U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB [ ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2000. [X ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _______ to _______ COMMISSION FILE NUMBER 001-06-560 ---------- FAIRCHILD INTERNATIONAL CORPORATION (Name of Small Business Issuer in its Charter) Nevada 91-1880015 (State or other jurisdiction of (IRS Employer Identification Number) Incorporation or Organization) Suite 600, 596 Hornby Street, Vancouver, B.C. Canada V6C 1A4 (Address of Principal Executive Offices) (Zip Code) (604) 646-5614 (Issuer's Telephone Number) Check whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [] The number of shares of common stock outstanding as of March 31, 2000 is 10,988,210. - ----------- ITEM 1. FINANCIAL INFORMATION FAIRCHILD INTERNATIONAL CORPORATION (A DEVELOPMENT STAGE COMPANY) STATEMENT OF OPERATIONS AND DEFICIT FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (EXPRESSED IN U.S. DOLLARS) CUMULATIVE PERIOD ENDED TO MARCH 31 MARCH 31 EXPENSES 2000 2000 1999 ADVERTISING $ 9,008 $ - $ - BANK CHARGES AND FOREIGN EXCHANGE 12,108 43 196 CONSULTING 39,267 - 664 OFFICE, RENT AND SECRETARIAL 25,040 5,884 5,380 PROFESSIONAL FEES 78,183 1,728 - PROMOTION AND TRAVEL 331,040 6,000 47,962 RELATED PARTY ADMINISTRATION CHARGES 119,855 10,733 5,000 CONSULTING FEES 50,000 - 50,000 RESEARCH AND DEVELOPMENT AND LICENSE FEES 163,520 5,020 - SHAREHOLDER INFORMATION 19,769 1,747 664 TELEPHONE AND UTILITIES 3,440 246 438 TRANSFER AGENT FEES 7,757 - 1,045 858,987 31,401 111,349 MINERAL INTEREST AND EXPLORATION COSTS 99,627 - - NET LOSS FOR THE PERIOD 958,614 31,401 111,349 DEFICIT BEGINNING OF THE PERIOD 927,213 456,276 DEFICIT END OF THE PERIOD $958,614 $567,625 BASIC LOSS PER SHARE PRE STOCK SPLITS $ 0.01 $ 0.01 POST STOCK SPLITS $ 0.01 $ 0.03 UNAUDITED FAIRCHILD INTERNATIONAL CORPORATION (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET MARCH 31, 2000 (EXPRESSED IN U.S. DOLLARS) ASSETS 2000 CURRENT CASH $ 5,186 LIABILITIES CURRENT ACCOUNTS PAYABLE $ 7,826 OWING TO RELATED PARTIES 61,205 69,031 COMMITMENTS (NOTE 3) STOCKHOLDERS' EQUITY SHARE CAPITAL AUTHORIZED 50,000,000 COMMON SHARES WITH A PAR VALUE OF $0.001 PER SHARE 1,000,000 PREFERRED SHARES WITH A PAR VALUE OF $0.01 PER SHARE ISSUED AND FULLY PAID (NOTE 2) 10,988,210 COMMON SHARES 894,769 DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (958,614) TOTAL STOCKHOLDERS' EQUITY (63,845) TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,186 APPROVED BY THE DIRECTOR UNAUDITED FAIRCHILD INTERNATIONAL CORPORATION (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOW FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (EXPRESSED IN U.S. DOLLARS) CUMULATIVE PERIODS ENDED TO SEPTEMBER 30 MARCH 31 2000 2000 1999 CASH PROVIDED (USED) BY $ - $ - OPERATING ACTIVITIES NET LOSS FOR THE PERIOD $ (958,614) $ (31,401) $ (111,349) NON-CASH ITEMS ISSUE OF SHARES FOR SERVICES AND MINERAL INTEREST 236,858 - - CHANGE IN NON-CASH OPERATING ITEM ACCOUNTS PAYABLE 7,826 (379) (5,020) (713,930) (31,780) (116,369) FINANCING ACTIVITIES OWING TO RELATED PARTIES 61,205 - 87,451 SHARE CAPITAL ISSUED FOR CASH 657,911 - - SHARE SUBSCRIPTIONS - - 30,000 719,116 - 117,451 CHANGE IN CASH FOR THE PERIOD $ 5,186 (31,780) 1,082 CASH BEGINNING OF THE PERIOD 36,966 595 CASH END OF THE PERIOD $ 5,186 $ 1,677 UNAUDITED FAIRCHILD INTERNATIONAL CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO THE FINANCIAL STATEMENTS MARCH 31, 2000 1. ACCOUNTING POLICIES AND NOTES The accounting policies followed by the Company are unchanged from those outlined in the audited financial statements for the year ended December 31, 1999. The notes to the financial statements at December 31, 1999 substantially apply to the interim financial statements at March 31, 2000 and are not repeated here. All adjustments have been made which, in the opinion of management, are necessary in order to make these financial statements not misleading. 2. SHARE CAPITAL Common shares issued and fully paid SHARES CONSIDERATION Balance at March 31, 2000 and December 31, 1999 10,988,210 $ 894,769 3. COMMITMENTS a. Pharmaceutical Research and Development The Company has entered into Research, Development and License Agreements to acquire an exclusive license to make, use and sell pharmaceutical products and processes relating to arthritis and dermal wrinkles. The Company has paid $137,520 of the total research and development funding obligation of $250,000 and issued 2,600,000 post-split common shares in consideration for the license. The balance of the funding obligation is due by October 1, 2000. The shares have been issued at a nominal value of $.01 per share and are subject to regulatory restrictions relating to their saleability. A net revenue royalty of 35% will be payable by the Company on revenue for licensed products. The agreement is with a company formerly under common management. b. Consulting Agreement The Company entered into a consulting agreement with a former director for public relations services for a twelve month period to March 15, 2000. As consideration for the services, the Company: - - paid cash of $25,000; - - issued 500,000 post-split (50,000 pre-split) shares at an ascribed value of $.50 per share; - granted options to acquire to March 15, 2000 (lapsed without being exercised) 500,000 post-split common shares at $.05 and 500,000 post-split common shares at $.15; and - granted an option to acquire up to 5% of the outstanding common shares of the Company when these shares qualify for the NASDAQ small cap over the counter public trading at $.50 per share for a period of two years from the date of the listing. As of March 31, 2000, the exercise price of outstanding stock options exceeded the quoted market value of the shares. Accordingly, no stock option compensation has been recognized in the financial statements. UNAUDITED ITEM 2.PLAN OF OPERATION With the exception of historical facts stated herein, the matters discussed in this report are "forward looking" statements that involve risks and uncertainties that could cause actual results to differ materially from projected results. Such "forward looking" statements include, but are not necessarily limited to, statements regarding anticipated levels of future revenues and earnings from operations of the Company. Readers of this report are cautioned not to put undue reliance on "forward looking" statements which are, by their nature, uncertain as reliable indicators of future performance. The Company disclaims any intent or obligation to publicly update these "forward looking" statements, whether as a result of new information, future events, or otherwise. We eventually plan to develop specialized e-commerce sites on the Internet. Over the next twelve months, we plan to focus on development of an Internet portal for alternative health care products. We hope that this site will offer our products, as well as those of other companies. In addition, we plan to offer information on related topics on the website. In the past, we have relied upon funding from our former officer and director, Mr. David Stadnyk. We borrowed approximately $44,000 from Mr. Stadnyk during our development stage, $40,000 of which has been repaid. We are currently unable to satisfy our cash requirements without the financial support of our President, Byron Cox, or his designee. We anticipate that we will meet our cash requirements for the next twelve months through Mr. Cox's financial support, even though Mr. Cox has not supplied funds to the Company in the past. Currently, we have no commitment for funding from our past or present officers and directors or any other party. Eventually, we will need to raise additional funds, if we plan to implement an advertising and marketing plan to advance our website. We have not yet determined how we plan to obtain these additional funds. In 1999, we raised cash proceeds of $475,000 from the sale of our common stock to business associates and friends of Mr. Standyk and Mr. Cox. These funds were for general operating expenses. At the time these funds were raised they were not intended for the Praxis Pharmaceuticals licensing agreement. In this regard, we issued 3,000,000 shares for $150,000 on March 15, 1999 and we issued 1,000,000 shares on April 1, 1999 for $300,000. The proceeds are to be used to implement our new plan of business. At the time of sale, the proceeds were not earmarked for the Praxis Pharmaceuticals licensing agreement. Since we have entered into an agreement with Praxis Pharmaceuticals for research and development, we will encounter significant research and development expenses over the next twelve months. In addition to the terms of the Praxis Pharmaceuticals agreement, we may seek to conduct other research and development, which would result in expenses beyond those outlined in the agreement with Praxis Pharmaceuticals. Our goal is to have Praxis Pharmaceuticals provide us with products that are ready for market. The first product that we hope to receive from Praxis Pharmaceuticals is the anti-wrinkle compound while the second is an arthritis product. Since we outsource most of our operations, we do not anticipate establishing our own manufacturing facilities over the next twelve months. Beyond this time frame, we plan to make a decision with regard to purchase or sale of any plant and significant equipment in the long term after products are introduced to the public through our website, if ever. As conditions dictate, we will engage additional employees. We do not plan to make any significant changes in the number of employees over the next twelve months. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K None. SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: 8/24/00 By: /s/ Byron Cox --------------------- Byron Cox, President and Director <DOCUMENT> <TYPE> EX-27 <DESCRIPTION> FINANCIAL DATA SCHEDULE <ARTICLE> 5 <LEGEND> replace this with text </LEGEND> <MULTIPLIER> 1000 <PERIOD-TYPE> 3-MOS <FISCAL-YEAR-END> December 31, 2000 <PERIOD-START> January 1, 2000 <PERIOD-END> March 31, 2000 <CASH> 5,186 <SECURITIES> 0 <RECEIVABLES> 0 <ALLOWANCES> 0 <INVENTORY> 0 <CURRENT-ASSETS> 5,186 <PP&E> 0 <DEPRECIATION> 0 <TOTAL-ASSETS> 5,186 <CURRENT-LIABILITIES> 69,031 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 894,794 <OTHER-SE> 0 <TOTAL-LIABILITY-AND-EQUITY> (63,845) <SALES> 0 <TOTAL-REVENUES> 0 <CGS> 0 <TOTAL-COSTS> 0 <OTHER-EXPENSES> 31,401 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> (31,401) <INCOME-TAX> 0 <INCOME-CONTINUING> (31,401) <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> (31,401) <EPS-PRIMARY> (0.01) <EPS-DILUTED> (0.01)
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10-Q Filing
Energy Quest (EQST) Inactive 10-Q2000 Q1 Quarterly report
Filed: 24 Aug 00, 12:00am