Form 10-QSB
QUARTERLY OR TRANSITION REPORT
UNDER SECTION 13 OR 15(d)
(As last amended by 34-2231, eff. 6/3/93)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter year ended June 30, 2000
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to
Forestry International, Inc.
(Name of small business issuer as specified in its charter)
0-23310
Commission File Number
Colorado 84-1116284
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1205, Ampere Street, Ste 206, Boucherville, (QC) J4B 7M6
(Address of principal executive offices) (Zip Code)
Issuer?s telephone number (514) 495-7747
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12,
13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a
court. N/A Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer?s
classes of common equity, as of the latest practicable date:
As of June 30, 2000, registrant had one class of commons stock,
of which 25,440,736
shares were outstanding among which 5,246,083 are in stop
transfer.
Transitional Small Business Disclosure Format (Check one): Yes
X
No
(Added by Exch Act Rel No. 31905, eff 4/26/93)
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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Forestry International, Inc.
Balance Sheet
June 30
144: 2000 1999
Consolidated Non-Consolidated
(Unaudited) (Unaudited)
Assets
Current Assets:
Cash and Cash Equivalent $ - $
2,664
Accounts Receivable
534,775 -
Inventory
117,895 -
Notes Receivable, non-interest bearing 26,900
-
Due from Shareholders
230,969 -
Prepaid Expenses and Sundry Assets 1,727
-
Total Current Assets
912,266 2,664
Property and Equipment
Buildings
106,979 -
Office Equipment
35,086 6,000
Computers and Software
258,384 6,000
Vehicles 48,370 -
176:
448,819 12,000
Less Accumulated Depreciation 301,781
11,200
Net Property and Equipment
147,038 800
Other Assets:
Long Term Investments
110,854 -
Total Assets
$ 1,170,158 $ 3,464
(See Accompanying Notes to Financial Statements)
Forestry International, Inc.
Balance Sheet
June 30
2000 1999
Consolidated Non-Consolidated
(Unaudited) (Unaudited)
Liabilities and Stockholders? Equity (Deficit)
Current Liabilities:
Bank Deficiency $ 34,188
$ -
Bank Loan 163,753 -
Accounts Payable
504,135 128,493
Accrued Payroll and Other Expenses -
138,471
Income Tax Payable
70,334 42,764
Due to Related Party
- 18,964
Current Portion of Long-Term Debt 22,102
342,984
Total Current Liabilities 794,512
671,676
Long Term Debt - Unrelated 90,381
-
Loan Payable 4,492
-
Deferred Income Taxes
3,838 -
Contingency (Note 5)
Stockholders? Equity:
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 25,440,763
(1999-18,629,333) Shares
2,544 1,863
Additional Paid in Capital
7,746,955 7,218,596
Retained Earnings
(7,472,564) (7,888,671)
Total Stockholders? Equity 276,935
(668,212)
Total Liabilities and Stockholders? Equity $1,170,158
$ 3,464
(See Accompanying Notes to Financial Statements)
Forestry International, Inc.
Statement of Operations and Changes in Retained Earnings
Three Months
Ended June 30 Six Months Ended June 30
2000 1999
2000 1999
Consolidated Non-
Consolidated Consolidated Non- Consolidated
(Unaudited)
(Unaudited) (Unaudited) (Unaudited)
Operating Revenue (Note 1)$ 535,483 $ -
$ 535,483 $ -
Cost of Sales 415,144 -
415,144 -
_________
__________ _________ _________
Gross Margin 120,339 -
120,339 -
Operating Expenses:
Selling 58,422 - 58,422
-
Gen. & Administrative 193,947
78,634 255,716 123,997
Financial 3,291 - 3,291
-
_________
_________ _________ _________
Operating Loss (135,321)
(78,634) (197,090) (123,997)
_________ _________
_________ _________
Other Income (Expense):
Interest Expense -
(9,707) -
(21,870)
Profit Share in
Limited Partnership 220 -
220 -
Total Other Income and Exp 220
(9,707) 220
(21,870)
_________
_________ __________ _________
Loss Before Income Taxes
And Extraordinary Item
Extraordinary Gain 196, 190 -
196,190 -
Income Tax (Benefit) 2,832
- 2,832
-
_________
_________ _________ _________
Net Income (Loss) 58,257 ($
88,341) (3,512) ($ 145,867)
_________
_________ _________ ___________
Retained Earnings, Beginning (7,530,821) ($7,800,330)
(7,469,052) ($7,742,804)
Retained Earnings, Ending (7,472,564) ($7,888,671)
(7,472,564) ($7,888,671)
Net Loss per Common Share ($0.002) ($0.005)
($0.000) ($ 0.008)
Weighted Average Number
of Common Shares 25,276,547 18,154,999
22,473,317 17,849,749
(See Accompanying Notes to Financial Statements)
Forestry International, Inc.
Statement of Cash Flows
Three Months Ended June
30 Six Months Ended June 30
2000
1999 2000
1999
Consolidated Non-
Consolidated Consolidated Non- Consolidated
(Unaudited)
(Unaudited) (Unaudited) (Unaudited)
Cash Flows from Operating Activities:
Net Income (Loss) 58,257 ($88,341)
(3,512) ($145,867)
Adjustments to Reconcile Net Loss
Amortization & Depreciation 1,083 400
1,083 800
(Increase) Decrease in:
Prepaid Expenses and
Sundry Assets -
- -
330
Acc Pay And Accrued Exp (70,178) 315
(76,162) (16,625)
Due to Related Parties 16,180 11,632
(40,595) 18,964
Income Tax Payable -
- -
2,456
Net Cash Used by Oper.
Activities 5,342
(75,994) (119,187)
(139,942)
Cash Flows from (Applied to)
Investing Activities:
Acquisitions of Subsidiary,
net of cash acquired (404,526)
(404,526)
Net Cash Used by Investing
Activities (404,526)
- (404,526)
-
Cash Flows From (Applied to)
Financing Activities:
Issuance of Common Stock 293,837 68,223
324,837 122,223
Increase in Debt -
9,707 -
19,416
Net Cash Provided by
Financing Activities 293,837 77,930
324,837 141,639
Net Increase (Decrease)
in Cash (105,347)
1,936 (198,876)
1,697
Cash, Beginning of Period 71,159 728
935 967
Cash, End of Period (34,188)
2,664 (197,940)
2,664
(See Accompanying Notes to Financial Statement)
FORESTRY INTERNATIONAL, INC.
Notes to Financial Statements
June 30, 2000
(1) Basis of Presentation
The accompanying unaudited financial statements have been
prepared
by Forestry in accordance with generally accepted accounting
principles pursuant to the rules and regulations of the
Securities
and Exchange Commission. These unaudited financial statements of
June 30, 2000 represents the results of the Canadian fully own
subsidiary of the Company for the period starting May 2, 2000
through June 30, 2000. In the opinion of management, the
accompanying financial statements include all adjustments
of a normal recurring nature) which are necessary
for fair presentation of the financial results for the interim
periods presented. Certain information and footnote disclosures
normally included in financial statements have been condensed or
omitted pursuant to such rules and regulations. Although
Forestry
believes that the disclosures are adequate to make the
information
presented not misleading, it is suggested that these financial
statements be read in conjunction with the financial statements
and the notes thereto included in the Company's 1999 Annual
Report
on Form 10-KSB. The results of operations for the six months
ended
June 30, 2000 are not necessarily indicative of the results to
be
expected for the full year.
(2) Computation of Net Income Per Share
Net Income per common and common equivalent share is computed
using the weighted average
number of common shares outstanding during the periods.
Outstanding stock options are
non-dilutive as of June 30, 2000.
(3) Liquidity
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 has a shareholders equity of $276,935
at the quarter ended June 30,
2000. The company generated $535,483 operating revenue for the
six months ended June 30,
2000. See Note 1 and Item 2, Management?s Plan of Operation.
(4) Concentrations
On June 30, 2000 cash in bank account did not exceed federally
insured limits.
(5) Contingency
On November 17, 1998 in the United States District Court of
Jackson Mississippi, the Company
filed a $35,000,000 civil action against Randy Pope, President
of Dixieland Forest Products, Inc.
FORESTRY INTERNATIONAL, INC.
Notes to Financial Statements
June 30, 2000
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. Mr. Pope filed a
counter-claim for $300,000 based
on money he paid for the operation of Dixieland, which was
payment for the benefit of
Dixieland. To that effect, a trial started on May 30, 2000.
Notwithstanding extensive efforts by
the Defendant and his lawyers to cause Forestry?s claims to be
dismissed prior to trial through
summary judgment motions and the attempts to have the case
dismissed at trial, the case
proceeded to jury deliberations which, unfortunately, resulted
in a deadlocked jury and ultimately
an order of a mistrial by the Judge. The Company is presently
waiting to the Court to determine
the new trial date.
On June 6, 2000, the Superior Court of the State of Arizona
granted a Summary Judgment in
favor of the Arizona Department of Revenue and against the
Company for unpaid State corporate
income taxes and interest in the amount of $10,869.34 and
$36,008.92 calculated through May
31, 2000, for tax period March 31, 1994 through March 31, 1994.
Although on July 3, 2000 the
Company submitted the Judgment to the Court of Appeals of the
State of Arizona.
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.
(6) Subsequent Events
On July 5, 2000, the company have announced two contracts with
the ?Bureau des Soumissions
Deposees du Quebec? (BSDQ) and Quebec Cartier Mining Corporation
(QCM) that will generate
approximately $800,000 in sales. Also, on July 5, 2000 the
Company has reevaluated its
proposed acquisition of Genilog, Inc. After several discussions
with Genilog?s management, the
Company?s Board of Directors with its financial advisers has
determined that it is in the best
interest of both corporations to pursue their four (4) year
strategic alliance rather than integrate
the two entities under the same roof.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION.
The Company?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 and on May 3,
2000 has completed the
acquisition of RMM & Associates.
The Company, as of June 3, 2000 had net operating loss
carryforwards for federal and state
income tax purposes of approximately $3,500,000 and $2,100,000
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.
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,
warrants 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. The Company 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 the
Company, the analysis of
potential business endeavors will be undertaken by or under the
supervision of the Company?s
Directors. The Directors 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. The Company
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. The Company 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 the Company participates.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
N\A
Item 2. Changes in Securities
N\A
Item 3. Defaults Upon Senior Securities
N\A
Item 4. Submission to a Vote of Security Holders
N\A
Item 5. Other Information
N\A
Item 6. Exhibits and Reports on Form 8-K
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)
August 28, 2000
Date
