Form 10-KSB
ANNUAL OR TRANSITION REPORT
UNDER SECTION 13 OR 15(d)
(As last amended by Exch Act Rel No. 35113,
eff.1/30/95)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the fiscal year ended December 31, 1999
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the period from
Forestry International, Inc.
(Name of small business issuer as specified in its
charter)
Colorado
84-1116284
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
1205, Ampere Street
Suite 206
Boucherville, Quebec
Canada
J4B 7M6
(Address of principal executive offices) (Zip
Code)
Issuer's telephone number (514) 495-7747
Securities registered under Section 12(b) of the Exchange Act:
None
Securities register under Section 12(g) of the Exchange Act:
Common Stock, $0.0001 Par Value per Share
(Title of class)
Check whether the issuer (1) filed all reports required to be
filed by
Section 13 or 15(d) of the Exchange Act during the 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. X Yes No
Check if there is no disclosure of delinquent filers in
response to Item
405 of Regulation S-B contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in
definitive
proxy or information statements incorporated by reference in
Part III
of this Form 10-KSB or any amendment to this Form 10-KSB. X
State issuer's revenues for its most recent fiscal year $
0 .
State the aggregate market value of the voting stock held by
non-affiliates
computed by reference to the price at which the stock was sold,
or the
average bid and asked prices of such stock, as of a specified
date within
the past 60 days. (See definition of affiliated in Rule 12b-2
of the
Exchange Act).
As of December 31, 1999, 20,421,636 voting shares were
outstanding,
among which, 1,040,563 in Stop Transfer and 3,550,991
restricted under
the provisions of Rule 144 of the Securities Act of 1933. A
total of
18,504,449 of which were held by on-affiliates. On that date
the bid and
ask prices were $0.125 to $0.175. Therefore, the aggregate
market value
of voting stock held by non-affiliates as of 12/ 31, 1999 was
$2,313,056.
Note: If determining whether a person is an affiliate will
involve an
unreasonable effort and expense, the issuer may calculate the
aggregate
market value of the common equity held by non-affiliates on
the basis of
reasonable assumptions, if the assumptions are stated.
(ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after
distribution of securities under a plan confirmed by a court.
N/A
(APPLICABLE TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's
classes of
common equity, as of the latest practicable date:
20,421,636 as of December 31, 1999.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference,
briefly describe
them and identify the part of the Form 10-KSB (e.g.,Part I,
Part II, etc.)
into which the document is incorporated: (1) any annual report
to security
holders; (2) any proxy or information statement: and (3) any
prospectus
filed pursuant to Rule 424 (b) or (c) of the Securities Act of
1933 (Securities
Act"). The listed documents should be clearly described for
identification
purposes (e.g., annual report to security holders for fiscal
year ended
December 24, 1990). Not Applicable
Transitional Small Business Disclosure Format (Check one):
Yes X No
(Added by Exch Act Rel No. 31905, eff 4/26/93)
PART 1
ITEM 1. DESCRIPTION OF BUSINESS
Development
Established in December of 1992, Forestry International is a
Colorado based
company. Initial involvement in the wood industry was the
acquisition of
clonal technology relating to the accelerated development of
rapid-growth
hardwood trees as an alternative wood species source. In
September of 1997,
a new management team evolved from major shareholders that saw
the need
for change. The company took another direction with this new
management
team and established a growth strategy plan.
Management's corporate objective is highly focused on growth
via niche
markets in order to increase Forestry's net asset worth and
enhance
shareholder value via the acquisition of businesses which are
active within
the Information Technology sector and Forest Products industry,
led by
strong and professional management teams. As it expands, the
Company
should gain competitive advantages relative to smaller
operators, including
greater purchasing power, a lower cost of capital, significant
market
recognition, and the ability to provide customers with a
broader range of
products and services in response to customer demand.
By way of careful analysis and evaluation of private and public
acquisition
targets, management intends to develop a vertically integrated
corporate
operation within the Information Technology industry and the
Forest
Products industry.
Sale of Significant Amount of Assets not in the Ordinary Course
of
Business
Non applicable
Growth Strategy
Forestry International has targeted several acquisitions to
fulfill its
management objectives. The Company is seeking to acquire
Information
Technology and Forest Products companies of varying size. In
evaluating
potential acquisition targets, the Company considers a number
of factors,
including their market niche, the quality of the assets and
management, the
opportunities to improve operating margins and increase
internal growth of
the target, the economic prospects of the region in which the
target is located,
and the potential for additional acquisitions in the region.
The Company will
seek expansion opportunities in the United States, Canada and
Europe.
Management will pursue acquisition candidates with varying
types of
equipment and customer specializations. Forestry believes that
geographic
and customer diversification will enhance the Company's
stability to
fluctuations in regional economic conditions or changes that
affect particular
market segments.
Management believes there will be significant opportunities to
improve
operating margins of acquired companies through the efficient
integration of
these acquisitions, the elimination of duplicated costs,
reduction in overhead
and the centralization of functions. A lack of capital has
constrained
expansion and modernization of many small and medium sized
companies
within the Information Technology sector and the Forest
Products industry.
The Company will seek efficiency by investing in additional and
upgraded
equipment, using advanced technology systems to improve asset
utilization.
The Company intends also to establish a sales and marketing
program
targeted toward the major players within both industry.
Management will
continually evaluate its organizational structure and
manufacturing operations
to identify opportunities to more effectively meet its
customers' requirements
and to reduce cost.
Industry Outlook (Information Technology Industry (IT))
Worldwide revenues from Internet consulting services will reach
$78 billion
in 2003, reflecting a compound annual growth rate of
approximately 60%.
The Network infrastructure consulting services will be one of
the fastest
growing segment in the IT industry. Estimated at $12.2 billion
in 1998, this
market is expected to reach $25.5 billion worldwide by 2003.
Source:
International Data Corporation.
As a result of the new Internet economy, it is expected that
the next four
years will see 500 million users online. E-Commerce
transactions are
booming. International Data Corporation forecasts that in
2003, transactional
Web sites will be used by some 183 million internet surfers to
make
purchases worth over $1 trillion. Along with revenues from the
sale of e-
Commerce applications, they will climb from $1.7 billion in
1999 and should
reach $8.5 billion in 2003.
The explosion and wide spread use of the Internet has been one
of the biggest
developments to impact the world at the end of the last
millennium. The rush
by million of consumers to use Internet shopping for Christmas
1999 was just
the latest, and most pervasive, example of how this is changing
consumer
purchasing. The rapid acceptance of the World Wide Web as a
medium for
communications (E-mail), information dissemination, and the
buying and
selling of products has been astonishing. Just as consumer
e-Commerce has
grown rapidly, the potential for business-to-business (B2B)
transactions has
grown as well. A wave of Internet-based e-Commerce web sites
that provide
the opportunity to buy and sell products have proliferated over
the last years.
E-Commerce is possibly the most influential, component of
developments
that are driving unprecedented changes that affect all
business. Two sets of
imperatives have emerged for the Information Technology: 1)
addressing the
impact of the New Economy and 2) determine the right strategy
for
Enterprise Systems. One of the new key rules is that the
consumers will
manage the relationship. New network intermediaries are going
to emerge
that increasingly will broker the customer-supplier
relationship. These are the
dot-com intermediaries, of which many have emerged in the last
years.
Another key point is that Wall Street is going to, in the
future, value
companies very differently. It's not just about market share,
it will be about
mind share and intellectual property.
This New Economy will require information technology and
companies will
have to quickly establish and align with the partners and
customers that are
strategic. These are customers that value the relationship and
the process of
dealing with them has to be streamlined and easy. The New
Economy is
going to change all industries in many ways. It will force
industries to
specialize, and to increase new network-based value
propositions as well as
to focus on customers and intellectual capital instead of
assets. Valuations
will be based on soft assets, not hard assets, which will be a
major shift for
all industries.
E-Business is real and growing rapidly, and probably much more
rapidly than
anyone had anticipated. Speed of action is an important aspect
of this New
Economy. Over the last 12 months, major companies such as
Shell, Dow,
Dupont, Mobile, etc. moved forward with e-Commerce business.
They are
radically changing the nature of their culture to create
innovation-based
cultures. Some are establishing whole new e-Commerce ventures,
which are
separate businesses. There are two dimensions to the
e-business. the first one
is E-basics, which focus on current products and services and
how to cut
costs to become more efficient, and the second is moving to new
e-ventures
such as partnering with competitors or companies who make
products that are
different but could be complementary. Forestry will focus on
three major
avenues for e-Commerce: low-cost interactive, high-value
interactive and
virtual marketplace. The Information Technology industry will
probably
outpace by far all other industries for the next decade.
Industry Outlook (Forest Products Industry)
Global economic conditions should pickup enough later in the
year to
generate a recovery in domestic and overseas markets. The
North American
Pulp and Paper industry has been in recovery for more than
three quarters in
1999 and the outlook for continued expansion remains good,
according to
financial analysts. Growth rates in Europe, Asia and Latin
America will be
better than in North America, which will give a boost to paper
demand
throughout the world, according to J.P. Morgan Inc.
To reduce the volatility in pulp and paper markets, companies
have focused
on consolidation. The possibility of more mergers and
takeovers in the
industry also encourages industry and market watchers.
Opinions vary but
containerboard and coated papers are most mentioned as sectors
where more
consolidation may occur. The $2.5 billion merger of Jefferson
Smurfit Corp.
and Stone Container Corp in late 1998 opened the way for major
capacity
rationalization in the containerboard sector. The merger trend
continued in
1999 where International Paper Co. acquired rival Union Camp
Corp. for
$6.6 billion. The stock transaction valued Union Camp at $71 a
share. The
transaction represented a substantial consolidation in two
large segments of
the paper industry: containerboard and uncoated free-sheet
paper. Georgia-
Pacific also merge with distributorship Unisource Worldwide
Inc. the U.S.'s
largest merchant for $1.24 billion offer. Unisource is G-P's
biggest customer
Georgia-Pacific said it could deliver $75 million annually in
savings over the
next two years. Also, Weyerhaeuser Co., announced a takeover of
MacMillan
Bloedel Ltd., Canada's largest paper and forest products group.
The
transaction strengthened Weyerhaeuser's leading market position
as the
world's largest producer of softwood lumber and market pulp.
It also moved
Weyerhaeuser up to the No. 3 spot for U.S. producers of
containerboard and
corrugated packaging. This follows last year's $2.5 billion
merger of Avenor
Inc., a Montreal-based company, and Bowater Inc., creating the
second
largest newsprint manufacturer in North America.
Louisiana-Pacific Corp., the largest U.S. maker of OSB emerged
as the
winner against Boise Cascade Corp. in the bidding war for
Canada's leading
producer of oriented strand board (OSB) Le Groupe Forex, with a
total offer
of $33 per share or U.S. $512 million. The Forex deal fills a
geographic hole
for Louisiana-Pacific in the Northeast and parts of the Midwest
and will
become No. 1 in the North American OSB industry and is
expecting to grow
from its current 50 percent share in structural paneling to a
70 to 80 percent
market share within 8 to 10 years.
The pulp market has finally turned around and pulp producers
are expected
to have the upper hand in 2000 and beyond. The announced
January 1 prices
of benchmark northern bleached softwood kraft (NBSK) would,
depending
on the producer, bring prices to $640 or $650/mton in North
America and
$630 or $640/mton overseas. With improved pulp demand,
especially in
Asia, and limited new pulp capacity, the market is expected to
stay strong
into 2001. Pricing reached $600/mton in November 1999. With
fewer market
pulp producers now and more producers who focus on pulp as a
core product,
the industry is expected to show more discipline in maintaining
announced
price levels and balanced inventory. Equity Research Associates
expects
prices in Europe to average $680/mton in 2000. The market
momentum has
caused several analyst to revise price forecasts. Salomon
Smith Barney said
last November that his group was reviewing its global NBSK
price forecast
of $610/mton for 2000. In mid-October of 1999, Morgan Stanley
Dean Witter
revised its 2000 forecast to $636/mton from $598/mton.
The newsprint market consumption in 2000 is expected to be flat
with 1999's
strong levels of 14.4 million mton, according to Pulp & Paper
Forecaster.
They expect newsprint prices to average $545/mton in 2000, up
almost 7%
from an average of about $510/mton in 1999. Industry observers
said they
expect to see consolidation continue, either through mergers
among large
newsprint producers or through large producers acquiring
smaller operators
or stand-alone mills.
The expansion and consolidation activity in the North American
tissue
market continued to be very active with a number of projects
completed in
1999 and 11 new machines are scheduled for start-up in the
period 1999 to
2001 in the U.S. which indicates that capacity growth will
remain strong.
Global Tissue LLC (formerly Shepherd Tissue Inc.) from Memphis,
Tenn.,
was acquired by Montreal-based Kruger Inc. in February 1999.
Georgia-
Pacific Corp. and Chesapeake Corp. announced that they have
form a joint
venture combining their away-from-home tissue businesses.
U.S. containerboard industry in 1999 underwent a significant
change in
dynamics and in pricing. The rapid turnaround was caused by
North
American producers eliminating 6% of containerboard capacity at
the end of
1998, and demand for corrugated containers remaining steady,
growing at or
nearly 2% above 1998 volume. The turnaround put prices at
their highest
level by year end 1999 since January 1996. The average kraft
lineboard price
for 1999 hit $390-$400/tom, just above the five-year average
price of
$395/ton.
Companies are purchasing paper mill assets rather than building
new
greenfield operations, a trend which has been pushed by Wall
Street
observers for years. Today's basic structures under which the
industry
operates is different. The traditional thinking in the paper
industry that
presaged an unprecedented capacity expansion in previous years
has been
replaced by a more pragmatic approach to business. Managements
have
begun to change as they focus more on capital and returns.
The industry competes mostly on the basis of price, quality,
availability,
product choice, sustainability and environmental impact.
Consequently, the
future of U.S. and Canadian Forest Products Industry depends
mainly upon
factors which are products that are second-to-none, access to
world markets,
industry innovation, and a comprehensive global approach to
sustainable
forestry practices. Market competitiveness starts with economic
viability and
the outlook is favorable. Notwithstanding the cyclical nature
of the industry,
being a low cost producer with adequate and attractive
financial returns is
acceptable, but the ultimate goal for a company is to earn it's
cost of capital.
Due to the highly fragmented nature of the industry, Forestry
believes that
there is a large number of attractive acquisition opportunities
in the Forest
Products Industry and will pursue in year 2000 an acquisition
project in that
industry.
Significant Calendar 1998 Operating Results and Subsequent
Developments
Tax Assessments
The Arizona Department of Revenue is asserting a tax lien for
fiscal 1993
and 1994 in the amount of $10,869.34 for unpaid Arizona state
taxes against
the Company. As of March 9, 2000, the total amount including
interest was
approximately $42,763.66 .
Future Operations
New management has been consistently involved in the
identification and
analysis of potential acquisition targets within the timber and
forest product
industry. Beginning of the new millennium, management has
decided to
create a new division through its fully own Canadian subsidiary
and to be
involved in the explosive sector of the Information Technology
(IT). The
Company expects that these activities will result in further
acquisitions and
anticipates that such will provide additional corporate growth
during the
coming years.
Future Project Acquisition
On February 16, 2000, Forestry International announced that it
will merge its
Canadian fully owned subsidiary with RMM & Associates, a
provider of
business-to-business solutions and services for e-Commerce. RMM
&
Associates has been involved in the consulting and systems
integration
business and active in the Information Technology (IT) sector
for over 17
years. RMM & Associates has been supporting customers from
Fortune 500
companies, small and medium-size corporations, Professional and
Membership Association as well as Government Agencies. RMM &
Associates expertise resides in its ability to deliver and
support adapted
solutions such as Networking, Office Automation Tools and
e-Commerce
solutions. The transaction is subject to the receipt of all
consents and
approvals of governmental Canadian bodies and it is expected to
be
completed by May 9, 2000.
On March 8, 2000, Forestry International signed an agreement to
acquire all
the outstanding shares of Genilog, Inc. an Information
Technology Research
and Development company headquartered in Montreal, Canada with
European operations based in Switzerland. Forestry
International will pay in
stock the equivalent of CAN $800,000 or approximately US
$550,000
representing 1,750,000 shares of common stock of Forestry
International, Inc.
which are to be issued in compliance with the provisions of
Rule 144 of the
Securities Act of 1933 and subject to regulatory hold periods.
Forestry
International will also grant to Genilog, Inc. options to
purchase common
shares of Forestry International, Inc. in accordance with the
terms of the
Company's Stock Option Plan for a period of five years. The
acquisition is
expected to be completed by June 1, 2000, and Genilog, Inc.
will operate as
an independent division of Forestry's Canadian operating
subsidiary.
Forestry International will pursue through its U.S. Forest
Products division,
the acquisition of a US Forest Products entity in order to use
its tax loss
carryforwards of approximately $6.5M for the benefit of its
stockholders.
The Company will then spin off the proceed into a distribution
to the
shareholders.
ITEM 2. DESCRIPTION OF PROPERTY
As of August 26, 1998, the principal business office of the
Company is
located at 1205 Ampere Street, Suite 206, Boucherville, Quebec,
Canada J4B
7M6. The telephone number is (514) 495-7747. The US registered
office is
located at 4251 Kipling Street, Suite 560, Wheat Ridge,
Colorado 80033.
ITEM 3. LEGAL PROCEEDINGS
On May 4, May 17 and November 18, 1999, Forestry obtained
default
judgments in its favor against seven (7) defendants which
constitutes final
judgment confirming the Company's contention that $930,000 of
principal
amount of certain indebtedness previously reflected on the
Company's
balance sheet is not owed to the defendants.
Although Forestry International's books and records reflect an
indebtedness
in the amount of $146,606 attributable to a promissory note
executed by the
former President of Forestry, in favor of Dylan-Hutton, Inc.
Forestry's
position is that the debt is not valid as well as the Notes
which Forestry
received judgments in its favor. Forestry is seeking to obtain
declaration
from the Arizona Bankruptcy Court to the effect that this Note
is null, void
and unenforceable as against Forestry International, Inc.
Management expects
to achieve the same results where the Court will ultimately
declare this debt
invalid.
On November 17, 1998 in the United States District Court of
Jackson
Mississippi, Forestry filed a $35,000,000 civil action against
Randy Pope,
President of Dixieland Forest Products, Inc. for breach of
contract, breach of
duty of good faith and fair dealing including wrongful
foreclosure. The
Company is seeking restitution in equity as well as
compensatory and
punitive damages as a result of Defendant's actions. By this
action, Forestry
intends to redress the losses incurred by the loss of control
of Dixieland
Forest Products. A pre-trial conference has been set for April
17, 2000 and
a trial scheduled for May 10, 2000. Unless there is a
settlement before such
time, the trial should proceed within that time frame.
On March 17, 1999 the Arizona Department of Revenue filed an
amended
complaint against Forestry International, Inc. claiming
$10,869.34 in unpaid
income taxes, plus interest as of March 9, 1999 in the amount
of $31,894.32,
for the audited period of March 31, 1993 through March 31,
1994. Although
the initial audit by the Arizona Department of Revenue
reflected a tax
liability base on the sale of certain common shares by
Forestry. It appears
through a very complicated transaction between the former
President of the
Company, Mr. David Shorey and, Rehabnet, Inc., that Forestry
have assumed
the tax burden of a capital gain on the sale of certain common
shares whereas
these common shares where originally distributed to Mr. Shorey.
If this
assumption is correct, there should be no tax liability related
to Forestry
International. It is our opinion that Forestry has a good case
and is prepared
to see it through conclusion. The result of this case is
presently
indeterminable.
No other legal proceedings to which the Company is a party or
to which the
property of the Company is subject is currently pending against
the
Company, and no such material proceeding is known to be
contemplated
against any officer or director which is adverse to the
Company, except as
mentioned in the preceding paragraphs.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
There has not, during the period covered by this report, up to
and including
the date of signature of this report, been any submission of
matters to a vote
of security holders.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Market Information
The common stock of the Company is quoted on the Bulletin Board
maintained by the NASD. The following table sets forth the
range of closing
bid and ask quotations for the common stock in each full
quarterly period
since January 1, 1993.
CLOSING BID CLOSING ASK
March 31, 1993 1.50 2.50
June 30, 1993 1.875 2.50
September 30, 1993 2.50 4.00
December 31, 1993 2.75 4.00
March 31, 1994 3.00 4.50
June 30, 1994 3.00 5.00
September 30, 1994 3.00 4.00
December 31, 1994 3.00 3.875
March 31, 1995 2.00 4.00
June 30, 1995 2.00 3.00
September 30, 1995 0.75 1.125
December 31, 1995 0.47 0.53
March 31, 1996 0.29 0.30
June 30, 1996 0.12 0.12
September 30, 1996 1.00 1.07
December 31, 1996 1.38 1.38
March 31, 1997 1.20 1.22
June 30, 1997 0.375 0.4375
September 30, 1997 0.18 0.21
December 31, 1997 0.08 0.10
March 31, 1998 0.09 0.15
June 30, 1998 0.09 0.10
September 30, 1998 0.055 0.065
December 31, 1998 0.14
0.17
March 31, 1999 0.21
0.25
June 30, 1999 0.22
0.23
September 30, 1999 0.17
0.20
December 31, 1999 0.125
0.175
The above prices were obtained from National Quotation Bureau,
Inc. and
from Daily Trade and Quote Summary Report of the NASDAQ Trading
&
Market Services. These quotations represent inter-dealer
quotations, without
retail mark-up, markdown or commission, and may not necessarily
represent
actual transactions. On March 27, 2000 the closing bid was
$0.485 and the
closing ask price was $0.51, as quoted on the Bulletin Board
for the common
stock of the Company. On that date, there were 12
broker-dealers publishing
quotes.
Dividends
Neither the Company nor any of its subsidiaries have, during
their respective
existences, declared or paid or set aside for payment any cash
dividends on
their common shares and no dividends are contemplated at any
time in the
foreseeable future. There are no current or contemplated
restrictions
attributable to any contractual commitment of the Company which
will limit
the ability of the Company to declare and pay dividends.
ITEM 6. MANAGEMENTS' PLAN OF OPERATION
Forestry International's initial involvement and primary
business was the
acquisition of clonal technology relating to the accelerated
development of
rapid-growth hardwood trees as an alternative wood species
source. Effective
February 16, 2000, the Company took a new direction within the
Information
Technology (IT) industry.
While actively working toward the completion of the merger of
its fully own
Canadian subsidiary with RMM & Associates, the Company has
eliminated
the majority of its payroll and will utilize contract
consultants to maintain its
reporting requirements until this new business venture is
completed. The
proposed transaction is expected to be completed by May 9,
2000. It is
anticipated that only nominal funding should be necessary
before the
completion of the merger which amounts should be available from
equity.
The Company, as of December 31, 1999 had net operating loss
carryforwards
for federal and state income tax purposes of approximately
$3,507,000 and
$2,154,000 respectively and a net capital loss carryforwards
for federal and
state income taxes of approximately $1,500,000. Management
plans to use
these losses to its advantage to save taxes on the operations
of future
acquisitions and against capital gains. Forestry will consult
tax specialists to
determine to which extent this may be used to its greatest
benefit.
New management has determined that the Company's new business
strategy
plan is primarily to seek one or more potential businesses
which may, in the
opinion of its Board of Directors, warrant the Company's
involvement. In
seeking to attain its business objective, the Company will
mainly focus on
targets within the Information Technology sector but will not
restrict its
search to that industry. Forestry may investigate businesses
of essentially
any kind or nature, including but not limited to, high
technology,
manufacturing, service, research and development,
communications and
others. Management's discretion is otherwise unrestricted, and
it may
participate in any business whatsoever which may, in the
opinion of
management, meet the business objectives discussed herein.
The Company may acquire any entity or position in a company
which is (i)
a fully integrated corporation in a specific segment of its
industry; or (ii) in
its preliminary or development stage; or (iii) is a going
concern. In other
instances, possible business endeavors may involve the
acquisition of or a
merger with a company that does not need additional equity, but
seeks to
establish a public trading market for its securities.
Businesses that seek the
Company's participation in their operations may desire to do so
to avoid what
such businesses deem to be adverse factors related to
undertaking a public
offering. Such factors include substantial time requirements
and legal costs,
along with other conditions or requirements imposed by Federal
and State
securities laws.
Since new management got involved in the daily operation of
Forestry
International, the analysis of potential business endeavors
will be undertaken
by or under the supervision of the Company's Directors and
their principal
consultants. The Directors and principal consultants are
comprised of
individuals of varying business experiences, and management
will rely on
their own business judgment in formulating decisions as to the
types of
businesses that the Company may acquire or in which the Company
may
participate.
In analyzing prospective businesses, management will consider
such factors
as available technical, financial and managerial resources,
working capital
and other financial requirements such businesses history of
operations, if any,
and prospect for the future, the nature of present and expected
compensation,
the quality and experience of management services, the depth of
that
management, the potential for further research and development
and risk
factors. Forestry will also consider their niche market, the
opportunities to
improve operating margins, potential growth and expansion, the
economic of
the region in which the target is located, the potential for
profit, the perceived
public recognition or acceptance of such businesses, products,
services and
other relevant factors. The Company will seek opportunities in
the United
States, Europe and Canada. Management believes that geographic
and
customer diversification will enhance the Company's stability
to fluctuations
in regional economic conditions or changes that affect
particular market
segments. Generally, the Company will analyze all available
information and
make a determination based upon a composite of available facts,
without
reliance upon a single factor as controlling. Forestry has
targeted several
acquisitions to fulfill its management objectives. Also, it is
anticipated that
prospective businesses will be available to the Company from
various
sources, including its management, its professional advisors,
securities broker
dealers, venture capitalists members of the financial
community, and others
who may present unsolicited proposals. In some instances, the
Company
may publish notices or advertisements in financial or trade
publications
seeking potential business acquisition. In certain
circumstances, the Company
may agree, in connection with an acquisition, to pay a finder's
fee or other
compensation to an investment banking firm or other person who
submits to
the Company a business in which Forestry participates.
ITEM 7. FINANCIAL STATEMENTS
The audited financial statements and supporting schedules
required under this
item are listed under Item 13 below, and are set forth in the
pages
immediately following Item 13.
ITEM 8. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS: COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT
The following table sets forth all current directors, executive
officers and
significant employees of the Company and of each significant
subsidiary, as
well as their ages:
Name Age Positions With The
Company
Louis R. Turp 42 President and CEO
Andrea Audet 47 Secretary / Treasurer
Richard Jamieson 65 Chief Financial Officer
No Director or executive officer has any arrangement or
understanding
whereby they have been or will be selected as a director of the
Company.
Further, no executive officer or director of the Company is
related to any
other executive officer or director, other than Louis R. Turp
and Andrea
Audet, who are husband and wife. All directors of the Company
hold office
until the next annual meeting of shareholders, and until their
successors have
been duly elected and qualified. Executive officers are
selected by the board
at its annual meeting and hold office until the first to occur
of their death,
resignation or removal from office.
Biographical Profiles
The following biographical profiles relate to each individual
currently serving
as a director, and executive officer of the Company.
Louis R. Turp - Portfolio manager associated with several major
Canadian
brokerage firms for 14 years. Accepted the invitation to serve
as a director
of Forestry International on July 21 1997 and became President
and CEO on
September 1997. Corporate restructuring objective with
fundamental
emphasis on selected strategic acquisitions and business
combinations with
profitable operating companies in niche markets, but not
limited to the Paper
and Forest Products Industry.
Richard Jamieson - Chief Financial Officer of Forestry
International, Mr.
Jamieson has been associated as a Vice President Finance with
Commercial
Credit Corporation Ltd. and Royal Insurance Company Ltd. He
brings an
impressive array of financial, administrative and marketing
skills with a
strong background in the commercial credit industry.
Andrea Audet - Mrs. Audet has been involved internationally
with various
companies as a Bookkeeper. As the Director of public relations
for a family
business for several years, Mrs. Audet is also a real estate
agent and a
graduate with honors in computer applications. She offers to
the Company
an international experience with evidence of administrative
competence.
ITEM 10. EXECUTIVE COMPENSATION
On December 1, 1998, the Board of Directors authorized the
granting of
stock options to Louis R. Turp, President and Andrea Audet,
Secretary-
Treasurer. On January 20, 2000, the Board of Directors has
also granted
stock options to Louis R. Turp, Andrea Audet and Richard
Jamieson, Chief
Financial Officer, in recognition of past services and the
shares to be received
by their exercise are subjected to Rule 144 of the Securities
Act of 1933. The
following table sets forth all cash and any other compensation
paid for each
of the two years ended December 31, 1997 and the calendar years
ended 1998
and 1999:
Annual
Long Term
Name And Compensation Other
Compensation
Principal Year Salary ($) Bonus
Compensation Options
Louis R. Turp 1997 nil nil
nil nil
1998 $75,000 (1)
100,000 (2)
1999 $75,000 (3)
100,000 (2)
Perry Gower 1998 $36,000 nil
nil nil
1999 $ 9,000 (4)
nil nil nil
Andrea Audet 1998 nil
nil nil 50,000 (5)
1999 nil
nil nil 50,000 (5)
Richard Jamieson 1999 nil nil
nil 50,000 (5)
(1) Was paid in 500,000 restricted common shares at $0.10 per
share and the
remaining portion of $25,000 cash is to be paid.
(2) Right to purchase up to a maximum of 100,000 shares each of
common
stock of the company at $0.05 per share for a period of five
years.
(3) Was paid in 275,000 restricted common shares at $0.20 per
share and the
remaining portion of $20,000 cash is to be paid.
(4) Was paid $9,000 in cash for January, April and May 1999 and
received
60,000 restricted common shares for February and March 1999.
(5) Right to purchase up to a maximum of 50,000 shares each of
common
stock of the company at $0.05 per share for a period of five
years.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Based upon information which has been made available to the
Company by
its stock transfer agent, the following table sets forth, as of
December 31,
1999, the shares of common stock owned by each current Director
and
executive officer, by Directors and officers as a group and by
each person
known to the Company to own more than 5% of the outstanding
common
shares:
Title Of Name & Address Of Amount Of
Percent of
Class Beneficial Owner Beneficial
Ownership Class (1)
Common Louis R. Turp 1,493,156
7.3
474 Cote Ste-Catherine
Montreal, (QC) Canada
H2V 2B4
Common Richard Jamieson 87,500
0.4
543 Croissant Simonet
Ile Bizard, (QC) Canada
H9C 2R9
Common Andrea Audet 336,531
1.6
474, Cote Ste-Catherine
Outremont, (QC) Canada
H2V 2B4
Officers & Directors
1,917,187 9.4
as a Group (3 persons)
(1) The figures in this column are based upon approximately
20,421,636
common shares which had been or were to be issued and were
outstanding
on December 31, 1999.
ITEM 12. EXHIBITS AND REPORTS ON FORM 8-K
The following reports have been filed as a part of this report:
(1) Report of Sylvie Monette-Houle, CA and Robert
Kliaman, CA, CPA
(Massachusetts).
The following 8-K reports were filed on the dates indicated:
(1) A report on Form 8-K was filed by the company on
February 9, 1998
reporting an new director, change of address of the registrant,
receipt of a
notice of default from Randy Pope, President of Dixieland
Forest Products,
Inc. and resignation of a director of the Company.
(2) A report on Form 8-K was filed by the company on August
7, 1998
reporting the sale of common stock.
(3) A report on Form 8-K was filed by the company on
September 17,
1998 reporting the appointment of a director, change in
registrant's certifying
accountant, and resignation of a director.
(4) A report on Form 8-K was filed by the company on
November 10,
1998 reporting the new address of principal executive offices.
(5) A report on Form 8-K was filed by the company on
November 12,
1998 reporting that Mr. Robert Kliaman, CA, CPA (Massachusetts)
was
joining Mrs. Sylvie Monette-Houle as an auditor of the Company.
(6) A report on Form 8-K A was filed by the company on
February 16,
1999 clarifying the Form 8 K that was filed on November 12,
1998.
Independent Auditor's Report
Board of Directors
Forestry International, Inc.
We have audited the accompanying balance sheets of Forestry
International,
Inc. as of December 31, 1999 and December 31, 1998 and the
related
statements of operations, stockholders' equity (deficit) , and
cash flows for
years ended December 31, 1999 and December 31, 1998. The
financial
statements are the responsibility of the Company's management.
Our
responsibility is to express an opinion on these financial
statements based on
our audits.
We conducted our audit in accordance with United States'
generally accepted
auditing standards. Those standards require that we plan and
perform the
audit to obtain reasonable assurance about 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
statement. An audit also includes assessing the accounting
principles used
and significant estimates made by management, as well as
evaluating the
overall financial statement preparation. We believe that our
audit provides
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all
material respects the financial position of Forestry
International, Inc. as of
December 31, 1999 and December 31, 1998 and the results of its
operations
and its cash flows for the years then ended in conformity with
United States
generally accepted accounting principles.
/s/ Robert Kliaman, CA, CPA (Massachusetts)
Toronto, Ontario
Canada
March 14, 2000
Forestry International, Inc.
Balance Sheets
As at December 31, 1999 and 1998
1999 1998
Assets
Current Assets:
Cash and Cash Equivalents(Note 2) $ 935
$ 967
Prepaid Expenses and Deposits
330 330
1,265
1,297
Fixed Assets (Note 4)
- 1,600
Total Current Assets 1,265
2,897
(See Accompanying Notes to Financial
Statements)
Forestry
International, Inc.
Balance
Sheets
As at December 31,
1999 and 1998
1999 1998
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
Current portion of long term debt (Note 8) $ 196,190
323,568
Accounts Payable 134,599 131,049
Accrued Payroll and Other Expenses -
152,540
Due to Director
6,294 -
Income Tax Payable (Note 9) 42,764
40,908
_________
________
Total Current Liabilities 379,847
647,465
Stockholders' Equity (Deficit):
Preferred Stock, Par Value $.0001 Per
Share, Authorized 10,000,000 Shares
Common Stock, Par Value $.0001 Per
Share, Authorized 100,000,000 Shares:
Issued and Outstanding 20,421,636 Shares 2,042
1,738
Common stock subscribed 325,000 shares
18,275
Capital in Excess of Par Value 7,422,620 7,078,223
Accumulated deficit (7,803,244)
(7,742,804)
Total Stockholders' Equity (378,582)
(644,658)
Total Liabilities and Stockholders' Equity $ 1,265
$ 2,897
(See Accompanying Notes to Financial Statements)
Forestry International, Inc.
Statement of Operations
For the years ended December 31, 1999 and 1998
1999
1998
Operating Expenses
Depreciation
$ 1,600 $
2,400
General & Administrative
183,764 255,283
185,764
257,283
Other Income (Expense):
Interest Expense (39,186)
(41,557)
(39,186)
(41,557)
Net Loss Before Extraordinary Item
($224,550) ($299,240)
Extraordinary gain (Note 11)
164,110 763,225
Net Income
$60,440 $ 463,985
Earnings per Common Share:
Net loss before Extraordinary Item
$ ( 0.01) ($ 0.02)
Extraordinary Item
0.01 0.05
Net Income (Loss)
$ - $ (0.03)
Weighted Average Number
of Common Shares 18,130,231
17,319,249
(See Accompanying Notes to Financial Statements)
Forestry International, Inc.
Statement of Stockholder's Equity (Deficit)
For the years ended December 31, 1999 and 1998
Common Stock Paid
in Common Stock
Capital in Subscribed
Net
Number
Par Excess of
Accumulated
Stockholders
of Shares
Value Par Value
Deficit
Equity
Balances at
Dec. 31, 1997 15,599,517
1,542 6,941,327
- (8,206,789)
2,122,061
Issuance of
Common stock
for cash 1,860,000
186 96,361
18,275 -
114,822
Cancellation of
Common Stock (241,375)
(24) -
- -
(24)
Issuance of
Common stock
for Services 341,375
34 40,535
- -
40,569
Net Income -
- -
- 463,985
463,985
Balances at
Dec. 31, 1998 17,377,833
1,738 7,078,223
- (7,742,804)
(644,568)
Subscription and
Issuance of
Common Stock
for Cash 2,356,303
173 199,477
(18,275) -
181,375
Cancellation of
Common Stock -
- -
- -
-
Issuance of
Common Stock
for Services 687,500
131 144,920
- -
145,051
Net Income -
- -
- (60,440)
(60,440)
Balances at
Dec. 31, 1999 20,421,636
2,042 7,422,620
- (7,803,244)
(378,582)
(See Accompanying Notes to Financial Statements)
Forestry International, Inc.
Statement of Cash Flows
For the years ended December 31, 1999 and 1998
1999 1998
Cash Flows from Operating Activities:
Net Loss before Extraordinary Item ($ 224,550)
($ 299,240)
Adjustments to Reconcile Net Income to net
cash provided by operating activities:
Depreciation 1,600
2,400
Change in assets and liabilities:
(Increase) Decrease in prepaid expenses
and deposits
- (330)
Decrease (Increase) in Accounts Payable
and Accrued liabilities (148,990) 55,652
Increase (Decrease) in interest and Income
Taxes Payable 2,456
(600)
Equipment held for sale
- 60,175
Total adjustments (146,534) 114,897
Net Cash provided by Operating Activities
(369,484) (181,943)
Cash Flows from Financing Activities
Advances from Directors
6,294 -
Capital Stock Issuance
344,701 137,092
Increase in long-term debt
36,732 34,666
Decrease in related party debt
- (9,895)
Subscription of common stock
(18,275) 18,275
Net Cash provided by Financing Activities 369,452
180,138
Net Decrease in Cash and Cash Equivalents
(32) (1,805)
Net Cash and Cash Equivalents, beginning of year 967
2,772
Net Cash and Equivalents, end of Year $ 935
$ 967
(See Accompanying Notes to Financial Statement)
FORESTRY INTERNATIONAL, INC
Notes to Financial Statements
December 31, 1999
(1) Organization and Purposes
Plantation Capital corporation ("Plantation"), was incorporated
in the State of Colorado on August
9, 1988, for the primary purpose of seeking selected mergers or
acquisitions with a small number of
business entities expected to be private companies, partnerships
or sole proprietorships. On August
10, 1990, Plantation acquired RehabNet, Inc. through an exchange
of stock. Subsequently,
RehabNet, Inc. was merged into Plantation with a name change to
RehabNet, Inc.
On September 18, 1992, the stockholders of RehabNet, Inc.
approved the acquisition of all assets and
the assumption of all liabilities of RehabNet, Inc. by an
unrelated public entity in a tax-free stock
exchange.
On January 2, 1993, the stockholders approved a name change to
Forestry International, Inc. (The
"Company").
On March 1, 1993, the Company acquired the exclusive right to
the use of clonal research and
development pertaining to the paulownia tree, a hardwood species
developed by BioTech Plants Pty,
Ltd. At that time the Company planted, grew, developed and
marketed this rapid growing hardwood
tree on a global basis.
The Company was in its development stage until December 16, 1996
when it acquired Dixieland
Forest Products, Inc ("DFP"), a Mississippi corporation. DFP, a
wholly owned subsidiary, supplied
timber to pulp, paper, and lumber mills and provided landowner
assistance with replanting, thinning,
and timber transportation.
On November 12, 1997 the Company loss control of Dixieland
Forest Products, Inc. through a
unilateral decision of Mr. Randy Pope that was not recognized by
Forestry.
In May 1998 the Company has also discontinued the operations of
planting, developing and
marketing Paulownia trees.
The Company has restructured its operations for the primary
purpose of seeking selected acquisitions
with a number of entities primarily in the forest products
industry and the Information Technology
sector..
(2) Summary of Significant Accounting Policies
(a) Cash and Cash Equivalents
All short-term investments purchased with an original maturity
of three months or less are considered
to be cash equivalents. Cash and cash equivalents primarily
include cash on hand.
(b) Fixed Assets
Fixed assets are stated at cost. Fixed Assets of the Company
are depreciated using the straight-line
method over the estimated useful lives of the respective assets,
which has been determined to be five
to seven years for equipment.
(c) Income Taxes
The Company uses the asset and liability method of accounting
for income taxes. Deferred tax assets
and liabilities are recognized for the future tax consequences
attributable to differences between the
financial statement carrying amounts of the existing assets and
liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to
taxable income in the years in which those temporary differences
are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the
period that includes the enactment date.
(d) Computation of Earnings Per Share
Earnings per share is based upon the weighted average number of
common shares outstanding.
Outstanding stock options are non-dilutive as of December 31,
1999.
(e) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amounts reported in the
financial statements and related notes to the financial
statements. Changes in such estimates may
affect amounts reported in future periods.
(3) Going Concern
The Company's financial statements have been presented on the
basis that it is a going concern,
which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of
business. The Company's business plan calls for the use of
banks, investment and merchant bankers,
and venture capital firms to provide capital to acquire future
investments.
Since the Company lost control of Dixieland, it has lost
substantially all of the assets of the
Company. In order to meet its liability requirements, management
has proceeded to dispose of certain
assets and substantially reduce and delay expenditures. It is
likely that management's plans for
dealing with such adverse circumstances can be implemented for
the duration of the fiscal year
ending December 31, 2000.
(4) Fixed Assets
Accumulated Net Net
Cost
Depreciation 1999 1998
Office Equipment $ 6,000 $
6,000 $ - $ 800
Computers and software 6,000
6,000 $ - 800
$12,000
$ 12,000 $ -
(5) Capital Stock
Authorized
10,000,000 preferred shares, par value $0.0001
per share
100,000,000 common shares, par value $0.0001 per
share
1999
1998
Issued and Outstanding
20,421,636 1998 (17,377,833) common shares
$ 2,042 $ 1,738
NIL 1998 (325,000) common stock subscribed
- 18,275
NIL preferred shares
- -
Capital in excess of par value
7,422, 620 7,078,223
$7,424,662 $7,098,236
(6) Uncertainty Due to the Year 2000 Issue
The year 2000 Issue arises because many computerized systems use
two digits rather than four to
identify a year. Date-sensitive systems may recognize the year
2000 as 1900 or some other date,
resulting in errors when information using year 2000 dates is
processed. In addition, similar problems
may arise in some systems which use certain dates in 1999 to
represent something other than a date.
The effects of the Year 2000 Issue may be experienced before,
on, or after January 1, 2000, and, if
not addressed, the impact on operations and financial reporting
may range from minor errors to
significant systems failure, which could affect an entity's
ability to conduct normal business
operations. It is not possible to be certain that all aspects of
the Year 2000 Issue affecting the entity,
including those related to the efforts of customers, suppliers,
or other third parties, will be fully
resolved.
(7) Fair Value of Financial Instruments
The fair values of cash and cash equivalents, notes payable and
accounts payable approximate cost
because of the short-term maturity of these financial
instruments. Long-term debt including current
maturities are at variable rates tied to the prime rate and
therefore carrying values approximate fair
values. The estimated fair values of the Company's financial
instruments are as follows:
December 31, 1999
December 31, 1998
Carrying Fair
Carrying Fair
Amount Value
Amount Value
Financial assets:
Cash and cash
equivalents $ 935 $ 935
$ 967 $ 967
Financial Liabilities:
Accounts Payable and
accrued liabilities 134,599 134,599
109,717 109,717
Long term debt 196,190 196,190
323,568 323,568
(8) Long term Debt
A summary of unrelated long-term debt follows:
Notes payable to unrelated parties, 12% interest bearing;
convertible into common shares; principal
and interest was due December 31, 1997.
1999 1998
- - ------------- ------------
Long term debt $ 196,190
$ 323,568
Less current portion 196,190
323,568
- - -------------- ---------------
$
- -
- - -------------- ---------------
Management disputes the validity or existence of this debt. In
that regard, the Company has initiated
litigation to have the debt declared invalid and is otherwise
seeking to have the debt determined
invalid.
(9) Income Taxes
At December 31, 1999 the Company had net operating loss
carryforwards for federal and state
income tax purposes of approximately $3,507,000 and $2,154,000
respectively.
Year of loss Year of
Losses
expiration
Federal State
March 1995 2000 -
318,000
March 1996 2001 -
781,000
March 1996 2011 2,485,000
270,000
December 1996 2012 237,000
-
December 1997 2013 353,000
353,000
December 1998 2014 299,000
299,000
December 1999 2015 133,000
133,000
- - ------------- -------------
3,507,000 2,154,000
Other temporary differences between carrying amounts of the
assets for financial reporting purposes
and the amount used for income tax purposes are insignificant
and are not included in the deferred
tax asset. The deferred tax asset resulting from net operating
loss carryforwards amount to
approximately $1,663,000 at December 31, 1999 and $1,318,000 at
December 31, 1998. Realization
of this tax benefit depends upon the Company's future revenue
from acquisitions.
A loss limitation applies if there is an acquisition of control
of the Company. Generally the amount
of net operating loss carryforwards would be limited to the
value of the Company when control
changed times the long-term tax-exempt rate.
At December 31, 1999, the Company also had net capital loss
carryforwards for federal and state
income tax purposes of approximately $1,500,000. Capital losses
are deductible only to the extent
of capital gains for a period of five years and may not offset
operating income. The tax benefit will
be reflected when realized.
Management is unable to predict whether future revenues will be
adequate to generate taxable income
before expiration of the loss carryforwards. Therefore
valuation allowances of $1,663,000 and
$1,318,000 have been provided at December 31, 1999 and December
31, 1998, respectively to reflect
the estimated value of the deferred tax asset. If the Company
achieves sufficient profitability to
utilize the net operating loss carryforwards the valuation
allowance will be reduced by a credit to
income at that time.
Significant components of the provision for income taxes for the
year ended December 31, 1999 and
year ended December 31, 1998 are as follows:
Dec
31, 1999 Dec 31, 1998
- - --------------- ----------------
Deferred income tax (benefit):
Federal
$1,423,000 $ 1,147,000
Less allowance 1,423,000
1,147,000
- - ------_------- -------_------
- - --------------- --------------
States
240,000 171,000
Less Allowance (240,000)
(171,000)
Total deferred tax benefit $ -
$ -
The current income tax liability consists of the following
balance due from the year ended March 31,
1993 and 1994:
1999 1998
- - ---------------- ----------------
State tax $
10,869 10,869
Penalty and Interest 31,895
29,439
- - ------------- ---------------
$ 42,764 $ 40,308
======== ==========
A reconciliation of the provision for income taxes to the
federal statutory rate is:
1999 1998
- - ---------------- ---------------
Statutory federal rate 34.0%
34.0 %
Change in valuation allowance -
-
- - ---------------- ---------------
34.0
% 34.0%
==========
=========
(10) Stock Options
On December 20, 1995, the stockholders approved a Stock Option
Plan for a maximum of 1,000,000
shares of the Company's common stock to be sold to employees and
others providing valuable
services to the Company at option prices equal to the market
price of the stock at the time of the
grant. The options can be exercised for a period of up to ten
years and are registerable by the
Company at the time of exercise under the Securities Act of
1933. At December 31, 1999 there were
options exercisable but none were exercised.
On December 1, 1998 the Board of Directors authorized the
granting of stock options to Louis Turp,
President and CEO, to purchase up to 100,000 shares each of
common stock of the company at $.05
per share for a period of five years and Andrea Audet,
Secretary-Treasurer, to purchase up to 50,000
shares of common stock of the Company at $0.05 per share for a
period of five years. The options
were granted in recognition of past services and the shares to
be received by their exercise are
subjected to Rule 144 of the Securities Act of 1933. On January
20, 2000 the Board of Directors
authorized the granting of stock options to Richard Jamieson,
CFO, and Andrea Audet, Secretary-
Treasurer, to purchase up to 50,000 shares of common stock of
the Company at $0.05 per share for
a period of five years. Louis R. Turp, President, was also
granted of stock options to purchase up to
100,000 shares of common stock of the Company at $0.05 per share
for a period of five years.
(11) Extraordinary Gain
As a result of a Judgment in a lawsuit in 1999 filed by the
Company against certain creditors, debts
totaling $164,110 were rendered null and void. This gain results
in increased earning of $0.01 per
common shares.
As a result of a Judgment in a lawsuit filed in 1998 by the
Company against certain creditors, debts
totaling $763,225 (net of tax of $323,989 and valuation
allowance reduction of $323,989), were
rendered null and void. This gain results in increased earnings
of $0.05 per common share.
(12) Subsequent Event
On February 16, 2000, the Company entered into an agreement to
acquire all the shares of 25247883
Quebec, Inc. and all of the shares owned by Valence Ratelle,
Inc. in Les Services Informatiques
RMM, Inc. The agreement stipulates that the consideration
payable is an amount equivalent to the
total outstanding common shares of the Company at the time of
closing. Including in the transaction
is a building owned by Gestion RMM "Societe en commandite".
On March 8, 2000, the Company entered into an agreement to
purchase all the outstanding shares of
Genilog, Inc. The consideration payable for Genilog, Inc. is
1,750,000 common shares of the
Company.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant
caused this report to be signed on its behalf by the
undersigned, thereunto
duly authorized.
Forestry International, Inc.
- - ----------------------------------
(Registrant)
By: /s/ Louis R. Turp, President
- - ----------------------------------
(Signature and Title)
March 14, 2000
- - ----------------------------------
Date
Louis R. Turp, President
Forestry International, Inc.
1205 Ampere Street
Suite 206
Boucherville, Quebec
Canada J4B 7M6
Dear Louis,
I hereby consent to the use of my name as the auditor in the
Annual Report pursuant to Section 13
or 15 (d) of the Securities Exchange Act of 1934 for the fiscal
year ended December 31, 1999 and
year ended December 31, 1998 filed by Forestry International,
Inc. on Form 10-KSB.
/s/
Robert Kliaman, CA, CPA (Mass)
March 14, 2000
Toronto, Ontario
Canada
