<PAGE>
STOCKSCAPE.COM TECHNOLOGIES INC.
1999 ANNUAL REPORT
<PAGE>
CORPORATE PROFILE
Stockscape.com Technologies Inc. is an electronic commerce Internet company
trading on the OTC Bulletin Board under the symbol STKSF. The Company is engaged
in the rapidly growing field of e-commerce and maintains an established Internet
investment portal of small cap companies at www.stockscape.com. Stockscape.com
provides extensive investor information enhanced by an exclusive relationship
with numerous leading financial newsletter writers. The Company is growing
through the development of its core business and strategic acquisitions of
related businesses.
INVESTMENT HIGHLIGHTS
Listing: NASD OTCBB Symbol: STKSF
$8.0 million financing completed
Cash and securities $14 million
Sales increase of 517% over 1998
High liquidity: Over 20 million shares traded from July - December, 1999
Over 10 million shares traded from January - March, 2000
Robust new server system installed
New website and expanded services planned for Spring, 2000
2
<PAGE>
REPORT TO SHAREHOLDERS
On June 30, 1999, you the shareholders approved a corporate reorganization that
enabled the Company to withdraw from a collapsing gold market and make a timely
entry into the burgeoning Internet industry.
The impact on your Company's well-being and the concomitant increase in
shareholder value has been impressive. Throughout 1998, every effort was being
directed towards averting the closing of the Mineral Ridge Mine and preventing
dilution of the Company's interest in the Ivanhoe Joint Venture. The sale of the
Mineral Ridge Mine on favorable terms and the exchange of the Ivanhoe interest
for 2,750,000 shares and 250,000 warrants of Great Basin Gold Ltd. were reported
in detail in the 1998 Annual Report. During the past year the wisdom of this
decision has been amply confirmed.
The acquisition of Stockscape Technologies Ltd. and the consequent change of
your Company's name to Stockscape.com Technologies Inc. has also been
successful. The consolidation of the former Cornucopia shares on a 1 new for 10
old basis was accompanied by a private placement of 4 million units at a price
of $0.50 per unit, with each unit consisting of one common share and two common
share warrants convertible into common shares at prices of $0.65 and $0.95 per
share respectively. By November 30, 1999, a total of 7,358,000 warrants had been
exercised. The financing yielded a net total of $7,742,787 which was applied to
the working capital of the Company.
At the end of 1999, working capital stood at $6,987,354 and the market value of
the Great Basin investment had increased to over $8 million. This strong
financial position has enabled your Company to expand and improve the computer
hardware upon which successful Internet service operations are based.
Additionally, capital is now available to finance expansion programs and several
potential acquisitions, several of which are under active consideration.
Dramatic growth was also evident in the sales for the year, which exceeded $1.2
million compared to $196,000 in the previous calendar year. Costs are being
maintained at an appropriate level for a rapidly expanding operation. The net
loss for the year of $954,379 includes amounts for non-recurring costs related
to the corporate reorganization.
Operations are described in detail in the following report. In the six months
from reorganization to year end, considerable progress was made in
re-establishing a reliable and versatile server system. Our service to investors
has been greatly enhanced and the Internet marketing programs for our client
companies have been expanded through the database management programs offered by
our newly constituted subsidiaries Stockscape.com Corporate Communications
Canada Ltd. and Stockscape Corporate Communications USA, L.L.C.
Your Company's future is predicated on two things: the continued development of
Stockscape.com's business through internal growth and external acquisitions, and
continuance of the explosive growth of information technology in general. With
e-commerce expected to reach US$1.3 trillion by 2003, it is highly likely that
the Internet market will continue to expand exponentially. We believe our
technical excellence and established reputation will allow us to share
handsomely in this expansion.
It is our hope that each one of the Company's shareholders will become a regular
visitor to the website at www.stockscape.com and, conversely, that users of
Stockscape.com's services will themselves elect to become shareholders.
The effect of the corporate reorganization upon the market for your Company's
shares has been extremely positive. 20,656,000 shares were traded between July
13th and December 31, 1999. The high trade was US$2.25 and the low was US$0.58.
During the first ten weeks of 2000, the market has been even more active with
over 10 million shares trading within a range of US$0.65 and US$2.00. This
vigorous trading and the high level of liquidity which it represents is most
encouraging.
3
<PAGE>
REPORT TO SHAREHOLDERS (Continued)
Your Director wish to thank retiring Director David Williamson for his 12 years
of strong support as a board member. The Directors are also pleased to welcome
Barry Duggan as our new President & Chief Executive Officer. He has enjoyed a
successful career in broadcasting and television and brings a high level of
management skills to the appointment. He in turn is fortunate in inheriting a
dedicated staff at Stockscape whose determined efforts have been central in the
development of the new system and website and the concentrated effort required
to bring them to market. They, like yourselves, look forward to continued
successful and profitable growth in the coming year.
On behalf of the Directors
(SIGNED)
Andrew F. B. Milligan
Chairman of the Board
April 10, 2000
4
<PAGE>
REPORT ON OPERATIONS
By the year 2003, 9.7 million US households will manage more than $3 trillion
USD in assets in 20.4 million on-line accounts according to estimates made by
Forrester Research, who also predicts that the number of households investing
on-line will almost double from 2.4 million at the start of 1999 to 4.6 million
by the end of 2000. Most of these investors will come from mainstream
households.
Computer Industry Almanac Inc. estimates that the number of worldwide Internet
users grew over 325% from 61 million users in 1996 to over 259 million users in
1999. They further project 320, 490 and 720 million worldwide Internet users at
the end of the years 2000, 2002 and 2005 respectively.
The rapid growth in personal computer usage and the phenomenal growth in
worldwide Internet connectivity, coupled with a unique affiliate program, have
been instrumental in Stockscape's aggressive strategy to establish itself as a
prominent online investment portal of small cap communities encapsulating
international newsletter writers, publishers and small cap companies.
Since July 1999, Stockscape has been developing a solid infrastructure in which
its affiliates collaborate in providing surfing investors with the most
comprehensive and timely financial content available through the Internet and to
develop a significant database of loyal investors actively participating in the
small cap portal. In addition, Stockscape has developed extensive Internet
marketing programs for small cap companies, newsletter writers and surfing
investors.
Over the last nine months Stockscape's management has added significant value to
the Company through a strategic action plan to resolve performance and service
problems, facilitate growth and achieve profitability. A $250,000 capital
expenditure program was undertaken to improve the server architecture and
reliability. A robust dual path, fully redundant, clustered server system
whereby all points of failures are backed up by a fail-over system has been
installed with firewall protection. In addition, an upgraded network system has
been implemented providing a central database, print and backup service through
an NT server. The network also includes logon scripts, security features and
anti-virus solutions to desktops and provides for remote service support. The
server system exceeds the Company's current needs and can be readily expanded to
meet future growth expectations.
Stockscape's position at the leading edge has demanded the implementation of an
ongoing program of development and improvement. To this end, a logo and branding
program was designed and implemented identifying Stockscape with uniqueness,
service, quality, innovation and reliability. Further, the first phase of our
"next generation" website was launched March 31, 2000. The website includes
numerous enhanced features to dramatically increase the traffic and site
stickiness. This branded site includes an exciting and dynamic redesigned
NEWSSTAND EXPRESS currently featuring over 35 newsletters, with the capability
to deal with over 130 newsletters by year end. The site will be very user
friendly and easy to navigate, with visitors being only two clicks away from
their destinations and it is expected to exhibit the fastest loading time of all
investment portals. The second phase of the website renewal plan should be
launched by the end of April and will provide over 1,000 news features daily,
enhanced quotes, quick charts and interactive charts, customizable portfolios,
message boards, chat rooms, secure financial transaction management and free
user email. Management anticipates translating the site into Chinese and Spanish
later in the year.
A vigorous twelve month search engine optimization program was implemented in
January to position Stockscape in the highest search engine ranking possible and
increase the website traffic. Since its implementation, this program has doubled
the number of hits and tripled the number of page views.
At the time of the corporate reorganization in July 1999, the Company had a
staff of 9 employees. On December 31, 1999 the Company employed 11 technical and
sales people. At mid-March 2000, staffing has grown to 16 dedicated, highly
skilled employees. Management anticipates a staff of over 40 by year end.
5
<PAGE>
REPORT ON OPERATIONS (Continued)
Additional products and services have been added to the Internet marketing
portfolio being offered to our affiliates. In July, 1999 five products were
offered in comparison to the current 12 products including streaming videos,
Investor Lead Generation, micro-sites, secure transaction management systems,
and customized tracking tools to monitor traffic to affiliate sites.
New sources of revenue are also being actively sought from the placement of
banner ads on website pages and provision of audio interviews and search engine
optimization services to Stockscape's affiliates. Management anticipates these
and other products will positively contribute to the Company's bottom line.
6
<PAGE>
NATURE OF TRADING MARKET
On January 29, 1988, the Company's common shares were listed on The Toronto
Stock Exchange (symbol CNP). The common shares were also quoted in the United
States on The Nasdaq Stock Market, National Market System until January 17, 1992
and the Nasdaq Small Cap Market until October 29, 1998. At the Company's
request, its common shares were delisted from trading on the Vancouver Stock
Exchange on February 4, 1993; and as part of the reorganization of the Company,
the Company delisted its common shares from The Toronto Stock Exchange on March
31, 1999. The Company's common shares currently trade on the Nasd OTC Bulletin
Board under the symbol STKSF.
The high and low trade prices of the Company's common shares as reported on the
TSE until March 31, 1999, and as quoted on Nasdaq and the OTCBB for each quarter
during the past two years are as follows:
<TABLE>
<CAPTION>
- ----------------- -------------------------------------------------- ------------------- -----------------
HIGH LOW
PERIOD TSE (C $) C $)
- ----------------- -------------------------------------------------- ------------------- -----------------
<S> <C> <C> <C>
1998 First quarter 0.49 0.19
Second quarter 0.33 0.04
Third quarter 0.15 0.05
Fourth quarter 0.13 0.035
1999 First quarter 0.20 0.035
Second quarter N/A N/A
Third quarter N/A N/A
Fourth quarter N/A N/A
- ----------------- -------------------------------------------------- ------------------- -----------------
</TABLE>
The following table sets forth, for the periods indicated, the high and low bid
prices of the Company's common shares as quoted on Nasdaq Small Cap Market
before October 29, 1998, and currently on the OTC Bulletin Board:
<TABLE>
<CAPTION>
- ----------------- -------------------------------------------------- ------------------- -----------------
HIGH LOW
PERIOD (US $) (US $)
- ----------------- -------------------------------------------------- ------------------- -----------------
<S> <C> <C> <C>
1998 First quarter 0.37 0.12
Second quarter 0.21 0.03
Third quarter 0.09 0.03
Fourth quarter 0.09 0.02
1999 First quarter 0.11 0.02
Second quarter 0.20 0.07
Third quarter * 2.25 0.10
Fourth quarter * 1.01 0.57
2000 First quarter * (to March 27, 2000) 2.50 0.65
* After 1 for 10 consolidation on July 9, 1999.
- ----------------- -------------------------------------------------- ------------------- -----------------
</TABLE>
The TSE, Nasdaq Small Cap Market and OTCBB quotations above reflect inter-dealer
prices, without retail mark-up, mark-down or commission.
As at March 31, 2000, there were approximately 1,924 registered shareholders of
record holding a total 26,282,183 common shares of the Company. To the best of
the Company's knowledge there were 81 registered Canadian shareholders, 9
international shareholders, and 1,834 shareholders resident in the United States
holding approximately 18,972,116; 6,920,344 and 389,723 shares respectively,
which represented 72.19%, 26.33% and 1.48% respectively of the Company's shares
then outstanding.
7
<PAGE>
NATURE OF TRADING MARKET (Continued)
The Company has not declared or paid any dividends on its common shares and
currently intends to utilize its funds to finance its business development
activities and for the acquisition of capital assets relating to its business.
It does not foresee paying any dividends on its common shares in the near
future.
There are currently no limitations imposed by Canadian federal or provincial
laws on the rights of non-resident or foreign owners of Canadian securities to
hold or vote the securities held. There are no such limitations imposed by the
Company's Memorandum, Articles or contracts of which the management of the
Company is aware.
There are no decrees or regulations in Canada or its several provinces that
restrict the import or export of capital, including, but not limited to foreign
exchange controls, or that affect the remittance of dividends or other payments
to holders of the Registrant's securities. Any such remittances to United States
residents, however, are subject to withholding tax.
Under Section 1296 of the Internal Revenue Code of the United States, a foreign
corporation is treated as a passive investment company (a "PFIC") if a
corporation not formed in the United States earns 75% or more of its income from
passive sources. Because the Company may have been a PFIC for its fiscal year
ended December 31, 1998, and may have been a PFIC for some of its fiscal years
ending before that date, each US shareholder of the Company should consult a tax
advisor with respect to how the PFIC rules may affect such shareholder's tax
situation. In particular, a US shareholder should determine whether such
shareholder should elect to have the Company be treated as a Qualified Electing
Fund in the event the Company is a PFIC. This might avoid adverse US federal
income tax consequences that may otherwise result from the Company should it be
treated as a PFIC.
8
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
OVERVIEW
During 1999, Stockscape.com Technologies Inc. ("Stockscape, Stockscape.com, or
the Company") continued designing and hosting websites for public and private
companies, performing Internet marketing for these companies, and expanded the
Internet products that it offers. In addition, the Company continued to expand
NewsStandExpress.com by adding more newsletters to the site and assisting the
newsletter writers in their conversions from regular mailings to Internet
distribution. The revenues, clients and general activity of the Company has
increased dramatically over 1998 as outlined below. Stockscape's expanded
services also include the coordination of the dissemination of information on
its clients to interested parties. This new service was implemented during the
fourth quarter of 1999 and is planned to become a growth area for the Company.
The Company became publicly listed on the Nasd OTCBB market in the United States
in July 1999, through a reverse takeover with Cornucopia Resources Ltd. This
transaction was combined with a share offering to raise $2 million. Warrants
were also issued with this financing and were subsequently exercised to generate
further share issue proceeds of $5.8 million in the last half of 1999.
Cornucopia's main asset was an interest in Great Basin Gold Ltd., a publicly
traded company, the fair market value of which was $8.1 million at year end.
Due to the acquisition of Stockscape.com Technologies (Canada) Ltd. and the
application of reverse takeover accounting, the comparative figures reflect the
results of the operations of this subsidiary, which had a September 30 year end.
The audited financial statements reflect the year ended December 31, 1999, the
three months ended December 31, 1998 and the years ended September 30, 1998 and
1997. All amounts are expressed in Canadian dollars.
RESULTS OF OPERATIONS
Stockscape's main sources of revenues are the Internet services, website design
and hosting, and other related Internet services. This area has grown from
revenues of $15,250 in the year ended September 30, 1997, $170,157 in the year
ended September 30, 1998, and $68,422 in the three months ended December 31,
1998, to $759,832 in the year ended December 31, 1999. This large increase is
mainly due to the addition of more clients and newsletters to the website.
During the current year, Stockscape further expanded the investor relations
services aspects by beginning to coordinate large volume mail services. Such a
mailing would be done in coordination with the Internet website hosting, email
blasts to Stockscape's "opt-in" database, video interviews posted on the
Internet, advertising placed on certain newsletters sent out, and conferences
coordination. The revenues from these programs was $368,575 for the year ended
December 31, 1999. Overall, sales increased by approximately 517% from the prior
year.
At December 31, 1999, the Company had cash and short term investments of $6.8
million (1998 - $57,795). Most of these funds were received from the financing
done in conjunction with the Cornucopia transaction ($2.0 million) and the
subsequent exercise of the Series A ($2.6 million) and Series B ($3.2 million)
Warrants. The interest income of $81,635, which increased from nil in 1998 and
1997, was due to the larger cash balance.
The cost of sales for Stockscape includes all costs, other than corporate
overhead, related to generating the sales and operating the websites. Cost of
sales increased from $184,758 and $337,494 for the years ended September 30,
1997 and 1998 and $74,365 for the three months ended December 31, 1998 to
$1,210,042 for the year ended December 31, 1999. The cost of sales increased by
approximately 272% over the prior year. This increase was mainly due to
additional staff hired during 1999 and the associated costs such as benefits,
computer and office equipment, and supplies. At December 31, 1999, there were 16
full time staff members compared to 8 at the end of 1998.
9
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
General and administration costs also increased significantly from prior
periods. In 1999, these costs totaled $945,935, compared with $77,386 for the
three months ended December 31, 1998, $332,018 for the year ended September 30,
1998, and $88,048 for the year ended September 30, 1997. The increase is
commensurate with the increased activity of the Company in general. Specific
areas of increase included audit and legal fees of $127,434 (prior periods -
$nil), generally due to the conversion to a public company, consulting and
management fees of $261,447 (prior periods - $nil), due to additional management
staff and consultants, and investor relations costs of $131,294 (prior periods -
$nil) due to the conversion to a public company. In addition, travel costs,
listing and maintenance fees, and amortization also increased.
The loss for the period increased from $257,556 for the year ended September 30,
1997, $499,355 for the year ended September 30, 1998, and $83,329 for the three
months ended December 31, 1998, to $954,379 or $0.06 per share for the year. On
a per share basis, the loss decreased due to the increased number of shares
outstanding during the year.
LIQUIDITY AND CAPITAL RESOURCES
During 1999, Stockscape raised $8.0 million from the issuance of common shares.
Stockscape completed a reverse takeover of Cornucopia Resources Ltd. in July
1999. Cornucopia had 41.6 million common shares outstanding which were
consolidated, on a 10 for 1 basis, into 4.2 million common shares. Cornucopia
then issued 10 million restricted common shares to acquire Stockscape in the
reverse takeover transaction. At the time of the transaction the new Stockscape
issued 4 million common shares to raise $2 million such that there were 18.2
million common shares outstanding on completion of the transaction.
The 4 million common shares issued in July were part of a unit offering combined
with an A and a B warrant. The A warrants were all exercised to buy 4 million
common shares at $0.65 per common share in September. In November, 3.4 million
of the B warrants were exercised to buy the same number of common shares at
$0.95 each. The exercise of the A warrants raised proceeds of $2.6 million and
the exercise of the B warrants raised $3.2 million. In addition, there were
402,500 common shares issued on the exercise of employee stock options. At
December 31, 1999, there were 25.9 million common shares outstanding, of which
10 million are escrowed, and Stockscape had $6.8 million in cash and short term
investments.
Another source of working capital is the investment in Great Basin Gold Ltd.,
which Cornucopia held prior to the transaction. At December 31, 1999, the
Company had 2.75 million common shares of Great Basin with a fair market value
of $2.95 per common share or $8.1 million. These shares are subject to various
resale restrictions and Stockscape can sell a minimum of 25,000 common shares
per month such that the majority of this investment is shown as a long term
investment.
Stockscape's major shareholder was financing the Company via loans prior to the
conversion to public status in July, 1999. These loans totaled $825,000 by
March, 1999, including accrued interest at 12% and were repaid by issuing
8,250,000 common shares to the shareholder, prior to the conversion to a public
company. Interest on the loans totaled $21,084 in 1999 ($18,973 for the three
months ended December 31, 1998, and $nil in prior periods).
RISKS AND UNCERTAINTIES
The Company's business is substantially dependent on the functionality of the
world wide web, generally known as the Internet, through the website
www.stockscape.com. Factors outside of the Company's control such as general
Internet failures, software or hardware faults, viruses, or direct attacks could
disable the Internet system for periods of time. Such external factors are
substantially beyond the control of the Company, but steps are taken to mitigate
any such factors within the control of the Company including using only proven
software and hardware; using certain security and back up features to detect and
prevent computer problems; and hiring senior personnel to maintain the Internal
computer systems.
10
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
The investment in Great Basin Gold Ltd. is one of the Company's largest assets
and is subject to market fluctuation in the price due to the results of this
company. While Stockscape does have a representative on the Board of Directors
of Great Basin Gold Ltd., the common shares are restricted from resale over
various periods of time. There is also no certainty that such a large amount of
shares being sold would not reduce the price of the shares of Great Basin Gold
Ltd. given that Stockscape's investment at December 31, 1999 represented
approximately 9.9% of the outstanding common shares of Great Basin Gold.
The Company has been operating since October 1996, and has incurred losses every
year. The Company must earn higher revenues in order to reach the breakeven
point and begin to earn profits. There are a number of factors which the Company
must address to reach this point. The main objective is to increase the number
of revenue producing clients using the Company's services, while maintaining
tight controls on costs. There is no assurance that the Company can address all
of the factors to reach profitability.
OUTLOOK
Stockscape has been able to increase its revenues over the past three periods.
Expenses have only increased, as a percentage of sales, in the current year due
to the conversion from a private company to a public company. Management
believes Stockscape is well positioned to take advantage of the growing Internet
business and expects that revenues will continue to increase while costs will
continue to decrease as a percentage of sales. The Company expects that a gross
operating profit will be achieved by the end of 2000 with continued sales
increases.
The cash and short term investments of the Company are very strong at $6.8
million and during 2000, significant investments will be made in marketing and
advertising to build the business and increase the awareness of Stockscape's
activities. Losses incurred due to high marketing expenditures during 2000 and
beyond are hoped to be mitigated by future profits and cash flow from the sale
of Great Basin Gold shares.
Stockscape is also considering expanding the operations through the acquisition
of complementary businesses. Although no specific acquisition agreements have
been signed, it is expected that such transactions will be undertaken through
the issuance of common shares and minimal cash payments.
11
<PAGE>
MANAGEMENTS' REPORT
The consolidated financial statements and information contained in this
Annual Report have been prepared by the management of Stockscape.com
Technologies Inc. The financial statements have been prepared in accordance
with Canadian generally accepted accounting principles and where appropriate,
reflect management's best estimate and judgments based on currently available
information. A system of internal accounting control is maintained to provide
reasonable assurance that financial information is accurate and reliable. The
Company's independent auditors, who are appointed by the shareholders,
conduct an audit in accordance with Canadian generally accepted auditing
standards to allow them to express an opinion on the financial statements and
their report is shown below.
The Audit Committee of the Board of Directors, with two of the three members
not being officers of the Company, meets periodically with management and the
independent auditors to review the scope and result of the annual audit, and
to review the financial statements and related financial reporting matters
prior to submitting the financial statements to the Board for approval.
(SIGNED) (SIGNED)
Andrew F. B. Milligan John J. Brown
Chairman of the Board Chief Financial Officer
March 10, 2000
12
<PAGE>
AUDITORS' REPORT
We have audited the consolidated balance sheet of Stockscape.com Technologies
Inc. as at December 31, 1999 and the consolidated statements of operations
and deficit and cash flows for the year then ended. 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 audit.
We conducted our audit 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 the results of its operations and its cash flows for the year
ended December 31, 1999, in accordance with Canadian generally accepted
accounting principles. As required by the Company Act (British Columbia), we
report that, in our opinion, these principles have been applied on a basis
consistent with that of the preceding year.
Canadian generally accepted accounting principals vary in certain significant
respects from accounting principles generally accepted in the United States.
Application of accounting principles generally accepted in the United States
to these consolidated financial statements would have affected total assets
and shareholders' equity as at December 31, 1999 and net loss for the year
then ended to the extent summarized in Note 10 to the consolidated financial
statements.
The consolidated financial statements as at December 31, 1998 and for the
three months ended December 31, 1998 and the years ended September 30, 1998
and 1997 were audited by other auditors who expressed an opinion without
reservation on those statements in their report dated March 25, 1999.
(SIGNED)
KPMG LLP Vancouver, Canada
Chartered Accountants March 10, 2000
13
<PAGE>
STOCKSCAPE.COM TECHNOLOGIES INC.
(Formerly Cornucopia Resources Ltd.)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1999, THREE MONTHS
ENDED DECEMBER 31, 1998 AND YEARS ENDED SEPTEMBER 30, 1998 AND 1997
14
<PAGE>
CONSOLIDATED BALANCE SHEETS as at December 31.
Expressed in Canadian Dollars unless otherwise stated.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
1999 1998
---- ----
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 947,369 $ 57,795
Short-term investments 5,847,601 -
Marketable securities 426,039 937
Accounts receivable 73,881 74,742
Prepaid expenses 22,201 8,920
----------- ----------
7,317,091 142,394
LONG-TERM INVESTMENTS (Note 4) 2,656,466 -
CAPITAL ASSETS (Note 5) 348,414 95,314
RESOURCE PROPERTY (Note 6) 1 -
INTANGIBLE ASSETS (Note 5) 11,328 8,270
----------- ----------
$10,333,300 $ 245,978
=========== ==========
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 262,480 $ 100,506
Unearned revenue 67,257 55,224
----------- ----------
329,737 155,730
LONG-TERM DEBT (Note 7) - 672,988
SHAREHOLDERS' EQUITY
SHARE SUBSCRIPTIONS - 200,000
SHARE CAPITAL (Note 8) 11,798,182 57,500
DEFICIT (1,794,619) (840,240)
----------- ----------
10,003,563 (582,740)
----------- ----------
Nature of operations (Note 1)
Commitments (Note 13)
Subsequent events (Note 15)
$10,333,300 $ 245,978
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
Approved by the Board of Directors
(SIGNED) (SIGNED)
____________________ _____________________
Andrew F.B. Milligan John J. Brown
Director Director
15
<PAGE>
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
Expressed in Canadian dollars unless otherwise stated.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Three Months
Year Ended Ended Year Ended Year Ended
December 31, December 31, September 30, September 30,
1999 1998 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE
Web-site sales and service $ 759,832 $ 68,422 $ 170,157 $ 15,250
Investor on-line services 368,575 - - -
Interest 81,635 - - -
----------- ------------ ------------ ----------
1,210,042 68,422 170,157 15,250
COST OF SALES 1,218,486 74,365 337,494 184,758
----------- ------------ ------------ ----------
GROSS LOSS 8,444 5,943 167,337 169,508
GENERAL AND ADMINISTRATIVE EXPENSES
Advertising and promotion 25,008 12,398 48,661 23,948
Depreciation 73,106 - - -
Audit and legal fees 127,434 403 18,140 3,361
Bad debt expense 25,101 - 6,657 -
Management and administration fees 261,447 - - -
Foreign exchange 6,698 - - -
Interest on debt 29,718 18,973 44,479 832
Investor and shareholder relations 131,294 - - -
Listing and transfer fees 27,505 - - -
Office and miscellaneous 104,686 8,904 42,120 20,506
Salaries, wages and benefits 95,917 36,708 171,961 39,401
Travel 36,552 - - -
Loss on disposal of fixed assets 16,042 - - -
Gain on sale of marketable
securities (14,573) - - -
----------- ------------ ------------ ----------
945,935 77,386 332,018 88,048
----------- ------------ ------------ ----------
NET LOSS FOR THE PERIOD 954,379 83,329 499,355 257,556
DEFICIT, BEGINNING OF PERIOD 840,240 756,911 257,556 -
----------- ------------ ------------ ----------
DEFICIT, END OF PERIOD $ 1,794,619 $ 840,240 $ 756,911 $ 257,556
=========== ============ ============ ==========
LOSS PER SHARE $ 0.06 $ 0.09 $ 0.53 $ 0.27
=========== ============ ============ ==========
</TABLE>
See accompanying notes to consolidated financial statements.
16
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOW
Expressed in Canadian Dollars unless otherwise stated.
<TABLE>
<CAPTION>
Three Months
Year Ended Ended Year Ended Year Ended
December 31 December 31, September 30 September 30,
1999 1998 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
CASH PROVIDED BY (USED FOR)
OPERATIONS
Net loss for the year $ (954,379) $ (83,329) $ (499,355) $ (257,556)
Items not involving cash
Depreciation 73,106 8,416 35,895 17,539
Loss on disposal of fixed assets 16,042 - - -
Interest paid by issuance of shares 21,105 - - -
Gain on sale of marketable (14,573) - - -
securities
Changes in non-cash working capital items (239,801) (54,822) 137,065 (11,112)
------------ ------------- ----------- -------------
(1,098,500) (129,735) (326,395) (251,129)
INVESTING
Proceeds on disposal of marketable
securities 144,218 - - -
Purchase of short-term investments (5,847,601) - - -
Purchase of capital assets (92,573)
(343,817) (2,497) (59,604)
Proceeds from sale of capital assets 4,200 - - -
Purchase of intangible assets (3,852)
(5,689) (1,758) (5,150)
Cash acquired on business combination
(Note 3)
36,819 - - -
------------ ------------ ----------- -------------
(6,011,870) (4,255) (64,754) (96,425)
FINANCING
Share subscriptions - - - 200,000
Short-term financing 102,500 - - -
Repayment of short-term financing (177,500) - - -
Private placement proceeds, net of issue
costs 1,952,687 - - 57,500
Proceeds on exercise of Series A Warrants 2,600,000 - - -
Proceeds on exercise of Series B Warrants 3,190,100 - - -
Proceeds on exercise of options 201,250 - - -
Long-term debt (Note 7) 130,907 93,677 488,479 90,832
------------ ------------ ----------- -------------
7,999,944 93,677 488,479 348,332
------------ ------------ ----------- -------------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 889,574 (40,313) 97,330 778
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 57,795 98,108 778 -
------------ ------------ ----------- -------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 947,369 $ 57,795 $ 98,108 $ 778
============ ============ =========== =============
</TABLE>
Supplementary information (Note 14)
See accompanying notes to consolidated financial statements.
17
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 1999, the three months ended December 31, 1998,
and the years ended September 30, 1998, and 1997. Expressed in Canadian dollars
unless otherwise stated.
1. NATURE OF OPERATIONS
During 1999, Stockscape.com Technologies Inc. ("Stockscape" or the
"Company"; formerly Cornucopia Resources Ltd.), completed a
reorganization and change of principal activity from that of
exploration and development of mineral properties to that of providing
investment information and services through the Internet. In March
1999, the Company sold its sole remaining active resource property
located on the Carlin Trend in the State of Nevada, USA. Effective July
9, 1999, the Company acquired Stockscape.com Technologies (Canada) Ltd.
("Stockscape Canada"), a privately-held Internet research company which
maintains an Internet portal for investors at www.stockscape.com which
has been in operation since October 1996 (Note 3). Effective July 9,
1999, the Company changed its name to Stockscape.com Technologies Inc.
on completion of the business combination with Stockscape Canada.
2. SIGNIFICANT ACCOUNTING PRINCIPLES
(a) BASIS OF PRESENTATION AND CONSOLIDATION
These financial statements have been prepared in accordance with
Canadian generally accepted accounting principles. Significant
differences from those in the United States of America are disclosed in
Note 10.
The consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly-owned. All
significant intercompany balances and transactions have been
eliminated.
Effective July 9, 1999, the Company completed the acquisition of 100%
of the outstanding common shares of Stockscape Canada. Since the former
sole shareholder of Stockscape Canada obtained control of the Company
through the share exchange, this transaction has been accounted for in
these financial statements as a reverse takeover. Consequently, the
consolidated statements of operations and deficit and cash flows
reflect the results of operations of Stockscape Canada, the legal
subsidiary, for the year ended December 31, 1999, combined with those
of Stockscape, the legal parent, from July 9, 1999 to December 31,
1999. In addition the comparative figures presented are those of
Stockscape Canada.
(b) REVENUE RECOGNITION
(i) Revenues from services provided to create web-sites are recognized as
the services are provided.
(ii) Revenues from investor on-line services, including web-site maintenance
and digital dispatches, are recognized as the services are provided.
(iv) Unearned revenue arises from cash received in advance of services
provided and is recorded as revenue when the services are provided.
18
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SIGNIFICANT ACCOUNTING PRINCIPLES (Continued)
(c) INCOME TAXES
Income taxes are accounted for using the deferral method of income tax
allocation. Under this method, a provision for deferred income taxes
arises as a result of differences in the timing of income recognition
for financial statement and income tax purposes.
(d) CASH EQUIVALENTS
Cash equivalents consist of highly liquid investments that are readily
convertible to known amounts of cash and have maturity dates of three
months or less from date of purchase.
(e) SHORT-TERM INVESTMENTS
Short term investments consist of highly liquid investments that have
maturity dates greater than three months but less than one year from
date of purchase. Short-term investments are recorded at cost which
does not materially differ from fair value.
(f) INVESTMENTS
The Company's investments represent common shares of publicly listed
companies and are carried at the lower of cost or market. Investments
in common shares which are subject to trading restrictions for the next
year are classified as long-term investments.
(g) TRANSLATION OF FOREIGN CURRENCIES
The Company's functional and reporting currency is the Canadian dollar.
The Company's United States operations conducted during the year are
considered to be integrated operations for purposes of foreign currency
translation. Amounts stated in United States dollars are translated
into Canadian dollars as follows: monetary assets and liabilities are
translated at the exchange rate in effect at the balance sheet date;
non-monetary assets and liabilities are translated at the rate in
effect on the date of the transaction; revenues and expenses are
translated at average rates during the reporting period. Gains and
losses arising from the conversion of foreign currency balances and
transactions are reported in income as they occur.
(h) CAPITAL AND INTANGIBLE ASSETS
Capital and intangible assets are stated at cost less accumulated
depreciation.
(i) The following fixed assets are depreciated on a declining
balance basis at the following rates:
<TABLE>
<S> <C>
Computer equipment 30%
Office equipment 20%
</TABLE>
19
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SIGNIFICANT ACCOUNTING PRINCIPLES, (Continued)
(ii) Computer software is depreciated on a straight-line basis over
twelve months.
(iii) Leasehold improvements are depreciated on a straight-line
basis over their three year lease term.
(iv) Trademarks and other organization costs are depreciated on a
straight-line basis over five years.
(v) Development and maintenance costs of the corporate web-site
are expensed as incurred.
(i) SHARE CAPITAL
The Company records proceeds from the issuances of common shares net of
issue costs. Shares issued for other than cash consideration are valued
at the quoted price on the stock exchange on the date the agreement to
issue the shares was reached.
The Company has a stock-based compensation plan which is described in
Note 8(c). No compensation expense is recognized for this plan when
stock or stock options are issued to directors or employees. Any
consideration paid by directors or employees on exercise of stock
options or purchase of stock is credited to share capital.
(j) FINANCIAL INSTRUMENTS
The carrying value of cash, short-term investments, marketable
securities, accounts receivable, long-term investments and accounts
payable and accrued liabilities approximate fair values due to their
short term nature. The fair value of long term investments is disclosed
in Note 4.
(k) USE OF ESTIMATES
The preparation of the financial statements in conformity with Canadian
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. Actual results could
differ from these estimates.
(l) LOSS PER SHARE
The loss per share is computed using the weighted average number of
common shares outstanding during the reporting period. For periods
prior to the date of the reverse takeover, the weighted average number
of shares equals that proportion of the Stockscape Canada shares issued
at the date of transaction times the 10,000,000 common shares issued on
the transaction. Fully diluted loss per share is not presented as the
effect on basic loss per share would be anti-dilutive.
20
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SIGNIFICANT ACCOUNTING PRINCIPLES, (Continued)
(m) COMPARATIVE FIGURES
Certain of the prior years comparative figures have been reclassified
to conform to the presentation adopted for the current year.
The Canadian Institute of Chartered Accountants established a new
standard for the presentation of cash flows and related information.
The Company has adopted the new standard during the year ended December
31, 1999 and has restated the comparative amounts and disclosures to
reflect the new standard.
3. BUSINESS COMBINATION
Effective July 9, 1999, Cornucopia Resources Ltd. ("Cornucopia") and
Stockscape Canada received all of the necessary approvals to complete
their agreements to merge. Cornucopia consolidated its shares, changed
its name to Stockscape, and issued 10,000,000 post-consolidation common
shares to the sole shareholder of Stockscape Canada in consideration
for all of its outstanding common shares on a one for one basis. Since
the former sole shareholder of Stockscape Canada obtained control of
the Company through the share exchange, this transaction has been
accounted for in these financial statements as a reverse takeover and
the purchase method of accounting has been applied. Under reverse
takeover accounting, Stockscape Canada is considered to have acquired
Cornucopia.
<TABLE>
<S> <C>
Net assets acquired at fair values:
Cash $ 36,819
Marketable securities 229,465
Non-cash working capital (476,388)
Long-term investment 2,981,748
Resource property 1
----------
$2,771,645
==========
Consideration assigned to common shares issued $2,771,645
==========
</TABLE>
21
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. BUSINESS COMBINATION, (Continued)
Since, for accounting purposes, the continuing entity is deemed to be
Stockscape Canada, the share capital of the Company has been reduced by
$56,233,689, which amount results in an assigned value to share capital
after the transaction equal to that of Stockscape Canada immediately
prior to the transaction plus the value assigned to the consideration
issued on the transaction.
Supplementary financial information presenting the results of
operations and cash flows of Cornucopia for the period from January 1,
1999 to June 30, 1999 is presented below. This information covers the
period from the date following its most recent audited financial
statements presented to its shareholders to the quarter end immediately
prior to the effective combination date.
(a) CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 1
TO JUNE 30, 1999
<S> <C>
REVENUE
Interest $ 9,788
General and administrative expenses (c) 677,479
----------
LOSS BEFORE THE FOLLOWING (667,691)
Gain on sale of short-term investments 19,950
Gain on sale of subsidiary 217,321
----------
LOSS FOR THE PERIOD $ (430,420)
==========
</TABLE>
22
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. BUSINESS COMBINATION, (Continued)
(b) CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 1
TO JUNE 30, 1999
<S> <C>
CASH PROVIDED BY (USED FOR)
OPERATIONS
Loss for the period $(430,420)
Items not involving cash
Depreciation 17,520
Gain on sale of subsidiary (217,321)
Write-down of resource properties 4
---------
(630,217)
Change in non-cash working capital items 513,690
---------
(116,527)
Decrease in cash (116,527)
CASH, beginning of period 153,346
---------
CASH, end of period $ 36,819
=========
</TABLE>
23
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. BUSINESS COMBINATION (Continued)
(c) CONSOLIDATED SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 1
TO JUNE 30, 1999
<S> <C>
Depreciation $ 17,520
Audit and legal 171,378
Consulting and management fees 149,522
Foreign Exchange 3,618
Investor and shareholder information 4,638
Listing and transfer fees 133,916
Office and miscellaneous 36,249
Rent 21,586
Salaries, wages and benefits 117,952
Travel 21,100
--------
$677,479
========
</TABLE>
(d) RELATED PARTY TRANSACTIONS
During the period from January 1, 1999 to June 30, 1999, Cornucopia
paid a total of $108,000 to a company controlled by the president and
director of the Company in return for management services. In
addition, Cornucopia incurred legal fees of $97,227 to a legal firm of
which a director is a partner.
24
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. LONG TERM INVESTMENTS
In June 1999, Cornucopia completed the sale of a subsidiary to Great
Basin Gold Ltd., ("Great Basin"). The consideration received for this
sale was 2,750,000 common shares and 250,000 share purchase warrants of
Great Basin which are exercisable at $2.00 per share for a period of
one year from June 30, 1999. The closing market price of the Great
Basin common shares on June 30, 1999 was approximately $1.45 per share,
($0.98 US). An additional 25% discount has been applied to the carrying
value of these Great Basin common shares to reflect the restrictions
placed on their resale and voting rights. The total value attributable
to the common shares and purchase warrants was $2,981,748. The material
continuing restrictions on the rights attached to these shares are as
follows:
(i) The Company is entitled to sell, without restriction, up to
25,000 of the Great Basin shares in any thirty calendar day
period or to carry over any or all of that number of shares
to the next thirty calendar day period and thereafter for up to
four such periods, so that, in effect the Company may sell up
to 100,000 Great Basin shares during the last thirty days of a
120 calendar day period.
(ii) Notwithstanding the above, the Company is entitled to sell up to
100,000 Great Basin shares in any thirty calendar day period
provided that it first gives to Great Basin the right to cause
such shares to be acquired by a person designated by Great Basin
at a price at least equal to the five day average closing price
of Great Basin's shares on the five trading days before it
received such notice, less a 10% discount. If Great Basin does
not exercise that right, the Company is free to sell up to
100,000 Great Basin shares for a period of forty-five days.
(iii) Under the terms of the agreement, Great Basin has an assignable
right to purchase Great Basin shares in excess of 2,000,000
(fully-diluted) held from time to time by the Company at a price
based on the five day average closing price of Great Basin's
shares, plus 10%, subject to a minimum price of $1.00 per share.
The agreement provides for adjustments to the price in the event
that the five day average closing price post-sale is more than a
specified percentage of the price paid.
(iv) The Company has agreed to a voting trust in favour of Great Basin
management for a period of two years and has been given
representation on the board of directors of Great Basin.
(v) The Company will have the right to participate in future
financings of Great Basin in order to maintain its equity
interest if so desired.
The market value of the Great Basin common shares at December 31, 1999
was approximately $8,112,500 ($2.95 per share).
25
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. CAPITAL AND INTANGIBLE ASSETS
<TABLE>
<CAPTION>
1999 1998
ACCUMULATED ---- ----
CAPITAL ASSETS COST DEPRECIATION NET BOOK VALUE
-------------- --------- ------------ --------------------------
<S> <C> <C> <C> <C>
Computer equipment $352,349 $ 69,091 $283,258 $79,599
Computer software 87,234 35,716 51,518 2,200
Office equipment 12,054 3,588 8,466 6,779
Leasehold improvements 13,430 8,258 5,172 6,736
-------- -------- -------- -------
$465,067 $116,653 $348,414 $95,314
======== ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
1999 1998
ACCUMULATED ---- ----
INTANGIBLE ASSETS COST DEPRECIATION NET BOOK VALUE
----------------- ------- ------------ -------------------------
<S> <C> <C> <C> <C>
Trademarks $15,192 $5,121 $10,071 $8,270
Organization costs 1,257 - 1,257 -
------- ------ ------- ------
$16,449 $5,121 $11,328 $8,270
======= ====== ======= ======
</TABLE>
6. RESOURCE PROPERTY
The Company holds an undivided 100% interest in certain mineral claims
on the Yakobi Island property located in Southeastern Alaska. This
property is carried at a nominal value of $1.
7. LONG-TERM DEBT
As at December 31, 1998, Stockscape Canada had a long-term loan
outstanding to its shareholder of $672,988. Additional advances
totaling $130,907 were made to Stockscape Canada during 1999. During
March, 1999 this loan plus accrued interest charged at 12% per annum
totaled $825,000 and was converted into 8,250,000 common shares of
Stockscape Canada.
8. SHARE CAPITAL
(a) AUTHORIZED
100,000,000 Preferred Shares without par value, with rights to be
determined upon issue 200,000,000 Common Shares without par value.
During 1999, the Company consolidated its authorized common share
capital on a 10 old for 1 new basis and subsequently increased its
authorized share capital to its pre consolidation level of 200,000,000
Common Shares.
26
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. SHARE CAPITAL (Continued)
(b) ISSUED AND OUTSTANDING
<TABLE>
<CAPTION>
Number of
Stockscape.com Technologies (Canada) Ltd. Shares Amount
---------- ----------
<S> <C> <C>
BALANCE AS AT OCTOBER 1, 1996 - $ -
Shares issued for cash 950,000 57,500
---------- ----------
BALANCE AS AT SEPTEMBER 30, 1997 AND 1998 AND DECEMBER 31, 1998
950,000 57,500
Shares issued for cash subscriptions 800,000 200,000
Shares issued on conversion of debt (Note 7) 8,250,000 825,000
---------- ----------
BALANCE AS AT JUNE 30, 1999, PRIOR TO THE ARRANGEMENT WITH
CORNUCOPIA RESOURCES LTD. (BELOW AND NOTE 3) 10,000,000 $1,082,500
========== ==========
</TABLE>
All of the above outstanding common shares were exchanged into
post-consolidation Stockscape common shares on a 1 for 1 basis at time
of business combination, (see below).
27
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. SHARE CAPITAL (Continued)
<TABLE>
<CAPTION>
Number of
Stockscape.com Technologies Inc. Shares Amount
----------- ------------
<S> <C> <C>
BALANCE AS AT DECEMBER 31, 1997 38,556,040 $ 55,805,794
Issued for services 107,500 31,717
Issued for services 150,717 27,378
Issued for cash 2,777,777 368,800
----------- ------------
BALANCE AS AT DECEMBER 31, 1998 41,591,834 56,233,689
Consolidation of common shares on a
10 old for 1 new basis (37,432,651) -
----------- ------------
BALANCE AS AT JUNE 30, 1999, prior to business combination 4,159,183 56,233,689
Shares of Stockscape issued in exchange for shares of
Stockscape Canada, valued at the fair value of
the net tangible assets of Cornucopia prior to
the transaction (Note 3) 10,000,000 2,771,645
Adjustment to record business combination
Reduction in book value of the Company's share capital
to that of Stockscape Canada (Note 3) - (55,151,189)
----------- ------------
BALANCE, after business combination 14,159,183 3,854,145
Issued for cash due to private placement 4,000,000 1,952,687
Issued for cash on exercise of Series A Warrants 4,000,000 2,600,000
Issued for cash on exercise of Series B Warrants 3,358,000 3,190,100
Issued for cash on exercise of Stock Options 402,500 201,250
----------- ------------
BALANCE AS AT DECEMBER 31, 1999 25,919,683 $ 11,798,182
=========== ============
</TABLE>
28
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. SHARE CAPITAL (Continued)
(c) STOCK OPTIONS
The Company has adopted a stock option plan that allows it to grant
options to its officers, directors, employees and consultants. The
exercise price of each option is determined by the board of directors,
but may not be less than the market price on the date on which the
option is granted. The number of share options granted is determined by
the board of directors with the aggregate number of share options
granted to any individual not to exceed 5% of the issued and
outstanding common shares of the Company. Options have a maximum term
of five years and terminate thirty days following the termination of
the optionee's employment, except in the case of retirement, death or
disability, in which case they terminate one year after the event. The
vesting period of options is determined at the time of granting at the
discretion of the board of directors. Once approved and vested, options
are exercisable at any time.
<TABLE>
<CAPTION>
Number Weighted-Average
of Shares Exercise Price
--------- ----------------
<S> <C> <C>
Granted during the year 1,410,000 $0.54
Exercised (402,500) 0.50
--------- -----
Outstanding at December 31, 1999 1,007,500 $0.56
========= =====
--------- -----
Exercisable at December 31, 1999 872,500
=========
</TABLE>
<TABLE>
<CAPTION>
Number Number
Outstanding at Remaining Exercisable at
Exercise December 31, Contractual December 31,
Price 1999 Life 1999
-------- -------------- ----------- --------------
<S> <C> <C> <C>
$0.50 872,500 4.5 years 872,500
$0.60 USD 135,000 5 years -
--------- -------
1,007,500 872,500
========= =======
</TABLE>
(d) SHARE PURCHASE WARRANTS
<TABLE>
<CAPTION>
Number Exercise Price Expiry Date
------- -------------- -----------------
<S> <C> <C>
175,000 $ 2.00 December 31, 2001
400,000 $ 0.50 July 12, 2004
-------
575,000
=======
</TABLE>
(e) ESCROWED SHARES
The 10,000,000 common shares issued in exchange for Stockscape Canada
have been placed in escrow and are not subject to release so long as
trading restrictions exist under U.S. securities laws.
29
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. SEGMENTED INFORMATION
The Company operates in a single operating segment, being the
maintenance of an Internet portal for investors. At December 31, 1999
all of the Company's material assets were held in Canada.
10. DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN CANADA
AND THE UNITED STATES
These financial statements have been prepared in accordance with
Canadian generally accepted accounting principles ("Canadian GAAP"). A
description of accounting principles that differ in certain respects
from United States generally accepted accounting principles ("U.S.
GAAP") follows:
(a) INCOME TAXES
Under the asset and liability method of United States Statement of
Financial Accounting Standards No. 109, ("SFAS 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. There is no effect of adopting the
provisions of SFAS 109 on the Company's financial statements as the
recognition criteria for deferred tax assets has not been met.
(b) STOCK-BASED COMPENSATION
The Financial Accounting Standards Board in the U.S. has issued
Financial Accounting Standards Board Statement No. 123, "Accounting for
Stock-Based Compensation". As permitted by the statement, the Company
has elected to continue measuring stock-based compensation costs for
employees using the intrinsic value based method of accounting.
Under the intrinsic value method, compensation cost is the excess, if
any, of the quoted market value of the stock at grant date over the
amount an employee or director must pay to acquire the stock. As the
exercise prices of options granted by the Company to employees and
directors approximate market value at the grant date, the Company has
determined that the adoption of this accounting policy for U.S. GAAP
purposes does not result in a Canadian/U.S. GAAP difference.
Stock options granted to non-employees for services rendered to the
Company are required to be accounted for based on the fair value of the
services provided or the consideration issued. As the Company has not
granted any stock options to non-employees during any of the periods
presented, the Company has determined that the adoption of this
accounting policy for U.S. GAAP purposes does not result in a
Canadian/U.S. GAAP difference.
30
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN CANADA
AND THE UNITED STATES (Continued)
(c) INVESTMENTS
Under Financial Accounting Standard No. 115 "Accounting for Certain
Investments in Debt and Equity Securities" ("FAS 115") the Company's
investments in securities would be classified as available-for-sale
securities and carried at fair value. Unrealized holding gains and
losses on available-for-sale securities are excluded from earnings
under U.S. GAAP and reported as a net amount in a separate component of
shareholders' equity until realized.
Under practices proscribed by the Securities and Exchange Commission,
the Company would not apply a 25% discount to the carrying value of the
Great Basin equity securities received as consideration for the sale of
its wholly-owned subsidiary (Note 4).
(d) COMPREHENSIVE INCOME
The Financial Accounting Standards Board in the U.S. has issued
Financial Accounting Board Statement No. 130 ("FAS 130"), "Reporting
Comprehensive Income". This statement establishes standards for
reporting and display of comprehensive income and its components in
financial statements. Comprehensive income includes all changes in
equity during a period except those resulting from transactions and
other events and circumstances from owner sources. Under FAS 130,
unrealized holding gains and losses on available-for-sale securities
would be included as a component of comprehensive income.
(e) NEW ACCOUNTING STANDARDS
Effective for fiscal years beginning after June 15, 2000, the Financial
Accounting Standards Board Statement No. 133 ("FAS 133") "Accounting
for Derivative Instruments and Hedging Activity" is applicable for U.S.
GAAP purposes. FAS 133 established accounting and reporting standards
for derivative instruments and for hedging activities. As at December
31, 1999, the Company does not have any derivative instruments and,
therefore, believes that the adoption of FAS 133 would not have
resulted in a material Canadian/U.S. GAAP difference.
31
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN CANADA
AND THE UNITED STATES (Continued)
(f) RECONCILIATION
The effect of the differences between Canadian GAAP and U.S. GAAP on
the balance sheets and statements of operations and deficit are
summarized as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
December 31, December 31,
1999 1998
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets under Canadian GAAP $ 10,333,300 $ 245,978
Adjustment for unrealized holding gain (Note 10(c))
4,125,000 -
Adjustment for discount on investments (Note 10(c))
1,005,752 -
------------- ----------
Assets under U.S. GAAP $ 15,464,052 $ 245,978
============= ==========
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
December 31, December 31,
1999 1998
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Shareholders' equity, under Canadian GAAP $ 10,003,563 $ (182,740)
Adjustment for unrealized holding gain (Note 10(c))
4,125,000 -
------------- ----------
Shareholders' equity under U.S. GAAP $ 14,128,563 $ (182,740)
============= ==========
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Three months
Year ended ended Year ended
December 31, December 31, September 30,
1999 1998 1998
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net loss under U.S. GAAP $ (954,379) $ (83,329) $ (499,355)
Other comprehensive income:
Adjustment for unrealized holding
gain (Note 10(c)) 4,125,000 - -
------------ ---------- -----------
Comprehensive income (loss) $ 3,170,621 $ (83,329) $ (499,355)
============ ========== ===========
</TABLE>
32
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. INCOME TAXES
The Company has non-capital losses available in Canada of approximately
$12.1 million which may be carried forward and applied to reduce future
taxable income. If not utilized these losses will expire during the
years ended 2000 to 2006.
The Company also has net operating loss carry forwards for United
States income tax purposes of approximately $16 million USD which if
not utilized to reduce United States taxable income in future periods,
expires through 2011. These available tax losses may only be applied to
offset future taxable revenues from the Company's current US
subsidiaries and to offset specific types of revenues.
The potential tax benefits, if any, relating to these tax losses have
not been recorded in the accounts of the Company.
12. RELATED PARTY TRANSACTIONS
The following amounts represent totals paid to related parties of
Stockscape.com Technologies Inc. for the period July 1, 1999 to
December 31, 1999 and Stockscape Canada for the full calendar year of
January 1, 1999 to December 31, 1999.
(a) The Company paid a total of $66,972, (three months ended December 31,
1998 - nil; years ended September 30, 1998 and 1997 - nil), to a
company controlled by the president and director of the Company in
return for management services.
(b) A Company controlled by the Chief Financial Officer and a director of
the Company provides reception, accounting, administrative and
management services to the Company. During the year, the Company
incurred charges totaling $191,578, (three months ended December 31,
1998 - $14,490; year ended September 30, 1998 - $65,794, year ended
September 30, 1997 - $47,306), for these services of which $68,076 was
outstanding at year end (1998 - $17,934).
(c) The Company incurred legal fees totaling approximately $23,055, (three
months ended December 31, 1998 - nil; years ended September 30, 1998
and 1997 - nil), to a legal firm of which a director is a partner.
(d) The Company paid a total of $6,970, (three months ended December 31,
1998 - nil; years ended September 30, 1998 and 1997 - nil), to company
controlled by a director for foreign news release dissemination fees.
33
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. RELATED PARTY TRANSACTIONS, (Continued)
(e) As at December 1998, Stockscape Canada had an outstanding loan due to
its shareholder of $672,988. Additional advances were made by this
shareholder totaling $130,907 up to March of 1999. Interest of $21,105
(three months ended December 31, 1998 - $18,973; years ended September
30, 1998 and 1997 - $6,372) was accrued during this period with the
entire loan balance then converted into common shares of Stockscape
Canada at the option of this shareholder.
Subsequent to the conversion of this shareholder's long term loan, this
shareholder made additional short term advances to Stockscape Canada of
$102,500. This short term loan plus accrued interest of $2,790 was
repaid in full during the year.
This same related party also made short term advances to Cornucopia
before the reverse takeover totaling $75,000 in order to fund its
operations. This short term loan plus accrued interest of $2,175 was
also repaid in full subsequent to the reserve takeover.
13. COMMITMENTS
The Company has the following commitments relating to lease
obligations. The future minimum lease payments are as follows:
<TABLE>
<CAPTION>
Year Payments
---- --------
<S> <C>
2000 $ 73,046
2001 49,810
2002 4,139
--------
$126,995
========
</TABLE>
The Company has the right to purchase certain capital assets outright
at 10% of the assets original purchase price. This option must be
exercised three months before expiry of its corresponding lease.
14. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental cash flow information is as follows:
Changes in non-cash working capital:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Three months
Year ended ended Year ended Year ended
December 31, December 31, September 30, September 30,
1999 1998 1998 1997
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Accounts receivable $ 15,656 $ (45,737) $ (10,002) $ (19,940)
Prepaid expenses 2,865 (1,208) (6,281) (1,431)
Accounts payable and accrued (270,355) 23,923 66,324 10,259
liabilities
Client deposits - (11,926) 11,926 -
Unearned revenue 12,033 (19,874) 75,098 -
----------- ---------- ---------- ----------
$ (239,801) $ (54,822) $ 137,065 $ (11,112)
=========== ========== ========== ==========
</TABLE>
34
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. SUPPLEMENTAL CASH FLOW INFORMATION, (Continued)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Three months
Year ended ended Year ended Year ended
December 31, December 31, September 30, September 30,
1999 1998 1998 1997
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest paid $ 8,613 $18,973 $44,479 $832
Taxes paid - - - -
Non-cash investing and financing
activities:
Shares issued on business
combination, net of cash
received 2,734,826 - - -
Shares issued for prior year's
cash subscriptions 200,000 - - -
Shares issued on long-term
debt conversion 825,000 - - -
Marketable securities received
in exchange for amounts owing - - 937 -
--------------------------------------------------------------------------------------------------------
</TABLE>
15. SUBSEQUENT EVENTS
(a) Subsequent to December 31, 1999, the Company incorporated a new wholly
owned United States operating company, Stockscape Corporate
Communication USA, LLC, for the purpose of providing investor on-line
services to companies incorporated in the United States.
(b) The Company granted a total of 695,000 stock options to directors,
officers and employees. These options have an exercise price of $0.75
USD per option and have an expiry date of January 9, 2005.
(c) The Company issued 362,500 common shares for proceeds of $181,250.
35
<PAGE>
CORPORATE INFORMATION
BOARD OF DIRECTORS
Sargent H. Berner
Partner
DuMoulin Black
Vancouver, British Columbia
John J. Brown
President
Pacific Opportunity Company Ltd
Vancouver, British Columbia
Barry F. Duggan
President & Chief Executive Officer
Stockscape.com Technologies Inc.
Vancouver, British Columbia
Andrew F. B. Milligan
Chairman of the Board
Stockscape.com Technologies Inc.
Vancouver, British Columbia
A. Murray Sinclair
President
Quest Management Corp.
Vancouver, British Columbia
David R. Williamson
President
David Williamson Associates Limited
London, England
OFFICERS
Andrew F. B. Milligan
Chairman of the Board
Barry F. Duggan
President & Chief Executive Officer
John J. Brown
Chief Financial Officer
Karyn E. Bachert
Corporate Secretary
Mark T. Brown
Treasurer
Eric Cardey
General Manager
36
<PAGE>
CORPORATE INFORMATION (Continued)
EXECUTIVE OFFICE
Stockscape.com Technologies Inc.
#407 - 325 Howe Street
Vancouver, B.C.
V6C 1Z7
Tel: (604) 687-0619
Fax: (604) 681-4170
Website: www.stockscape.com
Email: [email protected]
TRANSFER AGENT & REGISTRAR
CIBC Mellon Trust Company
Suite 1600, The Oceanic Plaza
1066 West Hastings Street
Vancouver, British Columbia
V6E 3X1
LEGAL COUNSEL
DuMoulin Black
10th Floor
595 Howe Street
Vancouver, British Columbia
V6C 2T5
AUDITORS
KPMG LLP
777 Dunsmuir Street
P.O. Box 10426, Pacific Centre
Vancouver, British Columbia
V7Y 1K3
FORM 20-F
A copy of the Company's Annual Report to the Securities and Exchange
Commission is available without charge upon request from the Company's
executive office.
ANNUAL MEETING
The Annual General Meeting of the Company will be held at The Pan Pacific
Hotel, Port and Starboard Room, Level R, 999 Canada Place Way, in Vancouver,
British Columbia on May 29, 2000, at 10:00 a.m.
EXCHANGE LISTINGS
The Company's common shares are listed for trading on the Nasd OTC Bulletin
Board (symbol STKSF).
37
