UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM 10-QSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
|_| 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: ______________
FENWAY INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 98-0203850
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
308-409 Granville Street, Vancouver, British Columbia, Canada V6C 1T2
(Address of principal executive offices (Zip Code)
604.844.2265
(Registrant's Telephone Number, Including Area Code)
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 practical date. As of March 31, 2000, there were
20,265,141 shares of the issuer's $.001 par value common stock issued and
outstanding.
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
MARCH 31, 2000
TABLE OF CONTENTS
Page No.
--------
INDEPENDENT ACCOUNTANTS' REVIEW REPORT ............................... 1
FINANCIAL STATEMENTS
Balance Sheet.................................................. 2
Statements of Comprehensive (Loss)............................. 3
Statements of Operations....................................... 4
Statement of Changes in Stockholders' Equity................... 5 - 7
Statements of Cash Flows....................................... 8 - 9
Notes to Financial Statements.................................. 10 - 24
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
MARCH 31, 2000
(UNAUDITED)
ASSETS
Cash and cash equivalents $ 130,124
Advance royalty payments 160,813
Prepaid expenses 3,633
Investment in Palcan Mining and Cement Corporations 18,563
Investments in projects in The Republic of the Philippines 2,685,687
Loan receivable 92,400
Property and equipment, net of accumulated depreciation 4,720
-----------
TOTAL ASSETS $ 3,095,940
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable
Trade $ 46,764
Related parties 71,904
Accrued liabilities 28,868
Short-term notes payable 137,466
-----------
TOTAL LIABILITIES $ 285,002
STOCKHOLDERS' EQUITY
Common stock, par value $0.001 per share
Authorized 100,000,000 shares
Issued and outstanding - 20,265,141 shares 20,265
Paid in capital in excess of par value of stock 4,052,395
Cumulative currency translation adjustment (21,084)
Deficit accumulated during development stage (1,240,638)
-----------
TOTAL STOCKHOLDERS' EQUITY 2,810,938
-----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 3,095,940
===========
See Accompanying Notes and Independent Accountants' Review Report.
2
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF COMPREHENSIVE (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
FOR THE PERIOD FROM MAY 7, 1984 (DATE OF INCEPTION) TO
MARCH 31, 2000
(UNAUDITED)
May 7, 1984
Three Months (Date of
Ended Inception) to
March 31, March 31,
2000 2000
----------- -----------
NET (LOSS) $ (210,058) $(1,240,638)
OTHER COMPREHENSIVE (LOSS)
Foreign currency translation adjustments (4,065) (21,084)
----------- -----------
NET COMPREHENSIVE (LOSS) $ (214,123) (1,261,722)
=========== ===========
See Accompanying Notes and Independent Accountants' Review Report.
3
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
FOR THE PERIOD FROM MAY 7, 1984 (DATE OF INCEPTION) TO
MARCH 31, 2000
(UNAUDITED)
May 7, 1984
Three Months (Date of
Ended Inception) to
March 31, March 31,
2000 2000
----------- -----------
REVENUE $ 0 $ 0
DEVELOPMENT COSTS 210,058 1,240,638
----------- -----------
NET (LOSS) $ (210,058) $(1,240,638)
=========== ===========
NET (LOSS) PER COMMON SHARE
Basic and diluted $ ( .01)
==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
Basic and diluted 20,227,141
===========
See Accompanying Notes and Independent Accountants' Review Report.
4
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MAY 7, 1984 (DATE OF INCEPTION) TO
MARCH 31, 2000
(UNAUDITED)
Paid In Deficit
Capital in Cumulative Accumulated
Common Stock Excess of Currency Advances During the
----------------------- Par Value Translation On Stock Development
Shares Amount of Stock Adjustment Subscriptions Stage
--------- -------- --------- ----------- ------------- -----------
BALANCE, MAY 7, 1984
(DATE OF INCEPTION) 0 $ 0 $ 0 $ 0 $ 0 $ 0
Issuance of common stock for
mineral lease (unknown value)
and expenses at $.005 -
May 7, 1984 600,000 600 2,400 0 0 0
Issuance of common stock for
cash at $.267 - May 7, 1984 8,610 9 2,287 0 0 0
Net loss for the period ended
December 31, 1984 0 0 0 0 0 (5,296)
--------- --------- --------- --------- --------- ---------
BALANCE, DECEMBER 31, 1984 608,610 609 4,687 0 0 (5,296)
Issuance of common stock for
services at $.267 -
February 3, 1985 9,000 9 2,391 0 0 0
Issuance of common stock for
cash at $.267 - February 3, 1985 96,480 96 25,632 0 0 0
Net (loss) for the year ended
December 31, 1985 0 0 0 0 0 (28,128)
--------- --------- --------- --------- --------- ---------
BALANCE, DECEMBER 31, 1985 714,090 714 32,710 0 0 (33,424)
--------- --------- --------- --------- --------- ---------
BALANCE, DECEMBER 31, 1996 714,090 714 32,710 0 0 (33,424)
Contribution to capital -
expenses - 1997 0 0 3,600 0 0 0
Net (loss) for the year ended
December 31, 1997 0 0 0 0 0 (3,600)
--------- --------- --------- --------- --------- ---------
BALANCE, DECEMBER 31, 1997 714,090 714 36,310 0 0 (37,024)
Contribution to capital -
expenses - 1998 0 0 1,300 0 0 0
Issuance of common stock
for cash
$.01 - May 29, 1998 2,000,000 2,000 18,000 0 0 0
$.01 - June 9, 1998 9,000,000 9,000 81,000 0 0 0
See Accompanying Notes and Independent Accountants' Review Report.
5
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY( CONTINUED)
FOR THE PERIOD FROM MAY 7, 1984 (DATE OF INCEPTION) TO
MARCH 31, 2000
(UNAUDITED)
Paid In Deficit
Capital in Cumulative Accumulated
Common Stock Excess of Currency Advances During the
------------------------ Par Value Translation On Stock Development
Shares Amount of Stock Adjustment Subscriptions Stage
--------- -------- --------- ----------- ------------- -----------
Issuance of common stock for
net assets of Fenway
Resources Ltd - $.387 -
August 31, 1998 7,644,067 $ 7,644 $ 2,950,988 $ 0 $ 0 $ 0
Issuance of common stock
for cash
$3.00 - October 29, 1998 2,128 2 6,450 0 0 0
$3.00 - October 29, 1998 670 1 2,031 0 0 0
Net (loss) for the year
ended December 31, 1998 0 0 0 0 0 (370,360)
---------- --------- ----------- -------- -------- -----------
BALANCE, DECEMBER 31, 1998 19,360,955 19,361 3,096,079 0 0 (407,384)
Issuance of common stock for cash
$ .25 - February 4, 1999 500,000 500 124,500 0 0 0
$ 3.00 - February 24, 1999 2,000 2 5,998 0 0 0
$ 3.00 - March 16, 1999 5,000 5 14,995 0 0 0
$ 3.00 - March 17, 1999 4,000 4 11,996 0 0 0
$ 3.00 - March 30, 1999 9,000 9 26,991 0 0 0
$ 3.00 - April 12, 1999 5,000 5 14,995 0 0 0
$ 3.00 - November 3, 1999 32,000 32 95,968 0 0 0
$ 2.25 - November 12, 1999 25,000 25 56,225 0 0 0
$ 2.25 - November 16, 1999 3,000 3 6,747 0 0 0
$ 2.00 - December 7, 1999 7,000 7 13,993 0 0 0
$ 2.25 - December 14, 1999 11,112 11 24,988 0 0 0
Advances on stock subscriptions 0 0 0 0 24,221 0
$3.00 - July 2, 1999 65,000 65 194,935 0 0 0
$3.00 - September 9, 1999 8,074 8 24,213 0 (24,221) 0
(Transferred from advances on
stock subscriptions)
Cumulative currency translation 0 0 0 (17,019) 0 0
adjustment
Net (loss) for the year
ended December 31, 1999 0 0 0 0 0 (623,196)
---------- --------- ----------- -------- -------- -----------
BALANCE, DECEMBER 31, 1999 20,037,141 20,037 3,712,623 (17,019) 0 (1,030,580)
See Accompanying Notes and Independent Accountants' Review Report.
6
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY( CONTINUED)
FOR THE PERIOD FROM MAY 7, 1984 (DATE OF INCEPTION) TO
MARCH 31, 2000
(UNAUDITED)
Paid In Deficit
Capital in Cumulative Accumulated
Common Stock Excess of Currency Advances During the
---------------------- Par Value Translation On Stock Development
Shares Amount of Stock Adjustment Subscriptions Stage
----------- -------- ----------- ----------- ------------- ----------
Issuance of common stock for cash
$1.50 - February 28, 2000, net of cost 228,000 $ 228 $ 339,772 $ 0 $ 0 $ 0
Cumulative currency translation adjustment 0 0 0 (4,065) 0 0
Net (loss) for the three months
ended March 31, 2000 0 0 0 0 0 (210,058)
----------- -------- ----------- --------- --------- -----------
BALANCE, MARCH 31, 2000 20,265,141 $ 20,265 $ 4,052,395 $ (21,084) $ 0 $(1,240,638)
=========== ======== =========== ========= ========= ===========
See Accompanying Notes and Independent Accountants' Review Report.
7
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
FOR THE PERIOD FROM MAY 7, 1984 (DATE OF INCEPTION) TO
MARCH 31, 2000
(UNAUDITED)
May 7, 1984
Three Months (Date of
Ended Inception) to
March 31, March 31,
2000 2000
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (210,058) $(1,240,638)
Adjustments to reconcile net (loss)
to net cash (used) by operating activities
Depreciation 309 2,504
Contributions to capital and stock issued for
expenses and services 0 9,000
Changes in operating assets and liabilities
Cash-held in lawyer's trust account 0 118,578
Interest receivable 0 (1,867)
Accounts receivable 0 14,678
G.S.T. tax refund 1,711 0
Accounts payable (21,798) 60,014
Accrued liabilities 4,090 28,868
----------- -----------
NET CASH (USED) BY OPERATING
ACTIVITIES (225,746) (1,008,863)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Palcan Mining and Cement Corporations 26 (18,563)
Change in Loans receivable (1,589) (7,189)
Purchase of property and equipment (238) (238)
----------- -----------
NET CASH PROVIDED (USED) BY INVESTING
ACTIVITIES (1,801) (25,990)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 340,000 1,144,145
Proceeds from issuance of short term notes (190) 41,916
----------- -----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 339,810 1,186,061
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (4,065) (21,084)
----------- -----------
See Accompanying Notes and Independent Accountants' Review Report.
8
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
FOR THE PERIOD FROM MAY 7, 1984 (DATE OF INCEPTION) TO
MARCH 31, 2000
(UNAUDITED)
May 7, 1984
Three Months (Date of
Ended Inception) to
March 31, March 31,
2000 2000
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 108,198 $ 130,124
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 21,926 0
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 130,124 $ 130,124
========== ==========
SCHEDULE OF NON CASH INVESTING AND
FINANCING ACTIVITIES
Issuance of 400,000 shares of common stock for mineral
lease (unknown value) and expenses - 1984 $ 0 $ 3,000
---------- ----------
Issuance of 9,000 shares of common stock for
services - 1985 $ 0 $ 2,400
---------- ----------
Contribution to capital - expenses - 1997 $ 0 $ 3,600
---------- ----------
Contribution to capital - expenses - 1998 $ 0 $ 1,300
---------- ----------
Issuance of 7,644,067 shares of stock for
Fenway Resources Ltd.- August 31, 1998 $ 0 $2,918,215
---------- ----------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Interest paid $ 0 $ 0
========== ==========
Taxes paid $ 0 $ 0
========== ==========
See Accompanying Notes and Independent Accountants' Review Report.
9
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Business
The Company was incorporated under the laws of the State of Nevada on May
7, 1984 for the primary purpose of developing mineral properties. During
1985, the Company abandoned its remaining assets and settled its
liabilities and was inactive until 1998. In 1998, the Company became
active again by acquiring mineral properties in the Republic of the
Philippines.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months
or less to be cash equivalents.
Property and Equipment
Property and equipment are stated at cost. Major renewals and
improvements are charged to the asset accounts while replacements,
maintenance and repairs, which do not improve or extend the lives of
respective assets, are expensed. At the time property and equipment are
retired or otherwise disposed of, the assets and related depreciation
accounts are relieved of the applicable amounts. Gains or losses from
retirements or sales are credited or charged to income.
The Company depreciates its property and equipment for financial
reporting purposes using the accelerated methods based upon an estimated
useful life of five years.
Accounting Estimates
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were used.
Income Taxes
Provisions for income taxes are based on taxes payable or refundable for
the current year and deferred taxes on temporary differences between the
amount of taxable income and pretax financial income and between the tax
bases of assets and liabilities and their reported amounts in the
financial statements. Deferred tax assets and liabilities are included in
the financial statements at currently enacted income tax rates applicable
to the period in which the deferred tax assets and liabilities are
expected to be realized or settled as prescribed in FASB Statement No.
109, Accounting for Income Taxes. As changes in tax laws or rate are
enacted, deferred tax assets and liabilities are adjusted through the
provision for income taxes.
See Accompanying Notes and Independent Accountants' Review Report.
10
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Compensated Absences
Employees of the corporation are entitled to paid vacations, sick days
and other time off depending on job classification, length of service and
other factors. It is impractical to estimate the amount of compensation
for future absences, and accordingly, no liability has been recorded in
the accompanying financial statements. The corporation's policy is to
recognize the costs of compensated absences when paid to employees.
Net Loss Per Share
The Company adopted Statement of Financial Accounting Standards No. 128
that requires the reporting of both basic and diluted earnings per share.
Basic earnings per share is computed by dividing net income available to
common shareowners by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock. In
accordance with FASB 128, any anti-dilutive effects on net loss per share
are excluded.
Disclosure About Fair Value of Financial Instruments
The Company has financial instruments, none of which are held for trading
purposes. The Company estimates that the fair value of all financial
instruments at March 31, 2000 as defined in FASB 107, does not differ
materially from the aggregate carrying values of its financial
instruments recorded in the accompanying balance sheet. The estimated
fair value amounts have been determined by the Company using available
market information and appropriate valuation methodologies. Considerable
judgement is required in interpreting market data to develop the
estimates of fair value, and accordingly, the estimates are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange.
Long-Lived Assets
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of," requires that long-lived assets be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of
the asset in question may not be recoverable. This standard did not have
a material effect on the Company's results of operations, cash flows or
financial position.
International Currency Translation
For translation of its international currencies, the Company has
determined that the local currencies of its international subsidiaries
are the functional currencies.
See Accompanying Notes and Independent Accountants' Review Report.
11
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 2 DEVELOPMENT STAGE OPERATIONS
As of March 31, 2000, the Company was in the development stage of
operations. According to the Financial Accounting Standards Board of the
Financial Accounting Foundation, a development stage Company is defined
as a company that devotes most of its activities to establishing a new
business activity. In addition, planned principle activities have not
commenced, or have commenced and have not yet produced significant
revenue.
FAS-7 requires that all development costs be expensed during the
development period. The Company expensed $109,058 of development costs
for the three months ended March 31, 2000 and $1,220,638 from May 7, 1984
(date of inception) to March 31, 2000.
NOTE 3 INVESTMENT IN PALCAN MINING AND CEMENT CORPORATIONS
Palcan Mining Corporation
A. Incorporation
Palcan Mining Corporation was incorporated in the Republic of the
Philippines on August 13, 1998 under Republic of the Philippines
Sec. Reg. No. A199811014. The term for which the corporation is to
exist is fifty years from and after the date of issuance of the
certificate of incorporation.
B. Incorporators and directors
Names and nationalities of the incorporators and directors are as
follows:
Name Nationality
--------------------------- -----------------
Rene E. Cristobal Filipino
Carlos A. Fernandez Filipino
Dativa C. Dimaano-Sangalang Filipino
Arthur Leonard Taylor Canadian
Herbert John Wilson Canadian
C. Authorized capital
The authorized capital stock of the corporation is one million
pesos in lawful money of the Republic of the Philippines, divided
into one thousand shares with the par value of one thousand pesos
per share.
See Accompanying Notes and Independent Accountants' Review Report.
12
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 3 INVESTMENT IN PALCAN MINING AND CEMENT CORPORATIONS (CONTINUED)
D. Subscribers and issued capital
25% of the authorized capital stock has been subscribed and at
least 25% of the total subscription has been paid as follows:
Number of
Shares Amount Amount
Name Subscribed Subscribed Paid
---- ---------- ---------- ----
Rene E. Cristobal 200 P 200,000 p 50,000
Carlos A. Fernandez 150 150,000 37,500
Dativa C. Dimaano-
Sangalang 250 250,000 62,500
Arthur Leonard Taylor 1 1,000 1,000
Herbert John Wilson 1 1,000 1,000
Fenway Resources Ltd. 398 398,000 398,000
--------- ----------- -----------
1,000 p 1,000,000 p 550,000
========= =========== ===========
E. The primary purpose of this corporation is to hold the mineral
claims of Central Palawan Mining and Ind. Corp. ("CPMIC"), Palawan
Star Mining Ventures, Inc. ("PSMVI") and Pyramid Hill Mining &
Ind. Corp. ("PHMIC"), their respective MPSA's, ECC's and quarry
shale and limestone and any other commercial minerals found on the
property and to buy, sell, on whole basis only, exchange or
otherwise produce and deal in all kinds of minerals and in their
products and by-products of every kind and description and by
whatsoever process; to purchase, lease, option, locate or
otherwise acquire, own, exchange, sell, assign or contract out the
property and the operation of the property, or otherwise dispose
of, pledge, mortgage, deed in trust, hypothecate and deal in
mining claims, land related to production from the mining claims,
timber lands, water, and water rights and other property, both
real and personal.
Palcan Cement Corporation
A. Palcan Cement Corporation was incorporated in the Republic of the
Philippines on August 12, 1998 under Philippines Sec. Reg. No.
A199811013. The Company has a fiscal year end of December 31.
See Accompanying Notes and Independent Accountants' Review Report.
13
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 3 INVESTMENT IN PALCAN MINING AND CEMENT CORPORATIONS (CONTINUED)
B. Incorporators and directors
Names and nationalities of the incorporators and directors are as
follows:
Name Nationality
--------------------------- ------------
Rene E. Cristobal Filipino
Carlos A. Fernandez Filipino
Dativa C. Dimaano-Sangalang Filipino
Arthur Leonard Taylor Canadian
Herbert John Wilson Canadian
C. Authorized capital
The authorized capital stock of the corporation is five million
pesos in lawful money of the Republic of the Philippines, divided
into five thousand shares with the par value of one thousand pesos
per share.
D. Subscribers and issued capital
The subscribers to the capital stock and the amounts paid-in to
their subscriptions are as follows:
Number of
Shares Amount Amount
Name Subscribed Subscribed Paid
---- ---------- ---------- ----
Rene E. Cristobal 170 p 170,000 p 42,500
Carlos A. Fernandez 150 150,000 37,500
Dativa C. Dimaano-
Sangalang 180 180,000 45,000
Laurie G. Maranda 1 1,000 1,000
Robert George Muscroft 1 1,000 1,000
Arthur Leonard Taylor 1 1,000 1,000
Herbert John Wilson 1 1,000 1,000
Fenway Resources Ltd. 4,496 4,496,000 4,496,000
------ ----------- -----------
5,000 p 5,000,000 p 4,625,000
====== =========== ===========
See Accompanying Notes and Independent Accountants' Review Report.
14
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 3 INVESTMENT IN PALCAN MINING AND CEMENT CORPORATIONS (CONTINUED)
E. Foreign Investments Act of 1991
The Company has applied to do business under the Foreign
Investments Act of 1991, as amended by RA8179, with 90% foreign
equity, with the intention to operate an export enterprise with
the primary purpose of cement manufacturing.
NOTE 4 INVESTMENT IN THE REPUBLIC OF PHILIPPINES - CONSORTIUM AGREEMENT
Consortium Agreement
By letter amendment agreement dated April 30, 1997, all prior agreements
between Fenway and Central Palawan Mining and Industrial Corporation
("CPMIC"), Palawan Star Mining Ventures Inc. ("Palawan Star") and Pyramid
Hill Mining and Industrial Corp. ("Pyramid Hill"), were amended in
accordance with the terms and amendments below:
A. Reference and Interpretation
CPMIC, Palawan Star and Pyramid Hill shall be collectively
referred to as the "Consortium".
B. Joint Venture Mining Company ("JVMC")
I. A Joint Venture Mining Company shall be established.
II. Neither the Consortium nor each member of the Consortium
shall have any equity interest in the JVMC and each member
assigns and waives all right to own and subscribe to the
shares of the JVMC.
III. 10% of net profits of the JVMC shall be paid to the
Consortium as consideration for the transfer of their
respective interests in each of the properties, including
the mining claims, the MPSA and the ECC.
IV. Royalty payments applicable to raw material quarried or
mined from property belonging individually to CPMIC,
Palawan Star and Pyramid Hill will be waived and
surrendered by each member of the Consortium in favor of
the Consortium.
V. The properties, consisting of mining claims, the MPSA, and
the ECC and all rights, title and interest thereto shall be
transferred by each member of the Consortium to the JVMC.
See Accompanying Notes and Independent Accountants' Review Report.
15
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 4 INVESTMENT IN THE REPUBLIC OF PHILIPPINES - CONSORTIUM AGREEMENT
(CONTINUED)
C. Advances in Relation to the Joint Venture Mining Company
I. In consideration of the amendments in the letter amendment
agreement, Fenway shall, upon signing, pay the Consortium
US $100,000 as an advance maintenance payment which shall
be deducted from the royalties payable to the Consortium.
II. JVMC is to advance US $100,000 to each member of the
Consortium per year payable prorata in quarterly payments
as advance royalty payments to be deducted from the
royalties of $0.35 per ton of raw material used in the
manufacture of cement from the properties. Advance royalty
payments shall cease upon commencement of commercial
production of any one of the properties of the Consortium.
D. Joint Venture Cement Manufacturing Company ("JVCC")
A joint venture cement manufacturing company will be formed for
the development of the Palawan Cement Project for the
manufacturing of cement and related cement products.
E. Interest in Net Profit of JVCC
10% interest in the net profit of the JVCC are to go to the
Consortium out of the interest of Fenway in the JVCC.
F. Conditions Precedent to this Agreement
Receipt of an Environmental Compliance Certificate ("ECC") and a
Mineral Production Sharing Agreement ("MPSA") shall be conditions
precedent to the establishment of JVMC and JVCC, and accordingly
the production funding deadline of June 30, 1997 will be extended
and the right to purchase 10% of Fenway's interest is waived.
See Accompanying Notes and Independent Accountants' Review Report.
16
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 4 INVESTMENT IN THE REPUBLIC OF PHILIPPINES - CONSORTIUM AGREEMENT
(CONTINUED)
G. Share Options and Warrants
I. The Consortium members will have options to purchase Fenway
shares, subject to regulatory approvals, as follows:
CPMIC PALAWAN STAR PYRAMID HILL
----------------------------- ------------ -----------------
Nine hundred Thousand Shares 1 million shares 4 million shares
@ CDN $2.00/sh @ CDN $4.00/sh @ CDN $2.00/sh
With 1:1 warrant 1million shares
@ CDN $3.00/sh @ CDN $5.00/sh
exercisable at any time exercisable at any time
II. The common conditions governing both Stock Options and
Warrants in G(I), above, are as follows:
a. The timing of the release of the shares is subject
to the release of the senior financing or funding.
b. They are exercisable only upon receipt of the
Production Funds.
c. The terms and payment are to be determined in a
separate agreement to be entered into between and
among Fenway and the individual members of the
Consortium.
III. Subject to the approval by the relevant Securities
Regulatory Authorities, it is expressly understood that the
stock options and warrants referred to above may not be
exercised by the Consortium until such time as Fenway has
received the Acceptable Funding Commitment, provided
however, that Fenway may issue at any time all or a portion
of the warrants and Consortium may exercise at any time the
warrants in the event the issued and outstanding share
capital of Fenway is increased in order to facilitate
and/or meet the financing requirements to undertake the
Palawan Cement Project.
See Accompanying Notes and Independent Accountants' Review Report.
17
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 5 INVESTMENT IN THE REPUBLIC OF PHILIPPINES - OPTION AGREEMENT - NEGOR RR
CEMENT PROJECT
On July 16, 1998, the Company entered into an option agreement with Negor
RR Cement Corporation, a Philippine corporation, for the purpose of
forming and operating a mining and cement manufacturing company.
The following are the details of the option agreement:
A. For a period of four (4) years following the date of acceptance by
the Company of a commercial feasibility study and report for the
project, which study and report are sufficient to enable the
Company to obtain any and all funds necessary or appropriate to
finance the development and operation of the project, that number
of shares of the Company's $.001 par value common stock equal to
the lesser of (a) two million (2,000,000) such shares, or (b)
equal to ten percent (10%) of the then issued and outstanding
shares of that common stock, at a purchase price of Five United
States Dollars ($5.00) per share.
B. The manufacturing company shall prepare, sign and deliver to Negor
any and all documents and other instruments necessary or
appropriate to vest in Negor a free, carried ownership interest in
the manufacturing company equal to ten percent (10%). As a result
of such ownership interest, Negor shall be entitled to have
allocated to it ten percent (10%) of the net profits, losses and
credits of the manufacturing company.
C. The manufacturing company shall prepare, sign and deliver, to the
Company any and all documents and other instruments necessary or
appropriate to vest in the Company an ownership interest in the
manufacturing company equal to ninety percent (90%). As a result
of such ownership interest, the Company shall be entitled to have
allocated to it ninety percent (90%) of the net profits, losses
and credits of the manufacturing company.
D. The mining company shall prepare, sign and deliver to Negor any
and all documents and other instruments necessary or appropriate
to vest in Negor an ownership interest in the mining company equal
to forty percent (40%). As a result of such ownership interest,
Negor shall be entitled to have allocated to it forty percent
(40%) of the net profits, losses and credits of the mining
company.
E. The mining company shall prepare, sign and deliver to the Company
any and all documents and other instruments necessary or
appropriate to vest in the Company an ownership interest in the
mining company equal to forty percent (40%). As a result of such
ownership interest, the Company shall be entitled to have
allocated to it forty percent (40%) of the net profits, losses and
credits of the mining company.
See Accompanying Notes and Independent Accountants' Review Report.
18
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 5 INVESTMENT IN THE REPUBLIC OF PHILIPPINES - OPTION AGREEMENT - NEGOR RR
CEMENT PROJECT (CONTINUED)
F. The mining company shall prepare, sign and deliver to one or more
third party investors any and all documents and other instruments
necessary or appropriate to vest collectively in those third party
investors an ownership interest in the mining company equal to
twenty percent (20%). As a result of such ownership interest,
those third party investors shall be entitled to have allocated to
it twenty percent (20%) of the net profits, losses and credits of
the mining company.
G. Payment obligations $50,000 at date of signing of the agreement
$50,000 no later than September 30, 1998 (Both payments were made)
At such time as all feasibility studies and similar studies and
reports are completed which are necessary or appropriate for the
construction and operation of the manufacturing facilities and
which will be required prior to the receipt of the funds required
to finance construction of the manufacturing facilities, which
funds may be contributions to capital and proceeds from one or
more borrowing transactions, or either of them, the manufacturing
company shall pay to Negor One Million United States Dollars
($1,000,000.00). In connection with any and all such borrowing
transactions, the acquired claims may be utilized as collateral or
otherwise be pledged to enhance the credit of the borrower.
NOTE 6 LOAN RECEIVABLE
On September 6, 1995, the Company loaned $80,000 to Central Palawan
Mining & Industrial Corp., Palawan Star Mining Ventures Inc. and Pyramid
Hill Mining & Industrial Corp. This loan bears interest at 7% per annum
from date of signing until repaid in full.
NOTE 7 PROPERTY AND EQUIPMENT
The components of the property and equipment are as follows:
Office equipment $ 6,427
Computers 5,360
-------
Total cost 11,787
Less accumulated depreciation 7,067
-------
Total property and equipment $ 4,720
=======
Depreciation expense for the three months ended March 31, 2000 amounted
to $309.
See Accompanying Notes and Independent Accountants' Review Report.
19
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 8 INCOME TAXES
(Loss) before income taxes $(190,058)
--------
The provision for income taxes is estimated as follows:
Currently payable $ 0
--------
Deferred $ 0
--------
A reconciliation of the provision for income taxes
compared with the amounts at the U.S. Federal
Statutory and Foreign rates is as follows:
Tax at U.S. Federal Statutory
income tax rates $ 0
--------
Tax at foreign rates $ 0
--------
Deferred income tax assets and liabilities reflect the
impact of temporary differences between amounts of
assets and liabilities for financial reporting
purposes and the basis of such assets and liabilities
as measured by tax laws
The net deferred tax asset is $ 0
--------
The net deferred tax liability is $ 0
--------
Temporary differences and carry forwards that
give rise to deferred tax assets and liabilities
include the following:
Deferred Tax
--------------------
Assets Liabilities
-------- --------
Net operating losses $310,200 $ 0
Valuation allowance 310,200 0
-------- --------
Total deferred taxes $ 0 $ 0
======== ========
A reconciliation of the valuation allowance is as follows:
Balance, January 1, 2000 $ 261,900
Addition for the three months ended March 31, 2000 48,300
---------
Balance, March 31, 2000 $ 310,200
=========
See Accompanying Notes and Independent Accountants' Review Report.
20
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 9 NET OPERATING LOSS CARRYFORWARDS
The Company has the following net operating loss carryforwards:
Tax Year Amount Expiration date
-------- ------ ---------------
December 31, 1984 $ 5,296 December 31, 1999
December 31, 1985 28,128 December 31, 2000
December 31, 1987 3,600 December 31, 2001
December 31, 1998 370,360 December 31, 2018
December 31, 1999 623,196 December 31, 2019
-----------
$ 1,030,580
===========
NOTE 10 SHORT-TERM NOTES PAYABLE
The Company has two short term loans as follows:
A. Unsecured, 12% note dated June 3, 1998 for
$150,000 Canadian dollars. There is no due
date on the note. $ 103,099
B. Unsecured, 12% note dated September 28,
1998 for $50,000 Canadian dollars. There is no
due date on the note. 34,367
--------
$ 137,466
=========
NOTE 11 STOCK OPTIONS
The Company has stock options outstanding at March 31, 2000 as follows:
Number of Exercise Expiration
Name of Optionee Shares Price Date
--------------------- ------- -------- -------------
Milton M. Schlesinger 200,000 US $3.00 July 4, 2004
Steven Sobolewski 250,000 US $3.00 July 4, 2004
H. John Wilson 495,963 US $3.00 July 4, 2004
A. Leonard Taylor 495,963 US $3.00 July 4, 2004
Laurie G. Maranda 300,000 US $3.00 July 4, 2004
R. George Muscroft 300,000 US $3.00 July 4, 2004
Willi Magill 200,000 US $3.00 July 4, 2004
Detty Sangalang 200,000 US $3.00 July 4, 2004
Rene E. Cristobal 200,000 US $3.00 July 4, 2004
See Accompanying Notes and Independent Accountants' Review Report.
21
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 11 STOCK OPTIONS (CONTINUED)
Number of Exercise Expiration
Name of Optionee Shares Price Date
--------------------- ------- -------- -------------
Carlos Fernandez 200,000 US $3.00 July 4, 2004
Robert Shoofey 180,000 US $3.00 July 4, 2004
Daniel Maarsman 195,000 US $3.00 July 4, 2004
Edward Cardozo 200,000 US $3.00 July 4, 2004
Friedhelm Menzel 200,000 US $3.00 July 31, 2004
William Anderson 200,000 US $3.00 July 31, 2004
J. Roderick Ainsworth 200,000 US $3.00 July 31, 2004
---------
4,016,926
=========
A summary of the all options is as follows:
Balance at January 1, 2000 4,016,926
Options issued 0
Options exercised 0
Options canceled 0
---------
Balance at March 31, 2000 4,016,926
=========
NOTE 12 STOCK WARRANTS
The following warrants are outstanding and applicable to investment in
projects in Palawan, Philippine.
Warrants outstanding as of March 31, 2000.
45,750 Shares at a price of Canadian $5.50 per share if exercised
on or before December 5, 2000
25,250 Shares at a price of Canadian $5.50 per share if exercised
on or before February 25, 2001
28,901 Shares at a price of Canadian $5.50 per share if exercised
on or before May 29, 2001
25,000 Shares at a price of Canadian $5.50 per share if exercised
on or before June 2, 2001
27,000 Shares at a price of Canadian $5.50 per share if exercised
on or before June 6, 2001
2,128 Shares at a price of United States $4.00 per share if
exercised on or before October 29, 2000
670 Shares at a price of United States $4.00 per share if
exercised on or before October 29, 2000
65,000 Shares at a price of United States $4.00 per share if
exercised on or before June 10, 2001
See Accompanying Notes and Independent Accountants' Review Report.
22
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 12 STOCK WARRANTS (CONTINUED)
32,000 Shares at a price of United States $4.00 per share if
exercised on or before February 11, 2001
25,000 Shares at a price of United States $3.00 per share if
exercised on or before September 11, 2001
3,000 Shares at a price of United States $3.00 per share if
exercised on or before September 11, 2001
7,000 Shares at a price of United States $3.00 per share if
exercised on or before March 12, 2001
11,112 Shares at a price of United States $3.00 per share if
exercised on or before December 13, 2001
228,000 Shares at a price of United States $3.00 per share if
exercised on or before February 28, 2002
-------
297,811
=======
NOTE 13 CONSULTING AGREEMENT WITH RELATED PARTIES
The Company assumed a consulting agreement with a former director of
Fenway Resources Ltd. which requires quarterly payments of $5,000
(Canadian dollars).
NOTE 14 INTEREST EXPENSE
The Company incurred $5,820 of interest expense for the three months
ended March 31, 2000.
NOTE 15 OPERATING LEASES
The Company is leasing office facilities in Vancouver, British Columbia,
Canada and Manila, Philippines as follows:
Vancouver
5 year lease expiring February 28, 2001
Monthly rental of $308 plus occupancy costs
Manila
5 year lease expiring April 30, 2000
Monthly rental of $1,754 plus occupancy costs
Future minimum lease payments are as follows:
March 31, 2000 $ 5,450
==========
Rent expense for the three months ended March 31, 2000 is $7,578.
See Accompanying Notes and Independent Accountants' Review Report.
23
FENWAY INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 16 CONTINGENT EMPLOYMENT CONTRACTS
The Company has the following contingent employment contracts that only
become effective in the event of an unfriendly or hostile take over:
Annual Expiration
Title Date Salary Date Renewable
--------------- ---------------- --------------- --------------- --------------
President and
Chief Executive
Officer September 1, 1995 $ 400,000 (CND) August 31, 2000 5 year periods
Secretary and
Chief Financial
Officer September 1, 1995 $ 300,000 (CND) August 31, 2000 5 year periods
Project Manager February 1, 1996 $ 200,000 (CND) August 31, 2000 5 year periods
NOTE 17 FINANCIAL CONSULTING AGREEMENTS
On November 4, 1999, the Company entered into a financial consulting
agreement for the period from October 7, 1999 until April 30, 2000. The
company is obligated to pay a monthly retainer of $10,000 from November
1, 1999 through April 1, 2000.
In January 2000, the company entered into a second financial consulting
agreement that requires the following payments:
January 2000 $7,500
February 2000 7,500
March through June 2000 $5,000 per month
NOTE 18 GOING CONCERN
The company is developing its cement operations in the Philippines and
needs substantial funds to complete the project. Management is proceeding
with its development plans and seeking new investors to finance the
project.
NOTE 19 UNAUDITED FINANCIAL INFORMATION
The accompanying financial information as of March 31, 2000 is unaudited.
In managements opinion, such information includes all normal recurring
entries necessary to make the financial information not misleading.
See Accompanying Notes and Independent Accountants' Review Report.
24
Item 2. Management's Discussion and Analysis or Plan of Operation
THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF
MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT
ESTIMATE THE HAPPENING OF FUTURE EVENTS ARE NOT BASED ON HISTORICAL FACT.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY, SUCH AS "MAY", "SHALL", "WILL", "COULD", "EXPECT", "ESTIMATE",
"ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", OR
SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE
FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN
COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND
CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS,
HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY
IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.
THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN
THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT
TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND
OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA
AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM
AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE
EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY
FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED
ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. NO ASSURANCE CAN BE
GIVEN THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS
SPECIFIED IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION
TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.
Development of the Company. Fenway International, Inc., a Nevada corporation
("Company") was incorporated in the State of Nevada on May 7, 1984 using the
name Nevada-Utah Gold, Inc. for the primary purpose of developing mining
properties. During 1985, we settled our liabilities and were inactive until
1998, when we began acquiring property and mineral interests in anticipation of
developing commercial grade cement production facilities in the Philippines.
Specifically, we acquired the assets of Negor RR Cement Corporation and on or
about August 10, 1998, we acquired the assets of Fenway Resources, Ltd., a
Delaware corporation, which assets included property and mineral interests in
the Philippines. We issued 7,644,067 shares of our $.001 par value common stock
for the assets acquired. On or about September 4, 1998, we filed a Certificate
of Amendment to our Articles of Incorporation changing our name to Fenway
International, Inc. Our executive offices are located at 308-409 Granville
Street, Vancouver, British Columbia, Canada V6C 1T2. Our telephone number is
604.844.2265.
Business of the Company. We plan to develop and construct two large commercial
grade cement production facilities in the Philippines. Our
predecessor-in-interest, Fenway Resources, Ltd., spent more than five years
obtaining the necessary licensing, permits and environmental approvals necessary
to support construction of such facilities on the island of Palawan (the
"Palawan Project"). The necessary permits and environmental approvals for a
proposed facility on the island of Negros Oriental (the "Negros Project") have
already been received. We are required to participate with local corporations in
the Philippines in order to commercially exploit Philippine mineral
2
claims and, therefore, we have incorporated two Philippine corporations. The
organizational chart attached as Exhibit 21 to our Registration Statement on
Form 10-SB filed with the Commission on March 8, 1999 provides a diagram of our
relationships with these entities, which are specified in detail below.
The Negros Project. On or about July 16, 1998, we entered into an option
agreement ("Option Agreement") with Negor RR Cement Corporation, an independent
Philippine corporation, for the purpose of forming and operating a Negros mining
company ("NMC") and a Negros cement manufacturing company ("NCC"). Pursuant to
the Option Agreement, we purchased a 90% equity interest in the Negor RR Cement
Corporation, a Philippine corporation ("Negor Corporation").
The details of the Option Agreement are as follows:
A. For a period of four (4) years following the date of acceptance by us of a
commercial feasibility study and report for the Negros Project, which study
and report are sufficient to enable us to obtain any and all funds
necessary or appropriate to finance the development and operation of the
Negros Project, Negor Corporation has the option to acquire that number of
shares of our $.001 par value common stock equal to the lesser of (a) two
million (2,000,000), or (b) ten percent (10%) of the then issued and
outstanding shares of our common stock, at a purchase price of Five Dollars
($5.00) per share.
B. NMC shall prepare, sign and deliver to Negor Corporation any and all
documents and other instruments necessary or appropriate to vest in Negor
Corporation an ownership interest in NMC equal to ten percent (10%) of the
total issued and outstanding capital stock of NMC. As a result of such
ownership interest, Negor Corporation shall be entitled to have allocated
to it ten percent (10%) of the net profits, losses and credits of NMC.
C. NMC shall prepare, sign and deliver to us any and all documents and other
instruments necessary or appropriate to vest in us an ownership interest in
NMC equal to ninety percent (90%) of the total issued and outstanding
capital stock of NMC. As a result of such ownership interest, we shall be
entitled to have allocated to us ninety percent (90%) of the net profits,
losses and credits of NMC.
D. NCC shall prepare, sign and deliver to Negor Corporation any and all
documents and other instruments necessary or appropriate to vest in Negor
Corporation an ownership interest in NCC equal to forty percent (40%) of
the total issued and outstanding capital stock of NMC. As a result of such
ownership interest, Negor shall be entitled to have allocated to it forty
percent (40%) of the net profits, losses and credits of NCC.NCC shall
prepare, sign and deliver to us any and all documents and other instruments
necessary or appropriate to vest in us an ownership interest in NCC equal
to forty percent (40%) of the total issued and outstanding capital stock of
NMC. As a result of such ownership interest, we shall be entitled to have
allocated to it forty percent (40%) of the net profits, losses and credits
of NCC.
E. NCC shall prepare, sign and deliver to one or more third party investors
any and all documents and other instruments necessary or appropriate to
vest collectively in those third party investors an ownership interest in
NCC equal to twenty percent (20%) of the total issued and outstanding
capital stock of NMC. As a result of such ownership interest, those third
party investors shall be entitled to have allocated to them, in the
aggregate, twenty percent (20%) of the net profits, losses and credits of
NCC.
F. We paid Negor Corporation Fifty Thousand Dollars ($50,000) at the date of
signing of the Option Agreement and Fifty Thousand Dollars ($50,000) on or
prior to September 30, 1998, as specified in the Option Agreement.
At such time as all feasibility studies and similar studies and reports which
are necessary or appropriate for the construction and operation of the
manufacturing facilities (and which will be required prior to the receipt of the
funds to finance construction of the manufacturing facilities) are completed,
NMC has agreed to pay to Negor One Million Dollars ($1,000,000.00) which funds
may be contributions to capital and proceeds from one or more borrowing
3
transactions, or either of them. In connection with any and all such borrowing
transactions, the acquired claims may be utilized as collateral or otherwise be
pledged to enhance the credit of the borrower.
The Palawan Project. Fenway Resources, Ltd., as a British Columbia corporation,
acquired mineral rights to 10,296 hectares in 1992 and mineral rights to 3,200
hectares in 1995 in three (3) contiguous claims on the west central portion of
Palawan Island near Scott Point, Municipality of Sofronio Espanola, Palawan, the
Philippines. We believe Scott Point is a good location because it is a seaward
site providing immediate access to marine transport which will allow us to
transport our products at a low cost to various regional markets in the
Philippines and to other regions in Asia.
We believe that these claims have significant reserves of limestone and shale,
the two main ingredients for the manufacture of Type 1 (heavy construction
quality) Portland cement. We retained Kilborn Engineering Pacific Ltd., now
known as Kilborn-SNC Lavalin Inc., to prepare a project feasibility study, which
was completed in 1995. Our management believes that the study supports the
proposed Palawan Project.
The Palawan Project has been under development for more than five years by us,
in association with local mining and development interests in Palawan.
Explorations by the Philippine Government first confirmed the existence of
limestone deposits in the central part of the main island of Palawan. The
professional feasibility study by Kilborn-SNC Lavalin, Inc. completed for us in
1995 concluded that the plant and quarries can be developed in full compliance
with environmental regulations in the Philippines and should not have any
adverse effect on local communities. Local communities have expressed strong
support for the Palawan Project, which we believe will stimulate local economic
development and employment. Formal application for environmental certification
of the Palawan Project will be submitted to the Philippine Department of
Environment and Natural Resources after receipt of the Mineral Production
Sharing Agreement. The application is currently under departmental review.
In addition to the license application procedures and environmental review
process mandated by the Philippine government, we have conducted discussions
with provincial government officials, with indigenous leaders and with local
landowners who might be affected by the Palawan Project. We have received strong
local support for the Palawan Project as evidenced by the Palawan Council for
Sustainable Development endorsement of the environmental compliance certificate
and letters of recommendation from local government units and endorsement of the
project from indigenous people as evidenced by the National Commission on
Indigenous People's certificate.
Commercial law in effect on Palawan Island requires the participation of local
entities to exploit the island's mineral resources. Two local corporations have
been created and formally registered in compliance with local commercial law and
securities regulation. We own approximately 40% of Palcan Mining Company ("PMC")
which will be responsible for the quarry properties and the production of
crushed stone, both graded and blended, for cement plant processing operations.
PMC will also be responsible for payments of royalties and fees based on the
volumes of quarried stone extracted for cement production. PMC was incorporated
in the Republic of the Philippines on August 13, 1998, and has several common
directors with us. Specifically, Herbert John Wilson, President of the Company,
is an incorporator and director of PMC. Arthur Leonard Taylor, Chief Financial
Officer, Secretary and a director of the Company, is an incorporator and
director of PMC. Rene E. Cristobel and Carlos A. Fernandez, directors of the
Company, are also incorporators and directors of PMC. Rene E. Cristobel and
Carlos Fernandez each hold 10% or more of the issued and outstanding capital
stock of PMC. We own approximately 90% of a second Philippine corporation,
Palcan Cement Company ("PCC"), which will own and operate the Palawan cement
plant and will be responsible for the marketing and distribution of our
products.
We have also continued to assess the market acceptance for products of the
proposed Palawan plant within the Philippines and in export markets. The ability
to produce cement of high quality and reliable uniformity from local materials
is essential to our success and this ability is currently unproven.
Discussions are currently in progress with several design-build groups to
construct and equip the Palawan plant. We are negotiating with Krupps Polysius
to provide the cement plant equipment and with Bilfinger & Berger to engineer
and construct the Palawan Project. These negotiations have not been concluded
and there can be no assurance that either Krupps Polysius or Bilfinger & Berger
will provide equipment or services to us.
4
We have prepared the following schedule for completion of the Negros Project and
Palawan Project which includes forward looking statements which estimate the
happenings of future events. The actual occurrence of these events may differ
materially from those contemplated by this schedule.
================================================================================
Activity Palawan Negros
- --------------------------------------------------------------------------------
Complete permit application process and 06/00-09/00 06/01-09/01
ground testing programs
- --------------------------------------------------------------------------------
Obtain financing 08/00-09/00 08/01-09/01
- --------------------------------------------------------------------------------
Complete land acquisitions for plant sites; 09/00-10/00 09/01-10/01
begin development of port site
- --------------------------------------------------------------------------------
Complete engineering 09/00-09/01 09/01-09/02
- --------------------------------------------------------------------------------
Begin plant construction 03/01 03/02
- --------------------------------------------------------------------------------
Negotiate and execute sales contracts 12/00-12/01 01/02-01/03
- --------------------------------------------------------------------------------
Complete plant construction and begin cement 01/03 01/04
production
================================================================================
The capital costs of the plants, including the construction of all facilities
such as power and ports, are estimated by our engineering consultants to be
approximately $340 million for the Negros Project and approximately $380 million
for the Palawan Project. To conform to investment guidelines promulgated by the
Philippine government, 70% of those capital costs must be financed by loans,
including export credits, and 30% can be financed by equity investments.
The approximately $500 million required in loans may be provided by a consortium
of German banks. Krupp-Polysius, one of the world's largest corporations,
anticipates supplying the cement plant equipment to both the Negros Project and
the Palawan Project and has offered to assist us in its loan negotiations with
these German banks. We anticipate that approximately $215 million may be
received from a registered offering of our common or preferred stock, probably
through brokerage firms located in New York, complemented by one or more private
placements of our common stock. In addition, approximately $110 million may be
provided by contractors for the quarry and power plant which will reduce
Fenway's need for equity financing.
On August 3, 1999, we announced the signing of a Financial Agency Agreement with
First Access Financial Group, Inc., international investment bankers ("First
Access"). In January 2000, this agreement was cancelled.
On August 5, 1999, we announced the appointment of Friedhelm Menzel as resident
general manager for our Philippine cement projects. Mr. Menzel was educated in
Germany, specializing in the study of export marketing and linguistics. Mr.
Menzel was export marketing manager for a leading German garment manufacturer
from 1962 to 1967, at which time he joined the German-based multinational
corporation Krupp Polysius AG, Germany, as Far East Sales Manager. From 1968 to
1994, Mr. Menzel was employed by Krupp Polysius in various capacities relating
to the manufacture and supply of heavy industrial equipment to clients in India,
the middle east and the far east by Krupp Polysius from its various plants. From
1995 to July 1999, Mr. Menzel was General Manager of Krupp Polysius's Philippine
agent, Marsson Industrial Inc., which specialized in the sales and project
finance for cement producing equipment and other heavy industrial equipment
within the Philippines.
Products. We are not currently producing any products or supplying any services
to any third parties. However, we are currently negotiating contracts to supply
cement to our customers from other cement suppliers in order to create markets
for our production as well as cash flow prior to start up. When, and if, we
develop and construct our cement manufacturing facilities, we anticipate
producing commercial quantities of Portland cement. Portland cement is a finely
ground processed material that, when mixed with sand, gravel, water and other
minerals, forms concrete. The raw materials, limestone and shale, are mined,
crushed, and burned in high-temperature rotary kilns, producing a substance
commonly referred to as "clinker". The resulting clinker is then finely
5
ground with small amounts of gypsum to produce Portland cement. From the Palawan
Project, we anticipate producing 2.5 million metric tonnes of Portland cement
per year.
Our products may be subject to numerous foreign government standards and
regulations that are continually being amended. Although we will endeavor to
satisfy foreign technical and regulatory standards, there can be no assurance
that our products will comply with foreign government standards and regulations,
or changes thereto, or that it will be cost effective for us to redesign our
products to comply with such standards or regulations. Our inability to design
or redesign products to comply with foreign standards could have a material
adverse effect on our business, financial condition and results of operations.
Marketing and Sales. We anticipate that all revenues from the sale of our
products will be derived from customers located outside the United States. To
support our overseas customers, we anticipate operating offices outside the
continental United States. There can be no assurance that we will be able to
manage these operations effectively or that we will be able to compete
successfully in international markets or satisfy the service and support
requirements of its customers. In addition, a significant portion of our sales
and operations are subject to significant risks, including tariffs and other
trade barriers, difficulties in staffing and managing foreign subsidiary and
branch operations, currency exchange risks and exchange controls, potentially
adverse tax consequences, and the possibility of difficulty in accounts
receivable collection. There can be no assurance that any of these factors will
not have a material adverse effect on our business, financial condition and
results of operations.
We anticipate that initially the Portland cement produced by the Negros and
Palawan Projects will be marketed partly in the Philippines, with expanded
capacity providing cement to foreign markets, such as South East Asia. Nearby
Asian export markets for cement products have a current volume exceeding 90
million tonnes per year moving in trade. Entities that have previously taken
most Philippine cement exports have been countries bordering the South China
Sea, those close to the Malacca Straits and other countries in the South Asia
Sub-Continent. Our strategy for growth is substantially dependent upon our
ability to market and distribute products successfully. Other companies,
including those with substantially greater financial, marketing and sales
resources, compete with us, and have the advantage of marketing existing
products with existing production and distribution facilities. There can be no
assurance that we will be able to market and distribute products on acceptable
terms, or at all. Our failure to market our products successfully could have a
material adverse effect on our business, financial conditions or results of
operations.
We anticipate that the construction industries in the Target Countries will
experience positive growth, ranging from modest growth expected for Japan, to
more significant growth anticipated in the lesser developed countries, such as
Vietnam, Thailand, the Philippines and Indonesia. The location of the Palawan
and the Negros Projects provides easy access to the Target Countries.
Raw Materials. For the Palawan Project, we have acquired mineral rights to
13,496 hectares in three contiguous claims on the west central portion of the
Palawan Island near Scott Point. The claims are underlain by significant
reserves of limestone and shale, the two main ingredients for the manufacture of
Type I Portland cement. Chemical analysis by the Philippine Bureau of Mines and
Geosciences, Technical Services Division, indicates that the site of the Palawan
Project contains commercial quantities of these raw materials.
The Negor Corporation (in which we hold a 90% equity interest) has mineral
claims on the island of Negros Oriental in the Philippines, which include
significant reserves of limestone and shale suitable for the manufacture of
Portland cement. Limestone mineral claims lie near the coastal towns of
Guihulngan and La Libertad on the island of Negros Oriental. Geological studies
suggest that the raw resources on those claims could sustain significant cement
manufacturing operations. We have received an Environmental Compliance
Certificate and have entered into the Mineral Production Sharing Agreement
required by the Philippine government for all mining projects in the Philippines
before mining operations can proceed.
6
Distribution and Transportation. Distribution in the cement industry is
typically conducted using agency contracts. The agent accepts product in bulk or
bagged from the plant at a specified price. The agent then takes responsibility
for marketing within the region(s) served; for transport and delivery to
customers; and for selling to large-volume customers, retailers or intermediate
wholesalers. The agent marks up the price to cover all costs of distribution.
The final price to consumers at retail accommodates markups as appropriate in
the distribution process. An allowance is included in the markup applied at each
step as profit for product handling and sale.
The Palawan plant will adopt the customary methods typically used in the
Philippines for distribution of cement products, with the following variations:
1. As the Palawan plant will ship to markets in different countries, not one
but several distribution agencies probably will be utilized;
2. Shipments of bagged or bulk product by truck will be for the emerging
market on Palawan;
3. Most products will be shipped from the Palawan plant in bulk by sea to
reach the Target Countries;
4. Transfer of Palawan product from vessels, bulk storage, bagging (as needed)
and distribution by truck will occur within regional markets in the Target
Countries; and,
5. Intra-regional transportation to customers will be minimized by the
locations of regional facilities for the receipt and handling of Palawan
plant products.
Costs of the first water crossing from Palawan to Philippine markets will be
less than typical costs associated with the transport of equivalent tonnage in
bulk by truck from competing plants. Overall, we believe that the costs of
product distribution to Philippine regional markets from the new plant in
Palawan pursuant to agency contracts will be equivalent to similar costs for
competing plants serving the same markets. If necessary to assure entry to
Philippine regional markets, all or part of the costs of the initial water
crossing can be absorbed at the Palawan plant by adjusting the price for product
placed to agents for distribution. Given the cost advantages of marine
transport, this will not be necessary as a general condition, but can be done
where and as needed in special situations.
The Palawan plant is ideally located for export of cement products to regional
markets in the Target Countries. Export sales will be developed and sustained
from the Palawan plant, as a means of broadening market presence, preserving
high utilization of plant assets and pursuing the best combination of available
customer relationships and opportunities for product sales and profits. Direct
relationships with large-volume customers and distribution relationships with
importers will be established in receptive countries, to assure that export
options remain available for the Palawan plant at all times.
We believe that we can provide our products to markets in the Target Countries,
subject to import barriers. Overt barriers have not been present in the
countries where Philippine cement has been accepted in the past, and import
duties in these and other locations continue to decline. Additional
liberalization of trade in East and South Asia may expand opportunities for
general acceptance of products from the Palawan plant. If necessary in
particular situations, entry may be eased by adjusting prices to absorb some of
the costs of marine transport and import costs. Although not necessary as a
general condition, some absorption of transport costs has been assumed to apply,
for purposes of project valuation, to all products shipped from Palawan.
Employees. We currently have eight full-time employees. Our management
anticipates using consultants for business, accounting, engineering, and legal
services on an as-needed basis. Management has senior company experience in mine
management, mineral processing, engineering, construction, administration, and
marketing. All members of management have held senior positions in international
companies or organizations.
Competition. As a result of the lack of product differentiation and the
commodity nature of cement, the cement industry is quite competitive.
Competition is based generally on price and, to a lesser extent, quality and
service. We may compete with national, international and regional cement
producers in its target markets. Many of our competitors are larger and have
significantly greater resources than us. The prices that we charge our customers
probably won't be materially different from the prices charged by other cement
producers in the same markets. Accordingly, profitability in the cement industry
is generally dependent on the level of cement demand and on a cement producer's
ability to
7
contain operating costs. Prices are subject to material changes in response to
relatively minor fluctuations in supply and demand, general economic conditions
and other market conditions beyond our control. There can be no assurance that
prices will not decline in the future or that such declines will not have a
material adverse effect on our financial condition or results of operations.
Our anticipated cost per tonne of production will be directly related to the
number of tonnes of cement manufactured; and decreases in production will
increase our fixed cost per tonne. Equipment utilization percentages can vary
from year to year based upon demand for our products or as a result of equipment
failure. Much of our anticipated manufacturing equipment requires significant
time to replace and is very costly to replace or repair. Although we will
attempt to maintain sufficient spare parts to avoid long periods of shutdown in
the event of equipment failure, there can be no assurance such shutdowns can be
avoided.
Compliance with Environmental Laws. The proposed site for the Palawan Project is
near the ancestral lands of a Filipino indigenous people. We have received
support from 92% of the indigenous people affected as evidenced by the signing
of the National Commission on Indigenous People's certificate on February 28,
2000. In the event of such an accident, we, or any successor-in-interest, could
be held liable for any damages that result and any such liability could exceed
our financial resources. In addition, there can be no assurance that in the
future we will not be required to incur significant costs to comply with
environmental laws and regulations relating to hazardous materials. There can be
no assurance that we will not be required to incur significant costs to comply
with current or future environmental laws and regulations nor that our
operations, business or assets will not be materially or adversely affected by
current or future environmental laws or regulations; provided, however, that we
have retained SNC Lavalin, a Canadian firm, and GAIA South, Inc., a Philippine
firm, to prepare and file the requisite environmental impact statements
necessary for us to receive our Environmental Compliance Certificate for the
Palawan Project (an Environmental Compliance Certificate has already been issued
for the Negros Project).
Our management believes that both the Palawan Project and the Negros Project can
operate cleanly and without significant pollution in an environmentally safe
manner. However, certain environmental consequences associated with mining are
unavoidable. The primary environmental damage from the mineral industry occurs
during the extraction of raw materials, which requires large amounts of water
and energy. We believe that with the utilization of modern technology and
careful planning we can significantly reduce the environmental impact of the
manufacturing of cement. As we are not presently manufacturing any products, our
management believes we will not have any significant material expenditures in
the next fiscal year related to the cost of compliance with applicable
environmental laws, rules and regulations. However, at some time in the future,
our operations may involve the controlled use of explosive materials. As a
result, we may be subject to various laws and regulations governing the use,
manufacture, storage, handling, and disposal of such materials. We cannot
presently estimate the potential costs of complying with the applicable foreign
environmental laws.
Results of Operations. We have not yet realized any revenue from operations, as
our cement manufacturing facilities are presently in the development stage.
Liquidity and Capital Resources. At December 31, 1999, we had cash resources of
$130,124 and a loan receivable of $92,400. Employment agreements with H. John
Wilson and A. Leonard Taylor obligate us to payments totaling $5,850 per month:
$3,250 to Mr. Wilson and $2,600 to Mr. Taylor. An Employment agreement with R.
George Muscroft obligates us to payment of $3,250 per quarter to Mr. Muscroft.
The cash and equivalents constitute our present internal sources of liquidity.
Because we are not generating any revenues at this time from our operations, our
only external source of liquidity is the sale of our capital stock. We are
attempting to acquire funding for both the Palawan Project and the Negros
Project from German financial institutions with assistance from Krupp-Polysius,
a German machinery manufacturing, engineering, trading and financial services
company. Krupp-Polysius has agreed to help us arrange the export credits and the
required loan guaranties for the loans required for both projects.
Our Plan of Operation For Next 12 Months. We presently anticipate that initial
construction on the Palawan Project will begin in the first quarter of year
2001, with production of cement beginning in 2003. The Palawan Project, if
8
completed pursuant to our current schedule, will be the only cement
manufacturing facility on Palawan Island. We anticipate that the Negros Project
will consist of a cement producing facility capable of producing 1.5 million
tonnes per year of Portland cement with expansion capacity to 3 million tonnes
per year. We have solicited and received bids for an exploratory drilling
program, pursuant to which we hope to confirm the extent of limestone reserves
on Negor Corporation's Negros Oriental Province mineral claims in the central
islands of the Philippines. On June 9, 1999, we announced that we had signed a
contract with Roctest Machinery and Drilling Corporation to core drill 2,000
meters for test sampling of the limestone deposits at the Negros Project. The
core drilling will commence as soon as we obtain the necessary regional work
licenses and permits.
Our success is materially dependent upon our ability to satisfy additional
financing requirements. We are reviewing our options to raise substantial equity
capital. We cannot personally estimate when we will begin to realize positive
gross revenue. In order to satisfy our requisite budget, management has held and
continues to conduct negotiations with various investors. We anticipate that
these negotiations will result in additional investment income for us. To
achieve and maintain competitiveness, we may be required to raise additional
substantial funds. We anticipate that we will need to raise significant capital
to develop, promote and conduct its operations. Such capital may be raised
through public or private financing as well as borrowing and other sources.
There can be no assurance that funding for our operations will be available
under favorable terms, if at all. If adequate funds are not available, we may be
required to curtail operations significantly or to obtain funds by entering into
arrangements with collaborative partners or others that may require us to
relinquish rights to certain products and services that we would not otherwise
relinquish.
Foreign Currencies. Currency risks and fluctuations in exchange rates are an
important consideration for lenders and investors. We anticipate that many of
our transactions will involve the use of the Philippine Peso, the official
currency of the Philippines. In 1998, the Philippine Peso was volatile, as were
the currencies of the Target Countries. From January to October 1999, the
Philippine Peso and the currencies of the Target Countries strengthened
considerably in comparison to a similar period in 1998. Even if we are able to
obtain all funds necessary to finance the development and operation of the
Palawan Project and the Negros Project, and a commercially viable amount of
Portland cement can be produced, there can be no assurance that foreign
currencies and exchange rates will remain stable and that we will be profitable.
The exchange rates of the Philippine Peso and the currencies of the Target
Countries could have a material adverse effect on our business, financial
position and results of operation.
Manufacturing Our Products. Our present business plan, which is subject to the
availability of financing, weather conditions, the political climate in the
Philippines, and other factors beyond our control, anticipates the completion of
construction of both the Palawan Project and the Negros Project in or before the
year 2002. Assuming completion of the two facilities, we may be the largest
manufacturer of cement in the Philippines.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
3.1 Corporate Charter of Nevada/Utah Gold Inc. (Charter document)*
9
3.2 Bylaws of Nevada/Utah Gold Inc. (Instrument defining the rights of
Security holders)*
3.3 Articles of Incorporation of Nevada/Utah Gold Inc. (Charter document)*
3.4 Certificate of Amendment to the Articles of Incorporation of
Nevada/Utah Gold Inc. authorizing the name change (Charter document)*
3.5 Certificate of Amendment to the Articles of Incorporation of Fenway
International Inc. authorizing issuance of additional shares*
5. Opinion Re: Legality (not applicable)
8. Opinion Re: Tax Matters (not applicable)
10.1 Option Agreement Regarding Negor RR Cement Corporation Project*
10.2 Agreement of Purchase and Sale of Assets between Fenway Resources Ltd.
and Nevada/Utah Gold, Inc. dated August 10, 1998*
10.3 Employment Agreement (H. John Wilson)*
10.4 Employment Agreement (A. Leonard Taylor)*
10.5 Employment Agreement (R. George Muscroft)*
10.6 Memorandum of Agreement (Dated August 29, 1996 by and between Central
Palawan Mining & Industrial Corporation and Fenway Resources Ltd.)*
10.7 Memorandum of Agreement (Dated November 11, 1996 by and between
Palawan Star Mining Ventures, Inc. and Fenway Resources Ltd.)*
10.8 Memorandum of Agreement (Dated November 11, 1996 by and between
Pyramid Hill Mining & Industrial Corporation and Fenway Resources
Ltd.)*
10.9 Amendment to MOA and other Agreements dated March 21, 1997*
10.10 Agreement (Dated June 29, 1999) by and between First Access Financial
Group, Inc. and Fenway International, Inc.***
10
21 Corporate Chart*
27 Financial Data Schedule
* Previously filed as exhibits to Registration Statement on Form 10-SB
filed on March 8, 1999.
** Previously filed as exhibits to Amendment No. 1 to Form 10-SB filed on
August 13, 1999.
*** Previously filed as exhibits to Amendment No. 2 to Form 10-SB filed on
November 5, 1999.
**** Included in Financial Statements.
11
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 in the City of Vancouver, British Columbia, on July 25, 2000.
Fenway International, Inc.,
a Nevada corporation
By: /s/ H. John Wilson
------------------
H. John Wilson
Its: President
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Fenway International, Inc.
By: /s/ Arthur Leonard Taylor July 25, 2000
--------------------------------------
Arthur Leonard Taylor
Its: Secretary, Vice President and Director
By: /s/ Robert George Muscroft July 25, 2000
--------------------------------------
Robert George Muscroft
Its: Vice President and Director
By: /s/ Rene Cristobel July 25, 2000
---------------------------------------
Rene Cristobel
Its: Director
By: /s/ Carlos A. Fernandez July 25, 2000
--------------------------------------
Carlos A. Fernandez
Its: Director
12