-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EGnoKv0LTJm7k1K5zEx3LY9xU8uB/jDltAGh33xsrdTkWUnqotT+b32iYzNSqBYR tuBV1umWoMg2+V2T2WlSbw== 0000891554-99-001749.txt : 19990902 0000891554-99-001749.hdr.sgml : 19990902 ACCESSION NUMBER: 0000891554-99-001749 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AURORA GOLD CORP CENTRAL INDEX KEY: 0001037049 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 133945947 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-24393 FILM NUMBER: 99704616 BUSINESS ADDRESS: STREET 1: 1505 1060 ALBERNI ST CITY: VANCOUVER BC CAN V6E STATE: A1 MAIL ADDRESS: STREET 1: 1505-1060 ALBERNI STREET STREET 2: VANCOUVER BC CANADA V6E 4K2 10QSB 1 FORM 10-QSB QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to ______________ Commission file number 0-24393 AURORA GOLD CORPORATION (Exact name of small business issuer as specified in its charter) Delaware 13-3945947 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 1505 - 1060 ALBERNI STREET, VANCOUVER B.C. CANADA V6E 4K2 (Address of principal executive offices) (604) 687-4432 (Issuer's Telephone Number) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS 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 court. 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: 11,319,488 shares of Common Stock were outstanding as of June 30, 1999. Transitional Small Business Disclosure Format (check one); YES [ ] NO [X] AURORA GOLD CORPORATION This quarterly report contains statements that plan for or anticipate the future and are not historical facts. In this Report these forward looking statements are generally identified by words such as "anticipate", "plan", "believe", "expect", "estimate", and the like. Because forward looking statements involve future risks and uncertainties, these are factors that could cause actual results to differ materially from the estimated results. These risks and uncertainties are detailed in Part 1 Financial Information - Item 1. "Financial Statements", Item 2. "Management's Discussion and Analysis or Plan of Operation". The Private Securities Litigation Reform Act of 1995, which provides a "safe harbor" for such statements, may not apply to this Report. PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PAGE Consolidated Balance Sheet 3 Consolidated Statements of Stockholder's Equity 4 Consolidated Statements of Operations 5 Consolidated Statement of Cash Flows 6 Notes to Financial Statements 7-10 2
- ---------------------------------------------------------------------------------------------- Aurora Gold Corporation (A development stage enterprise) Consolidated Balance Sheet (unaudited) (Expressed in U.S. Dollars) June 30, December 31, 1999 1998 - ---------------------------------------------------------------------------------------------- Assets Current Cash and cash equivalents $ 7,415 $ 68,326 Non-trade accounts receivable 5,590 -- ----------------------------- 13,005 68,326 Fixed assets -- -- Notes receivable 20,000 20,000 Mineral property costs 99,070 69,441 Organizational costs 3,456 4,607 ----------------------------- $ 135,531 $ 162,374 - ---------------------------------------------------------------------------------------------- Liabilities and Stockholders' Surplus (Deficiency) Current Accounts payable $ 39,218 $ 20,580 ----------------------------- 39,218 20,580 Long-term debt 103,862 -- ----------------------------- 143,080 20,580 ----------------------------- Stockholders' deficiency, Share Capital Authorized 50,000,000 common shares, par value $0.001 Issued 11,319,488 (1998 - 11,181,494) common shares 11,319 11,181 Additional paid-in capital 2,367,758 2,259,305 Deficit accumulated during the development stage (2,386,626) (2,128,692) ----------------------------- (7,549) 141,794 ----------------------------- $ 135,531 $ 162,374 - ----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Approved on behalf of the Board: /s/ DAVID JENKINS /s/ JOHN A.A. JAMES - ----------------- --------------------- Director Director 3
- ------------------------------------------------------------------------------------------------------------------------------------ Aurora Gold Corporation (a development stage enterprise) Consolidated Statements of Stockholder's Equity (Expressed in U.S. Dollars) (Unaudited) For the period ended June 30, 1999 - ------------------------------------------------------------------------------------------------------------------------------------ Deficit Acumulated Common Stock Additional During the Total ------------------------------- Paid-In Development Stockholder's Shares Amount Capital Stage Equity ----------------------------------------------------------------------------------- Balance, January 1, 1997 9,920,389 $ 9,920 $ 344,461 $ (361,208) $ (6,827) Issuance of common stock For cash in March 1997 at $1.00 per share (less issue costs of $4,842) 750,000 750 744,408 -- 745,158 Net loss for the year (615,880) (615,880) ----------------------------------------------------------------------------------- Balance, December 31, 1997 10,670,389 10,670 1,088,869 (977,088) 122,451 Issuance of common stock For cash in May 1998 at $1.25 per share 200,000 200 249,800 -- 250,000 For settlement of Indebtedness 311,105 311 229,636 -- 229,947 Grant of options to employees and directors -- -- 518,900 -- 518,900 Grant of options to Consultants -- -- 172,100 -- 172,100 Net loss for the year (1,151,604) (1,151,604) ----------------------------------------------------------------------------------- Balance, December 31, 1998 11,181,494 11,181 2,259,305 (2,128,692) 141,794 Issuance of common stock For settlement of Indebtedness 112,994 -- 113 88,166 88,279 For finders fee -- 25,000 25 20,287 20,312 Net loss for the period (257,934) (257,934) ----------------------------------------------------------------------------------- Balance, June 30, 1999 11,319,488 $ 11,319 $ 2,367,758 $(2,386,626) $ (7,549) - ------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 4
- ------------------------------------------------------------------------------------------------------------------------------------ Aurora Gold Corporation (A development stage enterprise) Consolidated Statements of Operations (Expressed in U.S. Dollars) October 10 1995 Six-months ended (inception) to June 30, June 30, ----------------------------------- 1999 1999 1998 For the periods ended (cumulative) (Unaudited) (Unaudited) - ------------------------------------------------------------------------------------------------------------------------------------ General and administrative expenses Consultants $ 53,633 $ -- $ 9,366 Depreciation and amortization 18,406 1,151 5,364 Interest, bank charges and foreign exchange 21,851 1,927 3,718 Office and miscellaneous, net of recoveries 111,788 (11,980) 13,760 Professional fees - legal 132,963 4,623 11,463 - accounting 38,560 -- 2,045 Rent and other 62,101 6,363 3,926 Salaries and wages 253,456 34,032 36,630 Shareholder relations, advertising and Promotion 92,328 (14,754) 8,067 Stock option compensation 691,000 -- -- Transfer agents, listing and filing fees 52,134 6,185 9,510 Travel 50,265 -- 6,352 Telephone 44,376 1,914 4,743 ----------------------------------------------------------- 1,622,861 29,461 114,944 Less interest income 21,299 439 3,623 ----------------------------------------------------------- 1,601,562 29,022 111,321 Exploration expenses 745,654 228,912 110,638 Write off of mineral property costs 39,410 -- -- ----------------------------------------------------------- Net loss for the period $ 2,386,626 $ 257,934 $ 221,959 - ------------------------------------------------------------------------------------------------------------------------------------ Loss per share Basis and diluted $ 0.02 $ 0.02 ----------------------------------------------------------- Weighted average common shares outstanding Basic and diluted 11,225,661 10,724,828 - ------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 5
- --------------------------------------------------------------------------------------------------------------------------- Aurora Gold Corporation (A development stage enterprise) Consolidated Statements of Cash Flows (Expressed in U.S. Dollars) October 10 1995 Six-months ended (inception) to June 30, June 30, -------------------------------- 1999 1999 1998 For the periods ended (cumulative) (Unaudited) (Unaudited) - --------------------------------------------------------------------------------------------------------------------------- Cash provided (used) by: Cash flows from operating activities Net loss for the period $(2,386,626) $ (257,934) $ (221,959) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 18,406 1,151 5,364 Write off of mineral properties 39,410 -- -- Compensation on stock options 691,000 -- -- Expenses satisfied with common stock 188,538 108,591 -- Changes in assets and liabilities Decrease (increase) in accounts receivable (5,590) (5,590) (67,142) Increase(decrease) in accounts payable 39,218 18,638 1,901 ----------------------------------------------------- (1,415,644) (135,144) (281,836) ----------------------------------------------------- Investing activities Purchase of fixed assets (24,800) -- -- Mineral property costs (138,480) (29,629) (37,942) Notes receivable (20,000) -- -- Proceeds on disposal of fixed assets 14,449 -- -- Incorporation costs (11,511) -- -- ----------------------------------------------------- (180,342) (29,629) (37,942) ----------------------------------------------------- Financing activities Proceeds from issuance of common stock 1,349,539 -- 250,000 Repayment of notes payable (65,000) (15,000) -- Proceeds from notes and advances payable 318,862 118,862 -- ----------------------------------------------------- 1,603,401 103,862 250,000 ----------------------------------------------------- Increase (decrease) in cash for the period 7,415 (60,911) (69,778) Cash, Beginning of period -- 68,326 122,921 ----------------------------------------------------- Cash, end of period $ 7,415 $ 7,415 $ 53,143 - ---------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 6 Notes to Interim Consolidated Financial Statements (Unaudited) Basis of Presentation In the opinion of management, the accompanying interim financial statements contain all material adjustments consisting only of normal recurring adjustments necessary to present fairly the financial position, the results of operations and cash flows of the Company and its consolidated subsidiaries for the interim period. Users of the financial information produced for the interim periods are encouraged to refer to the footnotes contained in the Annual Report on Form 10-KSB when reviewing interim financial results. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Aurora Gold, S.A. and Aurora Gold (BVI) Ltd. All intercompany transactions and balances have been eliminated. Exploration costs are charged to operations as incurred as are normal development costs until such time that proven reserves are discovered. At June 30, 1999 and 1998, the Company did not have proven reserves. Costs of initial acquisition of mineral rights and concessions are capitalized until the properties are abandoned or the right expires. 1. Nature of Business and Going Concern The Company was formed on October 10, 1995 under the laws of the State of Delaware and is in the business of exploration and development of mineral properties. The Company has not yet determined whether its properties contain mineral resources that may be economically recoverable. These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The general business strategy of the Company is to acquire mineral properties either directly or through the acquisition of operating entities. The continued operations of the Company and the recoverability of mineral property costs is dependent upon the existence of economically recoverable reserves, confirmation of the Company's interest in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete the development and upon future profitable production. The Company has incurred recurring operating losses and requires additional funds to meet its obligations and maintain its operations. Management's plans in this regard are to raise equity financing as required. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might result from this uncertainty. 7 2. Fixed Assets
June 30, 1999 June 30, 1998 ------------------------------------------------------ Accumulated Accumulated Cost Depreciation Cost Depreciation ------------------------------------------------------ Furniture $ -- $ -- $ 5,229 $ 873 Computer equipment -- -- 11,554 7,584 Office equipment -- -- 8,017 1,894 ---------------------------------------------------- -- -- 24,800 10,351 ---------------------------------------------------- Cost less accumulated depreciation $ -- $14,449 ====================================================
3. Mineral Properties and Exploration Expenses Mineral property costs consist of: 1999 1998 Kumealon - Limestone property Canada $ 23,629 $ -- Guatemala 68,441 30,499 Totem Talc (United States of America) 6,000 -- --------------------- $ 98,070 $ 30,499 ===================== Mineral exploration expenses consist of: Canada - Yukon Exploration expenditures, end of period $ 81,802 $ -- Exploration expenditures, beginning of year -- -- --------------------- Expenditures for the period 81,802 -- --------------------- Guatemala Mineral Claims Exploration expenditures, end of period 249,358 125,043 Exploration expenditures, beginning of year 194,644 45,900 --------------------- Expenditures for the period 54,714 79,143 --------------------- Kumealon - Limestone Exploration expenditures, end of period 2,286 -- Exploration expenditures, beginning of year -- -- --------------------- Expenditures for the period 2,286 -- --------------------- Totem Talc Exploration expenditures, end of period 48,801 -- Exploration expenditures, beginning of year 11,418 -- --------------------- Expenditures for the period 37,383 -- --------------------- Tunisia Exploration expenditures, end of period 19,878 -- Exploration expenditures, beginning of year -- -- --------------------- Expenditures for the period 19,878 -- --------------------- eneral exploration 32,849 31,495 --------------------- Total $228,912 $110,638 ===================== 8 4. Organization Costs 1999 1998 Cost $ 11,511 $ 11,511 Less accumulated amortization (8,055) (5,753) --------------------------- $ 3,456 $ 5,758 =========================== 5. Related Party Transactions Related party transactions not disclosed elsewhere in these financial statements include: a) Included in accounts payable is $19,513 (1998 - $667) due to directors and a company controlled by a director in respect of salaries, consulting fees and reimbursement for operating expenses. b) During the period, consulting fees, salaries and wages of $30,000 (1998 - $30,000) were paid or are payable to directors or companies controlled by directors. 6. Non Cash Investing and Financing Activities Amounts owing to a director of $42,190 were settled in January 1999 with the issuance of 50,000 common shares. In March 1999, the Company settled promissory notes payable of $15,000 with the issuance of 22,871 (including accrued interest) shares of common stock. In March accounts payable of $7,000 were settled with the issuance of 8,615. In March, amounts owing to a director of $22,650 were settled with the issuance of 31,510 shares. In March, a finder's fee of $20,312 was settled with the issue of 25,000 shares of common stock. The conversion of indebtedness was done at the following prices: Conversion Indebtedness Price Shares ----------------------------------------------- $ 42,190 $0.84 50,000 27,312 $0.81 33,615 39,089 $0.72 54,381 -------- ------- $108,591 137,996 ============================================== The carrying value of the indebtedness approximated the fair value of the common shares issued. 9 7. Outstanding Options At June 30, 1999, the Company had 1,155,000 options outstanding which are exercisable between $0.01 and $0.75 per common share at varying dates through 2003. ITEM 2. MANAGEMENT'S' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS A. General The Company is a mineral exploration company based in Vancouver, Canada engaged in the exploration of base and precious metals worldwide. The Company was incorporated under the laws of the State of Delaware on October 10, 1995, under the name "Chefs Acquisition Corp." and is a development stage company. Since commencement of its exploration operations in 1996, the Company has undertaken a review of potential world mining properties with the objective of acquisitions, exploration and development. In addition to Guatemala, primary regions under investigation by the Company include Argentina, Canada, Egypt, Mexico, United States of America, West Africa and South Africa. The management of the Company has developed the following exploration objectives, the acquisition of properties with large scale potential, to minimize capital costs on leases or concessions, the acquisition of properties adjacent or in close proximity to recent discoveries of large scale mineral reserves, to be the first-in staking where possible, secured repatriation on mineral rights and royalties and to establish joint ventures and/or partnerships with established companies that possess the resources to complete mine development. All of the Company's properties are in the preliminary exploration stage without any presently known body of ore. B. Exploration 1. British Columbia, Canada In February 1999, the Company acquired, by staking, a high grade limestone property six (3) square kilometres (741 acres) located on the north shore of Kumealon Inlet, 54 kilometres south-southeast of Prince Rupert, B.C. Canada. The Company plans a complete geological investigation in connection with an extensive bedrock-sampling program in 1999. 2. Yukon Territories, Canada In May and June 1999 the Company acquired by staking, 100% interest in five gold exploration properties covering approximately 240 square kilometers, in the Yukon's Tintina Gold Belt. The primary interest lies between the Tintina Fault to the north and the Denali Fault to the south and defining a broad arc through central Alaska and the Yukon. Over the past several months the Company has compiled geochemical, geophysical and Yukon Minifile information for the Yukon in a computer-based Graphical Information System (GIS). With this input, the Company has been able to identify a large number of gold targets within the Yukon's Tintina Gold Belt. The Company has mobilized sampling 10 and mapping crews to the Yukon to carry out reconnaissance soil and stream sediment geochemical sampling at the properties in addition to sampling other target locations. 3. Guatemala During fiscal 1998 and the first quarter of fiscal 1999, the Company carried out programs of geological reconnaissance, sampling of rock outcrops and sampling of stream sediments, on the mineral exploration concession licenses at Aguas Calientes, Apantes, Chiyax, El Rancho, Jicaro, Los Angeles, Los Cipreses, Miramundo, Monjitas and Valenton 1. In addition, similar programs were completed on five (5) properties for which applications for mineral exploration concession licenses were pending, specifically Barranquillo, Bola de Oro, La Esperanza, La Union and El Tesoro 1. As a consequence of the results of these programs, it was decided to surrender six mineral exploration concession licenses (January 1999) and withdraw four applications (February 1999). During 1999, the Company will complete exploration programs, involving field mapping, sampling of outcrops, sampling of stream sediments, and soil geochemistry, on the four (4) mineral exploration concession licenses, Aguas Calientes, Apantes, Jicaro and Valenton 1, the one pending (1) mineral exploration concession license, La Esperanza and the one (1) mineral reconnaissance license, San Diego. 4. Tunisia During the past several months the Company has reviewed and extensive collection of data prepared by the Tunisia Office National des Mines (the "ONM") including historical production, detailed geological mapping, geochemistry, geophysics and in many cases, drill hole data to outline areas of interest in Tunisia. Based on its analysis the Company in July entered into five option agreements with High March Holdings Ltd. ("High Marsh") to acquire 100% interest in five zinc properties in the North African country of Tunisia. The properties are located within, or near the `Zone des Domes" district, a SW-NE striking belt of Triassic salt-domes and diapirs intruded into Cretaceous carbonates, located in Northern Tunisia. The zone is approximately 250 km long and 80 km wide. Nearly all of the historic lead/zinc producers, and three currently producing lead/zinc mines are located in the Zone des Domes district. The targets are replacement-type deposits of galena and sphalerite, accompanied by barite and flourite, and similar in setting to `Mississippi Valley Type' (MTV) lead/zinc deposits but tend to have appreciably higher zinc grades. The five exploration permits (Permis de Recherche des Mines) under option have been formally awarded to High Marsh by the Director General of Mines for Tunisia (Le Directeur General des Mines). 5. United States of America The Totem Talc property, consists of ten unpatented lode claims, covering approximately 206 acres, and is held under option by Aurora in an agreement with the joint venture owners, United Catalysts Inc. and Getchell Gold Corporation. The Company is currently considering strategies for advancing the development of the property based on the conclusions and recommendations in the report provided by the international firm of consultants responsible for the re-estimation of the Mineral Resources. 11 C. Financial Information Six Months Ended June 30, 1999 versus Six Months Ended June 30, 998 Net loss for the six months ended June 30, 1999 was $257,934 compared to a loss of $221,959 for the six months ended June 30, 1998. The increase in the current period net loss is the result of increased exploration expenditures of $228,912 (June 30, 1998 - $110,638). Office and miscellaneous, net of recoveries were a credit of $11,980 for the six months ended June 30, 1999 compared to $13,760 for the six months ended June 30, 1998. Shareholder relations, advertising and promotion had a credit of $14,779 for the six months ended June 30, 1999 compared to $8,067 for the six months ended June 30, 1998. The credit relates to a recovery of shared costs. D. Financial Condition At June 30, 1999, the Company had cash and cash equivalents of $7,415 (June 30, 1998 - $53,143) and a working capital deficiency of $26,213 (working capital June 30, 1998 - $61,844) respectively. Total liabilities as of June 30, 1999 were $39,218 (June 30, 1998 - $1,723), an increase of $37,495. During the six months ended June 30, 1999 investing activities consisted of additions to mineral properties $29,629 (1998 - $37,942). Net loss for the six months ended June 30, 1999 increased $35,975 to $257,934 (Loss June 30, 1998 - $221,959). Accounts receivable decreased $4,834 to $5,590 (June 30, 1998 - $10,424) The Company does not have sufficient working capital to (i) pay its administrative and general operating expenses through December 31, 1999 and (ii) to conduct its preliminary exploration programs. Without cash flow from operations, it may need to obtain additional funds (presumably through equity offerings and/or debt borrowing) in order, if warranted, to implement additional exploration programs on its properties. Failure to obtain such additional financing may result in a reduction of the Company's interest in certain properties or an actual foreclosure of its interest. The Company has no agreements or understandings with any person as to such additional financing. None of the Company's properties has commenced commercial production and the Company has no history of earnings or cash flow from its operations. While the Company may attempt to generate additional working capital through the operation, development, sale or possible joint venture development of its properties, there is no assurance that any such activity will generate funds that will be available for operations. The Company has not declared or paid dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. E. Year 2000 Issues The "Year 2000 problem", as it has come to be known, refers to the fact that many computer programs use only the last two digits to refer to a year, and therefore recognize a year that begins with "20" as instead beginning with "19". For example, the year 2000 would be read as being the year 1900. If not corrected, this problem could cause many computer applications to fail or create erroneous results. The Company has modified and tested all the critical applications of its information technology ("IT"), the result of which is that all such critical applications are now Year 2000 12 compliant. The Company believes that virtually all of the non-critical applications of its IT are Year 2000 compliant. The Company is using independent consultants to oversee the Year 2000 project as well, as to perform certain remediation efforts. In addition, progress on the Year 2000 project is also monitored by senior management, and reported to the Board of Directors. The total amount of the payments made to date and to be made hereafter to such independent consultant are not expected to be material. Based on the Company's analysis to date, the Company believes that its material non-IT systems are either Year 2000 compliant, or do not need to be made Year 2000 compliant in order to continue to function in substantially the same manner in the Year 2000. The Company intends to continue its analysis of whether its non-IT systems require any Year 2000 remediation. The Company's Year 2000 compliance work has not caused, nor does the Company expect that it will cause, a deferral on the part of the Company of any material IT or non-IT projects. However, there can be no assurance that any of the Company's vendors or others, with whom it transacts business, will be Year 2000 compliant prior to such date. The company is unable to predict the ultimate affect that the Year 2000 problem may have upon the Company, in that there is no way to predict the impact that the problem will have nation-wide or world-wide and how the Company will in turn be affected, and, in addition, the company cannot predict the number and nature of its vendors and customers who will fail to become Year 2000 compliant prior to January 1, 2000. Significant Year 2000 difficulties on the part of vendors or customers could have a material adverse impact upon the Company. The Company intends to monitor the progress of its vendors and customers in becoming Year 2000 compliant. The Company has not to date formulated a contingency plan to deal with the potential non-compliance of vendors and customers, but will be considering whether such a plan would be feasible. PART 11. OTHER INFORMATION ITEM 1. Legal Proceedings The Company is not party to any litigation, and has no knowledge of any pending or threatened litigation against it. ITEM 2. Changes in Securities Not Applicable ITEM 3. Defaults Upon Senior Securities Not Applicable ITEM 4. Submission of Matters to a Vote of Security Holders Not Applicable ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: None. (b) Reports on Form 8-K None. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunder duly authorized. Date: August 27, 1999 BY: /s/ David Jenkins --------------------------- David Jenkins Director and President Date: August 27, 1999 BY: /s/ John A.A. James --------------------------- John A.A. James Director and Vice-President 14 EX-27 2 FDS --
5 6-MOS DEC-31-1999 JAN-01-1999 JUN-01-1999 7,415 0 5,590 0 0 13,005 99,070 0 135,531 39,218 0 0 0 11,319 (18,868) 135,531 0 0 0 0 257,934 0 0 (257,934) 0 (257,934) 0 0 0 (257,934) (0.02) (0.02)
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