United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the Period Ended July 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the Transition Period From
_______________ to_______________
Commission file number 0-22636
CANMAX INC.
___________________________________________________________
(Exact name of registrant as specified in its charter)
Wyoming 75-2461665
______________________________ ____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 W. Carpenter Freeway
Irving, Texas 75039
______________________________ ____________________
(Address of principal
executive offices) (Zip Code)
(214) 541-1600
______________________________________________________________________
(Registrant's telephone number, including area code)
Not applicable
______________________________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter periods 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______
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.
Common Stock, No Par Value----5,012,869 shares as of September 11,1996.
CANMAX INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
July 31 October 31
1996 1995
ASSETS
Current Assets:
Cash $ 1,174,443 $ 477,364
Accounts receivable, net 609,304 1,221,458
Inventory (Note B) 336,183 474,481
Prepaid expenses and other 166,191 76,259
Total current assets 2,286,121 2,249,562
Property and equipment at cost
less accumulated depreciation
and amortization of $1,833,950
in 1996 and $1,568,324 in 1995 1,451,559 1,634,325
Capitalized software costs, net
of accumulated amortization of
$550,003 in 1996 and $381,811
in 1995 574,853 614,171
Intellectual property rights,
net of accumulated amortization
of $613,082 in 1996 and $497,005
in 1995 57,091 173,168
Other assets 84,927 30,676
$ 4,454,551 $ 4,701,902
See accompanying notes.
CANMAX INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets, continued
(Unaudited)
July 31 October 31
1996 1995
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,107,943 $ 1,290,263
Accrued liabilities 625,648 511,641
Deferred revenue 454,796 586,836
Current portion of leasehold
obligation 126,485 109,475
Advance from shareholder (Note D) 150,481 220,000
Total current liabilities 2,465,353 2,718,215
Leasehold obligation 201,545 200,015
Development obligation (Note C) - 65,000
Note Payable (Note E) 63,157 -
Shareholders' equity;
Common stock, no par value,
44,169,100 shares authorized;
5,012,869 and 3,952,775 shares
issued and outstanding in 1996
and 1995, respectively. 18,372,574 18,163,634
Option to purchase common stock
(Note C) 4,861,659 4,861,659
Deficit (21,509,737) (21,306,621)
Total shareholders' equity 1,724,496 1,718,672
$ 4,454,551 $ 4,701,902
See accompanying notes.
CANMAX INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
For the three months For the nine months
ended July 31 ended July 31
1996 1995 1996 1995
Revenues:
Software, hardware and
product licenses $ 353,441 $ 905,344 $ 1,769,038 $ 1,580,221
Development 2,075,642 1,112,611 4,381,064 2,664,517
Service agreements 987,662 573,541 2,425,530 1,609,563
3,416,745 2,591,496 8,575,632 5,854,301
Costs and expenses:
Cost of software,
hardware and product
license revenues 143,007 735,020 1,249,418 1,104,320
Cost of development
revenues 773,616 523,204 1,706,682 1,505,516
Customer service 564,974 596,053 1,594,714 1,733,206
Product development 436,464 429,410 1,109,245 2,030,296
Selling and administration 1,153,657 1,058,923 3,124,695 3,327,335
3,071,718 3,342,610 8,784,754 9,700,673
Net income (loss) $ 345,027 $ (751,114) $ (209,122) $ (3,846,372)
Net income (loss) per
common and common
equivalent share $.05 $(.15) $(.04) $(.83)
Weighted average common
and common equivalent
shares outstanding
(Note F) 6,346,115 4,872,573 4,972,985 4,609,321
See accompanying notes.
CANMAX INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
For the nine months
ended July 31
1996 1995
Net loss $ (209,122) $ (3,846,372)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 656,458 652,398
Writedown of inventory 217,623 -
Writedown of investment 43,675 -
Loss on disposal of assets 9,452 -
Changes in assets and liabilities:
Accounts receivable 612,154 804,331
Inventory (79,325) (178,115)
Prepaid expenses and other (89,932) (91,190)
Accounts payable (182,320) 305,863
Accrued liabilities 114,007 (56,880)
Deferred revenue (132,040) 469,946
Net cash provided by (used in)
operations 960,630 (1,940,019)
Investing activities:
Purchase of property and
equipment (203,426) (177,080)
Capitalized software costs (128,874) -
Increase in other assets (54,251) -
Net cash used in investing activities (386,551) (177,080)
Financing activities:
Net proceeds from issuance of
common stock 208,940 2,126,000
Payments on leasehold obligation (18,540) (76,405)
Increase (decrease) in development
obligation (65,000) 250,000
Proceeds from borrowing 63,157 -
Advances from shareholder - 250,000
Repayment of shareholder advance (69,519) (107,200)
Net cash provided by financing
activities 119,038 2,442,395
Effect of exchange rate changes on cash 3,962 (5,288)
Net increase in cash 697,079 320,008
Cash at beginning of period 477,364 10,581
Cash at end of period $ 1,174,443 $ 330,589
See accompanying notes.
CANMAX INC.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three month period and
nine month period ended July 31, 1996 are not necessarily indicative
of the results that may be expected for the year ended October 31,
1996. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual
report on Form 10K for the year ended October 31, 1995. Certain
amounts in the 1995 consolidated statement of operations and
consolidated statement of cash flows have been reclassified to conform
with the 1996 presentation.
NOTE B - INVENTORY
Inventory consists of raw materials and finished products, primarily
computer hardware, software, and components for sale to software
licensees.
July 31, 1996 October 31, 1995
Raw Materials $ - $ 75,040
Finished Products 336,185 399,441
$ 336,185 $ 474,481
NOTE C - EDS AGREEMENT
The Company signed agreements with Electronic Data Systems Corporation
("EDS") in April 1993 which were amended in October 1994. Under the
terms of the amended agreements, EDS markets the Company's software
services and hardware technology to the retail petroleum marketplace
exclusively, and the Company offers EDS the right to participate with
its customers and prospective customers. EDS provided $2,600,000 in
cash of which $2,000,000 was used for product development, $500,000
was used to support the Company's marketing efforts, and $100,000 as
consideration for a software license to EDS. EDS also provided
$2,000,000 in services to the Company.
In connection with the above agreements, EDS received an option (the
EDS Option) to purchase up to 25% of the common stock of the Company
at an exercise price of not less than 75% of the market value of the
common stock at the time of exercise, minus $4,000,000, which will be
reduced by royalties or similar payments received by EDS from any
licensing of the Company's product other than through EDS. The stock
option is exercisable at EDS' option any time between April 22, 1994
and April 22, 1998.
The Company accounted for the transaction as follows:
$4,000,000 as an option to purchase common stock
$ 500,000 as a deferred marketing credit with respect to
the cash intended for marketing support and
$ 100,000 as revenue with respect to the software license.
During 1994, the Company purchased services from EDS valued at
$1,972,329. By agreement, $861,659 of this amount was not paid by the
Company and has been added to the original $4,000,000 option amount.
The balance, $1,110,670, was offset against EDS' liability to the
Company for site licenses sold to EDS.
In connection with prospective business opportunities with major oil
companies, the Company and EDS jointly incurred $2,130,130 in product
development costs. EDS funded that total cost, which included
reimbursing the Company for $1,679,977 in expenses paid by the
Company. By agreement, the Company owed EDS for one-half of the total
cost. That development obligation for $1,065,065, and other amounts
due to EDS of $34,935 were converted into 229,167 common shares of the
Company on November 15, 1994. The price per share of $4.80 was
determined pursuant to agreement with EDS and represented 75% of
market value. In fiscal 1995, EDS and the Company jointly incurred
$346,190 in product development costs. By agreement the Company owed
EDS for one half of the total cost. On April 20, 1995, the $173,095
development obligation due to EDS was converted into 36,061 common
shares of the Company at a conversion rate of $4.80 per share. The
balance of the outstanding amounts owed to EDS at October 31, 1995
have been repaid in full.
During 1994, the Company sold EDS 788 site licenses for $1,810,670.
Pursuant to the contract, the amount receivable for this transaction
was used to offset amounts payable to EDS of $1,110,670 and to settle
a disputed $400,000 liability with respect to deferred marketing
funding that arose from an amendment to the original agreements with
EDS. The balance of $300,000 was received in cash after October 31,
1994.
NOTE D - ADVANCES FROM SHAREHOLDERS
During the first quarter of 1995, a director, W. Thomas Rinehart,
advanced the Company $250,000. The advance was unsecured and had an
interest rate of 1% above the then current prime rate. The principal
balance is being repaid in weekly installments. Principal payments
totaling $53,365 were made during the quarter ended July 31, 1996.
NOTE E - NOTE PAYABLE TO BANK
During the second quarter of 1996, a bank advanced the Company
$63,157. The note is secured by certain investments of the Company.
Monthly payments of $1,523 are due commencing August 15, 1996 through
August 15, 2000, at which time, all remaining unpaid principal and
interest becomes due. The interest rate on the note floats over the
term of the loan at the bank's prime borrowing rate plus one percent.
NOTE F - NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE
Net income (loss) per common and common equivalent share is based upon
the weighted average number of common shares outstanding, and when
dilutive, common equivalent shares outstanding during the period.
Common equivalent shares consist of stock options (using the treasury
stock method) and the EDS Option (Note C).
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Revenue
During the third quarter of 1996, the Company had revenues of
$3,416,745, an increase of $825,249 or 31.8% over the third quarter of
1995. For the nine months ended July 31, 1996 the Company had revenue
of $8,575,632, an increase of $2,721,331 or 46.5% over the comparable
period in 1995. The improvement in revenue is a result of moderate
growth in software revenues from the Company's proprietary software
product C-Serve, increased hardware revenues, improved service
agreement revenues and significant growth in development revenue as
the Company completed a project to develop a preliminary (non
scanning) point of sale software application in UNIX for The Southland
Corporation (SLC) and commenced a project to produce a scanning point
of sale application and other associated inventory, merchandising and
back office functions for SLC in a Windows NT environment.
Software, hardware and product license revenue for the third quarter
of 1996 was $353,441, a decrease of $551,901 or 61.0% over the third
quarter of 1995. The decrease is primarily due to the sale during 1995
of software and hardware components to SLC in accordance with their
contract which did not occur during the third quarter of 1996. The
provision of these items to SLC under their contract commenced during
1995 and concluded during the first quarter of 1996. Software,
hardware and product license revenue increased 24.7% from the second
quarter of 1996 due to a slight increase in the sale of the Company's
proprietary software and the sale of other software licenses to SLC in
relation to current projects.
For the nine months ended July 31, 1996 the Company had software,
hardware and product license revenue of $1,769,039 an increase of
$188,818 or 11.9% over the comparable period in 1995. This increase
was primarily due to the increased sale of hardware components to SLC
offset by a decrease in sales of software products.
Development revenue for the third quarter of 1996 was $2,075,642, an
increase of $963,031 or 86.6% over the third quarter of 1995. While
development revenue from the base contract with SLC declined in
accordance with the terms of the contract compared with the same
period in 1995, the Company recognized additional development revenue
of $398,320 for work associated with a contract between the Company
and NCR Corporation (NCR) to develop a preliminary (non scanning)
point of sale software application in UNIX for SLC. This project was
completed in July 1996. Further, the Company recognized additional
development revenue of $1,218,990 for work performed under agreement
with NCR and SLC to develop a scanning point of sale application for
SLC and other associated inventory, merchandising and back office
functions, running in a Windows NT environment. No such revenue
was recorded in 1995.
Development revenue increased 100.2% from the second quarter of 1996
due to the work performed under the agreement with NCR and SLC to
produce a Windows NT based point of sale application.
For the nine months ended July 31, 1996 the Company had development
revenue of $4,381,064, an increase of $1,716,547 or 64.4% over the
comparable period in 1995. The increase is due to the factors noted
above.
Service agreements revenue for the third quarter of 1996 was $987,662,
an increase of $414,121 or 72.2% over the third quarter of 1995. This
improvement results from an increase in revenue from the 24 hour/7 day
a week help desk services of 62.2%, reflecting an increase in the
number of sites supported from 2748 as of July 31, 1995 to 5798 as
of July 31, 1996. While the number of sites more than doubled, revenue
increased at a lower rate due to the structure of the support contract
with SLC which provided for a minimum payment until a certain volume of
support calls was reached. In addition the Company recorded service
revenue of $120,474 for work associated with a contract between the
Company and NCR to develop a (non scanning) point of sale software
application in Unix for SLC. This project was completed in July 1996.
No such revenue was recorded in 1995. These increases were offset by a
reduction in installation and training revenue resulting from a decrease
in the number of sites installed and trained in 1996 compared with 1995
for The Army and Air Force Exchange.
For the nine months ended July 31, 1996, the Company recorded service
revenues of $2,425,529, an increase of $815,966 or 50.7% over the
comparable period in 1995. This improvement results from an increase
in revenue from the 24 hour/7 day a week help desk services reflecting
an increase in the number of sites supported from 2503 as of November
1, 1994 to 2748 as of July 31, 1995 compared with an increase from
4158 as of November 1, 1995 to 5798 as of July 31, 1996. Further, the
Company recorded $520,477 in service revenue for the nine months ended
July 31, 1996 for work associated with a contract between the Company
and NCR to develop a preliminary (non scanning) point of sale software
application in UNIX for SLC. No such revenue was recorded in 1995.
These increases were offset by a reduction in installation and
training revenue resulting from a decrease in the number of sites
installed and trained in 1996 compared with 1995 for The Army and Air
Force Exchange.
Gross Margin
Gross margin as a percentage of software, hardware, product licenses
and development revenue was 62.3% for the third quarter of 1996
compared with 37.6% for the same period in 1995. Gross margin as a
percentage of software, hardware, product licenses and development
revenue for the nine months ended July 31, 1996 was 51.9% compared
with 38.5% for the comparable period in 1995.
This increase is due to the following:
Gross margin on software sales was 66.7% for the third quarter of 1996
compared with 38.1% for the same period in 1995. This improvement was
due to a change in mix of products sold away from low margin products
sold to SLC during the third quarter 1995 to a mix that is more
representative, of higher margin products sold during the third
quarter of 1996. Gross margin on hardware sales was 37.7% for the
third quarter of 1996 compared with -16.7% for the same period in
1995. The improvement in the third quarter of 1996 was due to the sale
of hardware with higher than normal margins compared with the third
quarter of 1995 which was impacted by an inventory writedown of slow
moving and obsolete items.
For the nine months ended July 31, 1996 the gross margin on software
sales was 46.4% compared with 40.6% for the same period in 1995. For
the nine months ended July 31, 1996 the gross margin on hardware sales
was 28.8% compared with 18.5% for the same period in 1995. These
improvements were principally due to the reasons noted above. As
previously reported, gross margins on software, hardware and product
license revenue were negatively impacted by a $217,623 writedown of
software and hardware inventory recorded in the second quarter of
1996.
Gross margin for development revenue for the third quarter of 1996 was
62.7% compared with 53.0% for the same period in 1995. For the nine
months ended July 31, 1996, the gross margin on development revenue
was 61.0% compared with 43.5% for the same period in 1995. The
improvement for the three month period and nine month period ended
July 31,1996 compared with the same period in 1995 is a result of
improved profit margins negotiated on the development projects
mentioned above. Gross margins increased from 50.9% for the second
quarter of 1996 to 62.7% for the third quarter of 1996 as a result of
continued improvement in the margin on development contracts.
Expenses
Customer service costs for the third quarter of 1996 decreased 5.2%
compared with the same period in 1995. For the nine months ended July
31, 1996 customer service costs decreased 8.0% compared with the same
period in 1995. In both cases, the decline in cost is due to lower
operating costs for the service arising from increased efficiencies
and lower overall expenditure levels.
Product development costs increased from $429,410 in the third quarter
of 1995 to $436,464 for the third quarter of 1996, an increase of
3.0%. This was due to an increase in investment in product development
funded by the Company.
For the nine months ended July 31, 1996 product development costs
declined from $2,030,296 for the same period in 1995 to $1,109,245, a
reduction of 45.4%. The reduction was due to an overall reduction in
product development funded by the Company and, as previously reported,
due to the capitalization of software development costs amounting to
$128,874 relating to a new credit card processing network interface
the Company developed during the first quarter of 1996.
Selling and administrative expenses increased 8.9 % for the third
quarter of 1996 compared with the third quarter of 1995, predominately
as a result of the establishment of a business development unit
responsible for identifying new business opportunities and project
management. These costs were previously recorded as development costs.
Selling and administrative expenses declined 6.1% for the nine months
ended July 31, 1996 compared with the same period in 1995. These cost
reductions are a result of lower expenditure levels and cost savings
arising from the reduction in staffing levels and improved supply
contracts for certain services offset by the costs of the business
development unit as noted above.
During the quarter ended July 31, 1996, the Company announced it would
close its wholly owned subsidiary Dataplane Technologies Inc. on
August 31, 1996. Dataplane had designed and developed certain
communication processor boards which allow C-Serve to handle some of
the communication protocols and device interfaces used in the
industry. The Company determined that the technology had a limited
life and it would no longer continue to develop and manufacture the
technology. Canmax has licensed the manufacture of the technology to
Bass Inc. for the next 3 years and anticipates providing for future
requirements through Bass. The costs of closing the subsidiary have
been provided in the quarter and amount to less than $10,000.
As a result of the foregoing, the Company incurred a net profit of
$345,027, or a net profit of $0.05 cents per share for the third
quarter of 1996 as compared with a net loss of $751,114 or a net loss
of $0.15 cents per share for the third quarter of 1995.
For the nine months ended July 31, 1996, the Company incurred a net
loss of $209,122 or a net loss of $0.04 cents per share, as compared
with a net loss of $3,846,372 or a net loss of $0.83 cents per share
for the comparable period in 1995.
Liquidity and Sources of Capital
At July 31, 1996, the Company had a net working capital deficiency of
$179,232. During the nine months ended July 31, 1996, cash flow
generated from operating activities was $960,630, an improvement of
$1,159,983 over the six months ended April 30, 1996. The Company was
able to maintain liquidity during the first three quarters of 1996
primarily from net proceeds arising from the exercise of stock options
which provided cash of $208,940 in the second quarter of 1996 and
cash flow from operations generated during the third quarter of 1996.
The Company continues to develop a version of its C-Serve software
that runs under the Microsoft Windows family of operating systems. The
new product is being developed in conjunction with SLC and is expected
to include state of the art technology and best industry practices for
the management of retail gas stations and convenience stores.
Completion of the new product is dependent, among other things, on the
successful and timely completion of a scanning point of sale system
and other associated inventory, merchandising and back office
functions that the Company and NCR are developing for SLC in a Windows
NT environment. The Company is performing work under an arrangerment
with NCR and SLC and is in the process of finalizing the final terms of
a development contract with NCR and SLC for this project. During the
third quarter the Company received $1,437,000 and to date has
received $2,237,000 from SLC to enable development to continue on this
project.
Management anticipates that it will have sufficient cash flow from
operations and from the NCR/SLC contract, when consummated, to meet
liquidity needs in the foreseeable future.
Outlook
The statements contained in this Outlook and this report are based on
current expectations, anticipated events and trends, beliefs and
similar expressions that are not historical facts. These statements
are "forward looking" within the meaning of the federal securities
laws and are subject to risks and uncertainties that could cause
actual results to differ materially from those expressed in or implied
by the statements.
The Company expects revenue for the fourth quarter of 1996 to be
approximately the same as the third quarter revenue of $3.4 million.
The Company expects that the contract with SLC and NCR will be
finalized during the fourth quarter and work on the project will
continue. The actual level of revenues that will be recognized in
relation to progress on the project will depend on the terms of the
contract, as agreed upon, and the Company meeting certain development
goals. In addition, actual revenues will be impacted by the number of
orders for new business received, shipped and installed during the
quarter.
One of Canmax's sales strategies is to seek alternative distribution
channels for its products and services and the Company continues to
pursue sales and marketing alliances with a number of companies
believed capable of providing these channels.
Canmax is working with NCR to identify possible areas of mutual
interest and opportunity. NCR has increased its focus on point of
sale equipment manufacture and sale to the retail industry. Canmax
believes that it can benefit from NCR's increased focus as Canmax's
products run on a range of NCR point of sale equipment, including
models 2760, 7054 and 7450. The impact, if any, of any such future
business arrangement is unlikely to be realized prior to fiscal 1997.
The Company expects gross margins in the fourth quarter to be at
similar levels as the third quarter. Canmax's gross margins for
software, hardware and product licenses vary depending on the mix of
hardware and software products sold as hardware generally has a lower
gross margin. The Company's gross margin percentage on development
should remain reasonably constant. Various factors may influence the
Company's gross margins, including the mix of contractors and
employees working on development projects as contractors are generally
more expensive than employees but are often used to provide
specialized skills or to provide additional resources on a short term
basis to meet deadlines and the work effort required to meet
deliverables.
Spending on customer service is expected to remain reasonably constant
during the fourth fiscal quarter, while selling and administrative
expenses are expected to remain flat. Spending on development is
expected to increase during the fourth fiscal quarter of 1996 as the
Company continues to develop the new Windows NT based product for
release in the summer of 1997. Expense projections in the fourth
quarter are subject to change based on the level of business activity
in the customer service area and the level of software capitalization
of development activities.
The foregoing "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section contains various
forward-looking statements within the meaning of the Securities Act of
1933 and the Securities Exchange Act of 1934, which represent the
Company's expectations or beliefs concerning, among other things,
future operating results and various components thereof and the
adequacy of future operations to provide sufficient liquidity. The
Company cautions that such matters necessarily involve significant
risks and uncertainties that could cause actual operating results and
liquidity needs to differ materially from such statements, including,
without limitation: user acceptance of Windows NT as an operating
system, continued acceptance of UNIX based software and the Company's
products and services, timing of completion of development projects
and new products, competitive factors such as pricing and the release
of new products and services by competitors, potential need for
additional financing to fund product development, marketing and
related support services, general economic conditions, product demand
and manufacturing efficiencies.
PART II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
At Canmax's Annual Meeting of Stockholders held on July 23, 1996, the
following proposals were adopted by the margins indicated.
1. To elect a board of directors to hold office until the next
annual meeting of stockholders or until their respective
successors are duly elected and qualified.
Number of Shares
Vote For Withheld
R.D.Bryant 3,799,527 142,152
D.L.Burgess 3,799,527 142,152
N.DeMare 3,799,367 142,312
R.Fidler 3,799,567 142,112
P.M.Parsons 3,799,567 142,112
T.W.Rinehart 3,799,567 142,112
G.R.Seay 3,799,367 142,312
2. To ratify the appointment of the accounting firm, Ernst & Young LLP,
as independent auditors for the Company for the current fiscal
year and authorize the Directors to fix the auditors remuneration.
Number of Shares
Vote For Vote Against Abstained
3,871,544 63,105 6,630
3. To approve a proposal to amend the Company's stock option plan by
increasing the number of shares reserved for issuance under the
plan to 1,200,000.
Number of Shares
Vote For Vote Against Abstained No Vote
1,305,658 647,027 45,584 1,943,410
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.08 Stock Option Plan as amended
11.01 Statement re: Computation of earnings per share
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed with the Securities and Exchange
Commission during the quarter ended July 31, 1996.
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 thereunto duly authorized.
Canmax Inc.
(Registrant)
DATE: September 12, 1996 /s/ Roger D. Bryant
Roger D. Bryant
President & CEO
DATE: September 12, 1996 /s/ Philip M. Parsons
Philip M. Parsons
Chief Financial Officer
and Authorized Signatory