UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period ended
June 30, 1999.
or
[ ] Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
__________ to __________.
Commission file number 0-30090
IMAGIS TECHNOLOGIES INC.
----------------------------------------------------------------
(Exact name of Small Business Issuer as Specified in its Charter)
BRITISH COLUMBIA, CANADA NOT APPLICABLE
- - ------------------------------- -------------------------------
(State or other jurisdiction of IRS Employer Identification No.
incorporation or organization)
1300-1075 WEST GEORGIA STREET, VANCOUVER, BC V6E 3C9
-------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (604) 684-2449
State the number of shares outstanding of each of the issuer's class of common
equity, as of the latest practicable date: 8,958,214 as of June 30, 1999
Transitional Small Business Disclosure Format (check one):
YES [ ] NO [X]
<PAGE>
IMAGIS TECHNOLOGIES INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets (unaudited) as of
June 30, 1999 and December 31, 1998 ................... 3
Consolidated Statements of Operations (unaudited) for
The Three and Six months ended June 30, 1999 and 1998.. 5
Consolidated Statements of Cash Flows (unaudited) for
The Three and Six months ended June 30, 1999 and 1998.. 6
Notes to Consolidated Financial Statements ............ 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ...................9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings .................................13
Item 2. Changes in Securities .............................13
Item 3. Defaults upon Senior Securities ...................13
Item 4. Submission of Matters to a Vote of Shareholders ...13
Item 5. Other Information .................................14
Item 6. Exhibits and Reports on Form 8-K ..................14
Signatures ...........................................15
Exhibit Index ........................................16
Financial Data Schedule ...................................17
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited financial statements for the period ended June 30, 1999
are included in response to Item 1 and have been compiled by management.
The financial statements should be read in conjunction with the Management's
Discussion and Analysis or Plan of Operations and other financial information
included elsewhere in this Form 10-QSB.
IMAGIS TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)
Jun 30 Dec 31
1999 1998
$ $
ASSETS
CURRENT ASSETS
Cash 844,761 38,804
Accounts receivable 141,174 126,163
Inventory - 111,836
---------- ----------
985,935 276,803
CAPITAL ASSETS 90,741 70,124
---------- ----------
1,076,676 346,927
========== ==========
See accompanying notes to financial statements.
<PAGE>
IMAGIS TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)
Jun 30 Dec 31
1999 1998
$ $
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable And accruals 256,424 644,681
Notes payable - 590,000
Payable to Pacific Cascade 445,688 416,572
Current portion capital lease 6,667 6,667
---------- ----------
708,779 1,657,920
---------- ----------
OBLIGATION UNDER CAPITAL LEASE 9,445 9,445
---------- ----------
SHAREHOLDERS' EQUITY
Share capital 2,595,211 1
Cost of financing - -
Retained earnings (2,236,759) (1,320,439)
---------- ----------
358,452 (1,320,438)
---------- ----------
1,076,676 346,927
========== ==========
See accompanying notes to financial statements.
<PAGE>
IMAGIS TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)
Three Months Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
$ $ $ $
Revenues 118,580 81,511 364,238 290,825
---------- ---------- ---------- ----------
Operating costs
Hardware purchases 64,449 19,419 144,802 78,767
Marketing and sales 209,114 159,970 338,590 332,837
Technology development 147,494 - 225,534 -
Administration 472,017 217,506 606,569 447,264
Write-off of inventory 111,836 - 111,836 -
Amortization 9,172 5,100 14,432 11,900
---------- ---------- ---------- ----------
1,014,082 401,995 1,441,763 870,768
Loss before other (895,502) (320,484) (1,077,525) (579,943)
Other revenues
Gain on debt settlement 161,205 - 161,205 -
---------- ---------- ---------- ----------
LOSS FOR THE PERIOD (734,297) (320,484) (916,320) (579,943)
RETAINED EARNINGS - BEG. ========== ========== (1,320,439) -
---------- ----------
RETAINED EARNINGS - END (2,236,759) (579,943)
========== ==========
EARNINGS PER COMMON SHARE
- - - basic (Canadian GAAP) $ (0.10) $ (0.09) $ (0.16) $ (0.18)
========== ========== ========== ==========
- - - weighted average number of common
shares outstanding 8,061,511 3,400,000 6,320,973 3,230,939
========== ========== ========== ==========
- - - basic (US GAAP) $ (0.11) $ (0.09) $ (0.17) $ (0.18)
========== ========== ========== ==========
- - - weighted average number of common
shares outstanding 7,261,511 3,400,000 5,759,647 3,230,939
========== ========== ========== ==========
See accompanying notes to financial statements.
<PAGE>
IMAGIS TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)
Three Months Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
$ $ $ $
OPERATING ACTIVITIES
Loss for the period (734,297) (320,484) (916,320) (579,943)
Amortization 9,172 5,100 14,432 11,900
Changes in non-cash working capital items:
Accounts receivable 160,219 110,705 96,825 (57,872)
Inventories - (81,291) - (160,011)
Accounts payable (357,917) 95,773 (372,145) 382,117
Payable to PCC (1,152,403) (154,178) - 386,582
---------- ---------- ---------- ----------
(2,075,226) (344,375) (1,177,208) (17,227)
---------- ---------- ---------- ----------
INVESTING ACTIVITIES
Business combination (356,790) - (356,790) -
Deferred acquisition costs 313,500 - - (125,492)
Capital assets (35,049) (26,850) (35,049) (91,610)
---------- ---------- ---------- ----------
(78,339) (26,850) (391,839) (217,102)
---------- ---------- ---------- ----------
FINANCING ACTIVITIES
Issuance of common shares 2,952,000 - 2,952,000 -
Loan from ValorInvest Limited - 100,000 - 200,000
Loans payable - 173,274 (576,996) -
---------- ---------- ---------- ----------
2,952,000 273,274 2,375,004 200,000
---------- ---------- ---------- ----------
INCREASE IN CASH 798,435 (97,951) 805,957 (34,329)
CASH - BEGINNING OF PERIOD 46,326 63,622 38,804 -
---------- ---------- ---------- ----------
CASH - END OF PERIOD 844,761 (34,329) 844,761 (34,329)
========== ========== ========== ==========
See accompanying notes to financial statements.
<PAGE>
IMAGIS TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)
BASIS OF PRESENTATION:
The consolidated financial statements of the Company are prepared in
accordance with generally accepted accounting principles in Canada for
interim financial reporting. For information on material differences
between Canadian and United States accounting principles, reference
should be made to the annual consolidated financial statements of Imagis
Cascade Technologies Inc. (Imagis) which have been filed with the
Company's registration statement on Form 10-SB.
The financial information presented in these consolidated financial statements
is unaudited. However, such information reflects all adjustments, consisting
solely of normal recurring adjustments, necessary to a fair statement of the
results for the interim periods presented.
SIGNIFICANT ACCOUNTING POLICIES:
Revenue Recognition:
Revenues arise from the sale of the Company's software products and from
consulting services rendered in conjunction with their installation in complex,
multiple-user environments. Each software product is discrete and self-
contained and permits easy customer installation. Consequently, revenue from
sale of software is not dependent on installation or customer acceptance and is
recorded on shipment to the customer. For consulting services, revenues are
only recorded when the service has been fully rendered.
Research and Development Expenditures:
The Company has a number of employees dedicated to on-going technology
development work to expand the Company's product offering. Because this work
is focused toward new product development for which there is no certainty of
market acceptance and consequent recovery of costs, all such expenditures are
expensed as incurred.
BUSINESS COMBINATION:
As described more fully in notes 1 and 8(b) to the Company's annual financial
statements filed with the registration statement on Form 10-SB, on February 23,
1999 the Company acquired all of the issued and outstanding common shares of
Imagis for common share and cash consideration. As the former shareholders of
Imagis gained voting control of the Company on the acquisition, this business
combination was accounted for as a reverse take-over transaction under which
Imagis is deemed for accounting purposes to be the acquirer and the Company the
acquired entity. Under these accounting principles, the consolidated financial
statements of the Company present Imagis on a historical basis consolidated with
the results of operations of the Company from the date of acquisition. The
consideration issued was applied to the assets acquired and liabilities assumed
of the Company based on their relative fair values at the date of acquisition
as follows:
<PAGE>
IMAGIS TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)
BASIS OF PRESENTATION CONT'D:
Cash $239,522
Other current assets -
Current liabilities (33,012)
---------
Working capital acquired 206,510
Cash consideration (900,000)
---------
Net deficiency recognized as a charge to deficit ($693,490)
on acquisition in accordance with accounting =========
principles for reverse take-overs
Pursuant to the terms of this acquisition, the Company is committed to pay an
additional $400,000 to one of Imagis shareholders if, as and when 400,000
warrants exercisable at $1.25 each that were issued on the offering are
exercised.
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward Looking Statements:
Statements in this Quarterly Report on Form 10-QSB, including those concerning
the Company's expectations of future sales, gross profits, research and
development expenses, selling, general and administrative expenses, product
introductions, cash requirements and Year 2000 compliance, include certain
forward-looking statements. As such, actual results may vary materially from
such expectations. Factors which could cause actual results to differ from
expectations include variations in the level of orders which can be affected by
general economic conditions and in the markets served by the Company's
customers, the international economic and political climates, difficulties or
delays in product functionality or performance, the timing of future product
releases, failure to respond adequately to either changes in technology or
customer preferences, changes in pricing by the Company or its competitors,
ability to manage growth, risk of nonpayment of accounts receivable, changes in
budgeted costs, ability to evaluate, identify and correct date recognition
problems in software used by the Company, its customers or suppliers, all of
which constitute significant risks. There can be no assurance that the
Company's results of operations will not be adversely affected by one or more of
these factors.
Overview:
In February, 1999, the Company completed its acquisition of Imagis-Cascade
Technologies Inc. and in the current quarter, completed a financing raising
approximately Cdn$2.9 million before financing costs. The acquisition, more
fully described in the attached notes to the financial statements, was accounted
for as a reverse take-over whereby the company acquired is deemed the parent
for reporting purposes and the target is considered the acquired entity. This
treatment conforms with generally accepted accounting principles in Canada
which are essentially identical to those applicable in the United States for
such transactions.
Prior to the acquisition, Imagis-Cascade Technologies Inc. had developed
software programs directed to the security industry, primarily jails and other
government agencies, and were in the process of developing its current primary
product, CABS, and other related products for the law enforcement sector. In
addition, due to the lack of funding, the Company's management was heavily
focused on raising additional capital to continue operations. Consequently the
period prior to the acquisition is not comparable to the current period. In
addition, prior to the acquisition, the Company was small and privately held,
and consequently many specific details on individual product sales volumes
and revenues as well as functional costing were not tracked either in the
Company's accounting system or by other means in a meaningful manner.
Comparative numbers reported in the past for some functional costs included
significant management allocations between categories.
Results of Operations for the three months ended June 30, 1999 and 1998:
Revenues:
Revenues were $118,580 for the second quarter, up somewhat from the comparable
prior year period of $81,511. Revenues during the three month period ended
June 30, 1999 included $48,663 from sales of the Company's CABS software
product, $42,725 for installation services and $27,192 for sales of various
hardware components purchased on behalf of customers. In 1999, revenues from
thesale of older software products were only $3,999.
In past periods, the Company has supplied third-party products to its
customers. Management of the Company intends to decrease its practice of
supplying third-party products to its customers. Instead, management plans to
develop strategic alliances with third-parties that will supply their products
directly to the Company's customers. As a result of this shift in supply of
third-party products, management expects revenues from hardware sales to
decrease in future periods.
In the three month period ended June 30, 1998, revenues from software products
and installation and support services were approximately $54,000. No sales of
the Company's new CABS product were made in this prior period. Sales of
hardware products in the comparative 1998 period were approximately $27,000.
During this period, all sales were made by the Imagis-Cascade Technologies
staff directly to customers, and hardware sales were part of a comprehensive
install.
<PAGE>
Hardware Purchases:
Hardware purchases for the quarter amounted to $64,449, more than three times
that purchased in 1998 of $19,419. As noted above, the costs of hardware
purchases are expected to be considerably lower in future periods as a result
of the Company's altered marketing approach involving partners.
Marketing and Sales:
Marketing and Sales costs were $209,114 in the current quarter, reflecting the
Company's stronger financial condition and consequent ability to fund an
increased market awareness program both for the Company and its CABS product
grouping. During the period, the Company's sales team traveled extensively
throughout North America to attend various trade shows. Marketing and sales
costs reported include salaries of $73,288, travel to shows and to establish
and support new partner relationships of $62,915, and materials and other
advertising costs of $72,911. In 1998, Marketing and Sales expenditures
incurred were $159,970, 24 per cent lower than in the current year, somewhat
constrained by lower funding. The lower cost level was attributable almost
completely to less travel.
Technology Development:
Technology Development costs for the quarter ended June 30, 1999 were $147,494
while no costs were recorded in the prior comparable three month period. Costs
for programmer salaries were $120,774, over 80 per cent of the functional total
and twice the level of the prior quarter reflecting several additions to staff.
The remaining costs of $26,720 related to software and other support purchases
and some travel for these individuals. The current level of expenditure
reflects the Company's commitment to new product development and is expected to
increase in future periods. Costs of development in 1998 were not identified
and were included in the Administration category.
Administration:
Administrative costs of $472,017 were incurred in the three month period ended
June 30, 1999 while comparable costs for the prior year in this quarter were
only $217,506. Costs included salaries and office costs of $292,679, legal fees
of $112,730, shareholder and regulatory costs of $19,984 and travel amounting
to $46,624. The substantial increase in costs, representing an increase of 117
per cent, arose as a result of the addition of several new managers to support
the expansion of the Company and its transition from private status to one of a
listed public company, and professional fees and other costs incurred in
conjunction with a public offering.
Other Costs and Expenses:
Other costs include amortization of $9,172, an inventory valuation adjustment
of $111,836, and a one-time gain on settlement of debt of $161,205, the latter
two items related to terms negotiated with the vendors and creditors at the
time of the acquisition. In the prior year, amortization amounted to only
$5,100.
Net Loss for the Period:
In both three month periods, the Company experienced losses due to its early
stage of operations. In the current three month period ended June 30, 1999,
the loss amounted to $734,297 which is more than double that of the comparable
period where the loss was $320,484. The higher loss in the current period
reflects the impact of the higher costs in both Marketing and Sales and
Administrative areas. Basic earnings per share was ($0.11) which was lower than
for the prior year due to the dilution resulting from the acquisition and
financing issuances this year. The basic earnings per share for the comparable
1998 period was ($0.09).
<PAGE>
Results of Operations for the six months ended June 30, 1999 and 1998:
Revenues:
Revenues for the year to date were $364,238, and were 25 per cent higher than
the prior year level of $290,825. Revenues were comprised of approximately
$125,000 or 34 per cent from sales of the Company's CABS software product,
hardware and other supplies sales of $117,000, and Installation services and
support fees of $122,000. As noted previously, prior year sales revenues were
for older products sold into other government segments and for related
hardware.
Hardware Purchases:
Hardware purchases and other materials aggregated $144,802, almost double the
expenditure of the prior year of $78,767. The hardware required is dependent on
individual customer needs dictated to some degree by the size of the
installation. Management expects that the hardware component of revenue will
decline due to the involvement of strategic partners fulfilling this component
need directly, and that software sales revenues will grow due to the extended
reach of these partners, and this growth will more than compensate for the loss
of hardware revenue.
Marketing and Sales:
Expenditures on marketing and sales were $338,590 which is slightly more than
for the comparable prior year period of $332,837. The Company has changed its
marketing approach during the current year to engage strategic partners which
can provide a far wider geographic reach and supplement the technical support
requirements of customers. This strategy expands the sales force through the
partners and frees technical staff to focus exclusively on product development.
While the period to period expenditure levels are comparable, the Company spent
less on direct marketing in 1999 and more on development of the partner network
and trade conference promotion to increase product awareness. Costs in the
current year included salaries of $131,075, travel of $113,235 and other
advertising materials and support costs of $94,280. In the comparative prior
year period, salaries were approximately $184,000, travel was $41,000 and all
other costs amounted to $107,000. All prior period costs reported include some
allocations to marketing and sales activities from the administrative category
as detailed records separating all costs by function were not maintained. The
above 1998 salary and other costs include costs for some research and
development activity. The lower travel expenses reflect the Company's limited
funds during this period.
Technology Development:
The Company expended in the current year $225,534 on product development. The
technical staff was more than doubled in size and two new product modules,
Evidence ID and ID 2000, were brought to the beta stage in the period. As was
the case in the quarter, salary costs of $184,514 were the largest cost
component at 82 per cent of the total. Travel and support costs constituted the
remaining 18 per cent. Prior year costs for the six-month period incurred for
development were not segregated, but included with Marketing and Sales and
Administrative costs.
Administrative:
Administrative costs for the current year to date were $606,569, up 36 per cent
over the prior year of $447,264. The higher expenditure level reflects the
costs of engaging new staff and supporting the sale of the Company in February
and its subsequent financing completed in May. Included in this function are
salaries and other office support costs of $347,851, professional fees,
primarily legal, of $151,051, shareholder and regulatory costs of $36,007 and
travel and other of $71,660. The 1998 comparative administrative costs included
salaries and support costs of $362,000, legal fees of $56,000 and travel and
other of $29,000. As noted above, some Research and Development costs are
included in the 1998 amounts reported in this category.
<PAGE>
Other Costs and Expenses:
Other costs and expenses include amortization of $14,432, slightly higher than
the previous year amount of $11,900. As well, there was an inventory valuation
adjustment of $111,836, and a one-time gain of $161,205 on debt settlement,
both of which relate to special terms negotiated with the vendors and creditors
associated with the Company prior to the acquisition.
Loss for the Period:
The Company experienced a net loss for the period of $916,320 or $0.17 per
share. This is considerably larger than that of the prior year of $579,943 or
$0.18 per common share. The current year per share amount has only experienced
a slight change due to the effect of the common share issuances arising from
the acquisition and financing transactions in the period.
Liquidity and Capital Resources:
The Company completed its acquisition of Imagis-Cascade Technologies Inc. in
February issuing 3.5 million common shares in conjunction with the acquisition,
and completed additionally two financings, a private placement of 608,214
common shares at a per share value of $0.56 yielding gross proceeds of $300,000,
and a Public offering of 2.4 million common shares at a per share value of $1.23
for gross proceeds of $2,952,000. These funds were used to repay cash
obligations incurred in the acquisition of $900,000 and a bridge loan of
$200,000 taken on prior to the acquisition closing to sustain the Company to the
closing of the public financing. The remainder of the financing was available to
support day-to-day operations of the Company. During the period, the Company
purchased equipment totaling $35,049. In management's view, this level is
representative of the level of capital expenditure required in the future since
the Company is a software developer, and additional equipment will be required
essentially to support additional development staff. While cash was augmented by
collection of trade receivables amounting to $96,825, trade accounts payable of
$372,145 were cleared from the accounts such that an overall draw on cash
resources from operations of $1,177,208 resulted. Further cash was used to
reduce other loans payable by $376,996.
At the period end, the Company had cash resources of $844,761 but working
capital of only $267,711, due to an amount payable to a related party of
$445,688 due early in year 2000. Subsequent to the quarter-end, due to the
accelerated level of operations and expenditure, the liquidity of the Company
declined and management is currently seeking additional financing through the
issue of equity.
Year 2000:
The Company's current software products have all been developed over the past
two years and consequently are fully compliant with the requirements for year
2000 and beyond. The development staff are technically knowledgeable of the
issues related to the Year 2000 problem, have consciously designed all products
to not be sensitive to the problem and have conducted appropriate testing to
ensure all products perform without difficulty or exception. The staff are
aware that certain customer system software on which the Company's products
operate are not Year 2000 compliant and where reasonably possible, have made
customers aware of the deficiency and exposure.
The Company has conducted a review of its internal financial reporting systems,
completed testing using technically qualified consultants, identified non-
compliant equipment and applications and replaced all non-compliant items. In
addition, the Company has reviewed its dependence on third party providers of
material and services and to the extent possible, satisfied itself that all
such providers are working diligently and will be able to provide uninterrupted
supply of service in year 2000.
Management has developed alternative plans as a precaution for additional steps
to be taken both before and after the start of the new millennium to ensure
continuous operations throughout the Company are maintained in this
transitional and threatening period.
<PAGE>
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
N/A
ITEM 2. CHANGES IN SECURITIES
FINANCE OFFERING
Imagis Technologies Inc. completed an offering during the period of 2,400,000
units pursuant to an Exchange Offering Prospectus to residents of British
Columbia, Canada, dated April 16, 1999. The Offering was completed at a price
of Cdn.$1.23 per unit for gross proceeds of Cdn.$2,952,000. Each unit consists
of one common share and one transferable share purchase warrant, two such
warrants entitle the holder to acquire an additional common share at an
exercise price of Cdn.$1.23 per share up until October 29, 1999. The warrants
are listed for trading on the Vancouver Stock Exchange under the symbol NAB.WT.
Goepel McDermid Inc. and Canaccord Capital Corporation acted as agents in
connection with the offering. The agents received a commission in the amount of
7.5% of the price of each unit sold in the offering for an aggregate commission
of $221,400. In addition, Imagis issued a total of 360,000 agents' warrants
entitling the agents to purchase a total of 360,000 additional common shares at
a price of Cdn.$1.23 up until October 29, 1999.
Imagis received the net proceeds of the offering from Canaccord Capital
Corporation and Goepel McDermid Inc. and on May 4, 1999, issued 1.2 million
common shares of Imagis to Canaccord Capital Corporation and 1.2 million common
shares to Goepel McDermid Inc. On April 29, 1999, Imagis issued 807,000
warrants at Cdn.$1.23 expiring on October 29, 1999 to Canaccord Capital
Corporation and 1.953 million warrants at Cdn.$1.23 to Goepel McDermid Inc.
OPTIONS ISSUED
On April 13, 1999, Imagis received regulatory approval from the Vancouver Stock
Exchange to issue 45,000 options, vested over three years, at an exercise price
of Cdn.$1.00 per share to a member of Imagis' Advisory Board.
In connection with each of the above issuances of securities, the Registrant
relied on the exclusion from registration provided by Rule 903(b)(1) of
Regulation S under the Securities Act of 1933, as amended. In each case, the
securities were issued by the Registrant, a "foreign issuer", as defined by
Regulation S, to persons outside the United States.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
N/A
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
An Annual General Meeting of the shareholders was held on June 16, 1999.
The following were voted by the shareholders to continue as Directors of
the Company: Iain Drummond, Altaf Nazerali, Sandra Buschau, Fred Clarke,
Rory Godinho
The following matters were considered at the meeting:
To receive and consider the Report of the Directors (For: 958,276;
Against: 0; Unvoted: 7,999,938)
To receive and consider the audited financial statements of the Company
for the year ended December 31, 1998, together with the auditors'
report thereon (For: 958,276; Against: 0; Unvoted: 7,999,938)
To appoint auditors for the ensuing year and to authorize the directors
to fix the remuneration to be paid to the auditors (For: 958,276;
Against: 0; Unvoted: 7,999,938)
<PAGE>
To fix the number of directors for the ensuing year at five (For: 958,276;
Against: 0; Unvoted: 7,999,938)
To elect directors for the ensuing year:
Iain Drummond (For: 958,276; Against: 0; Withheld: 7,999,938)
Altaf Nazerali (For: 958,276; Against: 0; Withheld: 7,999,938)
Sandra Buschau (For: 958,276; Against: 0; Withheld: 7,999,938)
Fred Clarke (For: 958,276; Against: 0; Withheld: 7,999,938)
Rory Godinho (For: 958,276; Against: 0; Withheld: 7,999,938)
To consider and, if deemed advisable, pass an ordinary resolution
approving the grant of existing stock options to insiders and that
general authority be given to the board of directors to grant
directors, senior officers and employees of the Company, before the
next annual general meeting of the Company, incentive stock options
to purchase shares in the capital stock of the Company, and to amend
any such options, for such periods, in such amounts and at such
prices per share as agreed upon and in the discretion of the board of
directors, provided that the same are in accordance with the policies
of the Vancouver Stock Exchange, and that no further approval from
the shareholders will be required before the exercise of all or part
of any such options granted (For: 958,276; Against: 0; Withheld:
7,999,938)
To consider and, if thought fit, to pass an ordinary resolution, with or
without amendment:
Approving the Company's Stock Option Plan, as described in the
Information Circular accompanying the Notice of Annual General
Meeting; (For: 958,276; Against: 0; Withheld: 7,999,938) and
Authorizing the Company, subject to regulatory approval, to grant
stock options pursuant and subject to the terms and conditions of
the Stock Option Plan, entitling the optionholders to purchase up
to 1,800,000 common shares of the Company (For: 958,276; Against: 0;
Withheld: 7,999,938)
To transact such other business as may properly come before the meeting.
ITEM 5. OTHER INFORMATION
N/A
ITEM 6. EXHIBITS AND REPORTS FILED ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: September 23, 1999
Imagis Technologies Inc.
(Registrant)
By: s IAIN DRUMMOND
----------------------
Iain Drummond
President & CEO
By: s ROSS WILMOT
----------------------
Ross Wilmot
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT
Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<CURRENCY> CANADIAN
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1.50
<CASH> 844,761
<SECURITIES> 0
<RECEIVABLES> 141,174
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 985,935
<PP&E> 139,425
<DEPRECIATION> (48,684)
<TOTAL-ASSETS> 1,076,676
<CURRENT-LIABILITIES> 708,779
<BONDS> 0
0
0
<COMMON> 2,595,211
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,076,676
<SALES> 364,238
<TOTAL-REVENUES> 364,238
<CGS> 0
<TOTAL-COSTS> 1,441,763
<OTHER-EXPENSES> 161,205
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (916,320)
<INCOME-TAX> 0
<INCOME-CONTINUING> (916,320)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (916,320)
<EPS-BASIC> (0.16)
<EPS-DILUTED> (0.17)
</TABLE>
