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
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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
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