBER
<S> <C>
Arias, Veronica 10,000
Colen, Michael 200,000
Dhat, Neelam 20,000
Dreskai, Robert 10,000
Dykstra, John 20,000
Gubser, Lyn 25,000
Hall, Chris 20,000
Huang, May 20,000
MacGregor, Michelle 20,000
Mahon, Alex 20,000
Sutherland, Grant 250,000
Taylor, Vince 100,000
Zhang, John 25,000
</TABLE>
DATE: OCTOBER 20, 1999
EXERCISE PRICE: $2.78
EXPIRY DATE: OCTOBER 20, 2004
<TABLE>
<CAPTION>
NAME NUMBER
<S> <C>
Benson, Shanna 20,000
Drezet, Tony 10,000
Hall, Chris 10,000
Hildebrand, Paul 25,000
Jurisic, Sava 20,000
Lai, Harry 20,000
Mounts, Gary 5,000
Sterniolo, Vince 20,000
Unger, Al 10,000
Vandrimmlen, Ed 10,000
</TABLE>
<PAGE>
QUARTERLY REPORT - FORM 61
QUARTER ENDED DECEMBER 31, 1999
SIDEWARE SYSTEMS INC.
SHEDULE C: MANAGEMENT DISCUSSION
PERIOD: OCTOBER 1, 1999 TO MAY 17, 2000
1. SCOTT FRIEDLANDER
Mr. Friedlander joined Sideware as Executive Vice President of Sales and
Marketing. Scott spent 18 years with Xerox and brings a wealth of knowledge and
contacts to Sideware.
2. SALES OFFICES
Sales offices have been opened in San Jose, Atlanta, Boston and Chicago in
addition to our main Herndon, Virginia office.
3. SALES AND SUPPORT STAFF
Sales and Support Staff in the U.S. have grown to 70 people. The company now has
approximately 130 employees.
4. FINANCING
Private Placement financing during this period resulted in approximately
US$15,000,000 being raised for Sideware.
5. INVESTOR RELATIONS ACTIVITIES
Shareholders and interested persons can contact Richard Simpson by telephone at
(604) 986-6121; fax at (604) 980-7121 or by e-mail to [email protected].
Jennifer Burke can be contacted at (604) 669-2101, ext 224, fax at (604)
669-2151 or by e-mail to [email protected]. Please visit our website at
sideware.com.
LIST OF DIRECTORS AT MAY 17, 2000
OWEN JONES
GRANT SUTHERLAND
JAMES SPEROS
JAY NUSSBAUM
EDWARD WHITE
PETER KOZICKI
<PAGE>
[LOGO]
[LETTERHEAD]
FOR IMMEDIATE RELEASE: JANUARY 31, 2000
INVESTOR CONTACTS:
Richard S. Simpson or
Jennifer Burke
[email protected]
(604) 988-0440
SIDEWARE SYSTEMS INC. ANNOUNCES US $25,000,000
PRIVATE PLACEMENT
VANCOUVER, B.C. - Sideware Systems Inc. (CDNX:SYD.U and OTC-BB:SDWSF) has
arranged a non-brokered private placement in the sum of US $25,000,000. Under
the private placement, 2,500,000 units will be issued at price of US $10.00 per
unit, subject to regulatory approval.
Each unit is comprised of one common share and one share purchase warrant. Each
share purchase warrant entitles the holder to purchase one additional common
share of the company for a period of two years, at a price of US $10.00 per
share in the first year or US $11.50 per share in the second year. A finder's
fee of 5% will be paid in cash or securities or a combination thereof, subject
to regulatory approval.
The proceeds in the sum of US $25,000,000 will be used to finance product
development, sales and marketing, company expansion and general working capital.
ABOUT SIDEWARE
Sideware is an IBM ISV and Business Partner providing products, solutions and
integration services. The company has coupled Dr. Bean e-Customer Relationship
Management Technology ("e-CRMT") with IBM products providing a flexible
e-Business "backbone" for small companies to large corporations. The company is
a Java developer and has exclusively built Dr. Bean using Java and Enterprise
Java technologies. For further information on Sideware's total solution or
turnkey products and services, please visit www.sideware.com. For investment
information visit www.techwestmgmt.com/sideware. Sideware Systems Inc.,
Corporate Headquarters in North Vancouver, BC publicly trades on both the OTC
Bulletin Board, "SDWSF" and in U.S. dollars on the Canadian Venture Stock
Exchange (CDNX) - "SYD-U". Sideware Corp. is headquartered in Herndon, VA, and
is the centre for the company's product sales and service operations.
ON BEHALF OF THE BOARD
/s/Grant Sutherland
Grant Sutherland
Chairman
-more-
<PAGE>
THE CANADIAN VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbour"
for forward-looking statements. Certain information included in this
communication (as well as information included in oral statements or other
written statements made or to be made by Sideware Systems Inc.) contains
statements that are forward-looking, such as statements relating to the future
anticipated direction of the high technology industry, plans for future
expansion, various business development activities, planned capital
expenditures, future funding sources, anticipated sales growth and potential
contracts. Such forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results in the future
and, accordingly, such results may differ from those expressed in any
forward-looking statements made by or on behalf of Sideware Systems Inc. These
risks and uncertainties include, but are not limited to, those relating to
development and expansion activities, dependence on existing management,
financial activities, domestic and global economic conditions, changes in
federal or state income tax laws, and market competition factors.
<PAGE>
FORM 27
SECURITIES ACT
MATERIAL CHANGE REPORT UNDER SECTION 85(1) OF THE ACT
ITEM 1. REPORTING ISSUER
Sideware Systems Inc.
102 - 930 West 1st Street
North Vancouver, B.C.
V7P 3N4
ITEM 2. DATE OF MATERIAL CHANGE
January 31, 2000
ITEM 3. PRESS RELEASE
The News Release was issued on January 31, 2000.
ITEM 4. SUMMARY OF MATERIAL CHANGE
The Company announces a non-brokered private placement of up
to 2,500,000 units at a price of US $10.00.
ITEM 5. FULL DESCRIPTION OF MATERIAL CHANGE
Sideware Systems Inc. (CDNX:SYD.U and OTC-BB:SDWSF) has
arranged a non-brokered private placement in the sum of up to
US $25,000,000. Under the private placement, up to 2,500,000
units will be issued at price of US $10.00 per unit, subject
to regulatory approval.
Each unit is comprised of one common share and one share
purchase warrant. Each share purchase warrant entitles the
holder to purchase one additional common share of the company
for a period of two years, at a price of US $10.00 per share
in the first year or US $11.50 per share in the second year. A
finder's fee of 5% will be paid in cash or securities or a
combination thereof, subject to regulatory approval.
The proceeds in the sum of US $25,000,000 will be used to
finance product development, sales and marketing, company
expansion and general working capital.
<PAGE>
ITEM 6. RELIANCE ON SECTION 85(2) OF THE ACT
N/A
ITEM 7. OMITTED INFORMATION
N/A
ITEM 8. SENIOR OFFICERS
Grant Sutherland: (604) 986-6121
ITEM 9. STATEMENT OF SENIOR OFFICER
The foregoing accurately discloses the material change
referred to herein.
DATED at Vancouver, British Columbia, this 31st day of January, 2000.
Sideware Systems Inc.
/s/ Grant Sutherland
- --------------------------------
Grant Sutherland
Director
<PAGE>
FORM 4A
PRIVATE PLACEMENT NOTICE FORM
Re: Sideware Systems Inc. (SYD.U) (the "Issuer").
SEDAR Project #: N/A .
--------------------
Issued and Outstanding Shares Prior to Private Placement 56,256,620 .
----------------
Date of News Release Announcing the Private Placement January 31, 2000 .
------------------------
- --------------------------------------------------------------------------------
1. Total amount of funds to be raised: US$11,040,000.
2. Description of securities to be issued:
(a) Class common.
(b) Number 1,104,000.
(c) Price per security US$10.00.
3. If Warrants are to be issued, provide the following information:
(a) Number 1,104,000.
(b) Number of Listed Shares eligible to be purchased on
exercise of Warrants 1,104,000.
(c) Exercise price of Warrants US$10.00 in the first year
and US$11.50 in the second year.
(d) Expiry date of Warrants two years from the date of
issue.
4. If Debt Securities are to be issued, provide the following information:
(a) Aggregate principal amount _________________________.
(b) Maturity date ______________________________________.
(c) Interest rate ______________________________________.
(d) Conversion terms ___________________________________.
(e) Default provisions _________________________________.
- --------------------------------------------------------------------------------
FORM 4A PAGE 1
<PAGE>
5. Placees - If the Private Placement is non-brokered, please
complete the following chart for each anticipated placee.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
NAME & ADDRESS OF
PURCHASER (IF PLACEE IS SECTION OF PRESENT DIRECT
A ISSUER, STATE THE NUMBER OF ACT/RULES & INDIRECT
NAMES OF THE BENEFICIAL SECURITIES PROSPECTUS HOLDINGS IN THE PAYMENT INSIDER
OWNERS) PURCHASED EXEMPTION ISSUER DATE Y / N
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William W. Noel, III 10,000 74(2)(4) 250,000 03/10/00 N
3527 B. S. Stafford
Street
Arlington, VA
22206
-----------------------------------------------------------------------------------------------------
Daniel P. Walsh 10,000 74(2)(4) 10,000 03/10/00 N
1212 Chadworth Ct.
McLean, VA
22102
-----------------------------------------------------------------------------------------------------
James B. Freud 25,000 74(2)(4) Nil 02/29/00 N
20760 Eastlake Court
Potomac Falls, VA
20165
-----------------------------------------------------------------------------------------------------
Edward J. McCrossen 25,000 74(2)(4) Nil 02/29/00 N
20231 Watermark Place
Potomac Falls, VA
20165
-----------------------------------------------------------------------------------------------------
V&D Partnerships, Inc., 50,000 74(2)(4) Nil 02/29/00 N
LLC
633 SE 3rd Avenue Suite
4F
Fort Lauderdale, FL
33301
(Victor Souaid and
Danny Scarfone)
-----------------------------------------------------------------------------------------------------
Capitol Ventures LLC 50,000 74(2)(4) Nil 03/02/00 N
8133 Leesburgh Pike #360
Vienna, VA
22182
(Harold P. McLarnon and
Royal Collette)
-----------------------------------------------------------------------------------------------------
Communications Partners 25,000 74(2)(4) Nil 03/02/00 N
LLC
7444 Old Maple Square
McLean, VA
22102
(Harold P. McLarnon
John P. Mamana and
Michael T. Shehadi)
-----------------------------------------------------------------------------------------------------
Jeff Lubore 50,000 74(2)(4) 1,405,800 02/25/00 N
8160 Silverberry
Way
- --------------------------------------------------------------------------------
FORM 4A PAGE 2
<PAGE>
Vienna, VA
22182
-----------------------------------------------------------------------------------------------------
Dan Brigati 25,000 74(2)(4) 3,000 02/28/00 N
11027 Earlsgate Lane
Rockville, MD
20852
-----------------------------------------------------------------------------------------------------
MTTM LLC 50,000 74(2)(4) Nil 03/01/00 N
10022 Park Trail
Houston, TX
77024
(Eric Mattson, Schuyler
Tilney, Beth Tilney and
Franklin Myers)
-----------------------------------------------------------------------------------------------------
Steven Daniels 20,000 74(2)(4) 275,000 03/01/00 N
6765 Creekside Drive
Long Grove, IL
60047
-----------------------------------------------------------------------------------------------------
Vinnie Maniola 10,000 74(2)(4) 30,000 03/01/00 N
1074 South Thyra Lane
Inverness, IL
60067
-----------------------------------------------------------------------------------------------------
Charles J. Schatz 10,000 74(2)(4) Nil 03/01/00 N
10430 Wilshire Place
#PH5
Los Angeles, CA
90024
-----------------------------------------------------------------------------------------------------
Mark S. Kim 10,000 74(2)(4) 11,000 03/01/00 N
678 N. Maple Avenue
Palatine, IL
60067
-----------------------------------------------------------------------------------------------------
Michael S. Ward 25,000 74(2)(4) Nil 02/26/00 N
407 S. Royal Palm Way
Tampa, FL
33609
-----------------------------------------------------------------------------------------------------
David A. Robison 50,000 74(2)(4) 1,145,750 02/28/00 N
10104 Harewood Court
Great Falls, VA
22066
-----------------------------------------------------------------------------------------------------
Peter J. Valotto 25,000 74(2)(4) Nil 02/28/00 N
101 Preston Place
Beverly Farms, MA
01915-2159
-----------------------------------------------------------------------------------------------------
Thomas E. Gillman 25,000 74(2)(4) 110,000 02/28/00 N
12402 Macao Court
Herndon, VA
20171-2100
-----------------------------------------------------------------------------------------------------
John B. Giarolo 25,000 74(2)(4) 150,000 02/18/00 N
62 South Pond Road
- --------------------------------------------------------------------------------
FORM 4A PAGE 3
<PAGE>
S. Glastonbury, CT
06073-2324
-----------------------------------------------------------------------------------------------------
Peter N. Gladding 50,000 74(2)(4) 15,000 02/26/00 N
38 Miss Fry Drive
East Greenwich, RI
02818-1245
-----------------------------------------------------------------------------------------------------
Michael H. Owen 50,000 74(2)(4) Nil 02/28/00 N
2243 Fisher Island Drive
Fisher Island, FL
33109
-----------------------------------------------------------------------------------------------------
Roman Matijkiw 1176 25,000 74(2)(4) 100,000 02/18/00 N
Brandy Run Road
Herndon, VA
22070
-----------------------------------------------------------------------------------------------------
Gus Wahlroth 25,000 74(2)(4) Nil 03/13/00 N
5737 126th Street
Surrey, B.C.
V3W 0J2
-----------------------------------------------------------------------------------------------------
Leo Wong 30,000 74(2)(4) Nil 03/13/00 N
1115 W. 38th Avenue
Vancouver, B.C.
V6M 1P8
-----------------------------------------------------------------------------------------------------
Theresa Kong 10,000 74(2)(4) Nil 03/13/00 N
1189 Balford Avenue
Vancouver, B.C.
V6H 1X3
-----------------------------------------------------------------------------------------------------
Tom Wood 25,000 74(2)(4) 10,500 03/13/00 N
46032 Britton Avenue
Chilliwack, B.C.
V2R 2P9
-----------------------------------------------------------------------------------------------------
Irene Tai 10,000 74(2)(4) Nil 03/13/00 N
7 Dianthus Road
Yau Yat Chuen, Kowloon
Hong Kong
852-238-10800
-----------------------------------------------------------------------------------------------------
Agora Partners 139,000 74(2)(4) Nil 03/15/00 N
31 Forester Crescent
Markham, Ontario
L6C 1W2
(George Tsiolis, George
Koutroubis, Paul
Kondakos, Anthony
Iantorno, Realest
Marketing Corp., Manny
-----------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM 4A PAGE 4
<PAGE>
Speranza, Dubravko
Trpcic, Jim Gamas)
-----------------------------------------------------------------------------------------------------
Beancounter Investments 40,000 BOR #98/11 416,000 03/22/00 N
Pty Limited 73
Market Street Mudgee NSW
2850, Australia
(Hugh Gordon Bateman,
Catherine Bateman,
Richard Hooper, Mary
Hooper, Christopher Davis,
Patrick Hawkes, David
Brayshaw, Cheryl
Brayshaw, The Property
Shop (NSW) PTY LTD
Superannuation Fund)
-----------------------------------------------------------------------------------------------------
Charles Magal and 15,000 74(2)(4) 120,000 03/15/00 N
Helen Stamatacos
505 Washington Street
Cumberland, MD
21502
-----------------------------------------------------------------------------------------------------
JNF II LLC 10,000 74(2)(4) 250 03/31/00 N
6931 Arlington Road
Bethesda, MD
20814
(Joel Fernebok)
-----------------------------------------------------------------------------------------------------
Drake Darrin 25,000 74(2)(4) 2Nil00 03/15/00 N
125 Mason Street
Grenwich, CT
06831
-----------------------------------------------------------------------------------------------------
Dennis Keegan 50,000 74(2)(4) 62,500 03/03/00 N
13 Parkridge Hollow Road
Grenwich, CT
06831
-----------------------------------------------------------------------------------------------------
Cameron Capital Ltd. 50,000 74(2)(4) Nil 03/16/00 N
Century House
Par-la-Ville Road
Hamilton, HM08, Bermuda
-----------------------------------------------------------------------------------------------------
David Osnos 10,000 74(2)(4) Nil 03/16/00 N
6606 Rivercrest Ct.
Bethudsa, Maryland
20816
-----------------------------------------------------------------------------------------------------
Reicher Capital 20,000 74(2)(4) 125,000 03/16/00 N
Management
- --------------------------------------------------------------------------------
FORM 4A PAGE 5
<PAGE>
Company Inc.
#1 Bridge Street
Irvington, NY
10533
-----------------------------------------------------------------------------------------------------
</TABLE>
6. Please disclose the proposed use of proceeds.
If the Issuer is a Tier 2 Issuer, provide a comparison to
expenditures on similar categories in the preceding 12 month
period.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
USE OF PROCEEDS EXPENDITURES ON SIMILAR CATEGORIES IN
PRECEDING 12 MONTHS
----------------------------------------------------------------------------------------------------------------
<S> <C>
To provide capital for financing product
development, sales and marketing, company expansion General & Administrative expense for 12 months ending
and general working capital........US$11,040,000 January 31, 2000:......................................
approx. US$4,838,335 (this does not include
expenditures on research and development, marketing or
sales)
----------------------------------------------------------------------------------------------------------------
</TABLE>
7. State the estimated working capital on hand as at the preceding
month end.
US$15,038,929
8. Provide the following information for any finder's fee or
commission to be paid in connection with the placement:
(a) Finder/broker (name, address, beneficial ownership where
applicable)
GEORGE TSIOLIS OF 31 FORESTER CRESCENT, MARKHAM, ON, L6C 1W2;
GOLDEN CAPITAL SECURITIES LTD. OF SUITE 168, 1177 WEST
HASTINGS STREET, VANCOUVER, BC, V6E 2K3; JEFF LUBORE OF 8160
SILVERBERRY WAY, VIENNA, VA, 22182; BRIAN COHN OF 5410
CATHEDRAL AVENUE N.W., WASHINGTON, D.C., 20016. .
(b) Cash GEORGE TSIOLIS - US$54,500; GOLDEN CAPITAL SECURITIES
LTD. - US$50,000; JEFF LUBORE - US$262,500; BRIAN COHN -
US$77,500.
(c) Securities N/A.
(d) Expiry date for Warrants N/A .
(e) Exercise price of Warrants N/A .
9. State whether the finder is at Arm's Length to the Issuer.
The finders are at Arm's Length to the Issuer.
10. Describe the particulars of any other proposed material changes in
the affairs of the Issuer.
- --------------------------------------------------------------------------------
FORM 4A PAGE 6
<PAGE>
N/A
11. Describe any unusual particulars of the transaction (i.e. tax "flow
through" shares, etc.).
N/A
12. State whether the Private Placement will result in a change of
control.
No change of control will result from this private placement.
13. State whether shareholder approval of the Private Placement is
required.
N/A
14. State the Prospectus exemption being relied on and the hold period
to which the securities will be subject.
The prospectus exemptions being relied on are: 74(2)(4) of the Act
and BOR #98/11. The Issuer has a current AIF on file with the B.C.
Securities Commission and hence the securities will be subject to
a four-month hold period.
15. If this transaction is not fully in accordance with Policy 4.1 -
Private Placements, indicate where there are deviations, and
explain why a waiver of policy is in the best interests of the
Issuer and the investing public.
- --------------------------------------------------------------------------------
FORM 4A PAGE 7
<PAGE>
FORM 4B
PRIVATE PLACEMENT SUMMARY FORM
To be provided at the final filing stage. Please complete the following:
Re: Sideware Systems Inc. (SYD.U) (the "Issuer").
----------------------------------------------------------
SEDAR Project #: N/A .
-----------------------------
Date: April 5, 2000 .
-----------------
Date of Exchange Conditional Acceptance: March 20, 2000 .
--------------------------------
Total Number and Type of Security: 1,104,000 Units .
--------------------------------------
<TABLE>
<CAPTION>
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
FULL NAME &
RESIDENTIAL ADDRESS NUMBER OF PURCHASE PROSPECTUS PRESENT DIRECT & PAYMENT DATE* INSIDER
OF PURCHASER SECURITIES PRICE PER EXEMPTION INDIRECT HOLDINGS Y / N
PURCHASED SECURITY IN THE ISSUER
(CDN$)
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
William W. Noel, III 10,000 $14.60 74(2)(4) 250,000 03/10/00 N
3527 B. S. Stafford (US$10.00)
Street
Arlington, VA
22206
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Daniel P. Walsh 10,000 $14.60 74(2)(4) 10,000 03/10/00 N
1212 Chadworth Ct. (US$10.00)
McLean, VA
22102
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
James B. Freud 25,000 $14.60 74(2)(4) Nil 02/29/00 N
20760 Eastlake Court (US$10.00)
Potomac Falls, VA
20165
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Edward J. McCrossen 25,000 $14.60 74(2)(4) Nil 02/29/00 N
20231 Watermark (US$10.00)
Place
Potomac Falls, VA
20165
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
V&D Partnerships, 50,000 $14.60 74(2)(4) Nil 02/29/00 N
Inc., LLC (US$10.00)
633 SE 3rd Avenue
Suite 4F
Fort Lauderdale,
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
- --------------------------------------------------------------------------------
FORM 4B PRIVATE PLACEMENT SUMMARY FORM PAGE 1
(AS AT JANUARY 2000)
<PAGE>
FL
33301
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Capitol Ventures LLC 50,000 $14.60 74(2)(4) Nil 03/02/00 N
8133 Leesburgh Pike (US$10.00)
#360
Vienna, VA
22182
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Communications 25,000 $14.60 74(2)(4) Nil 03/02/00 N
Partners LLC (US$10.00)
7444 Old Maple
Square
McLean, VA
22102
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Jeff Lubore 50,000 $14.60 74(2)(4) 1,405,800 02/25/00 N
8160 Silverberry Way (US$10.00)
Vienna, VA
22182
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Dan Brigati 25,000 $14.60 74(2)(4) 3,000 02/28/00 N
11027 Earlsgate Lane (US$10.00)
Rockville, MD
20852
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
MTTM LLC 50,000 $14.60 74(2)(4) Nil 03/01/00 N
10022 Park Trail (US$10.00)
Houston, TX
77024
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Steven Daniels 20,000 $14.60 74(2)(4) 75,000 03/01/00 N
6765 Creekside Drive (US$10.00)
Long Grove, IL
60047
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Vinnie Maniola 10,000 $14.60 74(2)(4) 30,000 03/01/00 N
1074 South Thyra (US$10.00)
Lane
Inverness, IL
60067
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Charles J. Schatz 10,000 $14.60 74(2)(4) Nil 03/01/00 N
10430 Wilshire Place (US$10.00)
#PH5
Los Angeles, CA
90024
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Mark S. Kim 10,000 $14.60 74(2)(4) 11,000 03/01/00 N
678 N. Maple Avenue (US$10.00)
Palatine, IL
60067
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Michael S. Ward 25,000 $14.60 74(2)(4) Nil 02/26/00 N
407 S. Royal Palm (US$10.00)
Way
Tampa, FL
33609
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
David A.
- -----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM 4B PRIVATE PLACEMENT SUMMARY FORM PAGE 3
(AS AT JANUARY 2000)
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------
Robison 50,000 $14.60 74(2)(4) 1,145,750 02/28/00 N
10104 Harewood Court (US$10.00)
Great Falls, VA
22066
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Peter J. Valotto 25,000 $14.60 74(2)(4) Nil 02/28/00 N
101 Preston Place (US$10.00)
Beverly Farms, MA
01915-2159
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Thomas E. Gillman 25,000 $14.60 74(2)(4) 110,000 02/28/00 N
12402 Macao Court (US$10.00)
Herndon, VA
20171-2100
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
John B. Giarolo 25,000 $14.60 74(2)(4) 150,000 02/18/00 N
62 South Pond Road (US$10.00)
S. Glastonbury, CT
06073-2324
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Peter N. Gladding 50,000 $14.60 74(2)(4) 15,000 02/26/00 N
38 Miss Fry Drive (US$10.00)
East Greenwich, RI
02818-1245
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Michael H. Owen 50,000 $14.60 74(2)(4) Nil 02/28/00 N
2243 Fisher Island (US$10.00)
Drive
Fisher Island, FL
33109
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Roman Matijkiw 1176 25,000 $14.60 74(2)(4) 100,000 02/18/00 N
Brandy Run Road (US$10.00)
Herndon, VA
22070
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Gus Wahlroth 25,000 $14.60 74(2)(4) Nil 03/13/00 N
5737 126th Street (US$10.00)
Surrey, B.C.
V3W 0J2
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Leo Wong 30,000 $14.60 74(2)(4) Nil 03/13/00 N
1115 W. 38th Avenue (US$10.00)
Vancouver, B.C.
V6M 1P8
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Theresa Kong 10,000 $14.60 74(2)(4) Nil 03/13/00 N
1189 Balford Avenue (US$10.00)
Vancouver, B.C.
V6H 1X3
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
- --------------------------------------------------------------------------------
FORM 4B PRIVATE PLACEMENT SUMMARY FORM PAGE 3
(AS AT JANUARY 2000)
<PAGE>
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Tom Wood 25,000 $14.60 74(2)(4) 10,500 03/13/00 N
46032 Britton Avenue (US$10.00)
Chilliwack, B.C.
V2R 2P9
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Irene Tai 10,000 $14.60 74(2)(4) Nil 03/13/00 N
7 Dianthus Road (US$10.00)
Yau Yat Chuen,
Kowloon
Hong Kong
852-238-10800
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Agora Partners 139,000 $14.60 74(2)(4) Nil 03/15/00 N
31 Forester Crescent (US$10.00)
Markham, Ontario
L6C 1W2
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Beancounter 40,000 $14.60 BOR #98/11 16,000 03/22/00 N
Investments Pty (US$10.00)
Limited
73 Market Street
Mudgee Nsw 2850,
Australia
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Charles Magal and 15,000 $14.60 74(2)(4) 20,000 03/15/00 N
Helen Stamatacos (US$10.00)
505 Washington
Street
Cumberland, MD
21502
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
JNF II LLC 10,000 $14.60 74(2)(4) 250 03/31/00 N
6931 Arlington Road (US$10.00)
Bethesda, MD
20814
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Drake Darrin 25,000 $14.60 74(2)(4) Nil 03/15/00 N
125 Mason Street (US$10.00)
Grenwich, CT
06831
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Dennis Keegan 50,000 $14.60 74(2)(4) 62,500 03/03/00 N
13 Parkridge Hollow (US$10.00)
Road
Grenwich, CT
06831
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Cameron Capital Ltd. 50,000 $14.60 74(2)(4) Nil 03/16/00 N
Century House (US$10.00)
Par-la-Ville Road
Hamilton,
HM08, Bermuda
Bermuda
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
David Osnos 10,000 $14.60 74(2)(4) Nil 03/16/00 N
6606 Rivercrest (US$10.00)
Ct.
- -----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
FORM 4B PRIVATE PLACEMENT SUMMARY FORM PAGE 4
(AS AT JANUARY 2000)
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Bethudsa,
Maryland
20816
- --------------------- ---------------- ------------- ---------------- -------------------- -------------- -------------
Reicher Capital 20,000 $14.60 74(2)(4) 125,000 03/16/00 N
Management Company (US$10.00)
Inc.
#1 Bridge Street
Irvington, NY
10533
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
*Has each placee advanced payment to the Issuer or have the placement funds been
placed in trust pending receipt of all necessary approvals?
YES X NO
----- --------
If NO, please explain:
---------------------------------------------------------
1. Each purchaser has been advised of the applicable Securities Law
and Exchange hold period. All certificates for securities issued
which are subject to a hold period bear the appropriate legend
restricting their transfer until the expiry of the applicable hold
period.
2. Where there is a change in the control of the Issuer resulting
from the issuance of the private placement shares, indicate the
names of the new controlling shareholders, and provide the date on
which shareholder approval has been or will be obtained for the
transaction.
3. A Form 4D - Corporate Placee Registration Form with current
information is enclosed or has been filed for each subscriber that
is not an individual.
YES X NO
----- --------
If the Form 4D on file does not contain current information, a new
Form, or amendment to the Form, must be submitted by the placee.
- --------------------------------------------------------------------------------
FORM 4B PRIVATE PLACEMENT SUMMARY FORM PAGE 5
(AS AT JANUARY 2000)
<PAGE>
FORM 45-501F1
Securities Act
Report of a trade under clause 72(1)(a), (b),
(c), (d), (l), (p) or (q) of the Act,
Section 2.4, 2.5 or 2.11 of Rule 45-501
or Subsection 2.1(1) or paragraph 2.2(d) or 2.3(d) of rule 45-504
(Note: Circle or highlight applicable provision)
Note: This report is not required where a bank listed in Schedule I or II to the
BANK ACT (CANADA) or a loan corporation or trust corporation registered under
the LOAN AND TRUST CORPORATION ACT acquires from a customer an evidence of
indebtedness of the customer or an equity investment in the customer acquired
concurrently with an evidence of indebtedness.
1. FULL NAME AND ADDRESS OF THE VENDOR.
Sideware Systems Inc.
102 - 930 West 1st Street
North Vancouver, BC
V7P 3N4
2. NAME AND ADDRESS OF THE ISSUER OF THE SECURITY TRADED AND DESCRIPTION OF
THE SECURITY.
Sideware Systems Inc.
102 - 930 West 1st Street
North Vancouver, B.C.
V7P 3N4
139,000 units with each unit comprising one common share and one share
purchase warrant. Each underlying warrant will entitle the holder thereof
to purchase one additional common share of the Issuer for a period of two
years at a price of US$10.00 per share in the first year and US$11.50 per
share in the second year.
3. DATE OF TRADE(S).
April 13, 2000
4. AMOUNT OR NUMBER OF PURCHASE
SECURITIES PURCHASED 139,000 UNITS PRICE US$10.00 PER UNIT
<PAGE>
5. THE VENDOR HAS PREPARED AND CERTIFIED A LIST COMPRISING THE NAME AND
ADDRESS OF EACH PURCHASER, THE AMOUNT OR NUMBER OF SECURITIES PURCHASED AND
THE PURCHASE PRICE PAID BY EACH PURCHASER AND SUCH CERTIFIED LIST WILL BE
PROVIDED ON REQUEST TO A DULY AUTHORIZED REPRESENTATIVE OF THE COMMISSION
OR TO SECURITYHOLDERS WHO ACQUIRED SECURITIES PURSUANT TO THE PROSPECTUS
EXEMPTION IN CLAUSE 72(1)(p) OF THE ACT OR SECTION 2.4 OF RULE 45-501
EXEMPT DISTRIBUTIONS.
6. STATE THE NAME AND ADDRESS OF ANY PERSON ACTING AS AGENT IN CONNECTION WITH
THE TRADE(S) AND THE COMPENSATION PAID OR TO BE PAID TO SUCH AGENT.
George Tsiolis of 31 Forester Crescent, Markham, ON, L6C 1W2 was paid a finder's
fee of US$54,500 in connection with the trade.
7. CALCULATION OF FEES PAYABLE UPON FILING FORM 45-501F1: (SEE SECTION 7.3 OF
RULE 45-501 EXEMPT DISTRIBUTIONS)
(0.02% of $2,029,400 being the Canadian dollar equivalent of the purchase
price.)
TOTAL FEE PAYABLE: $405.88.
8. AFTER EXERCISING REASONABLE DILIGENCE IN ITS ENQUIRIES, THE VENDOR BELIEVES
THAT THE VENDOR IS ENTITLED TO THE USE OF THE EXEMPTION WHICH IS CIRCLED ABOVE.
CERTIFICATE OF VENDOR OR AGENT OF VENDOR
THE UNDERSIGNED HEREBY CERTIFIES THAT THE STATEMENTS MADE IN THIS REPORT ARE
TRUE AND CORRECT.
DATED AT VANCOUVER, BRITISH COLUMBIA THIS 20TH DAY OF APRIL, 2000.
SIDEWARE SYSTEMS INC.
(NAME OF VENDOR OR AGENT - PLEASE PRINT)
/s/ GRANT SUTHERLAND
- -----------------------------
(SIGNATURE)
DIRECTOR
- -----------------------------
(OFFICIAL CAPACITY - PLEASE PRINT)
GRANT SUTHERLAND
- -------------------------------------
(PLEASE PRINT HERE NAME OF INDIVIDUAL WHOSE SIGNATURE APPEARS ABOVE, IF
DIFFERENT FROM NAME OF VENDOR OR AGENT ABOVE)
<PAGE>
INSTRUCTIONS:
1. In answer to question 6 give the name of the person or company who has been
or will be paid remuneration directly related to the trade(s), such as
commissions, discounts or other fees or payments of a similar nature. It is not
necessary to include payments for services incidental to the trade such as
clerical, printing, legal or accounting services.
2. If the space provided for any answer is insufficient, additional sheets may
be used and must be cross-referred to the relevant item and properly identified
and signed by the person whose signature appears on the report.
3. Fee: Cheque made payable to the Ontario Securities Commission.
4. Please print or type and file TWO signed copies with:
Ontario Securities Commission
Suite 1800, Box 55,
20 Queen Street West
Toronto, Ontario M5H 3S8.
<PAGE>
This is the form required under section 139 of the SECURITIES RULES and, if
applicable, by an order issued under section 76 of the SECURITIES ACT.
FORM 20
SECURITIES ACT
REPORT OF EXEMPT DISTRIBUTION
(PLEASE REFER TO THE INSTRUCTIONS BEFORE COMPLETING THE INFORMATION BELOW.)
Report of a distribution of a security under section 74(2)(1) to (5), (8) to
(10), 11(i), (14), (16)(i), (18), (19) or (23) to (26) of the SECURITIES ACT,
R.S.B.C. 1996, c. 418, or section 128(a), (b), (c) or (e) to (h) of the
SECURITIES RULES, R.B.C. Reg. 194/97 or, if applicable, by an order issued under
section 76 of the SECURITIES ACT.
1. Name, address and telephone number of the issuer of the security
distributed.
SIDEWARE SYSTEMS INC.
102 - 930 West 1st Street
North Vancouver, B.C.
V7P 3N4
Telephone Number: (604) 986-6121
2. State whether the issuer is or is not an exchange issuer (ie. listed on
the Canadian Venture Exchange, but not listed or quoted on any other
stock exchange or trading or quotation system in Canada).
The Issuer is an exchange issuer.
3. Describe the type of security and the aggregate number distributed.
1,104,000 units with each unit comprising one common share and one
share purchase warrant. Each underlying warrant will entitle the holder
thereof to purchase one additional common share of the Issuer for a
period of two years at a price of US$10.00 per share in the first year
and US$11.50 per share in the second year.
4. Date of the distribution(s) of the security.
April 13, 2000
5. Specify the section(s) of the Act or Rules and, if applicable, the date
of the discretionary order or the blanket order number under which the
distribution(s) of the security was made.
Section 74(2)(4) of the Act and BOR #98/11.
6. If the distribution(s) of the security was made to 50 purchasers or
less, circle and
<PAGE>
2
complete clause (a) of this section. If the distribution(s) of the
security was made to more than 50 purchasers, circle clause (b) of this
section.
(a)
<TABLE>
<CAPTION>
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Full Name and Residential Address of Number of Price Per Share Total Purchase Price Section of Act/Rules
Purchaser Securities (Canadian $) (Canadian $) and if applicable,
Purchased Date of Discretionary
Order or Blanket Order
Number
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
<S> <C> <C> <C> <C>
William W. Noel, III 10,000 $14.60 $146,000 74(2)(4)
3527 B. S. Stafford Street (US$10.00) (US$100,000)
Arlington, VA
22206
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Daniel P. Walsh & Cynthia P. Walsh 10,000 $14.60 $146,000 74(2)(4)
JTWROS (US$10.00) (US$100,000)
1212 Chadworth Ct.
McLean, VA
22102
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
James B. Freund 25,000 $14.60 $365,000 74(2)(4)
20760 Eastlake Court (US$10.00) (US$250,000)
Potomac Falls, VA
20165
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Edward J. McCrossen 25,000 $14.60 $365,000 74(2)(4)
20231 Watermark Place (US$10.00) (US$250,000)
Potomac Falls, VA
20165
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
V&D Partnerships, Inc., LLC 50,000 $14.60 $730,000 74(2)(4)
633 SE 3rd Avenue Suite 4F (US$10.00) (US$500,000)
Fort Lauderdale, FL
33301
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Capitol Ventures LLC 50,000 $14.60 $730,000 74(2)(4)
8133 Leesburgh Pike #360 (US$10.00) (US$500,000)
Vienna, VA
22182
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Communications Partners LLC 25,000 $14.60 $365,000 74(2)(4)
7444 Old Maple Square (US$10.00) (US$250,000)
McLean, VA
22102
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Jeff Lubore 50,000 $14.60 $730,000 74(2)(4)
8160 Silverberry Way (US$10.00) (US$500,000)
- ------------------------------------------------------------------------------------------------------------------------------
<PAGE>
3
- ------------------------------------------------------------------------------------------------------------------------------
Vienna, VA
22182
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Daniel Brigati 25,000 $14.60 $365,000 74(2)(4)
11027 Earlsgate Lane (US$10.00) (US$250,000)
Rockville, MD
20852
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
MTTM LLC 50,000 $14.60 $730,000 74(2)(4)
10022 Park Trail (US$10.00) (US$500,000)
Houston, TX
77024
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Steven Daniels 20,000 $14.60 $292,000 74(2)(4)
6765 Creekside Drive (US$10.00) (US$200,000)
Long Grove, IL
60047
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Vinnie Maniola 10,000 $14.60 $146,000 74(2)(4)
1074 South Thyra Lane (US$10.00) (US$100,000)
Inverness, IL
60067
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Charles J. Schatz 10,000 $14.60 $146,000 74(2)(4)
10430 Wilshire Place (US$10.00) (US$100,000)
#PH5
Los Angeles, CA
90024
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Mark S. Kim 10,000 $14.60 $146,000 74(2)(4)
678 N. Maple Avenue (US$10.00) (US$100,000)
Palatine, IL
60067
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Michael S. Ward 25,000 $14.60 365,000 74(2)(4)
407 S. Royal Palm Way (US$10.00) (US$250,000)
Tampa, FL
33609
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
David A. Robison 50,000 $14.60 $730,000 74(2)(4)
10104 Harewood Court (US$10.00) (US$500,000)
Great Falls, VA
22066
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Peter J. Valotto 25,000 $14.60 $365,000 74(2)(4)
101 Preston Place (US$10.00) (US$250,000)
Beverly Farms, MA
01915-2159
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Thomas E. Gillman 25,000 $14.60 $365,000 74(2)(4)
12402 Macao Court (US$10.00) (US$250,000)
Herndon, VA
20171-2100
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
John B. Giarolo 25,000 $14.60 $365,000 74(2)(4)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
4
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
62 South Pond Road (US$10.00) (US$250,000)
S. Glastonbury, CT
06073-2324
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Peter N. Gladding 50,000 $14.60 $730,000 74(2)(4)
38 Miss Fry Drive (US$10.00) (US$500,000)
East Greenwich, RI
02818-1245
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Michael H. Owen 50,000 $14.60 $730,000 74(2)(4)
2243 Fisher Island Drive (US$10.00) (US$500,000)
Fisher Island, FL
33109
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Roman Matijkiw 25,000 $14.60 $365,000 74(2)(4)
1176 Bandy Run Road (US$10.00) (US$250,000)
Herndon, VA
20170
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Gus Wahlroth 25,000 $14.60 $365,000 74(2)(4)
5737 126th Street (US$10.00) (US$250,000)
Surrey, B.C.
V3W 0J2
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Leo Wong 30,000 $14.60 $438,000 74(2)(4)
1115 W. 38th Avenue (US$10.00) (US$300,000)
Vancouver, B.C.
V6M 1P8
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Theresa Kong 10,000 $14.60 $146,000 74(2)(4)
1189 Balford Avenue (US$10.00) (US$100,000)
Vancouver, B.C.
V6H 1X3
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Tom Wood 25,000 $14.60 $365,000 74(2)(4)
46032 Britton Avenue (US$10.00) (US$250,000)
Chilliwack, B.C.
V2R 2P9
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Irene Tai 10,000 $14.60 $146,000 74(2)(4)
7 Dianthus Road (US$10.00) (US$100,000)
Yau Yat Chuen, Kowloon
Hong Kong
852-238-10800
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Agora Partners 139,000 $14.60 2,029,400 74(2)(4)
31 Forester Crescent (US$10.00) (US$1,390,000)
Markham, Ontario
L6C 1W2
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Beancounter Investment Pty Limited 40,000 $14.60 $584,000 BOR #98/11
73 Market Street (US$10.00) (US$400,000)
Mudgee NSW 2850,
- ------------------------------------------------------------------------------------------------------------------------------
<PAGE>
5
- ------------------------------------------------------------------------------------------------------------------------------
Australia
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Charles Magal and Helen Stamatacos 15,000 $14.60 $219,000 74(2)(4)
505 Washington Street (US$10.00) (US$150,000)
Cumberland, MD
21502
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
JNF II LLC 10,000 $14.60 $146,000 74(2)(4)
6931 Arlington Road (US$10.00) (US$100,000)
Bethesda, MD
20814
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Drake Darrin 25,000 $14.60 $365,000 74(2)(4)
125 Mason Street (US$10.00) (US$250,000)
Greenwich, CT
06830
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Dennis Keegan 50,000 $14.60 $730,000 74(2)(4)
13 Partridge Hollow Road (US$10.00) (US$500,000)
Greenwich, CT
06831
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Cameron Capital Ltd. 50,000 $14.60 $730,000 74(2)(4)
Century House Par-la-Ville Road (US$10.00) (US$500,000)
Hamilton, HM08, Bermuda
Bermuda
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
David Osnos 10,000 $14.60 $146,000 BOR #98/11
6606 Rivercrest Ct. (US$10.00) (US$100,000)
Bethedsa, Maryland
20816-2178
- --------------------------------------- ------------------- ------------------- --------------------- ------------------------
Reicher Capital Management Company 20,000 $14.60 $292,000 74(2)(4)
Management Company Inc. (US$10.00) (US$200,000)
#1 Bridge Street
Irvington, NY
10533
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(b) The issuer has prepared and certified a list of purchasers
comprising the same information required by clause (a) of this
section and a certified true copy of the list will be provided
to the Commission upon request.
N/A
7. State the total dollar value (Canadian $) of the securities distributed
by the issuer to purchasers resident in British Columbia in respect of
which this report is filed.
$1,314,000
<PAGE>
6
8. State the name and address of any person acting as agent in connection
with the distribution(s) of the security, the compensation paid or to
be paid to the agent and the name(s) of the purchasers(s) in respect of
which the compensation was paid or is to be paid.
The following finder's fee was paid in connection with a portion of the
distribution:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS COMPENSATION PAID (NUMBER PRICE PER SHARE NAME OF PURCHASER
OF AGENT AND TYPE OF (CANADIAN $)
SECURITY AND/OR CASH
AMOUNT )
- ------------------------------- ------------------------------ ----------------------- -------------------------------
<S> <C> <C> <C>
GEORGE TSIOLIS US$54,500 N/A AGORA PARTNERS
31 Forester Crescent
Markham, ON
L6C 1W2
- ------------------------------- ------------------------------ ----------------------- -------------------------------
GOLDEN CAPITAL SECURITIES LTD. US$50,000 N/A GUS WALROTH
168 - 1177 West Hastings TOM WOOD
Street IRENE TAI
Vancouver, BC THERESA KONG
V6E 2K3 LEO WONG
- ------------------------------- ------------------------------ ----------------------- -------------------------------
JEFF LUBORE US$262,500 N/A MICHAEL OWEN
8160 Silverberry Way PETER GLADDING
Vienna, VA JOHN GIAROLO
22182 ROMAN MATIJKIW
THOMAS GILLMAN
PETER VALOTTO
DAVID ROBISON
MICHAEL WARD
CHARLES SCHATZ
MARK KIM
STEVEN DANIELS
VINNIE MANIOLA
MTTM LLC
DANIEL BRIGATI
COMMUNICATIONS PARTNERS LLC
CAPITOL VENTURES LLC
JAMES FREUND
EDWARD
- ----------------------------------------------------------------------------------------------------------------------
<PAGE>
7
- ----------------------------------------------------------------------------------------------------------------------
MCCROSSEN
- ------------------------------- ------------------------------ ----------------------- -------------------------------
BRIAN COHN US$77,500 N/A DRAKE DARRIN
5410 Cathedral Avenue N.W. DENNIS KEEGAN
Washington, DC CAMERON CAPITAL LTD.
20016 DAVID OSNOS
REICHER CAPITAL MANAGEMENT
COMPANY INC.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
9. If the distribution of the security was made under section 128(a) of
the Rules, state the number of different purchasers who acquired any
securities of the issuer under that section during the 12 month period
preceding the distribution of this security.
N/A
10. If the distribution of the security was made under section 128(h) of
the Rules, state
(a) the number of different purchasers who acquired any securities
of the issuer under that section during the 12 month period
preceding the distribution of this security, and
N/A
(b) the total dollar value (Canadian $) of all securities of the
issuer distributed under that section (including the
distribution of this security), during the 12 month period
preceding the distribution of this security.
N/A
The undersigned hereby certifies that the statements made in this report are
true and correct.
DATED at Vancouver, this 19th day of April, 2000.
SIDEWARE SYSTEMS INC.
-------------------------------------
Name of issuer (PLEASE PRINT)
/s/ GRANT SUTHERLAND
--------------------------------------------
Signature of authorized signatory
<PAGE>
8
Grant Sutherland, DIRECTOR
--------------------------------------------
Name and office of authorized signatory
(PLEASE PRINT)
IT IS AN OFFENCE FOR A PERSON TO MAKE A STATEMENT IN A RECORD REQUIRED TO BE
FILED OR PROVIDED UNDER THE SECURITIES ACT OR SECURITIES RULES THAT, AT THE TIME
AND IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH IT IS MADE, IS A
MISREPRESENTATION.
<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.
Sideware Systems Inc.
"Grant Sutherland"
Date: May 19, 2000 By: Grant Sutherland, Chairman
