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 June 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 Section13
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 August 14, 2000 is
10,988,210.
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<PAGE>
ITEM 1. FINANCIAL INFORMATION
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
June 30, 2000
(EXPRESSED IN U.S. DOLLARS)
UNAUDITED
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<TABLE>
<CAPTION>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
June 30, 2000
(EXPRESSED IN U.S. DOLLARS)
ASSETS 2000
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<S> <C>
CURRENT
CASH $ 106
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LIABILTIES
CURRENT $ 11,190
ACCOUNTS PAYABLE 61,205
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OWING TO RELATED PARTIES
72,395
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COMMITMENTS (NOTE 3)
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 WITH A PAR VALUE
OF $0.01 PER SHARE
ISSUED AND FULLY PAID (NOTE 2)
10,988,210 COMMON SHARES 894,769
DEFICIT ACCUMULATED DURING THE (967,058)
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DEVELOPMENT STAGE
TOTAL STOCKHOLDERS' DEFICIENCY (72,289)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 106
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</TABLE>
APPROVED BY THE DIRECTOR
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UNAUDITED
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<TABLE>
<CAPTION>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERARATIONS AND DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(EXPRESSED IN U.S. DOLLARS)
CUMULATIVE
TO PERIOD ENDED
JUNE 30, JUNE 30,
2000 2000 1999
-------- -------- --------
<S> <C> <C> <C>
ADMINISTRATIVE EXPENSES
ADVERTISING $ 9,008 - -
BANK CHARGES AND
FOREIGN EXCHANGE 12,439 374 971
CONSULTING 39,267 - 664
OFFICE, RENT AND SECRETARIAL 25,863 6,707 10,535
PROFESSIONAL FEES 83,248 6,793 5,609
PROMOTION AND TRAVEL 331,040 6,000 69,882
RELATED PARTY
ADMINISTRATION CHARGES 121,855 12,733 26,477
CONSULTING FEES 50,000 - 50,000
RESEARCH AND DEVELOPMENT AND
LICENSE FEES 163,520 5,020 -
SHAREHOLDER INFORMATION 19,994 1,972 1,460
TELEPHONE AND UTILITIES 3,440 246 1,020
TRANSFER AGENT FEES 7,757 - 1,938
-------- -------- --------
$867,431 39,845 168,556
MINERAL INTERESTS AND
EXPLORATION COSTS 99,627 - -
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NET LOSS FOR THE PERIOD $967,058 39,845 168,556
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DEFICIT BEGINNING OF THE PERIOD 927,213 456,276
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DEFICIT END OF THE PERIOD $967,058 $624,832
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BASIS LOSS PER SHARE
PRE STOCK SPLIT $ 0.01 $ 0.25
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POST STOCK SPLIT $ 0.01 $ 0.03
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</TABLE>
UNAUDITED
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<TABLE>
<CAPTION>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(EXPRESSED IN U.S. DOLLARS)
CUMULATIVE
TO PERIOD ENDED
JUNE 30, JUNE 30,
2000 2000 1999
----------- ---------- -----------
<S> <C> <C> <C>
CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
NET LOSS FOR THE PERIOD ($967,058) ($39,845) ($168,556)
NON-CASH ITEMS
ISSUE OF SHARES FOR SERVICES
AND MINERAL INTEREST 236,858 - -
CHANGE IN NON-CASH
OPERATING ITEM
ACCOUNTS PAYABLE 11,190 2,985 -
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(719,010) (36,860) (168,556)
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FINANCING ACTIVITIES
OWING TO RELATED PARTIES 61,205 - 35,432
SHARE CAPITAL ISSUED FOR CASH 657,911 - 475,000
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719,116 - 510,432
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CHANGE IN CASH FOR THE PERIOD $ 106 (36,860) 341,876
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CASH BEGINNING OF THE PERIOD 36,966 595
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CASH END OF THE PERIOD $ 106 $ 342,471
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</TABLE>
UNAUDITED
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2000
1. ACCOUNTING POLICES 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 June 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. SHARE CAPITAL
SHARES CONSIDERATION
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Common shares issued and fully paid
Balance at June 30, 2000 and December 31, 1999 10,988,210 $ 894,769
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3. 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 and processes
relating to arthritis and dermal wrinkles. The Company has paid $137,520 of the
total research and development funding obligation of $250,000 and issued
2,600,000 post-split common shares in consideration for the license. The
balance of the funding obligation is due by October 1, 2000. 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.
b. Consulting Agreement
The Company entered into a consulting agreement with a former director for
public relations services for a twelve-month period to March 15, 2000. As
consideration for the services, the Company:
- paid cash of $25,000;
- issued 500,000 post-split (50,000 pre-split) shares at an ascribed value of
$.50 per shares;
- granted options to acquire to March 15, 2000 (lapsed without being exercised)
500,000 post-split common shares at $.05 and 500,000 post-split common shares
at $.15; and
- granted an option to acquire up to 5% of the outstanding common shares of the
Company when these shares qualify for the NASDAQ small cap over the counter
public trading at $.50 per share for a period of two years from the date of
the listing.
As of June 30, 2000, the exercise price of outstanding stock options exceeded
the quoted market value of the shares. Accordingly, no stock option
compensation has been recognized in the financial statements.
<PAGE>
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.
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.
<PAGE>
In the past, we have relied upon funding from our former officer and director,
Mr. David 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.
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.
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: 8/14/00 By: /s/ Byron Cox
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Byron Cox, President and Director
<PAGE>
Vancouver, Canada
August 2, 2000
