U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the quarterly period ended September 30, 2000.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from _______ to
-------
COMMISSION FILE NUMBER 001-06-560
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FAIRCHILD INTERNATIONAL CORPORATION
(Name of Small Business Issuer in its Charter)
Nevada 91-1880015
(State or other jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
Suite 600, 596 Hornby Street, Vancouver, B.C. Canada V6C 1A4
(Address of Principal Executive Offices) (Zip Code)
(604) 646-5614
(Issuer's Telephone Number)
Check whether the issuer (1)filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares of common stock outstanding as of September 30, 2000 is
10,988,210.
PART 1-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 2000
(EXPRESSED IN U.S. DOLLARS)
2000
ASSETS
CURRENT
CASH $ 2,814
=================
LIABILITIES
CURRENT
ACCOUNTS PAYABLE $ 10,719
OWING TO RELATED PARTIES 67,793
-----------------
78,512
=================
COMMITMENTS (NOTE 4)
STOCKHOLDERS' EQUITY (DEFICIENCY)
SHARE CAPITAL
AUTHORIZED
50,000,000 COMMON SHARES WITH A PAR VALUE
OF $0.001 PER SHARE
1,000,000 PREFERRED SHARES WITHOUT PAR VALUE
OF $0.01 PER SHARE
ISSUED AND PAID (NOTE 3)
10,988,210 COMMON SHARES 894,769
DEFICIT ACCUMULATED DURING THE
DEVELOPMENT STAGE (970,467)
-----------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) (75,698)
-----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,814
=================
APPROVED BY THE DIRECTOR
UNAUDITED
<TABLE>
<CAPTION>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
FOR THE NINE MONTHS ENDED SEPTEMBER 30. 2000 AND 1999
(EXPRESSED IN U.S. DOLLARS)
CUMULATIVE PERIODS
TO ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 1999
<S> <C> <C> <C>
ADMINISTRATIVE EXPENSES
ADVERTISING $ 9,008 $ - $ -
BANK CHARGES AND EXCHANGE 12,535 470 2,310
CONSULTING 39,267 - 25,664
OFFICE, RENT AND SECRETARIAL 28,769 9,613 12,044
PROFESSIONAL FEES 83,750 7,295 32,954
PROMOTION AND TRAVEL 331,040 6,000 97,396
RELATED PARTY
ADMINISTRATION CHARGES 121,855 12,733 42,692
CONSULTING FEES 50,000 - -
RESEARCH AND DEVELOPMENT AND
LICENSE FEES 163,520 5,020 96,500
SHAREHOLDER INFORMATION 19,899 1,877 4,099
STOCK OPTION COMPENSATION - - 120,000
TELEPHONE AND UTILITIES 3,440 246 1,655
TRANSFER AGENT FEES 7,757 - 3,408
---------------- --------------- -----------------
870,840 43,254 438,722
MINERAL INTERESTS AND
EXPLORATION COSTS 99,627 - -
---------------- --------------- -----------------
NET LOSS FOR THE PERIOD $ 970,467 43,254 438,722
================
DEFICIT BEGINNING OF THE PERIOD 927,213 456,276
--------------- -----------------
DEFICIT END OF THE PERIOD $970,467 $894,998
=============== =================
BASIC LOSS PER SHARE $0.01 $0.07
=============== =================
UNAUDITED
</TABLE>
<TABLE>
<CAPTION>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(EXPRESSED IN U.S. DOLLARS)
CUMULATIVE PERIODS
TO ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 1999
<S> <C> <C> <C>
CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
NET LOSS FOR THE PERIOD $ (970,467) $ (43,254) $ (438,722)
NON-CASH ITEMS
ISSUE OF SHARES FOR SERVICES
AANDMMINERALIINTEREST 236,858 - 25,000
CHANGE IN NON-CASH OPERATING ITEM
STOCK OPTION COMPENSATION - - 120,000
ACCOUNTS PAYABLE 10,719 2,514 5,876
---------------- --------------- -----------------
(722,890) (40,740) (287,846)
---------------- --------------- -----------------
FINANCING ACTIVITIES
OWING TO RELATED PARTIES 67,793 6,588 10,432
SHARE CAPITAL ISSUED FOR CASH 657,911 - 450,000
---------------- --------------- -----------------
725,704 6,588 460,432
---------------- --------------- -----------------
CHANGE IN CASH FOR THE PERIOD - (34,152) 172,586
CASH BEGINNING OF THE PERIOD - 36,966 595
---------------- --------------- -----------------
CASH END OF THE PERIOD $ 2,814 $ 2,814 $ 173,181
================ =============== =================
</TABLE>
UNAUDITED
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
1. ACCOUNTING POLICIES AND NOTES
The accounting policies followed by the Company are unchanged from
those outlined in the audited financial statements for the year ended
December 31, 1999. The notes to the financial statements at December
31, 1999 substantially apply to the interim financial statements at
September 30, 2000 and are not repeated here. All adjustments have been
made which, in the opinion of management, are necessary in order to
make these financial statements not misleading.
2. GOING CONCERN CONSIDERATIONS
As of September 30, 2000, the Company had not reached a level of
operations which would finance day to day activities. These financial
statements have been prepared on the assumption that the company is a
going concern, meaning it will continue in operation for the
foreseeable future and will be able to realize assets and discharge
liabilities in the ordinary course of operations. Different basis of
measurement may be appropriate when a company is not expected to
continue operations for the foreseeable future. The Company's
continuation as a going concern is dependent upon its ability to attain
profitable operations and generate funds therefrom and/or raise equity
capital or borrowings from third parties and related parties sufficient
to meet current and future obligations. The Company suffered losses
from operations of $43,254 and $438,722 for the nine months ended
September 30, 2000 and 1999 respectively and had a net capital
deficiency of $75,698 as of September 30,2000.
3. SHARE CAPITAL
Shares Consideration
Common shares issued and fully paid
Balance at September 30, 2000 and
December 31, 1999 10,988,210 $ 894,769
---------- ------------
4. COMMITMENTS
a. Pharmaceutical Research and Development
The Company has entered into Research, Development and License
Agreements to acquire an exclusive license to make, use and sell
pharmaceutical products and processes relating to arthritis and dermal
wrinkles. The Company has issued 2,600,000 common shares and is
committed to funding $250,000 ($137,520 paid) for research and
development as consideration for license. The shares have been issued
at a nominal value of $.01 per share and are subject to regulatory
restrictions relating to their saleability. A net revenue royalty of
35% will be payable by the Company on revenue for licensed products.
The agreement is with a company formerly under common management.
The balance of the funding of $112,480 is unpaid and unaccrued as the
registration of certain patents has been delayed. No notice of default
under the terms of the agreement has been received.
<PAGE>
UNAUDITED
UNAUDITED
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
b. Consulting Agreement
The Company has entered into a consulting agreement with a former
director for public relations services and granted an option to acquire
up to 5% of the outstanding common shares of the Company. The option
can be exercised when the Company's shares qualify for the NASDAQ small
cap over the counter public trading at a price of $.50 per share for a
period of two years from the date of the listing.
The exercise price of stock options granted exceeded the quoted market
value of the shares. Accordingly, no stock option compensation has been
recognized in the financial statements
ITEM 2.PLAN OF OPERATION
With the exception of historical facts stated herein, the matters discussed in
this report are "forward looking" statements that involve risks and
uncertainties that could cause actual results to differ materially from
projected results. Such "forward looking" statements include, but are not
necessarily limited to, statements regarding anticipated levels of future
revenues and earnings from operations of the Company. Readers of this report are
cautioned not to put undue reliance on "forward looking" statements which are,
by their nature, uncertain as reliable indicators of future performance. The
Company disclaims any intent or obligation to publicly update these "forward
looking" statements, whether as a result of new information, future events, or
otherwise.
THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS REGISTRATION STATEMENT.
We eventually plan to develop specialized e-commerce sites on the Internet. Over
the next twelve months, we plan to focus on development of an Internet portal
for alternative health care products. We hope that this site will offer our
products, as well as those of other companies. In addition, we plan to offer
information on related topics on the website.
In the past, we have relied upon funding from our former officer and director,
Mr. Stadnyk. We borrowed approximately $44,000 from Mr. Stadnyk during our
development stage, $40,000 of which has been repaid. We are currently unable to
satisfy our cash requirements without the financial support of our President,
Byron Cox, or his designee. We anticipate that we will meet our cash
requirements for the next twelve months through Mr. Cox's financial support,
even though Mr. Cox has not supplied funds to the Company in the past.
Currently, we have no commitment for funding from our past or present officers
and directors or any other party. Eventually, we will need to raise additional
funds, if we plan to implement an advertising and marketing plan to advance our
website. We have not yet determined how we plan to obtain these additional
funds.
In 1999, we raised cash proceeds of $475,000 from the sale of our common stock
to business associates and friends of Mr. Standyk and Mr. Cox. These funds were
for general operating expenses. At the time these funds were raised they were
not intended for the Praxis Pharmaceuticals licensing agreement. In this regard,
we issued 3,000,000 shares for $150,000 on March 15, 1999 and we issued
1,000,000 shares on April 1, 1999 for $300,000. The proceeds are to be used to
implement our new plan of business. At the time of sale, the proceeds were not
earmarked for the Praxis Pharmaceuticals licensing agreement.
Since we have entered into an agreement with Praxis Pharmaceuticals for research
and development, we will encounter significant research and development expenses
over the next twelve months. In addition to the terms of the Praxis
Pharmaceuticals agreement, we may seek to conduct other research and
development, which would result in expenses beyond those outlined in the
agreement with Praxis Pharmaceuticals.
Our goal is to have Praxis Pharmaceuticals provide us with products that are
ready for market. The first product that we hope to receive from Praxis
Pharmaceuticals is the anti-wrinkle compound while the second is an arthritis
product.
Since we outsource most of our operations, we do not anticipate establishing our
own manufacturing facilities over the next twelve months. Beyond this time
frame, we plan to make a decision with regard to purchase or sale of any plant
and significant equipment in the long term after products are introduced to the
public through our website, if ever.
As conditions dictate, we will engage additional employees. We do not plan to
make any significant changes in the number of employees over the next twelve
months.
PART II- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
SIGNATURES
In accordance with 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: 11/16/00 By: /s/ Byron Cox
----------------
Byron Cox, President and Director
